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FIYTA HOLDINGS LTD.
2018 Semi-annual Report
August, 2018
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Section 1 Important Notice, Table of Contents and Definition
The Board of Directors, the Supervisory Committee, directors, supervisors and senior executives hereby individually andcollectively accept responsibility for the correctness, accuracy and completeness of the contents of this report and confirmthat there are neither material omissions nor errors which would render any statement misleading.Huang Yongfeng, the Company leader, Chen Zhuo, chief financial officer, and Tian Hui, the manager of the accountingdepartment (treasurer) hereby confirm the authenticity and completeness of the financial report enclosed in this AnnualReport.With the exception of the following directors, all the other directors personally attended the board meeting where thissemi-annual report was reviewed.
Names of the directors failed to personally attend the Board Meeting | Offices taken by the directors absent from the Meeting | Cause of the absence | Name of the mandatary |
Fu Debin | Director | For the sake of work | Wang Bo |
Chen Libin | Director | For the sake of work | Huang Yongfeng |
Wang Yan | Independent director | For the sake of work | Zhang Shunwen |
Any perspective description, such as future plan, development strategy, etc. involved in the Semi-annual Report shall not
constitute the Company’s substantial commitment to the investors and the investors should please pay attention to their
investment risks.The Company intends neither to distribute any cash dividend or bonus shares nor to convert any reserve into share
capital.
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Table of Contents
Section 1 Important Notice, Table of Contents and DefinitionSection 2 Company Profile and Financial HighlightsSection 3 Business SummarySection 4 Discussion and Analysis of the ManagementSection 5 Significant EventsSection 6 Change of Shares and Particulars about ShareholdersSection 7 About the Preferred SharesSection 8 Directors, Supervisors, Senior Executives and EmployeesSection 9 Company BondSection 10 Financial ReportSection 11 Documents Available for Inspection
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Definitions
Terms to be defined | Refers to | Definition |
This Company, the Company or FIYTA | Refers to | FIYTA HOLDINGS LTD. |
AVIC | Refers to | Aviation Industry Corporation of China, Ltd. |
AVIC International | Refers to | AVIC International Holding Corporation |
AVIC International Shenzhen | Refers to | AVIC International Shenzhen Co., Ltd. |
AVIC IHL | Refers to | AVIC International Holding Limited |
Harmony | Refers to | Shenzhen Harmony World Watches Center Co., Ltd. |
The Sales Co. | Refers to | FIYTA Sales Co., Ltd. |
the Manufacture Co. | Refers to | Shenzhen FIYTA Sophisticated Timepieces Manufacture Co., Ltd. |
the Technology Co. | Refers to | Shenzhen FIYTA Technology Development Co., Ltd. |
the Hong Kong Co. | Refers to | FIYTA (Hong Kong) Limited |
SHIYUEHUI | Refers to | Shiyuehui Boutique (Shenzhen) Co., Ltd. |
Rainbow Ltd. | Refers to | Rainbow Department Store Co., Ltd. |
AVIC SUNDA | Refers to | AVIC SUNDA Co., Ltd. |
AVIC Property | Refers to | AVIC Property Management Co., Ltd. |
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Section 2 Company Profile and Financial Highlights
I. Company Profile
Short form of the stock: | FIYTA A, FIYTA B | Stock Codes: | 000026 and 200026 |
Stock Exchange Listed with | Shenzhen Stock Exchange Listed | ||
Company Name in Chinese | 飞亚达(集团)股份有限公司 | ||
Abbreviation of Registered Company Name in Chinese | 飞亚达公司 | ||
Company name in foreign language (if any) | FIYTA HOLDINGS LTD. | ||
Abbreviation of the Company name in foreign language (if any) | FIYTA | ||
Legal Representative | Huang Yongfeng |
II. Liaison Persons and Communication Information
Secretary of the Board | Securities Affairs Representative | |
Names | Lu Wanjun | Zhang Yong |
Liaison Address | 20th Floor, FIYTA Technology Building, Gaoxin S. Road One, Nanshan District, Shenzhen | 20th Floor, FIYTA Technology Building, Gaoxin S. Road One, Nanshan District, Shenzhen |
Tel | 0755 and -86013669 | 0755 and -86013669 |
Fax | 0755 and -83348369 | 0755 and -83348369 |
investor@fiyta.com.cn | investor@fiyta.com.cn |
III. Other Information1. Way of CommunicationThere is no change in the registered address, office address and post code, company website, email during the
reporting period. For the detail, refer to 2017 Annual Report.2. Information Disclosure and Place where the Regular Reports are PreparedNewspapers designated for disclosing the information, Internet web site designated by China Securities Regulatory
Commission for publishing the Semi-annual Report, place of the Company’s Semi-annual Report prepared for inquiry, for
the detail, refer to 2017 Annual Report.
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IV. Summary of Accounting/Financial DataDoes the Company need to make retroactive adjustment or restatement of the accounting data of the previous years
No
Reporting period | Same period of the previous year | Year-on-year increase/decrease in the reporting period | |
Revenue in CNY | 1,695,891,432.72 | 1,599,541,144.35 | 6.02% |
Net profit attributable to the Company’s shareholders, in CNY | 112,367,921.44 | 86,708,824.76 | 29.59% |
Net profit attributable to the Company’s shareholders less the non-recurring items, in CNY | 99,759,371.16 | 85,938,456.94 | 16.08% |
Net cash flows arising from operating activities, in CNY | 224,672,274.09 | 276,715,660.53 | -18.81% |
Basic earnings per share (CNY/share) | 0.2561 | 0.1976 | 29.61% |
Diluted earnings per share (CNY/share) | 0.2561 | 0.1976 | 29.61% |
Return on equity, weighted average | 4.45% | 3.65% | 0.80% |
End of the reporting period | End of the previous year | Increase/decrease at the end of the year over the end of the previous year | |
Total assets, in CNY | 3,629,325,363.14 | 3,579,789,692.90 | 1.38% |
Net profit attributable to the Company’s shareholders, in CNY | 2,578,942,362.89 | 2,467,967,361.20 | 4.50% |
V. Difference in the Accounting Data based respectively on the Chinese Accounting Standards (CAS) andInternational Accounting Standards (IAS)
1. Differences in the net profit disclosed in the financial report & the net assets attributable to the Company’s
shareholders respectively according to the IAS and the CAS.Inapplicable
2. Differences in the net profit disclosed in the financial report & the net assets attributable to the Company’s
shareholders according to both the IAS and the CASInapplicableVI. Non-recurring gain/loss items and the amount involved
In CNY
Items | Amount | Notes |
Gain/loss from disposal of non-current assets, including the part offset from the | -54,407.16 | Gain/loss from disposal of partial obsolete |
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provision for impairment of assets. | office fixed assets during the reporting period | |
Government subsidy credited to the current gain and loss (except the government subsidies closely related with the Company’s business and enjoyable according to the unified standard quota or fixed amount specified by the central government). | 6,497,018.80 | For detail, refer to the supplementary description of the government subsidy counted to the current profit and loss, Note VII.70. |
Operating income and expenses other than the aforesaid items | 7,533,121.86 | Operating income and expenses other than the aforesaid items |
Other various non-operating revenue and expenditure with the aforesaid items exclusive | -102,663.02 | Other various non-operating revenue and expenditure |
Less: Amount affected by the income tax | 1,264,520.20 | |
Total | 12,608,550.28 | -- |
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No. 1 on InformationDisclosure for Companies Offering their Securities to the Public – Non-recurring Gains and Losses and its non-recurring
gain/loss items as illustrated in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering
their Securities to the Public – Non-recurring Gains and Losses which have been defined as recurring gains and losses, it
is necessary to explain the reason.Inapplicable
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Section 3 Business Summary
I. Principal Businesses in the Reporting PeriodDoes the Company need to comply with the requirements on information disclosure for special industries?
No(1) Principal Business and Operation ModelFIYTA has been concentrating itself in watch industry under the strategy with the brand strategy as the guidance, with
"products + channel” as the business model, is enthusiastically carrying forward integration of key value chains and
construction of core ability, continuously promoting the integrative brand development strategy. So far, the Company has
integrated watch R & D, design, manufacture, sales and services, has formed two general core businesses of “watchbrand management + retail of famous brand watches”, has constructed the proprietary product brand cluster representedby “FIYTA” Brand and watch retail channel brand represented by Harmony with mutual promotion and coordinateddevelopment of the Company’s product brand business and channel retail services.
(2) Development Status of Watch Industry and the Company's Position in the IndustryAt present, China has entered an important development stage of consumption demand in continuous growth and
consumption structure upgrading in an accelerated way; the people’s dreaming of good life and demand shall beincreasingly enhanced. China’s famous brand watch market started reviving in the second half year of 2016. After aroundtwo years’ growth and stabilization, the growth of the market is expectable under the new background. The growth of
economy and rise of the household consumption level shall continuously provide steady power for the growth of theindustry. In the first half year of 2018, the quality consumption and personalized consumption has been persistentlyoverheating, consumers are willing to pay higher prices to buy better quality products and services and medium and highend brands have kept stable growth rate. Despite some factors such as the Sino-US trade friction, capital marketfluctuation, etc. may possibly impact the market at a certain level and periodically in the short run, they shall not changethe judgment of the market trend towards a good prospect; in addition, differentiation has taken place in growth of thedomestic watches vs Swiss watch brands (especially high-end Switch watch brands), it shall accelerate upgrading of thedomestic watch brands and development progress of the domestic watch manufacturers.
Since its establishment, the Company has concentrated itself on the watch industry persistently. After 31 years’ temperingstruggling, the Company has now become a flagship enterprise in China’s watch industry. The Company’s brand “FIYTA”has become a leading brand among the domestic watches; and the channel brand “HARMONY” has become a world
watch retail and service channel leader in China. The Company shall seize the opportunity of consumption upgrading andpersonalized consumption growth, further quicken the steps its own brand upgrading and core ability construction, actively
explore and foster and develop new businesses, continuously consolidate the Company’s leading position in the industry
and create greater value for the customers, shareholders and the society.
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II. Significant Changes in the Prime Assets1. Significant Changes in the Prime Assets
Prime assets | Note to the significant change |
Fixed assets | Decrease of the carrying value of fixed assets as at the end of the reporting period by CNY -59,786,456.47 was mainly due to increase of the lease area of Shenyang 1928 Building and was carried to the investment oriented real estate for accounting; the book original value of the assets involved amounted to CNY 58,656,614.70 and the net value amounting to CNY 49,139,814.06. |
2. Prime Assets AbroadInapplicableIII. Analysis on Core CompetitivenessDoes the Company need to comply with the requirements on information disclosure for special industries?
No
Through many years’ development, the Company has focused on the brand building and channel operation, has already
successfully constructed its core competitiveness, including the abilities of product innovation, brand building, supplychain management, channel operation, quality services, strategic human resource management, etc. Based on theseabilities, the Company has become an enterprise with national technology center, national industry design center, anational technological innovation demonstration enterprise and national hi-tech enterprise; has risen to one of the globalthree powers of spaceflight watch R&D and manufacture enterprise. During the reporting period, the Company has baseditself on providing customers with better products and services, further elevated its core competitiveness, and has
achieved continuous breakthrough in partial fields. In the first half year, “FIYTA” Brand released the products with entirelynew style such as SOLO at Basel Fairground and received positive comments from market.
In respect of R & D, the Company further increased the R & D investment and achievement transformation. In the first halfyear, the Company applied for 3 patents of invention, 2 utility model patents, and 19 design patents; was granted 2patented inventions, 6 utility model patents and 15 design patents. Meanwhile, the Company continued to devote itself toconstruction of the industrial standards, took lead in and participated in amendment of the standards and completed 10national, industrial standards and 1 technical regulation of Shenzhen Municipality.
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Section 4 Discussion and Analysis of the Management
I. General
During the first half year of 2018, facing the changes of the market environment, the Company insisted on the brand
strategy and innovation driving, in compliance with the annual work theme of “brand upgrading, quality and efficiencyimprovement and innovation and development”, focused on the efficiency and benefit, carried forward various tasks.
While grasping the opportunity of steady growth of the market of famous brand watches and lifting of the market shares ofthe domestic watches, speeded up boosting upgrading of its proprietary brand, propelled transformation of the growth wayby unit price and gross profit rate and inventory turnover ratio, etc. and realized operation efficiency and furtherimprovement of the asset efficiency.In the reporting period, the Company realized operating revenue amounting to CNY1,695.89 million with year-on-year growth of 6.02% and realized total profit amounting to CNY 145.83 million with ayear-on-year growth of 29.54%.
Steadily carrying forward brand upgrading and differentiated brand cluster building. During the reporting period,the Company kept up with the market trend and boosted construction of brand cluster differentiation according to theestablished strategy, various brand segments were further specified, the 3-dimension brand system with distinct features
were basically shaped up, the “FIYTA” Brand positioning and development idea were further clarified, the brand building
ability was further upgraded. With the help of Basel Fairground, brand spokesman, cooperation with CCTV5+Game
Advertisement and the first-tier city flagship store project, etc. and multiple channels promoted the influence of “FIYTA”Brand; and as a result, the market share was steadily elevated. Such brands as “JONAS & VERUS”, “BEIJING”, “JEEP”
etc. have received ideal performance in aspects of brand influence, sales revenue, etc. The breakthrough orientation inproduct quality, high-end watch manufacture ability, supply chain competitiveness, etc. has been further specified. Such
products as KING’S SWORD triggered intense echo at the Basel World. Various tasks centering on improvement of the
product competitiveness have been spread comprehensively and are being carried forward in an orderly way and have
consolidated the foundation for the Company’s subsequent development.
The channel layout continuously optimized and channel operation ability improved with acceleration. During thereporting period, the Company actively carried forward offline channel structure optimization and improvement ofoperation ability. HARMONY World Watch seized the opportunity of the revival and growth of high-end brands, conducted
in-depth study on the customers’ consumption trend, persistently carried out the per-unit-yield raising work. As a result, its
customer size and unit price got improved significantly and its sales income grew steadily; to comply with the newconsumption demand, HARMONY actively established close cooperative relationship with domestic excellent cooperationresources, continuously optimized and improved the structure of existing shops, developed layout of the medium and highend brands in the newly opened shops. Meanwhile, HARMONY enhanced the online business layout, improved the onlineoperation ability and has become the designated operator of CARL F. BUCHERER in the official flagship store of JD.com.During the reporting period, the Company efocused on the per-unit-yield improvement for its own brand channel,enhanced the channel operation ability, increased resource distribution in the key regions and market, carried forwardchannel structure optimization and adjustment in an orderly way; continued to speed up development of the onlinechannels with building online operation ability as the key and achieved a good growth in sales income.
Enthusiastically carrying forward application of new technologies and new business layout. During the reporting
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period, the Company closely followed up the movement of the market demand and technology development trend, baseditself on the long term strategy, positively propelled development of new businesses, such as intelligent retail exploration
and practice, smart watch, etc. During the reporting period, “FIYTA” Brand and its partners jointly launched the first pointer
type aerobic capacity smart watch in the industry; JEEP Brand also newly launched a smart watch. This produced hasattracted attention and enjoyed favor from the consumers as soon as it came into being.
Various work for quality and efficiency improvement being initially paid off. During the reporting period, theCompany kept carrying forward the process optimization and efficiency improvement; systematically solved the key anddifficult problems existing in the business operation and management by using management tools, such as 6 Sigma ; theCompany kept carrying forward the adjustment for optimization of the organization structure and coordinative and high
efficiency operation of various links, including “research, design, production and sales”, boosted in depth the special tasks
of optimization of the product development cycle, the control of inventories and accounts receivable, etc. Through the
whole staff’s joint efforts, the Company achieved initial success in performances of the relevant tasks: the Company
reduced the total inventories by CNY162.32 million on year-on-year basis, and by CNY 85.16 million over the beginning of
the reporting period; achieved steady improvement in total assets turnover and inventory carry rate on year-on-year basis,realized net cash flow generated from business activities amounting to CNY 224.67 million, which have powerfullysupported the growth of the performances in the reporting period.
II. Analysis on Principal Businesses
Refer to “I. General” of “Discussion and Analysis of Business Conditions”
Movements of the Key Financial Items are summarized as follows:
In CNY
Reporting period | Same period of the previous year | Year-on-year increase/decrease | Cause of the movement | |
Revenue | 1,695,891,432.72 | 1,599,541,144.35 | 6.02% | Inapplicable |
Operating cost | 976,325,736.35 | 941,479,684.84 | 3.70% | Inapplicable |
Sales costs | 422,113,041.69 | 394,286,321.79 | 7.06% | Inapplicable |
Administrative expenses | 125,528,317.71 | 98,170,386.95 | 27.87% | Inapplicable |
Financial expenses | 18,147,791.49 | 26,200,633.06 | -30.74% | It was mainly due to year-on -year decrease of bank loan size during the reporting period. |
Income tax expense | 33,463,799.72 | 25,965,385.00 | 28.88% | Inapplicable |
R&D input | 21,285,926.02 | 21,944,615.09 | -3.00% | Inapplicable |
Net cash flows arising from operating activities, in CNY | 224,672,274.09 | 276,715,660.53 | -18.81% | Inapplicable |
Net cash flow arising from investment activities | -52,512,866.91 | -56,423,051.76 | 6.93% | Inapplicable |
Net cash flow arising from financing activities | -78,421,466.76 | -264,211,350.78 | 70.32% | It was mainly due to year-on -year decrease of bank loan size during the reporting period. while the |
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dividend distribution for year 2016 completed in the same period of the previous year. | ||||
Net increase of cash and cash equivalents | 93,856,380.26 | -43,578,751.94 | 315.37% | Mainly due to year-on-year increase of the net cash flow in connectino with financing activities during the reporting period. |
Significant change in profit composition or profit sources during the reporting period.InapplicableComposition of the principal business
In CNY
Revenue | Operating cost | Gross profit rate | Year-on-year increase/decrease of operating revenue over the same period of previous year | Year-on-year increase/decrease of operating cost over the same period of previous year | Year-on-year increase/decrease of gross profit rate over the same period of previous year | |
Sectors | ||||||
Watches | 1,626,297,488.93 | 961,750,068.78 | 40.86% | 5.79% | 3.25% | 1.45% |
Leases | 57,539,426.21 | 11,490,008.03 | 80.03% | 12.20% | 33.31% | -3.16% |
Others | 12,054,517.58 | 3,085,659.54 | 74.40% | 9.71% | 116.39% | -12.62% |
Products | ||||||
Famous brand watches | 1,133,532,373.71 | 808,009,338.65 | 28.72% | 7.79% | 3.63% | 2.86% |
FIYTA watches | 492,765,115.22 | 153,740,730.14 | 68.80% | 1.47% | 1.31% | 0.05% |
Leases | 57,539,426.21 | 11,490,008.03 | 80.03% | 12.20% | 33.31% | -3.16% |
Others | 12,054,517.58 | 3,085,659.54 | 74.40% | 9.71% | 116.39% | -12.62% |
Regions | ||||||
Northeast China | 167,808,988.90 | 107,206,732.64 | 36.11% | 4.85% | 4.10% | 0.46% |
Northeast China | 158,237,523.05 | 95,232,032.22 | 39.82% | -9.29% | -9.55% | 0.17% |
Northwest China | 296,818,912.14 | 187,468,984.48 | 36.84% | 12.33% | 12.31% | 0.01% |
Southwest China | 153,677,143.03 | 98,615,718.57 | 35.83% | -0.19% | -0.23% | 0.02% |
East China | 219,099,443.56 | 128,259,650.78 | 41.46% | -0.83% | -1.16% | 0.20% |
South China | 700,249,422.03 | 359,542,617.67 | 48.66% | 11.88% | 6.47% | 2.60% |
III. Analysis on Non-Principal BusinessesInapplicable
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IV. Assets and Liabilities1. Significant Changes in Assets Composition
In CNY
End of the reporting period | End of the same period of the previous year | Proportion increased/decreased | Note to significant changes | |||
Amount | Proportion in total assets | Amount | Proportion in total assets | |||
Monetary fund | 281,009,271.58 | 7.74% | 385,224,003.87 | 10.02% | -2.28% | Inapplicable |
Accounts receivable | 378,420,568.27 | 10.43% | 315,123,497.85 | 8.20% | 2.23% | Inapplicable |
Inventories | 1,735,371,328.09 | 47.82% | 1,897,695,603.73 | 49.36% | -1.54% | Inapplicable |
Investment real estate | 348,258,775.18 | 9.60% | 284,928,954.22 | 7.41% | 2.19% | Inapplicable |
Long-term equity investment | 43,972,531.47 | 1.21% | 43,612,496.76 | 1.13% | 0.08% | Inapplicable |
Fixed assets | 463,913,136.18 | 12.78% | 557,286,443.92 | 14.49% | -1.71% | Inapplicable |
Construction-in-process | 12,515,382.25 | 0.34% | 1,404,130.16 | 0.04% | 0.30% | Inapplicable |
Short term borrowings | 479,917,100.00 | 13.22% | 919,078,240.00 | 23.90% | -10.68% | Inapplicable |
Long term borrowings | 62,153,235.50 | 1.71% | 97,939,904.54 | 2.55% | -0.84% | Inapplicable |
2. Assets and liabilities measured based on fair valueInapplicable3. Restriction on rights in the assets ended the reporting periodA property owned by Switzerland based Montres Chouriet SA with net value of CNY 14,803,859.87 was used as a
collateral for the overseas long term loan amounting to CNY 4,791,307.50.V. Investment1. General
Amount of investment during the reporting period (CNY) | Amount of investment in the same period of the previous year (CNY) | Amount of variation |
1,568,081.72 | 1,404,130.16 | 11.68% |
2. Significant equity investment acquired in the reporting periodInapplicable
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3. Significant non-equity investment in process in the reporting period
In CNY
Description | Way of investment | Is it an investment in fixed assets? | Industry involved by the investment project | Amount invested during the reporting period | Accumulative amount actually invested by the end of the reporting period | Capital source | Project progress | Predicted earning | Earnings accumulatively realized by the end of the reporting period | Cause of the failure in arriving at the planned progress and predicted earnings | Date of disclosure (if any) | Disclosure index (if any) |
Construction project of FIYTA watch R&D and manufacture center | Self-built | Yes | Manufacture | 1,568,081.72 | 12,515,382.25 | Self-raised capital | 100.00% | 0.00 | 0.00 | Inapplicable | March 10, 2017 | http://www.cninfo.com.cn/ |
Total | -- | -- | -- | 1,568,081.72 | 12,515,382.25 | -- | -- | 0.00 | 0.00 | -- | -- | -- |
Note: The 13th session of the Eighth Board of Directors reviewed and approved the proposal for increase of theinvestment in the construction project of FIYTA Watch R&D and Manufacture Center by CNY 34.0509 million. For thedetail, refer to Announcement of the Resolution of the 13th Session of the Eighth Board of Directors 2017-003. Ended thereporting period, the accumulative amount of investment in the project was CNY12.5153 million.
4. Financial assets investment(1) Portfolio investmentInapplicable(2) Investment in derivativesInapplicableVI. Sales of Significant Assets and Equity1. Sales of Significant AssetsInapplicable2. Sales of Significant EquityInapplicable
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VII. Analysis on Principal Subsidiaries and Mutual Shareholding Companies
Particulars about the principal subsidiaries and mutual shareholding companies which may affect the Company’s net profit
by over 10%.
In CNY
Company Names | Company type | Principal business | Registered capital | Total assets | Net assets | Revenue | Operating profit | Net profit |
Shenzhen Harmony World Watches Center Co., Ltd. | Subsidiaries | Purchase & sale and repairing service of watches and components. Import & export (based on SHEN MAO JIN ZHUN ZI NO. [2001] No. 2204; sales of general merchandise, jewelry, diamond ornaments, leatherwares, pens, ties, tie clips, electronic products, communication equipment; domestic trading; property management; advertising business. | 600,000,000.00 | 1,440,193,056.51 | 779,097,297.14 | 1,058,209,281.29 | 85,709,797.97 | 65,724,745.75 |
FIYTA Sales Co., Ltd. | Subsidiaries | Design, R & D and sales of watches, timing instruments, and spare and accessory parts; sales of jewelry and ornaments; import & export of watches and repairing services. | 450,000,000.00 | 780,609,948.35 | 394,632,068.95 | 515,721,061.06 | -23,367,059.41 | -17,620,701.45 |
Shenzhen FIYTA Sophisticated Timepieces Manufacture Co., Ltd. | Subsidiaries | R & D, design and sales of various watches and driving units, watchcases, watchbands, and other spare and accessory parts; sales of sophisticated timepieces and their pare and accessory parts; wholesale of K gold ornaments and watches, superhard materials (hard alloy, sophisticated ceramics) spare and accessory parts; and development of technology for the aforesaid products and supporting business; import & export. Production of various watches and driving units, watchcases, watchbands and other spare and accessory parts; production of sophisticated timepieces and their sophisticated spare and accessory parts; processing of K gold ornamental watches, superhard material (hard alloy, sophisticated ceramics) spare and accessory parts; and repairing of the aforesaid products. | 10,000,000.00 | 308,517,739.97 | 218,419,211.64 | 238,249,943.95 | 83,665,663.87 | 71,518,996.35 |
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Shenzhen FIYTA Technology Development Co., Ltd. | Subsidiaries | R&D, production sales of watches (excluding the products in the catalogue of measuring instruments under control according to the law); production & machining and sales of sophisticated parts and technology development; investment and initiation of industrial entities (application shall be submitted for a specific project); domestic commerce, materials supply and sales. | 10,000,000.00 | 76,406,074.21 | 63,186,141.49 | 46,073,281.42 | 3,827,312.28 | 3,884,219.65 |
FIYTA (Hong Kong) Limited | Subsidiaries | Trading of watches and accessories and investment | 137,737,520.00 | 236,496,156.12 | 167,266,294.17 | 57,729,653.35 | -2,704,172.57 | -5,633,718.48 |
Shiyuehui Boutique (Shenzhen) Co., Ltd. | Subsidiaries | General business activities: Design, R & D, sales of timing instruments and spare and accessory parts; brand planning, design, R&D, sales and wholesale of general merchandise, jewelry, ornaments and gifts (with the restricted items exclusive); brand planning; advertising business; import & export. Permitted business activities: production of timing instruments and spare and accessory parts; production of general merchandise, jewelry, ornaments, gifts. | 5,000,000.00 | 20,944,271.37 | -5,293,140.12 | 6,079,828.02 | -2,177,427.21 | -1,753,275.62 |
Liaoning Hengdarui Commerce & Trade Co., Ltd. | Subsidiaries | Wholesale, retail and repairing services of watches and components; sales of electronic products, communication equipment and materials, instruments and meters, office equipment, general merchandise, jewelry, handicrafts, toys, metal materials; conference services; property management; property lease. (For the projects subject to approval according to the law, the business activities shall not be carried out before approval by the competent authority.) | 51,000,000.00 | 146,815,457.40 | 39,776,386.79 | 4,958,865.07 | 836,818.33 | 627,604.99 |
Harbin Harmony World Watch Distribution Co., Ltd. | Subsidiaries | Wholesale and retail of watches and accessories, general merchandise, jewelry, leatherwares, stationery articles, | 500,000.00 | 50,233,677.52 | 3,085,542.96 | 21,618,950.37 | -350,128.91 | -480,437.64 |
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costume; watch repairing; design, manufacture, agency, distribution of domestic advertising business. | ||||||||
Emile Chouriet (Shenzhen) Limited | Subsidiaries | Wholesale, import &export of watches and accessories, jewelry, ornaments (excluding loose diamond and gold, palladium material) and the relevant supporting businesses (For the commodities not subject to administration of state-run trade, quota or license, it is necessary to make application according to the relevant regulations of the government); after-sale repairing services of watches. | 41,355,200.00 | 108,940,423.85 | 75,763,067.52 | 44,509,243.81 | -4,952,004.03 | -3,741,042.18 |
Shanghai Watch Industry Co., Ltd. | Mutual shareholding company | Production (outward processing) and sales of watches, watch driving units, watch parts, sophisticated instruments and accessories; goods import & export and technology import & export. | 15,350,000.00 | 109,224,801.99 | 100,892,448.99 | 46,323,386.37 | -182,784.65 | 372,053.52 |
Subsidiaries acquired and disposed in the reporting periodInapplicableNote to the principal mutual shareholding companiesInapplicable
VIII. Structurized Entities Controlled by the CompanyInapplicableIX. Prediction of the Performances from January to September, 2018InapplicableX. Risks Possibly to be Confronted with and Measures to be Taken
1. Benefited by the growth of the residents’ disposable income, the consumption market is optimistic in its medium and
long term development. However, affected by such factors as the Sino-US trade friction, capital market fluctuation,
exchange rate fluctuation, etc., the domestic residents’ consumer confidence has been impacted somewhat. The
Company needs to keep carrying out the market and customer research work, sturdily carrying forward improvement ofthe operation efficiency, doing a good job in brand construction, tamping the foundation of management. Meanwhile, keepcarrying forward multi-brand strategy and seizing the opportunity of market segment growth.
2. Although the smart watch field is still in the stage of product optimization and improvement, but it has formed a certainconsumption foundation, and brought about a certain impact upon the traditional watch industry. The Company always
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pays close attention to smart watch field, enthusiastically practices, and has been involved in the smart watch market bymeans of FIYTA Brand and JEEP Brand. The Company shall still keep paying attention to the development trend of thisfield and persistently carries forward ability building and product layout.
3. The change of consumers’ consumption habit, persistent rapid development of the online channel and shopping
center have caused a certain bypass to the customer flow of traditional general merchandise channel. In the aspect ofonline channel, the Company made layout quite early and now is carrying forward improvement of operation ability. In thefirst half year, the Company has achieved good growth in online business; in respect of offline channels, the Companyactively conducted channel structure adjustment, and building the ability of site selection, product selection and terminaloperation. As a result, the number of shopping mall channels has been increasing continuously.
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Section 5 Significant Events
I. General Meeting and Extraordinary General Meetings1. General Meetings
Sessions | Meeting type | Proportion of attendance of the investors | Meeting date | Date of disclosure | Disclosure index |
2017 Annual General Meeting | Annual general meeting | 39.07% | June 21, 2018 | June 21, 2018 | www.cninfo.com.cn |
2018 1st Extraordinary General Meeting | Extraordinary General Meeting | 7.37% | January 16, 2018 | January 17, 2018 | www.cninfo.com.cn |
2. Extraordinary general meeting requested for holding by the preferred shareholders with the voting powerrecovered.
InapplicableII. Preplan for Profit Distribution and Conversion of Capital Reserve into Share Capital in the Reporting PeriodInapplicableIII. Commitments finished in implementation by the Company's actual controller, shareholders, related parties,
acquirer, the Company, etc. in the reporting period and commitments unfinished in implementation at the end ofthe reporting period
Commitments | Promiser | Commitment type | Description | Commitment time | Commitment deadline | Implementation status |
Commitment for Equity Separation Reform | ||||||
Commitments in the acquisition report or the written report on change of equity | ||||||
Commitment made at the time of asset reorganization | ||||||
Commitment made at IPO or re-financing | ||||||
Equity incentive commitment | ||||||
Other commitments to the minority shareholders | Huang Yongfeng, Chen Libin, Lu Bingqiang, Lu Wanjun, Liu | Commitment for sales restriction on shares | The said directors and senior executives increased holding | , December 16, 2017 | 6 months | Completed in implementation |
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Xiaoming, Pan Bo, Li Ming, Chen Zhuo | of the Company's shares and committed that within six months of the increase they shall not reduce the holding size initiatively, shall not be engaged in any inside trading, trading the shares during sensitive period or short swing trading. | |||
Has the commitment been timely implemented | Yes | |||
If the commitment has not been implemented at the end of the reporting period, it is necessary to explain the specific reason of failure in implementation and the future work plan. | Inapplicable |
IV. Engagement/Disengagement of CPAsHas the financial report to the Semi-Annual Report been audited
NoV. Explanation of the Board of Directors and the Supervisory Committee on the Qualified Auditors' Report for the
reporting period issued by the CPAsInapplicableVI. Explanation of the Board of Directors on the Qualified Auditors' Report for the previous year issued by the
CPAsInapplicableVII. Matters concerning Bankruptcy ReorganizationInapplicableVIII. LawsuitsInapplicable
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IX. Penalty and RectificationInapplicableX. Integrity of the Company, its Controlling Shareholder and Actual ControllerInapplicable
XI. Implementation of the Company’s Equity Incentive Plan, Employee Stock Ownership Plan or other Employee
Incentive MeasuresInapplicableXII. Significant Related Transactions1. Related Transactions Related with Day-to-Day Operations
Related Parties | Relationship | Type of related transaction | Description of Related Transactions | Principle of pricing of the related transactions | Price of related transactions | Amount of the related transaction (in CNY 10,000) | Proportion in the amount of the similar transactions | Transaction quota as approved (in CNY10,000) | Has the approved quota been exceeded? | Way of settlement for the related transaction | Market price of the similar transaction accessible | Date of disclosure | Disclosure index |
AVIC Property | Common controller | . Administrative expenses | Property management fee | Market price | Inapplicable | 296.62 | 100.00% | 1,000 | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
Rainbow Ltd. | Common controller | Sales costs | Shopping mall fees | Market price | Inapplicable | 255.46 | 9.66% | 800 | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
AVIC Building Co. | Common controller | Principal business costs | Engineering fees | Market price | Inapplicable | 46.84 | 88.43% | 500 | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
Shenzhen AVIC Group Enterprise Training Center | Common controller | . Administrative expenses | Talent fund | Market price | Inapplicable | 14.45 | 100.00% | 50 | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
Rainbow Ltd. | Common controller | Revenue from principal business | Sales of goods | Market price | Inapplicable | 3,506.04 | 2.07% | 11,000 | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
Shennan Circuit Co., Ltd. | Common controller | Revenue from principal | Sales of goods | Market price | Inapplicable | 330.03 | 15.31% | 1,500 | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
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business | |||||||||||||
Ganzhou 9 Square | Common controller | Revenue from principal business | Sales of goods | Market price | Inapplicable | 70.14 | 0.04% | 500 | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
Shenzhen Grand Skylight Hotel Management Co., Ltd. | Common controller | Revenue from principal business | Sales of goods | Market price | Inapplicable | 0.6 | 0.00% | - | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
AVIC Property | Common controller | Revenue from principal business | Property lease | Market price | Inapplicable | 378.67 | 6.58% | 2,000 | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
AVIC SUNDA | Common controller | Revenue from principal business | Property lease | Market price | Inapplicable | 89.89 | 1.56% | - | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
AVIC City Property Co., Ltd. | Common controller | Revenue from principal business | Property lease | Market price | Inapplicable | 18.8 | 0.33% | - | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
AVIC City Development | Common controller | Revenue from principal business | Property lease | Market price | Inapplicable | 0.24 | 0.00% | - | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
Guanlan Real Estate | Common controller | Revenue from principal business | Property lease | Market price | Inapplicable | 5.39 | 0.09% | - | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
Tianyue Hotel | Common controller | Revenue from principal business | Property lease | Market price | Inapplicable | 174.6 | 3.03% | - | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
Rainbow Ltd. | Common controller | Revenue from principal business | Property lease | Market price | Inapplicable | 22.93 | 0.40% | - | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
9 Square Assets | Common controller | Revenue from | Property lease | Market price | Inapplicable | 57.96 | 1.01% | - | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
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principal business | |||||||||||||
AVIC City Investment | Common controller | Revenue from principal business | Property lease | Market price | Inapplicable | 23.26 | 0.40% | - | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
AVIC Huacheng Property | Common controller | Revenue from principal business | Property lease | Market price | Inapplicable | 14.37 | 0.25% | - | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
AVIC Real Estate | Common controller | Revenue from principal business | Property lease | Market price | Inapplicable | 3.34 | 0.06% | - | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
AVIC Securities | Common controller | Revenue from principal business | Property lease | Market price | Inapplicable | 60.86 | 1.06% | 200 | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
Ganzhou 9 Square | Common controller | Sales costs | Lease expenses | Market price | Inapplicable | 54.46 | 1.34% | 300 | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
Jiujiang AVIC Real Estate | Common controller | Sales costs | Lease expenses | Market price | Inapplicable | 20.15 | 0.50% | - | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
AVIC City Property (Kunshan) | Common controller | Sales costs | Lease expenses | Market price | Inapplicable | 11.08 | 0.27% | - | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
Aviation Industry Corporation of China | Common controller | Sales costs | Purchase of goods | Market price | Inapplicable | 0 | 0.00% | 800 | No | Bank transfer | Inapplicable | March 10, 2018 | www.cninfo.com.cn |
Total | -- | -- | 5,456.18 | -- | 18,650 | -- | -- | -- | -- | -- | |||
Details of the rejection of the goods already sold in big amount | Inapplicable | ||||||||||||
In case the total amount of the regular related transaction incurred in the reporting period has been predicted based on categories, state the actual implementation of the in the reporting period (if any) | The 24th session of the Eighth Board of Directors and 2017 Annual General Meeting reviewed and approved the Proposal on Prediction of Routine Related Transactions in 2018. It was predicted that the total amount of the related transactions between the Company and the related parties in 2018 would not exceed CNY 186.50 million; the total amount of the related transactions actually incurred in the reporting year was CNY 54.5618 million which did not exceed the total predicted amount, where the amount actually incurred in each individual related transactions did not exceed the predicted amount. | ||||||||||||
Cause of the big difference between the transaction price and the market reference price. (if applicable) | Inapplicable |
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2. Related transactions concerning acquisition and sales of assets or equityInapplicable3. Related transactions concerning joint investment in foreign countriesInapplicable4. Current Associated Rights of Credit and LiabilitiesInapplicable5. Other Significant Related TransactionsInapplicableXIII. The Company's Funds Occupied by its Controlling Shareholder or/and Related Parties for Non-operating
PurposeInapplicableXIV. Important Contracts and Implementation1. Custody, Contacting and Leases(1) CustodyInapplicable(2) ContractingInapplicable(3) LeasesInapplicable2. Significant Guarantees(1) Guarantees
In CNY 10,000
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Outward guarantees Offered by the Company and its Subsidiaries (excluding guarantee to the subsidiaries) | |||||||||
Names of Gurantees | Date of the announcement on the guarantee line | Guarantee line | Date of occurrence (date of agreement execution) | Actual amount of guarantee | Type of guarantee | Guarantee period | Implementation status | Guarantee to related party? | |
Inapplicable | |||||||||
Guarantee to the subsidiaries | |||||||||
Names of Gurantees | Date of the announcement on the guarantee line | Guarantee line | Date of occurrence (date of agreement execution) | Actual amount of guarantee | Type of guarantee | Guarantee period | Implementation status | Guarantee to related party? | |
FIYTA (Hong Kong) Limited | March 10, 2018 | 8,306 | April 26, 2018 | 2,492 | Guarantee with joint responsibility | 1 year | No | No | |
Shenzhen Harmony World Watches Center Co., Ltd. | March 10, 2017 | 7,500 | December 30, 2017 | 7,500 | Guarantee with joint responsibility | 1 year | No | No | |
Total guarantee quota to the subsidiaries approved in the reporting period (B1) | 8,306 | Total amount of guarantee to the subsidiaries actually incurred in the reporting period (B2) | 2,492 | ||||||
Total guarantee quota to the subsidiaries approved at the end of the reporting period (B3) | 15,806 | Total balance of actual guarantee to the subsidiaries at the end of the reporting period (B4) | 9,992 | ||||||
Guarantee among the subsidiaries | |||||||||
Names of Gurantees | Date of the announcement on the guarantee line | Guarantee line | Date of occurrence (date of agreement execution) | Actual amount of guarantee | Type of guarantee | Guarantee period | Implementation status | Guarantee to related party? | |
Total amount of guarantees (i.e. Total of the previous three major items) | |||||||||
Total guarantee quota to the subsidiaries approved in the reporting period (A1+B1+C1) | 8,306 | Total amount of outward guarantee actually incurred in the report period (A2+B2+B3) | 2,492 | ||||||
Total amount of guarantees already approved at the end of the report period (A3+B3+C3) | 15,806 | Total ending balance of guarantees at the end of the report period (A4+B4+C4) | 9,992 | ||||||
Proportion of the actual guarantees in the Company’s net assets (namely A4+B4 + C4) | 3.87% | ||||||||
Including: | |||||||||
Amount of guarantees offered to the shareholders, actual controller and its related parties (D) | 0 |
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Amount of guarantee for liabilities directly or indirectly offered to the guarantees with the asset-liability ratio exceeding 70% (E) | 0 |
Guarantee with total amount exceeding 50% of the net assets (F) | 0 |
Total amount of the aforesaid three guarantees (D+E+F) | 0 |
Note to the undue guarantee which may bring about joint responsibility for discharging (if any) | Inapplicable |
Note to the outward guarantee against the established procedures (if any) | Inapplicable |
(2) Outward guarantee against regulationsInapplicable3. Other Important ContractsInapplicableXV. Social Responsibilities1. Significant Issues concerning Environmental ProtectionDoes the Company or any of its subsidiaries belong to a key pollutant discharging unit as announced to the public by the
environmental protection authority?Yes
Name of the Company or its Subsidiary | Description of the major pollutants or specific pollutant | Way of discharging | Number of discharging outlets | Distribution of the discharging outlets | Discharging concentration | Pollutant Discharge Standards in Force | Total discharge volume | Total discharge volume verified | Over-discharging |
Shanghai Watch Industry Co., Ltd. | Nickel and chromium effluent | Intermittent and interruption | 1 | At the port of effluent treatment equipment | Chromium﹤0.01 | Nickel:0.1; chromium:0.3 | 2640 tons/year | 3960 tons/year | None |
Construction and operation of the pollution prevention and control facilitiesShanghai Watch Co., Ltd. reconstructed the clean production facility in 2016 and added 2 sets of equipment in 2018 forthe purpose of ensuring discharging of nickel and chromium effluent to comply with the Emission Standard of Pollutantsfor Electroplating. So far, the facility has been running normally and has never over-discharged the pollutants; and hasnow networked the platform of the local environmental protection authority.
Environmental impact assessment on construction projects and other environmental protection administrative licensingIn 2018 Yangpu District Environmental Protection Bureau of Shanghai organized and held the Clean Production Auditingand Assessment Seminar of Shanghai Watch Co., Ltd. where the company's clean production work was assessed,
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audited and approved.Shanghai Watch Co., Ltd.has passed the pollution discharge verification organized by Yangpu District EnvironmentalProtection Bureau of Shanghai with the Notice of Pollution Discharging Verification No.: YANG HUAN JIAN HUAN JIANFEI HE ZI [2007] No. 05363;In accordance with the provisions of Shanghai Environmental Protection Bureau, the Company is going to apply for thepollutant discharging licence before the end of 2019. At present, the company is making the relevant preparation work forapplication for the pollutant discharging licence.
Contingency Plan for Emergent Environmental IncidentsShanghai Watch Co., Ltd. prepared the Emergency Response Plan against Emergent Environmental Incidents andregularly organizes training and exercise every year. The aforesaid plan has been approved and filed for record byYangpu District Environmental Protection Bureau of Shanghai and has been published on the Environmental InformationDisclosure Platform of Enterprises and Institutions of Shanghai.
Environment Self-Monitoring ProgramYangpu District Environmental Protection Bureau of Shanghai conducts supervision once every quarter. The companyentrusts Shanghai Light Industry Environment Protection and Pressure Vessel Monitoring General Station, a competentindependent agent, to conduct the monitoring every year. The company is itself equipped with monitoring instruments andconducts self-monitoring at least 4 times every month.
Other environment information necessary to be disclosedThe company has disclosed the concerned information on the Environmental Information Disclosure Platform ofEnterprises and Institutions of Shanghai according to the requirements of the local environmental protection authorities.Website: http://xxgk.eic.sh.cn
Other information in connection with the environmental protectionNone
2. Implementation of the social responsibility of precise poverty reliefDuring the reporting period of half a year, the Company had neither precise poverty relief work nor follow-up precise
poverty relief plan to be carried out.XVI. Notes to Other Significant EventsInapplicableXVII. Significant Events of the Company's SubsidiariesInapplicable
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Section 6 Change of Shares and Particulars about Shareholders
I. Change of Shares1. Change of Shares
In shares
Before the change | Increase / Decrease (+/ -) | After the change | |||||||
Quantity | Proportion | New issuing | Bonus shares | Shares converted from reserve | Others | Sub-total | Quantity | Proportion | |
I. Restricted shares | 490,773 | 0.11% | -110,260 | -110,260 | 380,513 | 0.09% | |||
1. Shares held by the state | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
2. State corporate shares | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
3. Other domestic shares | 490,773 | 0.11% | -110,260 | -110,260 | 380,513 | 0.09% | |||
Including: Domestic corporate shares | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
Shares held by domestic natural persons | 490,773 | 0.11% | -110,260 | -110,260 | 380,513 | 0.09% | |||
4、Foreign invested shares | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
Including: Foreign corporate shares | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
Shares held by foreign natural persons | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
II. Unrestricted shares | 438,254,108 | 99.89% | 110,260 | 110,260 | 438,364,368 | 99.91% | |||
1. CNY ordinary shares | 356,606,108 | 81.28% | 110,260 | 110,260 | 356,716,368 | 81.30% | |||
2. Foreign invested shares listed in Mainland China | 81,648,000 | 18.61% | 0 | 0 | 81,648,000 | 18.61% | |||
3、Foreign invested shares listed abroad | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
4. Others | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
III. Total shares | 438,744,881 | 100.00% | 0 | 0 | 438,744,881 | 100.00% |
Cause of the change of shares
On December 15, 2017, part of the Company’s directors and senior executives increased the holding of the Company’s
shares in a way of centralized auction trading through the securities trading system of Shenzhen Stock Exchange totaling
441,040 shares, taking 0.10% of the Company’s total shares. During the reporting period, the Company released the
restriction for sale on 110,260 shares.Approval of Change of the Shares
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InapplicableTransfer of the Shares ChangedInapplicableInfluence of the change of the shares upon such financial indicators as the basic EPS and diluted EPS, net asset valueper share attributable to the common stockholders in the past year and the latest periodInapplicableOther information the Company considers necessary or required by the securities regulatory authority to be disclosed.Inapplicable
2. Change of the Restricted Shares
In shares
Names of the Shareholders | Number of restricted shares at the beginning of the reporting period | Number of restricted shares relieved in the reporting period | Number of restricted shares increased in the reporting period | Number of restricted shares at the end of the reporting period | Cause of restriction | Date of relieving the restriction |
Huang Yongfeng | 80,000 | 20,000 | 0 | 60,000 | Restricted shares held by the senior executives | June 16, 2018 |
Chen Libin | 80,000 | 20,000 | 0 | 60,000 | Restricted shares held by the senior executives | June 16, 2018 |
Lu Bingqiang | 79,733 | 7,500 | 0 | 72,233 | Restricted shares held by the senior executives | June 16, 2018 |
Lu Wanjun | 50,000 | 12,500 | 0 | 37,500 | Restricted shares held by the senior executives | June 16, 2018 |
Liu Xiaoming | 50,000 | 12,500 | 0 | 37,500 | Restricted shares held by the senior executives | June 16, 2018 |
Pan Bo | 50,000 | 12,500 | 0 | 37,500 | Restricted shares held by the senior executives | June 16, 2018 |
Li Ming | 50,040 | 12,510 | 0 | 37,530 | Restricted shares held by the senior executives | June 16, 2018 |
Chen Zhuo | 51,000 | 12,750 | 0 | 38,250 | Restricted shares held by the senior executives | June 16, 2018 |
Total | 490,773 | 110,260 | 0 | 380,513 | -- | -- |
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II. Issuing and ListingInapplicableIII. Number of Shareholders and Shareholding
In shares
Total common shareholders at the end of the reporting period | 32,013 | Total preference shareholders with the voting power recovered at the end of the reporting period (if any) (Refer to Note 8) | 0 | ||||||||
Shares held by the common shareholders holding over 5% shares or the top 10 common shareholders | |||||||||||
Names of the Shareholders | Nature of the shareholder | Shareholding proportion | Number of common shares held at the end of the reporting period | Increase/decrease in the reporting period | Number of the restricted common shares held | Number of the unrestricted common shares held | Pledging or freezing | ||||
Status of the shares | Quantity | ||||||||||
AVIC International Holding Limited | State corporate | 37.15% | 162,977,327 | 0 | 0 | 162,977,327 | |||||
#Yang Zugui | Domestic natural persons | 2.23% | 9,763,469 | 100,000 | 0 | 9,763,469 | |||||
National Social Security Fund 114 Portfolio | Domestic non-state-owned corporate | 2.15% | 9,417,998 | 6,159,526 | 0 | 9,417,998 | |||||
Chongqing International Trust Co., Ltd. - RONGXINTONG Series Unitrust No.10 | Domestic non-state-owned corporate | 2.07% | 9,088,723 | -332,957 | 0 | 9,088,723 | |||||
Chongqing International Trust Co., Ltd. - YUXIN Trust No.2 | Domestic non-state-owned corporate | 1.90% | 8,326,000 | -777,318 | 0 | 8,326,000 | |||||
Chongqing International Trust Co., Ltd. - YUXIN No. 2 Trust | Domestic natural persons | 1.59% | 6,996,595 | 0 | 0 | 6,996,595 | |||||
Industrial and Commercial Bank of China Co., Ltd. - FUGUO Recreation & Sports and Health Stock Type Securities | Domestic non-state-owned corporate | 1.26% | 5,537,337 | 4,200,837 | 0 | 5,537,337 |
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Investment Fund | ||||||||||
Xizang Investment Co., Ltd. | State corporate | 1.13% | 4,976,551 | 0 | 0 | 4,976,551 | ||||
MANULIFE TEDA Fund- Minsheng Bank-MANULIFE TEDA Value Growth Oriented Additional Issue No. 351 Assets Management Program | Domestic non-state-owned corporate | 1.12% | 4,893,559 | -150,000 | 0 | 4,893,559 | ||||
Shenzhen Heli Fengyuan Commerce & Trade Co., Ltd. | Domestic non-state-owned corporate | 0.75% | 3,300,000 | 0 | 0 | 3,300,000 | ||||
About the fact that a strategic investor or ordinary corporate became one of the top ten common shareholders due to placement of new shares (if any) (Refer to Note 3) | Of the top 10 shareholders, Xizang Investment Co., Ltd., MANULIFE TEDA Fund - Minsheng Bank-MANULIFE TEDA Value Growth Oriented Additional Issue No. 351 Assets Management Program are all the shareholders that have participated in the Company's non-public issuing; the new shares subscribed by them got listed with Shenzhen Stock Exchange on January 15, 2016 and they were not allowed to be listed for trading or assigned within 12 months commencing from the first of listing. The aforesaid restriction on sales has been released since January 16, 2017. | |||||||||
Explanation on associated relationship or consistent action of the above shareholders | Of the top 10 shareholders, both Chongqing International Trust Co., Ltd. - Rongxintong Serial Order - No. 10 Trust and Chongqing International Trust Co., Ltd. - YUXIN No. 2 Trust are subsidiaries of Chongqing International Trust Co., Ltd. Both of them are holding totaling 17,414,723 shares in the Company, which takes 3.97% of the Company's total shares. | |||||||||
Shares held by top 10 shareholders of unrestricted shares | ||||||||||
Names of the Shareholders | Quantity of unrestricted shares held at the end of the reporting period | Share type | ||||||||
Share type | Quantity | |||||||||
AVIC International Holding Limited | 162,977,327 | CNY ordinary shares | 162,977,327 | |||||||
#Yang Zugui | 9,763,469 | CNY ordinary shares | 9,763,469 | |||||||
National Social Security Fund 114 Portfolio | 9,417,998 | CNY ordinary shares | 9,417,998 | |||||||
Chongqing International Trust Co., Ltd. - RONGXINTONG Series Unitrust No.10 | 9,088,723 | CNY ordinary shares | 9,088,723 | |||||||
Chongqing International Trust Co., Ltd. - YUXIN Trust No.2 | 8,326,000 | CNY ordinary shares | 8,326,000 | |||||||
Chongqing International Trust Co., Ltd. - YUXIN No. 2 Trust | 6,996,595 | CNY ordinary shares | 6,996,595 | |||||||
Industrial and Commercial Bank of China Co., Ltd. - FUGUO Recreation & Sports and Health Stock Type Securities Investment Fund | 5,537,337 | CNY ordinary shares | 5,537,337 | |||||||
Xizang Investment Co., Ltd. | 4,976,551 | CNY ordinary shares | 4,976,551 | |||||||
MANULIFE TEDA Fund- Minsheng Bank- | 4,893,559 | CNY ordinary shares | 4,893,559 |
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MANULIFE TEDA Value Growth Oriented Additional Issue No. 351 Assets Management Program | |||
Shenzhen Heli Fengyuan Commerce & Trade Co., Ltd. | 3,300,000 | CNY ordinary shares | 3,300,000 |
Note to the associated relationship or consistent action among the top 10 shareholders of non-restricted common shares and that between the top 10 shareholders of non-restricted common shares and top 10 common shareholders. | Of the top 10 shareholders, both Chongqing International Trust Co., Ltd. - Rongxintong Serial Order - No. 10 Trust and Chongqing International Trust Co., Ltd. - YUXIN No. 2 Trust are subsidiaries of Chongqing International Trust Co., Ltd. Both of them are holding totaling 17,414,723 shares in the Company, which takes 3.97% of the Company's total shares. | ||
Note to the top 10 common shareholders involved in margin financing & securities lending (if any) (Refer to Note 4) | Inapplicable |
Did the top ten common shareholders or top ten shareholders of unrestricted common shares conduct contractualrepurchase during the reporting period?No
IV. Change of the Controlling Shareholder or Actual ControllerInapplicable
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Section 7 About the Preferred Shares
Inapplicable
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Section 8 Directors, Supervisors, Senior Executives and Employees
I. Change in Shares Held by Directors, Supervisors and Senior ExecutivesNo change has taken place in the shares held by directors, supervisors and senior executives of the Company during the
reporting period. For the detail, refer to 2017 Annual Report.II. Personnel Change in Directors, Supervisors and Senior ExecutivesNo change has taken place in directors, supervisors and senior executives of the Company during the reporting period.
For the detail, refer to 2017 Annual Report.
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Section 9 Company Bonds
Did there exist any company bonds publically issued and listed with any stock exchange for trading while still undue at thetime of issuing the Semi-annual report or not yet fully honored although already due at the end of the reporting periodNo
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Section 10 Financial Report
I. Auditors’ Report
The Semi-Annual Report has not been audited.II. Financial StatementsThe currency applied in the financial notes and statements is Renminbi (CNY)1. Consolidated Balance SheetPrepared by FIYTA Holdings Ltd.
June 30, 2018
In CNY
Items | Ending balance | Ending balance |
Current assets: | ||
Monetary fund | 281,009,271.58 | 187,152,891.32 |
Settlement reserve | ||
Inter-bank lending | ||
Financial assets which is measured based on the fair value and whose movement is counted to the current gain/loss | ||
Derivative financial assets | ||
Notes receivable | 4,632,089.34 | 9,693,883.68 |
Accounts receivable | 378,420,568.27 | 326,254,624.94 |
Advance payment | 24,690,349.29 | 24,663,314.53 |
Receivable premium | ||
Reinsurance accounts receivable | ||
Reserve for reinsurance contract receivable | ||
Interest receivable | ||
Dividends receivable | ||
Other receivables | 47,707,666.00 | 34,990,539.09 |
Redemptory monetary capital for sale | ||
Inventories | 1,735,371,328.09 | 1,820,526,676.26 |
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Held-for-sale assets | ||
Non-current assets due within a year | ||
Other current assets | 23,779,637.36 | 24,616,815.21 |
Total current assets | 2,495,610,909.93 | 2,427,898,745.03 |
Non-current assets: | ||
Provision of loans and advance in cash | ||
Available-for-sale financial assets | 85,000.00 | 85,000.00 |
Held-to-due investments | ||
Long term accounts receivable | ||
Long-term equity investment | 43,972,531.47 | 43,879,518.09 |
Investment real estate | 348,258,775.18 | 305,493,987.77 |
Fixed assets | 463,913,136.18 | 523,699,592.65 |
Construction-in-process | 12,515,382.25 | 10,947,300.53 |
Engineering supplies | ||
Clearing of fixed assets | ||
Productive biological asset | ||
Oil and gas assets | ||
Intangible assets | 44,446,605.63 | 44,223,280.21 |
Development expenses | ||
Goodwill | ||
Long-term expenses to be apportioned | 109,190,273.11 | 109,409,785.49 |
Deferred income tax asset | 106,468,887.10 | 105,905,944.80 |
Other non-current assets | 4,863,862.29 | 8,246,538.33 |
Total non-current assets | 1,133,714,453.21 | 1,151,890,947.87 |
Total assets | 3,629,325,363.14 | 3,579,789,692.90 |
Current liabilities: | ||
Short term borrowings | 479,917,100.00 | 525,990,510.00 |
Borrowings from central bank | ||
Deposits taking and interbank placement | ||
Loans from other banks | ||
Financial liabilities measured based on the fair value and whose change was charged to the current gain and loss. | ||
Derivative financial liabilities | ||
Notes payable |
t
Accounts payable | 266,982,797.21 | 263,256,495.65 |
Advance receipts | 18,605,653.79 | 15,141,587.79 |
Funds from selling out and repurchasing financial assets | ||
Service charge and commission payable | ||
Salaries payable to the employees | 40,464,315.83 | 71,564,367.14 |
Taxes payable | 56,008,726.34 | 55,857,236.59 |
Interest payable | 686,654.15 | 1,464,729.11 |
Dividends payable | ||
Other payables | 84,655,036.89 | 57,767,536.64 |
Payable reinsurance | ||
Reserve for insurance contract | ||
Acting trading securities | ||
Income from securities underwriting on commission | ||
Held-for-sale liabilities | ||
Non-current liabilities due within a year | 35,000,000.00 | 35,000,000.00 |
Other current liabilities | ||
Total current liabilities | 982,320,284.21 | 1,026,042,462.92 |
Non-current liabilities: | ||
Long term borrowings | 62,153,235.50 | 79,870,353.00 |
Bonds payable | ||
Including: preferred shares | ||
Perpetual bond | ||
Long-term accounts payable | ||
Long term accrued payroll | ||
Special accounts payable | ||
Predicted liabilities | ||
Deferred income | 5,904,000.00 | 5,904,000.00 |
Deferred income tax liability | ||
Other non-current liabilities | ||
Total non-current liabilities | 68,057,235.50 | 85,774,353.00 |
Total liabilities | 1,050,377,519.71 | 1,111,816,815.92 |
Owner’s equity: | ||
Capital Stock | 438,744,881.00 | 438,744,881.00 |
t
Other equity instruments | ||
Including: preferred shares | ||
Perpetual bond | ||
Capital Reserve | 1,062,455,644.22 | 1,062,455,644.22 |
Less: shares in stock | ||
Other comprehensive income | -12,916,362.14 | -11,523,442.39 |
Special reserve | ||
Surplus Reserve | 206,805,713.35 | 206,805,713.35 |
Reserve against general risks | ||
Retained earnings | 883,852,486.46 | 771,484,565.02 |
Total owners’ equity attributable to the parent company | 2,578,942,362.89 | 2,467,967,361.20 |
Minority shareholders’ equity | 5,480.54 | 5,515.78 |
Total owner’s equity | 2,578,947,843.43 | 2,467,972,876.98 |
Total liabilities and owners’ equity | 3,629,325,363.14 | 3,579,789,692.90 |
Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge of theAccounting Department: Tian Hui
2. Balance Sheet, Parent CompanyPrepared by FIYTA Holdings Ltd.
June 30, 2018
In CNY
Items | Ending balance | Ending balance |
Current assets: | ||
Monetary fund | 253,398,514.18 | 131,163,944.43 |
Financial assets which is measured based on the fair value and whose movement is counted to the current gain/loss | ||
Derivative financial assets | ||
Notes receivable | ||
Accounts receivable | 7,386,159.04 | 6,832,006.11 |
Advance payment | ||
Interest receivable | ||
Dividends receivable | ||
Other receivables | 698,286,652.54 | 831,952,437.86 |
t
Inventories | ||
Held-for-sale assets | ||
Non-current assets due within a year | ||
Other current assets | 10,533,391.51 | 9,089,170.12 |
Total current assets | 969,604,717.27 | 979,037,558.52 |
Non-current assets: | ||
Available-for-sale financial assets | 85,000.00 | 85,000.00 |
Held-to-due investments | ||
Long term accounts receivable | ||
Long-term equity investment | 1,375,221,122.40 | 1,375,128,109.02 |
Investment real estate | 265,238,770.42 | 270,241,724.52 |
Fixed assets | 334,026,583.81 | 340,765,873.45 |
Construction-in-process | 12,515,382.25 | 10,947,300.53 |
Engineering supplies | ||
Clearing of fixed assets | ||
Productive biological asset | ||
Oil and gas assets | ||
Intangible assets | 36,303,042.25 | 36,932,963.95 |
Development expenses | ||
Goodwill | ||
Long-term expenses to be apportioned | 4,789,075.14 | 4,418,287.94 |
Deferred income tax asset | 1,499,126.32 | 1,499,126.32 |
Other non-current assets | 1,322,816.84 | 2,687,910.84 |
Total non-current assets | 2,031,000,919.43 | 2,042,706,296.57 |
Total assets | 3,000,605,636.70 | 3,021,743,855.09 |
Current liabilities: | ||
Short term borrowings | 455,000,000.00 | 470,000,000.00 |
Financial liabilities measured based on the fair value and whose change was charged to the current gain and loss. | ||
Derivative financial liabilities | ||
Notes payable | ||
Accounts payable | 57,686,340.48 | 60,520,874.66 |
Advance receipts | 3,401,495.93 | 4,212,930.07 |
Salaries payable to the employees | 4,580,915.75 | 9,291,422.00 |
t
Taxes payable | 2,626,857.04 | 1,038,481.26 |
Interest payable | 663,902.90 | 929,155.39 |
Dividends payable | ||
Other payables | 38,509,235.57 | 20,666,945.05 |
Held-for-sale liabilities | ||
Non-current liabilities due within a year | 35,000,000.00 | 35,000,000.00 |
Other current liabilities | ||
Total current liabilities | 597,468,747.67 | 601,659,808.43 |
Non-current liabilities: | ||
Long term borrowings | 57,361,928.00 | 74,861,928.00 |
Bonds payable | ||
Including: preferred shares | ||
Perpetual bond | ||
Long-term accounts payable | ||
Long term accrued payroll | ||
Special accounts payable | ||
Predicted liabilities | ||
Deferred income | 5,904,000.00 | 5,904,000.00 |
Deferred income tax liability | ||
Other non-current liabilities | ||
Total non-current liabilities | 63,265,928.00 | 80,765,928.00 |
Total liabilities | 660,734,675.67 | 682,425,736.43 |
Owner’s equity: | ||
Capital Stock | 438,744,881.00 | 438,744,881.00 |
Other equity instruments | ||
Including: preferred shares | ||
Perpetual bond | ||
Capital Reserve | 1,068,111,185.32 | 1,068,111,185.32 |
Less: shares in stock | ||
Other comprehensive income | ||
Special reserve | ||
Surplus Reserve | 206,805,713.35 | 206,805,713.35 |
Retained earnings | 626,209,181.36 | 625,656,338.99 |
Total owner’s equity | 2,339,870,961.03 | 2,339,318,118.66 |
t
Total liabilities and owners’ equity | 3,000,605,636.70 | 3,021,743,855.09 |
Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge of theAccounting Department: Tian Hui
3.Consolidated Profit StatementPrepared by FIYTA Holdings Ltd.
June 30, 2018
In CNY
Items | Amount incurred in the reporting period | Amount incurred in the previous period |
I. Turnover | 1,695,891,432.72 | 1,599,541,144.35 |
Including: operating income | 1,695,891,432.72 | 1,599,541,144.35 |
Interest income | ||
Earned insurance premium | ||
Service charge and commission income | ||
II. Total operating costs | 1,556,492,673.56 | 1,488,102,213.22 |
Including: Operating costs | 976,325,736.35 | 941,479,684.84 |
Interest payment | ||
Service charge and commission payment | ||
Surrender Value | ||
Compensation expenses, net | ||
Provision of reserve for insurance contract, net | ||
Payment of policy dividend | ||
Reinsurance expenses | ||
Taxes and surcharges | 17,790,786.43 | 15,181,497.28 |
Sales costs | 422,113,041.69 | 394,286,321.79 |
. Administrative expenses | 125,528,317.71 | 98,170,386.95 |
Financial expenses | 18,147,791.49 | 26,200,633.06 |
Loss from impairment of assets | -3,413,000.11 | 12,783,689.30 |
Add: Income from change of fair value (loss is stated with “-“) | ||
Investment income (loss is stated with “-“) | 93,013.38 | 188,871.89 |
Including: return on investment in associate and joint venture | 93,013.38 | 188,871.89 |
Exchange income (loss stated with “-“) |
t
Income from disposal of assets (loss is stated with “-“) | -54,407.16 | -13,352.95 |
Other income | 6,497,018.80 | 1,478,043.00 |
III. Operating Profit (loss is stated with “-“) | 145,934,384.18 | 113,092,493.07 |
Plus: Non-operating income | 363,859.51 | 145,866.91 |
Less: Non-operating expenses | 466,522.53 | 661,190.44 |
IV. Total profit (total loss is stated with “-”) | 145,831,721.16 | 112,577,169.54 |
Less: Income tax expense | 33,463,799.72 | 25,965,385.00 |
V. Net Profit (net loss is stated with “-“) | 112,367,921.44 | 86,611,784.54 |
(I) Net Profit from sustainable operation (net loss is stated with “-“) | 112,367,921.44 | 86,611,784.54 |
(II) Net profit from termination of business operation (net loss is stated with “-“) | ||
Net profit attributable to the parent company’s owner | 112,367,921.44 | 86,708,824.76 |
Minority shareholders’ gain/loss | -97,040.22 | |
VI. Net of other comprehensive income after tax | -1,392,954.99 | 7,086,490.52 |
Net of other comprehensive income after tax attributable to the parent company’s owner | -1,392,919.75 | 7,168,544.58 |
(I) Other comprehensive income which cannot be re-classified into the gain and loss | ||
1. Movement of the net liabilities and net assets re-measured for setting the beneficial plan | ||
2. Share enjoyable in the other comprehensive income in which the investee cannot be re-classified into the gain and loss under the equity method | ||
(II) Other comprehensive income which cannot be re-classified into the gain and loss in future | -1,392,919.75 | 7,168,544.58 |
1. Share enjoyable in the other comprehensive income in which the investee cannot be re-classified into the gain and loss under the equity method in future | ||
2. Gain/loss from change in the fair value of the financial assets available for sale | ||
3. Gain/loss from which the held-to-maturity investment is re-classified as available-for-sale financial assets |
t
4. Valid part of the gain/loss from cash flow hedge | ||
5. Conversion difference in foreign currency statements | -1,392,919.75 | 7,168,544.58 |
6. Others | ||
Net amount of other comprehensive income after tax attributable to minority shareholders | -35.24 | -82,054.06 |
VII. Total comprehensive income | 110,974,966.45 | 93,698,275.06 |
Total comprehensive income attributable to the parent company’s owner | 110,975,001.69 | 93,877,369.34 |
Total comprehensive income attributable to minority shareholders | -35.24 | -179,094.28 |
VIII. Earnings per share: | ||
(I) Basic earnings per share | 0.2561 | 0.1976 |
(II) Diluted earnings per share | 0.2561 | 0.1976 |
Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge of theAccounting Department: Tian Hui
4.Statement of Profit, Parent CompanyPrepared by FIYTA Holdings Ltd.
June 30, 2018
In CNY
Items | Amount incurred in the reporting period | Amount incurred in the previous period |
I. Revenue | 56,119,634.18 | 51,354,423.93 |
Less: Operating cost | 9,578,544.70 | 8,618,881.55 |
Taxes and surcharges | 2,206,362.07 | 1,857,724.22 |
Sales costs | 5,024,222.36 | |
. Administrative expenses | 41,637,155.81 | 33,744,643.77 |
Financial expenses | 3,554,000.36 | 5,846,311.05 |
Loss from impairment of assets | ||
Add: Income from change of fair value (loss is stated with “-“) | ||
Investment income (loss is stated with “-“) | 93,013.38 | 188,871.89 |
Including: return on investment in associate and joint venture | 93,013.38 | 188,871.89 |
Income from disposal of assets (loss is | -13,917.68 |
t
stated with “-“) | ||
Other income | 1,598,000.00 | 754,000.00 |
II. Operating Profit (loss is stated with “-“) | 820,666.94 | -2,794,487.13 |
Plus: Non-operating income | 9,480.00 | 35,879.89 |
Less: Non-operating expenses | 446,782.07 | 20,000.00 |
III. Total profit (total loss is stated with “-“) | 383,364.87 | -2,778,607.24 |
Less: Income tax expense | -169,477.50 | -1,787,850.83 |
IV. Net Profit (net loss is stated with “-“) | 552,842.37 | -990,756.41 |
(I) Net Profit from sustainable operation (net loss is stated with “-“) | 552,842.37 | -990,756.41 |
(II) Net profit from termination of business operation (net loss is stated with “-“) | ||
V. Net of other comprehensive income after tax | ||
(I) Other comprehensive income which cannot be re-classified into the gain and loss | ||
1. Movement of the net liabilities and net assets re-measured for setting the beneficial plan | ||
2. Share enjoyable in the other comprehensive income in which the investee cannot be re-classified into the gain and loss under the equity method | ||
(II) Other comprehensive income which cannot be re-classified into the gain and loss in future | ||
1. Share enjoyable in the other comprehensive income in which the investee cannot be re-classified into the gain and loss under the equity method in future | ||
2. Gain/loss from change in the fair value of the financial assets available for sale | ||
3. Gain/loss from which the held-to-maturity investment is re-classified as available-for-sale financial assets | ||
4. Valid part of the gain/loss from cash flow hedge | ||
5. Conversion difference in foreign currency statements | ||
6. Others | ||
VI. Total comprehensive income | 552,842.37 | -990,756.41 |
t
VII. Earnings per share: | ||
(I) Basic earnings per share | 0.0013 | -0.0023 |
(II) Diluted earnings per share | 0.0013 | -0.0023 |
Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge of theAccounting Department: Tian Hui
5. Consolidated Cash Flow StatementPrepared by FIYTA Holdings Ltd.
June 30, 2018
In CNY
Items | Amount incurred in the reporting period | Amount incurred in the previous period |
I. Net cash flows arising from operating activities: | ||
Cash received from sales of goods and supply of labor service | 1,905,278,291.59 | 1,812,867,961.66 |
Net increase of customers’ deposit and due from banks | ||
Net increase of borrowings from the central bank | ||
Net increase of borrowings from other financial institutions | ||
Cash received from the premium of the original insurance contract | ||
Net cash received from the reinsurance business | ||
Net increase of the reserve from policy holders and investment | ||
Net increase from disposal of financial assets which is measured based on the fair value and whose movement is counted to the current gain/loss | ||
Cash received from interest, service charge and commission | ||
Net increase of loan from other banks | ||
Net increase of fund from repurchase business | ||
Rebated taxes received | 185,691.63 | 84,719.44 |
Other operation activity related cash receipts | 25,022,648.38 | 19,800,294.79 |
Subtotal of cash flow in from operating activity | 1,930,486,631.60 | 1,832,752,975.89 |
t
Cash paid for purchase of goods and reception of labor services | 1,010,882,821.40 | 980,063,342.31 |
Net increase of loans and advances to customers | ||
Net increase of due from central bank and due from banks | ||
Cash from payment for settlement of the original insurance contract | ||
Cash paid for interest, service charge and commission | ||
Cash for payment of policy dividend | ||
Cash paid to and for staff | 308,576,830.37 | 263,216,670.99 |
Taxes paid | 169,009,260.06 | 130,097,049.65 |
Other business activity related cash payments | 217,345,445.68 | 182,660,252.41 |
Subtotal of cash flow out from operating activity | 1,705,814,357.51 | 1,556,037,315.36 |
Net cash flows arising from operating activities | 224,672,274.09 | 276,715,660.53 |
II. Cash flows arising from investment activities: | ||
Cash received from recovery of investment | ||
Cash received from investment income | ||
Net cash from disposal of fixed assets and intangible asset and recovery of other long term assets | 6,872.90 | 24,249.89 |
Net cash received from disposal of subsidiaries and other operating units | ||
Other investment related cash receipts | ||
Subtotal of cash flow in from investment activity | 6,872.90 | 24,249.89 |
Cash paid for purchase/construction of fixed assets, Intangible assets and other long term assets | 52,519,739.81 | 56,447,301.65 |
Cash paid for investment | ||
Net increase of the pledged loan | ||
Net cash paid for acquisition of subsidiaries and other operation units | ||
Other investment related cash payments | ||
Subtotal of cash flow out from investment activity | 52,519,739.81 | 56,447,301.65 |
Net cash flow arising from investment activities | -52,512,866.91 | -56,423,051.76 |
III. Cash flows arising from fund raising activities: |
t
Cash received from absorbing investment | ||
Incl.: Cash received from the subsidiaries’ absorption of minority shareholders’ investment | ||
Cash received from loans | 384,997,200.00 | 173,846,200.00 |
Cash received from bond issuing | ||
Other fund-raising related cash receipts | ||
Subtotal of cash flow in from fund raising activity | 384,997,200.00 | 173,846,200.00 |
Cash paid for debt repayment | 448,409,609.38 | 371,965,603.86 |
Cash paid for dividend/profit distribution or repayment of interest | 15,009,057.38 | 66,091,946.92 |
Including: Dividend and profit paid by the subsidiaries to minority shareholders | ||
Cash paid for other financing activities | ||
Sub-total cash flow paid for financing activities | 463,418,666.76 | 438,057,550.78 |
Net cash flow arising from financing activities | -78,421,466.76 | -264,211,350.78 |
IV. Change of exchange rate influencing the cash and cash equivalent | 118,439.84 | 339,990.07 |
V. Net increase of cash and cash equivalents | 93,856,380.26 | -43,578,751.94 |
Plus: Opening balance of cash and cash equivalents | 184,947,891.32 | 427,227,755.81 |
VI. Ending balance of cash and cash equivalents | 278,804,271.58 | 383,649,003.87 |
Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge of theAccounting Department: Tian Hui
6.Cash Flow Statement, Parent CompanyPrepared by FIYTA Holdings Ltd.
June 30, 2018
In CNY
Items | Amount incurred in the reporting period | Amount incurred in the previous period |
I. Net cash flows arising from operating activities | ||
Cash received from sales of goods and supply of labor service | 56,758,456.16 | 50,374,752.27 |
Rebated taxes received | ||
Other operation activity related cash receipts | 1,204,947,705.78 | 264,986,637.47 |
Subtotal of cash flow in from operating activity | 1,261,706,161.94 | 315,361,389.74 |
t
Cash paid for purchase of goods and reception of labor services | ||
Cash paid to and for staff | 33,422,054.30 | 31,949,428.47 |
Taxes paid | 4,702,936.63 | 4,894,598.25 |
Other business activity related cash payments | 1,045,289,650.60 | 13,685,482.18 |
Subtotal of cash flow out from operating activity | 1,083,414,641.53 | 50,529,508.90 |
Net cash flows arising from operating activities | 178,291,520.41 | 264,831,880.84 |
II. Cash flows arising from investment activities: | ||
Cash received from recovery of investment | ||
Cash received from investment income | ||
Net cash from disposal of fixed assets and intangible asset and recovery of other long term assets | ||
Net cash received from disposal of subsidiaries and other operating units | ||
Other investment related cash receipts | ||
Subtotal of cash flow in from investment activity | ||
Cash paid for purchase/construction of fixed assets, Intangible assets and other long term assets | 9,442,405.28 | 26,633,834.50 |
Cash paid for investment | ||
Net cash paid for acquisition of subsidiaries and other operation units | ||
Other investment related cash payments | ||
Subtotal of cash flow out from investment activity | 9,442,405.28 | 26,633,834.50 |
Net cash flow arising from investment activities | -9,442,405.28 | -26,633,834.50 |
III. Cash flows arising from fund raising activities: | ||
Cash received from absorbing investment | ||
Cash received from loans | 360,000,000.00 | 165,000,000.00 |
Cash received from bond issuing | ||
Other fund-raising related cash receipts | ||
Subtotal of cash flow in from fund raising activity | 360,000,000.00 | 165,000,000.00 |
Cash paid for debt repayment | 392,500,000.00 | 354,000,000.00 |
Cash paid for dividend/profit distribution or repayment of interest | 14,108,861.83 | 62,917,164.79 |
Cash paid for other financing activities | ||
Sub-total cash flow paid for financing activities | 406,608,861.83 | 416,917,164.79 |
t
Net cash flow arising from financing activities | -46,608,861.83 | -251,917,164.79 |
IV. Change of exchange rate influencing the cash and cash equivalent | -5,683.55 | -26,249.80 |
V. Net increase of cash and cash equivalents | 122,234,569.75 | -13,745,368.25 |
Plus: Opening balance of cash and cash equivalents | 128,958,944.43 | 269,372,926.47 |
VI. Ending balance of cash and cash equivalents | 251,193,514.18 | 255,627,558.22 |
Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge of theAccounting Department: Tian Hui
7.Consolidated Statement of Changes in Owner’s Equity
Prepared by FIYTA Holdings Ltd.
June 30, 2018Amount in the reporting period
In CNY
Items | Reporting period | ||||||||||||
Owners’ equity attributable to the parent company | Minority shareholders’ equity | Total owner’s equity | |||||||||||
Capital Stock | Other equity instruments | Capital Reserve | Less: shares in stock | Other comprehensive income | Special reserve | Surplus Reserve | Reserve against general risks | Retained earnings | |||||
Preferred shares | Perpetual bond | Others | |||||||||||
I. Ending balance of the previous year | 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: Change in accounting policy | 0.00 | ||||||||||||
Correction of previous errors | 0.00 | ||||||||||||
Consolidation of enterprises under the same control | 0.00 | ||||||||||||
Others | 0.00 | ||||||||||||
II. Opening balance of the reporting year | 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/increase of the report year (decrease is stated with “-“) | -1,392,919.75 | 112,367,921.44 | -35.24 | 110,974,966.45 | |||||||||
(I) Total comprehensive | -1,392,919 | 112,367,92 | -35.24 | 110,974,9 |
t
income | .75 | 1.44 | 66.45 | ||||||||||
(II) Owners’ input and decrease of capital | 0.00 | ||||||||||||
1.Common shares contributed by the shareholder | 0.00 | ||||||||||||
2. Capital contributed by other equity instruments holders | 0.00 | ||||||||||||
3. Amount of payment for shares credited to owners’ equity | 0.00 | ||||||||||||
4. Others | 0.00 | ||||||||||||
(III) Profit Distribution | 0.00 | ||||||||||||
1. Provision of surplus reserve | 0.00 | ||||||||||||
2. Provision of generic risk reserve | 0.00 | ||||||||||||
3. Distribution to the owners (or shareholders) | 0.00 | ||||||||||||
4. Others | 0.00 | ||||||||||||
(IV) Internal carry-over of owners’ equity | 0.00 | ||||||||||||
1. Conversion of capital reserve into capital (or capital stock) | 0.00 | ||||||||||||
2. Conversion of surplus reserve into capital (or capital stock) | 0.00 | ||||||||||||
3. Loss made up with surplus reserve | 0.00 | ||||||||||||
4. Others | 0.00 | ||||||||||||
(V) Special reserve | 0.00 | ||||||||||||
1. Provision in the reporting period | 0.00 | ||||||||||||
2.. Applied in the reporting period | 0.00 | ||||||||||||
(VI) Others | 0.00 |
t
IV. Ending balance of the reporting period | 438,744,881.00 | 1,062,455,644.22 | -12,916,362.14 | 206,805,713.35 | 883,852,486.46 | 5,480.54 | 2,578,947,843.43 |
Amount of the previous year
In CNY
Items | Previous period | ||||||||||||
Owners’ equity attributable to the parent company | Minority shareholders’ equity | Total owner’s equity | |||||||||||
Capital Stock | Other equity instruments | Capital Reserve | Less: shares in stock | Other comprehensive income | Special reserve | Surplus Reserve | Reserve against general risks | Retained earnings | |||||
Preferred shares | Perpetual bond | Others | |||||||||||
I. Ending balance of the previous year | 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: Change in accounting policy | |||||||||||||
Correction of previous errors | |||||||||||||
Consolidation of enterprises under the same control | |||||||||||||
Others | |||||||||||||
II. Opening balance of the reporting year | 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/increase of the report year (decrease is stated with “-“) | 255,055.85 | 12,844,012.90 | 83,497,757.28 | -3,572,138.78 | 93,024,687.25 | ||||||||
(I) Total comprehensive income | 255,055.85 | 140,216,258.28 | 2,116,368.91 | 142,587,683.04 | |||||||||
(II) Owners’ input and decrease of capital | -5,688,507.69 | -5,688,507.69 | |||||||||||
1.Common shares contributed by the shareholder | |||||||||||||
2. Capital contributed by other equity instruments holders | |||||||||||||
3. Amount of payment for shares credited to owners’ equity |
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4. Others | -5,688,507.69 | -5,688,507.69 | |||||||||||
(III) Profit Distribution | 12,844,012.90 | -56,718,501.00 | -43,874,488.10 | ||||||||||
1. Provision of surplus reserve | 12,844,012.90 | -12,844,012.90 | |||||||||||
2. Provision of generic risk reserve | |||||||||||||
3. Distribution to the owners (or shareholders) | -43,874,488.10 | -43,874,488.10 | |||||||||||
4. Others | |||||||||||||
(IV) Internal carry-over of owners’ equity | |||||||||||||
1. Conversion of capital reserve into capital (or capital stock) | |||||||||||||
2. Conversion of surplus reserve into capital (or capital stock) | |||||||||||||
3. Loss made up with surplus reserve | |||||||||||||
4. Others | |||||||||||||
(V) Special reserve | |||||||||||||
1. Provision in the reporting period | |||||||||||||
2. Applied in the reporting period | |||||||||||||
(VI) Others | |||||||||||||
IV. Ending balance of the reporting period | 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 |
Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge of theAccounting Department: Tian Hui
8. Statement of Changes in Owner’s Equity, Parent Company
Prepared by FIYTA Holdings Ltd.
June 30, 2018Amount in the reporting period
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In CNY
Items | Reporting period | ||||||||||
Capital Stock | Other equity instruments | Capital Reserve | Less: shares in stock | Other comprehensive income | Special reserve | Surplus Reserve | Retained earnings | Total owner’s equity | |||
Preferred shares | Perpetual bond | Others | |||||||||
I. Ending balance of the previous year | 438,744,881.00 | 1,068,111,185.32 | 206,805,713.35 | 625,656,338.99 | 2,339,318,118.66 | ||||||
Plus: Change in accounting policy | |||||||||||
Correction of previous errors | |||||||||||
Others | |||||||||||
II. Opening balance of the reporting year | 438,744,881.00 | 1,068,111,185.32 | 206,805,713.35 | 625,656,338.99 | 2,339,318,118.66 | ||||||
III. Decrease/increase of the report year (decrease is stated with “-“) | 552,842.37 | 552,842.37 | |||||||||
(I) Total comprehensive income | 552,842.37 | 552,842.37 | |||||||||
(II) Owners’ input and decrease of capital | |||||||||||
1.Common shares contributed by the shareholder | |||||||||||
2. Capital contributed by other equity instruments holders | |||||||||||
3. Amount of payment for shares credited to owners’ equity | |||||||||||
4. Others | |||||||||||
(III) Profit Distribution | |||||||||||
1. Provision of surplus reserve | |||||||||||
2. Distribution to the owners (or shareholders) | |||||||||||
3. Others | |||||||||||
(IV) Internal carry-over of |
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owners’ equity | |||||||||||
1. Conversion of capital reserve into capital (or capital stock) | |||||||||||
2. Conversion of surplus reserve into capital (or capital stock) | |||||||||||
3. Loss made up with surplus reserve | |||||||||||
4. Others | |||||||||||
(V) Special reserve | |||||||||||
1. Provision in the reporting period | |||||||||||
2. Applied in the reporting period | |||||||||||
(VI) Others | |||||||||||
IV. Ending balance of the reporting period | 438,744,881.00 | 1,068,111,185.32 | 206,805,713.35 | 626,209,181.36 | 2,339,870,961.03 |
Amount of the previous year
In CNY
Items | Previous period | ||||||||||
Capital Stock | Other equity instruments | Capital Reserve | Less: shares in stock | Other comprehensive income | Special reserve | Surplus Reserve | Retained earnings | Total owner’s equity | |||
Preferred shares | Perpetual bond | Others | |||||||||
I. Ending balance of the previous year | 438,744,881.00 | 1,068,111,185.32 | 193,961,700.45 | 553,934,710.97 | 2,254,752,477.74 | ||||||
Plus: Change in accounting policy | |||||||||||
Correction of previous errors | |||||||||||
Others | |||||||||||
II. Opening balance of the reporting year | 438,744,881.00 | 1,068,111,185.32 | 193,961,700.45 | 553,934,710.97 | 2,254,752,477.74 | ||||||
III. Decrease/increase of the report year (decrease is stated with “-“) | 12,844,012.90 | 71,721,628.02 | 84,565,640.92 | ||||||||
(I) Total comprehensive | 128,440,12 | 128,440,129. |
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income | 9.02 | 02 | |||||||||
(II) Owners’ input and decrease of capital | |||||||||||
1. Common shares contributed by the shareholder | |||||||||||
2. Capital contributed by other equity instruments holders | |||||||||||
3. Amount of payment for shares credited to owners’ equity | |||||||||||
4. Others | |||||||||||
(III) Profit Distribution | 12,844,012.90 | -56,718,501.00 | -43,874,488.10 | ||||||||
1. Provision of surplus reserve | 12,844,012.90 | -12,844,012.90 | |||||||||
2. Distribution to the owners (or shareholders) | -43,874,488.10 | -43,874,488.10 | |||||||||
3. Others | |||||||||||
(IV) Internal carry-over of owners’ equity | |||||||||||
1. Conversion of capital reserve into capital (or capital stock) | |||||||||||
2. Conversion of surplus reserve into capital (or capital stock) | |||||||||||
3. Loss made up with surplus reserve | |||||||||||
4. Others | |||||||||||
(V) Special reserve | |||||||||||
1. Provision in the reporting period | |||||||||||
2. Applied in the reporting period | |||||||||||
(VI) Others | |||||||||||
IV. Ending balance of the reporting period | 438,744,881.00 | 1,068,111,185.32 | 206,805,713.35 | 625,656,338.99 | 2,339,318,118.66 |
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Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge of theAccounting Department: Tian Hui
III. Company Profile
Fiyta Holdings Ltd. (hereinafter referred to as the Company) was reorganized, incorporated and renamed from Shenzhen
Fiyta Timer Industry Company on December 25 1992 with approval by the General Office of Shenzhen Municipal People’s
Government with Document SHEN FU BAN FU [1992] No. 1259 and with China National Aero-Technology Import &Export Corporation Shenzhen Industry & Trade Center (which was renamed as AVIC International Shenzhen CompanyLimited as the sponsor. The Company's head office is located at the 20th Floor, FIYTA Technology Building, Gaoxin S.Road One, Nanshan District, Shenzhen, Guangdong Province.
On March 10, 1993, the Company, with approval by the People’s Bank of China Shenzhen Special Economic Zone
Branch [SHEN REN YIN FU ZI (1993) No. 070], issued publically domestic CNY based common shares (A-shares) andCNY based special shares (B-shares). In accordance with the Approval Document of Shenzhen Municipal SecuritiesRegulatory Office SHEN ZHENG BAN FU [1993] No. 20 and the Approval Document of Shenzhen Stock Exchange SHEN
ZHENG SHI ZI (1993) No. 16, the Company’s A-shares and B-shares were all listed with Shenzhen Stock Exchange for
trading commencing from June 3, 1993.
On January 30, 1997, with approval by Shenzhen Municipal Administration for Industry and Commerce, the Company wasrenamed as Shenzhen Fiyta Holdings Ltd.
On July 4, 1997, according to the equity assignment agreement between China National Aero-Technology CorporationShenzhen (CATIC Shenzhen Corporation) and CATIC Shenzhen Holdings Limited ( with original name of ShenzhenCATIC Group Co., Ltd. (hereinafter referred to as CATIC Shenzhen), CATIC Shenzhen Corporation assigned 72.36 million
corporate shares (taking 52.24% of the Company’s total shares) to CATIC Shenzhen. From then on, the Company’s
controlling shareholder turned to be CATIC Shenzhen from CATIC Shenzhen Corporation.
On October 26, 2007, the Company implemented the equity separation reform, according to which the shareholder of the
Company’s non-negotiable shares would pay shares to the whole shareholders of negotiable shares registered on the
equity record day as designated in the equity separation reform plan at the rate of 3.1 shares for every 10 shares held by
them while the Company’s total 249,317,999 shares remained unchanged. So far, after the equity separation reform, theproportion of the Company’s shares held by CATIC Shenzhen reduced from 52.24% to 44.69%.
On February 29, 2008, due to expansion of the Company’s business scope and with approval by Shenzhen MunicipalAdministration for Industry and Commerce, the Company’s enterprise corporate business licence number was changed
from 4403011001583 into 440301103196089.
In 2010, approved by China Securities Regulatory Commission (CSRC) with the Official Reply on Approval of Non-publicIssuing of Shenzhen Fiyta Holdings Ltd., ZHENG JIAN XU KE [2010] No. 1703 and the Official Reply on the Issue ofNon-Public Issuing of Shenzhen Fiyta Holdings Ltd. by State-owned Assets Supervision and Administration Commissionof the State Council [2010] No. 430, the Company was approved to non-publically issue no more than 50 million common
shares (A-shares). After completion of non-public issuing on December 9, 2010, the Company’s registered capital
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increased to CNY 280,548,479.00 and AVIC Shenzhen holds 41.49% of the Company’s equity based capital.
On March 03, 2011, with approval by Shenzhen Municipal Administration for Industry and Commerce, the Company wasrenamed as Fiyta Holdings Ltd. On April 8, 2011, the Company took the total share capital of 280,548,479 shares as atDecember 31, 2010 as the base, converted its capital reserve into share capital at the rate of 4 shares for every 10 shares.
After the conversion, the Company’s total share capital became 392,767,870 shares.
On November 11, 2015, approved by China Securities Regulatory Commission (CSRC) with the Official Reply onApproval of Non-public Issuing of Fiyta Holdings Ltd., ZHENG JIAN XU KE [2015] No. 2588 and the Official Reply on theIssue of Non-Public Issuing of Fiyta Holdings Ltd. by State-owned Assets Supervision and Administration Commission ofthe State Council [2015] No. 415, the Company was approved to non-publically issue no more than 46,911,649 common
shares (A-shares). After completion of non-public issuing on December 22, 2015, the Company’s registered capitalincreased to CNY 438,744,881.00 and CATIC Shenzhen holds 37.15% of the Company’s equity based capital.
Ended June 30, 2018, the Company accumulatively issued altogether 438,744,881 shares. For the detail, refer to Note VII.
53 “Share Capital”.
The principal business activities of the Company and its subsidiaries (collectively the Group) are: production and sales ofvarious pointer type quartz watches and units, spares and parts, various timing apparatus, processing and wholesale of Kgold watches and ornament watches (for production site, separate application should be submitted); domestic trade,materials supply and sales (excluding the commodities for exclusive operation, exclusive control and monopoly); propertymanagement and lease. Self-run import and export, design and construction; import and export business (implementedaccording to Document SHEN MAO GUAN DENG ZHENG ZI NO. 2007-072). The Company's legal representative isHuang Yongfeng.
The Company has established the Shareholders’ General Meeting, the Board of Directors, the Supervisory Committee,
the Audit Committee, the Strategy Committee and the Nomination, Remuneration and Assessment Committee as thegovernance organs, etc. The Company has also established a number of functional departments, includingcomprehensive management department, human resource department, financial department, property department,innovation & design department, strategy and information department, office of the Board of Directors, audit department,R & D department, etc.
The financial statements was approved and issued through the resolution of the Board of Directors dated August 21,2018.
There were 9 subsidiaries consolidated during the reporting period. For the detail, refer to Note IX. "Equity in OtherEntities". The consolidation scope of the reporting year is the same as that of the previous year. For the detail, refer toNote VIII "Change of the Consolidation Scope".
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IV. Basis for preparation of the financial statements1. Preparation BasisThe financial statements are prepared with the going-concern assumption as the base and the transactions and matters
actually occurred in accordance with the Accounting Standards for Business Enterprises - Basic Standards promulgatedby the Ministry of Finance (issued by Order 33 of the Ministry of Finance and revised according to Order 76 of the Ministryof Finance), 42 specific accounting standards promulgated and revised on February 15, 2006 and afterwards, and theirapplication guidelines, interpretations and other relevant requirements (collectively, "Accounting Standards forEnterprises"). Besides, the Company discloses the relevant financial information in accordance with Compilation Rules forInformation Disclosure by Companies Offering Securities to the Public No.15-General Provisions on Financial Reports(2014 Revision)
In accordance with the Enterprise Accounting Standards, the Company follows the accrual basis of accounting. With theexception of some financial instruments, these financial statements are measured based on the historic cost basis. Ifimpaired, the assets shall provide for impairment in accordance with the relevant regulations.
2. Operation on Going Concern BasisThe financial statements of the Company have been prepared on going concern basis.V. Important accounting policies and accounting estimatesPresentation on specific accounting policies and accounting estimates:
The Company and its subsidiaries have made a few of specific accounting policies and accounting estimates aboutcognition of revenue, depreciation of fixed assets, amortization of intangible assets, R & D expenditures and othertransactions and matters in accordance with the actual operation and management characteristics and based on relevantprovisions of accounting standards for business enterprises. For the detail, refer to various descriptions stated in Note
V.28 "Revenue", Note V.16 "Fixed assets", Note V.21(1) "Intangible Assets", Note V.21(2) “R & D expenditure" for details.
1. Statement on complying with the accounting standards for business enterpriseThe financial statements prepared by the Company in accordance with the requirements of accounting standards for
business enterprises truly and fully reflect the financial status of the Company on June 30, 2018 and the business resultand cash flow and relevant information for January to June 2018. In addition, the Company's financial statements are inconformity with the disclosure requirements of Compilation Rules for Information Disclosure by Companies OfferingSecurities to the Public No. 15 - General Provisions for Financing Reporting as amended in 2014 by China SecuritiesRegulatory Commission on relevant financial statements and their notes in all important aspects.
2. Fiscal periodThe fiscal period of the Company includes the fiscal year and interim period. The interim period refers to the reporting
period less than a whole fiscal year. The fiscal year of the Company is the Gregorian year, i.e. from January first to
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December 31st.
3. Business CycleThe normal business cycle refers to the period of the Company from purchasing the assets for processing to realization of
cash or cash equivalent. The Company takes 12 months as a business cycle and uses it as the liquidity divisionstandard for assets and liabilities.
4. Recording CurrencyRenminbi is the currency for the major economic environment where the Company and its domestic subsidiaries are
managed, and the Company and its domestic subsidiaries take Renminbi as the standard currency for accounting.
Except Switzerland based Montres Chouriet SA Company (hereinafter referred to as the "Swiss Company"), an overseassubsidiary of FIYTA Hong Kong Co., Ltd. (hereinafter referred to as "FIYTA HK"), has determined Swiss franc as itsrecording currency for accounting in accordance with the currencies available in its major economic environment where itis operated. The other overseas subsidiaries, including FIYTA HK, have determined Hong Kong currency as theirrecording currency for accounting in accordance with the currencies available in their major economic environment wherethey are operated. Hong Kong currency will be converted into Renminbi while in preparing financial statements.
The Company uses Renminbi while preparing these financial statements.
5. The accounting treatment on merger of enterprises under the same control and not under the same controlMerger of enterprises refers to the transaction or matter that two or more independent enterprises are merged into a
reporting entity. The merger of enterprises includes merger under the same control and the merger not under the samecontrol.
(1) Merger of enterprises under the same controlThe enterprise participating in merger is under the final control of the same party or parties and such control is nottemporary, this is the merger of enterprises under the same control. In the merger of enterprises under the same control,the party that obtains the control right to the other enterprises participating in merger on the date of merger is the mergingparty and the other enterprises participating in the merger are the merged party. The date of merger refers to the datewhen the merging party has actually obtained the control right to the merged party.
The assets and liabilities acquired by the merging party are measured at the book value on the merged party on the dateof merger. If the book value of net assets acquired by the merging party is different with the book value paid for mergerconsideration (or sum of book value of issued shares), the capital reserve (premium on stock capital) shall be adjusted; ifthe capital reserve (premium on stock capital) is not sufficient to be written down, the retained earnings shall be adjusted.
Various direct expenses incurred by the merging party for merger of enterprises are included in the current profits andlosses at the time of occurrence.
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(2) Merger of enterprises not under the same controlThe enterprises to be merged, if not under the final control by the same party or parties before or after merger, refer to themerger of enterprises not under the same control. For the merger of enterprises not under the same control, the partyacquiring the control right to the other enterprises involved with the merger on the date of purchase is the purchasing partyand the other enterprises involved with the merger are the purchased party. The date of purchase refers to the datewhen the purchasing party actually acquires the control right to the purchased party.
For the merger of enterprises not under the same control, the merger costs contain the assets paid by the purchasingparty on the date of purchase for acquiring the control right to the purchased party, the liabilities incurred or undertakenand the fair value of the issued equity securities are the commission incurred for merger of enterprises and involved withaudit, legal service, evaluation, consultation and etc., as well as other overhead expenses, are included in the currentprofits and losses at the time of occurrence. The transaction costs of equity securities or debt securities issued as mergerconsideration by the purchasing party are included in the initial confirmation amount of equity securities or debt securities.The contingent consideration involved is included into the merger costs at the fair value on its purchase date. If it isnecessary to adjust the contingent consideration because any new or further evidence for the existing situation on thepurchase date appears within 12 months after the purchase date, the merged goodwill shall be modified accordingly. Themerger costs incurred and the net identifiable assets acquired in the merger by the purchasing party are measured at thefair value on the purchase date. The difference that the merger costs are larger than the fair value of the net identifiableassets of the purchased party on the purchase date as acquired in the merger is confirmed as the goodwill. If the mergercosts are less than the fair value of the net identifiable assets of the purchased party as acquired in the merger, the fairvalue of various identifiable assets, liabilities and contingent liabilities of the purchased party and measurement of mergercosts are first checked, and if the merger costs are less than the fair value of net identifiable assets of the purchased partyacquired in the merger, the difference is included in the current profits and losses.
If the deductible temporary difference of the purchased party acquired by the purchasing party is not confirmed for it doesnot conform to the confirmation conditions of deferred tax assets on the date of purchase, but new or further informationobtained within 12 months after the date of purchase shows the existence of relevant situation on the date of purchaseand it is expected that the economic interest arising from deductible temporary difference of the purchased party on thedate of purchase could be realized, the relevant deferred tax assets are confirmed and the goodwill is reducedsynchronously. If the goodwill is not sufficient to be written down, the difference is confirmed as the current profits andlosses; except the above situation, if the deferred tax assets involved with merger of enterprises are confirmed, it isincluded in the current profits and losses.
For the merger of enterprises not under the same control as realized in steps through several transactions, whether theseveral transactions are "package deals" is judged in accordance with the Notice of the Ministry of Finance on Issuing theExplanation No. 5 of Accounting Standards for Business Enterprises (Cai Kuai [2012]19) and the judgment standard on"package deals" in article 51 of Accounting Standards for Business Enterprises No. 33 - Consolidated FinancialStatements (see the Note V.6(2)). If they are package deals, they are treated with reference to the description of variousparagraphs in front of this part and the Note V.14 "Long-term Equity Investment"; if they are not package deals, individualfinancial statements and consolidated financial statements are separately made relevant accounting treatment:
In individual financial statements, the sum of the book value of the equity investment of the purchased party as held beforethe date of purchase and the newly increased investment costs on the date of purchase is used as the initial investment
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costs of the investment; if the equity of the purchased party as held before the date of purchase is involved with othercomprehensive income, while this investment is being disposed, other comprehensive incomes related to it are madeaccounting treatment on the same basis as the purchased party directly disposing relevant assets or liabilities (namely,except the purchased party measures again the corresponding share in the change caused by the net liabilities or netassets of the set benefit plan according to the equity method, the others are included in the current profits and losses).
In the consolidated financial statements, the equity of the purchased party as held before the date of purchase ismeasured again at the fair value on the date of purchase of such equity, and the difference between the fair value and itsbook value is included in the current profits and losses; if the equity of the purchased party as held before the date ofpurchase is involved with other comprehensive incomes, other comprehensive incomes related to it shall be madeaccounting treatment on the same basis as the purchased party directly disposing relevant assets or liabilities (namely,except the purchased party measures again the corresponding share in the change caused by the net liabilities or netassets of the set benefit plan according to the equity method, the others are included in the current profits and losses).
6. Method of preparing consolidated financial statements(1) Principle of determining the scope of consolidated financial statements
The consolidation scope of the consolidated financial statements is determined on the basis of control. Control refers to,the Company owns the power to the purchased party, enjoys variable return by participating in the relevant activities of thepurchased party and is able to impact the amount of return by using the power to the purchased party. The scope ofconsolidation includes the Company and all of its subsidiaries. A subsidiary refers to the entity under control of theCompany.
Once the change of relevant facts and situations causes the change of relevant factors involved with the above definitionof control, the Company will make new evaluation.
(2) Method of preparing consolidated financial statementsAs of the date when the actual control right to the net assets, production and management decision of subsidiary isacquired, the Company starts to put it into the scope of consolidation; ceases to contain it in the scope of consolidationfrom the date of losing the actual control right. For any subsidiary disposed, its operation result and cash flow beforedisposal date have been properly contained in the consolidated profit statement and consolidated cash flow; anysubsidiary disposed in the current period is not modified the beginning number of the balance sheet. For any subsidiaryincreasing due to merger of enterprises not under the same control, its operation result and cash flow after the date ofpurchase have been properly contained in the consolidated profit statement and consolidated cash flow, and thebeginning number and comparison number of the consolidated financial statements are not modified. For any subsidiaryincreasing due to merger of enterprises under the same control, its operation result and cash flow from the beginning ofthe current consolidation period to the date of consolidation have been properly contained in the consolidated profitstatement and consolidated cash flow, and the comparison numbers of the consolidated financial statement aresynchronously modified.
While preparing the consolidated financial statements, if the accounting policies or accounting period adopted by anysubsidiary and the Company are not consistent, necessary modification shall be made to the subsidiary's financialstatements based on the Company's accounting policies and accounting period. For any subsidiary acquired from merger
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of enterprises not under the same control, its financial statements are modified on the basis of the fair value of netidentifiable assets on the date of purchase.
All major current account balances, transactions and unrealized profit in the Company are set off in preparation ofconsolidated financial statements.
In the stockholder's equity and current net profit or loss of a subsidiary, the parts not owned by the Company are solelylisted under the stockholder's equity and net profit in the consolidated financial statements separately as minority equityand minority interest. If the loss of subsidiary shared by minority shareholders exceeds the share enjoyed by minorityshareholders in the shareholders' equity of the subsidiary in the beginning, it still writes down the minority equity. When
the loss in a subsidiary shared by minority shareholders exceeded the share in the shareholders’ equity enjoyable by theminority shareholders at the beginning of the reporting period, the minority shareholders’ equity should be written down.
When the control right to the original subsidiary is lost due to disposal of partial equity investment or other reasons, theresidual equity is measured again at its fair value on the date of losing the control right. The sum of the considerationacquired from disposal of equity and the fair value of residual equity is minus the share of net assets of the originalsubsidiary as continually calculated from the date of purchase at the original shareholding ratio, such difference isincluded in the investment income in the current period of losing the control right. Other comprehensive incomes related toequity investment of the original subsidiary shall be made accounting treatment on the same basis as the purchased partydirectly disposing relevant assets or liabilities when the control right is lost (namely, except the original subsidiarymeasures again the change caused by the net liabilities or net assets of the set benefit plan according to the equitymethod, the others are included in the current profits and losses). Thereafter, such part of the residual equity is madesubsequent measurement in accordance with the Accounting Standards for Business Enterprises No. 2 - Long-termEquity Investment or Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of FinancialInstruments and other relevant provisions. See the Note V.14 "Long-term Equity Investment" or the Note V.10 "FinancialInstruments".
If the Company disposes the investment on the subsidiary's equity in steps through several transactions and until losesthe control right, whether the various transactions disposing the investment on the subsidiary's equity until losing thecontrol right are package deals shall be distinguished. If the terms, conditions and economic impact of varioustransactions disposing the investment on the subsidiary's equity conform to one or more of the following circumstances, it
is usually indicated that several transactions shall be made accounting treatment as package deal:① these transactionsare concluded synchronously or in consideration of mutual impact; ② these transactions can wholly reach a completecommercial result; ③ Occurrence of a transaction lies on occurrence of at least another transaction; ④ A transaction
may be uneconomic separately, but it is economical if the transaction is considered with other ones. If they are notpackage deals, each transaction thereof is made accounting treatment in accordance with the principle applicable for
"partially disposing long-term equity investment on subsidiary in the case of not losing control right" (see (2) ④, Note V.14
for details) and "losing control right to the original subsidiary due to disposal of partial equity investment or other reasons"(see the above paragraph) as appropriate. If the various transactions disposing the investment on the subsidiary's equityuntil losing control right are package deals, various transactions are made accounting treatment as a transaction ofdisposing the subsidiary and losing control right; however, before losing control right, the difference between everydisposal amount and the share of the subsidiary's net assets enjoyed corresponding to disposal of investment isrecognized as other comprehensive income in the consolidated financial statements, and is included in the current profitand loss corresponding to loss of control right.
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7. Classification of joint venture arrangements and accounting treatment method of joint managementJoint venture arrangement refers to an arrangement that two or more participants jointly control. In accordance with the
rights enjoyed and obligations undertaken in the joint venture arrangement, the Company classifies joint venturearrangements into joint management and joint venture. Joint management refers to the joint venture arrangement that theCompany enjoys the relevant assets of the arrangement and undertakes the relevant liabilities of the arrangement. Jointventure refers to the joint venture arrangement that the Company only enjoys rights to the net assets of the arrangement.
The Company's investment on joint venture is measured with equity method and is treated in accordance with the
accounting policies as stated in the Note V.14 (2) ② "Long-term equity investment measured with equity method".
As a joint venture in the joint management, the Company confirms the assets solely held, liabilities solely undertaken andthe assets jointly held and liabilities jointly undertaken as confirmed according to the Company's share; confirms theincome arising from sale of the joint management's output share enjoyed by the Company; confirms the income arisingfrom sale of output if confirming joint management according to the Company's share; confirms the expenses solelyincurred by the Company, and the expenses incurred if confirming joint management according to the Company's share.
When the Company as a joint venture delivers or sells assets to the joint management (the assets do not constitutebusiness, same as below), or the joint management purchases assets, before such assets are sold to a third party, theCompany only confirms the parts in the profit and loss arising from such transaction and belonging to other participants ofthe joint management. If occurrence of such assets is in conformity with the impairment loss as stated in the AccountingStandards for Business Enterprises No. 8 - Impairment of Assets, in the event that the Company delivers or sells assets tothe joint management, the Company fully confirms the loss; in the event that the Company purchases assets from the jointmanagement, the Company confirms the loss according to its share undertaken.
8. Standard for confirming cash and cash equivalentThe cash and cash equivalent of the Company include the cash on hand, the deposit that can be used for payment at any
time, and the investment held by the Company, which has short term (generally becomes mature within three months fromthe date of purchase), good liquidity and is easy to be converted into known amount of cash and with low risk in change ofvalue.
9. Foreign currency transactions and translation of foreign currency statements(1) Translation methods for foreign currency transactions
The foreign currency transactions occurred in the Company, at the time of initial recognition, shall be translated into theamount of bookkeeping base currency at the spot exchange rate (generally refer to the medium price of the foreignexchange quotation as declared by the People's Bank of China) on the date of transaction, but any foreign currencyexchanging business or any transaction related to exchange of foreign currency occurred by the Company shall betranslated into the amount of bookkeeping base currency at the actual exchange rate.
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(2) Translation methods for monetary items in foreign currency and nonmonetary items in foreign currencyThe monetary items in foreign currency shall be translated according to the spot exchange rate on the date of balancesheet, and the balance of exchange incurred accordingly is included in the current profits and losses except the balance ofexchange arising from the special borrowing in foreign currency related to purchase and building of the assets meetingcapitalization conditions is treated on the principle of capitalization of borrowing cost, and for the monetary items in foreigncurrency available for sale, the balance of exchange arising from change of other book balances exclusive of amortizedcost is included in other comprehensive incomes.
If preparation of consolidated financial statements is involved with overseas operation and any monetary item in foreigncurrency substantially constitutes net investment to overseas operation, the balance of exchange arising from change ofexchange rate is included in other comprehensive incomes; when overseas operation is disposed, it is transferred into thecurrent profits and losses from disposal.
The non-monetary items in foreign currency measured with historical cost are still measured with the amount inbookkeeping base currency which is translated at the spot exchange rate on the transaction occurring date. Thenon-monetary items in foreign currency measured at fair value are translated at the exchange rate on the date ofrecognizing fair value, and the difference between the amount in bookkeeping base currency and the previous amount inbookkeeping base currency after translated is treated as change of fair value (including change of exchange rate) andincluded in the current profits and losses or recognized as other comprehensive incomes.
(3) Translation methods for financial statements in foreign currencyIf preparation of consolidated financial statements is involved with overseas operation and any monetary item in foreigncurrency substantially constitutes net investment to overseas operation, the balance of exchange arising from change ofexchange rate is deemed as "translation balance of statements in foreign currency" and recognized as othercomprehensive incomes; when overseas operation is disposed, it is included in the current profits and losses fromdisposal.
The financial statements in foreign currency for overseas operation are translated into the statements in Renminbiaccording to the following method: the items of assets and liabilities in the balance sheet are translated at the spotexchange rate on the date of balance sheet; in the items of stockholder's equity, except the item of "undistributed profit",other items are translated at the spot exchange rate at the time of occurrence. The items of incomes and expenses in theprofit statement are translated at the current average exchange rate on the transaction occurring date. The undistributedprofit at the beginning of the year is the undistributed profit at the ending of the previous year after translated; theundistributed profit at the ending of the year is listed according to the calculation of translated profit distributed on variousitems; after translated, the difference between the sum of assets items and liabilities items and the sum of stockholder'sequity items is the translated difference of statements in foreign currency and is recognized as other comprehensiveincomes. If overseas operation is disposed and the control right is lost, the translated difference of foreign currencystatements as listed under the item of stockholder's equity in balance sheet and related to overseas operation istransferred fully or at the ratio of disposing the overseas operation into the current profits and losses from disposal.
The cash flow in foreign currency and cash flow of overseas subsidiaries are translated at the current average exchangerate on the cash flow occurring date. The amount of cash impacted by change of exchange rate is used as themodification item and solely listed in the cash flow statement.
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The number in the beginning of the year and the actual number in the previous year are listed according to the amountafter the financial statements for the previous year are translated.
While disposing all owners' equity of the Company in overseas operation or losing the control right to overseas operationdue to disposal of partial equity investment or other reasons, the foreign current statements attributive to the owners'equity of the parent company, as listed under the item of stockholder's equity in balance sheet and related to overseasoperation, are translated into difference and fully transferred into the current profits and losses from disposal.
When the ratio of holding overseas operation equity caused by disposal of partial equity investment or other reasonsreduces but the control right to overseas operation is not lost, the translated difference of foreign currency statementsrelated to the overseas operation disposing part is attributive to minority equity and not transferred into the current profitsand losses. When the disposal of overseas operation is involved with the partial equity of a joint venture or a cooperativeenterprise, the translated difference of foreign currency statements related to the overseas operation is transferred at theratio of disposing the overseas operation into the current profits and losses from disposal.
10. Financial instrumentsA financial asset or financial liability is recognized when the Company becomes a party of financial instrument contract.
Financial assets and financial liabilities are measured at fair value at the initial recognition time. For the financial assetsand financial liabilities that are measured at fair value and which changes are included into the current profits and losses,the relevant transaction expenses are directly included in the profits and losses; for other financial assets and financialliabilities, the relevant transaction expenses are included in the amount of initial recognition.
(1) Methods for determining fair value of financial assets and financial liabilitiesFair value refers to the price that a market participant can receive from selling an asset or is payable for transferring aliability in the orderly transactions occurring in the date of measurement. If there is an active market for financialinstruments, the Company uses the quotation in the active market to determine its fair value. The quotation in the activemarket refers to the price that is readily available from exchanges, brokers, industry associations and pricing serviceinstitutes on regular basis, and represents the price of market transaction actually occurring in the fair transactions. Ifthere is not an active market for financial instruments, the company takes valuation technologies to determine its fair value.Valuation technologies include with reference to the price used in the recent transactions that the parties who are familiarwith situation and willingly transact make in the market, with reference to the current fair value of other financialinstruments that are substantially same, discounted cash flow and option pricing model.
(2) Classification, confirmation and measurement of financial assetsThe financial assets purchased or sold in any conventional manner are made accounting confirmation and termination ofconfirmation on the date of transaction. At the time of initial confirmation, financial assets are classified into the financialassets that are measured at fair value and which change is included in the current profits and losses, held-to-maturityinvestment, loan, receivable and the financial assets available for sale.
① The financial assets that are measured at fair value and which change is included in the current profits and losses,
Including trading financial assets and the financial assets designated as measurement at fair value and which change isincluded in the current profits and losses
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The financial assets held for trading refer to the financial assets that meet one of the following conditions: A. the purposeof acquiring the financial assets is mainly for recent sale; B. are a part of the portfolio of identifiable financial instrumentsunder concentrated management, and objective evidences showing that the Company recently administrates the portfoliowith short-term profit making mode; C. are a derivative instrument, except the derivative instruments designated andbeing effective hedging instruments, the derivative instruments belonging to financial guarantee contract, the derivativeinstruments connecting with an equity instrument investment that is without quotation in an active market and which fairvalue cannot be reliably measured, and must be settled by delivering the equity instrument.
Any financial asset meeting one of the following conditions can be designated at the time of initial recognition as thefinancial asset that is measured at fair value and which change is included in the current profits and losses: A. Thisdesignation can eliminate or significantly reduce inconsistence of relevant gains or losses in the aspect of confirmation ormeasurement as caused due to different measurement basis of the financial asset; B. The formal written document of therisk management or investment strategy of the Company has clearly stated that the portfolio of financial assets or theportfolio of financial assets and financial liabilities containing the financial asset is manage and evaluated on the basis offair value, and reported to the key management.
The financial assets that are measured at fair value and which change is included into the current profits and losses aremade subsequent measurement at fair value, and the gains or losses formed due to change of fair value and thedividends and interests related to such financial assets are included in the current profits and losses.
② Held-to-maturity investment
Refers to non-derivative financial assets with fixed date of maturity, fixed or identifiable recovery amount, and which theCompany has the clear intention and ability to hold until its maturity.
Held-to-maturity investment is subject to effective interest method and is subsequently measured according to theamortized cost. The gains or losses generating in case of terminated confirmation, occurrence of devaluation oramortization are included in the current profits and losses.
Effective interest method refers to such method that their amortized costs and interest incomes or expenditures in variousperiods are calculated at the effective interest rate of financial assets or financial liabilities (including a set of financialassets or financial liabilities). Effective interest rate refers to such interest rate with which the future cash flow of anyfinancial asset or financial liability in the expected period of existence or applicable shorter period is discounted to thecurrent book value of such financial asset or financial liability.
While calculating the effective interest rate, the Company will forecast the future cash flow on the basis of considering allcontract articles of financial assets or financial liabilities (no consideration of the credit loss in the future), and will alsoconsider various charges, transaction expenses, discount or premium paid or collected among all parties of financialassets or financial liabilities contract and belonging to a part of effective interest rate.
③ Loans and receivables
Refer to non-derivative financial assets without quotation, fixed or identifiable recovery amount in an active market. Thefinancial assets classified as loans and receivables by the Company include notes receivable, accounts receivable,interest receivable, dividends receivable and other receivables.
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Loans and receivables are subject to effective interest method and are subsequently measured according to theamortized cost. The gains or losses generating in case of terminated confirmation, occurrence of devaluation oramortization are included in the current profits and losses.
④ Financial assets available for sale
Including the non-derivative financial assets that are designated available for sale at the time of initial recognition, and thefinancial assets except the financial assets measured at fair value and which changes are included in the current profitsand losses, loans and receivables, held-to-maturity investments.
The ending costs of debt instruments investment available for sale are determined according to the amortized cost,namely, initially recognized amount deducted with the paid principal, plus or minus the accumulative amount ofamortization arising from amortizing the difference between the initially recognized amount and the amount on the date ofmaturity with effective interest rate, and deducted with the loss of devaluation occurred. The ending costs of equityinstruments available for sale are their initially acquired costs.
The financial assets available for sale are subsequently measured at fair value, and the gains or losses from change offair value are recognized as other comprehensive incomes except that the balance of exchange related to the amortizedcosts in the loss of devaluation and monetary financial assets in foreign currency are included in the current profits andlosses, and they are transferred and included into the current profits and losses when the financial assets are terminatedrecognition. However, any equity instrument investment with quotation in an active market and which fair value cannot bereliably measured, and the derivative financial assets connecting with such equity instrument and must be settled bydelivering the equity instrument are subsequently measured at costs.
The interest of any financial asset accrued in the holding period and dividend in cash as distributed upon declaration of theinvested organization are included in the income from investments.
(3) Devaluation of financial assetsExcept the financial assets that are measured at fair value and which changes are included into the current profits andlosses, the Company checks the book values of other financial assets on the date of each balance sheet. If any objectiveevidence shows that devaluation of financial assets occurs, provision for impairment is set aside.
The Company separately makes devaluation testing for any single financial asset in large amount; any single financialasset without large amount is separately made devaluation testing or made devaluation testing in the portfolio of financialassets with the similar credit risk characteristics. Any financial assets not found devaluation in a single testing (includingthe single financial assets with or without large amount) are made devaluation testing in the portfolio of financial assetswith the similar credit risk characteristics. Any financial assets recognized impairment loss in a single item are madedevaluation testing not in the portfolio of financial assets with the similar credit risk characteristics.
① Devaluation of held-to-maturity investments, loans and receivables
The book value of any financial asset measured at costs or amortized costs is written down to the present value of thefuture cash flow forecasted, and the write-down amount is recognized as impairment loss and included in the currentprofits and losses. After any financial asset is recognized its impairment loss, if any objective evidence shows that suchfinancial asset has recovered its value, and it is objectively related to the matter occurring after the loss is recognized, the
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previously recognized impairment loss is reversed, and the book value of financial asset after the impairment loss isreversed does not exceed the amortized cost of the financial asset on the date of reversal when it is assumed thatprovision for impairment is not set aside.
② Devaluation of financial assets available for sale
If it is judged according to comprehensive relevant factors that the fall of fair value of equity instrument investmentavailable for sale is serious or non temporary, it shows that the equity instrument investment available for sale devalues.
When any financial asset available for sale devalues, the accumulative losses arising from fall of fair value as previouslyrecorded in other comprehensive income are transferred out and included in the current profits and losses.
After any financial asset is recognized its impairment loss, if any objective evidence shows that such financial asset hasrecovered its value, and it is objectively related to the matter occurring after the loss is recognized, the previouslyrecognized impairment loss is reversed, the impairment loss of equity instrument investment available for sale is reversedand recognized as other comprehensive incomes, and the impairment loss of equity instrument investment available forsale is reversed and included in the current profits and losses.
The impairment loss of the equity instrument investment without quotation in an active market and which fair value cannotbe reliably measured, or the derivative financial assets connecting with the equity instrument and must be settled bydelivering the equity instrument is not reversed.
(4) Recognition basis and measurement method for transfer of financial assets
Any financial asset meeting one of the following conditions is terminated recognition: ① The rights under the contract ofcollecting the cash flow of the financial asset are terminated; ② the financial asset has been transferred and substantiallyall of risks and remunerations on the ownership of the financial asset are transferred to the transferee; ③ the financial
asset has been transferred, the enterprise has neither transferred nor kept substantially all of risks and remunerations onthe ownership of the financial asset, but it gives up control to the financial asset.
If the enterprise has neither transferred nor kept substantially all of risks and remunerations on the ownership of thefinancial asset, and does not gives up control to the financial asset, relevant financial assets are recognized based on theextent continually involved with the transferred financial asset, and relevant liabilities are recognized accordingly. Theextent continually involved with the transferred financial asset refers to the level of risk that the enterprise suffers fromvalue change of the financial asset.
If the whole transfer of any financial asset meets the termination recognizing conditions, the book value of the transferredfinancial asset and the consideration received from the transfer is minus the accumulative amount of fair value changepreviously included in other comprehensive incomes, and the balance is included in the recent profits and losses.
If the partial transfer of any financial asset meets the termination recognizing conditions, the book value of the transferredfinancial asset is shared between the termination recognizing part and non- termination recognizing part at their relativefair values. The consideration received from transfer and the accumulative amount of fair value change shared in thetermination recognizing part and previously included in other comprehensive incomes, minus the shared aforesaid bookvalue, are the balance, which is included in the current profits and losses.
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If the Company sells the financial asset in mode of recourse or transfers the financial asset it holds by endorsement, itshall determine whether substantially all of risks and remunerations on the ownership of the financial asset have beentransferred. If substantially all of risks and remunerations on the ownership of the financial asset have been transferred tothe transferee, the financial asset's recognition is terminated; if substantially all of risks and remunerations on theownership of the financial asset are kept, the financial asset's recognition is not terminated; if neither transfer is made norsubstantially all of risks and remunerations on the ownership of the financial asset are kept, it shall continually judgewhether control to the asset is maintained, and accounting treatment is made in accordance with the principles as statedin above paragraphs.
(5) Classification and measurement of financial liabilitiesIn the initial recognition, financial liabilities are classified as the financial liabilities that are measured at fair value andwhich change is included in the current profits and losses, and other financial liabilities. The initially recognized financialliabilities are measured at fair value. For financial liabilities that are measured at fair value and which change is included inthe current profits and losses, the relevant transaction expenses are directly included in the current profits and losses; forother financial liabilities, relevant transaction expenses are included in the initially recognized amount.
① Financial liabilities measured at fair value and which change is included in the current profits and losses
The financial liabilities held for trading and the financial liabilities designated at the time of initial recognition asmeasurement at fair value and which change is included in the current profits and losses have the conditions consistentwith the financial assets held for trading and the financial assets designated at the time of initial recognition asmeasurement at fair value and which change is included in the current profits and losses.
The financial liabilities measured at fair value and which change is included in the current profits and losses aresubsequently measured at fair value, and the gains or losses arising from change of fair value and the dividends andinterests related to such financial liabilities are included in the current profits and losses.
② Other financial liabilities
The derivative financial liabilities connecting with the equity instrument without quotation in an active market and which fairvalue cannot be reliably measured, and must be settled by delivering the equity instrument are subsequently measured atcosts. Other financial liabilities are subject to effective interest method and are subsequently measured according to theamortized cost. The gains or losses generating in case of terminated confirmation, occurrence of devaluation oramortization are included in the current profits and losses.
③ Financial guarantee contract
A financial guarantee contract that is not specified as financial liabilities at fair value through profit or loss is initiallyrecognized at fair value minus direct transaction fees, and the subsequent measurement is based on the higher of the
amount recognized in accordance with Accounting Standards for Business Enterprises No.13 – Contingencies and the
initially recognized amount deducting the cumulative amortization in accordance with Accounting Standards for Business
Enterprises No.14 – Income.
(6) Derecognition of financial liabilitiesThe current liabilities of financial liabilities have been wholly or partially cancelled, recognition on the financial liabilities ora part thereof can be terminated. The Company (the debtor) and the creditor enter an agreement to substitute the existingfinancial liabilities in the manner of undertaking new financial liabilities, and the contract's articles of new financial liabilities
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and the existing financial liabilities are materially different, recognition on the existing liabilities is terminated and newliabilities are recognized synchronously.
If recognition on financial liabilities is wholly or partially terminated, the difference between the book value of the partterminated to recognize and the consideration paid (including non-cash assets transferred out or new financial liabilitiesundertaken) is included in the current profits and losses.
(7) Derivative instruments and embedded derivativesA derivative instrument is initially measured at fair value on the date of signing relevant contract and is subsequentlymeasured at fair value.. Except the derivative instruments designated as hedging instrument and with highly effectivehedging, the gains or losses arising from which change of fair value are recognized to be included in the period of profitsand losses based on the nature of hedging relationship and in accordance with the accounting requirements of hedging,the change of fair value of other derivative instruments is included in the current profits and losses
For the mixed instruments containing embedded derivative instruments, if they are not designated as financial assets orfinancial liabilities measured at fair value and which change is included in the current profits and losses, the embeddedderivatives and the master contract have no close relationship in the economic characteristics and risk, and have thesame conditions as the embedded derivatives, the separately existing instrument meets the definition of derivativeinstrument, then the embedded derivatives are separated from mixed instruments and are treated as sole derivativefinancial instruments. If it cannot carry out separate measurement to the embedded derivatives at the time of acquisitionor subsequent date of balance sheet, the mixed instruments are wholly designated as financial assets or financialliabilities measured at fair value and which change is included in the current profits and losses.
(8) Setoff of financial assets and financial liabilitiesWhen the Company has the legal rights of setting off the recognized financial assets and financial liabilities and cancurrently these legal rights now, and if the Company has the plan to settle with net amount or synchronously realize thesefinancial assets and discharge these financial liabilities, the financial assets and financial liabilities are listed in the balancesheet with the amount after mutual set-off. Except that, financial assets and financial liabilities are listed respectively in thebalance sheet and are not set off mutually.
(9) Equity instrumentsEquity instrument refers to the contract that can certify possession of the residual equity of the Company in the assetsafter deducted all liabilities. If the Company issues (including refinancing), repurchase, sell or cancel any equity instrument,this is treated as change of equity. The Company does not recognize change of fair value of equity instruments. Thetransaction expenses related to equity transactions are deducted from equity.
The Company makes various distributions (exclusive of stock's dividends) to the equity instrument holders fromstockholders' equity. The Company does not recognize fair value changing amount of equity instruments. The Companydoes not recognize change of fair value of equity instruments.
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11. Receivables(1) Individually significant receivable and provision for bad and doubtful debts individually
Criteria of individually significant receivables | The carrying amount of accounts receivables of over CNY 800,000.00 (with CNY 800,000.00 inclusive )and other receivables of over CNY500,000.00 (with CNY 500,000.00 inclusive) are recognized as individually significant receivable. |
Measurement of individually recognized bad and doubtful debts provision of individually significant receivables: | The Company separately made devaluation testing for any single accounts receivable in large amount, individually tested financial assets which have not experienced impairment, or made devaluation testing in the portfolio of financial assets with the similar credit risk characteristics. The accounts receivable whose impairment loss has been recognized through individual item testing shall no longer be included in the portfolio of financial assets with the similar credit risk characteristics for devaluation testing. |
(2) Receivables with provision for bad and doubtful debts based on the credit risk characteristics collectively
Portfolio Description | Method of provision for bad and doubtful debts |
Group of ageing | Ageing analysis method |
Specific fund portfolio | Other Method |
In grouping, reserve for bad debt is provided by ageing analysis method
Ageing | Percentage of provision for accounts receivable | Percentage of provision for other receivables |
Within 1 year (including 1 year) | 5.00% | 5.00% |
1-2 years | 10.00% | 10.00% |
2-3 years | 30.00% | 30.00% |
Over 3 years | 50.00% | 50.00% |
In grouping, the account receivable for which reserve for bad debt is provided based on balance percentage:
Inapplicable
In grouping, the accounts receivable for which the bad debt reserve is provided based on the other method:
Portfolio Description | Percentage of provision for accounts receivable | Percentage of provision for other receivables |
Specific fund portfolio | 0.00% | 0.00% |
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(3) Accounts receivable with insignificant individual amount but individually recognized bad and doubtful debtsprovision
Reason of individual provision for bad and doubtful debts | Including the accounts receivable involving dispute or lawsuit/arbitration with the counterparty and the accounts receivable in which there exists evident indication showing that a debtor may possibly be unable to implement the obligation of repayment. |
Method for provision for bad and doubtful debts | Provision for bad and doubtful debts is based on the difference of the present value of future cash flow lower than the book value. |
12. InventoriesDoes the Company need to comply with the requirements on information disclosure for special industries?
No(1) Classification of InventoriesInventories include raw materials, products-in-process, commodity stocks, etc.
(2) Pricing of Inventories Acquired and DeliveredInventories are priced based on the actual costs at the time of acquisition. Costs of inventories include purchase cost,processing cost and other costs. Raw materials, products-in-process and merchandise inventory are priced respectivelyaccording to the weighted average (with brand world watch stocks exclusive), specific identification (for famous brandwatch stocks) at the time of delivery.
(3) Basis for determination of the net realizable value of inventories and the method for provision for price falling ofinventories
The net realizable value of the inventories refers to the amount of the estimated sales prices of inventories less theestimated costs up to the completion, the estimated sales costs and relevant taxes. In determining the realizable net valueof inventories, with the acquired concrete evidence as the base, the purpose of holding the inventories and the influencefrom the events after the balance sheet day are taken into consideration at the same time.
On the balance sheet day, inventories are measured based on the lower of the cost and the realizable net value. When therealizable net value is lower than the cost, reserve for price falling of inventories is provided. Including:
① For the inventories directly for sale, including the finished products and the materials for sale, in process of normal
production and operation, the realizable net value is the amount of the estimated sales price of the inventories less theestimated sales costs and the relevant taxes;
② For the material inventories necessary to be processed, the realizable net value is the amount of the estimated sales
price of the finished products produced in process of normal production and operation less the costs predicted to incur atthe time of finishing the work, the estimated sales expenses and the relevant taxes.
The Company provides reserve for price falling of the inventories classified based on the models of self-made FIYTAwatch inventories.
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For the famous brand watches in distribution, reserve for price falling of inventories is provided based on the individualitems.
For the raw materials for FIYTA watches, based on the terminal sales status of FIYTA finished watches, reserve for pricefalling of inventories is provided with interchangeability of spares and parts and specialized classification of applications ofmaterials taken into consideration.
After reserve for price falling of inventories is provided, if the factors influencing the price falling of the inventories havedisappeared, which causes the realizable net value of the inventories to be higher than their book value, the reserve forprice falling of the inventories provided previously is reversed, the amount reserved is recorded in the current gain andloss.
(4) The inventory system for the inventories is the perpetual inventory system
(5) Amortization of low value consumables and packing materialsLow value consumables and packing materials are amortized in lump sum at the time of reception.
13. Classified as assets held for saleThe Company shall classify a non-current asset or disposal group as held for sale if its carrying amount will be recovered
principally through a sale transaction (including a non-monetary asset exchange of commercial substance, the samebelow) rather than through continuous use. Non-current assets or disposal group classified as held for sale shall meet thefollowing criteria: disposable immediately under current conditions based on similar transactions for disposals of suchassets or practices for the disposal group; a decision has been made on a plan for disposal and an undertaking topurchase has been obtained, and the disposal is expected to be completed within a year. Where, the disposal grouprefers to a group of assets which are disposed altogether by sale or other way as a whole in a transaction as well as aliability transferred in the transaction with direct connection with these assets. For an asset group or asset group portfolioattributable to the disposal group where the goodwill has been apportioned at the time of entity consolidation according tothe Standards for Enterprise Accounting No. 8 - Impairment of Assets, the disposal group should be included in thegoodwill apportioned to the disposal group.
When the Company makes initial measurement or makes re-measurement of the disposal group which has beenclassified as held for sale non-current assets and where book value is higher than the net value of fair value less disposalexpenses, the difference between book value and the net value of fair value less disposal expenses is recognized asasset impairment loss in profit and loss in the current period, and at the same time, provision is made for impairment ofheld as available-for-sale asset. For the disposal group, the loss from impairment of the assets as recognized first offsetsthe carrying value of the goodwill in the disposal group and then offsets the carrying value of various non-current assets inthe disposal group in compliance with the measurement provisions as specified in the Standard for Enterprise Accounting
No. 42 - Held for Sale Assets, Disposal Group and Termination of Operation (hereinafter referred to as the “Standard for
Holding for Sale). Where there is increase in net value of fair value less disposal expenses for non-current assets held asavailable-for-sale on subsequent balance sheet days, the previously charged difference should be recovered andreversed in asset impairment loss recognized applicable to the provision of the measurement standard for held-for-sale
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after classification as held as available-for-sale investment; the reversal amount is recognized in profit and loss in thereporting period. The book value is increased based on the proportion of the book value of various non-current assetsaccording to the provision of the measurement standard for held-for-sale in the disposal group with the goodwill exclusive:
the book value of goodwill already offset as well as the impairment loss of the assets recognized before classification ofthe non-current assets applicable to the provision of the measurement standard as held-for-sale is not reversible.
No depreciation or amortization is provided for a non-current asset in the non-current assets or disposal groups held forsale. Interest and other expenses attributable to the liabilities of a disposal group held for sale shall continue to berecognized.
When a non-current asset or disposal group no longer satisfies the conditions for classification of the held-for-sale, theCompany no longer classifies it as held-for-sale category or removes the non-current asset from the held-for-sale disposalgroup, and measures it based on the lower of the two: (1) for the book value before classification as the held-for-sale, theamount after the adjustment for depreciation, amortization or impairment which should be recognized under the conditionin which it is assumed not to be classified as held-for-sale; (2) recoverable amount.
14. Long-term equity investmentsThe long-term equity investment as stated in this part refers to the long term equity investment with control over, joint
control over or significant influence upon the investees. The long term equity investment without control over, joint controlover or significant influence upon the investees in the Company are taken as available-for-sale financial assets or thefinancial assets which are measured based on the fair value and their changes are counted to the current profit and loss.For the detail of the accounting policy, refer to Note V. 10 "Financial Instruments".
Joint control refers to the joint control over some arrangement made by the Company according to the relevant agreementand the relevant activities for the arrangement must be jointly decided by all the parties sharing the control power.Significant influence refers to the Company's power of participation in making an investee's financial and operationpolicies but the Company cannot control or jointly control with other parties to make these policies.
(1) Determination of Investment CostsFor the long term equity investment acquired through consolidation of enterprises under the common control, the share ofthe book value of the consolidatee's owner's equity as at the date of consolidation in the eventual controller's financialstatements is taken as the initial investment cost of the long term equity investment. The balance among the initialinvestment cost of the long term equity investment and the cash as paid, non-cash asset as assigned and the book valueof the liabilities as assumed is used for adjustment of the capital reserve; in case the capital reserve is not enough forwriting-down, the retained earnings is adjusted. In case the equity securities as issued for consolidation consideration, theshare of the book value of the consolidatee's owner's equity as at the date of consolidation in the eventual controller'sconsolidated financial statements is taken as the initial investment cost of the long term equity investment, the total bookvalue of the issued shares is taken as the share capital, the balance between the initial investment cost of the long termequity investment and the total face value of the issued shares is used for adjustment of the capital reserve; in case thecapital reserve is not enough for writing-down, the retained earnings is adjusted. The equity in the consolidatee under thecommon control which is acquired in steps through a number of transactions and the consolidation of the enterprise undercontrol is eventually formed shall be treated depending on whether it belongs to "one package deal": if it belongs to "one
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package deal", all the transactions shall be taken as a transaction for acquiring the control power for accounting treatment.If it does not belong to "one package deal", the share of the book value of the consolidatee's owner's equity in the eventualcontroller's consolidated financial statements is taken as the initial investment cost of the long term equity investment; thebalance among the initial investment cost of the long term equity investment and the book value of the long term equityinvestment before arrival of the consolidation plus the book value of the newly paid consideration of the shares acquiredfurther on the consolidation date shall be used to adjust the capital reserve; in case the capital reserve is not enough forwriting-down, the retained earnings is adjusted. For the equity investment held before the date of consolidatoin or theother comprehensive income as recognized from the available-for-sale financial assets, no accounting treatment shall betaken for time being.
For the long term equity investment acquired through consolidation of enterprises not under the common control, theconsolidation cost as at the acquisition date is taken as the initial investment cost of the long term equity investment. Theconsolidation cost is the sum of the assets paid to the buyer, the liabilities incurred or assumed, and the fair value of theequity securities as issued. The equity which is acquired in steps through a number of transactions and eventually formsconsolidation of enterprises not under the common control shall be treated depending on whether it belongs to "onepackage deal": if it belongs to "one package deal", all the transactions shall be taken as a transaction for acquiring thecontrol power for accounting treatment. If it does not belong to "one package deal", the sum of the book value of the equityinvestment in the purchasee originally held plus the newly increased investment cost shall be taken as the initialinvestment cost of the long term equity investment calculated according to the cost method. In case the equity originallyheld is calculated based on the equity method, the relevant other comprehensive income shall not undergo accountingtreatment for time being. If the equity investment originally held is an available-for-sale financial asset, the balancebetween its fair value and the book value and the accumulative movement of the fair value originally counted to othercomprehensive income are transferred to the current profit and loss.
Intermediary fees in connection with audit, law service, appraisal and consulting, etc. incurred to the consolidator orpurchaser and other relevant administrative fees shall be counted to the current profit and income at the time ofincurrence.
The equity investment other than the long term equity investment formed from the enterprise consolidation which isinitially measured based on the cost, such costs are recognized in such ways as the fair value of the equity securitiesissued by the Company, the value as specified in the investment contract or agreement, the fair value or the original bookvalue of the assets exchanged out in the non-monetary asset exchange transactions, or the own fair value of the long termequity investment, etc. depending on the ways of acquirement of the long term equity investment. The expenses, taxesand other necessary expenditures directly in connection with the acquirement of the long term equity investment arecounted to the investment costs. For the long term equity investment resulted from the additional investment which maybring out significant influence upon or joint control over the investee but shall not constitute control, the cost of the longterm equity investment is the sum of the fair value of the equity investment originally held as determined according to theAccounting Standards for Enterprises No. 22 - Recognition and Measurement of Financial Instruments plus the cost of thenewly increased investment.
(2)Subsequent measurement and recognition of gains and lossesThe long term equity investment with the investee enjoying joint control (with the constitution of joint operators exclusive)or significant influence is calculated by means of equity method; and also for the long term equity investment in which theCompany's financial statements can implement control over the investee by calculation based on the cost method.
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① Long term equity investment calculated based on the cost method
In calculation by cost method, the long term equity investment is valuated according to the initial investment cost, and foradditional or recovery of investment, the cost of the long term equity investment is adjusted. Except that the actualpayment or consideration paid at the time of acquiring the investment contains the cash dividend or profit alreadyannounced but not yet distributed, the return on the investment in the reporting period is recognized based on the cashdividend or profit already announced for distribution by the investee.
② Long term equity investment calculated based on the equity method
When the calculation based on the equity method is used, if the initial investment cost of the long term equity investmentis greater than the share of the fair value of net identifiable assets enjoyable in the investee, the initial investment cost ofthe long term equity investment shall not be adjusted; when the initial investment cost is less than the share of the fairvalue of net identifiable assets enjoyable in the investee, the balance is counted to the current profit and loss and at thesame time the cost of the long term equity investment is adjusted.
When the equity method is used for calculation, the net gains and losses realized by the investee and the share of theother comprehensive income enjoyable or sharable shall be respectively used to recognize the return on investment andother comprehensive income and at the same time the book value of the long term equity investment is adjusted;according to the profit announced for distribution by the investee or the part of the cash dividend enjoyable uponcalculation, the book value of the long term equity investment is reduced correspondingly. For other change in the netprofit and loss, other comprehensive income and owner's equity other than the profit distribution, the book value of thelong term equity investment is adjusted and counted to the capital reserve. In determining the net profit and loss in theinvestee enjoyable, with the fair value of various identifiable assets, etc. in the investee when the investment is acquiredas the base, the net profit of the investee is recognized after adjustment. When the accounting policy and fiscal periodadopted by the investee is different from that of the Company, the investee's financial statements are adjusted accordingto the accounting policy and fiscal period adopted by the Company and the return on the investment and othercomprehensive income are recognized on this basis. For the transactions between the Company and its associates orjoint ventures, in case the assets provided or sold do not constitute business, the part calculated based on the proportionof the unrealized internal transaction gains and losses attributable to the Company shall be offset and the gains andlosses on the investment shall be recognized on this basis. However, the loss from no internal transaction between theCompany and an investee shall not be offset if the loss belongs to impairment of the assets assigned. In case the assetsinvested in a joint venture or an associate constitutes business and the investor has acquired the long term equityinvestment therefrom but has not achieved the control power, the fair value of the business provided shall be taken as theinitial investment cost of the newly added long term equity investment, the balance between the initial investment cost andthe book value of the business provided shall all be counted to the current gains and losses. In case assets sold by theCompany to its joint ventures or associates constitute business, the balance between the consideration acquired and thebook value of the business shall all be counted to the current gains and losses. In case the asset provided to the Companyby its joint venture or the associate constitutes business, accounting treatment shall be conducted according to theEnterprise Accounting Standards No. 20 - Enterprise Consolidation and all the amount shall be recognized as thetransaction related gains and losses.
In determining the part of the net loss incurred to the investee to be shared by the Company, the book value of the longterm equity investment and other long term equity which has substantially constituted net investment in the investee shallbe reduced to the limit of zero. In addition, in case the Company is obliged for extra loss in an investee, the predicted
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liabilities shall be recognized according to the obligation predicted to assume and counted to the current gains and lossesin the investment. In case an investee realizes net profit in subsequent periods, the Company shall recover recognition ofthe part of income enjoyable after the recognized part of the loss shared by the Company has been made up for with thepart of the benefit enjoyable.
③ Acquisition of minority equity
In preparation of the consolidated financial statements, the balance between the long term equity investment newlyincreased resulted from purchase of minority equity and the share of the net asset continuously calculated commencingfrom the date of purchase (or date of consolidation) enjoyable by the subsidiary shall be used to adjust the capital reserve.In case the capital reserve is not enough for writing-down, the retained earnings shall be adjusted.
④ Disposal of long term equity investment
In a consolidated financial statement, the parent company has partially disposed the long term equity investment in itssubsidiary without losing its control power, the difference between the disposal income of the amount enjoyable in the
subsidiary’s net assets corresponding to the long term equity investment disposed is counted to the owner’s equity. In
case that the parent company has partially disposed the long term equity investment in its subsidiary has caused theparent company to have lost the control power over the subsidiary, it should be treated according to the accounting policy
as specified in the “method for preparation of consolidated financial statements” of Note V. 6.(2).
If a long term equity investment is disposed under other situation, for the equity disposed, the difference between its bookvalue and the consideration actually obtained is counted to the current gains and losses.
For the long term equity investment calculated based on the equity method, the other comprehensive income part which
was originally counted to the owner’s equity undergoes accounting treatment according to the corresponding proportion
by using the same base for direct disposal of the relevant assets or liabilities used by the investee. The owner's equityrecognized due to change of the other owners' equity of the investee with the net gains and loss, other comprehensiveincome and profit distribution exclusive is carried over into the current gains and losses based on the proportions.
For the long term equity investment, in case the remaining equity after disposal sitll needs to be calculated according tothe cost method, the other comprehensive income calculated by the equity method or calculated and recognized based onthe standards for recognition and measurement of financial instruments undergoes the accounting treatment by using thesame base as the investee has adopted for direct disposal of the relevant assets or liabilities and carried over to thecurrent gains and losses according to the proportion; movement of all other owners' equity calculated and determined byusing the equity method with the net gains and losses in the investee's net assets as determined, other comprehensiveincome and profit distribution exclusive is carried over to the current gains and losses according to the proportion.
In case the Company has lost the control over an investee due to disposal of partial equity, in preparation of individualfinancial statements, the remaining equity after disposal can still implement joint control over or significant influence on theinvestee; the equity method is applied for calculation instead and the said remaining equity is adjusted as if the equitymethod was used for calculation commencing from the time of its acquisition; in case the remaining equity after theadjustment can no longer implement joint control over or significant influence on the investee, the accounting treatmentshall be conducted according to the provisions concerning recognition and measurement of financial instruments; thebalance between the fair value as at the day of loosing the control power and the book value is counted to the currentgains and losses. The other comprehensive income calculated by means of the equity method or calculated and
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recognized according to the standards for recognition and measurement of financial instruments undergoes accountingtreatment on the same base as the investee has lost control and the investee directly disposes the relevant assets orliabilities. The movement of the other owner's equity in the investee's net assets calculated and recognized by means ofthe equity method is carried over into the current gains and losses at the time of loosing the control over the investee withthe exception of the net gains and profit, other comprehensive income and profit distribution. Where, for the remainingequity after disposal calculated by means of equity method, the other comprehensive income and other owner's equity arecarried over according to the proportion; in case the remaining equity after disposal is recognized and measured based onthe financial instruments, the other comprehensive income and other owner's equity are all carried over.
In case the Company has lost the joint control over or significant influence on the investee due to disposal of partial equity,the remaining equity after disposal is calculated according to the standards for recognition and measurement of financialinstruments while the balance between the fair value and the book value as at the day when the Company lost its jointcontrol or significant influence is counted to the current gains and losses. The other comprehensive income from theoriginal equity investment calculated and recognized by means of the equity method undergoes accounting treatment byusing the same base as the investee directly disposes the relevant assets or liabilities when the calculation based on tehequity method is terminated; the owner's equity recognized due to the movement of other owner's equity with theinvestee's net gains and losses, other comprehensive income and profit distribution exclusive is all transferred into thecurrent return on investment when the equity method is stopped.
The Company disposes the equity investment in a subsidiary in steps through a number of transactions until it has lost thecontrol power. If the aforesaid transaction belongs to a one-package transaction, the transactions shall undergoaccounting treatment as a transaction in which the equity investment in a subsidiary is disposed and the control power islost. The balance between the first disposal consideration prior to loss of the control power the book value of the long termequity investment corresponding to the equity disposed is recognized as other comprehensive income first and then alltransferred into the current gains and losses from loss of the control power.
15. Investment based real estateMeasurement model for investment real estate
Measured based on the cost methodDepreciation or amortization method
Investment based real estate refers to the real estate held by the Company which creates rental or added value of capitalor both, Including the land use right which has already been let out, the land use right held and to be assigned afterappreciation, building which has been leased out, etc.
Investment based real estate is initially measured according to the cost Investment based real estate is initially measuredbased on the cost. The follow-expenses in connection with the investment based real estate are recorded in theinvestment based real estate costs in case the relevant economic benefit may flow into the Company while the costs canbe reliably measured. Other follow-up expenses are recorded in the current gain and loss at the time of incurrence.
The Company adopts the cost model to make follow-up measurement of the investment based real estate and makesdepreciation or amortization according to the policy of coincidence with housing and building or land use right.
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About the impairment test method and method for provision of reserve for impairment of the investment based real estate.For the detail, refer to Note V.22 "Impairment of Long Term Assets".
When the self-use real estate is transferred into the investment based real estate or the investment based real estate istransferred into the self-use real estate, the book value prior to the transfer is taken as the entry value after the transfer.
When the application of the investment based real estate is for self-use, the investment based real estate is transferred tofixed asset or intangible asset commencing from the date of change. When the application of the self-use real estate ischanged into earning rental or increase of capital value, commencing from the date of change, the fixed asset orintangible asset are transferred into investment based real estate. When conversion takes place, for the investment basedreal estate measured by means of the cost module instead, the book value before conversion shall be taken as the entryvalue after the conversion; for the investment based real estate measured by means of fair value instead, the fair value asat the conversion date shall be taken as the entry value after conversion.
When the investment based real estate is disposed or permanently withdrawn from use and it is predicted that it is unableto earn economic benefit, the recognition of the investment based real estate is terminated. The income from disposal ofinvestment based real estate, including sale, assignment, discarding or damage, is charged to the current gain and lossafter deduction of the book value and the relevant taxes.
16. Fixed asset(1) Recognition of fixed assetsFixed assets are tangible assets that are held for use in the production or supply of services, for rental to others, or for
administrative purposes and have useful lives more than one accounting year. A fixed asset shall be recognized onlywhen it is probable that economic benefits associated with the asset will flow into the enterprise and the cost of the assetcan be measured reliably. A fixed asset shall be initially measured at actual cost.
(2) Depreciation methods
Categories | Depreciation methods | Depreciation life | Residual rate | Yearly depreciation |
Plant & buildings | Average service life method | 20 -35 | 5 | 2.7 -4.8 |
Machinery & equipment | Average service life method | 10 | 5 -10 | 9 -9.5 |
Electronic equipment | Average service life method | 5 | 5 | 19 |
Motor vehicle | Average service life method | 5 | 5 | 19 |
Other equipment | Average service life method | 5 | 5 | 19 |
(3) Basis for recognizing the fixed assets under financing lease, Pricing and Depreciation MethodsThe "finance lease" shall refer to a lease that has transferred in substance all the risks and rewards related to the
ownership of an asset. The ownership of it may or may not eventually be transferred. For the fixed assets rented by
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means of financing lease, depreciation of the rented assets is provided according to the policy identical to the proprietaryassets. If it is reasonable to be certain that the lessee will obtain the ownership of the leased asset when the lease termexpires, the leased asset shall be fully depreciated over its useful life. If it is not reasonable to be certain that the lesseewill obtain the ownership of the leased asset at the expiry of the lease term, the leased asset shall be fully depreciatedover the shorter one of the lease term or its useful life.
17. Construction-in-processThe cost of construction-in-process is determined according to the actual expenditure incurred for the construction,
including all necessary construction expenditures incurred during the construction period, borrowing costs that shall becapitalized before the construction reaches the condition for intended use and other relevant expenses.Construction-in-process is transferred to fixed assets when the asset is ready for its intended use.
For provision for impairment of construction-in-process and the method for provision for impairment, refer to Note V.22"Impairment of Long Term Assets".
18. Borrowing CostsBorrowing costs include interest on borrowings, amortization of depreciation or premium, auxiliary expenses and balance
of exchange resulted from foreign currency loan, etc. he borrowing costs from acquisition or production of the assets orborrowing expenses result therefrom directly attributable to compliance with the condition of capitalization starts to becapitalized when the expense of the asset has incurred, borrowing costs have incurred and the acquisition andconstruction or production activities necessary to let the asset reach the predicted applicable or sellable status; when theassets acquired, constructed or produced in compliance with capitalization have reached the predicted applicable statusor sellable status, the capitalization stops. The other borrowing costs are recognized as expenses in the period ofincurrence.
Interest expenses of special borrowings incurred actually for the current period less interest income from borrowings atbank or investment income from temporary investments is capitalized; capitalization amount is determined asaccumulative asset expenditure of general borrowings over weighted average asset expenditure of special borrowingsmultiples capitalization rate of general borrowings. Capitalization rate is determined as calculating weighted averageinterest rate of general borrowings.
In the capitalization period, exchange differences of special borrowings in foreign currency is totally capitalized; exchangedifferences of general borrowings in foreign currency is recognized in profit or loss for the current period.
The assets in compliance with the capitalization conditions refer to such assets as fixed assets, investment based realestate, inventories, etc. which need to undergo long time of acquisition or construction or production activities before theycan reach the predicted applicable or sellable status.
Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or production of aqualifying asset is interrupted abnormally and when the interruption is for a continuous period of more than 3 months untilthe acquisition or construction or production activities of the assets restart.
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19. Biological AssetsInapplicable20. Oil and Gas AssetsInapplicable21. Intangible assets(1) Pricing Method, Service Life and Impairment TestAn intangible asset refers to a recognizable non-monetary asset without physical form possessed by or under the control
of the Company.
Intangible assets are initially measured based on the cost.. All expenses in connection with the intangible assets arecharged to the costs of intangible assets if the relevant economic benefit can flow into the Company and the costs can bereliably measured. All the expenses of other items except that are charged to the current gain and loss at the time ofincurrence.
The land use right acquired is usually calculated as intangible asset. For the buildings, such as factory building,constructed independently, the expenses in connection with the land use right and the construction cost of such buildingare calculated as intangible asset and fixed assets. For purchased housing and buildings, the relevant costs aredistributed between the land use right and buildings; in case it is difficult to distribution rationally, they shall all be handledas fixed assets.
An intangible asset with limited service life is amortized in average by using the straight-line method over the predictedservice life with its original value less the predicted residual value and the accumulated amount of the reserve forimpairment already provided commencing from the time of availability for use. The intangible asset with unidentifiedservice life would not be amortized.
The method for amortization of intangible assets with limited service life is as follows:
Categories | Useful Life (Year) | Amortization Method |
Land use right | 50 | Straight-line method |
Software system | 5 | Straight-line method |
Trademark rights | 5 -10 | Straight-line method |
At the end of a year, the Company rechecks the service life of the intangible asset and the amortization method. Thechange incurred is treated as change of accounting estimation. In addition, the service life of intangible asset withindefinite service life is rechecked. If there is evidence showing that the duration of the economic benefit brought about bythe intangible asset for the enterprise is foreseeable, the estimated service life is amortized according to the amortizationpolicy of intangible assets with limited service life.
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(2) Accounting policy for internal research and development expenditureExpenditure on an internal research and development project is classified into expenditure on the research phase and
expenditure on the development phase.
Expenditure on the research phase is recognized in profit or loss when incurred.
Expenditure on the development phase is capitalized only when the Company can satisfy all of the following conditions:
① the technical feasibility of completing the intangible asset so that it will be available for use or sale;② its intention to complete the intangible asset is to use or sell it; how the intangible asset will generate economic
benefits;
③ Way of intangible assets producing economic interest, including those that can demonstrate the existence of a market
for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of theintangible asset;
④ The availability of adequate technical, financial and other resources to complete the development and the ability to use
or sell the intangible asset;
⑤ Its ability to measure reliably the expenditure attributable to the intangible asset during its development phase.
If it is impossible to distinguish research stage expenses and development stage expenses, the R & D expenses asincurred shall be all charged to the current gains and losses.
The research and development projects of the Company will enter into the development stage after meeting the aboveconditions and passing through the technical feasibility and economic feasibility studies and the formation of the project.
Capitalized expenditure on the development phase is presented as “development costs” in the balance sheet and shall be
transferred to intangible assets when the project is completed to its intended use state.
(3) Impairment testing method and method for provision for impairment of intangible assetsAbout the impairment testing method and method for provision of reserve for impairment of the investment basedintangible assets. For the detail, refer to Note V.22 "Impairment of Long Term Assets".
22. Impairment of long term assetsFor non-current and non-financial assets such as fixed assets, construction-in-process, intangible assets with limited
service life, investment based real estate measured based on the cost model, the long term equity investment insubsidiaries, joint ventures and associates, etc., the Company make judgment on whether there exists any sign ofimpairment on balance sheet day. In case there exists sign of impairment, the Company estimates the recoverableamount and makes impairment test. For goodwill and the intangible assets with the service life undetermined and theintangible assets which have not reached applicable status, regardless whether there exists sign of impairment, theCompany makes impairment test every year.
In case impairment test result shows that the recoverable amount of asset is lower than the book value, provision forimpairment is made based on the difference and is regarded in the loss for impairment. The recoverable amount isdetermined based on the higher of the net amount of the fair value of the asset less the expense of disposal and the
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present value of the predicted future cash flow of the asset. The fair value of assets is determined based on the salesagreement price in fair transaction; in case there is no sales agreement but does exist active market of asset, the fair
value is determined according to the buyer’s offer of the asset; in case there exists neither sales agreement nor active
market of asset, the fair value of assets is estimated based on the best information obtainable. The disposal expensesinclude legal expenses, relevant taxes, handling fee and direct expenses incurred before the asset reaches the sellablestatus in connection with disposal of the assets. The present value the predicted future cash flow of assets: according tothe predicted future cash flow created in process of continuous application and final disposal, choose the proper discountrate to determine the amount after discount. Provision for impairment of asset is calculated and recognized based on theindividual asset. In case it is difficult to make estimation of the recoverable amount of individual asset, the recoverableamount of asset group is determined based on the asset group which the asset belongs to. The asset group is theminimum grouping of assets which can independently produce cash flow in.
For the goodwill separately stated in the financial statements, at the time of impairment testing, the book value of thegoodwill is apportioned to the asset group or combination of asset groups of assets benefited from the synergistic effect ofenterprise consolidation. In case the testing result shows that the recoverable amount of an asset group or combination ofasset groups which contain apportioned goodwill is lower than their book value, the corresponding impairment loss isrecognized. The amount of the impairment loss first offsets and is apportioned to the book value of the goodwill of theasset group or combination of asset groups, and then offset the book value of other assets according to the proportions ofother various assets in the book value with the exception of goodwill in the asset group or combination of asset groups.
The impairment loss of the aforesaid assets, once recognized, shall not be reversed as the recovered part in subsequentperiods.
23. Long term expenses to be apportionedLong term expenses to be apportioned refer to various expenses which have already incurred but should be borne in the
reporting period and subsequent periods with the apportioning term exceeding one year. The Company's long termexpenses to be apportioned include the special counter fabrication cost, repairing fee, etc. Long term expenses to beapportioned are amortized according to the straight-line method in the predicted beneficial period.
24. Payroll to Employees(1) Accounting treatment of short term salariesShort term salaries mainly include wages, bonus, allowances and subsidy, welfare expenses to employees, medical
insurance premium, birth insurance premium, work related injury insurance premium, housing fund, labor union dues andemployees' personnel education fund, non-monetary welfare, etc. The Company recognizes the short term salaries toincur during the fiscal periods when employees offer services to the Company as liabilities and count the same to thecurrent gains and losses or the relevant cost of assets. Of them, non-monetary welfare is measured based on the fairvalue.
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(2) Post-employment benefitsThe post-employment benefits mainly include the basic endowment insurance, unemployment insurance, annuity, etc.
Post-employment benefit program includes defined contribution plan. In case the defined contribution plan is used, thecorresponding contributable amount is counted to the corresponding asset cost or the current gains and losses at the timeof incurrence.
(3) Dismission welfareIn case the employment relation between the Company and an employee is terminated before the employment contract
term is due or for the purpose of encouraging an employee to volunteerly accept the lay-off, the Company proposes tooffer compensation, and the employees' payroll liabilities resulted from the termination benefits are recognized as at theearlier of the time when the Company cannot unilaterally withdraw the dismission welfare as specified in the plan fortermination of labor relationship or the lay-off proposal and the time when the Company recognizes the costs related withthe reorganization of payment of the termination benefits and such liabilities are counted to the current gains and losses.However, if the termination benefits are predicted to be unable to be fully paid within 12 months after termination of theannual reporting period, it shall be handled according to the other long term payroll to employees.
The internal retirement program for employees is handled based on the same principle as that for the aforesaid dismissionwelfare. The Company plans to count the salaries paid to the internally retired employees and their social insurancepremium paid by the Company from the date when the concerned employees stops offering services to the Company tothe time of their official retirement to the current gains and losses (dismission welfare) when they comply with theconditions for recognizing the predicted liabilities.
(4) Other long term employees' welfareOther long term employees' welfare provided by the Company to its employees shall undergo the accounting treatment
according to the defined contribution plan as long as it complies with the defined contribution plan. With the exception ofthis, it shall undergo accounting treatment according to the defined beneficial plan.
25. Predicted liabilitiesPredicted liabilities are recognized when an obligation in connection with contingencies complies with the following
conditions: (1) The obligation is a present obligation of the Company; (2) It is probable that an outflow of economicbenefits will be required to settle the obligation; (3) The amount of the obligation can be measured reliably.
On the balance sheet day, with consideration of such factors as contingency related risk, uncertainty and the time value ofmoney, etc., the predicted liabilities are measured according to the best estimated amount necessary to be paid inimplementation of the relevant current obligation.
If the expenses for clearing of predictive liability is fully or partially compensated by a third party, and the compensatedamount can be definitely received, it is recognized separated as asset. The compensated amount shall not be greater
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than the carrying amount of the predictive liability.
26. Payment for sharesInapplicable
27. Other financial instruments, such as preferred shares, perpetual liabilities, etc.Inapplicable
28. RevenueDoes the Company need to comply with the requirements on information disclosure for special industries?
No(1) General Principle
① Sale of goods
Revenue from the sale of goods is recognized only when all of the following conditions are satisfied: the Company hastransferred to the buyer the significant risks and rewards of ownership of the goods, the Company retains neithercontinuing managerial involvement nor effective control over the goods sold, and related income has been achieved orevidences of receivable have been obtained, and the associated costs can be measured reliably.
②Provision of services
Where the outcome of a transaction involving the provision of services can be estimated reliably, at the end of the period,revenue associated with the transaction is recognized using the percentage of completion method. The stage ofcompletion of a transaction involving the providing of services is determined according to the proportion of the servicesperformed to the total services to be performed.
The outcome of a transaction involving the providing of services can be estimated reliably only when all of the following
conditions can be satisfied at the same time: ①. The amount of revenue can be measured reliably; ②. The associatedeconomic benefits are likely to flow into the enterprise; ③. The stage of completion of the transaction can be measuredreliably; ④. The costs incurred and to be incurred in the transaction can be measured reliably.
If the outcome of a transaction involving the providing of services can’t be estimated reliably, the revenue of providing of
services is recognized at the service cost that incurred and is estimated to obtain compensation and the service costincurred is recognized in profit or loss for the current period. If the service cost incurred is estimated to obtain
compensation, revenue isn’t recognized.
When a contract or agreement signed between the Company and other enterprise covers sales of goods and supply oflabor service, in case the part of sales of goods and the part of providing labor service are distinguishable and can bemeasured separately, the part of sales of goods and the part of providing labor service should be treated separately; incase the part of sales of goods and the part of providing labor service cannot be distinguished or cannot be separately
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measured despite that they are distinguishable, all the contract shall be treated as sales of goods.
③ Royalty revenue
Revenue is recognized on accrual basis according to the relevant contract or agreement.
④ Interest incomeThe interest income shall be calculated based on the tenure of the Company’s monetary funds used by others and the
actual interest rates used.
(2) Detailed method of revenue recognitionThe watches sold by the Company includes two types, one is the self-manufactured FIYTA watch, the sales of which ismanaged by branch offices and provincial-level sale sections by regions set up by Harmony, a subsidiary of theCompany's. The other is brand watches, the sales of which are controlled by HARMONY Company, a subsidiary of theCompany, and we act as agent Regarding to sales modes, a small portion of the sales of self-manufactured FIYTAwatches is sold through direct sales to customer and consignment sales while most self-manufactured FIYTA watches andbrand watches under agent are under two sales modes, namely exclusive shop and shop-in-shop. Detailed method ofrevenue recognition as follows:
① Direct sales to the customers
Under direct sales to the customers mode, the Company delivers products to customers and recognizes sales incomeafter customers check and accept.
② Exclusive shop
Under exclusive shop mode, the Company delivers products to customers and recognizes sales income after customerscheck, accept and pay.
③ Shop-in-shop
Under shop-in-shop mode, the Company delivers products to customers, sales staff issues notes to retail customers andrecognizes sales income after customers check and accept and department store collects the payment from thecustomers.
④ Consignment sales
Under consignment sales mode, the Company receives the detail of the sales list from consignee and recognizes revenuewhile issuing invoice to distributors.
29. Government subsidies(1) Basis for judging asset related government grants and the accounting treatment methodGovernment subsidy refers to the monetary asset and non-monetary asset obtained free by the Company from the
government, excluding the capital from the government as owner's contribution. Government subsidy consists ofasset-related government subsidy and income-related government subsidy.
The government subsidy in form of monetary asset is measured based on the amount received or receivable. The
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government subsidy in form of non-monetary asset is measured based on fair value; or measured based on nominalamount if the fair value cannot be reliably obtained. The government subsidy measured based on nominal amount isdirectly counted to the current gains and losses.
Asset-related government subsidy is recognized as deferred income and is distributed and counted on averaged to thecurrent gains and losses over the service life of the relevant assets.
In case there exists any balance of the related deferred income when the government subsidy as already recognizedneeds to be returned, the balance is used to write down the book balance of the relevant deferred income and theexceeded part is counted to the current gains and losses; in case there exists no related deferred income, it is counteddirectly to the current gains and losses.
(2) Basis for judging income related government subsidy and the accounting treatment methodThe income-related government subsidy used for compensate the relevant expenses and losses in the subsequent period
is recognized as deferred income and counted to the current gains and losses in the period of recognizing the relevantexpenses.
In case there exists any balance of the related deferred income when the government subsidy as already recognizedneeds to be returned, the balance is used to write down the book balance of the relevant deferred income and theexceeded part is counted to the current gains and losses; in case there exists no related deferred income, it is counteddirectly to the current gains and losses.
30. Deferred tax assets and deferred tax liabilities(1) Income tax in the reporting period
At the balance sheet day, the current income tax liabilities (or asset) formed in the reporting period and previous periodsare measured based on the income tax amount predicted payable (or returnable) as calculated according to the tax law.The taxable income amount based on which the current income tax expense is calculated is worked out after thecorresponding adjustment of the pretax accounting profit during the reporting period according to the relevant provisionsof the tax law.
(2) Deferred income tax asset and deferred income tax liabilityThe balance between the book value of some assets and liability items and their tax base and the provisional differencearising from the balance between the book value of the items which have not been taken as asset and liability but may bedetermined as tax base according to the tax law are recognized as deferred income tax asset and deferred income taxliability by means of the debt method based on balance sheet.
The taxable provisional difference which is connected with the initial recognition of goodwill and the initial recognition ofthe asset or liability arising from the transaction which is neither enterprise consolidation nor influences the accountingprofit and taxable income amount (or may be used to offset loss) at the time of incurrence are not recognized as relevantdeferred income tax liability. In addition, as to the taxable provisional difference in connection with investment in thesubsidiaries, associates and joint ventures, if the Company can control the time of reversal of the provisional difference
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while such provisional difference may be possibly unable to be reversed in the foreseeable future and the relevantdeferred income tax liability shall not be recognized either. With the exception of the aforesaid situation, the Companyrecognizes the deferred income tax liability arising from other taxable provisional difference.
The offsetable provisional difference which is connected with the initial recognition of the asset or liability (or may be usedto offset loss) arising from the transaction which is neither enterprise consolidation nor influences the accounting profit andtaxable income amount is not recognized as the relevant deferred income tax asset. In addition the offsetable provisionaldifference in connection with investment in the subsidiaries, associates and joint ventures, in case such provisionaldifference may be possibly unable to be reversed in the foreseeable future, or it is not highly possible to obtain taxableincome amount which can be used to offset the offsetable provincial difference in future, shall not be recognized as therelevant deferred income tax asset. With the exception of the aforesaid situation, the Company recognizes the deferredincome tax asset arising from the other offsetable provisional difference only with the taxable income amount which maypossibly be obtainable for offsetting the offsetable provisional difference.
For the offsetable loss and tax payment write-down which may be carried over to the future years, only the future taxableincome amount which may be obtainable and used to offset the offsetable loss and write down the tax payment may berecognized as the corresponding deferred income tax asset.
At the balance sheet day, deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected toapply to the period when the asset is realized or the liability is settled according to the tax law.
At the balance sheet day, the Company reviews the carrying amount of a deferred tax asset. If it is probable that sufficienttaxable profits will not be available in future to allow the benefit of the deferred tax asset to be utilized, the carrying amountof the deferred tax asset is reduced. Any such reduction in amount is reversed when it becomes probable that sufficienttaxable profits will be available.
(3) Income tax expenseIncome tax expense includes the current income tax and deferred income tax.
Except that the current income tax and deferred income tax in connection with other comprehensive income or thetransactions and matters which are directly stated in the shareholders' equity are counted to the other comprehensiveincome or shareholder's equity and the deferred income tax arising from enterprise consolidation is used to adjusted thebook value of goodwill, all the other current income tax and deferred income tax expenses or income are counted to thecurrent gains and losses.
(4) Income Tax OffsettingIn case the Company has legal right to make netting and is desirous to make netting or obtain assets and settle liabilitiesat the same time, the Company may present the net amount after offsetting the current income tax liabilities with thecurrent income tax assets.
In case the Company has legal right to settle the current income tax asset and current income tax liability in net while thedeferred income tax asset and the deferred income tax liability are related to the income tax which is collected by thesame tax collection and administration authority from the same tax payer or related to the different tax payer, but duringthe period in future when each significant deferred income tax asset and liability are reversed, the Company present the
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deferred income tax asset and deferred income tax liability in net after offsetting when it involves the tax payer's desire tosettle the current income tax asset and liability or obtaining asset and satisfying liability in net.
31. Lease(1) Accounting process for operating leaseThe "finance lease" shall refer to a lease that has transferred in substance all the risks and rewards related to the
ownership of an asset. The ownership of it may or may not eventually be transferred. Other lease except the financinglease is operational lease
① The Company records the operational lease business as the tenant
Rental payment of operational lease is recorded in the relevant asset cost or current gain and loss based on the straightline method over various fiscal periods within the lease term. The initial direct expense is recorded in the current gain andloss. Contingent rental is recorded in the current gain and loss when it actually incurs.
② The Company records the operational lease business as the lessor
The rental income of the operational lease is recorded in the current gain and loss according to the straight line method indifferent periods within the lease term. The initial direct expense with bigger amount is capitalized at the time of incurrenceand is recorded in the current gain and loss periodically according to the same base in recognizing the rental incomeduring the lease term; other initial direct expense with smaller amount is recorded in the current gain and loss at the timeof incurrence. Contingent rental is recorded in the current gain and loss when it actually incurs.
(2) Accounting treatment method for finance lease
① As lessor
At the beginning date of lease period, the Company will recognize the lower of the fair value of the lease asset at thebeginning of the lease and the present value of the minimum amount of rent payment as the entry value of rent asset;takes the minimum rent payment as the entry value of long term account payable and its balance as the unrecognizedfinancial charges. In addition, when the lease negotiation takes place in the same process of conclusion of lease contract,the initial direct expenses attributable to lease item are also counted to the value of rent asset. The balance of theminimum rent payment amount less the unrecognized financial charges is respectively stated on the long term liabilitiesand the long term liabilities due within a year.
Unrecognized financial charges are recognized in the current financing expenses by using the actual interest rate methodwithin the lease term. Contingent rental is recorded in the current gain and loss when it actually incurs.
② As lessee
As at the beginning date of lease period, the Company takes the sum of the minimum amount of the rent collected at thebeginning of the lease and the initial direct expense as the entry value of the finance lease receivable and at the sametime records the unsecured residual value; the recognizes the balance of the sum of the minimum rent collection amount,initial direct expenses and unsecured residual value and the sum of its present value as the unrealized financing income.The balance between the receivable rent from finance lease less the unrealized revenue of financing is respectively
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presented in the long term claim and the long term claim due within a year.
The unrecognized financial charges are calculated by means of the actual interest rate method within the lease term andrecognized as the current financial expenses. Contingent rental is recorded in the current gain and loss when it actuallyincurs.
32. Other important accounting policy and accounting estimateOperation termination
Operation termination refers to the components which can satisfy one of the following conditions, can be separately
distinguished and have been disposed or classified as the category of held-for-sale by the Company: ① this componentrepresents an independent major business or an independent major operation region; ② this component is a part of arelated plan for an independent principal business or an independent principal operation region; ③ this component is a
subsidiary acquired exclusively for resale.
About the accounting treatment method for operation termination, refer to the relevant description of Note V.13
“Held-for-sale assets and disposal group”
33. Changes in significant accounting policies and accounting estimates(1) Change in significant accounting policiesInapplicable(2) Change in significant accounting estimatesInapplicable34. MiscelleneousInapplicableVI. Taxation1. Types of major taxes and tax rates
Type of taxes | Tax basis | Tax rates |
VAT | VAT is calculated and paid based on the balance of the output VAT as worked out based on 16% of the taxable revenues less the input VAT allowed to be offset in the very period. | 16% |
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Consumption tax | For the high-grade watch at the price higher than CNY 10,000 (with CNY 10,000 inclusive) imported or produced, the consumption tax is calculated and payable. | 20% |
Urban maintenance and construction tax | The urban maintenance and construction tax is based on 7% of the turnover tax actually paid | 7% |
Corporate income tax | Taxable income amount | 15%-30% |
Real estate tax | 1.2% of 70% of the cost of the property or 12% of the rental income | 1.2% and 12% |
In case there exist taxpayers subject to different corporate income tax rates, disclose the information.
Taxpayers | Income tax rates |
The Company (Notes①②) | 25.00% |
Shenzhen Harmony World Watches Center Co., Ltd. (HARMONY) (Notes①) | 25.00% |
Shenzhen FIYTA Sophisticated Timepieces Manufacture Co., Ltd. (the Manufacture Co.) (Notes②③) | 15.00% |
FIYTA Hong Kong (Note ④) | 16.50% |
Shenzhen FIYTA Technology Development Co., Ltd. (the Technology Co.) (Notes②③) | 15.00% |
Shiyuehui Boutique (Shenzhen) Co., Ltd. (Shiyuehui ) (Notes⑤) | 25.00% |
Harbin Harmony World Watch Distribution Co., Ltd. (Harbin Company) (Notes⑤) | 25.00% |
Emile Chouriet (Shenzhen) Limited (Emile Choureit Shenzhen Company) (Notes⑤) | 25.00% |
FIYTA Sales Co., Ltd. (the Sales Co.) (Notes①⑤) | 25.00% |
Liaoning Hengdarui Commerce & Trade Co., Ltd. (Hengdarui) (Notes⑤) | 25.00% |
Montres Chouriet SA (the Swiss Co.) (Notes⑥) | 30.00% |
2. Tax Preferences(1) Enterprise Income Tax
Note ①: According to the regulations stated in GuoShuiFa (2008) No. 28, “Interim Administration Method for Levy ofCorporate Income Tax to Enterprise that Operates Cross-regionally”, the head office of the Company and its branchoffices, the head office of HARMONY Company and its branch offices adopt tax submission method of “unified calculation,managing by classes, pre-paid in its registered place, settlement in total, and adjustment by finance authorities” starting
from 1 January 2008. 50% is shared and prepaid by branches and 50% is prepaid by the headquarters.
Note ②: According to the Notice of Improving R & D Expense Pre-tax Weighted Deduction Policy (CAI SHUI (2015) No.
119 promulgated by the Science and Technology Department of State Administration of Taxation, the R & D expensesarising from development of new technology, new products and new process in the Company, the Manufacture Companyand the Technology Company may enjoy 50% weighted deduction as the R & D expenses based on the specifieddeduction according to fact as long as they have not formed intangible assets and counted to the current gains and loss;
Note ③: The company enjoys the “income tax rate exclusion of high-tech enterprises key supported by the state”.
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Note ④: These companies are registered in Hong Kong and the income tax rate of Hong Kong applicable is 16.50% this
year.
Note ⑤: According to the People's Republic of China Enterprise Income Tax Law, the income tax rate is 25% for
residential enterprises since 1 January 2008.
Note ⑥: The tax rate of 30% is applicable for Swiss Company as it registered in Switzerland.
(2) Property taxAccording to Article 2 of the Circular on Transmission of the Provisions on the Policy in Connection with the Property Taxand Urban Land Use Tax Promulgated by the State Administration of Taxation (SHEN DI SHUI FA [2003] No. 676: for thenew properties newly constructed or purchased by taxpayers, the property tax may be exempted for three yearscommencing from the next month after completion of the construction or purchase. Our FIYTA Watch Building located atGuangming New Zone of Shenzhen enjoys exemption from the property tax for three years commencing from the nextmonth of completion of the construction in September 2016.
3. MiscelleneousInapplicableVII. Notes to items of consolidated financial statements1. Monetary capital
In CNY
Items | Ending balance | Ending balance |
Cash in stock | 233,265.12 | 414,210.14 |
Bank deposit | 278,565,485.60 | 184,528,160.32 |
Other Monetary Funds | 2,210,520.86 | 2,210,520.86 |
Total | 281,009,271.58 | 187,152,891.32 |
2. Financial assets measured based on fair value and its movements counted to the current gain or lossInapplicable3. Derivative financial assetsInapplicable
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4. Notes receivable(1) Presentation of classification of notes receivable
In CNY
Items | Ending balance | Ending balance |
Bank acceptance | 3,164,514.86 | 2,398,579.72 |
Trade acceptance | 1,467,574.48 | 7,295,303.96 |
Total | 4,632,089.34 | 9,693,883.68 |
(2) Notes receivable already pledged by the Company at the end of the reporting periodInapplicable(3) Endorsed or discounted notes receivable at the end of the reporting period, but not yet due on the balance
sheet dayInapplicable
(4) Notes transferred to receivables due to issuer’s default at the end of the reporting period
Inapplicable5. Accounts receivable(1) Accounts receivables disclosed by types
In CNY
Categories | Ending balance | Ending balance | ||||||||
Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | |||||
Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
Accounts receivable with significant single amount and provision of bad debt reserve on individual basis | 1,702,371.94 | 0.44% | 1,702,371.94 | 13.57% | 0.00 | 6,985,493.80 | 2.04% | 6,985,493.80 | 44.40% | 0.00 |
Receivables for which provision for bad debts have been recognized based on the portfolio | 389,169,407.57 | 99.54% | 10,748,839.30 | 85.66% | 378,420,568.27 | 334,903,968.85 | 97.93% | 8,649,343.91 | 54.98% | 326,254,624.94 |
Accounts receivable with insignificant single amount | 97,147.84 | 0.02% | 97,147.84 | 0.77% | 0.00 | 97,147.84 | 0.03% | 97,147.84 | 0.62% | 0.00 |
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and provision of bad debt reserve on individual basis | ||||||||||
Total | 390,968,927.35 | 100.00% | 12,548,359.08 | 100.00% | 378,420,568.27 | 341,986,610.49 | 100.00% | 15,731,985.55 | 100.00% | 326,254,624.94 |
Accounts receivable with significant single amount and provision of bad debt reserve on individual basis at the end of thereporting period :
In CNY
Accounts receivable (based on units) | Ending balance | |||
Accounts receivable | Bad debt reserve | Provision proportion | Provision reason | |
Xi'an Centuryginwa Qujiang Shopping Center Co., Ltd. | 1,702,371.94 | 1,702,371.94 | 100.00% | Chances of recovering is remote |
Total | 1,702,371.94 | 1,702,371.94 | -- | -- |
In the combination, the accounts receivable for which the bad debt reserve is provided based on the age analysis:
In CNY
Ageing | Ending balance | ||
Accounts receivable | Bad debt reserve | Provision proportion | |
Itemized within 1 year | |||
Sub-total within 1 year | 200,590,710.06 | 10,022,012.71 | 5.00% |
1 to 2 years | 1,386,065.23 | 138,606.52 | 10.00% |
2 to 3 years | 726,441.81 | 217,932.54 | 30.00% |
Over 3 years | 740,575.05 | 370,287.53 | 50.00% |
Total | 203,443,792.15 | 10,748,839.30 | 5.28% |
Note to the basis for determining the combination:
In the combination, the account receivable for which reserve for bad debt is provided based on balance percentage:
InapplicableIn the combination, the accounts receivable for which the bad debt reserve is provided based on the other method:
Portfolio Description | Ending balance | ||
Accounts receivable | Bad debt reserve | Provision proportion (%) | |
Specific fund portfolio | 185,725,615.42 | - | - |
Note: Based on historical experience, the Company’s receivables due from petty cash paid to employees, receivables due
from subsidiaries of the Company and accounts receivable for the sales between the last settlement date of the samedepartment store and the balance sheet day are with high recoverability and low possibility of incurring bad debt, as aresult, no bad debt provisions are provided for such receivables.
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(2) Bad debt reserve provided, recovered or reversed in the reporting periodDuring the reporting period, the Company provided reserve for bad debt amounting to CNY 2,101,421.27; the reserve for
bad debt recovered or reversed during the reporting period amounted to CNY 5,283,121.86.
Where the significant amount of the reserve for bad debt recovered or reversed:
In CNY
Company name | Amount recovered or reversed | Way of recovery |
Xi'an Centuryginwa Shopping Co., Ltd. | 5,283,121.86 | Bank transfer |
Total | 5,283,121.86 | -- |
(3) Accounts receivable actually written off in current periodInapplicable(4) Accounts receivable due from the top five debtors are as follows:
Total accounts receivable due from the top five debtors of the Company in the current period is CNY32,639,305.03,
accounting for 8.35% of the total accounts receivable as at the end of the current period and the total provision for bad anddoubtful debts made as at the end of the current period is CNY1,631,965.25.
(5) Accounts receivable terminated for recognition due to transfer of financial assetsInapplicable(6) Amount of assets, liabilities formed by transfer of accounts receivable and continuing to be involvedInapplicable6. Advance payments(1) Advance payments are presented based on ages
In CNY
Ageing | Ending balance | Ending balance | ||
Amount | Proportion | Amount | Proportion | |
Within 1 year | 17,227,525.25 | 69.77% | 20,284,829.30 | 82.25% |
1 to 2 years | 6,528,167.69 | 26.44% | 2,034,407.41 | 8.25% |
2 to 3 years | 932,656.35 | 3.78% | 2,344,077.82 | 9.50% |
Over 3 years | 2,000.00 | 0.01% | 0.00 | 0.00% |
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Total | 24,690,349.29 | -- | 24,663,314.53 | -- |
(2) Advance payment to the top five payees of the ending balance collected based on the payees of the advancepayment
The total amount of advance payment to the top five payees of the ending balance collected based on the payees of theadvance payment was CNY 15,260,482.94, taking 61.81% of the toal ending balance of the advance payment.
Other notes:
Inapplicable
7. Interest receivable(1) ClassificationInapplicable(2) Significant overdue interestInapplicable8. Dividends receivable(1) Dividends receivableInapplicable(2)Significant dividends receivable with age exceeding 1 yearInapplicable9. Other receivables(1) Disclosure of classification of other receivables
In CNY
Categories | Ending balance | Ending balance | ||||||||
Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | |||||
Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
Other receivables with significant single amount and provision of bad debt | 6,784,706.55 | 11.73% | 6,784,706.55 | 66.80% | 0.00 | 6,847,372.68 | 15.23% | 6,847,372.68 | 68.70% | 0.00 |
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reserve on individual basis | ||||||||||
Other receivables for which bad debt reserve has been provided based on the portfolio | 51,060,207.68 | 88.24% | 3,352,541.68 | 33.00% | 47,707,666.00 | 38,090,257.88 | 84.73% | 3,099,718.79 | 31.10% | 34,990,539.09 |
Other receivables with insignificant single amount and provision of bad debt reserve on individual basis | 20,000.00 | 0.03% | 20,000.00 | 0.20% | 0.00 | 20,000.00 | 0.04% | 20,000.00 | 0.20% | 0.00 |
Total | 57,864,914.23 | 100.00% | 10,157,248.23 | 100.00% | 47,707,666.00 | 44,957,630.56 | 100.00% | 9,967,091.47 | 100.00% | 34,990,539.09 |
Other receivables with significant single amount and provision of bad debt reserve on individual basis at the end of thereporting period:
In CNY
Other receivables (based on unit) | Ending balance | |||
Other receivables | Bad debt reserve | Provision proportion | Provision reason | |
Deposit of China Resources (Chongqing) Industrial Co., Ltd. | 800,000.00 | 800,000.00 | 100.00% | Unrecoverable |
Beat Blattman Marketing | 3,843,487.75 | 3,843,487.75 | 100.00% | Unrecoverable |
Liberty Time Center GmbH | 2,141,218.80 | 2,141,218.80 | 100.00% | Unrecoverable |
Total | 6,784,706.55 | 6,784,706.55 | -- | -- |
In the combination, other receivables for which the bad debt reserve is provided based on the age analysis:
In CNY
Ageing | Ending balance | ||
Other receivables | Bad debt reserve | Provision proportion | |
Itemized within 1 year | |||
Sub-total within 1 year | 32,815,493.64 | 1,442,731.93 | 4.40% |
1 to 2 years | 7,530,672.67 | 753,067.27 | 10.00% |
2 to 3 years | 3,446,284.94 | 1,033,885.48 | 30.00% |
Over 3 years | 245,714.00 | 122,857.00 | 50.00% |
Total | 44,038,165.25 | 3,352,541.68 | 7.61% |
Note to the basis for determining the combination:
In the combination, other account receivable for which reserve for bad debt is provided based on balance percentage:
InapplicableIn the combination, other receivable for which the bad debt reserve is provided based on other method:
Portfolio Description | Ending balance | ||
Other receivables | Bad debt reserve | Provision proportion (%) |
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Specific fund portfolio | 7,022,042.43 | - | - |
(2) Bad debt provision accrual, received or reversed in the reporting periodDuring the reporting period, the Company provided reserve for bad debt amounting to CNY 190,156.76; the reserve for
bad debt recovered or reversed during the reporting period amounted to CNY 0.00.(3) Accounts receivable actually written off in current periodInapplicable(4) Classification of other receivables based on nature of payment
In CNY
Nature of Payment | Ending book balance | Opening book balance |
Cash deposit and deposit in security | 32,937,359.59 | 30,200,936.65 |
Commodity promotion fee | 3,701,674.02 | 3,387,360.70 |
Reserve | 7,022,042.43 | 4,399,822.68 |
Payment for goods | 5,984,706.55 | 6,047,372.68 |
Others | 8,219,131.64 | 922,137.85 |
Total | 57,864,914.23 | 44,957,630.56 |
(5) Other receivables owed by the top five debtors based on the ending balance
In CNY
Company name | Nature of Payment | Ending balance | Ageing | Proportion in total ending balance of other receivables | Ending balance of the provision for bad debts |
Beat Blattman Marketing | Payment for goods | 3,843,487.75 | Over 3 years | 6.64% | 3,843,487.75 |
China Resources (Shenzhen) Co., Ltd | Deposit in security | 2,960,734.00 | Within 1 year | 5.12% | 148,036.70 |
Liberty Time Center GmbH | Payment for goods | 2,141,218.80 | Over 3 years | 3.70% | 2,141,218.80 |
CHINA RESOURCES SUN HUNG KAI PROPERTIES (HANGZHOU) LIMITED | Deposit in security | 1,497,003.00 | Within 1 year | 2.59% | 74,850.15 |
Shenzhen Yitian Holiday Plaza Co,. Ltd. | Deposit in security | 1,171,173.00 | Within 1 year | 2.02% | 58,558.65 |
Total | -- | 11,613,616.55 | -- | 20.07% | 6,266,152.05 |
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(6) Accounts receivable involving government subsidyInapplicable(7) Other receivables with recognition terminated due to transfer of financial assetsInapplicable(8) Amount of assets and liabilities formed through transfer of other receivables and continuing to be involvedInapplicable10. Inventories(1) Classification of inventories
In CNY
Items | Ending balance | Ending balance | ||||
Book balance | Provision for price falling | Book value | Book balance | Provision for price falling | Book value | |
Raw materials | 181,142,722.04 | 26,475,316.23 | 154,667,405.81 | 192,872,336.46 | 26,899,506.29 | 165,972,830.17 |
Products in process | 9,992,097.03 | 0.00 | 9,992,097.03 | 16,744,428.79 | 0.00 | 16,744,428.79 |
Commodities in stock | 1,632,393,233.64 | 61,681,408.39 | 1,570,711,825.25 | 1,708,413,402.70 | 70,603,985.40 | 1,637,809,417.30 |
Total | 1,823,528,052.71 | 88,156,724.62 | 1,735,371,328.09 | 1,918,030,167.95 | 97,503,491.69 | 1,820,526,676.26 |
Does the Company need to comply with the requirements on disclosure according to the Guidance of Shenzhen StockExchange on Disclosure of Information of the Industry Engaged in No. 4 - Listed Companies Engaged in Seed Industry,CultivationNo
(2) Reserve for Price Falling of Inventories
In CNY
Items | Ending balance | Increase in the reporting period | Decrease in the reporting period | Ending balance | ||
Provision | Others | Reversal or Offset | Others | |||
Raw materials | 26,899,506.29 | 2,050,627.60 | 0.00 | 2,474,817.66 | 0.00 | 26,475,316.23 |
Products in process | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Commodities in stock | 70,603,985.40 | 0.00 | 0.00 | 8,922,577.01 | 0.00 | 61,681,408.39 |
Total | 97,503,491.69 | 2,050,627.60 | 0.00 | 11,397,394.67 | 0.00 | 88,156,724.62 |
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(3) Note to the amount of capitalized borrowing costs involved in the ending balance of inventoriesInapplicable(4) Assets already completed but not yet settled formed in the construction contract at the end of the reporting
periodInapplicable11. Classified as held-for-sale assetsInapplicable12. Non-current assets due within a yearInapplicable13. Other current assets
In CNY
Items | Ending balance | Ending balance |
Rent | 4,036,993.89 | 5,229,782.50 |
Input VAT to be offset | 14,235,658.91 | 18,745,349.24 |
Income tax paid in advance | 803,709.68 | 314,917.39 |
Others | 4,703,274.88 | 326,766.08 |
Total | 23,779,637.36 | 24,616,815.21 |
14. Available-for-sale financial assets(1) About available-for-sale financial assets
In CNY
Items | Ending balance | Ending balance | ||||
Book balance | Impairment reserve | Book value | Book balance | Impairment reserve | Book value | |
Available-for-sale equity instrument | 385,000.00 | 300,000.00 | 85,000.00 | 385,000.00 | 300,000.00 | 85,000.00 |
Measured based on cost | 385,000.00 | 300,000.00 | 85,000.00 | 385,000.00 | 300,000.00 | 85,000.00 |
Total | 385,000.00 | 300,000.00 | 85,000.00 | 385,000.00 | 300,000.00 | 85,000.00 |
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(2) Available-for-sale financial assets measured based on fair value at the end of the reporting periodInapplicable(3) Available-for-sale financial assets measured based on costs at the end of the reporting period
In CNY
Investees | Book balance | Impairment reserve | Holding proportion of the shares in the investees | Cash dividend in the reporting period | ||||||
Beginning of the reporting period | Increase in the reporting period | Decrease in the reporting period | End of the reporting period | Beginning of the reporting period | Increase in the reporting period | Decrease in the reporting period | End of the reporting period | |||
Shenzhen AVIC Culture Communication Co., Ltd. | 300,000.00 | 0.00 | 0.00 | 300,000.00 | 300,000.00 | 0.00 | 0.00 | 300,000.00 | 15.00% | 0.00 |
Xi'an Tangcheng Co., Ltd. | 85,000.00 | 0.00 | 0.00 | 85,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.10% | 0.00 |
Total | 385,000.00 | 0.00 | 0.00 | 385,000.00 | 300,000.00 | 0.00 | 0.00 | 300,000.00 | -- | 0.00 |
(4) Change in impairment of available-for-sale financial assets
In CNY
Classification of available-for-sale financial assets | Available-for-sale equity instrument | Available-for-sale liability instrument | Total |
Balance with provision for impairment recognized at the beginning of the reporting period | 300,000.00 | 0.00 | 300,000.00 |
Balance with provision for impairment recognized at the end of the reporting period | 300,000.00 | 0.00 | 300,000.00 |
(5) Note to serious falling or non-provisional falling of the fair value of available-for-sale equity instrumentswithout provision for impairment provided
Inapplicable15. Held-to-maturity investments(1) About held-to-maturity investmentsInapplicable
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(2) Significant held-to-maturity investments at the end of the reporting periodInapplicable(3) Reclassification of the held-to-maturity investments in the reporting periodInapplicable16. Long term accounts receivable(1) About long term accounts receivableInapplicable(2) Long term accounts receivable recognized due to termination of the transfer of financial assetsInapplicable(3) Transfer of long term accounts receivable while continuing to be involved in the amount of the formed assets
and liabilitiesInapplicable17. Long-term equity investments
In CNY
Investees | Ending balance | Increase/ Decrease (+ / -) in the reporting period | Ending balance | Ending balance of the provision for impairment | |||||||
Additional investment | Decrease of investment | Income from equity investment recognized under equity method | Other comprehensive income adjustment | Other equity movement | Announced for distributing cash dividend or profit | Provision for impairment | Others | ||||
I. Joint Venture | |||||||||||
II. Associates | |||||||||||
Shanghai Watch Industry Co., Ltd. (Shanghai Watch) | 43,879,518.09 | 0.00 | 0.00 | 93,013.38 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 43,972,531.47 | 0.00 |
Sub-total | 43,879,518.09 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 43,972,531.47 | 0.00 |
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Total | 43,879,518.09 | 0.00 | 0.00 | 93,013.38 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 43,972,531.47 | 0.00 |
Other notes
18. Investment based real estate(1) Investment property measured based on the cost method
In CNY
Plant and buildings | Land use right | Construction-in-process | Total | |
I. Original book value | ||||
1. Opening balance | 449,153,501.16 | 0.00 | 0.00 | 449,153,501.16 |
2. Increase in the reporting period | 58,656,614.70 | 0.00 | 0.00 | 58,656,614.70 |
(1) Purchased | ||||
(2) Inventories\fixed assets/construction- in – process transferred in | 58,656,614.70 | 0.00 | 0.00 | 58,656,614.70 |
(3) Increase of enterprise consolidation | ||||
3. Amount decreased in the reporting period | ||||
(1) Disposal | ||||
(2) Other transfer out | ||||
4. Ending balance | 507,810,115.86 | 0.00 | 0.00 | 507,810,115.86 |
II. Accumulative depreciation and accumulative amortization | ||||
1. Opening balance | 143,659,513.39 | 0.00 | 0.00 | 143,659,513.39 |
2. Increase in the reporting period | 15,891,827.29 | 0.00 | 0.00 | 15,891,827.29 |
(1) Provision or amortization | 6,375,026.65 | 0.00 | 0.00 | 6,375,026.65 |
(2)Transferred in to the fixed asset | 9,516,800.64 | 0.00 | 0.00 | 9,516,800.64 |
3. Amount decreased in the reporting period | ||||
(1) Disposal |
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(2) Other transfer out | ||||
4. Ending balance | 159,551,340.68 | 0.00 | 0.00 | 159,551,340.68 |
III. Provision for impairment | ||||
1. Opening balance | ||||
2. Increase in the reporting period | ||||
(1) Provision | ||||
3. Amount decreased in the reporting period | ||||
(1) Disposal | ||||
(2) Other transfer out | ||||
4. Ending balance | ||||
IV. Book value | ||||
1.Book value at the end of the reporting period | 348,258,775.18 | 0.00 | 0.00 | 348,258,775.18 |
2.Book value at the beginning of the reporting period | 305,493,987.77 | 0.00 | 0.00 | 305,493,987.77 |
(2) Investment property measured based on fair valueInapplicable(3) Investment property without certificate of property rightInapplicable19. Fixed asset(1) About fixed assets
In CNY
Items | Plant & buildings | Machinery & equipment | Motor vehicle | Electronic equipment | Others | Total |
I. Original book value | ||||||
1. Opening | 548,203,064.99 | 76,359,195.91 | 15,572,717.72 | 43,168,802.82 | 56,767,439.55 | 740,071,220.99 |
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balance | ||||||
2. Increase in the reporting period | 0.00 | 1,821,880.34 | 0.00 | 1,463,669.77 | 1,471,405.39 | 4,756,955.50 |
(1) Purchase | 0.00 | 1,821,880.34 | 0.00 | 1,463,669.77 | 1,471,405.39 | 4,756,955.50 |
(2) Construction-in-process transferred in | ||||||
(3) Increase of enterprise consolidation | ||||||
3. Amount decreased in the reporting period | 59,093,947.97 | 157,887.39 | 0.00 | 671,612.42 | 304,807.47 | 60,228,225.25 |
(1) Disposal or scrapping | 437,333.27 | 157,887.39 | 0.00 | 671,612.42 | 304,807.47 | 1,571,640.55 |
(2) Transferred into investment purpose real estate | 58,656,614.70 | 0.00 | 0.00 | 0.00 | 0.00 | 58,656,614.70 |
4. Ending balance | 489,109,117.02 | 78,023,188.86 | 15,572,717.72 | 43,960,860.17 | 57,934,037.47 | 684,599,921.24 |
II. Accumulative depreciation | ||||||
1. Opening balance | 94,955,404.27 | 36,106,695.76 | 12,805,115.03 | 25,960,630.90 | 46,543,782.38 | 216,371,628.34 |
2. Increase in the reporting period | 7,080,045.25 | 3,131,927.12 | 508,303.00 | 2,471,305.70 | 1,514,155.42 | 14,705,736.49 |
(1) Provision | 7,080,045.25 | 3,131,927.12 | 508,303.00 | 2,471,305.70 | 1,514,155.42 | 14,705,736.49 |
3. Amount decreased in the reporting period | 9,516,800.64 | 32,522.96 | 0.00 | 593,038.40 | 248,217.77 | 10,390,579.77 |
(1) Disposal or scrapping | 0.00 | 32,522.96 | 0.00 | 593,038.40 | 248,217.77 | 873,779.13 |
(2) Transferred into investment purpose real estate | 9,516,800.64 | 0.00 | 0.00 | 0.00 | 0.00 | 9,516,800.64 |
4. Ending balance | 92,518,648.88 | 39,206,099.92 | 13,313,418.03 | 27,838,898.20 | 47,809,720.03 | 220,686,785.06 |
III. Provision for impairment |
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1. Opening balance | ||||||
2. Increase in the reporting period | ||||||
(1) Provision | ||||||
3. Amount decreased in the reporting period | ||||||
(1) Disposal or scrapping | ||||||
4. Ending balance | ||||||
IV. Book value | ||||||
1.Book value at the end of the reporting period | 396,590,468.14 | 38,817,088.94 | 2,259,299.69 | 16,121,961.97 | 10,124,317.44 | 463,913,136.18 |
2.Book value at the beginning of the reporting period | 453,247,660.72 | 40,252,500.15 | 2,767,602.69 | 17,208,171.92 | 10,223,657.17 | 523,699,592.65 |
(2) About temporarily idle fixed assetsInapplicable(3) Fixed assets rented through finance leaseInapplicable(4) Fixed assets leased through operating leaseInapplicable(5) Fixed assets that do not have certificate for property rightInapplicable20. Construction-in-process(1)About construction in progress
In CNY
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Items | Ending balance | Opening balance | ||||
Book balance | Impairment reserve | Book value | Book balance | Impairment reserve | Book value | |
FIYTA Watch Building design, construction and supporting construction project | 12,515,382.25 | 0.00 | 12,515,382.25 | 10,947,300.53 | 0.00 | 10,947,300.53 |
Total | 12,515,382.25 | 0.00 | 12,515,382.25 | 10,947,300.53 | 0.00 | 10,947,300.53 |
(2) Movements of important construction-in-progress projects in the reporting period
In CNY
Description | Budget | Opening balance | Increase in the reporting period | Transferred into the fixed assets in the current period | Other decreases in the reporting year | Ending balance | Proportion of the accumulative engineering input in the budget | Project progress | Accumulative amount involved in interest capitalization | Including: amount of the capitalized interest in the reporting period | Interest capitalization rate in the reporting period | Capital source |
FIYTA Watch Building design, construction and supporting construction project | 34,050,900.00 | 10,947,300.53 | 1,568,081.72 | 0.00 | 0.00 | 12,515,382.25 | 36.75% | 36.75% | 0.00 | 0.00 | 0.00% | Self-raised capital |
Total | 34,050,900.00 | 10,947,300.53 | 1,568,081.72 | 0.00 | 0.00 | 12,515,382.25 | -- | -- | 0.00 | 0.00 | 0.00% | -- |
(3) Provision for impairment of construction in progress in the current periodInapplicable
21. Engineering materialsInapplicable
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22. Disposal of fixed assetsInapplicable23. Productive biological asset(1) Productive biological asset by using the cost measurement modelInapplicable(2) Productive biological asset by using the fair value measurement modelInapplicable24. Oil and Gas AssetsInapplicable25. Intangible assets(1) About the intangible assets
In CNY
Items | Land use right | Patent Right | Non-patent technology | Software system | Trademark rights | Total |
I. Original book value | ||||||
1. Opening balance | 34,854,239.40 | 0.00 | 0.00 | 19,904,736.57 | 9,547,313.86 | 64,306,289.83 |
2. Increase in the reporting period | 79,583.00 | 0.00 | 0.00 | 2,077,738.43 | 496,358.86 | 2,653,680.29 |
(1) Purchase | 79,583.00 | 0.00 | 0.00 | 2,077,738.43 | 496,358.86 | 2,653,680.29 |
(2) Internal R & D | ||||||
(3) Increase of enterprise consolidation | ||||||
3. Amount decreased in the reporting period | ||||||
(1) Disposal | ||||||
4. Ending balance | 34,933,822.40 | 0.00 | 0.00 | 21,982,475.00 | 10,043,672.72 | 66,959,970.12 |
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II. Accumulative amortization | ||||||
1. Opening balance | 9,887,164.24 | 0.00 | 0.00 | 6,951,113.14 | 3,244,732.24 | 20,083,009.62 |
2. Increase in the reporting period | 366,015.82 | 0.00 | 0.00 | 1,893,226.08 | 171,112.97 | 2,430,354.87 |
(1) Provision | 366,015.82 | 0.00 | 0.00 | 1,893,226.08 | 171,112.97 | 2,430,354.87 |
3. Amount decreased in the reporting period | ||||||
(1) Disposal | ||||||
4. Ending balance | 10,253,180.06 | 0.00 | 0.00 | 8,844,339.22 | 3,415,845.21 | 22,513,364.49 |
III. Provision for impairment | ||||||
1. Opening balance | ||||||
2. Increase in the reporting period | ||||||
(1) Provision | ||||||
3. Amount decreased in the reporting period | ||||||
(1) Disposal | ||||||
4. Ending balance | ||||||
IV. Book value | ||||||
1.Book value at the end of the reporting period | 24,680,642.34 | 0.00 | 0.00 | 13,138,135.78 | 6,627,827.51 | 44,446,605.63 |
2.Book value at the beginning of the reporting period | 24,967,075.16 | 0.00 | 0.00 | 12,953,623.43 | 6,302,581.62 | 44,223,280.21 |
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(2) About the land use right without certificate of titleInapplicable26. Development expenditureInapplicable27. GoodwillInapplicable28. Long term expenses to be apportioned
In CNY
Items | Opening balance | Increase in the reporting period | Amount amortized in the reporting period | Other decrease | Ending balance |
Charge of fabrication of special counters | 49,334,415.56 | 14,981,157.22 | 24,086,669.23 | 0.00 | 40,228,903.55 |
Refurbishment expenses | 58,392,053.11 | 18,954,360.44 | 14,628,775.92 | 0.00 | 62,717,637.63 |
Market promotion | 0.00 | 6,792,452.86 | 1,698,113.22 | 0.00 | 5,094,339.64 |
Others | 1,683,316.82 | 0.00 | 533,924.53 | 0.00 | 1,149,392.29 |
Total | 109,409,785.49 | 40,727,970.52 | 40,947,482.90 | 0.00 | 109,190,273.11 |
29. Deferred tax assets and deferred tax liabilities(1) Deferred income tax asset without offsetting
In CNY
Items | Ending balance | Opening balance | ||
Offsetable provisional difference | Deferred income tax asset | Offsetable provisional difference | Deferred income tax asset | |
Asset impairment reserve | 81,697,110.54 | 19,865,559.30 | 93,805,178.33 | 22,891,430.26 |
Unrealized profit from the intracompany transactions | 298,377,314.29 | 73,967,818.56 | 309,982,920.90 | 76,608,130.54 |
Offsetable loss | 50,682,837.77 | 11,159,509.24 | 27,342,976.03 | 4,930,384.00 |
Deferred income | 5,904,000.00 | 1,476,000.00 | 5,904,000.00 | 1,476,000.00 |
Total | 436,661,262.60 | 106,468,887.10 | 437,035,075.26 | 105,905,944.80 |
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(2) Deferred income tax liabilities without offsettingInapplicable(3) Deferred income tax asset or liabilities stated with net amount after offsetting
In CNY
Items | Amount mutually offset between the deferred income tax assets and liabilities at the end of the reporting period | Ending balance of the deferred income tax asset or liabilities after offsetting | Amount mutually offset between the deferred income tax assets and liabilities at the beginning of the reporting period | Opening balance of the deferred income tax asset or liabilities after offsetting |
Deferred income tax asset | 0.00 | 106,468,887.10 | 0.00 | 105,905,944.80 |
(4) Statement of deferred income tax asset not recognized
In CNY
Items | Ending balance | Opening balance |
Offsetable provisional difference | 29,465,221.39 | 29,691,944.68 |
Offsetable loss | 52,654,047.72 | 41,326,518.50 |
Total | 82,119,269.11 | 71,018,463.18 |
(5) Unrecognized deferred income tax asset available for offsetting loss is going to expire in the following yearsInapplicable30. Other non-current assets
In CNY
Items | Ending balance | Opening balance |
Advance payment for equipment | 4,863,862.29 | 8,246,538.33 |
Total | 4,863,862.29 | 8,246,538.33 |
31. Short term loans(1) Classification of short-term loans
In CNY
Items | Ending balance | Opening balance |
Secured loan | 129,917,100.00 | 120,990,510.00 |
Credit loan | 350,000,000.00 | 405,000,000.00 |
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Total | 479,917,100.00 | 525,990,510.00 |
(2)Short-term loans overdue but still remaining outstandingInapplicable32. Financial liabilities measured based on fair value and the movements counted to the current gain or lossInapplicable33. Derivative financial liabilitiesInapplicable34. Notes payableInapplicable35. Accounts payable(1) Statement of accounts payable
In CNY
Items | Ending balance | Opening balance |
Payment for goods | 201,502,338.96 | 197,139,603.70 |
Payment for materials | 7,881,729.77 | 5,596,017.29 |
Engineering payment | 57,598,728.48 | 60,520,874.66 |
Total | 266,982,797.21 | 263,256,495.65 |
(2) Significant accounts payable with age exceeding 1 yearInapplicable36. Advances from customers(1) Statement of advances from customers
In CNY
Items | Ending balance | Opening balance |
Advances on sales | 15,204,157.86 | 10,928,657.72 |
Rent received in advance | 3,401,495.93 | 4,212,930.07 |
Total | 18,605,653.79 | 15,141,587.79 |
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(2) Significant advances from customers with age exceeding 1 yearInapplicable(3) Unfinished projects formed in the construction contracts but already settled at the end of the reporting periodInapplicable37. Employee remuneration payable(1) Statement of employee remuneration payable
In CNY
Items | Opening balance | Increase in the reporting period | Decrease in the reporting period | Ending balance |
I. Short term remuneration | 67,145,581.32 | 258,370,201.89 | 288,791,753.83 | 36,724,029.38 |
II. Post-employment benefit program - defined contribution plan. | 4,418,785.82 | 20,093,945.06 | 20,772,444.43 | 3,740,286.45 |
III. Dismission welfare | 0.00 | 0.00 | 0.00 | 0.00 |
IV. Other welfare due within a year | 0.00 | 0.00 | 0.00 | 0.00 |
Total | 71,564,367.14 | 278,464,146.95 | 309,564,198.26 | 40,464,315.83 |
(2) Presentation of short term remuneration
In CNY
Items | Opening balance | Increase in the reporting period | Decrease in the reporting period | Ending balance |
1. Salaries, bonus, allowances and subsidies | 66,712,129.20 | 230,556,433.10 | 261,048,814.75 | 36,219,747.55 |
2. Staff’s welfare | 0.00 | 5,507,544.99 | 5,507,544.99 | 0.00 |
3. Social security premium | 0.00 | 9,054,362.60 | 9,054,362.60 | 0.00 |
Including: medical insurance premium | 0.00 | 8,049,893.76 | 8,049,893.76 | 0.00 |
Work injury insurance | 0.00 | 410,886.39 | 410,886.39 | 0.00 |
Maternity Insurance | 0.00 | 593,582.45 | 593,582.45 | 0.00 |
4. Public reserve for housing | 0.00 | 8,249,237.92 | 8,249,237.92 | 0.00 |
5. Trade union fund and staff education fund | 433,452.12 | 4,356,888.05 | 4,286,058.34 | 504,281.83 |
Compensation provided for | 0.00 | 645,735.23 | 645,735.23 | 0.00 |
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severing of employment relation | ||||
Total | 67,145,581.32 | 258,370,201.89 | 288,791,753.83 | 36,724,029.38 |
(3) Presentation of the defined contribution plan
In CNY
Items | Opening balance | Increase in the reporting period | Decrease in the reporting period | Ending balance |
1. Basic endowment insurance premium | 1,044.89 | 18,891,415.99 | 18,850,590.58 | 41,870.30 |
2. Unemployment insurance premium | 0.00 | 529,422.59 | 529,422.59 | 0.00 |
3. Contribution to the enterprise annuity scheme | 4,417,740.93 | 673,106.48 | 1,392,431.26 | 3,698,416.15 |
Total | 4,418,785.82 | 20,093,945.06 | 20,772,444.43 | 3,740,286.45 |
Other notes:
38. Taxes payable
In CNY
Items | Ending balance | Opening balance |
VAT | 27,512,259.94 | 28,234,436.08 |
Consumption tax | 13,792.59 | 0.00 |
Corporate income tax | 23,107,706.42 | 24,051,749.74 |
Individual income tax | 2,254,316.88 | 779,154.31 |
Urban maintenance and construction tax | 906,564.08 | 948,001.89 |
Real estate tax | 1,370,319.41 | 640,117.90 |
Education Surcharge | 647,696.32 | 677,393.80 |
Stamp duty | 118,885.78 | 401,599.97 |
Dyke protection surcharge | 1,195.61 | 2,178.98 |
Others | 75,989.31 | 122,603.92 |
Total | 56,008,726.34 | 55,857,236.59 |
Other notes:
39. Interest payable
In CNY
Items | Ending balance | Opening balance |
Long term loan interest with interest payment in | 116,286.23 | 152,151.14 |
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installment and principal repayment upon maturity | ||
Interest payable for short term loan | 570,367.92 | 1,312,577.97 |
Total | 686,654.15 | 1,464,729.11 |
40. Dividend payableInapplicable41. Other payables(1) Other payments stated based on nature of fund
In CNY
Items | Ending balance | Opening balance |
Collateral and Deposit | 20,236,777.86 | 23,026,920.95 |
Fund for shop-front activities | 45,720,112.79 | 15,096,271.16 |
Personal account payable | 1,683,098.43 | 4,911,856.36 |
Refurbishment | 2,873,345.15 | 3,175,612.64 |
Down payment | 591,807.71 | 1,132,084.26 |
Others | 13,549,894.95 | 10,424,791.27 |
Total | 84,655,036.89 | 57,767,536.64 |
(2) Other payables in significant amount and with aging over 1 year
In CNY
Items | Ending balance | Cause of failure in repayment or carry-over |
Shenzhen Tencent Computer System Co., Ltd . | 4,693,429.16 | Property rental deposit; still in the lease term |
Oracle Research & Development Center(Shenzhen) Co., Ltd | 804,000.00 | Property rental deposit; still in the lease term |
Rainforest Restaurant Nanshan District, Shenzhen | 791,320.00 | Property rental deposit; still in the lease term |
SHENZHEN COMEN MEDICAL INSTRUMENTS CO., LTD. | 734,775.68 | Property rental deposit; still in the lease term |
China Merchants Bank Co., Ltd. Shenzhen Branch | 637,932.40 | Property rental deposit; still in the lease term |
Total | 7,661,457.24 | -- |
Other notes
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42. Liabilities classified as held-for-sale liabilitiesInapplicable43. Non-current liabilities due within a year
In CNY
Items | Ending balance | Opening balance |
Long-term liabilities due within a year | 35,000,000.00 | 35,000,000.00 |
Total | 35,000,000.00 | 35,000,000.00 |
Other notes:
44. Other current liabilitiesInapplicable45. Long-term Loan(1) Classification of Long-term Borrowings
In CNY
Items | Ending balance | Opening balance |
Mortgage loan | 4,791,307.50 | 5,008,425.00 |
Secured loan | 92,361,928.00 | 109,861,928.00 |
Less: Long-term borrowings due within 1 year | -35,000,000.00 | -35,000,000.00 |
Total | 62,153,235.50 | 79,870,353.00 |
Notes to classification of long term borrowings:
Note:① The Company has no overdue and outstanding long term borrowing.② For classification of the categories of collaterals of secured borrowings and the amount, refer to Note VII.78.③ For guaranteed borrowings and the guarantees offered by the related parties, refer to Note XII.5(4).④ The interest rate of long term borrowings is 4.5325%.
46. Bonds Payable(1) Bonds payableInapplicable(2) Increase/Decrease of bonds payable (excluding other financial instruments classified as financial liabilities,
such as preferred shares, perpetual bonds, etc.)Inapplicable
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(3) Note to the conditions and time of share conversion of convertible company bondsInapplicable(4) Note to other financial instruments classified as financial liabilitiesInapplicable47. Long term accounts payable(1) Long term accounts payable stated based on the natureInapplicable48. Long term payroll payable(1) Statement of long term payroll payableInapplicable(2) Change of defined benefit plansInapplicable49. Special accounts payableInapplicable50. Predicted liabilitiesInapplicable51. Deferred income
In CNY
Items | Opening balance | Increase in the reporting period | Decrease in the reporting period | Ending balance | Cause of formation |
Government subsidies | 5,904,000.00 | 0.00 | 0.00 | 5,904,000.00 | |
Total | 5,904,000.00 | 0.00 | 0.00 | 5,904,000.00 | -- |
Items involving government subsidies:
In CNY
Liabilities | Opening balance | Amount of newly | Amount counted | Amount counted | Amount offsetting | Other changes | Ending balance | Related with |
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added subsidy in the reporting period | to the non-operating income in the reporting period | to the other income in the reporting period | costs and expenses in the reporting period | assets/related with income | ||||
Special purpose fund of Shenzhen industrial design development (Note (1)) | 2,000,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 2,000,000.00 | Related with assets |
Funding project for construction of enterprise technology center designated by the state (Note (2)) | 2,000,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 2,000,000.00 | Related with assets |
Key technology R & D project of DF101 Airplane Benchmark Timing System (Note (3)) | 480,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 480,000.00 | Related with income |
Special purpose fund for the Self-dependent 2017 Innovation Industry Development in Nanshan District | 124,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 124,000.00 | Related with income |
Special purpose fund for 2017 Industry and Informationization at Provincial Level (Note (4)) | 1,300,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1,300,000.00 | Related with income |
Total | 5,904,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 5,904,000.00 | -- |
Other notes:
Note ①: It is the special fund for development of industrial design in Shenzhen obtained according to the Operation
Instructions on Certification and Financial Support Program for Industrial Design Centers in Shenzhen (TrialImplementation) SHEN JING MAO IT Zi [2013] No. 227 jointly promulgated by Economy, Trade and InformationCommission of Shenzhen Municipality and Finance Commission of Shenzhen Municipality;
Note ②: It is the fund from the financial support for construction of enterprise technology centers in Shenzhen obtained
according to the Circular of Development and Reform Commission of Shenzhen Municipality on Issuing the First Batch of
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Supporting Program of Financial Support Fund for Construction of Enterprise Technology Centers in Shenzhen in 2015(SHEN JING MAO XINXI YU [2015] No. 129 on October 28, 2015.
Note ③: It is the special fund for cooperation among organizations under the province and ministries, manufacturers and
research institutions obtained according to the Public Notice on the Projects Enjoying Support with the Special Fund forOverall Strategic Cooperation of Provincial Institutions from the Special Fund for Cooperation among Organizations underthe Province and Ministries, Manufacturers and Research Institutions in Year 2013 (YUE KE GONG SHI [2014] No. 13)promulgated by Department of Science and Technology of Guangdong Province on December 9, 2015.
Note ④: The special purpose fund obtained according to the Circular of the Economic and Information Commission of
Guangdong Province on Doing a Good Job in Submission to the Special Project Library of Production and Services atProvincial Level in 2017 (YUE JING XIN SHENG CHAN HAN (2016) No. 53) jointly promulgated by the Economic &Information Commission of Guangdong Province and the Finance Department of Guangdong Province.
52. Other non-current liabilitiesInapplicable53. Capital stock
In CNY
Opening balance | Increase / Decrease (+/ -) | Ending balance | |||||
New issuing | Bonus shares | Shares converted from reserve | Others | Sub-total | |||
Total Shares | 438,744,881.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 438,744,881.00 |
54. Other equity instruments(1) Basic information on the outstanding other financial instruments, including preferred shares, perpetual bonds,
etc. at the end of the reporting periodInapplicable(2)Movement of the outstanding other financial instruments, including preferred shares, perpetual bonds, etc. at
the end of the reporting periodInapplicable55. Capital reserve
In CNY
Items | Opening balance | Increase in the reporting period | Decrease in the reporting period | Ending balance |
Capital premium (capital stock | 1,047,963,195.57 | 0.00 | 0.00 | 1,047,963,195.57 |
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premium) | ||||
Other capital reserve | 14,492,448.65 | 0.00 | 0.00 | 14,492,448.65 |
Total | 1,062,455,644.22 | 0.00 | 0.00 | 1,062,455,644.22 |
56. Treasury sharesInapplicable57. Other comprehensive income
In CNY
Items | Opening balance | Amount incurred in the reporting period | Ending balance | ||||
Amount incurred before income tax in the reporting period | Less: Gain or loss counted to the other comprehensive income and transferred into gain or loss in the current period | Less: Income tax expense | Attributable to the parent company after tax | Attributable to minority shareholders after tax | |||
Other comprehensive income which cannot be re-classified into the gain and loss in future | -11,523,442.39 | -1,392,954.99 | 0.00 | 0.00 | -1,392,919.75 | -35.24 | -12,916,362.14 |
Conversion difference in foreign currency statements | -11,523,442.39 | -1,392,954.99 | 0.00 | 0.00 | -1,392,919.75 | -35.24 | -12,916,362.14 |
Total other comprehensive income | -11,523,442.39 | -1,392,954.99 | 0.00 | 0.00 | -1,392,919.75 | -35.24 | -12,916,362.14 |
Other notes include the valid part of gain and loss of a cash-flow hedge converted into initial amount of arbitraged itemsfor adjustment:
Inapplicable
58. Special reserveInapplicable59. Surplus Reserve
In CNY
Items | Opening balance | Increase in the reporting period | Decrease in the reporting period | Ending balance |
Surplus reserve | 144,820,819.35 | 0.00 | 0.00 | 144,820,819.35 |
Discretionary surplus reserve | 61,984,894.00 | 0.00 | 0.00 | 61,984,894.00 |
Total | 206,805,713.35 | 0.00 | 0.00 | 206,805,713.35 |
Note to surplus reserve, including the note to its increase/decrease and the cause(s) of its movement in the reporting
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period:
Inapplicable
60. Retained earnings
In CNY
Items | Reporting period | Previous period |
Before adjustment: Retained earnings at the end of the previous period | 771,484,565.02 | 687,986,807.74 |
After adjustment: Retained earnings at the beginning of the reporting period | 771,484,565.02 | 687,986,807.74 |
Plus: Net profit attributable to the parent company’s owner in the report period | 112,367,921.44 | 140,216,258.28 |
Less: Provision of statutory surplus public reserve | 0.00 | 12,844,012.90 |
Dividends of common shares payable | 0.00 | 43,874,488.10 |
Retained earnings at the end of the reporting period | 883,852,486.46 | 771,484,565.02 |
Statement of adjustment of retained earnings at the beginning of the reporting period:
1). The amount involved in the retroactive adjustment according to the Enterprise Accounting Standards and the relevantnew provisions influencing the retained earnings at the beginning of the reporting period was CNY 0.00.2). The amount involved in change of the accounting policy influencing the retained earnings at the beginning of thereporting period was CNY 0.00.3). The amount involved in correction of the significant accounting errors influencing the retained earnings at thebeginning of the reporting period was CNY 0.00.4). The amount involved in change of the consolidation scope caused by the common control influencing the retainedearnings at the beginning of the reporting period was CNY 0.00.5). The total amount involved in other adjustments influencing the retained earnings at the beginning of the reportingperiod was CNY 0.00.
61. Operation Income and Costs
In CNY
Items | Amount incurred in the reporting period | Amount incurred in the previous period | ||
Income | Costs | Income | Costs | |
Principal business | 1,683,836,915.14 | 973,240,076.81 | 1,588,553,573.96 | 940,053,728.29 |
Other businesses | 12,054,517.58 | 3,085,659.54 | 10,987,570.39 | 1,425,956.55 |
Total | 1,695,891,432.72 | 976,325,736.35 | 1,599,541,144.35 | 941,479,684.84 |
62. Business Taxes and Surcharges
In CNY
t
Items | Amount incurred in the reporting period | Amount incurred in the previous period |
Consumption tax | 35,185.87 | 3,685.47 |
Urban maintenance and construction tax | 8,003,388.87 | 6,767,130.24 |
Education Surcharge | 5,707,461.48 | 4,841,191.32 |
Resource tax | 0.00 | 0.00 |
Real estate tax | 1,987,807.87 | 1,792,451.23 |
Land use tax | 189,899.66 | 133,605.02 |
Tax on using vehicle and boat | 375.00 | 1,860.00 |
Stamp duty | 990,689.30 | 890,202.85 |
Others | 875,978.38 | 751,371.15 |
Total | 17,790,786.43 | 15,181,497.28 |
63. Sales expenses
In CNY
Items | Amount incurred in the reporting period | Amount incurred in the previous period |
Salaries & bonus | 139,546,287.86 | 137,774,121.37 |
Market promotion | 74,916,847.31 | 52,659,388.21 |
Rent | 37,604,819.68 | 33,600,054.64 |
Amortization of the long-term expenses to be apportioned | 34,992,451.67 | 46,807,569.89 |
Shopping mall fees | 26,432,225.66 | 30,701,374.17 |
Social security premium | 20,980,632.82 | 19,188,573.59 |
Advertisement fee | 14,113,335.56 | 13,600,866.95 |
Packing expenses | 8,692,707.95 | 6,046,492.43 |
Exhibition fee | 8,567,276.57 | 14,393,962.02 |
Freight | 5,646,078.77 | 5,646,078.77 |
Other expenses | 50,620,377.84 | 33,867,839.75 |
Total | 422,113,041.69 | 394,286,321.79 |
64. Administrative expenses
In CNY
Items | Amount incurred in the reporting period | Amount incurred in the previous period |
Salaries & bonus | 63,138,017.67 | 44,368,426.25 |
R & D expenses | 21,285,926.02 | 21,944,615.09 |
Depreciation expense | 7,397,612.68 | 6,605,338.51 |
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Social security premium | 5,047,581.22 | 4,088,475.24 |
Business travel expenses | 3,182,680.24 | 2,678,668.34 |
Rent | 3,014,559.67 | 647,956.03 |
Labor union dues | 2,603,067.32 | 1,249,443.18 |
Amortization of the long-term expenses to be apportioned | 2,539,439.18 | 1,767,821.69 |
Amortization of intangible assets | 2,223,019.77 | 1,277,694.42 |
Public reserve for housing | 2,048,849.77 | 2,252,733.41 |
Other expenses | 13,047,564.17 | 11,289,214.79 |
Total | 125,528,317.71 | 98,170,386.95 |
65. Financial expenses
In CNY
Items | Amount incurred in the reporting period | Amount incurred in the previous period |
Interest payment | 14,273,043.13 | 23,246,930.51 |
Less: capitalized interest | 0.00 | 0.00 |
Less: Interest income | 0.00 | 1,489,867.45 |
Exchange gain & loss | 33,652.69 | 265,259.52 |
Financial service charge | 4,920,682.75 | 4,178,310.48 |
Total | 18,147,791.49 | 26,200,633.06 |
66. Loss from impairment of assets
In CNY
Items | Amount incurred in the reporting period | Amount incurred in the previous period |
I. Loss from impairment of assets | -5,178,800.41 | 6,473,689.30 |
II. Loss from price falling of inventories | 1,765,800.30 | 6,310,000.00 |
Total | -3,413,000.11 | 12,783,689.30 |
67. Income from change of the fair valueInapplicable68. Return on investment
In CNY
Items | Amount incurred in the reporting period | Amount incurred in the previous period |
Income from long term equity investment based on equity | 93,013.38 | 188,871.89 |
t
method | ||
Total | 93,013.38 | 188,871.89 |
Other notes:
69. Income from disposal of assets
In CNY
Source of income from disposal of assets | Amount incurred in the reporting period | Amount incurred in the previous period |
Profit from disposal of assets | 3,490.00 | 3,570.55 |
Loss from disposal of assets | -57,897.16 | -16,923.50 |
70. Other income
In CNY
Source of arising of other income | Amount incurred in the reporting period | Amount incurred in the previous period |
2017 Shenzhen Patent Award (Note 1) | 2,000.00 | 0.00 |
Special Fund of Shenzhen Standard in 2017(Note 2) | 496,000.00 | 0.00 |
Financial support for integrating IT application with industrialization from the Economic Promotion Bureau of Nanshan District (Note 3) | 100,000.00 | 0.00 |
19th China Patent Award(Note 4) | 500,000.00 | 0.00 |
Special fund for industry transformation and upgrading in 2018(Note 5) | 500,000.00 | 0.00 |
Job stabilization subsidy delivered on behalf by Administration of Social Security Funds | 10,000.00 | 0.00 |
2016 R & D financial support from the Technology Innovation Commission (Note 6) | 866,000.00 | 0.00 |
R & D financial support from Guangming New Zone | 360,000.00 | 0.00 |
Financial support as exhibition subsidy in Guangming New Zone | 50,000.00 | 0.00 |
Special financial support for economic development in Guangdong New Zone | 208,000.00 | 0.00 |
Allowance for BaselWorld 2017 | 496,013.80 | 0.00 |
Financial support for excellence creation rating in Nanshan District (Note 7) | 200,000.00 | 0.00 |
The national E-commerce demonstration enterprise award from the State Commission of Economy and Information Technology (Note 8) | 1,000,000.00 | 0.00 |
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Subsidy of export credit insurance | 33,005.00 | 0.00 |
Domestic patent fee award for improving the enterprise's competitiveness (Note 9) | 2,000.00 | 0.00 |
Enterprise R & D financial support of year 2016(Note 10) | 1,024,000.00 | 0.00 |
Subsidy for the domestic economic and trade exhibition of the special fund for the new zone economic development in 2017 | 50,000.00 | 0.00 |
Special fund for supporting intellectual property for the economic development of the first half year of 2018 (Note 11) | 600,000.00 | 0.00 |
Prize of the 18th China Patent Award | 0.00 | 100,000.00 |
Special Fund for Shenzhen Standards 2016 | 0.00 | 651,000.00 |
Fund for financing patent application | 0.00 | 3,000.00 |
Support with Special Fund of Shenzhen Standard in 2016 | 0.00 | 499,350.00 |
Science & Technology Innovation Commission of Shenzhen Municipality - Innovation | 0.00 | 7,800.00 |
Allowance for BaselWorld | 0.00 | 100,000.00 |
Subsidy for Improving Internationalized Operation Ability 2016 | 0.00 | 57,073.00 |
Special Financial Support for Self-Innovation Industry Development of Nanshan District 2016 | 0.00 | 60,000.00 |
Other Notes:
Note 1: It refers to the patent award received according to the Circular of Market and Quality Supervision Commission ofShenzhen Municipality on Publishing the Name List of the Winners of Patent Awards of Shenzhen 2017 (SHEN SHI[2016]No.8);
Note 2: It refers to the patent award received according to Notice of Market and Quality Supervision Commission ofShenzhen Municipality on the Plan for Financial Support to Standard Related Projects for Building Shenzhen Standards in2017 and the Circular on Issuing the Supporting Plan with Special Fund for Development of Self-dependent Innovation
Industries in Nanshan District 2017 – Fund for the Sub-item of Economic Development (the Fourth Batch) (SHEN NAN
JING [2017] No. 6);
Note 3: It refers to the special fund received according to the Circular on Issuing the Supporting Plan with Special Fund for
Development of Self-dependent Innovation Industries in Nanshan District 2017 – Fund for the Sub-item of Economic
Development (the Fourth Batch) (SHEN NAN JING [2017] No. 6).
Note 4: It refers to the patent award received according to the Circular of Market and Quality Supervision Commission ofShenzhen Municipality on Handling the Reward of the 5
th
Guangdong Patent Award and the Supporting Award ofGuangdong Provincial Intellectual Property of the 19
th
China Patent Award;
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Note 5: It refers to the special fund received according to the Circular of Economic, Trade and Information Commission ofShenzhen Municipality on Carrying out Declaration Work of the Special Fund for Industrial Transformation and Upgradingfor Community Joint Stock Partnership Companies Reform and Improvement of the City 2018 ([2017] No. 243);
Note 6: It refers to the government financial support fund according to the Circular of Shenzhen Science & TechnologyInnovation Commission on the Second Batch of Enterprises to be Financially Supported in the Enterprise R & D FinancialSupport Plan 2017 (SHEN FA [2016] No. 7);
Note 7: It refers to the special fund received according to the Circular on Issuing the Supporting Plan with Special Fund for
Development of Self-dependent Innovation Industries in Nanshan District 2017 – Fund for the Sub-item of Economic
Development (the Fourth Batch) (SHEN NAN JING [2017] No. 6);
Note 8: It refers to the special fund of the government received according to the Circular of the Economic, Trade andInformation Commission of Shenzhen Municipality on Disclosing the Special Fund Projects for E-commerce Developmentin Shenzhen 2018 (SHEN JING MAO XIN XI SHENG CHAN ZI [2018] No. 100);
Note 9: It refers to the patent award received according to the Circular of Market and Quality Supervision Commission ofShenzhen Municipality on Publishing the Name List of the Winners of Patent Awards of Shenzhen 2017 (SHEN SHI[2016]No.8);
Note 10: It refers to the government financial support fund according to the Circular of Shenzhen Science & TechnologyInnovation Commission on the Second Batch of Enterprises to be Financially Supported in the Enterprise R & D FinancialSupport Plan 2017 (SHEN FA [2016] No. 7);
Note 11: It refers to the special fund received according to the Circular on the Projects to be Financially Supported for theStrategic Projects of Intellectual Property, Quality Certification, Brand and Standardization with the Special Fund forEconomic Development of Guangming New Zone in the First Half Year of 2018.
71. Non-operating expenses
In CNY
Items | Amount incurred in the reporting period | Amount incurred in the previous period | Amount counted to the current non-operating gain and loss |
Disposal of account payable impossible to be paid | 52,506.24 | 3,741.50 | 52,506.24 |
Others | 311,353.27 | 142,125.41 | 311,353.27 |
Total | 363,859.51 | 145,866.91 | 363,859.51 |
72. Non-operating expenditure
In CNY
t
Items | Amount incurred in the reporting period | Amount incurred in the previous period | Amount counted to the current non-operating gain and loss |
Outward donation | 380,000.00 | 3,000.00 | 380,000.00 |
Others | 86,522.53 | 658,190.44 | 86,522.53 |
Total | 466,522.53 | 661,190.44 | 466,522.53 |
73. Income tax expense(1) Statement of income tax expense
In CNY
Items | Amount incurred in the reporting period | Amount incurred in the previous period |
Income tax expense in the reporting period | 34,026,742.02 | 24,613,171.31 |
Deferred income tax expense | -562,942.30 | 1,352,213.69 |
Total | 33,463,799.72 | 25,965,385.00 |
(2) Process of adjustment of accounting profit and income tax expense
In CNY
Items | Amount incurred in the reporting period |
Total profit | 145,831,721.16 |
Income tax expense calculated based on the statutory/ applicable tax rate | 36,457,930.29 |
Influence of different tax rates applicable to subsidiaries | -5,958,497.90 |
Influence of adjustment of the income tax in the previous period | 117,154.89 |
Influence of the non-taxable income | -23,253.35 |
Influence of the non-offsetable costs, expenses and loss | 479,273.82 |
Influence from the offsetable provisional difference or offsetable loss of the unrecognized deferred income tax asset at the end of the reporting period | 3,398,258.77 |
Influence from the addition of the R & D expenses upon deduction of tax payment (to be stated with “-“) | -1,007,066.81 |
Income tax expense | 33,463,799.72 |
74. Other comprehensive incomeFor the detail, refer to Note X.57.
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75. Cash Flow Statement Items(1) Other operation activities related cash receipts
In CNY
Items | Amount incurred in the reporting period | Amount incurred in the previous period |
Commodity promotion fee | 6,072,093.46 | 8,162,746.84 |
Government subsidies | 6,497,018.80 | 2,778,043.00 |
Deposit in security | 4,350,761.76 | 1,420,812.66 |
Interest income | 1,079,587.08 | 1,489,867.45 |
Reserve | 1,406,129.93 | 1,707,688.82 |
Others | 5,617,057.35 | 4,241,136.02 |
Total | 25,022,648.38 | 19,800,294.79 |
(2) Other cash paid in connection with operation activities
In CNY
Items | Amount incurred in the reporting period | Amount incurred in the previous period |
Market promotion | 66,401,628.85 | 45,369,388.21 |
Rent | 39,732,881.18 | 34,532,393.41 |
Shopping mall fees | 26,461,676.31 | 30,701,374.17 |
Advertisement fee | 11,176,335.56 | 12,310,866.95 |
Packing expenses | 8,883,462.57 | 6,046,492.43 |
Business travel expenses | 8,333,226.89 | 7,772,400.58 |
Water and electricity fees | 7,029,160.13 | 4,636,608.93 |
R & D expenses | 6,759,781.73 | 7,253,934.93 |
Office expenses | 6,534,273.39 | 5,004,516.54 |
Freight | 6,018,407.34 | 5,112,140.83 |
Exhibition fee | 5,974,002.19 | 10,307,276.23 |
Property management fee | 4,228,170.40 | 2,405,767.74 |
Business entertainment | 2,830,040.57 | 3,093,901.20 |
Service fee to intermediary agencies | 2,156,715.09 | 1,929,387.83 |
Others | 14,825,683.48 | 6,183,802.43 |
Total | 217,345,445.68 | 182,660,252.41 |
Note to other cash paid in connection with operation activities:
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(3) Other investment activities related cash receiptsInapplicable(4) Other investment activities related cash paymentsInapplicable(5) Other fund-raising activities related cash receiptsInapplicable(6) Other fund-raising activities related cash paymentsInapplicable76. Supplementary information of the cash flow statement(1) Supplementary information of the cash flow statement
In CNY
Supplementary information | Amount in the reporting period | Amount in the previous period |
1. Net cash flows arising from adjustment of net profit into operating activities: | -- | -- |
Net profit | 112,367,921.44 | 86,611,784.54 |
Plus: Asset impairment reserve | -14,525,567.48 | 12,783,689.30 |
Depreciation of fixed assets, depletion of oil and gas asset, depreciation of productive biological asset | 21,080,763.14 | 21,936,993.35 |
Amortization of intangible assets | 2,430,354.87 | 1,594,234.34 |
Amortization of the long-term expenses to be apportioned | 40,947,482.90 | 54,065,432.58 |
Loss (income is stated in “-”) from disposal of fixed assets, intangible assets and other long term assets | 54,407.16 | 13,352.95 |
Financial expenses (income is stated with “-”) | 14,273,043.13 | 23,246,930.51 |
Investment loss (income is stated with “-”) | -93,013.38 | -188,871.89 |
Decrease of the deferred income tax asset (increase is stated with “_”) | -562,942.30 | 1,352,213.69 |
Decrease of inventories (Increase is stated with “-”) | 94,502,115.24 | 93,091,588.65 |
Decrease of operative items receivable (Increase is stated with “-”) | -56,854,840.95 | -12,212,990.56 |
Increase of operative items payable (Decrease is stated | 11,052,550.32 | -5,578,696.93 |
t
with “-”) | ||
Net cash flows arising from operating activities | 224,672,274.09 | 276,715,660.53 |
2. Significant investment and fund-raising activities with no cash income and expenses involved: | -- | -- |
3. Net change in cash and cash equivalents: | -- | -- |
Plus: Ending balance of cash equivalent | 278,804,271.58 | 383,649,003.87 |
Less: Opening balance of cash equivalent | 184,947,891.32 | 427,227,755.81 |
Net increase of cash and cash equivalents | 93,856,380.26 | -43,578,751.94 |
(2) Net cash paid for acquisition of subsidiary in the reporting periodInapplicable(3) Net cash received from disposal of subsidiary in the reporting periodInapplicable(4) Composition of cash and cash equivalents
In CNY
Items | Ending balance | Opening balance |
Including: Cash in stock | 233,265.12 | 414,210.14 |
Bank deposit available for payment at any time | 278,565,485.60 | 184,528,160.32 |
Other monetary fund used for payment at any time | 5,520.86 | 5,520.86 |
II. Cash equivalents | 278,804,271.58 | 184,947,891.32 |
III. Ending balance of cash and cash equivalents | 278,804,271.58 | 184,947,891.32 |
Including: cash and cash equivalents restricted for use from the parent company or other subsidiaries of the Group | 2,205,000.00 | 2,205,000.00 |
77. Notes to items of statement of change in owner’s equity
Inapplicable78. Assets restricted in ownership or use right
In CNY
Items | Book value at the end of the reporting period | Cause of being restricted |
Monetary capital | 2,205,000.00 | Deposit for L/G |
Total | 2,205,000.00 | -- |
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79. Foreign currency monetary items(1) Foreign currency monetary items
In CNY
Items | Ending balance of foreign currency | Conversion rate | Ending balance of Renminbi converted |
Monetary capital | |||
Including: USD | 358,309.02 | 6.61660 | 2,370,787.46 |
Euro | 145,749.33 | 7.65150 | 1,115,201.00 |
HKD | 5,537,161.79 | 0.84310 | 4,668,381.11 |
CHF | 229,106.11 | 6.63500 | 1,520,119.04 |
Accounts receivable | |||
Including: USD | 657,648.25 | 6.61660 | 4,351,395.41 |
Euro | 32,872.11 | 7.65150 | 251,520.95 |
HKD | 13,326,820.48 | 0.84310 | 11,235,842.35 |
CHF | 164,418.90 | 6.63500 | 1,090,919.40 |
Advance payments | |||
Including: HKD | 7,216,704.66 | 0.84310 | 6,084,403.70 |
CHF | 888,530.91 | 6.63500 | 5,895,402.59 |
Other receivables | |||
Including: HKD | 288,356.00 | 0.84310 | 243,112.94 |
CHF | 905,580.00 | 6.63500 | 6,008,523.30 |
Accounts payable | |||
Including: HKD | 11,482,520.80 | 0.84310 | 9,680,913.29 |
CHF | 30,046.97 | 6.63500 | 199,361.65 |
Advances from customers | |||
HKD | 218,093.00 | 0.84310 | 183,874.21 |
Other payables | |||
Including: HKD | 25,926.92 | 0.84310 | 21,858.99 |
CHF | 68,759.90 | 6.63500 | 456,221.94 |
Short term loans | |||
HKD | 30,000,000.00 | 0.84310 | 25,293,000.00 |
Long-term Loan | |||
CHF | 725,000.00 | 6.63500 | 4,810,375.00 |
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(2) Note to overseas operating entities, including important overseas operating entities, which should bedisclosed about its principal business place, function currency for bookkeeping and basis for the choice. In caseof any change in function currency, the cause should be disclosed.
For the principal business place, function currency for bookkeeping for key overseas business entities, refer to Note V.4.80. HedgingInapplicable81. MiscelleneousInapplicableVIII. Change in consolidation scope1. Consolidation of enterprises not under the same control(1) Consolidation of enterprises not under common control during the reporting periodInapplicable(2) Consolidation cost and goodwillInapplicable(3) Purchasee's distinguishable assets and liabilities as at the date of purchaseInapplicable(4) Profit or loss of the equity held before the date of purchase arising from re-measurement based on the fair
valueDoes there exist any transaction in which the enterprise consolidation is realized step by step through several transactions
and the control power is obtained within the reporting period.No
(5) Note to the consolidation consideration or the fair value of the distinguishable assets and liabilities of thepurchasee which cannot be reasonably identified as at the date of purchase or at the end of the very period ofconsolidation
Inapplicable
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(6) Other notes2. Consolidation of enterprises under the same control(1) Consolidation of enterprises not under common control during the reporting periodInapplicable(2) Consolidation costInapplicable(3) Book value of the consolidatee's assets and liabilities as at the date of consolidationInapplicable3. Counter purchaseInapplicable4. Disposal of subsidiariesDoes there exist any such situation that a single disposal may cause the control power over the investment in a subsidiary
lost?NoDoes there exist any such situation that disposal in steps through a number of transactions may cause the control powerover the investment in a subsidiary lost during the reporting period?No
5. Change of consolidation scope due to other reasonInapplicable6. MiscelleneousInapplicable
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IX. Equity in other entities1. Equity in a subsidiary(1) Composition of an enterprise group
Subsidiaries | Main business location | Place of registration | Nature of business | Shareholding proportion | Way of acquisition | |
Direct | Indirect | |||||
Harmony | Shenzhen | Shenzhen | Commerce | 100.00% | Establishment or investment | |
the Manufacture Co. | Shenzhen | Shenzhen | Manufacture | 90.00% | 10.00% | Establishment or investment |
FIYTA Hong Kong | Hong Kong | Hong Kong | Commerce | 100.00% | Establishment or investment | |
Harbin Co. | Harbin | Harbin | Commerce | 100.00% | Establishment or investment | |
Technology Co. | Shenzhen | Shenzhen | Manufacture | 100.00% | Establishment or investment | |
SHIYUEHUI | Shenzhen | Shenzhen | Commerce | 100.00% | Establishment or investment | |
Emile Choureit (Shenzhen) | Shenzhen | Shenzhen | Commerce | 100.00% | Establishment or investment | |
FIYTA Sales Co., Ltd. | Shenzhen | Shenzhen | Commerce | 100.00% | Establishment or investment | |
Hengdarui | Shenyang | Shenyang | Commerce | 100.00% | Consolidation of enterprises under the same control | |
Swiss Company | Switzerland | Switzerland | Commerce | 100.00% | Consolidation of enterprises not under the same control |
Note to the proportion of shareholding in a subsidiary different from the proportion of voting power:
Basis of holding less than a half of the voting power but still controlling the investee and holding more than a half of thevoting power but not controlling the investee:
InapplicableBasis of an important structurized entity being brought to the consolidation scope and being controlled:
InapplicableBasis of distinguishing an agent from consignor:
InapplicableOther notes:
Inapplicable
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(2) Important non-wholly-owned subsidiariesInapplicable(3) Key financial information of important non-wholly-owned subsidiariesInapplicable
(4) Significant restriction on use of enterprise group’s assets and paying off the enterprise group’s liabilities
Inapplicable(5) Financial support or other support provided to the structured entities incorporated in the scope of
consolidated financial statementsInapplicable
2. Transaction with a subsidiary with the share of the owner’s equity changed but still under control
(1)Note to change in the share of the owner's equity in subsidiariesInapplicable(2) Affect of the transaction on the minority equity and owner's equity attributable to the parent companyInapplicable3. Equity in joint venture arrangement or associates(1) Important joint ventures or associates
Name of joint venture or associate | Main business location | Place of registration | Nature of business | Shareholding proportion | Accounting treatment method for investment in joint ventures or associates | |
Direct | Indirect | |||||
Shanghai Watch | Shanghai | Shanghai | Manufacture | 25.00% | Equity method |
Note to the proportion of the shareholding in a joint venture or an associate different from voting power therein:
Inapplicable
Basis of holding below 20% voting power but having significant influence or holding more than 20% voting power but nothaving significant influenceInapplicable
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(2) Key financial information of important joint venturesInapplicable(3) Key financial information of important associates
In CNY
Ending balance/amount incurred in the reporting period | Opening balance/amount incurred in the reporting period | |
Current assets | 92,802,011.32 | 88,035,307.16 |
Non-current assets | 16,422,790.67 | 17,515,363.90 |
Total assets | 109,224,801.99 | 105,550,671.06 |
Current liabilities | 8,332,353.00 | 5,527,973.92 |
Non-current liabilities | 0.00 | 0.00 |
Total liabilities | 8,332,353.00 | 5,527,973.92 |
Minority shareholders’ equity | 0.00 | 0.00 |
Equity attributable to the parent company’s shareholders | 100,892,448.99 | 100,022,697.16 |
Share of net assets calculated according to the shareholding proportion | 25,223,112.25 | 25,005,674.29 |
Book value of the equity investment in associates | 43,972,531.47 | 43,879,518.09 |
Revenue | 46,323,386.37 | 43,499,754.20 |
Net profit | 372,053.52 | 755,487.55 |
Other comprehensive income | 0.00 | 0.00 |
Total comprehensive income | 372,053.52 | 755,487.55 |
Dividends from associates received in the current year | 0.00 | 0.00 |
(4) Financial information summary of unimportant joint ventures and associatesInapplicable(5) Note to significant restriction on the competence of a joint venture or an associate in transferring funds to the
CompanyInapplicable(6) Excessive loss incurred to a joint venture or an associateInapplicable
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(7) Unrecognized commitment in connection with investment in a joint ventureInapplicable(8) Contingent liabilities in connection with investment in joint ventures or associatesInapplicable4. Important joint operationInapplicable5. Equity in the structurized entities not incorporated in the consolidated financial statementsInapplicable6. MiscelleneousInapplicableX. Financial instruments and risk management
The Company’s major financial instruments consist of monetary funds, accounts receivable, notes receivable, other
receivables, other current assets, available-for-sale financial assets, accounts payable, interest payable, dividend payable,other payables, short term loan, non-current liabilities due within a year, long term loan, bonds payable. The detailedinformation about various financial instruments has been disclosed in the corresponding items in Note VII. The risks
involved in these financial instruments and the Company’s risk control policies aiming at reducing these risks are stated asfollows. The Company’s management conducts management and monitoring of these risk exposures so as to ensure
risks to be controlled within a specific limitation.
Sensitivity analysis is adopted by the Company to analyze possible impact on the current profit and loss or shareholders’
equity by the reasonable and possible changes of risk variables. Since any risk variables seldom happen individually,relativity between variables will cause significant influences on the ultimate impacted amount of the change in a riskvariable, so the following statement is based on supposition that each variable happens independently.
(I) Risk management goals and policiesThe goal of risk management is to keep proper balance between risk and profit, to reduce negative influence of financialrisk to financial performance of the Company, lower the negative influence of the risks upon the Company's businessperformance to the minimum and maximize the interest of the shareholders and its other equity investors. Based on thisgoal, the basic strategy of risk management for the Company is to ascertain and analyze all the risks that the Groupconfronts, establish appropriate bottom line for risk-taking, and manage the risks accordingly, in the meantime superviseall the risks in a timely and reliable manner, controlling the risks within the limited scope.
1. Market Risks(1) Foreign exchange risk
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Foreign exchange risk refers to the risk arising from the loss on exchange rate changes. The Company is mainly exposedto foreign exchange risk that relates to Hong Kong dollars, Swiss Franc. Except a number of the Company's subsidiariesthat conduct procurement and sales in Hong Kong Dollars and Swiss Franc, the principal business activities of the
Company’s principal business activities are settled in Renminbi. As at 30 June 2018, except the balance of the aforesaid
assets or liabilities which are stated in Hong Kong dollar, Swiss Franc, US dollar, etc., the balance of the financial assetsand financial liabilities of the Company are all in Renminbi. Foreign exchange risks arising from the balance of assets andliabilities of such foreign currencies may have an impact on the operating results of the Company.
In CNY
Items | 6/30/2018 | Amount at the beginning of the year |
Monetary capital | 9,674,488.61 | 9,103,319.22 |
Accounts receivable | 16,929,678.11 | 11,193,694.31 |
Advance payment for goods | 11,979,806.29 | 12,872,520.90 |
Other receivables | 6,251,636.24 | 6,290,491.67 |
Accounts payable | 9,880,274.94 | 1,330,403.14 |
Advance from customers | 183,874.21 | 185,101.44 |
Other payables | 478,080.93 | 794,190.64 |
Short term loans | 25,293,000.00 | 50,990,510.00 |
Long-term Loan | 4,810,375.00 | 5,008,425.00 |
Sensitivity analysis on foreign exchange risks:
Assumption for sensitivity analysis on foreign exchange risks: both the net investment hedge of the overseas businessand cash flow hedge are highly effective. On the basis of the aforesaid assumption, while the other variables remainunchanged, the pre-tax influence of the reasonable change of the exchange rate possibly incurred upon the current
income and loss and shareholders’ equity is as follows:
In CNY
Items | Change of the exchange rate | Current year | Previous year | ||
Influence upon the profit | Influence upon the shareholders’ equity | Influence upon the profit | Influence upon the shareholders’ equity | ||
Monetary capital | Appreciation of Renminbi by 5% | 483,724.43 | 483,724.43 | 1,408,960.66 | 1,408,960.66 |
Depreciation of Renminbi by 5% | -483,724.43 | -483,724.43 | -1,408,960.66 | -1,408,960.66 | |
Accounts receivable | Appreciation of Renminbi by 5% | 846,483.91 | 846,483.91 | 526,006.88 | 526,006.88 |
Depreciation of Renminbi by 5% | -846,483.91 | -846,483.91 | -526,006.88 | -526,006.88 | |
Advance payment for goods | Appreciation of Renminbi by 5% | 598,990.31 | 598,990.31 | 0.00 | 0.00 |
Depreciation of Renminbi by 5% | -598,990.31 | -598,990.31 | 0.00 | 0.00 |
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Other receivables | Appreciation of Renminbi by 5% | 312,581.81 | 312,581.81 | 267,418.42 | 267,418.42 |
Depreciation of Renminbi by 5% | -312,581.81 | -312,581.81 | -267,418.42 | -267,418.42 | |
Accounts payable | Appreciation of Renminbi by 5% | 494,013.75 | 494,013.75 | 169,110.89 | 169,110.89 |
Depreciation of Renminbi by 5% | -494,013.75 | -494,013.75 | -169,110.89 | -169,110.89 | |
Advance from customers | Appreciation of Renminbi by 5% | 9,193.71 | 9,193.71 | 0.00 | 0.00 |
Depreciation of Renminbi by 5% | -9,193.71 | -9,193.71 | 0.00 | 0.00 | |
Other payables | Appreciation of Renminbi by 5% | 23,904.05 | 23,904.05 | 331,358.00 | 331,358.00 |
Depreciation of Renminbi by 5% | -23,904.05 | -23,904.05 | -331,358.00 | -331,358.00 | |
Short term loans | Appreciation of Renminbi by 5% | 1,264,650.00 | 1,264,650.00 | 7,247,132.00 | 7,247,132.00 |
Depreciation of Renminbi by 5% | -1,264,650.00 | -1,264,650.00 | -7,247,132.00 | -7,247,132.00 | |
Long-term Loan | Appreciation of Renminbi by 5% | 240,518.75 | 240,518.75 | 280,757.79 | 280,757.79 |
Depreciation of Renminbi by 5% | -240,518.75 | -240,518.75 | -280,757.79 | -280,757.79 |
(2) Interest rate risk - risk from change of the cash flow
The Company’s risk of movement in the cash flow of financial instrument arising from change of the interest rate arising
from change of the interest rate is mainly related with the bank loan of the fluctuating interest rate (for the detail, refer toNote VI.31 and VI. 45). The Company's policy is to maintain the fluctuating interest rate of these loans.
Sensitivity analysis on interest rate risks:
Sensitivity analysis on interest rate risks is based on the following assumption:
· Influence of the change of market interest rate upon the interest income or expenses of the financial instruments withvariable interest rates;
· For the financial instrument with fixed interest rate measured based on the fair value, the change of the interest rateonly impact its interest income or expenses;
· For the derivative financial instrument designated as arbitrage tool, the change of the market interest rate impacts itsfair value and all the interest rate intercropping date is predicted to be highly valid;
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· The market interest rate as at the balance sheet day uses the discounted cash flow technique to calculate the changeof the fair value of the financial instrument and other financial assets and liabilities.
On the basis of the aforesaid assumption, while the other variables remain unchanged, the pre-tax influence of the
reasonable change of the interest rate possibly incurred upon the current income and loss and shareholders’ equity is as
follows:
In case the loan interest rate calculated based on the floating interest rate rises or falls by 50 base points as at 31st
December 2017 while the other factors keep unchanged, the Company's net profit and shareholders’ equity shall
decrease or increase by CNY 883,800 (as at 31st December 2017: CNY 326,300).
(3) Other price risksThe investment classified as the available-for-sale financial asset held by the Company is measured at the cost value asat the balance sheet day. Therefore, there exists no price risk necessary to be disclosed in the Company.
2. Credit riskAs at 30th June 2018 , the maximum credit risk exposure possibly arising from the financial loss to the Company wasmainly from the loss arising from failure of the other party to the contract in implementing the obligations which causedloss from generation of the Company's financial assets, which specifically included the carrying amount of the financialasses recognized in the consolidated balance sheet. The Company provided no other guarantee which may render theCompany bear the credit risk.
For the purpose of lowering the credit risk, the Company may possibly access to the guarantee, credit record and otherelements from the third party based on the debtor's financial status, independent rating and other elements, such as
assessment of the debtor’s credit qualification, such as the current market situation and specifying the corresponding debtlimit and credit term. The Company conducts regular supervision over the debtors’ credit records and may take the
measures of written reminders, shortening the credit period or canceling the credit period, etc. against the debtors with
poor credit record so as to ensure the Company’s overall credit risk to be within the controllable scope. In addition, the
Company examines the recovery of the accounts receivable on each balance sheet day so as to ensure to providesufficient bad debt reserve for the accounts impossible to be recovered. Therefore, in the opinion of the Company'smanagement, the credit risk borne by the Company has been greatly reduced.
In the Company's accounts receivable, the accounts receivable owed by the top five customers took 8.35% of theCompany's total accounts receivable (end of 2017: 6.30%); in the Company's other receivables, the total otherreceivables owed by the top five customers took 20.07% of the Company's total other receivables (end of 2017:
24.14%).
3. Liquidity riskIn management of the liquidity risk, the Company kept the cash and cash equivalent as sufficient as the managementconsidered necessary and conducted supervision over the same so as to satisfy the Company's business requirementsand reduced the impact from the fluctuation of cash flow. The Company's management conducted monitoring over theapplication of the bank loans and ensured its compliance with the loan agreements.
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The Company took the capital arising from its business, bank loans and other borrowings as the major capital source. Asat 30th June 2018, the amount of the bank loan not yet used by the Company was CNY 2,764.48 million (31st December2017: CNY 2,723.97 million).
The expiry of the remaining contract obligations for the financial liabilities held by the Company not discounted is analyzedas follows:
In CNY10,000
Items | Within 1 year | 1 to 2 years | 2-3 years | Over 3 years | Total |
Financial assets: | |||||
Monetary capital | 28,100.93 | - | - | - | 28,100.93 |
Notes receivable | 463.21 | - | - | - | 463.21 |
Accounts receivable | 38,916.94 | - | - | - | 38,916.94 |
Other receivables | 5,106.02 | - | - | - | 5,106.02 |
Total financial assets | 72,587.10 | - | - | - | 72,587.10 |
Financial liabilities: | |||||
Short term loans | 47,991.71 | - | - | - | 47,991.71 |
Accounts payable | 26,698.28 | - | - | - | 26,698.28 |
Interest payable | 68.67 | - | - | - | 68.67 |
Other payables | 8,465.50 | - | - | - | 8,465.50 |
Non-current liabilities due within a year | 3,500.00 | - | - | - | 3,500.00 |
Long-term Loan | - | 3,500.00 | 1,750.00 | 965.32 | 6,215.32 |
Financial guarantee | 20,491.71 | - | - | - | 20,491.71 |
Total financial liabilities and contingent liabilities | 107,215.87 | 3,500.00 | 1,750.00 | 965.32 | 113,431.19 |
XI. Disclosure of Fair Value1. Fair value at the end of the reporting period of the assets and liabilities measured based on the fair valueInapplicable2. Basis for determining the market price of the items measured based on the continuous and non-continuous
first level fair valueInapplicable
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3. Items measured based on the continuous or uncontinuous 2nd level fair value, valuatoin technique as used,nature of important parameters and quantitative information
Inapplicable4. Items measured based on the continuous or uncontinuous 3rd level fair value, valuatoin technique as used,
nature of important parameters and quantitative informationInapplicable5. Items measured based on the continuous 3rd level fair value, sensitivity analysis on adjusted information and
unobservable parameters between the book value at beginning and end of the periodInapplicable6. In case items measured based on fair value are converted between different levels incurred in the current
period, state the cause of conversion and determine conversion time pointInapplicable7. Change of valuation technique incurred in the current period and cause of such changeInapplicable8. Fair value of financial assets and financial liabilities not measured at fair valueInapplicable9. OthersInapplicableXII. Related parties and transactions1. Details of the parent company of the Company
Name of the parent company | Place of registration | Nature of business | Registered capital | Shareholding ratio of the parent company in the Company | Ratio of vote right of the parent company in the Company |
AVIC International Holding Limited | Shenzhen | Investment in industries, domestic trade, material supply and distribution | 1,166,161,996 | 37.15% | 37.15% |
Note to the parent company:
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AVIC International Shenzhen Co., Ltd. 33.93% of the shares in AVIC International Holdings Limited. AVIC InternationalShenzhen is a wholly owned subsidiary of AVIC International Holdings Limited (AVIC IHL), and China Aviation IndustryCorporation (AVIC) directly holds 62.52% of the equity of AVIC IHL. Therefore, the eventual controller of the Company isAVIC.
2. Subsidiaries of the CompanyRefer to Note IX. 1 for details of subsidiaries of the Company.3. Joint venture and association of the CompanyRefer to NOTE IX.3 for details of the Company's major joint ventures or associates.4. Other related parties of the Company
Names of other related parties | Relationship between other related parties and the Company |
AVIC Property Management Co., Ltd. (AVIC Property) | Controlled by the same party |
Shenzhen AVIC Building Technology Co., Ltd. (AVIC Building Co.) | Controlled by the same party |
Rainbow Department Store Co., Ltd. (RAINBOW) | Controlled by the same party |
Shennan Circuit Co., Ltd. (Shennan Circuit) | Controlled by the same party |
AVIC SUNDA Co., Ltd. (AVIC SUNDA) | Controlled by the same party |
AVIC Securities Co., Ltd. (AVIC Securities) | Controlled by the same party |
Xi’an Skytel Hotel Co., Ltd. (Skytel Hotel) | Controlled by the same party |
Shenzhen AVIC Nanguang Elevator Co., Ltd. (AVIC Nanguang ) | Controlled by the same party |
Shenzhen AVIC City Property Development Co., Ltd.(AVIC City Property) | Controlled by the same party |
Shenzhen AVIC Development Co., Ltd. (AVIC City Development) | Controlled by the same party |
Shenzhen AVIC Guanlan Real Estate Development Co., Ltd. (AVIC Guanlan Real Estate) | Controlled by the same party |
Shenzhen AVIC Changtai Investment Development Co., Ltd. (AVIC Changtai) | Controlled by the same party |
Shenzhen AVIC 9 Square Assets Management Co., Ltd. (9 Square Asset) | Controlled by the same party |
Ganzhou AVIC Real Estate Development Co., Ltd. (Ganzhou AVIC Real Estate) | Controlled by the same party |
Shenzhen AVIC City Investment Co., Ltd.(AVIC City Investment) | Controlled by the same party |
Shenzhen AVIC Group Enterprise Training Center | Controlled by the same party |
Ganzhou AVIC 9 Square Commerce Co., Ltd. (Ganzhou 9 Square) | Controlled by the same party |
Jiujiang AVIC City Real Estate Development Co., Ltd. (Jiujiang AVIC Real Estate) | Controlled by the same party |
AVIC City Property (Kunshan) Co., Ltd. (AVIC City Property (Kunshan) ) | Controlled by the same party |
Shenzhen AVIC Curtain Wall Engineering Co., Ltd. (AVIC Curtain Wall Engineering ) | Controlled by the same party |
AVIC Finance Co., Ltd. (AVIC Finance ) | Controlled by the same party |
Shenzhen AVIC Security Service Co., Ltd. (AVIC Security Service) | Controlled by the same party |
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Shenzhen AVIC Property Asset Management Co., Ltd. (AVIC Property Asset Management) | Controlled by the same party |
Jiujiang 9 Square Commerce Management Co., Ltd. (9 Square Commerce Management) | Controlled by the same party |
Shenzhen AVIC Huacheng Property Development Co., Ltd.(AVIC Huacheng Property) | Controlled by the same party |
AVIC Property Management Co., Ltd. CBD Branch (AVIC Property CBD) | Controlled by the same party |
AVIC Property Management Co., Ltd. Real Estate Project Branch (AVIC Property Real Estate Project) | Controlled by the same party |
Shenzhen AVIC Grand Skylight Hotel Management Co., Ltd. (Grand Skylight Hotel) | Controlled by the same party |
Shenzhen AVIC Real Estate Development Co., Ltd. (AVIC Real Estate) | Controlled by the same party |
Huang Yongfeng | A senior executive |
Wang Mingchuan | A senior executive |
Fu Debin | A senior executive |
Xiao Zhanglin | A senior executive |
Wang Bo | A senior executive |
Chen Libin | A senior executive |
Zhang Hongguang | A senior executive |
Zhang Shunwen | A senior executive |
Wang Yan | A senior executive |
Wang Baoying | A senior executive |
Sheng Qing | A senior executive |
Wang Jingqi | A senior executive |
Lu Bingqiang | A senior executive |
Lu Wanjun | A senior executive |
Liu Xiaoming | A senior executive |
Pan Bo | A senior executive |
Li Ming | A senior executive |
Chen Zhuo | A senior executive |
5. Related transactions(1) Related transactions of purchase and sale of commodities and supply and acceptance of labor servicesStatement of purchase of commodities and acceptance of labor services
In CNY
Related parties | Description of Related Transactions | Amount incurred in the reporting period | Transaction quota as approved | Has it exceeded the transaction quota | Amount incurred in the previous period |
AVIC Property | Reception of services | 2,966,178.17 | 5,000,000.00 | No | 3,912,604.61 |
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Rainbow Ltd. | Shopping mall fees/purchase of goods | 2,554,556.27 | 3,000,000.00 | No | 2,529,676.00 |
AVIC Building Co. | Engineering fees | 468,415.30 | 5,000,000.00 | No | 0.00 |
Shenzhen AVIC Group Enterprise Training Center | Training fee | 144,548.39 | 500,000.00 | No | 0.00 |
Statement of sales of goods/supply of labor services
In CNY
Related parties | Description of Related Transactions | Amount incurred in the reporting period | Amount incurred in the previous period |
Rainbow Ltd. | Products and labor services | 35,060,373.29 | 37,311,632.36 |
Shennan Circuit Co., Ltd. | Products and labor services | 3,300,322.92 | 1,074,050.91 |
Shenzhen Grand Skylight Hotel Management Co., Ltd. | Products and labor services | 5,982.90 | 2,564.10 |
Ganzhou 9 Square | Products and labor services | 701,423.33 | 0.00 |
Note to the related transactions of purchase and sale of commodities and supply and acceptance of labor services(2) Related entrusted management/contracted and mandatory management/contractingInapplicable(3) Related leaseThe Company as lessor:
In CNY
Names of lessees | Categories of leasehold properties | Rental income recognized in the current period | Rental income recognized in the previous period |
AVIC SUNDA | Housing | 898,931.71 | 679,371.90 |
AVIC Property | Housing | 3,786,677.96 | 3,213,521.33 |
AVIC Securities | Housing | 608,571.42 | 584,228.58 |
AVIC City Property Co., Ltd. | Housing | 187,965.57 | 218,555.04 |
AVIC City Development | Housing | 2,428.57 | 8,878.07 |
Guanlan Real Estate | Housing | 53,919.42 | 40,199.53 |
Tianyue Hotel | Housing | 1,746,031.74 | 2,095,238.09 |
Rainbow Ltd. | Housing | 229,327.58 | 262,440.80 |
9 Square Assets | Housing | 579,564.39 | 192,879.08 |
AVIC City Investment | Housing | 232,636.75 | 547,184.70 |
AVIC Huacheng Property | Housing | 143,684.84 | 165,498.96 |
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AVIC Real Estate Development | Housing | 33,406.82 |
The Company as lessee:
In CNY
Names of lessees | Categories of leasehold properties | Rental fee recognized in the current period | Rental fee recognized in the previous period |
Ganzhou 9 Square | Housing | 544,600.15 | 0.00 |
Jiujiang AVIC Real Estate | Housing | 201,501.48 | 0.00 |
AVIC City Property (Kunshan) | Housing | 110,753.27 | 101,827.56 |
AVIC Changtai | Housing | 0.00 | 176,273.10 |
(4) Related guaranteeThe Company as a guarantor
In CNY
Guarantees | Amount guaranteed | Effective date | Expiring date | Is the guarantee finished |
FIYTA (Hong Kong) Limited | 24,917,100.00 | April 26, 2018 | April 26, 2019 | No |
Shenzhen Harmony World Watches Center Co., Ltd. | 75,000,000.00 | December 30, 2017 | December 29, 2018 | No |
The Company as a guarantee
In CNY
Guarantors | Amount guaranteed | Effective date | Expiring date | Is the guarantee finished |
Shenzhen Harmony World Watches Center Co., Ltd. | 50,000,000.00 | September 12, 2017 | September 11, 2018 | No |
Shenzhen Harmony World Watches Center Co., Ltd. | 50,000,000.00 | June 12, 2018 | February 28, 2019 | No |
Shenzhen Harmony World Watches Center Co., Ltd. | 5,000,000.00 | July 03, 2017 | July 03, 2018 | No |
AVIC International Holding Limited | 17,861,928.00 | January 26, 2015 | June 24, 2019 | No |
AVIC International Holding Limited | 10,000,000.00 | October 28, 2015 | June 24, 2019 | No |
AVIC International Holding Limited | 6,000,000.00 | May 27, 2015 | June 24, 2019 | No |
AVIC International Holding Limited | 7,000,000.00 | December 01, 2015 | June 24, 2019 | No |
AVIC International Holding Limited | 10,000,000.00 | January 18, 2016 | December 24, 2019 | No |
AVIC International Holding | 15,000,000.00 | January 26, 2016 | June 24, 2020 | No |
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Limited | ||||
AVIC International Holding Limited | 2,000,000.00 | April 20, 2016 | June 24, 2020 | No |
AVIC International Holding Limited | 7,500,000.00 | May 05, 2016 | June 24, 2020 | No |
AVIC International Holding Limited | 17,000,000.00 | May 19, 2016 | June 24, 2020 | No |
(5) Borrowings and lendings among related partiesInapplicable(6) Assets assignment and liabilities reorganization of related partiesInapplicable(7)Remuneration to senior executivesInapplicable(8) Other related transactionsInapplicable6. Accounts receivable from and payable to related parties(1) Receivables
In CNY
Description | Related parties | Ending balance | Opening balance | ||
Book balance | Bad debt reserve | Book balance | Bad debt reserve | ||
Accounts receivable: | AVIC City Property Co., Ltd. | 39,204.91 | 1,960.25 | 0.00 | 0.00 |
AVIC Huacheng Property | 30,803.86 | 1,540.19 | 0.00 | 0.00 | |
AVIC 9 Square Assets | 260,240.52 | 13,012.03 | 0.00 | 0.00 | |
AVIC Property | 272,406.30 | 13,620.32 | 0.00 | 0.00 | |
Rainbow Ltd. | 7,196,437.23 | 359,821.86 | 1,782,356.36 | 89,117.82 | |
Shennan Circuit Co., Ltd. | 1,331,624.48 | 66,581.22 | 786,443.94 | 39,322.20 | |
Ganzhou 9 Square | 160.00 | 8.00 | 115,742.00 | 5,787.10 | |
Notes receivable: | Shennan Circuit Co., Ltd. | 2,514,502.57 | 0.00 | 2,398,579.72 | 0.00 |
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Other receivables: | Rainbow Ltd. | 843,580.00 | 42,179.00 | 832,774.30 | 41,638.72 |
AVIC International Holding Limited | 11,101.80 | 555.09 | 0.00 | 0.00 | |
Ganzhou 9 Square | 122,665.60 | 6,133.28 | 122,665.60 | 6,133.28 | |
AVIC City Property (Kunshan) | 35,000.00 | 1,750.00 | 35,000.00 | 1,750.00 | |
Grand Skylight Hotel | 32,000.00 | 1,600.00 | 32,000.00 | 1,600.00 | |
AVIC Training Center | 155,451.61 | 7,772.58 | 150,000.00 | 7,500.00 | |
Jiujiang 9 Square Commerce Management Co., Ltd. | 50,400.00 | 2,520.00 | 0.00 | 0.00 | |
AVIC Property | 0.00 | 0.00 | 100.00 | 5.00 | |
Jiujiang AVIC Real Estate | 0.00 | 0.00 | 50,000.00 | 2,500.00 | |
AVIC Building Co. | 0.00 | 0.00 | 126,598.73 | 6,329.94 |
(2) Payables
In CNY
Description | Related parties | Ending book balance | Opening book balance |
Advance Receipts: | Guanlan Real Estate | 10,971.43 | 8,315.43 |
AVIC SUNDA | 0.00 | 148,915.46 | |
9 Square Assets | 0.00 | 33,331.01 | |
AVIC Securities | 0.00 | 101,428.57 | |
Interest payable | AVIC Finance | 172,187.50 | 0.00 |
Other payables: | AVIC Property | 472,032.00 | 472,032.00 |
AVIC SUNDA | 442,407.92 | 442,407.92 | |
AVIC City Investment | 309,732.00 | 309,732.00 | |
9 Square Assets | 179,860.00 | 66,666.60 | |
AVIC Building Co. | 112,710.23 | 89,289.47 | |
AVIC City Property Co., Ltd. | 99,052.32 | 99,052.32 | |
AVIC Huacheng Property | 73,819.68 | 73,819.68 | |
Rainbow Ltd. | 60,000.00 | 60,000.00 | |
AVIC Real Estate | 51,014.88 | 0.00 | |
AVIC Guanlan Real Estate | 25,401.60 | 0.00 | |
AVIC Public Security Service Co. | 10,533.44 | 0.00 | |
Ganzhou 9 Square | 3,725.69 | 0.00 |
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9 Square Commerce Management Co., Ltd. | 2,532.20 | 0.00 | |
AVIC Changtai | 4,064.81 | 4,064.81 | |
AVIC Securities | 0.00 | 213,000.00 | |
AVIC City Development | 0.00 | 5,100.00 |
7. Related parties’ commitments
8. MiscelleneousXIII. Stock payment1. GeneralInapplicable2. Stock payment for equity settlementInapplicable3. Stock payment for cash settlementInapplicable4. Correction and termination of stock paymentInapplicable5. MiscelleneousInapplicableXIV. Commitments and contingencies1. Important commitmentsImportant commitments existing as at the balance sheet day
(1) Operating lease commitmentImplementation of irrevocable operating lease contract signed by the Company ended the balance sheet day is as follows:
In CNY
Items | Ending balance | Opening balance |
Minimum rent payment for irrevocable operational lease: | ||
1st year after the balance sheet day | 42,593,133.47 | 29,799,099.00 |
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2nd year after the balance sheet day | 20,439,242.80 | 14,570,632.00 |
3rd year after the balance sheet day | 9,207,698.49 | 7,533,388.00 |
Subsequent years | 5,253,776.23 | 1,121,206.00 |
2. Contingencies(1) Significant contingencies existing as at the balance sheet day(2) Important contingencies unnecessary to be disclosed but necessary to be explainedThere existed no such contingencies necessary to be disclosed in the Company.3. OthersInapplicableXV. Events after balance sheet day1. Significant non-adjustment eventsInapplicable2. Profit distributionInapplicable3. Sales returnInapplicable4. Note to other matters after the balance sheet dateInapplicableXVI. Other significant events1. Correction of the accounting errors in the previous period(1) Retroactive restatementInapplicable
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(2) Prospective applicationInapplicable2. Liabilities restructuringInapplicable3. Replacement of assets(1) Non-monetary assets exchangeInapplicable(2) Other assets exchangeInapplicable4. Pension planInapplicable5. Discontinuing operationInapplicable6. Segment information(1) Basis for determining the reporting segments and accounting policyInapplicable(2) Financial information of the reporting segmentsInapplicable(3) In case there is no reporting segment or the total assets and liabilities of the reporting segments cannot be
disclosed, explain the reasonInapplicable(4) Other notesInapplicable
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7. Other significant transactions and matters that may affect investors' decision makingInapplicable8. OthersInapplicable
XVII. Notes to the parent company’s financial statements
1. Accounts receivable(1) Accounts receivables disclosed by types
In CNY
Categories | Ending balance | Opening balance | ||||||||
Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | |||||
Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
Receivables for which provision for bad debts have been recognized based on the portfolio | 7,425,599.28 | 100% | 39,440.24 | 100% | 7,386,159.04 | 6,871,446.35 | 100% | 39,440.24 | 100% | 6,832,006.11 |
Total | 7,425,599.28 | 100% | 39,440.24 | 100% | 7,386,159.04 | 6,871,446.35 | 100% | 39,440.24 | 100% | 6,832,006.11 |
Accounts receivable with significant single amount and provision of bad debt reserve on individual basis at the end of thereporting period :
InapplicableIn the combination, the accounts receivable for which the bad debt reserve is provided based on the age analysis:
In CNY
Ageing | Ending balance | ||
Accounts receivable | Bad debt reserve | Provision proportion | |
Itemized within 1 year | |||
Sub-total within 1 year | 871,586.71 | 39,440.24 | 4.53% |
Total | 871,586.71 | 39,440.24 | 4.53% |
Note to the basis for determining the combination:
No reserve for bad debt of the accounts receivable was provided during the reporting period while it is going to beprovided at the end of the year.
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In the combination, the account receivable for which reserve for bad debt is provided based on balance percentage:
Inapplicable
In the combination, the accounts receivable for which the bad debt reserve is provided based on the other method:
In CNY
Portfolio Description | Book balance | Bad debt reserve | Provision proportion |
Specific fund portfolio | 6,554,012.57 | - | - |
Based on historical experience, the Company did not provide any reserve for bad debt for the Group’s receivables due
from its subsidiaries which should be brought into the consolidation scope (the specific fund grouping amounting to CNY6,554,012.57 is attributable to the rent receivable from the subsidiaries), as such receivables are highly recoverable and itis little possible to become bad debt .
(2) Bad debt provision accrual, received or reversed in the reporting periodInapplicable(3) Accounts receivable actually written off in current periodInapplicable(4) Accounts receivable due from the top five debtors are as follows:
In CNY
Serial No. | Names of the debtors | Nature of Payment | Amount | Ageing | Proportion taken | Bad debt reserve at the end of the reporting period | Are they related parties |
1 | FIYTA Sales Co., Ltd. | Rent | 6,116,757.60 | Within 1 year | 82.37% | - | Yes |
2 | Shenzhen FIYTA Sophisticated Timepieces Manufacture Co., Ltd. | Rent | 326,627.97 | Within 1 year | 4.40% | - | Yes |
3 | AVIC Property Management Co., Ltd. | Rent | 272,406.30 | Within 1 year | 3.67% | 13,620.32 | Yes |
4 | Shenzhen AVIC 9 Square Assets Management Co., Ltd. | Rent | 260,240.52 | Within 1 year | 3.50% | 13,012.03 | Yes |
5 | Shenzhen Goodfamily Sports Equipment Chain Store Co., Ltd. | Rent | 178,101.30 | Within 1 year | 2.40% | 8,900.52 | No |
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(5) Accounts receivable terminated for recognition due to transfer of financial assetsInapplicable(6) Amount of assets, liabilities formed by transfer of accounts receivable and continuing to be involvedInapplicable2. Other receivables(1) Disclosure of classification of other receivables
In CNY
Categories | Ending balance | Opening balance | ||||||||
Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | |||||
Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
Other receivables for which bad debt reserve has been provided based on the portfolio | 698,339,717.57 | 100% | 53,065.03 | 100% | 698,286,652.54 | 832,005,502.89 | 100% | 53,065.03 | 100% | 831,952,437.86 |
Total | 698,339,717.57 | 100% | 53,065.03 | 100% | 698,286,652.54 | 832,005,502.89 | 100% | 53,065.03 | 100% | 831,952,437.86 |
Other receivables with significant single amount and provision of bad debt reserve on individual basis at the end of thereporting period:
InapplicableIn the combination, other receivables for which the bad debt reserve is provided based on the age analysis:
In CNY
Ageing | Ending balance | ||
Other receivables | Bad debt reserve | Provision proportion | |
Itemized within 1 year | |||
Sub-total within 1 year | 369,198.43 | 17,840.03 | 4.83% |
1 to 2 years | 152,000.00 | 15,200.00 | 10% |
Over 3 years | 40,050.00 | 20,025.00 | 50% |
Total | 561,248.43 | 53,065.03 | 9.45% |
Note to the basis for determining the combination:
No reserve for bad debt of other receivables was provided during the reporting period while it is going to be provided at theend of the year.In the combination, other account receivable for which reserve for bad debt is provided based on balance percentage:
Inapplicable
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In the combination, other receivable for which the bad debt reserve is provided based on other method:
Based on historical experience, as the reserve receivable from the employees, accounts receivable due from thesubsidiaries which should be brought into the consolidation scope, accounts receivable with the nature of advancepayment and the accounts receivable as the part of the premiums of endowment insurance, medical insurance,unemployment insurance, work-related injury insurance and maternity insurance and housing fund payable by employeesare of high recoverability and low possibility of incurring bad debt, the Group provided no reserve for bad debt for them.
In CNY
Portfolio Description | Book balance | Bad debt reserve | Provision proportion |
Specific fund portfolio | 697,778,469.14 | - | - |
(2) Bad debt provision accrual, received or reversed in the reporting periodInapplicable(3) Accounts receivable actually written off in current periodInapplicable(4) Classification of other receivables based on nature of payment
In CNY
Nature of Payment | Ending book balance | Opening book balance |
Dealings among related parties within the consolidation scope | 696,575,834.05 | 831,217,702.17 |
Reserve | 1,202,635.09 | 0.00 |
Cash deposit and deposit in security | 258,104.00 | 352,131.00 |
Others | 303,144.43 | 435,669.72 |
Total | 698,339,717.57 | 832,005,502.89 |
(5) Other receivables owed by the top five debtors based on the ending balance
In CNY
Company name | Nature of Payment | Ending balance | Ageing | Proportion in total ending balance of other receivables | Ending balance of the provision for bad debts |
Shenzhen Harmony World Watches Center Co., Ltd. | Current accounts | 442,318,003.30 | Within 1 year | 63.34% | 0.00 |
Liaoning Hengdarui Commerce & Trade Co., Ltd. | Current accounts | 104,260,500.00 | Within 1 year | 14.93% | 0.00 |
FIYTA Sales Co., Ltd. | Current accounts | 100,129,598.82 | Within 1 year | 14.34% | 0.00 |
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Emile Chouriet (Shenzhen) Limited | Current accounts | 25,500,839.73 | Within 1 year | 3.65% | 0.00 |
Shiyuehui Boutique (Shenzhen) Co., Ltd. | Current accounts | 24,366,892.20 | Within 1 year | 3.49% | 0.00 |
Total | -- | 696,575,834.05 | -- | 99.75% | 0.00 |
(6) Accounts receivable involving government subsidyInapplicable(7) Other receivables with recognition terminated due to transfer of financial assetsInapplicable(8) Amount of assets and liabilities formed through transfer of other receivables and continuing to be involvedInapplicable3. Long-term equity investments
In CNY
Items | Ending balance | Opening balance | ||||
Book balance | Impairment reserve | Book value | Book balance | Impairment reserve | Book value | |
Investment in subsidiaries | 1,331,248,590.93 | 0.00 | 1,331,248,590.93 | 1,331,248,590.93 | 0.00 | 1,331,248,590.93 |
Investment in associates and joint ventures | 43,972,531.47 | 0.00 | 43,972,531.47 | 43,879,518.09 | 0.00 | 43,879,518.09 |
Total | 1,375,221,122.40 | 0.00 | 1,375,221,122.40 | 1,375,128,109.02 | 0.00 | 1,375,128,109.02 |
(1) Investment in subsidiaries
In CNY
Investees | Opening balance | Increase in the reporting period | Decrease in the reporting period | Ending balance | Provision for impairment in the reporting period | Ending balance of the provision for impairment |
Shenzhen Harmony World Watches Center Co., Ltd. | 601,307,200.00 | 0.00 | 0.00 | 601,307,200.00 | 0.00 | 0.00 |
FIYTA Sales Co., Ltd. | 450,000,000.00 | 0.00 | 0.00 | 450,000,000.00 | 0.00 | 0.00 |
Shenzhen FIYTA | 9,000,000.00 | 0.00 | 0.00 | 9,000,000.00 | 0.00 | 0.00 |
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Sophisticated Timepieces Manufacture Co., Ltd. | ||||||
Shenzhen FIYTA Technology Development Co., Ltd. | 10,000,000.00 | 0.00 | 0.00 | 10,000,000.00 | 0.00 | 0.00 |
FIYTA (Hong Kong) Limited | 137,737,520.00 | 0.00 | 0.00 | 137,737,520.00 | 0.00 | 0.00 |
Shiyuehui Boutique (Shenzhen) Co., Ltd. | 5,000,000.00 | 0.00 | 0.00 | 5,000,000.00 | 0.00 | 0.00 |
Harbin Harmony World Watch Co., Ltd. | 2,184,484.39 | 0.00 | 0.00 | 2,184,484.39 | 0.00 | 0.00 |
Liaoning Hengdarui Commerce & Trade Co., Ltd. | 36,867,843.96 | 0.00 | 0.00 | 36,867,843.96 | 0.00 | 0.00 |
Emile Chouriet (Shenzhen) Limited | 79,151,542.58 | 0.00 | 0.00 | 79,151,542.58 | 0.00 | 0.00 |
Total | 1,331,248,590.93 | 0.00 | 0.00 | 1,331,248,590.93 | 0.00 | 0.00 |
(2) Investment in associates and joint ventures
In CNY
Investees | Opening balance | Increase/ Decrease (+ / -) in the reporting period | Ending balance | Ending balance of the provision for impairment | |||||||
Additional investment | Decrease of investment | Income from equity investment recognized under equity method | Other comprehensive income adjustment | Other equity movement | Announced for distributing cash dividend or profit | Provision for impairment | Others | ||||
I. Joint Venture | |||||||||||
II. Associates | |||||||||||
Shanghai Watch Industry Co., Ltd. | 43,879,518.09 | 0.00 | 0.00 | 93,013.38 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 43,972,531.47 | 0.00 |
Sub-total | 43,879,518.09 | 0.00 | 0.00 | 93,013.38 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 43,972,531.47 | 0.00 |
Total | 43,879,518.09 | 0.00 | 0.00 | 93,013.38 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 43,972,531.47 | 0.00 |
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(3) Other notes4. Operation Income and Costs
In CNY
Items | Amount incurred in the reporting period | Amount incurred in the previous period | ||
Income | Costs | Income | Costs | |
Principal business | 56,119,634.18 | 9,578,544.70 | 51,281,774.36 | 8,618,881.55 |
Other businesses | 0.00 | 0.00 | 72,649.57 | 0.00 |
Total | 56,119,634.18 | 9,578,544.70 | 51,354,423.93 | 8,618,881.55 |
Other notes:
5. Return on investment
In CNY
Items | Amount incurred in the reporting period | Amount incurred in the previous period |
Income from long term equity investment based on equity method | 93,013.38 | 188,871.89 |
Total | 93,013.38 | 188,871.89 |
6. MiscelleneousXVIII. Supplementary information1. Statement of non-recurring gains and losses in the reporting period
In CNY
Items | Amount | Notes |
Gain/Loss from disposal of non-current assets | -54,407.16 | Gain/loss from disposal of partial obsolete office fixed assets during the reporting period |
Government subsidy credited to the current gain and loss (except the government subsidies closely related with the Company’s business and enjoyable according to the unified standard quota or fixed amount specified by the central government). | 6,497,018.80 | For detail, refer to the supplementary description of the government subsidy counted to the current profit and loss, Note VII.70. |
Operating income and expenses other than the aforesaid items | 7,533,121.86 | Operating income and expenses other than the aforesaid items. |
Other various non-operating revenue and expenditure with the aforesaid items exclusive | -102,663.02 | Other non-operating income and expenses |
Less: Amount affected by the income tax | 1,264,520.20 |
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Total | 12,608,550.28 | -- |
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No. 1 on InformationDisclosure for Companies Offering their Securities to the Public – Non-recurring Gains and Losses and its non-recurring
gain/loss items as illustrated in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering
their Securities to the Public – Non-recurring Gains and Losses which have been defined as recurring gains and losses, it
is necessary to explain the reason.Inapplicable
2. ROE and EPS
Profit in the reporting period | Return on equity, weighted average | Earnings per share | |
Basic earning per share (CNY/share) | Diluted earning per share (CNY/share) | ||
Net profit attributable to the Company’s shareholders of ordinary shares | 4.45% | 0.2561 | 0.2561 |
Net profit attributable to the Company’s shareholders of ordinary shares less non-recurring gains and loss | 3.95% | 0.2274 | 0.2274 |
3. Discrepancy in accounting data between IAS and CAS(1) Discrepancy in net profit and net assets as disclosed in the financial report respectively according to IAS and
CASInapplicable(2) Discrepancy in net profit and net assets as disclosed in the financial report respectively according to the
accounting standards outside Mainland China and CASInapplicable(3) Note to the discrepancy in accounting data under the accounting standards outside Mainland China. In case
the discrepancy in data which have been audited by an overseas auditing agent has been adjusted, pleasespecify the name of the overseas auditing agent.
4. MiscelleneousInapplicable
FIYTA HOLDINGS LTD. 2018 Semi-annual
Report, Full Text
Section11 Documents Available for Inspection
I. Financial Statements signed by and under the seal of the legal representative, the treasurer and theperson in charge of the accounting department of the Company;
II. All the manuscripts of the Company’s documents and announcements disclosed in the newspapers
(Securities Times and Hong Kong Commercial Daily) designated by China Securities RegulatoryCommission.