FIYTA Holdings Ltd.
Semi-Annual Financial Report 2017
Legal Representative:Xu Dongsheng
Chief Accountant: Chen Zhuo
Person in charge of the accounting department: Tian Hui
Financial Report
I. Auditors’ Report
Has the semi-annual report been audited
No
II. Financial Statements
The currency applied in the financial notes and statements is Renminbi.
1. Consolidated Balance Sheet
Prepared by FIYTA Holdings Ltd.
June 30, 2017
In CNY
Items Ending balance Opening balance
Current assets:
Monetary fund 385,224,003.87 428,802,755.81
Settlement reserve
Inter-bank lending
Financial assets which were
measured based on the fair value
and its change was counted to the
current gain and loss
Derivative financial assets
Notes receivable 11,978,785.61 7,662,556.28
Accounts receivable 315,123,497.85 306,671,021.69
Prepayment 28,575,041.43 33,709,656.73
Receivable premium
Reinsurance accounts
receivable
Reserve for reinsurance
contract receivable
Interest receivable 0.00 0.00
Dividends receivable 0.00 0.00
Other receivables 41,646,027.66 33,393,017.28
Redemptory monetary capital
for sale
Inventories 1,897,695,603.73 1,997,097,192.38
Held-for-sale assets as
classified
Non-current assets due within
0.00 0.00
a year
Other current assets 16,632,866.26 20,344,532.09
Total current assets 2,696,875,826.41 2,827,680,732.26
Non-current assets:
Provision of loans and
advance in cash
Available-for-sale financial
85,000.00 85,000.00
assets
Held-to-due investments 0.00 0.00
Long term accounts receivable 0.00 0.00
Long-term equity investment 43,612,496.76 43,423,624.87
Investment based real estate 284,928,954.22 244,202,635.09
Fixed assets 557,286,443.92 611,204,169.03
Construction-in-process 1,404,130.16 0.00
Engineering supplies
Disposal of fixed assets
Productive biological asset
Oil and gas assets
Intangible assets 39,876,492.97 38,751,903.42
Development expenses
Goodwill 0.00 0.00
Long-term expenses to be
112,045,952.01 133,688,403.88
apportioned
Deferred income tax asset 93,827,361.57 95,179,575.26
Other non-current assets 15,048,207.78 10,681,518.91
Total non-current assets 1,148,115,039.39 1,177,216,830.46
Total assets 3,844,990,865.80 4,004,897,562.72
Current liabilities:
Short-term Loan 919,078,240.00 1,098,438,070.00
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 0.00 0.00
Accounts payable 199,488,268.27 215,422,089.74
Advance receipts 8,875,797.18 13,902,703.90
Funds from selling out and
repurchasing financial assets
Service charge and
commission payable
Salaries payable to the
28,239,347.04 45,254,585.69
employees
Taxes payable 60,639,454.20 50,945,289.31
Interest payable 2,090,071.71 2,475,969.65
Dividends payable 0.00 0.00
Other payables 64,311,179.92 53,733,080.99
Payable reinsurance
Reserve for insurance contract
Acting trading securities
Income from securities
underwriting on commission
Held-for-purchase liabilities as
classified
Non-current liabilities due
21,500,000.00 26,117,387.52
within a year
Other current liabilities 10,776,626.25 2,379,148.19
Total current liabilities 1,314,998,984.57 1,508,668,324.99
Non-current liabilities:
Long-term Loan 97,939,904.54 115,301,048.00
Bonds payable
Including: preferred shares
Perpetual bond
Long-term accounts payable
Long term accrued payroll
Special accounts payable
Predicted liabilities
Deferred income 7,280,000.00 5,980,000.00
Deferred income tax liability
Other non-current liabilities
Total non-current liabilities 105,219,904.54 121,281,048.00
Total liabilities 1,420,218,889.11 1,629,949,372.99
Owner’s equipty
Capital stock 438,744,881.00 438,744,881.00
Other equity instruments
Including: preferred shares
Permanent liabilities
Capital reserve 1,062,455,644.22 1,062,455,644.22
Less: shares in stock
Other comprehensive income -4,609,953.66 -11,778,498.24
Special reserve
Surplus reserve 193,961,700.45 193,961,700.45
General risk reserve
Retained earnings 730,821,144.40 687,986,807.74
Total owner’s equity attributable to
2,421,373,416.41 2,371,370,535.17
the parent company
Minority equity 3,398,560.28 3,577,654.56
Total owners’ equity 2,424,771,976.69 2,374,948,189.73
Total liabilities and owners’ equity 3,844,990,865.80 4,004,897,562.72
Legal representative: Xu Dongsheng Chief Financial Officer: Chen Zhuo Person in charge of the
Accounting Department: Tian Hui
2. Balance Sheet, Parent Company
In CNY
Items Ending balance Opening balance
Current assets:
Monetary funds 257,202,558.22 270,947,926.47
Financial assets which were
measured based on the fair value
and its change was counted to the
current gain and loss
Derivative financial assets
Notes receivable
Accounts receivable 1,790,558.68 255,995.64
Prepayments
Interest receivable
Dividends receivable
Other receivables 952,810,803.52 1,191,947,054.57
Inventories:
Assets classifid as that held for
sale
Non-current assets due within
a year
Other current assets 7,829,564.26 5,805,712.39
Total current assets 1,219,633,484.68 1,468,956,689.07
Non-Current Assets:
Available-for-sale financial
85,000.00 85,000.00
assets
Held –to-maturity investment
Long-term accounts receivable
Long-term equity investment 1,256,782,216.76 1,256,593,344.87
Investment based real estate 249,103,728.60 207,804,447.15
Fixed assets 365,896,306.27 414,581,425.11
Construction-in-progress 1,404,130.16 0.00
Engineering supplies
Disposal of fixed assets
Productive biological assets
Oil and gas asset
Intangible assets 33,262,051.94 32,438,001.77
Development expenses
Goodwill
Long-term expenses to be 4,933,025.56 5,721,622.60
apportioned
Deferred income tax asset 1,827,555.54 1,502,555.54
Other non-current assets 13,199,539.98 10,681,518.91
Total non-current assets 1,926,493,554.81 1,929,407,915.95
Total assets 3,146,127,039.49 3,398,364,605.02
Current liabilities:
Short-term Loan 723,000,000.00 908,000,000.00
Financial liabilities which were
measured based on the fair value
and its change was charged to the
current gain and loss
Derivative financial liabilities
Notes payable
Accounts payable 64,567,679.63 77,826,174.63
Advance receipts 963,873.18 2,767,858.84
Salaries payable to the
1,009,028.52 8,020,288.56
employees
Taxes payable 1,064,316.08 2,883,511.63
Interest payable 1,026,527.83 1,312,644.11
Dividends payable
Other payables 23,466,453.02 18,959,721.51
Liabilities classifid as that held
for sale
Non-current liabilities due
21,500,000.00 8,000,000.00
within a year
Other current liabilities
Total current liabilities 836,597,878.26 1,027,770,199.28
Non-Current Liabilities:
Long term borrowings 92,361,928.00 109,861,928.00
Bonds payable
Including: preferred shares
Permanent liabilities
Long term accounts payable
Long term accrued payroll
Special accounts payable
Predicted liabilities
Deferred income 7,280,000.00 5,980,000.00
Deferred income tax liability
Other non-current liabilities
Total non-current liabilities 99,641,928.00 115,841,928.00
Total liabilities 936,239,806.26 1,143,612,127.28
Owner’s equipty
Capital stock 438,744,881.00 438,744,881.00
Other equity instruments
Including: preferred shares
Permanent liabilities
Capital reserve 1,068,111,185.32 1,068,111,185.32
Less: shares in stock
Other comprehensive income
Special reserve
Surplus reserve 193,961,700.45 193,961,700.45
Retained earnings 509,069,466.46 553,934,710.97
Total owners’ equity 2,209,887,233.23 2,254,752,477.74
Total liabilities and owners’ equity 3,146,127,039.49 3,398,364,605.02
Legal representative: Xu Dongsheng Chief Financial Officer: Chen Zhuo Person in charge of the
Accounting Department: Tian Hui
3. Consolidated Profit Statement
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
I. Gross Revenue 1,599,541,144.35 1,479,527,783.18
Including: revenue 1,599,541,144.35 1,479,527,783.18
Interest income
Earned premium
Service charge and
commission income
II. Total operating cost 1,488,102,213.22 1,404,258,390.87
Including: operating costs 941,479,684.84 881,663,280.51
Interest payment
Service charge and
commission payment
Refunded premiums
Compensation pay-out,
net
Net amount of reserves
for reinsurance contract
Policy dividend payment
Reinsurance expenses
Taxes and surcharges 15,181,497.28 13,068,582.12
Sales expenses 394,286,321.79 378,007,640.11
Administrative expenses 98,170,386.95 94,847,009.60
Financial expenses 26,200,633.06 35,230,653.98
Loss from impairment of
12,783,689.30 1,441,224.55
assets
Plus: Income from change of fair
value (loss is stated with “-“)
Investment income (loss is
188,871.89 172.19
stated with “-“)
Including: income from
investment in associates and joint 188,871.89 172.19
ventures
Exchange income (loss
expressed with “-“)
Other income
III. Operating Profit (loss is stated with
111,627,803.02 75,269,564.50
“-“)
Plus: Non-operating income 1,627,480.46 1,402,360.28
Including: profit from
3,570.55 10,960.00
disposal of non-current assets
Less: Non-operating expenses 678,113.94 528,969.02
Including: Loss from
16,923.50 94,833.03
disposal of non-current assets
IV. Total profit (total loss is stated with
112,577,169.54 76,142,955.76
“-“)
Less: Income tax expense 25,965,385.00 15,779,713.54
V. Net Profit (net loss is stated with “-“) 86,611,784.54 60,363,242.22
Net profit attributable to the
86,708,824.76 60,513,019.44
parent company’s owner
Minority shareholders’ gain/loss -97,040.22 -149,777.22
VI. Net of other comprehensive
7,086,490.52 9,649,898.67
income after tax
Net of other comprehensive
income after tax attributable to the 7,168,544.58 9,577,876.71
parent company’s owner
(I) Other comprehensive income
which cannot be re-classified into the 0.00 0.00
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 7,168,544.58 9,577,876.71
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
7,168,544.58 9,577,876.71
in foreign currency statements
6. Others
Net amount of other -82,054.06 72,021.96
comprehensive income after tax
attributable to minority shareholders
VII. Total comprehensive income 93,698,275.06 70,013,140.89
Total comprehensive income
attributable to the parent company’s 93,877,369.34 70,090,896.15
owner
Total comprehensive income
-179,094.28 -77,755.26
attributable to minority shareholders
VIII. Earnings per share:
(I) Basic earnings per share 0.1976 0.1379
(II) Diluted earnings per share 0.1976 0.1379
Legal representative: Xu Dongsheng Chief Financial Officer: Chen Zhuo Person in charge of the
Accounting Department: Tian Hui
4. Income Statement, Parent Company
in CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
I. Revenue 51,354,423.93 49,145,205.51
Less: Operating cost 8,618,881.55 6,783,241.62
Taxes and surcharges 1,857,724.22 2,056,046.32
Sales costs 5,024,222.36 0.00
Administrative expenses 33,744,643.77 27,638,190.90
Financial expenses 5,846,311.05 6,578,866.10
Loss from impairment of
assets
Plus: Income from change in
fair value (loss stated with “-“)
Investment return (loss
188,871.89 135,344,832.55
stated with “-“)
Including: return on
investment in associate and joint 188,871.89 172.19
venture
Other income
II. Operation profit (loss stated with
-3,548,487.13 141,433,693.12
“-“)
Plus: Non-operating income 789,879.89 112,119.88
Including: profit from
disposal of non-current assets
Less: Non-operating expenses 20,000.00 300,000.00
Including: Loss from
disposal of non-current assets
III. Total Profit (total loss stated with
-2,778,607.24 141,245,813.00
“-“)
Less: Income tax expense -1,787,850.83 922,202.22
IV. Net profit ( net loss is stated with
-990,756.41 140,323,610.78
“-“)
V. Net of other comprehensive
0.00 0.00
income after tax
(I) Other comprehensive
income which cannot be 0.00 0.00
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
0.00 0.00
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 ssets
4. Valid part of the
gain/loss from cash flow hedge
5. Conversion margin of
the financial statements in foreign
currency
6. Others
VI. Total comprehensive income -990,756.41 140,323,610.78
VII. Earnings per share:
(I) Basic earnings per share -0.0023 0.3198
(II) Diluted earnings per share -0.0023 0.3198
Legal representative: Xu Dongsheng Chief Financial Officer: Chen Zhuo Person in charge of the
Accounting Department: Tian Hui
5. Consolidated Cash Flow Statement
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
1,812,867,961.66 1,669,094,350.46
goods and supply of labor service
Net increase of customers’
deposit and due from banks
Net increase of borrowings
from the central bank
Net increase of borrowings
from other financial institutions
Cash received from the
premium of the original insurance
contract
Net cash received from the
reinsurance business
Net increase of the reserve
from policy holders and investment
Net increase of the financial
assets that are measured at fair
value and whose movement is
counted to the current gain and 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 84,719.44 6,421.29
Other operation activity related
19,800,294.79 13,479,123.94
cash receipts
Subtotal of cash flow in from
1,832,752,975.89 1,682,579,895.69
operating activity
Cash paid for purchase of
goods and reception of labor 980,063,342.31 905,753,936.17
services
Net increase of loans and
advances to customers
Net increase of due from
central bank and due from banks
Cash from payment for
settlement of the original insurance
contract
Cash paid for interest, service
charge and commission
Cash for payment of policy
dividend
Cash paid to and for staff 263,216,670.99 255,700,203.02
Taxes paid 130,097,049.65 141,464,964.05
Other business activity related
182,660,252.41 162,051,059.91
cash payments
Subtotal of cash flow out from
1,556,037,315.36 1,464,970,163.15
operating activity
Net cash flow arising from operating
276,715,660.53 217,609,732.54
activities
II. Cash flows arising from
investment activities:
Cash received from recovery
of investment
Cash received from
383,750.00
investment income
Net cash received from
disposal of fixed assets, intangible 24,249.89 420.00
assets and other long-term assets
Net cash received from
disposal of subsidiaries and other 0.00
operating units
Other investment related cash
0.00
receipts
Subtotal of cash flow in from
24,249.89 384,170.00
investment activity
Cash paid for
construction/purchase of fixed
56,447,301.65 101,330,436.01
assets, intangible assets and other
long term assets
Cash paid for investment 0.00
Net increase of the pledged
loan
Net cash paid for acquisition of
subsidiaries and other operation 0.00
units
Other investment related cash
0.00
payments
Subtotal of cash flow out from
56,447,301.65 101,330,436.01
investment activity
Net cash flow arising from
-56,423,051.76 -100,946,266.01
investment activities
III. Cash flows arising from fund
raising activities:
Cash received from absorbing
investment
Incl.: Cash received from the
subsidiaries’ absorption of minority
shareholders’ investment
Cash received from loans 173,846,200.00 449,044,295.81
Cash received from bond
issuing
Other fund-raising related cash
receipts
Subtotal of cash flow in from fund
173,846,200.00 449,044,295.81
raising activity
Cash paid for debt repayment 371,965,603.86 612,200,422.81
Cash paid for dividend/profit
66,091,946.92 93,079,913.22
distribution or repayment of interest
Including: Dividend and profit
paid by the subsidiaries to minority 0.00
shareholders
Cash paid for other financing
0.00 992,669.19
activities
Sub-total cash flow paid for
438,057,550.78 706,273,005.22
financing activities
Net cash flow arising from financing
-264,211,350.78 -257,228,709.41
activities
IV. Change of exchange rate
influencing the cash and cash 339,990.07 274,347.57
equivalent
V. Net increase of cash and cash
-43,578,751.94 -140,290,895.31
equivalents
Plus: Opening balance of cash
427,227,755.81 637,387,875.93
and cash equivalents
VI. Ending balance of cash and cash
383,649,003.87 497,096,980.62
equivalents
Legal representative: Xu Dongsheng Chief Financial Officer: Chen Zhuo Person in charge of the
Accounting Department: Tian Hui
6. Parent Company’s Cash Flow Statement
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
50,374,752.27 48,326,245.09
goods and supply of labor service
Rebated taxes received 0.00 0.00
Other operation activity related
264,986,637.47 297,292,855.21
cash receipts
Subtotal of cash flow in from
315,361,389.74 345,619,100.30
operating activity
Cash paid for purchase of
goods and reception of labor
services
Cash paid to and for staff 31,949,428.47 31,521,273.39
Taxes paid 4,894,598.25 4,378,264.62
Other business activity related
13,685,482.18 10,851,967.38
cash payments
Subtotal of cash flow out from
50,529,508.90 46,751,505.39
operating activity
Net cash flow arising from operating
264,831,880.84 298,867,594.91
activities
II. Cash flows arising from
investment activities:
Cash received from recovery
of investment
Cash received from
129,383,750.00
investment income
Net cash received from
disposal of fixed assets, intangible
assets and 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
129,383,750.00
investment activity
Cash paid for
construction/purchase of fixed
26,633,834.50 56,582,660.00
assets, intangible assets and other
long term assets
Cash paid for investment 0.00 442,270,000.00
Net cash paid for acquisition of
subsidiaries and other operation 0.00 0.00
units
Other investment related cash
0.00 0.00
payments
Subtotal of cash flow out from
26,633,834.50 498,852,660.00
investment activity
Net cash flow arising from
-26,633,834.50 -369,468,910.00
investment activities
III. Cash flows arising from fund
raising activities:
Cash received from absorbing
investment
Cash received from loans 165,000,000.00 441,500,000.00
Cash received from bond
issuing
Other fund-raising related cash
receipts
Subtotal of cash flow in from fund
165,000,000.00 441,500,000.00
raising activity
Cash paid for debt repayment 354,000,000.00 500,000,000.00
Cash paid for dividend/profit
62,917,164.79 85,591,364.77
distribution or repayment of interest
Cash paid for other financing
992,669.19
activities
Sub-total cash flow paid for
416,917,164.79 586,584,033.96
financing activities
Net cash flow arising from financing
-251,917,164.79 -145,084,033.96
activities
IV. Change of exchange rate
influencing the cash and cash -26,249.80 0.00
equivalent
V. Net increase of cash and cash
-13,745,368.25 -215,685,349.05
equivalents
Plus: Opening balance of cash
269,372,926.47 512,294,824.81
and cash equivalents
VI. Ending balance of cash and cash
255,627,558.22 296,609,475.76
equivalents
Legal representative: Xu Dongsheng Chief Financial Officer: Chen Zhuo Person in charge of the
Accounting Department: Tian Hui
7. Consolidated Statement of Change in Owner’s Equity
Amount in the reporting period
in CNY
Reporting Period
Owners’ equity attributable to the parent company
Other equity
Minorit
instruments Other Total
Retain y
Items owner’
Share Less: compre Surplu Genera
Capital Special ed shareh
capita Prefe Perm shares hensiv s l risk s
reserve reserve earning olders’
l in stock e reserve reserve equity
rred anent Other equity
s
share liabilit s income
s ies
I. Ending balance 438,7 1,062,4 193,96 687,98 2,374,9
-11,778 3,577,6
of the previous 44,88 55,644. 1,700.4 6,807.7 48,189.
,498.24 54.56
year 1.00 22 5 4 73
Plus:
Change in 0.00
accounting policy
Correction of 0.00
previous errors
Consolidation of
enterprises 0.00
under the same
control
Others 0.00
II. Opening 438,7 1,062,4 193,96 687,98 2,374,9
-11,778 3,577,6
balance of the 44,88 0.00 0.00 0.00 55,644. 0.00 0.00 1,700.4 0.00 6,807.7 48,189.
,498.24 54.56
reporting year 1.00 22 5 4 73
III.
Decrease/increa
7,168,5 42,834, -179,0 49,823,
se of the report
44.58 336.66 94.28 786.96
year (decrease is
stated with “-“)
(I) Total
7,168,5 86,708, -179,0 93,698,
comprehensive
44.58 824.76 94.28 275.06
income
(II) Owners’ input
and decrease of 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
capital
1．Common 0.00
shares
contributed by
shareholders
2. Capital
contributed by
other equity
0.00
instruments
holders
3. Amount of
payment for
0.00
shares charged
to owners’ equity
4. Others 0.00
-43,87 -43,87
(III) Profit
4,488.1 4,488.1
Distribution
0 0
1. Provision of
0.00
surplus reserve
2. Provision of
general risk 0.00
reserve
3. Distribution to -43,87 -43,87
the owners (or 4,488.1 4,488.1
shareholders) 0 0
4. Others 0.00
(IV) Internal
carry-over of 0.00
owners’ equity
1. Conversion of
capital reserve
0.00
into capital (or
capital stock)
2. Conversion of
surplus reserve
0.00
into capital (or
capital stock)
3. Surplus
reserves for 0.00
making up losses
4. Others 0.00
(V) Special
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
reserve
1. Provision in
0.00
the report period
2. Applied in the
0.00
report period
(VI) Others 0.00
IV. Ending 438,7 1,062,4 193,96 730,82 2,424,7
-4,609, 3,398,5
balance of the 44,88 0.00 0.00 0.00 55,644. 0.00 0.00 1,700.4 0.00 1,144.4 71,976.
953.66 60.28
reporting period 1.00 22 5 0 69
Amount of Previous Year
In CNY
Previous period
Owners’ equity attributable to the parent company
Other equity Minorit
Other Reserv Total
instruments Surplu Retaine y
Items owner’
Capti Capital Less: compre e
Special s d shareh
Prefe s
al Perp Reserv shares hensiv against
rred Other reserve Reserv earning olders’
stock etual e in stock e general equity
share e s equity
s
bond income risks
s
I. Balance at the 438,7 1,062,4 -17,14 179,74 635,41 2,302,8
3,614,
end of the 44,88 55,644. 5,189.7 3,077.1 7,237.5 30,324.
674.43
previous year 1.00 22 1 5 5 64
Plus:
Change in 0.00
accounting policy
Correction of 0.00
previous errors
Consolidation of
enterprises 0.00
under the same
control
Others 0.00
II. Opening 438,7 1,062,4 -17,14 179,74 635,41 2,302,8
3,614,
balance of the 44,88 0.00 0.00 0.00 55,644. 0.00 5,189.7 0.00 3,077.1 0.00 7,237.5 30,324.
674.43
reporting year 1.00 22 1 5 5 64
III.
Decrease/increa
5,366,6 14,218, 52,569, -37,01 72,117,
se of the report
91.47 623.30 570.19 9.87 865.09
year (decrease is
stated with “-“)
(I) Total 110,66 115,99
5,366,6 -37,01
comprehensive 2,681.5 2,353.1
91.47 9.87
income 9 9
(II) Owners’ input
and decrease of 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
capital
1. Common
shares
0.00
contributed by
shareholders
2. Capital
contributed by
other equity 0.00
instruments
holders
3. Amount of
payment for
0.00
shares charged
to owners’ equity
4. Others 0.00
-43,87
(III) Profit 14,218, -58,093
4,488.1
Distribution 623.30 ,111.40
0
1. Provision of 14,218, -14,218
0.00
surplus reserve 623.30 ,623.30
2. Provision of
general risk 0.00
reserve
3. Distribution to -43,87
-43,874
the owners (or 4,488.1
,488.10
shareholders) 0
4. Others 0.00
(IV) Internal
carry-over of 0.00
owners’ equity
1. Conversion of
capital reserve
0.00
into capital (or
capital stock)
2. Conversion of
surplus reserve
0.00
into capital (or
capital stock)
3. Surplus
reserves for 0.00
making up losses
4. Others 0.00
(V) Special
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
reserve
1. Provision in
0.00
the report period
2. Applied in the
0.00
report period
(VI) Others 0.00
IV. Ending 438,7 1,062,4 193,96 687,98 2,374,9
-11,778 3,577,
balance of the 44,88 0.00 0.00 0.00 55,644. 0.00 0.00 1,700.4 0.00 6,807.7 48,189.
,498.24 654.56
reporting period 1.00 22 5 4 73
Legal representative: Xu Dongsheng Chief Financial Officer: Chen Zhuo Person in charge of the
Accounting Department: Tian Hui
8. Statement of Change in Owner’s Equity, Parent Company
Amount in the reporting period
In CNY
Reporting period
Other equity
instruments Other Retaine
Less: Total
Items Capital Capital compreh Special Surplus d
Perma
Preferr shares in owners’
stock nent reserve ensive reserve reserve earning
ed Others stock equity
liabilitie income s
shares
s
I. Ending balance 438,74 553,93
1,068,11 193,961, 2,254,75
of the previous 4,881.0 4,710.9
1,185.32 700.45 2,477.74
year 0 7
Plus:
Change in 0.00
accounting policy
Correction of 0.00
previous errors
Others 0.00
II. Opening 438,74 553,93
1,068,11 193,961, 2,254,75
balance of the 4,881.0 0.00 0.00 0.00 0.00 0.00 0.00 4,710.9
1,185.32 700.45 2,477.74
reporting year 0 7
III.
Decrease/increa
-44,865 -44,865,
se of the report
,244.51 244.51
year (decrease is
stated with “-“)
(I) Total
-990,75 -990,756
comprehensive
6.41 .41
income
(II) Owners’ input
and decrease of 0.00
capital
1. Common
shares
0.00
contributed by
shareholders
2. Capital
contributed by
other equity 0.00
instruments
holders
3. Amount of
payment for
0.00
shares charged
to owners’ equity
4. Others 0.00
(III) Profit -43,874 -43,874,
Distribution ,488.10 488.10
1. Provision of
0.00
surplus reserve
2. Distribution to -43,874 -43,874,
the owners (or ,488.10 488.10
shareholders)
3. Others 0.00
(IV) Internal
carry-over of 0.00
owners’ equity
1. Conversion of
capital reserve
0.00
into capital (or
capital stock)
2. Conversion of
surplus reserve
0.00
into capital (or
capital stock)
3. Surplus
reserves for 0.00
making up losses
4. Others 0.00
(V) Special
0.00
reserve
1. Provision in
0.00
the report period
2. Applied in the
0.00
report period
(VI) Others 0.00
IV. Ending 438,74 509,06
1,068,11 193,961, 2,209,88
balance of the 4,881.0 0.00 0.00 0.00 0.00 0.00 0.00 9,466.4
1,185.32 700.45 7,233.23
reporting period 0 6
Amount of Previous Year
In CNY
Previous period
Other equity
instruments Other Retaine
Less: Total
Items Capital Capital compreh Special Surplus d
Perma
Preferr shares in owners’
stock nent reserve ensive reserve reserve earning
ed Others stock equity
liabilitie income s
shares
s
I. Ending balance 438,74 1,068,11 179,743, 469,84 2,156,44
of the previous 4,881.0 1,185.32 077.15 1,589.4 0,732.87
year 0 0
Plus:
Change in 0.00
accounting policy
Correction of 0.00
previous errors
Others 0.00
II. Opening 438,74 469,84
1,068,11 179,743, 2,156,44
balance of the 4,881.0 0.00 0.00 0.00 0.00 0.00 0.00 1,589.4
1,185.32 077.15 0,732.87
reporting year 0 0
III.
Decrease/increa
14,218,6 84,093, 98,311,7
se of the report
23.30 121.57 44.87
year (decrease is
stated with “-“)
(I) Total 142,18
142,186,
comprehensive 6,232.9
232.97
income 7
(II) Owners’ input
and decrease of 0.00
capital
1. Common
shares
0.00
contributed by
shareholders
2. Capital
contributed by
other equity 0.00
instruments
holders
3. Amount of
payment for
0.00
shares charged
to owners’ equity
4. Others 0.00
(III) Profit 14,218,6 -58,093 -43,874,
Distribution 23.30 ,111.40 488.10
1. Provision of 14,218,6 -14,218
0.00
surplus reserve 23.30 ,623.30
2. Distribution to
-43,874 -43,874,
the owners (or
,488.10 488.10
shareholders)
3. Others 0.00
(IV) Internal
carry-over of 0.00
owners’ equity
1. Conversion of
capital reserve
0.00
into capital (or
capital stock)
2. Conversion of
surplus reserve
0.00
into capital (or
capital stock)
3. Surplus
reserves for 0.00
making up losses
4. Others 0.00
(V) Special
0.00
reserve
1. Provision in
0.00
the report period
2. Applied in the
0.00
report period
(VI) Others 0.00
IV. Ending 438,74 553,93
1,068,11 193,961, 2,254,75
balance of the 4,881.0 0.00 0.00 0.00 0.00 0.00 0.00 4,710.9
1,185.32 700.45 2,477.74
reporting period 0 7
Legal representative: Xu Dongsheng Chief Financial Officer: Chen Zhuo Person in charge of the
Accounting Department: Tian Hui
III. Company Profile
Fiyta Holdings Ltd. (hereinafter referred to as the Company) was reorganized, incorporated and renamed from Shenzhen
Fiyta Timer Industry Company on December 25 1992 with approval by the General Office of Shenzhen Municipal People’s
Government with Document SHEN FU BAN FU [1992] No. 1259 and with China National Aero-Technology Import & Export
Corporation Shenzhen Industry & Trade Center (which was renamed as AVIC International Shenzhen Company Limited
) as the sponsor. Through reorganization, Shenzhen FIYTA Timekeeping Industry Company was renamed as Shenzhen
FIYTA Holdings Ltd. At present, the Company's head office is located at FIYTA Technology Building, Gaoxin S. Road One,
Nanshan District, Shenzhen, Guangdong Province.
On March 10, 1993, the Company, with approval by the People’s Bank of China Shenzhen Special Economic Zone Branch
[SHEN REN YIN FU ZI (1993) No. 070], issued publically domestic CNY based common shares (A-shares) and CNY based
special shares (B-shares). In accordance with the Approval Document of Shenzhen Municipal Securities Regulatory
Office SHEN ZHENG BAN FU [1993] No. 20 and the Approval Document of Shenzhen Stock Exchange SHEN ZHENG SHI
ZI (1993) No. 16, the Company’s A-shares and B-shares were all listed with Shenzhen Stock Exchange for trading
commencing from June 3, 1993.
On January 30, 1997, with approval by Shenzhen Municipal Administration for Industry and Commerce, the Company was
renamed as Shenzhen Fiyta Holdings Ltd.
On July 4, 1997, according to the equity assignment agreement between China National Aero-Technology Corporation
Shenzhen (CATIC Shenzhen Corporation) and CATIC Shenzhen Holdings Limited ( with original name of Shenzhen CATIC
Group Co., Ltd. (hereinafter referred to as CATIC Shenzhen), CATIC Shenzhen Corporation assigned 72.36 million
corporate shares (taking 52.24% of the Company’s total shares) to CATIC Shenzhen. From then on, the Company’s
controlling shareholder turned to be CATIC Shenzhen from CATIC Shenzhen Corporation.
On October 26, 2007, the Company implemented the equity separation reform, according to which the shareholder of the
Company’s non-negotiable shares would pay shares to the whole shareholders of negotiable shares registered on the
equity record day as designated in the equity separation reform plan at the rate of 3.1 shares for every 10 shares held by
them while the Company’s total 249,317,999 shares remained unchanged. So far, after the equity separation reform, the
proportion of the Company’s shares held by CATIC Shenzhen reduced from 52.24% to 44.69%.
On February 29, 2008, due to expansion of the Company’s business scope and with approval by Shenzhen Municipal
Administration for Industry and Commerce, the Company’s enterprise corporate business licence number was changed
from 4403011001583 into 440301103196089. In 2017, the Company finished the procedures of integrating the business
license, the organization code certificate, and the certificate of taxation registration into one document and the updated
unified social credit code is 91440300192189783K.
Approved by China Securities Regulatory Commission (CSRC) with the Official Reply on Approval of Non-public Issuing of
Shenzhen Fiyta Holdings Ltd., ZHENG JIAN XU KE [2010] No. 1703 and the Official Reply on the Issue of Non-Public
Issuing of Shenzhen Fiyta Holdings Ltd. by State-owned Assets Supervision and Administration Commission of the State
Council [2010] No. 430, the Company was approved to non-publically issue no more than 50 million common shares
(A-shares). After completion of non-public issuing on December 9, 2010, the Company’s registered capital increased to
CNY 280,548,479.00 and CATIC Shenzhen holds 41.49% of the Company’s equity based capital.
On April 8, 2011, the Company took the total share capital of 280,548,479 shares as at December 31, 2010 as the base,
converted its capital reserve into share capital at the rate of 4 shares for every 10 shares. After the conversion, the
Company’s total share capital became 392,767,870 shares.
On November 11, 2015, approved by China Securities Regulatory Commission (CSRC) with the Official Reply on Approval
of Non-public Issuing of Fiyta Holdings Ltd., ZHENG JIAN XU KE [2015] No. 2588 and the Official Reply on the Issue of
Non-Public Issuing of Fiyta Holdings Ltd. by State-owned Assets Supervision and Administration Commission of the State
Council [2015] No. 415, the Company was approved to non-publically issue no more than 46,911,649 common shares
(A-shares). After completion of non-public issuing on December 22, 2015, the Company’s registered capital increased to
CNY 438,744,881.00 and the proportion of the equity based capital held by CATIC Shenzhen decreased to 37.15%.
Ended June 30, 2017, the Company accumulatively issued totally 438,744,881 shares of the capital stock. For the detail,
refer to Note VII.53.
The principal business activities of the Company and its subsidiaries (collectively the Group) are: production and sales of
various pointer type quartz watches and units, spares and parts, various timing apparatus, processing and wholesale of K
gold watches and ornament watches (for production site, separate application should be submitted); domestic trade,
materials supply and sales (excluding the commodities for exclusive operation, exclusive control and monopoly); property
management and lease; import and export, design and construction; import and export business (implemented according to
Document SHEN MAO GUAN DENG ZHENG ZI NO. 2007-072). Legal Representative: Xu Dongsheng.
The Company has established the Shareholders’ General Meeting, the Board of Directors, the Supervisory Committee, the
Audit Committee, the Strategy Committee and the Nomination, Remuneration and Assessment Committee as the
governance organs, etc. The Company has also established a number of functional departments, including comprehensive
management department, human resource department, financial department, property department, innovation & design
department, strategy and information department, office of the Board of Directors, audit department, R & D department, etc.
The financial statements was approved and issued through the resolution of the Board of Directors dated August 11, 2017.
There were 15 subsidiaries consolidated from January to June, 2017. For the detail, refer to Note VIII "Equity in Other
Engities". The consolidation scope of the reporting year is the same as that of the previous year. For the detail, refer to Note
VIII "Change of the Consolidation Scope".
IV. Basis of preparation of Financial Statements
1. Basis of preparation
The financial statements are prepared with the going-concern assumption as the base and the transactions and matters
actually occurred in accordance with the Accounting Standards for Business Enterprises - Basic Standards promulgated by
the Ministry of Finance (issued by Order 33 of the Ministry of Finance and revised according to Order 76 of the Ministry of
Finance), 41 specific accounting standards promulgated and revised on February 15, 2006 and afterwards, and their
application guidelines, interpretations and other relevant requirements (collectively, "Accounting Standards for Enterprises").
Besides, the Company discloses the relevant financial information in accordance with Compilation Rules for Information
Disclosure by Companies Offering Securities to the Public No.15-General Provisions on Financial Reports (2014 Revision)
In accordance with the Enterprise Accounting Standards, the Company follows the accrual basis of accounting. With the
exception of some financial instruments, these financial statements are measured based on the historic cost basis. If
impaired, the assets shall provide for impairment in accordance with the relevant regulations.
2. Operation on Going Concern Basis
The financial statements of the Company have been prepared on going concern basis.
V. Important accounting policies and accounting estimates
Presentation on specific accounting policies and accounting estimates:
The Company and its subsidiaries have made a few of specific accounting policies and accounting estimates about
cognition of revenue, depreciation of fixed assets, amortization of intangible assets, R & D expenditures and other
transactions and matters in accordance with the actual operation and management characteristics and based on relevant
provisions of accounting standards for business enterprises. See the Note 5.28 "Revenue", Note 5.16 "Fixed assets", Note
5.21(1) "Intangible Assets", Note 5.21(2) "R & D expenditure" for details. The description on major accounting decisions
and estimates made by the management is referred to in the Note 4.27 "Major accounting decisions and estimates".
1. Statement on complying with the accounting standards for business enterprise
The financial statements prepared by the Company in accordance with the requirements of accounting standards for
business enterprises truly and fully reflect the financial status of the Company on June 30, 2017 and the business result
and cash flow and relevant information for January to June 2017. In addition, the Company's financial statements are in
conformity with the disclosure requirements of Compilation Rules for Information Disclosure by Companies Offering
Securities to the Public No. 15 - General Provisions for Financing Reporting as amended in 2014 by China Securities
Regulatory Commission on relevant financial statements and their notes in all important aspects.
2. Fiscal period
The fiscal period of the Company includes the fiscal year and interim period. The interim period refers to the reporting
period less than a whole fiscal year. The fiscal year of the Company is the Gregorian year, i.e. from January first to
December 31st.
3. Business
The normal business cycle refers to the period of the Company from purchasing the assets for processing to realization of
cash or cash equivalent. The Company takes 12 months as a business cycle and uses it as the liquidity division standard
for assets and liabilities.
4. Standard currency for accounting
Renminbi is the currency for the major economic environment where the Company and its domestic subsidiaries are
managed, and the Company and its domestic subsidiaries take Renminbi as the standard currency for accounting.
Except Montres Chouriet SA Company based in Swiss (hereinafter referred to as the "Swiss Company"), an overseas
subsidiary of FIYTA Hong Kong Co., Ltd. (hereinafter referred to as "FIYTA HK Co."), has determined Swiss franc as its
standard currency for accounting in accordance with the currencies available in its major economic environment where it is
operated, the overseas subsidiaries of the Company, including Harmony World Watch International Co., Ltd. ("World Watch
International Co."), a subsidiary of Shenzhen Harmony World Watch Center Company Limited ("Harmony Co."), FIYTA HK
Co., 68 Station Co., Ltd. ("68 Station Co.") as a subsidiary of FIYTA HK Co. and the entity NATURE ART LTD ("NATURE
ART") under control of 68 Station Co. for special purpose have determined Hong Kong currency as their standard currency
for accounting in accordance with the currencies available in their major economic environment where they are operated.
Hong Kong currency will be converted into Renminbi while in preparing financial statements.
The Company uses Renminbi while preparing these financial statements.
5. The accounting treatment on merger of enterprises under the same control and not under the
same control
Merger of enterprises refers to the transaction or matter that two or more independent enterprises are merged into a
reporting entity. The merger of enterprises includes merger under the same control and the merger not under the same
control.
(1) Merger of enterprises under the same control
The enterprise participating in merger is under the final control of the same party or parties and such control is not
temporary, this is the merger of enterprises under the same control. In the merger of enterprises under the same control,
the party that obtains the control right to the other enterprises participating in merger on the date of merger is the merging
party and the other enterprises participating in the merger are the merged party. The date of merger refers to the date when
the merging party has actually obtained the control right to the merged party.
The assets and liabilities acquired by the merging party are measured at the book value on the merged party on the date of
merger. If the book value of net assets acquired by the merging party is different with the book value paid for merger
consideration (or sum of book value of issued shares), the capital reserve (premium on stock capital) shall be adjusted; if
the capital reserve (premium on stock capital) is not sufficient to be written down, the retained earnings shall be adjusted.
Various direct expenses incurred by the merging party for merger of enterprises are included in the current profits and
losses at the time of occurrence.
(2) Merger of enterprises not under the same control
The enterprises to be merged, if not under the final control by the same party or parties before or after merger, refer to the
merger of enterprises not under the same control. For the merger of enterprises not under the same control, the party
acquiring the control right to the other enterprises involved with the merger on the date of purchase is the purchasing party
and the other enterprises involved with the merger are the purchased party. The date of purchase refers to the date when
the purchasing party actually acquires the control right to the purchased party.
For the merger of enterprises not under the same control, the merger costs contain the assets paid by the purchasing party
on the date of purchase for acquiring the control right to the purchased party, the liabilities incurred or undertaken and the
fair value of the issued equity securities. The commission incurred for merger of enterprises and involved with audit, legal
service, evaluation, consultation and etc., as well as other overhead expenses, are included in the current profits and
losses at the time of occurrence. The transaction costs of equity securities or debt securities issued as merger
consideration by the purchasing party are included in the initial confirmation amount of equity securities or debt securities.
The contingent consideration involved is included into the merger costs at the fair value on its purchase date. If it is
necessary to adjust the contingent consideration because any new or further evidence for the existing situation on the
purchase date appears within 12 months after the purchase date, the merged goodwill shall be modified accordingly. The
merger costs incurred and the net identifiable assets acquired in the merger by the purchasing party are measured at the
fair value on the purchase date. The difference that the merger costs are larger than the fair value of the net identifiable
assets of the purchased party on the purchase date as acquired in the merger is confirmed as the goodwill. If the merger
costs are less than the fair value of the net identifiable assets of the purchased party as acquired in the merger, the fair
value of various identifiable assets, liabilities and contingent liabilities of the purchased party and measurement of merger
costs are first checked, and if the merger costs are less than the fair value of net identifiable assets of the purchased party
acquired in the merger, the difference is included in the current profits and losses.
If the deductable temporary difference of the purchased party acquired by the purchasing party is not confirmed for it does
not conform to the confirmation conditions of deferred tax assets on the date of purchase, but new or further information
obtained within 12 months after the date of purchase shows the existence of relevant situation on the date of purchase and
it is expected that the economic interest arising from deductable temporary difference of the purchased party on the date of
purchase could be realized, the relevant deferred tax assets are confirmed and the goodwill is reduced synchronously. If
the goodwill is not sufficient to be written down, the difference is confirmed as the current profits and losses; except the
above situation, if the deferred tax assets involved with merger of enterprises are confirmed, it is included in the current
profits and losses.
For the merger of enterprises not under the same control as realized in steps through several transactions, whether the
several transactions are "package deals" is judged in accordance with the Notice of the Ministry of Finance on Issuing the
Explanation No. 5 of Accounting Standards for Business Enterprises (Cai Kuai [2012]19) and the judgment standard on
"package deals" in article 51 of Accounting Standards for Business Enterprises No. 33 - Consolidated Financial Statements
(see the Note 5.6(2)). if they are package deals, they are treated with reference to the description of various paragraphs in
front of this part and the Note 5.14 "Long-term Equity Investment"; if they are not package deals, individual financial
statements and consolidated financial statements are separately made relevant accounting treatment:
In individual financial statements, the sum of the book value of the equity investment of the purchased party as held before
the date of purchase and the newly increased investment costs on the date of purchase is used as the initial investment
costs of the investment; if the equity of the purchased party as held before the date of purchase is involved with other
comprehensive income, while this investment is being disposed, other comprehensive incomes related to it are made
accounting treatment on the same basis as the purchased party directly disposing relevant assets or liabilities (namely,
except the purchased party measures again the corresponding share in the change caused by the net liabilities or net
assets of the set benefit plan according to the equity method, the others are included in the current profits and losses).
In the consolidated financial statements, the equity of the purchased party as held before the date of purchase is measured
again at the fair value on the date of purchase of such equity, and the difference between the fair value and its book value is
included in the current profits and losses; if the equity of the purchased party as held before the date of purchase is involved
with other comprehensive incomes, other comprehensive incomes related to it shall be made accounting treatment on the
same basis as the purchased party directly disposing relevant assets or liabilities (namely, except the purchased party
measures again the corresponding share in the change caused by the net liabilities or net assets of the set benefit plan
according to the equity method, the others are included in the current profits and losses).
6. Method of preparing consolidated financial statements
(1) Principle of determining the scope of consolidated financial statements
The consolidation scope of the consolidated financial statements is determined on the basis of control. Control refers to, the
Company owns the power to the purchased party, enjoys variable return by participating in the relevant activities of the
purchased party and is able to impact the amount of return by using the power to the purchased party. The scope of
consolidation includes the Company and all of its subsidiaries. A subsidiary refers to the entity under control of the
Company.
Once the change of relevant facts and situations causes the change of relevant factors involved with the above definition of
control, the Company will make new evaluation.
(2) Method of preparing consolidated financial statements
As of the date when the actual control right to the net assets, production and management decision of subsidiary is
acquired, the Company starts to put it into the scope of consolidation; ceases to contain it in the scope of consolidation from
the date of losing the actual control right. For any subsidiary disposed, its operation result and cash flow before disposal
date have been properly contained in the consolidated profit statement and consolidated cash flow; any subsidiary
disposed in the current period is not modified the beginning number of the balance sheet. For any subsidiary increasing due
to merger of enterprises not under the same control, its operation result and cash flow after the date of purchase have been
properly contained in the consolidated profit statement and consolidated cash flow, and the beginning number and
comparison number of the consolidated financial statements are not modified. For any subsidiary increasing due to merger
of enterprises under the same control, its operation result and cash flow from the beginning of the current consolidation
period to the date of consolidation have been properly contained in the consolidated profit statement and consolidated cash
flow, and the comparison numbers of the consolidated financial statement are synchronously modified.
While preparing the consolidated financial statements, if the accounting policies or accounting period adopted by any
subsidiary and the Company are not consistent, necessary modification shall be made to the subsidiary's financial
statements based on the Company's accounting policies and accounting period. For any subsidiary acquired from merger
of enterprises not under the same control, its financial statements are modified on the basis of the fair value of net
identifiable assets on the date of purchase.
All major current account balances, transactions and unrealized profit in the Company are set off in preparation of
consolidated financial statements.
In the stockholder's equity and current net profit or loss of a subsidiary, the parts not owned by the Company are solely
listed under the stockholder's equity and net profit in the consolidated financial statements separately as minority equity and
minority interest. If the loss of subsidiary shared by minority shareholders exceeds the share enjoyed by minority
shareholders in the shareholders' equity of the subsidiary in the beginning, it still writes down the minority equity.
When the control right to the original subsidiary is lost due to disposal of partial equity investment or other reasons, the
residual equity is measured again at its fair value on the date of losing the control right. The sum of the consideration
acquired from disposal of equity and the fair value of residual equity is minus the share of net assets of the original
subsidiary as continually calculated from the date of purchase at the original shareholding ratio, such difference is included
in the investment income in the current period of losing the control right. Other comprehensive incomes related to equity
investment of the original subsidiary shall be made accounting treatment on the same basis as the purchased party directly
disposing relevant assets or liabilities when the control right is lost (namely, except the original subsidiary measures again
the change caused by the net liabilities or net assets of the set benefit plan according to the equity method, the others are
included in the current profits and losses). Thereafter, such part of the residual equity is made subsequent measurement in
accordance with the Accounting Standards for Business Enterprises No. 2 - Long-term Equity Investment or Accounting
Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments and other relevant
provisions. See the Note 5.14 "Long-term Equity Investment" or the Note 5.10 "Financial Instruments".
If the Company disposes the investment on the subsidiary's equity in steps through several transactions and until loses the
control right, whether the various transactions disposing the investment on the subsidiary's equity until losing the control
right are package deals shall be distinguished. If the terms, conditions and economic impact of various transactions
disposing the investment on the subsidiary's equity conform to one or more of the following circumstances, it is usually
indicated that several transactions shall be made accounting treatment as package deal:① these transactions are
concluded synchronously or in consideration of mutual impact; ② these transactions can wholly reach a complete
commercial result; ③ Occurrence of a transaction lies on occurrence of at least another transaction; ④ A transaction may
be uneconomic separately, but it is economical if the transaction is considered with other ones. If they are not package
deals, each transaction thereof is made accounting treatment in accordance with the principle applicable for "partially
disposing long-term equity investment on subsidiary in the case of not losing control right" (see (2) ④, Note 5.14 for details)
and "losing control right to the original subsidiary due to disposal of partial equity investment or other reasons" (see the
above paragraph) as appropriate. If the various transactions disposing the investment on the subsidiary's equity until losing
control right are package deals, various transactions are made accounting treatment as a transaction of disposing the
subsidiary and losing control right; however, before losing control right, the difference between every disposal amount and
the share of the subsidiary's net assets enjoyed corresponding to disposal of investment is recognized as other
comprehensive income in the consolidated financial statements, and is included in the current profit and loss corresponding
to loss of control right.
7. Classification of joint venture arrangements and accounting treatment method of joint
management
Joint venture arrangement refers to an arrangement that two or more participants jointly control. In accordance with the
rights enjoyed and obligations undertaken in the joint venture arrangement, the Company classifies joint venture
arrangements into joint management and joint venture. Joint management refers to the joint venture arrangement that the
Company enjoys the relevant assets of the arrangement and undertakes the relevant liabilities of the arrangement. Joint
venture refers to the joint venture arrangement that the Company only enjoys rights to the net assets of the arrangement.
The Company's investment on joint venture is measured with equity method and is treated in accordance with the
accounting policies as stated in the Note 5.14 (2) ② "Long-term equity investment measured with equity method".
As a joint venturer in the joint management, the Company confirms the assets solely held, liabilities solely undertaken and
the assets jointly held and liabilities jointly undertaken as confirmed according to the Company's share; confirms the income
arising from sale of the joint management's output share enjoyed by the Company; confirms the income arising from sale of
output if confirming joint management according to the Company's share; confirms the expenses solely incurred by the
Company, and the expenses incurred if confirming joint management according to the Company's share.
When the Company as a joint venturer delivers or sells assets to the joint management (the assets do not constitute
business, same as below), or the joint management purchases assets, before such assets are sold to a third party, the
Company only confirms the parts in the profit and loss arising from such transaction and belonging to other participants of
the joint management. If occurrence of such assets is in conformity with the impairment loss as stated in the Accounting
Standards for Business Enterprises No. 8 - Impairment of Assets, in the event that the Company delivers or sells assets to
the joint management, the Company fully confirms the loss; in the event that the Company purchases assets from the joint
management, the Company confirms the loss according to its share undertaken.
8. Standard for confirming cash and cash equivalent
The cash and cash equivalent of the Company include the cash on hand, the deposit that can be used for payment at any
time, and the investment held by the Company, which has short term (generally becomes mature within three months from
the date of purchase), good liquidity and is easy to be converted into known amount of cash and with low risk in change of
value.
9. Foreign currency transactions and translation of foreign currency statements
(1) Translation methods for foreign currency transactions
The foreign currency transactions occurred in the Company, at the time of initial recognition, shall be translated into the
amount of bookkeeping base currency at the spot exchange rate (generally refer to the medium price of the foreign
exchange quotation as declared by the People's Bank of China) on the date of transaction, but any foreign currency
exchanging business or any transaction related to exchange of foreign currency occurred by the Company shall be
translated into the amount of bookkeeping base currency at the actual exchange rate.
(2) Translation methods for monetary items in foreign currency and nonmonetary items in foreign currency
The monetary items in foreign currency shall be translated according to the spot exchange rate on the date of balance
sheet, and the balance of exchange incurred accordingly is included in the current profits and losses except the balance of
exchange arising from the special borrowing in foreign currency related to purchase and building of the assets meeting
capitalization conditions is treated on the principle of capitalization of borrowing cost, and for the monetary items in foreign
currency available for sale, the balance of exchange arising from change of other book balances exclusive of amortized
cost is included in other comprehensive incomes.
If preparation of consolidated financial statements is involved with overseas operation and any monetary item in foreign
currency substantially constitutes net investment to overseas operation, the balance of exchange arising from change of
exchange rate is included in other comprehensive incomes; when overseas operation is disposed, it is transferred into the
current profits and losses from disposal.
The nonmonetary items in foreign currency measured with historical cost are still measured with the amount in
bookkeeping base currency which is translated at the spot exchange rate on the transaction occurring date. The
nonmonetary items in foreign currency measured at fair value are translated at the exchange rate on the date of
recognizing fair value, and the difference between the amount in bookkeeping base currency and the previous amount in
bookkeeping base currency after translated is treated as change of fair value (including change of exchange rate) and
included in the current profits and losses or recognized as other comprehensive incomes.
(3) Translation methods for financial statements in foreign currency
If preparation of consolidated financial statements is involved with overseas operation and any monetary item in foreign
currency substantially constitutes net investment to overseas operation, the balance of exchange arising from change of
exchange rate is deemed as "translation balance of statements in foreign currency" and recognized as other
comprehensive incomes; when overseas operation is disposed, it is included in the current profits and losses from disposal.
The financial statements in foreign currency for overseas operation are translated into the statements in Renminbi
according to the following method: the items of assets and liabilities in the balance sheet are translated at the spot
exchange rate on the date of balance sheet; in the items of stockholder's equity, except the item of "undistributed profit",
other items are translated at the spot exchange rate at the time of occurrence. The items of incomes and expenses in the
profit statement are translated at the current average exchange rate on the transaction occurring date. The undistributed
profit at the beginning of the year is the undistributed profit at the ending of the previous year after translated; the
undistributed profit at the ending of the year is listed according to the calculation of translated profit distributed on various
items; after translated, the difference between the sum of assets items and liabilities items and the sum of stockholder's
equity items is the translated difference of statements in foreign currency and is recognized as other comprehensive
incomes. If overseas operation is disposed and the control right is lost, the translated difference of foreign currency
statements as listed under the item of stockholder's equity in balance sheet and related to overseas operation is transferred
fully or at the ratio of disposing the overseas operation into the current profits and losses from disposal.
The cash flow in foreign currency and cash flow of overseas subsidiaries are translated at the current average exchange
rate on the cash flow occurring date. The amount of cash impacted by change of exchange rate is used as the modification
item and solely listed in the cash flow statement.
The number in the beginning of the year and the actual number in the previous year are listed according to the amount after
the financial statements for the previous year are translated.
While disposing all owners' equity of the Company in overseas operation or losing the control right to overseas operation
due to disposal of partial equity investment or other reasons, the foreign current statements attributive to the owners' equity
of the parent company, as listed under the item of stockholder's equity in balance sheet and related to overseas operation,
are translated into difference and fully transferred into the current profits and losses from disposal.
When the ratio of holding overseas operation equity caused by disposal of partial equity investment or other reasons
reduces but the control right to overseas operation is not lost, the translated difference of foreign currency statements
related to the overseas operation disposing part is attributive to minority equity and not transferred into the current profits
and losses. When the disposal of overseas operation is involved with the partial equity of a joint venture or a cooperative
enterprise, the translated difference of foreign currency statements related to the overseas operation is transferred at the
ratio of disposing the overseas operation into the current profits and losses from disposal.
10. Financial instruments
A financial asset or financial liability is recognized when the Company becomes a party of financial instrument contract.
Financial assets and financial liabilities are measured at fair value at the initial recognition time. For the financial assets and
financial liabilities that are measured at fair value and which changes are included into the current profits and losses, the
relevant transaction expenses are directly included in the profits and losses; for other financial assets and financial liabilities,
the relevant transaction expenses are included in the amount of initial recognition.
(1) Methods for determining fair value of financial assets and financial liabilities
Fair value refers to the price that a market participant can receive from selling an asset or is payable for transferring a
liability in the orderly transactions occurring in the date of measurement. If there is an active market for financial
instruments, the Company uses the quotation in the active market to determine its fair value. The quotation in the active
market refers to the price that is readily available from exchanges, brokers, industry associations and pricing service
institutes on regular basis, and represents the price of market transaction actually occurring in the fair transactions. If there
is not an active market for financial instruments, the company takes valuation technologies to determine its fair value.
Valuation technologies include with reference to the price used in the recent transactions that the parties who are familiar
with situation and willingly transact make in the market, with reference to the current fair value of other financial instruments
that are substantially same, discounted cash flow and option pricing model.
(2) Classification, confirmation and measurement of financial assets
The financial assets purchased or sold in any conventional manner are made accounting confirmation and termination of
confirmation on the date of transaction. At the time of initial confirmation, financial assets are classified into the financial
assets that are measured at fair value and which change is included in the current profits and losses, held-to-maturity
investment, loan, receivable and the financial assets available for sale.
① The financial assets that are measured at fair value and which change is included in the current profits and losses
Including trading financial assets and the financial assets designated as measurement at fair value and which change is
included in the current profits and losses
The financial assets held for trading refer to the financial assets that meet one of the following conditions: A. the purpose of
acquiring the financial assets is mainly for recent sale; B. are a part of the portfolio of identifiable financial instruments under
concentrated management, and objective evidences showing that the Company recently administrates the portfolio with
short-term profit making mode; C. are a derivative instrument, except the derivative instruments designated and being
effective hedging instruments, the derivative instruments belonging to financial guarantee contract, the derivative
instruments connecting with an equity instrument investment that is without quotation in an active market and which fair
value cannot be reliably measured, and must be settled by delivering the equity instrument.
Any financial asset meeting one of the following conditions can be designated at the time of initial recognition as the
financial asset that is measured at fair value and which change is included in the current profits and losses: A. This
designation can eliminate or significantly reduce inconsistence of relevant gains or losses in the aspect of confirmation or
measurement as caused due to different measurement basis of the financial asset; B. The formal written document of the
risk management or investment strategy of the Company has clearly stated that the portfolio of financial assets or the
portfolio of financial assets and financial liabilities containing the financial asset is manage and evaluated on the basis of
fair value, and reported to the key management.
The financial assets that are measured at fair value and which change is included into the current profits and losses are
made subsequent measurement at fair value, and the gains or losses formed due to change of fair value and the dividends
and interests related to such financial assets are included in the current profits and losses.
② Held-to-maturity investment
Refers to non-derivative financial assets with fixed date of maturity, fixed or identifiable recovery amount, and which the
Company has the clear intention and ability to hold until its maturity.
Held-to-maturity investment is subject to effective interest method and is subsequently measured according to the
amortized cost. The gains or losses generating in case of terminated confirmation, occurrence of devaluation or
amortization are included in the current profits and losses.
Effective interest method refers to such method that their amortized costs and interest incomes or expenditures in various
periods are calculated at the effective interest rate of financial assets or financial liabilities (including a set of financial
assets or financial liabilities). Effective interest rate refers to such interest rate with which the future cash flow of any
financial asset or financial liability in the expected period of existence or applicable shorter period is discounted to the
current book value of such financial asset or financial liability.
While calculating the effective interest rate, the Company will forecast the future cash flow on the basis of considering all
contract articles of financial assets or financial liabilities (no consideration of the credit loss in the future), and will also
consider various charges, transaction expenses, discount or premium paid or collected among all parties of financial assets
or financial liabilities contract and belonging to a part of effective interest rate.
③ Loans and receivables
Refer to non-derivative financial assets without quotation, fixed or identifiable recovery amount in an active market. The
financial assets classified as loans and receivables by the Company include notes receivable, accounts receivable, interest
receivable, dividends receivable and other receivables.
Loans and receivables are subject to effective interest method and are subsequently measured according to the amortized
cost. The gains or losses generating in case of terminated confirmation, occurrence of devaluation or amortization are
included in the current profits and losses.
④ Financial assets available for sale
Including the non-derivative financial assets that are designated available for sale at the time of initial recognition, and the
financial assets except the financial assets measured at fair value and which changes are included in the current profits and
losses, loans and receivables, held-to-maturity investments.
The ending costs of debt instruments investment available for sale are determined according to the amortized cost, namely,
initially recognized amount deducted with the paid principal, plus or minus the accumulative amount of amortization arising
from amortizing the difference between the initially recognized amount and the amount on the date of maturity with effective
interest rate, and deducted with the loss of devaluation occurred. The ending costs of equity instruments available for sale
are their initially acquired costs.
The financial assets available for sale are subsequently measured at fair value, and the gains or losses from change of fair
value are recognized as other comprehensive incomes except that the balance of exchange related to the amortized costs
in the loss of devaluation and monetary financial assets in foreign currency are included in the current profits and losses,
and they are transferred and included into the current profits and losses when the financial assets are terminated
recognition. However, any equity instrument investment with quotation in an active market and which fair value cannot be
reliably measured, and the derivative financial assets connecting with such equity instrument and must be settled by
delivering the equity instrument are subsequently measured at costs.
The interest of any financial asset accrued in the holding period and dividend in cash as distributed upon declaration of the
invested organization are included in the income from investments.
(3) Devaluation of financial assets
Except the financial assets that are measured at fair value and which changes are included into the current profits and
losses, the Company checks the book values of other financial assets on the date of each balance sheet. If any objective
evidence shows that devaluation of financial assets occurs, provision for impairment is set aside.
The Company separately makes devaluation testing for any single financial asset in large amount; any single financial
asset without large amount is separately made devaluation testing or made devaluation testing in the portfolio of financial
assets with the similar credit risk characteristics. Any financial assets not found devaluation in a single testing (including the
single financial assets with or without large amount) are made devaluation testing in the portfolio of financial assets with the
similar credit risk characteristics. Any financial assets recognized impairment loss in a single item are made devaluation
testing not in the portfolio of financial assets with the similar credit risk characteristics.
① Devaluation of held-to-maturity investments, loans and receivables
The book value of any financial asset measured at costs or amortized costs is written down to the present value of the
future cash flow forecasted, and the write-down amount is recognized as impairment loss and included in the current profits
and losses. After any financial asset is recognized its impairment loss, if any objective evidence shows that such financial
asset has recovered its value, and it is objectively related to the matter occurring after the loss is recognized, the previously
recognized impairment loss is reversed, and the book value of financial asset after the impairment loss is reversed does not
exceed the amortized cost of the financial asset on the date of reversal when it is assumed that provision for impairment is
not set aside.
② Devaluation of financial assets available for sale
If it is judged according to comprehensive relevant factors that the fall of fair value of equity instrument investment available
for sale is serious or non temporary, it shows that the equity instrument investment available for sale devalues.
When any financial asset available for sale devalues, the accumulative losses arising from fall of fair value as previously
recorded in other comprehensive income are transferred out and included in the current profits and losses. The
accumulative losses transferred out are the balance that the initially acquired cost of the asset is deducted the recovered
principal and amortized amount, the current fair value and the impairment loss previously included in profits and losses.
After any financial asset is recognized its impairment loss, if any objective evidence shows that such financial asset has
recovered its value, and it is objectively related to the matter occurring after the loss is recognized, the previously
recognized impairment loss is reversed, the impairment loss of equity instrument investment available for sale is reversed
and recognized as other comprehensive incomes, and the impairment loss of equity instrument investment available for
sale is reversed and included in the current profits and losses.
The impairment loss of the equity instrument investment without quotation in an active market and which fair value cannot
be reliably measured, or the derivative financial assets connecting with the equity instrument and must be settled by
delivering the equity instrument is not reversed.
(4) Recognition basis and measurement method for transfer of financial assets
Any financial asset meeting one of the following conditions is terminated recognition: ① The rights under the contract of
collecting the cash flow of the financial asset are terminated; ② the financial asset has been transferred and substantially
all of risks and remunerations on the ownership of the financial asset are transferred to the transferee; ③ the financial asset
has been transferred, the enterprise has neither transferred nor kept substantially all of risks and remunerations on the
ownership of the financial asset, but it gives up control to the financial asset.
If the enterprise has neither transferred nor kept substantially all of risks and remunerations on the ownership of the
financial asset, and does not gives up control to the financial asset, relevant financial assets are recognized based on the
extent continually involved with the transferred financial asset, and relevant liabilities are recognized accordingly. The
extent continually involved with the transferred financial asset refers to the level of risk that the enterprise suffers from value
change of the financial asset.
If the whole transfer of any financial asset meets the termination recognizing conditions, the book value of the transferred
financial asset and the consideration received from the transfer is minus the accumulative amount of fair value change
previously included in other comprehensive incomes, and the balance is included in the recent profits and losses.
If the partial transfer of any financial asset meets the termination recognizing conditions, the book value of the transferred
financial asset is shared between the termination recognizing part and non- termination recognizing part at their relative fair
values. The consideration received from transfer and the accumulative amount of fair value change shared in the
termination recognizing part and previously included in other comprehensive incomes, minus the shared aforesaid book
value, are the balance, which is included in the current profits and losses.
If the Company sells the financial asset in mode of recourse or transfers the financial asset it holds by endorsement, it shall
determine whether substantially all of risks and remunerations on the ownership of the financial asset have been
transferred. If substantially all of risks and remunerations on the ownership of the financial asset have been transferred to
the transferee, the financial asset's recognition is terminated; if substantially all of risks and remunerations on the
ownership of the financial asset are kept, the financial asset's recognition is not terminated; if neither transfer is made nor
substantially all of risks and remunerations on the ownership of the financial asset are kept, it shall continually judge
whether control to the asset is maintained, and accounting treatment is made in accordance with the principles as stated in
above paragraphs.
(5) Classification and measurement of financial liabilities
In the initial recognition, financial liabilities are classified as the financial liabilities that are measured at fair value and which
change is included in the current profits and losses, and other financial liabilities. The initially recognized financial liabilities
are measured at fair value. For financial liabilities that are measured at fair value and which change is included in the
current profits and losses, the relevant transaction expenses are directly included in the current profits and losses; for other
financial liabilities, relevant transaction expenses are included in the initially recognized amount.
① Financial liabilities measured at fair value and which change is included in the current profits and losses
The financial liabilities held for trading and the financial liabilities designated at the time of initial recognition as
measurement at fair value and which change is included in the current profits and losses have the conditions consistent
with the financial assets held for trading and the financial assets designated at the time of initial recognition as
measurement at fair value and which change is included in the current profits and losses.
The financial liabilities measured at fair value and which change is included in the current profits and losses are
subsequently measured at fair value, and the gains or losses arising from change of fair value and the dividends and
interests related to such financial liabilities are included in the current profits and losses.
② Other financial liabilities
The derivative financial liabilities connecting with the equity instrument without quotation in an active market and which fair
value cannot be reliably measured, and must be settled by delivering the equity instrument are subsequently measured at
costs. Other financial liabilities are subject to effective interest method and are subsequently measured according to the
amortized cost. The gains or losses generating in case of terminated confirmation, occurrence of devaluation or
amortization are included in the current profits and losses.
(6) Recognition on termination of financial liabilities
The current liabilities of financial liabilities have been wholly or partially cancelled, recognition on the financial liabilities or a
part thereof can be terminated. The Company (the debtor) and the creditor enter an agreement to substitute the existing
financial liabilities in the manner of undertaking new financial liabilities, and the contract's articles of new financial liabilities
and the existing financial liabilities are materially different, recognition on the existing liabilities is terminated and new
liabilities are recognized synchronously.
If recognition on financial liabilities is wholly or partially terminated, the difference between the book value of the part
terminated to recognize and the consideration paid (including non-cash assets transferred out or new financial liabilities
undertaken) is included in the current profits and losses.
(7) Derivative instruments and embedded derivatives
A derivative instrument is initially measured at fair value on the date of signing relevant contract and is subsequently
measured at fair value. Except the derivative instruments designated as hedging instrument and with highly effective
hedging, the gains or losses arising from which change of fair value are recognized to be included in the period of profits
and losses based on the nature of hedging relationship and in accordance with the accounting requirements of hedging, the
change of fair value of other derivative instruments is included in the current profits and losses.
For the mixed instruments containing embedded derivative instruments, if they are not designated as financial assets or
financial liabilities measured at fair value and which change is included in the current profits and losses, the embedded
derivatives and the master contract have no close relationship in the economic characteristics and risk, and have the same
conditions as the embedded derivatives, the separately existing instrument meets the definition of derivative instrument,
then the embedded derivatives are separated from mixed instruments and are treated as sole derivative financial
instruments. If it cannot carry out separate measurement to the embedded derivatives at the time of acquisition or
subsequent date of balance sheet, the mixed instruments are wholly designated as financial assets or financial liabilities
measured at fair value and which change is included in the current profits and losses.
(8) Setoff of financial assets and financial liabilities
When the Company has the legal rights of setting off the recognized financial assets and financial liabilities and can
currently these legal rights now, and if the Company has the plan to settle with net amount or synchronously realize these
financial assets and discharge these financial liabilities, the financial assets and financial liabilities are listed in the balance
sheet with the amount after mutual set-off. Except that, financial assets and financial liabilities are listed respectively in the
balance sheet and are not set off mutually.
(9) Equity instruments
Equity instrument refers to the contract that can certify possession of the residual equity of the Company in the assets after
deducted all liabilities. If the Company issues (including refinancing), repurchase, sell or cancel any equity instrument, this
is treated as change of equity. The Company does not recognize change of fair value of equity instruments. The transaction
expenses related to equity transactions are deducted from equity.
The Company makes various distributions (exclusive of stock's dividends) to the equity instrument holders from
stockholders' equity. The Company does not recognize fair value changing amount of equity instruments.
11. Receivables
(1) Individually significant receivable and provision for bad and doubtful debts individually
The carrying amount of accounts receivables of over CNY
800,000.00 (with CNY 800,000.00 inclusive )and other
Criteria of individually significant receivables
receivables of over CNY500,000.00 (with CNY 500,000.00
inclusive) are recognized as individually significant
receivable.
Receivables that are individually significant are subject to
separate impairment assessment, if there is objective
Measurement of individually recognized bad and doubtful evidence that the impairment occurred, recognize the
debts provision of individually significant receivables: provision for bad and doubtful debts according to the
difference between the present value of future cash flows,
which is lower, and the carrying amount.
(2) Receivables with provision for bad and doubtful debts based on the credit risk characteristics
collectively
Group 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
Percentage of provision for accounts Percentage of provision for other
Aging
receivable 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:
Percentage of provision for accounts Percentage of provision for other
Group description
receivable receivables
Group of specific fund 0.00% 0.00%
(3) Accounts receivable with insignificant individual amount but individually recognized bad and
doubtful debts provision
Including the accounts receivable involving dispute or
lawsuit/arbitration with the counterparty and the
Reason of individual provision for bad and doubtful debts accounts receivable in which there exists evident
indication showing that a debtor may possibly be unable
to implement the obligation of repayment.
Provision for bad and doubtful debts is based on the
Method for provision for bad and doubtful debts difference of the present value of future cash flow lower
than the book value.
12. Inventories
Does the Company need to comply with the provisions on information disclosure for special industries
No
(1) Classification of Inventories
Inventories include raw materials, products-in-process, commodity stocks, etc.
(2) Pricing of Inventories Acquired and Delivered
Inventories are priced based on the actual costs at the time of acquisition. Costs of inventories include purchase cost,
processing cost and other costs. Raw materials, products-in-process and merchandise inventory are priced respectively
according to the first-in-first-out approach (for raw materials and products-in-process for FIYTA watches), weighted average
(for FIYTA watch stocks), specific identification (for famous brand watch stocks) at the time of delivery.
(3) Basis for determination of the net realizable value of inventories and the method for provision for price falling of
inventories
The net realizable value of the inventories refers to the amount of the estimated sales prices of inventories less the
estimated costs up to the completion, the estimated sales costs and relevant taxes. In determining the realizable net value
of inventories, with the acquired concrete evidence as the base, the purpose of holding the inventories and the influence
from the events after the balance sheet day are taken into consideration at the same time.
On the balance sheet day, inventores are measured based on the lower of the cost and the realizable net value. When the
realizable net value is lower than the cost, reserve for price falling of inventories is provided. Where:
① For the inventories directly for sale, including the finished products and the materials for sale, in process of normal
production and operation, the realizable net value is the amount of the estimated sales price of the inventories less the
estimated sales costs and the relevant taxes;
② For the material inventories necessary to be processed, the realizable net value is the amount of the estimated sales
price of the finished products produced in process of normal production and operation less the costs predicted to incur at
the time of finishing the work, the estimated sales expenses and the relevant taxes.
The Company provides reserve for price falling of the inventories classified based on the models of self-made FIYTA watch
inventories.
For the famous brand watches in distribution, reserve for price falling of inventories is provided based on the individual
items.
For the raw materials for FIYTA watches, based on the terminal sales status of FIYTA finished watches, reserve for price
falling of inventories is provided with interchangeability of spares and parts and specialized classification of applications of
materials taken into consideration.
The inventories are measured at the lower of cost and net realizable value on the balance sheet day. Reserve for price
falling of inventories is provided when the net realizable value is lower than the cost.
After reserve for price falling of inventories is provided, if the factors influencing the price falling of the inventories have
disappeared, which causes the realizable net value of the inventories to be higher than their book value, the reserve for
price falling of the inventories provided previously is reversed, the amount reserved is recorded in the current gain and loss.
(4) The inventory system for the inventories is the perpetual inventory system.
(5) Amortization of low value consumables and packing materials
Low value consumables and packing materials are amortized in lump sum at the time of reception.
13. Held-for-sale Assets as Classified
Inapplicable
14. Long-term equity investments
The long-term equity investment as stated in this part refers to the long term equity investment with control over, joint
control over or significant influence upon the investees. The long term equity investment without control over, joint control
over or significant influence upon the investees in the Company are taken as available-for-sale financial assets or the
financial assets which are measured based on the fair value and their changes are counted to the current profit and loss.
For the detail of the accounting policy, refer to Note V. 10 "Financial Instruments".
Joint control refers to the joint control over some arrangement made by the Company according to the relevant agreement
and the relevant activities for the arrangement must be jointly decided by all the parties sharing the control power.
Significant influence refers to the Company's power of participation in making an investee's financial and operation policies
but the Company cannot control or jointly control with other parties to make these policies.
(1) Determination of Investment Costs
For the long term equity investment acquired through consolidation of enterprises under the common control, the share of
the book value of the consolidatee's owner's equity as at the date of consolidation in the eventual controller's financial
statements is taken as the initial investment cost of the long term equity investment. The balance among the initial
investment cost of the long term equity investment and the cash as paid, non-cash asset as assigned and the book value of
the liabilities as assumed is used for adjustment of the capital reserve; in case the capital reserve is not enough for
writing-down, the retained earnings is adjusted. In case the equity securities as issued for consolidation consideration, the
share of the book value of the consolidatee's owner's equity as at the date of consolidation in the eventual controller's
consolidated financial statements is taken as the initial investment cost of the long term equity investment, the total book
value of the issued shares is taken as the share capital, the balance between the initial investment cost of the long term
equity investment and the total face value of the issued shares is used for adjustment of the capital reserve; in case the
capital reserve is not enough for writing-down, the retained earnings is adjusted. The equity in the consolidatee under the
common control which is acquired in steps through a number of transactions and the consolidation of the enterprise under
control is eventually formed shall be treated depending on whether it belongs to "one package deal": if it belongs to "one
package deal", all the transactions shall be taken as a transaction for acquiring the control power for accounting treatment.
If it does not belong to "one package deal", the share of the book value of the consolidatee's owner's equity in the eventual
controller's consolidated financial statements is taken as the initial investment cost of the long term equity investment; the
balance among the initial investment cost of the long term equity investment and the book value of the long term equity
investment before arrival of the consolidation plus the book value of the newly paid consideration of the shares acquired
further on the consolidation date shall be used to ajdust the capital reserve; in case the capital reserve is not enough for
writing-down, the retained earnings is adjusted. For the equity investment held before the date of consolidatoin or the other
comprehensive income as recognized from the available-for-sale financial assets, no accounting treatment shall be take for
time being.
For the long term equity investment acquired through consolidation of enterprises not under the common control, the
consolidation cost as at the acquisition date is taken as the initial investment cost of the long term equity investment. The
consolidation cost is the sum of the assets paid to the buyer, the liabilities incurred or assumed, and the fair value of the
equity securities as issued. The equity which is acquired in steps through a number of transactions and eventually forms
consolidation of enterprises not under the common control shall be treated depending on whether it belongs to "one
package deal": if it belongs to "one package deal", all the transactions shall be taken as a transaction for acquiring the
control power for accounting treatment. If it does not belong to "one package deal", the sum of the book value of the equity
investment in the purchasee originally held plus the newly increased investment cost shall be taken as the initial investment
cost of the long term equity investment calculated according to the cost method. In case the equity originally held is
calculated based on the equity mehtod, the relevant other comprehensive income shall not undergo accounting treatment
for time being. If the equity investment originally held is an available-for-sale financial asset, the balance between its fair
value and the book value and the accumulative movement of the fair value originally counted to other comprehensive
income are transferred to the current profit and loss.
Intermediary fees in connection with audit, law service, appraisal and consulting, etc. incurred to the consolidator or
purchaser and other relevant administrative fees shall be counted to the current profit and income at the time of incurrence.
The equity investment other than the long term equity investment formed from the enterprise consolidation which is initially
measured based on the cost, such costs are recognized in such ways as the fair value of the equity securities issued by the
Company, the value as specified in the investment contract or agreement, the fair value or the original book value of the
assets exchanged out in the non-monetary asset exchange transactions, or the own fair value of the long term equity
investment, etc. depending on the ways of acquirement of the long term equity investment. The expenses, taxes and other
necessary expenditures directly in connection with the acquirement of the long term equity investment are counted to the
investment costs. For the long term equity investment resulted from the additional investment which may bring out
significant influence upon or joint control over the investee but shall not constitute control, the cost of the long term equity
investment is the sum of the fair value of the equity investment originally held as determined according to the Accounting
Standards for Enterprises No. 22 - Recognition and Measurement of Financial Instruments plus the cost of the newly
increased investment.
(2)Subsequent measurement and recognition of gains and losses
The long term equity investment with the investee enjoying joint control (with the constitution of joint operators exclusive) or
significant influence is calculated by means of equity method; and also for the long term equity investment in which the
Company's financial statements can implement control over the investee by calculation based on the cost method.
① Long term equity investment calculated based on the cost method
In calculation by cost method, the long term equity investment is valuated according to the initial investment cost, and for
additional or recovery of investment, the cost of the long term equity investment is adjusted. Except that the actual payment
or consideration paid at the time of acquiring the investment contains the cash dividend or profit already announcd but not
yet distributed, the return on the investment in the reporting period is recognized based on the cash dividend or profit
already announcd for distribution by the investee.
② Long term equity investment calculated based on the equity method
When the calculation based on the equity method is used, if the initial investment cost of the long term equity investment is
greater than the share of the fair value of net identifiable assets enjoyable in the investee, the initial investment cost of the
long term equity investment shall not be adjusted; when the initial investment cost is less than the share of the fair value of
net identifiable assets enjoyable in the investee, the balance is counted to the current profit and loss and at the same time
the cost of the long term equity investment is adjusted.
When the equity method is used for calculation, the net gains and losses realized by the investee and the share of the other
comprehensive income enjoyable or sharable shall be respectively used to recognize the return on investment and other
comprehensive income and at the same time the book value of the long term equity investment is adjusted; according to the
profit announced for distribution by the investee or the part of the cash dividend enjoyable upon calculation, the book value
of the long term equity investment is reduced correspondingly. For other change in the net profit and loss, other
comprehensive income and owner's equity other than the profit distribution, the book value of the long term equity
investment is adjusted and counted to the capital reserve.
In determining the net profit and loss in the investee enjoyable, with the fair value of various identifiable assets, etc. in the
investee when the investment is acquired as the base, the net profit of the investee is recognized after adjustment. When
the accounting policy and fiscal period adopted by the investee is different from that of the Company, the investee's
financial statements are adjusted according to the accounting policy and fiscal period adopted by the Company and the
return on the investment and other comprehensive income are recognized on this basis. For the transactions between the
Company and its associates or joint ventures, in case the assets provided or sold do not constitute business, the part
calculated based on the proportion of the unrealized internal transaction gains and losses attributable to the Company shall
be offset and the gains and losses on the investment shall be recognized on this basis. However, the loss from no internal
transaction between the Company and an investee shall not be offset if the loss belongs to impairment of the assets
assigned. In case the assets invested in a joint venture or an associate constitutes business and the investor has acquired
the long term equity investment therefrom but has not achieved the control power, the fair value of the business provided
shall be taken as the initial investment cost of the newly added long term equity investment, the balance between the initial
investment cost and the book value of the business provided shall all be counted to the current gains and losses. In case
assets sold by the Company to its joint ventures or associates constitute business, the balance between the consideration
acquired and the book value of the business shall all be counted to the current gains and losses. In case the asset provided
to the Company by its joint venture or the associate constitutes business, accounting treatment shall be conducted
according to the Enterprise Accounting Standards No. 20 - Enterprise Consolidation and all the amount shall be recognized
as the transaction related gains and losses.
In determining the part of the net loss incurred to the investee to be shared by the Company, the book value of the long
term equity investment and other long term equity which has substantially constituted net investment in the investee shall
be reduced to the limit of zero. In addition, in case the Company is obliged for extra loss in an investee, the predicted
liabilities shall be recognized according to the obligation predicted to assume and counted to the current gains and losses in
the investment. In case an investee realizes net profit in subsequent periods, the Company shall recover recognition of the
part of income enjoyable after the recognized part of the loss shared by the Company has been made up for with the part of
the benefit enjoyable.
③ Acquisition of minority equity
In preparation of the consolidated financial statements, the balance between the long term equity investment newly
increased resulted from purchase of minority equity and the share of the net asset continuously calculated commencing
from the date of purchase (or date of consolidation) enjoyable by the subsidiary shall be used to adjust the capital reserve.
In case the capital reserve is not enough for writing-down, the retained earnings shall be adjusted.
④ Disposal of long term equity investment
In a consolidated financial statement, the parent company has partially disposed the long term equity investment in its
subsidiary without losing its control power, the difference between the disposal income of the amount enjoyable in the
subsidiary’s net assets corresponding to the long term equity investment disposed is counted to the owner’s equity. In case
that the parent company has partially disposed the long term equity investment in its subsidiary has caused the parent
company to have lost the control power over the subsidiary, it should be treated according to the accounting policy as
specified in the “method for preparation of consolidated financial statements” of Note V. 6.(2).
If a long term equity investment is disposed under other situation, for the equity disposed, the difference between its book
value and the consideration actually obtained is counted to the current gains and losses.
For the long term equity investment calculated based on the equity method, the other comprehensive income part which
was originally counted to the owner’s equity undergoes accounting treatment according to the corresponding proportion by
using the same base for direct disposal of the relevant assets or liabilities used by the investee. The owner's equity
recognized due to change of the other owners' equity of the investee with the net gains and loss, other comprehensive
income and profit distribution exclusive is carried over into the current gains and losses based on the proportions.
For the long term equity investment, in case the remaining equity after disposal sitll needs to be calculated according to the
cost method, the other comprehensive income calculated by the equity method or calculated and recognized based on the
standards for recognition and measurement of financial instruments undergoes the accounting treatment by using the same
base as the investee has adopted for direct disposal of the relevant assets or liabilities and carried over to the current gains
and losses according to the proportion; movement of all other owners' equity calculated and determined by using the equity
method with the net gains and losses in the investee's net assets as determined, other comprehensive income and profit
distribution exclusive is carried over to the current gains and losses according to the proportion.
In case the Company has lost the control over an investee due to disposal of partial equity, in preparation of individual
financial statements, the remaining equity after disposal can still implement joint control over or significant influence on the
investee; the equity method is applied for calculation instead and the said remaining equity is adjusted as if the equity
method was used for calculation commencing from the time of its acquisition; in case the remaining equity after the
adjustment can no longer implement joint control over or significant influence on the investee, the accounting treatment
shall be conducted according to the provisions concerning recognition and measurement of financial instruments; the
balance between the fair value as at the day of loosing the control power and the book value is counted to the current gains
and losses. The other comprehensive income calculated by means of the equity method or calculated and recognized
according to the standards for recognition and measurement of financial instruments undergoes accounting treatment on
the same base as the investee has lost control and the investee directly disposes the relevant assets or liabilities. The
movement of the other owner's equity in the investee's net assets calculated and recognized by means of the equity
method is carried over into the current gains and losses at the time of loosing teh control over the investee with the
exception of the net gains and profit, other comprehensive income and profit distribution. Where, for the remaining equity
after disposal calculated by means of equity method, the other comprehensive income and other owner's equity are carried
over according to the proportion; in case the remaining equity after disposal is recognized and measured based on the
financial instruments, the other comprehensive income and other owner's equity are all carried over.
In case the Company has lost the joint control over or significant influence on the investee due to disposal of partial equity,
the remaining equity after disposal is calculated according to the standards for recognition and measurement of financial
instruments while the balance between the fair value and the book value as at the day when the Company lost its joint
control or significant influence is counted to the current gains and losses. The other comprehensive income from the
original equity investment calculated and recognized by means of the equity method undergoes accounting treatment by
using the same base as the investee directly disposes the relevant assets or liabilities when the calculation based on teh
equity method is terminated; the owner's equity recognized due to the movement of other owner's equity with the investee's
net gains and losses, other comprehensive income and profit distribution exclusive is all transferred into the current return
on investment when the equity method is stopped.
The Company disposes the equity investment in a subsidiary in steps through a number of transactions until it has lost the
control power. If the aforesaid transaction belongs to a one-package transaction, the transactions shall undergo accounting
treatment as a transaction in which the equity investment in a subsidiary is disposed and the control power is lost. The
balance between the first disposal consideration prior to loss of the control power the book value of the long term equity
investment corresponding to the equity disposed is recognized as other comprehensive income first and then all transferred
into the current gains and losses from loss of the control power.
15. Investment based real estate
Investment based real estate refers to the real estate held by the Company which creates rental or added value of capital or
both, including housing and building already let out.
Investment based real estate is initially measured according to the cost Investment based real estate is initially measured
based on the cost. The follow-expenses in connection with the investment based real estate are recorded in the investment
based real estate costs in case the relevant economic benefit may flow into the Company while the costs can be reliably
measured. Other follow-up expenses are recorded in the current gain and loss at the time of incurrence.
The Company adopts the cost model to make follow-up measurement of the investment based real estate and makes
depreciation or amortization according to the policy of coincidence with housing and building or land use right.
About the impairment test method and method for provision of reserve for impairment of the investment based real estate.
For the detail, refer to Note V.22 "Impairment of Long Term Assets".
When the self-use real estate is transferred into the investment based real estate or the investment based real estate is
transferred into the self-use real estate, the book value prior to the transfer is taken as the entry value after the transfer.
When the application of the investment based real estate is for self-use, the investment based real estate is transferred to
fixed asset or intangible asset commencing from the date of change. When the application of the self-use real estate is
changed into earning rental or increase of capital value, commencing from the date of change, the fixed asset or intangible
asset are transferred into investment based real estate. When conversion takes place, for the investment based real estate
measured by means of the cost module instead, the book value before conversion shall be taken as the entry value after
the conversion; for the investment based real estate measured by means of fair value instead, the fair value as at the
conversion date shall be taken as the entry value after conversion.
When the investment based real estate is disposed or permanently withdrawn from use and it is predicted that it is unable
to earn economic benefit, the recognition of the investment based real estate is terminated. The income from disposal of
investment based real estate, including sale, assignment, discarding or damage, is charged to the current gain and loss
after deduction of the book value and the relevant taxes.
16. Fixed asset
(1) Recognition of fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of services, for rental to others, or for
administrative purposes and have useful lives more than one accounting year. A fixed asset shall be recognized only when
it is probable that economic benefits associated with the asset will flow into the enterprise and the cost of the asset can be
measured reliably. A fixed asset shall be initially measured at actual cost.
(2) Depreciation methods
Categories Depreciation method Depreciation life Residual rate Yearly depreciation
Average service life
Plant & buildings 20-35 5.00 2.70-4.80
method
Machinery & Average service life
10 5.00-10.00 9.00-9.50
equipment method
Average service life
Motor vehicles 5 5.00 19.00
method
Average service life
Electronic equipment 5 5.00 19.00
method
Average service life
Others 5 5.00 19.00
method
Commencing from the next month after a fixed asset has reached the predicted applicable status, when the average
service life method is used for provision of the depreciation within the service life. The service life, predicted net residual
value and annual depreciation rates of various fixed assets are stated on the above form.
(3) Basis for recognizing the fixed assets under financing lease, Pricing and Depreciation Methods
Inapplicable
(4) Impairment testing method and provision for the impairment of fixed assets
For the impairment testing method and provision for the impairment of fixed assets, refer to Note V. 22 "Impairment of Long
Term Assets".
(5) Other Notes
The follow-up expenses in connection with fixed assets are recorded in the costs of fixed assets if the economic benefit in
connection with the fixed assets can highly probably flow into while the costs can be reliably measured and the book value
of the part replaced is terminated for recognition. Besides, other follow-up expenses are recorded in the current gain and
loss at the time of incurrence.
When a fixed asset is in the status of disposal or is predicted not to produce any economic benefit by application or disposal,
the fixed asset shall be terminated for recognition.
Income from disposal of fixed assets, including sales, assignment, scrapping, or damage, is counted to the current gains
and losses after deduction of its book value and relevant taxes.
The Company rechecks the service life, predicted net residual value and depreciation method of fixed assets at least once
at the end of a year; in case any change takes place, it is taken as change in accounting estimation.
17. Construction-in-process
The cost of construction-in-process is determined according to the actual expenditure incurred for the construction,
including all necessary construction expenditures incurred during the construction period, borrowing costs that shall be
capitalized before the construction reaches the condition for intended use and other relevant expenses.
Construction-in-process is transferred to fixed assets when the asset is ready for its intended use.
For provision for impairment of construction-in-process and the method for provision for impairment, refer to Note V.22
"Impairment of Long Term Assets".
18. Borrowing Costs
Borrowing costs include interest on borrowings, amortization of depreciation or premium, auxiliary expenses and balance of
exchange resulted from foreign currency loan, etc. The borrowing costs from acquisition or production of the assets or
borrowing expenses result therefrom directly attributable to compliance with the condition of capitalization starts to be
capitalized when the expense of the asset has incurred, borrowing costs have incurred and the acquisition and construction
or production activities necessary to let the asset reach the predicted applicable or sellable status; when the assets
acquired, constructed or produced in compliance with capitalization have reached the predicted applicable status or
sellable status, the capitalization stops. The other borrowing costs are recognized as expenses in the period of incurrence.
Interest expenses of special borrowings incurred actually for the current period less interest income from borrowings at
bank or investment income from temporary investments is capitalized; capitalization amount is determined as accumulative
asset expenditure of general borrowings over weighted average asset expenditure of special borrowings multiples
capitalization rate of general borrowings. Capitalization rate is determined as calculating weighted average interest rate of
general borrowings.
In the capitalization period, exchange differences of special borrowings in foreign currency is totally capitalized; exchange
differences of general borrowings in foreign currency is recognized in profit or loss for the current period.
The assets in compliance with the capitalization conditions refer to such assets as fixed assets, investment based real
estate, inventories, etc. which need to undergo long time of acquisition or construction or production activities before they
can reach the predicted applicable or sellable status.
Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or production of a
qualifying asset is interrupted abnormally and when the interruption is for a continuous period of more than 3 months until
the acquisition or construction or production activities of the assets restart.
19. Biological Assets
Inapplicable
20. Oil and Gas Assets
Inapplicable
21. Intangible assets
(1) Pricing Method, Service Life and Impairment Test
An intangible asset refers to a recognizable non-monetary asset without physical form possessed by or under the control of
the Company.
Intangible assets are initially measured based on the cost. All expenses in connection with the intangible assets are
charged to the costs of intangible assets if the relevant economic benefit can flow into the Company and the costs can be
reliably measured. All the expenses of other items except that are charged to the current gain and loss at the time of
incurrence.
The land use right acquired is usually calculated as intangible asset. For the buildings, such as factory building, constructed
independently, the expenses in connection with the land use right and the construction cost of such building are calculated
as intangible asset and fixed assets. For purchased housing and buildings, the relevant costs are distributed between the
land use right and buildings; in case it is difficult to distribution rationally, they shall all be handled as fixed assets.
An intangible asset with limited service life is amortized in average by using the straight-line method over the predicted
service life with its original value less the predicted residual value and the accumulated amount of the reserve for
impairment already provided commencing from the time of availability for use. The intangible asset with unidentified service
life would not be amortized.
The method for amortization of intangible assets with limited service life is as follows:
Category Useful Life Amortization Method
Land use right 50 Straight-line method
Software system 5 Straight-line method
trademark rights 5-10 Straight-line method
At the end of a year, the Company rechecks the service life of the intangible asset and the amortization method. The
change incurred is treated as change of accounting estimation. In addition, the service life of intangible asset with indefinite
service life is rechecked. If there is evidence showing that the duration of the economic benefit brought about by the
intangible asset for the enterprise is foreseeable, the estimated service life is amortized according to the amortization policy
of intangible assets with limited service life.
For the method for impairment testing and method for provision for impairment of intangible assets, refer to Note V. 22
"Impairment of long term assets"
(2) Accounting policy for internal research and development expenditure
Expenditure on an internal research and development project is classified into expenditure on the research phase and
expenditure on the development phase.
Expenditure on the research phase is recognized in profit or loss when incurred.
Expenditure on the development phase is capitalized only when the Company can satisfy all of the following conditions:
① the technical feasibility of completing the intangible asset so that it will be available for use or sale;
② its intention to complete the intangible asset is to use or sell it; how the intangible asset will generate economic benefits.
③ Way of intangible assets producing economic interest, including those that can demonstrate the existence of a market
for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the
intangible asset;
④ The availability of adequate technical, financial and other resources to complete the development and the ability to use
or sell the intangible asset;
⑤ Its ability to measure reliably the expenditure attributable to the intangible asset during its development phase.
If it is impossible to distinguish research stage expenses and development stage expenses, the R & D expenses as
incurred shall be all charged to the current gains and losses
The research and development projects of the Company will enter into the development stage after meeting the above
conditions and passing through the technical feasibility and economic feasibility studies and the formation of the project.
Capitalized expenditure on the development phase is presented as “development costs” in the balance sheet and shall be
transferred to intangible assets when the project is completed to its intended use state.
22. Impairment of long term assets
For non-current and non-financial assets such as fixed assets, construction-in-process, intangible assets with limited
service life, investment based real estate measured based on the cost model, the long term equity investment in
subsidiaries, joint ventures and associates, etc., the Company make judgment on whether there exists any sign of
impairment on balance sheet day. In case there exists sign of impairment, the Company estimates the recoverable amount
and makes impairment test. For goodwill and the intangible assets with the service life undetermined and the intangible
assets which have not reached applicable status, regardless whether there exists sign of impairment, the Company makes
impairment test every year.
In case impairment test result shows that the recoverable amount of asset is lower than the book value, provision for
impairment is made based on the difference and is regarded in the loss for impairment. The recoverable amount is
determined based on the higher of the net amount of the fair value of the asset less the expense of disposal and the
present value of the predicted future cash flow of the asset. The fair value of assets is determined based on the sales
agreement price in fair transaction; in case there is no sales agreement but does exist active market of asset, the fair value
is determined according to the buyer’s offer of the asset; in case there exists neither sales agreement nor active market of
asset, the fair value of assets is estimated based on the best information obtainable. The disposal expenses include legal
expenses, relevant taxes, handling fee and direct expenses incurred before the asset reaches the sellable status in
connection with disposal of the assets. The present value the predicted future cash flow of assets: according to the
predicted future cash flow created in process of continuous application and final disposal, choose the proper discount rate
to determine the amount after discount. Provision for impairment of asset is calculated and recognized based on the
individual asset. In case it is difficult to make estimation of the recoverable amount of individual asset, the recoverable
amount of asset group is determined based on the asset group which the asset belongs to. The asset group is the minimum
grouping of assets which can independently produce cash flow in.
For the goodwill separately stated in the financial statements, at the time of impairment testing, the book value of the
goodwill is apportioned to the asset group or combination of asset groups of assets benefited from the synergistic effect of
enterprise consolidation. In case the testing result shows that the recoverable amount of an asset group or combination of
asset groups which contain apportioned goodwill is lower than their book value, the corresponding impairment loss is
recognized. The amount of the impairment loss first offsets and is apportioned to the book value of the goodwill of the asset
group or combination of asset groups, and then offset the book value of other assets according to the proportions of other
various assets in the book value with the exception of goodwill in the asset group or combination of asset groups.
The impairment loss of the aforesaid assets, once recognized, shall not be reversed as the recovered part in subsequent
periods.
23. Long term expenses to be apportioned
Long term expenses to be apportioned refer to various expenses which have already incurred but should be borne in the
reporting period and subsequent periods with the apportioning term exceeding one year. The Company's long term
expenses to be apportioned include the special counter fabrication cost, repairing fee, etc. Long term expenses to be
apportioned are amortized according to the straightline method in the predicted beneficial period.
24. Payroll to Employees
(1) Accounting treatment of short term salaries
Short term salaries mainly include wages, bonus, allowances and subsidy, welfare expenses to employees, medical
insurance premium, birth insurance premium, work related injury insurance premium, housing fund, labor union dues and
employees' personnel education fund, non-monetary welfare, etc. The Company recognizes the short term salaries to incur
during the fiscal periods when employees offer services to the Company as liabilities and count the same to the current
gains and losses or the relevant cost of assets. Of them, non-monetary welfare is measured based on the fair value.
(2) Post-employment benefits
The post-employment benefits mainly include the basic endowment insurance, unemployment insurance, annuity, etc.
Post-employment benefit program includes defined contribution plan. In case the defined contribution plan is used, the
corresponding contributable amount is counted to the corresponding asset cost or the current gains and losses at the time
of incurrence.
(3) Dismission welfare
In case the employment relation between the Company and an employee is terminated before the employment contract
term is due or for the purpose of encouraging an employee to volunteerly accept the lay-off, the Company proposes to offer
compensation, and the employees' payroll liabilities resulted from the termination benefits are recognized as at the earlier
of the time when the Company cannot unilaterally withdraw the dismission welfare as specified in the plan for termination of
labor relationship or the lay-off proposal and the time when the Company recognizes the costs related with the
reorganization of payment of the termination benefits and such liabilities are counted to the current gains and losses.
However, if the termination benefits are predicted to be unable to be fully paid within 12 months after termination of the
annual reporting period, it shall be handled according to the other long term payroll to employees.
The internal retirement program for employees is handled based on the same principle as that for the aforesaid dismission
welfare. The Company plans to count the salaries paid to the internally retired employees and their social insurance
premium paid by the Company from the date when the concerned employees stops offering services to the Company to the
time of their official retirement to the current gains and losses (dismission welfare) when they comply with the conditions for
recognizing the predicted liabilities.
(4) Other long term employees' welfare
Other long term employees' welfare provided by the Company to its employees shall undergo the accounting treatment
according to the defined contribution plan as long as it complies with the defined contribution plan. With the exception of
this, it shall undergo accounting treatment according to the defined beneficial plan.
25. Predicted liabilities
Predicted liabilities are recognized when an obligation in connection with contingencies complies with the following
conditions: (1) The obligation is a present obligation of the Company; (2) It is probable that an outflow of economic benefits
will be required to settle the obligation; (3) The amount of the obligation can be measured reliably.
On the balance sheet day, with consideration of such factors as contingency related risk, uncertainty and the time value of
money, etc., the predicted liabilities are measured according to the best estimated amount necessary to be paid in
implementation of the relevant current obligation.
If the expenses for clearing of predictive liability is fully or partially compensated by a third party, and the compensated
amount can be definitely received, it is recognized separated as asset. The compensated amount shall not be greater than
the carrying amount of the predictive liability.
26. Payment for shares
Inapplicable
27. Other financial instruments, such as preferred shares, perpetual liabilities, etc.
Inapplicable
28. Revenue
Does the Company need to comply with the provisions on disclosure for special industry.
No
(1) General Principle
① Sale of goods
Revenue from the sale of goods is recognized only when all of the following conditions are satisfied: the Company has
transferred to the buyer the significant risks and rewards of ownership of the goods, the Company retains neither continuing
managerial involvement nor effective control over the goods sold, and related income has been achieved or evidences of
receivable have been obtained, and the associated costs can be measured reliably.
②Providing of services
Where the outcome of a transaction involving the providing of services can be estimated reliably, at the end of the period,
revenue associated with the transaction is recognized using the percentage of completion method. The stage of completion
of a transaction involving the providing of services is determined according to the proportion of the services performed to
the total services to be performed.
The outcome of a transaction involving the providing of services can be estimated reliably only when all of the following
conditions can be satisfied at the same time:
①. The amount of revenue can be measured reliably; ②. The associated economic benefits are likely to flow into the
enterprise; ③. The stage of completion of the transaction can be measured reliably; ④. The costs incurred and to be
incurred in the transaction can be measured reliably.
If the outcome of a transaction involving the providing of services can’t be estimated reliably, the revenue of providing of
services is recognized at the service cost that incurred and is estimated to obtain compensation and the service cost
incurred is recognized in profit or loss for the current period. If the service cost incurred is estimated to obtain compensation,
revenue isn’t recognized.
When a contract or agreement signed between the Company and other enterprise covers sales of goods and supply of
labor service, in case the part of sales of goods and the part of providing labor service are distinguishable and can be
measured separately, the part of sales of goods and the part of providing labor service should be treated separately; in case
the part of sales of goods and the part of providing labor service cannot be distinguished or cannot be separately measured
despite that they are distinguishable, all the contract shall be treated as sales of goods.
③ Royalty revenue
Revenue is recognized on accrual basis according to the relevant contract or agreement.
④ Interest income
The interest income shall be calculated based on the tenure of the Company’s monetary funds used by others and the
actual interest rates used.
(2) Detailed method of revenue recognition
The watches sold by the Company includes two types, one is the self-manufactured FIYTA watch, the sales of which is
managed by branch offices and provincial-level sale sections by regions set up by Sales Company, a subsidiary of the
Company. The other is brand watches, the sales of which are controlled by HARMONY Company, a subsidiary of the
Company, and we act as agent Regarding to sales modes, a small portion of the sales of self-manufactured FIYTA watches
is sold through direct sales to customer and consignment sales while most self-manufactured FIYTA watches and brand
watches under agent are under two sales modes, namely exclusive shop and shop-in-shop. Detailed method of revenue
recognition as follows:
①. Direct sales to the customers
Under direct sales to the customers mode, the Company delivers products to customers and recognizes sales income after
customers check and accept.
②. Exclusive shop
Under exclusive shop mode, the Company delivers products to customers and recognizes sales income after customers
check, accept and pay.
③. Shop-in-shop
Under shop-in-shop mode, the Company delivers products to customers, sales staff issues notes to retail customers and
recognizes sales income after customers check and accept and department store collects the payment from the customers.
④. Consignment sales
Under consignment sales mode, the Company receives the detail of the sales list from consignee and recognizes revenue
while issuing invoice to distributors.
29. Government subsidies
(1) Basis for judging asset related government grants and the accounting treatment method
Government subsidy refers to the monetary asset and non-monetary asset obtained free by the Company from the
government, excluding the capital from the government as owner's contribution. Government subsidy consists of
asset-related government subsidy and income-related government subsidy.
The government subsidy in form of monetary asset is measured based on the amount received or receivable. The
government subsidy in form of non-monetary asset is measured based on fair value; or measured based on nominal
amount if the fair value cannot be reliably obtained. The government subsidy measured based on nominal amount is
directly counted to the current gains and losses.
Asset-related government subsidy is recognized as deferred income and is distributed and counted on averaged to the
current gains and losses over the service life of the relevant assets.
In case there exists any balance of the related deferred income when the government subsidy as already recognized needs
to be returned, the balance is used to write down the book balance of the relevant deferred income and the exceeded part
is counted to the current gains and losses; in case there exists no related deferred income, it is counted directly to the
current gains and losses.
(2) Basis for judging income related government subsidy and the accounting treatment method
The income-related government subsidy used for compensate the relevant expenses and losses in the subsequent period
is recognized as deferred income and counted to the current gains and losses in the period of recognizing the relevant
expenses.
In case there exists any balance of the related deferred income when the government subsidy as already recognized needs
to be returned, the balance is used to write down the book balance of the relevant deferred income and the exceeded part
is counted to the current gains and losses; in case there exists no related deferred income, it is counted directly to the
current gains and losses.
30. Deferred tax assets and deferred tax liabilities
(1) Income tax in the reporting period
At the balance sheet date, the current income tax liabilities (or asset) formed in the reporting period and previous periods
are measured based on the income tax amount predicted payable (or returnable) as calculated according to the tax law.
The taxable income amount based on which the current income tax expense is calculated is worked out after the
corresponding adjustment of the pretax accounting profit during the reporting period according to the relevant provisions of
the tax law.
(2) Deferred income tax asset and deferred income tax liability
The balance between the book value of some assets and liability items and their tax base and the provisional difference
arising from the balance between the book value of the items which have not been taken as asset and liability but may be
determined as tax base according to the tax law are recognized as deferred income tax asset and deferred income tax
liability by means of the debt method based on balance sheet.
The taxable provisional difference which is connected with the initial recognition of goodwill and the initial recognition of the
asset or liability arising from the transaction which is neither enterprise consolidation nor influences the accounting profit
and taxable income amount (or may be used to offset loss) at the time of incurrence are not recognized as relevant deferred
income tax liability. In addition, as to the taxable provisional difference in connection with investment in the subsidiaries,
associates and joint ventures, if the Company can control the time of reversal of the provisional difference while such
provisional difference may be possibly unable to be reversed in the foreseeable future and the relevant deferred income tax
liability shall not be recognized either. With the exception of the aforesaid situation, the Company recognizes the deferred
income tax liability arising from other taxable provisional difference.
The offsetable provisional difference which is connected with the initial recognition of the asset or liability (or may be used
to offset loss) arising from the transaction which is neither enterprise consolidation nor influences the accounting profit and
taxable income amount is not recognized as the relevant deferred income tax asset. In addition the offsetable provisional
difference in connection with investment in the subsidiaries, associates and joint ventures, in case such provisional
difference may be possibly unable to be reversed in the foreseeable future, or it is not highly possible to obtain taxable
income amount which can be used to offset the offsetable provincial difference in future, shall not be recognized as the
relevant deferred income tax asset. With the exception of the aforesaid situation, the Company recognizes the deferred
income tax asset arising from the other offsetable provisional difference only with the taxable income amount which may
possibly be obtainable for offsetting the offsetable provisional difference.
For the offsetable loss and tax payment write-down which may be carried over to the future years, only the future taxable
income amount which may be obtainable and used to offset the offsetable loss and write down the tax payment may be
recognized as the corresponding deferred income tax asset.
At the balance sheet date, deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to
apply to the period when the asset is realized or the liability is settled according to the tax law.
At the balance sheet date, the Company reviews the carrying amount of a deferred tax asset. If it is probable that sufficient
taxable profits will not be available in future to allow the benefit of the deferred tax asset to be utilized, the carrying amount
of the deferred tax asset is reduced. Any such reduction in amount is reversed when it becomes probable that sufficient
taxable profits will be available.
(3) Income tax expense
Income tax expense includes the current income tax and deferred income tax.
Except that the current income tax and deferred income tax in connection with other comprehensive income or the
transactions and matters which are directly stated in the shareholders' equity are counted to the other comprehensive
income or shareholder's equity and the deferred income tax arising from enterprise consolidation is used to adjusted the
book value of goodwill, all the other current income tax and deferred income tax expenses or income are counted to the
current gains and losses.
(4) Income Tax Offsetting
In case the Company has legal right to make netting and is desirous to make netting or obtain assets and settle liabilities at
the same time, the Company may present the net amount after offsetting the current income tax liabilities with the current
income tax assets.
In case the Company has legal right to settle the current income tax asset and current income tax liability in net while the
deferred income tax asset and the deferred income tax liability are related to the income tax which is collected by the same
tax collection and administration authority from the same tax payer or related to the different tax payer, but during the period
in future when each significant deferred income tax asset and liability are reversed, the Company present the deferred
income tax asset and deferred income tax liability in net after offsetting when it involves the tax payer's desire to settle the
current income tax asset and liability or obtaining asset and satisfying liability in net
31. Lease
(1) Accounting process for operating lease
Financing lease is actually the lease in which all the risks and remuneration in connection with the ownership of the asset
has been transferred and whose ownership may be either eventually transferred or possibly not transferred. Operating
lease refers to the leases other than financing lease.
① The Company records the operational lease business as the tenant
Rental payment of operational lease is recorded in the relevant asset cost or current gain and loss based on the straight line
method over various fiscal periods within the lease term. The initial direct expense is recorded in the current gain and loss.
Contingent rental is recorded in the current gain and loss when it actually incurs.
② The Company records the operational lease business as the lessor
The rental income of the operational lease is recorded in the current gain and loss according to the straight line method in
different periods within the lease term. The initial direct expense with bigger amount is capitalized at the time of incurrence
and is recorded in the current gain and loss periodically according to the same base in recognizing the rental income during
the lease term; other initial direct expense with smaller amount is recorded in the current gain and loss at the time of
incurrence. Contingent rental is recorded in the current gain and loss when it actually incurs.
(2) Accounting treatment method for finance lease
① As lessor
At the beginning date of lease period, the Company will recognize the lower of the fair value of the lease asset at the
beginning of the lease and the present value of the minimum amount of rent payment as the entry value of rent asset; takes
the minimum rent payment as the entry value of long term account payable and its balance as the unrecognized financial
charges. In addition, when the lease negotiation takes place in the same process of conclusion of lease contract, the initial
direct expenses attributable to lease item are also counted to the value of rent asset. The balance of the minimum rent
payment amount less the unrecognized financial charges is respectively stated on the long term liabilities and the long term
liabilities due within a year.
② As lessee
As at the beginning date of lease period, the Company takes the sum of the minimum amount of the rent collected at the
beginning of the lease and the initial direct expense as the entry value of the finance lease receivable and at the same time
records the unsecured residual value; the recognizes the balance of the sum of the minimum rent collection amount, initial
direct expenses and unsecured residual value and the sum of its present value as the unrealized financing income. The
balance between the receivable rent from finance lease less the unrealized revenue of financing is respectively presented
in the long term claim and the long term claim due within a year.
The unrecognized financial charges are calculated by means of the actual interest rate method within the lease term and
recognized as the current financial expenses. The contingent rental is counted to the current gains and losses at the time of
actual incurrence.
32. Other important accounting policy and accounting estimate
In process of implementing the accounting policy, due to the internal indefinity of business activities, the Company needs to
make judgment, estimation and assumption of the book value of the statement items which cannot be accurately measured.
These judgment, estimation and assumption are based on the management's past experience with consideration of other
relevant elements. These judgment, estimation and assumption may affect the reporting amount of revenues, expenses,
assets and liabilities, as well as disclosure of the contingent liabilities as at the balance sheet day. However, the actual
result resulted from the uncertainty of these estimates may result in difference with the present estimation made by the
management so as to further lead to significant adjustment of the carrying amount of the assets or liabilities as affected in
future.
The Company rechecks regularly the aforesaid judgment, estimation and assumption based on going concern. In case the
change of accounting estimates only affect the change of the present, the amount affected is recognized in the very period
of the change; in case the change not only affect the change of the present but also affect the change of the future, the
amount affected is recognized in the very period as well as the future period.
As at the balance sheet day, the Company needs to make judgment, estimation and assumption of the items of the financial
statements in the following important fields:
(1) Bad debt provision
The allowance method is adopted by the Company to account for losses on bad debts for receivables. Impairment of
accounts receivable is made based on estimation of its recoverability, which requires the management to make judgments
and estimates. The difference between the actual outcome and the estimates will have effects on the carrying amounts of
accounts receivable and on provision or reversal of the provision for bad debts of the accounting period in which the
estimates will be changed.
(2) Provision for price falling of inventories
In accordance with the inventory accounting policy, the Company provides reserve for price falling of inventories for the
inventories with the cost higher than the net realizable value, old-fashioned or unsalable and measured based on the lower
of the cost and the net realizable value. Impairment of inventories to the net realizable value is based on assessment of the
vendibility and net realizable value of the inventories. Identification of the impairment of an inventory acquires the
management to acquire concrete evidence, take consideration of the purpose for holding inventories, influence of the
events after the balance sheet day, etc. before making judgment and estimation. The differnce between the actual result
and previous estimation shall affect the book value of the inventories during the period of the estimation being changed and
provision or reversal of the reserve for price falling of the inventories.
(3) Impairment of available-for-sale financial assets
That the Company determines whether available-for-sale financial assets experience impairmant largely depends on the
management's judgment and assumption so as to determine whether it is necessary to recognize the loss from impairment
in the statement of profit. In process of making judgment and assumption, the Company needs to assess the level of the fair
value of the investment lower than the cost and the duration as well as the investee's financial position and short term
business expectation, including the status of the industry, technical innovation, credit rating, default rate and the
counterpart's risks.
(4) Provision for impairment of long term assets
At the balance sheet date, the Company judges whether there are indicators of impairment for non-current assets other
than financial assets. For an intangible asset with an indefinite useful life except for annually impairment test, an impairment
test will be conducted if there are any indicators of impairment occur. For non-current assets other than financial assets, an
impairment test shall be made if there are evidences indicating the carrying amounts cannot be recovered in full amount.
An asset or asset group is impaired when its carrying amount is higher than its recoverable amount (i.e. the higher of its fair
value less the disposal expenses and the present value of the estimated future cash flows).
The net amount of fair value less the disposal expenses are determined with reference to the quoted price of similar assets
in a sales agreement in an arm’s length transaction or an observable market price less incremental costs directly
attributable to disposal of the asset.
When estimating the present value of future cash flows, significant judgments are involved to the production output, selling
price, relevant business costs of the asset (or asset group) and the discount rate adopted in calculating the present value.
In estimating the recoverable amount, the Company will adopt all information available, such as forecasts for the production
output, the selling price and relevant business costs, which are made according to reasonable and supportive assumptions.
The Company conducts impairment test to goodwill at least once a year. This requires estimating the present value of future
cash flows of asset group or combination of asset group to which goodwill has been allocated.
In estimating the present value of future cash flows, the Company needs estimate future cash flows generated from the
asset group or the combination of asset groups and choose appropriate discount rates.
(5) Depreciation and amortization
Taking the residual value into consideration, an investment property, fixed asset and intangible asset are depreciated or
amortized on a straight-line basis over its useful life. The Group reviews the useful life periodically to determine the amount
of depreciation or amortization which shall be recognized in each accounting period. The useful life is determined according
to historical experience of similar assets and technological renovation estimated. The amount of depreciation or
amortization shall be adjusted in future accounting periods if there are material changes in estimates made before.
(6) Deferred income tax asset
A deferred tax asset shall be recognized for the unused deductible losses to the extent that it is probable that future taxable
profit will be available against which the deductible losses can be utilized. Taking the taxation planning into consideration,
the management of the Group is required to make significant amount of judgments to estimate the time and the amount of
future taxable profit in order to determine the amount of deferred income tax assets to be recognized.
(7) Corporate income tax
For some transactions in the Group’s ordinary course of business, uncertainties exist in their tax treatment and calculation.
An approval from the tax authority is needed to determine whether an item is deductible before tax. If the final confirmation
from the tax authority differs with the original estimation, the difference will have effects on the current income tax and
deferred income tax of the period in which the final confirmation is made by the tax authority.
(8) Predicted liabilities
The Company makes estimation based on the clauses of contracts, knowledge and historical experience available,
estimation of the predicted contract loss, default penalty of delayed delivery, etc. When such contingent matter has formed
a current obligation while implementation of such current obligation may possibly cause the economic benefit to flow out of
the Company, the Company recognizes the best estimated amount necessary to be paid out for the contingent matter which
has formed a current obligation for implementation as the predicted liabilities. Recognition and measurement of the
predicted liabilities largely depends on the management's judgment. In process of making judgment, the Company needs to
assess such elements as risks, uncertainty and time value of money, etc. in connection with such contingencies.
Where, the Company may predict the liabilities on the undertaking for after-sale quality improvement of the goods to the
customers on sales, repairing and improvement. However, the recent repairing experience may impossibly reflect the future
repairing conditions. Any increase or decrease of this reserve may affect future years' gains and losses.
33. Changes in significant accounting policies and accounting estimates
(1) Change in significant accounting policies
Inapplicable
(2) Change in significant accounting estimates
Inapplicable
34. Miscelleneous
Inapplicable
VI. Taxation
1. Types of major taxes and tax rates
Type of taxes Tax base Tax rates
VAT is calculated and paid based on
the balance of the output VAT as
VAT worked out based on 17% of the 17.00%
taxable revenues less the input VAT
allowed to be offset in the very period.
For the high-grade watch at the price
Consumption tax higher than CNY 10,000 (with CNY 20.00%
10,000 inclusive) imported or
produced, the consumption tax is
calculated and payable.
The urban maintenance and
Urban maintenance and construction
construction tax is based on 7% of the 7.00%
tax
turnover tax actually paid
Corporate income tax Taxable income amount 15.00%-30.00%
1.2% of 70% of the cost of the property
Real estate tax 1.20%and12%
or 12% of the rental income
In case there exist taxpayers subject to different corporate income tax rates, disclose the conditions.
Taxpayers Income tax rates
The Company (Notes①②⑤) 25.00%
HARMONY (Notes①⑤) 25.00%
Shenzhen FIYTA Sophisticated Timepieces Manufacture
15.00%
Co., Ltd. (the Manufacture Co.) (Notes②③)
FIYTA Hong Kong (Note ④) 16.50%
Station 68 Ltd. (Notes④) 16.50%
World Watch International (Notes④) 16.50%
FIYTA Technology Development Co., Ltd. (the Technology
15.00%
Co.) (Notes②③)
Shiyuehui Boutique (Shenzhen) Co., Ltd. (SHIYUEHUI,
whose original company name was Shenzhen Xiangji 25.00%
Commerce Trade Co., Ltd.) (Notes⑤)
Beijing Henglianda Watch Center Co., Ltd (Henglianda
25.00%
Company) (Notes⑤)
Harbin Harmony World Watch Distribution Co., Ltd. (Harbin
25.00%
Company) (Notes⑤)
Shenzhen Harmony Culture Communication Co., Ltd
10.00%
（Culture Company) (Notes⑦)
Emile Choureit Timing (Shenzhen) Ltd. (Emile Choureit
25.00%
Shenzhen Company) (Notes⑤)
FIYTA Sales Co., Ltd. (the Sales Co.) (Notes①⑤) 25.00%
Liaoning Hengdarui Commerce & Trade Co., Ltd.
25.00%
(Hengdarui) (Notes⑤)
Switzerland Company (Notes⑥) 30.00%
2. Tax Preferences
(1) Enterprise Income Tax
Note ①: According to the regulations stated in GuoShuiFa (2008) No. 28, “Interim Administration Method for Levy of
Corporate Income Tax to Enterprise that Operates Cross-regionally”, the head office of the Company and its branch offices,
the head office of HARMONY Company and its branch offices adopt tax submission method of “unified calculation,
managing by classes, pre-paid in its registered place, settlement in total, and adjustment by finance authorities” starting
from 1 January 2008. 50% is shared and prepaid by branches and 50% is prepaid by the headquarters.
Note ②: According to the Notice of Improving R & D Expense Pre-tax Weighted Deduction Policy (CAI SHUI (2015) No. 119
promulgated by the Science and Technology Department of State Administration of Taxation, the R & D expenses arising
from development of new technology, new products and new process in the Company, the Manufacture Company and the
Technology Company may enjoy 50% weighted deduction as the R & D expenses based on the specified deduction
according to fact as long as they have not formed intangible assets and counted to the current gains and loss;
Note ③: The company enjoys the “income tax rate exclusion of high-tech enterprises key supported by the state”.
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.
Note ⑦: According to the Circular on Further Extension of the Preferential Policy Scope of Corporate Income Tax to Small
Meager Profit Enterprises (CAI SHUI (2015) No. 99) promulgated by the Ministry of Finance and State Administration of
Taxation, the Culture Company counts 50% of its revenues to the taxable income amount and pays corporate income tax at
the rate of 20%.
(2) Property tax
According to Article 2 of the Circular on Transmission of the Provisions on the Policy in Connection with the Property Tax
and Urban Land Use Tax Promulgated by the State Administration of Taxation (SHEN DI SHUI FA [2003] No. 676: for the
new properties newly constructed or purchased by taxpayers, the property tax may be exempted for three years
commencing from the next month after completion of the construction or purchase. Our FIYTA Watch Building located at
Guangming New Zone of Shenzhen enjoys exemption from the property tax for three years commencing from the next
month of completion of the construction in September 2016.
3. Miscelleneous
Inapplicable
VII. Notes to items of consolidated financial statements
1. Monetary capital
In CNY
Items Ending balance Opening balance
Cash in stock 627,500.28 478,898.11
Bank deposit 383,015,982.73 426,743,336.84
Other Monetary Funds 1,580,520.86 1,580,520.86
Total 385,224,003.87 428,802,755.81
Where: total amount deposited
16,963,686.66 18,354,710.70
overseas
Other note:
Note: Of the other monetary fund, CNY 1,575,000.00 (December 31, 2016: CNY 1,575,000.00 ) was the marginal deposit
for security for the Company's application to the bank for issuing unconditional and irrevocable Letter of Guarantee
2. Financial assets measured based on fair value and its movements counted to the current gain
or loss
Inapplicable
3. Derivative financial assets
Inapplicable
4. Notes receivable
(1) Presentation of classification of notes receivable
In CNY
Items Ending balance Opening balance
Bank acceptance 415,271.13 854,616.60
Trade acceptance 11,563,514.48 6,807,939.68
Total 11,978,785.61 7,662,556.28
(2) Notes receivable already pledged by the Company at the end of the reporting period
Inapplicable
(3) Endorsed or discounted notes receivable at the end of the reproting period, but not yet due on
the balance sheet date
Inapplicable
(4) Notes transferred to receivables due to issuer’s default at the end of the reporting period
Inapplicable
5. Accounts receivable
(1) Accounts receivables disclosed by types
In CNY
Ending balance Opening balance
Book balance Bad debt reserve Book balance Bad debt reserve
Categories Provisio
Book Book
Proporti n Amoun Proporti Provision
Amount Amount value Amount value
on proporti t on proportion
on
Accounts
receivable with
significant single
amount and 4,261,80 4,261,80 100.00 8,962, 8,962,17
1.29% 0.00 2.77% 100.00% 0.00
provision of bad 0.00 0.00 % 179.22 9.22
debt reserve on
individual basis
Receivables for
which provision for
314,21
bad debts have 324,472, 9,349,32 315,123, 7,541,77 306,671,0
98.55% 2.78% 2,795. 97.04% 2.40%
been recognized 820.58 2.73 497.85 3.35 21.69
04
based on the
portfolio
Accounts
receivable with
insignificant single
528,626. 528,626. 100.00 604,14 604,140.
amount and 0.16% 0.00 0.19% 100.00% 0.00
39 39 % 0.59 59
provision of bad
debt reserve on
individual basis
323,77
329,263, 100.00 14,139,7 315,123, 100.00 17,108,0 306,671,0
Total 4.20% 9,114.8 5.28%
246.97 % 49.12 497.85 % 93.16 21.69
5
Accounts receivable with significant single amount and provision of bad debt reserve on individual basis at the end of the
reporting period
In CNY
Accounts receivable Ending balance
(based on units) Accounts receivable Provision for bad debt Provision proportion Provision reason
Centuryginwa Xinjiang 2,605,000.00 2,605,000.00 100.00% The shopping mail
Times Plaza Shopping failed to operate
Center Co., Ltd. properly and it is
almost impossible to
recover the payments
for goods
The shopping mail
failed to operate
Xi'an Centuryginwa
properly and it is
Qujiang Shopping 1,656,800.00 1,656,800.00 100.00%
almost impossible to
Center Co., Ltd.
recover the payments
for goods
Total 4,261,800.00 4,261,800.00 -- --
In the combination, the accounts receivable for which the bad debt reserve is provided based on the age analysis:
In CNY
Ending balance
Age
Accounts receivable Provision for bad debt Provision proportion
Itemized based on those within 1 year
Sub-toal within 1 year 143,425,319.06 8,540,801.09 5.95%
1 to 2 years 2,106,212.80 210,621.28 10.00%
2 to 3 years 88,690.82 26,607.25 30.00%
Over 3 years 1,142,586.23 571,293.12 50.00%
Total 146,762,808.91 9,349,322.73 6.15%
Note to the basis for determining the combination:
In the combination, the account receivable for which reserve for bad debt is provided based on balance percentage:
Inapplicable
In the combination, the accounts receivable for which the bad debt reserve is provided based on the other method:
Ending Balance
Name of portfolio
Accounts receivable Provision for bad debt Provision proportion %
Portfolio of specific
177,710,011.67 - -
accounts
Note: Based on historical experience, the Company’s receivables due from petty cash paid to employees, receivables due
from subsidiaries of the Company and accounts receivable for the sales between the last settlement date of the same
department store and the balance sheet date are with high recoverability and low possibility of incurring bad debt, as a
result, no bad debt provisions are provided for such receivables.
(2) Bad debt provision accrual, received or reversed in the reporting period
During the reporting period, the Company provided reserve for bad debt amounting to CNY 184,032.75; the reserve for bad
debt recovered or reversed during the reporting period amounted to CNY 0.00.
Where the significant amount of the reserve for bad debt recovered or reversed:
Inapplicable
(3) Accounts receivable actually written off in current period
In CNY
Items Amount written-off
Accounts receivable actually cancelled after verification 3,152,376.79
Of them, the significant accounts receivable were cancelled after verification:
In CNY
Procedures for
Was the amount
Type of Accounts Reason of writing implementing
Company name Amount written-off resulted from
Receivable off cancellation after
related transaction
verification
Taiyuan Guidu
Resolution of the
Department Store Payment for goods 3,152,376.79 Unrecoverable No
Board of Directors
Co., Ltd.
Total -- 3,152,376.79 -- -- --
Notes to cancellation of accounts receivable:
The account receivable cancelled after verification in the reporting period amounting to CNY 3,152,376.79 was the claims
formed in sales of goods with age exceeding three years. The Company provided reserve for bad debt in full for the said
account receivable in July, 2016 which shall not affect the current gains and losses. The said cancellation after verification
was reviewed and approved at the 16th session of the Eighth Board of Directors. For the detail, refer to the Announcement
of Fiyta Holdings Ltd. on Cancellation after Verification of the Bad Debt Owed by Beijing Henglianda Watch Co., Ltd.
(Announcement No. 2017-025).
(4) Accounts receivable due from the top five debtors of the Group are as follows:
Total accounts receivable due from the top five debtors of the Company in the current period is CNY31,739,073.98,
accounting for 9.64% of the total accounts receivable as at the end of the current period and the total provision for bad and
doubtful debts made as at the end of the current period is CNY1,586,953.70.
(5) Accounts receivable terminated for recognition due to transfer of financial assets
Inapplicable
(6) Amount of assets, liabilities formed by transfer of accounts receivable and continuing to be
involved
Inapplicable
6. Advance payments
(1) Advance payments are presented based on ages
In CNY
Ending balance Opening balance
Age
Amount Proportion Amount Proportion
Within a year 24,367,979.09 85.28% 24,129,365.63 71.58%
1 to 2 years 4,207,062.34 14.72% 2,634,183.83 7.81%
2 to 3 years 62,500.00 0.19%
Over 3 years 6,883,607.27 20.42%
Total 28,575,041.43 -- 33,709,656.73 --
Note to the failure in timely settlement of the advance payment with significant amount with age exceeding 1 year:
During the reporting period, partial advance payment amounting to CNY 6,268,942.84 has been carried to the bade debt for
accounts receivable as it has become unrecoverable.
(2) Advance payment to the top five payees of the ending balance collected based on the payees
of the advance payment
The total amount of advance payment to the top five payees of the ending balance collected based on the payees of the
advance payment was CNY 20,604,214.66, taking 72.11% of the toal ending balance of the advance payment.
Other notes:
Inapplicable
7. Interest receivable
(1) Classification
Inapplicable
(2) Significant overdue interest
Inapplicable
8. Dividends receivable
(1) Dividends receivable
Inapplicable
(2)Significant dividends receivable with age exceeding 1 year
Inapplicable
9. Other receivables
(1) Disclosure of classification of other receivables
In CNY
Ending balance Opening balance
Provision for bad Provision for bad
Book Balance Book Balance
debt debt
Categories Book Book
Provisio
Proporti n value Amoun Proporti Provision value
Amount Amount Amount
on proporti t on proportion
on
Other receivables
with significant
single amount and 800,000. 800,000. 100.00 1,519, 1,519,70
1.79% 0.00 4.10% 100.00% 0.00
provision of bad 00 00 % 703.69 3.69
debt reserve on
individual basis
Other receivables
for which bad debt 35,437
43,704,0 2,058,02 41,646,0 2,044,08 33,393,01
reserve has been 97.94% 5.47% ,104.2 95.58% 5.77%
52.35 4.69 27.66 6.97 7.28
provided based on 5
the portfolio
Other receivables
with insignificant
single amount and 120,000. 120,000. 100.00 120,00 120,000.
0.27% 0.00 0.32% 100.00% 0.00
provision of bad 00 00 % 0.00 00
debt reserve on
individual basis
37,076
44,624,0 100.00 2,978,02 41,646,0 100.00 3,683,79 33,393,01
Total 6.67% ,807.9 9.94%
52.35 % 4.69 27.66 % 0.66 7.28
4
Other receivables with significant single amount and provision of bad debt reserve on individual basis at the end of the
reporting period
in CNY
Other receivables Ending balance
(based on
Other receivables Provision for bad debt Provision proportion Provision reason
organizations)
Deposit of China Due poor operation of
Resources the shopping mall, it is
800,000.00 800,000.00 100.00%
(Chongqing) Industrial almost impossible to
Co., Ltd. get recovered
Total 800,000.00 800,000.00 -- --
In the combination, other receivables for which the bad debt reserve is provided based on the age analysis:
In CNY
Ending balance
Age
Other receivables Provision for bad debt Provision proportion
Itemized based on those within 1 year
Sub-toal within 1 year 27,935,994.15 1,074,389.35 3.85%
1 to 2 years 9,655,853.46 965,585.34 10.00%
2 to 3 years 100.00 30.00 30.00%
Over 3 years 36,040.00 18,020.00 50.00%
Total 37,627,987.61 2,380,435.05 6.33%
Note to the basis for determining the combination:
In the combination, other account receivable for which reserve for bad debt is provided based on balance percentage:
Inapplicable
In the combination, other receivable for which the bad debt reserve is provided based on other method:
Ending Balance
Name of portfolio
Accounts receivable Provision for bad debt Provision proportion %
Portfolio of specific
6,076,064.74 - -
accounts
Note: Based on historical experience, the Group’s receivables due from petty cash paid to employees, receivables due from
subsidiaries of the Company and accounts receivable for the sales between the last settlement date of the same
department store and the balance sheet date are with high recoverability and low possibility of incurring bad debt, as a
result, no bad debt provisions are provided for such receivables.
(2) Bad debt provision accrual, received or reversed in current period
The reserve for bad debt provided in the reporting period amounted to CNY 13,937.72; and reserve for bad debt recovered
or reversed in the reporting period amounted to CNY 0.00.
Of which, the significant amount of the reserve for bad debt reversed or recovered:
Inapplicable
(3) Accounts receivable actually written off in current period
in CNY
Items Amount written-off
Other receivables actually cancelled after verification 719,703.69
Of them, the significant other receivables were cancelled after verification:
in CNY
Procedures for
Was the amount
Type of Other Reason of writing implementing
Company name Amount written-off resulted from
Receivables off cancellation after
related transaction
verification
Taiyuan Guidu
Resolution of the
Department Store Deposit in security 719,703.69 Unrecoverable No
Board of Directors
Co., Ltd.
Total -- 719,703.69 -- -- --
Note to cancellation after verification of other receivables:
Other receivables actually cancelled after verification in the reporting period totaling CNY719,703.69 was the creditor's
rights formed from sales of commodities and deposits with age exceeding three years. The Company provided reserve for
bad debt in full for that part of receivables which would not affect the current gains and losses. The said cancellation after
verification was reviewed and approved at the 16th session of the Eighth Board of Directors. For the detail, refer to the
Announcement of Fiyta Holdings Ltd. on Cancellation after Verification of the Bad Debt Owed by Beijing Henglianda Watch
Co., Ltd. (Announcement No. 2017-025).
(4) Classification of other receivables based on nature of payment
in CNY
Nature of Payment Ending book balance Opening book balance
Reserve 6,076,064.74 4,690,748.62
Deposit in security 26,727,850.41 27,042,008.03
Commodity promotion fee 10,357,265.41 4,351,561.26
Others 1,462,871.79 992,490.03
Total 44,624,052.35 37,076,807.94
(5) Other receivables owed by the top five owers based on the ending balance
in CNY
Proportion in total Ending balance of
Company name Nature of Payment Ending balance Age ending balance of the provision for
other receivables bad debts
China Resources
(Shenzhen) Co., Deposit in security 2,824,954.00 within 1 year 6.33% 141,247.70
Ltd
Shanghai Baishi Promotion 2,548,555.56 within 1 year 5.71% 127,427.78
Watch Co., Ltd. expenses
CHINA
RESOURCES SU
N HUNG KAI
Deposit in security 1,497,003.00 within 1 year 3.35% 74,850.15
PROPERTIES
(HANGZHOU)
LIMITED
Shenzhen Yitian
Holiday Plaza Co,. Deposit in security 1,090,523.00 within 1 year 2.44% 54,526.15
Ltd.
Ernest Borel (Far Promotion
900,000.00 within 1 year 2.02% 45,000.00
East) Co., Ltd. expenses
Total -- 8,861,035.56 -- 19.86% 443,051.78
(6) Accounts receivable involving government subsidy
Inapplicable
(7) Other receivables with recognition terminated due to transfer of financial assets
Inapplicable
(8) Amount of assets and liabilities formed through transfer of other receivables and continuing to
be involved
Inapplicable
10. Inventories
Does the Company need to comply with the requirements for disclosure on real estate industry
No
(1) Classification of inventories
in CNY
Ending balance Opening balance
Items Provision for price Provision for price
Book Balance Book value Book Balance Book value
falling falling
Raw materials 177,775,591.72 6,162,480.01 171,613,111.71 179,751,190.75 6,162,480.01 173,588,710.74
Products in process 15,938,691.55 0.00 15,938,691.55 15,344,697.28 0.00 15,344,697.28
Commodities in
1,757,992,735.63 47,848,935.16 1,710,143,800.47 1,849,702,719.52 41,538,935.16 1,808,163,784.36
stock
Total 1,951,707,018.90 54,011,415.17 1,897,695,603.73 2,044,798,607.55 47,701,415.17 1,997,097,192.38
Does the Company need to comply with the requirements on disclosure according to the Guidance of Shenzhen Stock
Exchange on Disclosure of Information of the Industry Engaged in No. 4 - Listed Companies Engaged in Seed Industry,
Cultivation
No.
(2) Reserve for Price Falling of Inventories
In CNY
Increase in the reporting period Decrease in the reporting period
Opening
Items Provision Reversal Ending balance
balance Others Others
Proportion or Offset
Raw materials 6,162,480.01 0.00 0.00 0.00 0.00 6,162,480.01
Products in
0.00 0.00 0.00 0.00 0.00 0.00
process
Commodities in
41,538,935.16 6,310,000.00 0.00 0.00 0.00 47,848,935.16
stock
Total 47,701,415.17 6,310,000.00 0.00 0.00 0.00 54,011,415.17
(3) Note to the amount of capitalized borrowing costs involved in the ending balance of
inventories
Inapplicable
(4) Assets already completed but not yet settled formed in the construction contract at the end of
the reporting period
Inapplicable
11. Classified as held-for-sale assets
Inapplicable
12. Non-current assets due within a year
Inapplicable
13. Other current assets
in CNY
Items Ending balance Opening balance
Input VAT to be offset 13,144,087.60 15,379,195.44
Rent 1,218,166.99 3,088,189.21
Income tax paid in advance 786,149.95 1,400,591.12
Others 1,484,461.72 476,556.32
Total 16,632,866.26 20,344,532.09
14. Available-for-sale financial assets
(1) About available-for-sale financial assets
in CNY
Ending balance Opening balance
Items Impairment Impairment
Book Balance Book value Book Balance Book value
reserve reserve
Available-for-sale equity
385,000.00 300,000.00 85,000.00 385,000.00 300,000.00 85,000.00
instrument
Measured based
385,000.00 300,000.00 85,000.00 385,000.00 300,000.00 85,000.00
on cost
Total 385,000.00 300,000.00 85,000.00 385,000.00 300,000.00 85,000.00
(2) Available-for-sale financial assets measured based on fair value at the end of the reporting
period
Inapplicable
(3) Available-for-sale financial assets measured based on costs at the end of the reporting period
in CNY
Book Balance Impairment reserve Holding Cash
Beginning Increase in Decrease in Beginning Increase in Decrease in proporton of dividend in
End of the End of the
Investees of the the the of the the the the shares the
reporting reporting
reporting reporting reporting reporting reporting reporting in the reporting
period period
period period period period period period investees period
Shenzhen
CATIC
Culture
300,000.00 0.00 0.00 300,000.00 300,000.00 0.00 0.00 300,000.00 15.00% 0.00
Communica
tion Co.,
Ltd.
Xi'an
Tangcheng 85,000.00 0.00 0.00 85,000.00 0.00 0.00 0.00 0.00 0.10% 0.00
Co., Ltd.
Total 385,000.00 0.00 0.00 385,000.00 300,000.00 0.00 0.00 300,000.00 -- 0.00
(4) Change in impairment of available-for-sale financial assets
in CNY
Classification of
Available-for-sale Available-for-sale
available-for-sale Total
equity instrument liability instrument
financial assets
Balance with provision
for impairment
recognized at the 300,000.00 300,000.00
beginning of the
reporting period
Provision in the
0.00 0.00
reporting period
Where: transfer-in from
other comprehensive 0.00 0.00
income
Decrease in the
0.00 0.00
reporting period
Where: reversal of rise
0.00 0.00
of the post fair value
Balance with provision
for impairment
300,000.00 300,000.00
recognized at the end
of the reporting period
(5) Note to serious falling or non-provisional falling of the fair value of available-for-sale equity
instruments without provision for impairment provided
Inapplicable
15. Held-to-maturity investments
(1) About held-to-maturity investments
Inapplicable
(2) Significant held-to-maturity investments at the end of the reporting period
Inapplicable
(3) Reclassification of the held-to-maturity investments in the reporting period
Inapplicable
16. Long term accounts receivable
(1) About long term accounts receivable
Inapplicable
(2) Long term accounts receivable recognized due to termination of the transfer of financial assets
Inapplicable
(3) Transfer of long term accounts receivable while continuing to be involved in the amount of the
formed assets and liabilities
Inapplicable
17. Long term equity investment
in CNY
Increase/ Decrease (+ / -) in the reporting period
Income
Ending
from
Other Announ balance
equity
Addition Decreas compreh Other ced for Provision of the
Investee Opening investme Ending
al e of ensive equity distributi for provision
s balance nt Others balance
investme investme income moveme ng cash impairme for
recogniz
nt nt adjustme nt dividend nt impairme
ed under
nt or profit nt
equity
method
I. Joint Venture
II. Associates
Shangha
i Watch
Industry
43,423,6 188,871. 43,612,4
Co., Ltd. 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
24.87 89 96.76
(Shangh
ai Watch
Industry)
Sub-total 43,423,6 0.00 0.00 188,871. 0.00 0.00 0.00 0.00 0.00 43,612,4 0.00
24.87 89 96.76
43,423,6 188,871. 43,612,4
Total 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
24.87 89 96.76
18. Investment property
(1) Investment property measured based on the cost method
in CNY
Construction-in-proces
Items Plant and buildings Land use right Total
s
I. Original book value
1. Opening
378,528,070.44 378,528,070.44
balance
2. Increase in the
46,824,364.64 46,824,364.64
reporting period
(1) Purchased
(2)
Inventories\fixed
assets/construction- in 46,824,364.64 46,824,364.64
– process transferred
in
(3) Increase of
enterprise
consolidation
3. Amount
decreased in the
reporting period
(1) Disposal
(2) Other transfer
out
4. Ending
425,352,435.08 425,352,435.08
balance
II. Accumulative
depreciation and
accumulative
amortization
1. Opening
134,325,435.35 134,325,435.35
balance
2. Increase in the
6,098,045.51 6,098,045.51
reporting period
(1) Provision or
5,780,308.75 5,780,308.75
amortization
(2)Transferred in to the
317,736.76 317,736.76
fixed asset
3. Amount
decreased in the
reporting period
(1)Disposal
(2)Other
transfer-out
4. Ending
140,423,480.86 140,423,480.86
balance
III. Provision for
impairment
1. Opening
balance
2. Increased
amount in the reporting
period
(1) Provision
3. Decreased
amount 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 284,928,954.22 284,928,954.22
period
2.Book value at
the beginning of the 244,202,635.09 244,202,635.09
reporting period
(2) Investment property measured based on fair value
Inapplicable
(3) Investment property that does not have certificate for property right
In CNY
Cause of failure to get the property title
Items Book value
certificate
Still in process of application for
FIYTA Watch Building 46,824,364.64
approval
(4) About transform of real estate
On January 1, 2017, partial site of the Company's FIYTA Watch Building was used for lease. The fixed asset was specially
used for investment based real estate and measured based on the cost model. Its book value as at the transform date was
CNY 46,506,627.88.
19. Fixed assets
(1) About fixed assets
In CNY
Housing and Machines & Electronic
Items Motor vehicles Others Total
buildings equipment equipment
I. Original book
value
1. Opening
622,444,195.92 79,231,401.95 17,131,588.93 37,755,352.56 42,121,192.56 798,683,731.92
balance
2. Increase
in the reporting 1,423,622.54 2,176,846.91 197,225.73 3,542,252.91 1,439,965.89 8,779,913.98
period
(1)Purchase 1,423,622.54 2,176,846.91 197,225.73 3,542,252.91 1,439,965.89 8,779,913.98
(2)
Transfer-in from
the
construction-in-
process
(3) Increase
of the
consolidated
enterprises
3. Amount
decreased in
46,824,364.64 66,037.37 248,822.81 47,139,224.82
the reporting
period
(1) Disposal
66,037.37 248,822.81 314,860.18
or scrapping
(2)
Trnasferred into
investment 46,824,364.64 46,824,364.64
purpose real
estate
4. Ending
577,043,453.82 81,408,248.86 17,328,814.66 41,231,568.10 43,312,335.64 760,324,421.08
balance
II. Accumulative
depreciation
1. Opening
76,742,549.44 38,603,768.41 13,470,063.57 23,293,523.09 35,369,658.38 187,479,562.89
balance
2. Increase
in the reporting 9,225,044.53 2,990,135.56 572,668.96 2,124,926.92 1,243,908.63 16,156,684.60
period
(1)
9,225,044.53 2,990,135.56 572,668.96 2,124,926.92 1,243,908.63 16,156,684.60
Provision
3. Amount
decreased in
317,736.76 49,277.59 231,255.98 598,270.33
the reporting
period
(1) Disposal
49,277.59 231,255.98 280,533.57
or scrapping
(2)
Trnasferred into
investment 317,736.76 317,736.76
purpose real
estate
4. Ending
85,649,857.21 41,593,903.97 14,042,732.53 25,369,172.42 36,382,311.03 203,037,977.16
balance
III. Provision for
impairment
1. Opening
balance
2. Increase
in the reporting
period
(1)
Provision
3. Amount
decreased in
the reporting
period
(1)
Disposal or
scrapping
4. Ending
balance
IV. Book value
1. Book
value at the end 491,393,596.61 39,814,344.89 3,286,082.13 15,862,395.68 6,930,024.61 557,286,443.92
of the period
2. Book
value at the
545,701,646.48 40,627,633.54 3,661,525.36 14,461,829.47 6,751,534.18 611,204,169.03
beginning of the
period
(2) About temporarily idle fixed assets
Inapplicable
(3) Fixed assets rented through finance lease
Inapplicable
(4) Fixed assets leased through operating lease
Inapplicable
(5) Fixed assets that do not have certificate for property right
In CNY
Cause of failure to get the property title
Items Book value
certificate
Still in process of application for
FIYTA Watch Building 252,059,696.58
approval
Office building of Harbin Office 295,398.29 There exists defect in the property right
20.Construction in progress
(1)About construction in progress
In CNY
Ending balance Opening balance
Items Impairment Impairment
Book Balance Book value Book Balance Book value
reserve reserve
FIYTA Watch
Building design,
construction
1,404,130.16 1,404,130.16 0.00 0.00
and supporting
construction
project
Total 1,404,130.16 1,404,130.16 0.00 0.00
(2) Movements of important construction-in-progress projects in the reporting period
In CNY
Includin
Proporti
Accumu g:
Transfer on of Interest
lative amount
red into Other the capitaliz
Increas amount of the
Openin the fixed decreas project Project ation
e in the Ending involved capitaliz Fund
Item Budget g assets es in the put into progres rate in
reportin balance in ed source
balance in the reportin applicati s the
g period interest interest
current g year on in report
capitaliz in the
period the period
ation report
budget
period
FIYTA
Watch
Building
design,
constru 34,050, 1,404,1 1,404,1
0.00 0.00 0.00 4.12% 4.12% 0.00 0.00 0.00% 其他
ction 900.00 30.16 30.16
and
supporti
ng
constru
ction
project
34,050, 1,404,1 1,404,1
Total 0.00 0.00 0.00 -- -- 0.00 0.00 0.00% --
900.00 30.16 30.16
(3) Provision for impairment of construction in progress in the current period
The 13th session of the Eighth Board of Directors held on March 8, 2017 reviewed and approved the Proposal on
Investment for the Construction of FIYTA Watch R & D Center. The additional investment for the Construction of FIYTA
Watch R & D Center amounted to CNY 34.0509 million. The additional investment was mainly due to construction of the
design and construction project and the supporting project based on the construction of the principal engineering works of
FIYTA Watch R & D Center, including decoration and supporting construction of the plant, technology center, restaurant for
employees, museum and training base, etc.
21. Engineering materials
Inapplicable
22. Disposal of fixed assets
Inapplicable
23. Productive biological asset
(1) Productive biological asset by using the cost measurement model
Inapplicable
(2) Productive biological asset by using the fair value measurement model
Inapplicable
24. Oil and gas assets
Inapplicable
24. Oil and gas assets
Inapplicable
25. Intangible assets
(1) About the intangible assets
In CNY
Non-patent Software Trademark use
Items Land use right Patent Right Total
technology system right
I. Original book
value
1.
Opening 34,854,239.40 10,979,897.53 9,547,313.86 55,381,450.79
balance
2.
Increase in the 2,485,823.89 0.00 2,718,823.89
reporting period
2,485,823.89 0.00 2,718,823.89
(1)Purchase
(2) Internal
R&D
(3) Increase
of enterprise
consolidation
3. Amount
decreased in
the reporting
period
(1)Disposal
4. Ending
34,854,239.40 13,465,721.42 9,547,313.86 57,867,274.68
balance
II. Accumulative
amortization
1.
Opening 9,155,436.95 4,240,698.21 3,233,412.21 16,629,547.37
balance
2.
Increase in the 365,863.65 989,710.67 5,660.02 1,361,234.34
reporting period
(1)
365,863.65 989,710.67 5,660.02 1,361,234.34
Provision
3. Amount
decreased in
the reporting
period
(1)
Disposal
4. Ending
9,521,300.60 5,230,408.88 3,239,072.23 17,990,781.71
balance
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 25,332,938.80 8,235,312.54 6,308,241.63 39,876,492.97
of the period
2. Book
value at the
25,698,802.45 6,739,199.32 6,313,901.65 38,751,903.42
beginning of the
period
The proportion of intangible assets formed not through the Company’s internal research and development in the balance of
intangible assets was 0.00%.
(2) About the land use right that does not have certificate of title
Inapplicable
26. Development expenditure
Inapplicable
27. Goodwill
Inapplicable
28. Long-term expenses to be apportioned
In CNY
Amount amortized
Increase in the
Items Opening balance in the reporting Other decrease Ending balance
reporting period
period
Charge of
fabrication of 62,548,707.72 19,219,314.57 30,841,152.70 50,926,869.59
special counters
Refurbishment
62,351,629.48 12,973,707.59 18,907,880.66 56,417,456.41
expenses
Market promotion 8,115,378.72 0.00 4,057,689.36 4,057,689.36
Others 672,687.96 229,958.55 258,709.86 643,936.65
Total 133,688,403.88 32,422,980.71 54,065,432.58 112,045,952.01
29. Deferred Income Tax Asset and Deferred Income Tax Liability
(1) Deferred income tax asset without offsetting
In CNY
Ending balance Opening balance
Items Offsetable provisional Deferred income tax Offsetable provisional Deferred income tax
difference asset difference asset
Provision for
71,129,188.98 17,074,127.58 68,493,298.99 16,426,482.25
impairment of assets
Unrealized profit from
the intracompany 293,883,585.27 72,537,180.96 310,726,076.51 76,489,979.97
transactions
Offsetable loss 11,003,336.29 2,396,053.03 3,253,698.63 768,113.04
Deferred income 7,280,000.00 1,820,000.00 5,980,000.00 1,495,000.00
Total 383,296,110.54 93,827,361.57 388,453,074.13 95,179,575.26
(2) Deferred income tax liabilities without offsetting
Inapplicable
(3) Deferred income tax asset or liabilities stated with net amount after offsetting
Inapplicable
(4) Statement of deferred income tax asset not recognized
In CNY
Items Ending balance Opening balance
Offsetable provisional difference 6,568,942.84 300,000.00
Offsetable loss 29,429,359.59 22,867,656.64
Total 35,998,302.43 23,167,656.64
(5) Unrecognized deferred income tax asset available for offsetting loss is going to expire in the
following years
Inapplicable
30. Other non-current assets
In CNY
Items Ending balance Opening balance
Advance payment for equipment 10,622,382.13 9,432,329.88
Prepayment for accessories 1,166,762.93 1,249,189.03
Prepayment for engineering service 1,410,394.92 0.00
Prepayment for refurbishment 1,848,667.80 0.00
Total 15,048,207.78 10,681,518.91
31. Short-term loans
(1) Classification of short-term loans
In CNY
Items Ending balance Opening balance
Secured borrowings 196,078,240.00 260,438,070.00
Credit borrowing 723,000,000.00 838,000,000.00
Total 919,078,240.00 1,098,438,070.00
(2)Short-term loans overdue but still remaining outstanding
Inapplicable
32. Financial liabilities measured based on fair value and the movements counted to the current
gain or loss
Inapplicable
33. Derivative financial liabilities
Inapplicable
34. Notes payable
Inapplicable
35. Accounts payable
(1) Statement of accounts payable
In CNY
Items Ending balance Opening balance
Payment for goods 128,494,137.20 129,889,611.01
Payment for materials 6,426,451.44 7,706,304.10
Engineering payment 64,567,679.63 77,826,174.63
Total 199,488,268.27 215,422,089.74
(2) Significant accounts payable with age exceeding 1 year
Inapplicable
36. Advances from customers
(1) Statement of advances from customers
In CNY
Items Ending balance Opening balance
Advances on sales 7,911,924.00 10,691,615.06
Rent received in advance 963,873.18 3,211,088.84
Total 8,875,797.18 13,902,703.90
(2) Significant advances from customers with age exceeding 1 year
Inapplicable
(3) Unfinished projects formed in the construction contracts but already settled at the end of the
reporting period
Inapplicable
37. Employee remuneration payable
(1) Statement of employee remuneration payable
In CNY
Increase in the Decrease in the
Items Opening balance Ending balance
reporting period reporting period
I. Short term
45,026,789.38 230,897,835.48 247,788,403.22 28,136,221.64
remuneration
II. Benefit upon
retirement - defined 227,796.31 18,093,206.08 18,217,876.99 103,125.40
contribution plan
III. Dismissal welfare 0.00 559,856.24 559,856.24 0.00
IV. Other welfare due
0.00 0.00 0.00 0.00
within a year
Total 45,254,585.69 249,550,897.80 266,566,136.45 28,239,347.04
(2) Presentation of short term remuneration
In CNY
Increase in the Decrease in the
Items Opening balance Ending balance
reporting period reporting period
I. Salaries, bonus,
allowances and 44,751,046.97 207,768,312.73 224,697,251.29 27,822,108.41
subsidies
2. Staff’s welfare 0.00 4,846,738.80 4,813,638.80 33,100.00
3. Social security
0.00 8,018,969.30 8,018,969.30 0.00
premium
Including:
medical insurance 0.00 7,015,124.32 7,015,124.32 0.00
premium
Work
0.00 489,804.10 489,804.10 0.00
injury insurance
Maternity
0.00 514,040.88 514,040.88 0.00
Insurance
4. Public reserve for
0.00 8,045,046.65 8,045,046.65 0.00
housing
5. Trade union fund
and staff education 275,742.41 2,218,768.00 2,213,497.18 281,013.23
fund
Total 45,026,789.38 230,897,835.48 247,788,403.22 28,136,221.64
(3) Presentation of the defined contribution plan
In CNY
Increase in the Decrease in the
Items Opening balance Ending balance
reporting period reporting period
1. Basic endowment
894.51 17,461,141.28 17,358,910.39 103,125.40
insurance premium
2. Unemployment
0.00 632,064.80 632,064.80 0.00
insurance premium
3. Contribution to the
enterprise annuity 226,901.80 0.00 226,901.80 0.00
scheme
Total 227,796.31 18,093,206.08 18,217,876.99 103,125.40
38. Taxes payable
in CNY
Items Ending balance Opening balance
Value-added tax 35,777,425.54 41,019,759.02
Enterprise income tax 21,133,605.15 6,184,718.37
Individual income tax 947,419.37 726,368.87
Urban maintenance and construction
849,460.13 880,194.85
tax
Real estate tax 887,385.72 894,213.22
Education Surcharge 585,341.58 591,797.48
Stamp duty 246,531.64 239,875.22
Dyke protection surcharge 3,246.79 3,941.39
Others 209,038.28 404,420.89
Total 60,639,454.20 50,945,289.31
39. Interest payable
In CNY
Items Ending balance Opening balance
Long term loan interest with interest
payment in installment and principal 144,866.16 174,676.15
repayment upon maturity
Interest payable for short term loan 1,945,205.55 2,301,293.50
Total 2,090,071.71 2,475,969.65
40. Dividend payable
Inapplicable
41. Other payables
(1) Other payments stated based on nature of fund
In CNY
Items Ending balance Opening balance
Collateral and Deposit 20,918,087.29 20,066,595.17
Refurbishment 2,693,544.86 2,395,059.63
Down payment 1,881,571.69 1,660,730.93
Fund for shop-front activities 30,759,055.11 16,725,720.47
Personal account payable 1,497,591.58 2,474,103.56
Others 6,561,329.39 10,410,871.23
Total 64,311,179.92 53,733,080.99
(2) Other payables in significant amount and with aging over 1 year
in CNY
Cause of failure in repayment or
Items Ending balance
carry-over
Shenzhen Tencent Computer
4,693,429.16 Still in the lease term
System Co., Ltd .
Oracle Research &
Development Center(Shenzhen) Co.,Lt 811,590.00 Still in the lease term
d
Rainforest Restaurant Nanshan
791,320.00 Still in the lease term
District, Shenzhen
Total 6,296,339.16 --
42. Liabilities classified as held-for-sale liabilities
Inapplicable
43. Non-current liabilities due within one year
in CNY
Items Ending balance Opening balance
Long-term liabilities due within one
21,500,000.00 26,117,387.52
year
Total 21,500,000.00 26,117,387.52
44. Other current liabilities
in CNY
Items Ending balance Opening balance
Accrued expenses 10,776,626.25 2,379,148.19
Total 10,776,626.25 2,379,148.19
Increase/decrease of short term bonds payable:
Inapplicable
45. Long-term Loan
(1) Classification of Long-term Borrowings
in CNY
Items Ending balance Opening balance
Mortgage loan 5,577,976.54 5,666,307.52
Secured borrowings 113,861,928.00 135,752,128.00
Less: Long-term borrowings due within
-21,500,000.00 -26,117,387.52
1 year
Total 97,939,904.54 115,301,048.00
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.77.
③ For guaranteed borrowings and the guarantees offered by the related parties, refer to Note XII.5(4).
④ The interval of the interest rates of long term borrowings is 3.00%-4.53%。
46. Bonds Payable
(1) Bonds payable
Inapplicable
(2) Increase/Decrease of bonds payable (excluding other financial instruments classified as
financial liabilities, such as preferred shares, perpetual bonds, etc.)
Inapplicable
(3) Note to the conditions and time of share conversion of convertible company bonds
Inapplicable
(4) Note to other financial instruments classified as financial liabilities Inapplicable
47. Long term accounts payable
(1) Long term accounts payable stated based on the nature
Inapplicable
48. Long term payroll payable
(1) Statement of long term payroll payable
Inapplicable
(2) Change of defined benefit plans
Inapplicable
49. Special accounts payable
Inapplicable
50. Predicted liabilities
Inapplicable
51. Deferred income
In CNY
Items Opening balance Increase in the Decrease in the Ending balance Reasons of
reporting period reporting period formation
Government Income to be
5,980,000.00 1,300,000.00 7,280,000.00
subsidies recognized
Total 5,980,000.00 1,300,000.00 7,280,000.00 --
Items involving government subsidies:
In CNY
Amount counted
Amount of In connection
to the
Opening newly added with asset/in
Liabilities non-operating Other changes Ending balance
balance subsidy in the connection with
income in the
reporting period income
reporting period
Special fund for
Shenzhen
In connection
industrial design 3,500,000.00 0.00 0.00 0.00 3,500,000.00
with asset
development
(Note①)
Financing
project for
construction of
enterprise In connection
2,000,000.00 0.00 0.00 0.00 2,000,000.00
technology with asset
center certified
by the state
(Note②)
Key technology
R & D project for
DF101 Airplane 480,000.00 0.00 0.00 0.00 480,000.00 earning related
standard timing
system (Note③)
Special award
for industry and
informatization In connection
0.00 1,300,000.00 0.00 0.00 1,300,000.00
at provincial with asset
level in 2017
Note ④
Total 5,980,000.00 1,300,000.00 7,280,000.00 --
Other Notes:
Note ①: It is the special fund for development of industrial design in Shenzhen obtained according to the Operation
Instructions on Certification and Financial Support Program for Industrial Design Centers in Shenzhen (Trial
Implementation) SHEN JING MAO IT Zi [2013] No. 227 jointly promulgated by Economy, Trade and Information
Commission of Shenzhen Municipality and Finance Commission of Shenzhen Municipality;
Note ②: It is the fund from the financial support for construction of enterprise technology centers in Shenzhen obtained
according to the Circular of Development and Reform Commission of Shenzhen Municipality on Issuing the First Batch of
Supporting Program of Financial Support Fund for Construction of Enterprise Technology Centers in Shenzhen in 2015
(SHEN JING MAO XINXI YU [2015] No. 129 on October 28, 2015.
Note ③: It is the special fund for cooperation among organizations under the province and ministries, manufacturers and
research institutions obtained according to the Public Notice on the Projects Enjoying Support with the Special Fund for
Overall Strategic Cooperation of Provincial Institutions from the Special Fund for Cooperation among Organizations under
the Province and Ministries, Manufacturers and Research Institutions in Year 2013 (YUE KE GONG SHI [2014] No. 13)
promulgated by Department of Science and Technology of Guangdong Province on December 9, 2015.
Note ④: The special purpose fund obtained according to the Circular of the Economic and Information Commission of
Guangdong Province on Doing a Good Job in Submission to the Special Project Library of Production and Services at
Provincial Level in 2017.
52. Other non-current liabilities
Inapplicable
53. Capital stock
In CNY
Increase / Decrease (+/ -)
Opening Shares Ending
balance New issuing Bonus shares converted Others Sub-total balance
from reserve
438,744,881. 438,744,881.
Total Shares
00 00
54. Other equity instruments
(1) Basic information on the outstanding other financial instruments, including preferred shares,
perpetual bonds, etc. at the end of the reporting period
Inapplicable
(2)Movement of the outstanding other financial instruments, including preferred shares, perpetual
bonds, etc. at the end of the reporting period
Inapplicable
55. Capital reserve
In CNY
Increase in the Decrease in the
Items Opening balance Ending balance
reporting period reporting period
Capital premium
(capital stock premium) 1,047,963,195.57 1,047,963,195.57
Other capital reserve 14,492,448.65 14,492,448.65
Total 1,062,455,644.22 1,062,455,644.22
Other notes include notes to increase or decrease, cause of the movement, etc. in the reporting period:
Inapplicable
56. Treasury shares
Inapplicable
57. Other comprehensive income
In CNY
Amount incurred in the reporting period
Less: Gain or
loss counted
Amount
to the other Attributabl
incurred Attributabl
comprehensi e to
Opening before Less: e to the Ending
Items ve incom and minority
balance income tax Income tax parent balance
transferred sharehold
in the expense company
into gain or ers after
reporting after tax
loss in the tax
period
current
period
I. Other comprehensive income
which cannot be re-classified into
0.00 0.00 0.00 0.00 0.00 0.00 0.00
the gain and loss
II. Other comprehensive income
-11,778,498. 7,086,490. 7,168,544. -4,609,9
which cannot be re-classified into -82,054.06
24 52 58 53.66
the gain and loss in future
Translation difference in
-11,778,498. 7,086,490. 7,168,544. -4,609,9
financial statements expressed in -82,054.06
24 52 58 53.66
foreign currency
-11,778,498. 7,086,490. 7,168,544. -4,609,9
Total other comprehensive income -82,054.06
24 52 58 53.66
Other notes include the valid part of gain and loss of a cash-flow hedge converted into initial amount of arnotraged items for
adjustment:
Inapplicable
58. Special reserve
Inapplicable
59. Surplus reserve
In CNY
Increase in the Decrease in the
Items Opening balance Ending balance
reporting period reporting period
Statutory surplus
131,976,806.45 0.00 0.00 131,976,806.45
reserve
Discretionary surplus
61,984,894.00 0.00 0.00 61,984,894.00
reserve
Total 193,961,700.45 0.00 0.00 193,961,700.45
Note to surplus reserve, including the note to its increase/decrease and the cause(s) of its movement in the reporting
period:
Inapplicable
60. Retained earnings
In CNY
Items Reporting period Previous period
Before adjustment: Retained earnings at the
687,986,807.74 635,417,237.55
end of the previous period
Adjustment: Total of the retained earnings at
year beginning (amount adjusted up +, 0.00 0.00
amount adjusted down -)
After adjustment: Retained earnings at the
687,986,807.74 635,417,237.55
beginning of the reporting period
Plus: Net profit attributable to the parent
86,708,824.76 110,662,681.59
company’s owner in the report period
Less: Provision of statutory surplus public
0.00 14,218,623.30
reserve
Provision of discretionary surplus 0.00 0.00
reserve
Provision of general risk reserve 0.00 0.00
Dividends of common shares payable 43,874,488.10 43,874,488.10
Dividend for common shares converted 0.00 0.00
Retained earnings at year end 730,821,144.40 687,986,807.74
Statement of adjustment of retained earnings at the beginning of the reporting period:
1). The amount involved in the retroactive adjustment according to the Enterprise Accounting Standards and the relevant
new provisions influencing the retained earnings at the beginning of the reporting period was CNY 0.00.
2). The amount involved in change of the accounting policy influencing the retained earnings at the beginning of the
reporting period was CNY 0.00.
3). The amount involved in correction of the significant accounting errors influencing the retained earnings at the beginning
of the reporting period was CNY 0.00.
4). The amount involved in change of the consolidation scope caused by the common control influencing the retained
earnings at the beginning of the reporting period was CNY 0.00.
5). The total amount involved in other adjustments influencing the retained earnings at the beginning of the reporting period
was CNY 0.00.
61. Operation Income and Costs
In CNY
Amount incurred in the reporting period Amount incurred in the previous period
Items
Income Cost Income Cost
Principal business 1,588,553,573.96 940,053,728.29 1,469,081,337.25 880,864,674.10
Other business 10,987,570.39 1,425,956.54 10,446,445.93 798,606.41
Total 1,599,541,144.35 941,479,684.83 1,479,527,783.18 881,663,280.51
62. Business Taxes and Surcharges
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Consumption tax 3,685.47 0.00
Urban maintenance and construction
6,767,130.24 6,135,806.40
tax
Education surcharge 4,841,191.32 4,299,104.46
Resource tax 0.00 0.00
Real estate tax 1,792,451.23 0.00
Land use tax 133,605.02 0.00
tax on using vehicle and boat 1,860.00 0.00
Stamp duty 890,202.85 0.00
Business tax 0.00 2,121,487.67
Others 751,371.15 512,183.59
Total 15,181,497.28 13,068,582.12
63. Sales expenses
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Wages 137,774,121.37 128,204,790.69
Market promotion 52,659,388.21 43,982,810.03
Long-term expenses to be apportioned 46,807,569.89 50,513,483.05
Rental 33,600,054.64 31,632,919.79
Supermarket expenses 30,701,374.17 25,425,759.57
Labor insurance 19,188,573.59 18,582,742.25
Exhibition 14,393,962.02 10,030,786.86
Advertisement 13,600,866.95 20,858,769.36
Packing 6,046,492.43 6,555,952.03
Depreciation 5,691,232.08 6,640,615.39
Others 33,822,686.44 35,579,011.09
Total 394,286,321.79 378,007,640.11
64. Administrative Expenses
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Wages 44,368,426.25 46,178,475.38
R & D costs 21,944,615.09 18,483,969.94
Depreciation 6,605,338.51 4,052,492.67
Labor insurance 4,088,475.24 4,431,637.75
Business travel 2,678,668.34 2,666,524.90
Housing provident fund 2,252,733.41 1,922,608.21
Long-term expenses to be apportioned 1,767,821.69 1,547,461.28
Administrative expenses 1,707,674.89 2,027,004.60
Remuneration to agent(s) engaged by
1,640,549.87 1,946,271.53
the Company
Welfare 1,450,019.61 1,433,879.77
Others 9,666,064.05 10,156,683.57
Total 98,170,386.95 94,847,009.60
65. Financial expenses
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Interest payment 23,246,930.51 33,210,251.79
Less: Interest capitalized 0.00 2,193,208.35
Less: interest income 1,489,867.45 1,755,470.96
Exchange losses 265,259.52 283,183.66
Financial service charge 4,178,310.48 5,685,897.84
Total 26,200,633.06 35,230,653.98
66. Loss from impairment of assets
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
I. Loss from bad debts 6,473,689.30 1,441,224.55
II. Loss from price falling of inventories 6,310,000.00 0.00
Total 12,783,689.30 1,441,224.55
67. Income from change of the fair value
Inapplicable
68. Return on investment
In CNY
Amount incurred in the previous
Items Amount incurred in the reporting period
period
Income from long term equity investment
188,871.89 172.19
based on equity method
Total 188,871.89 172.19
69. Other income
Inapplicable
70. Non-operating income
In CNY
Amount counted to the
Amount incurred in the Amount incurred in the
Items current non-operating gain
reporting period previous period
and loss
Total income from disposal of
3,570.55 10,960.00 3,570.55
non-current asset
Where: income from disposal
3,570.55 10,960.00 3,570.55
of fixed assets
Government subsidy 1,478,043.00 815,000.00 1,478,043.00
Disposal of payables
3,741.50 99,618.61 3,741.50
impossible to pay
Others 142,125.41 476,781.67 142,125.41
Total 1,627,480.46 1,402,360.28 1,627,480.46
The government subsidy which counted to the current gains and losses:
In CNY
Does the In
subsidy connection
Is it a Amount in Amount in
Supported Subsidy influence with asset/
Causes Nature special the reporting the previous
projects providers the profit or In
subsidy period period
loss of the connection
very year with income
Subsidy
received
The 17th
State because of
Chinese In
Intellectual R & D,
Patents Award Yes No 600,000.00 connection
Property technology
Honorable with income
Office updating
Mention
and
innovation
Subsidy
The 17th received
China State because of
In
Industrial Intellectual R & D,
Award Yes No 100,000.00 connection
Design Property technology
with income
Honorable Office updating
Mention and
innovation
Subsidy
obtained for
the defined
Government trades and
subsidy for industries
exhibition at encouraged
Shenzhen
BaselWorld and In
Watchmaker
paid by Subsidy supported Yes No 60,000.00 connection
s
Shenzhen by the with income
Association
Watchmaker country
s (obtained
Association legally
according to
the national
policy)
Subsidy
obtained for
the defined
Financial
trades and
Support for
industries
Implementat
encouraged
ion of Bao'an
and In
Standardize District
Subsidy supported Yes No 50,000.00 connection
d Strategic Government
by the with income
Projects of , Shenzhen
country
Bao'an
(obtained
District,
legally
Shenzhen
according to
the national
policy)
Subsidy
Market and received
Financing
Quality because of
fund for the In
Supervision R & D,
First Patents Subsidy Yes No 5,000.00 connection
Commission technology
2016 with income
of Shenzhen updating
Shenzhen
Municipality and
innovation
Cash award Intellectual Subsidy
of the 18th Property received In
China Bureau of Award because of Yes No 100,000.00 connection
Patents Guangdong R & D, with income
Award Province technology
(Note①) updating
and
innovation
Subsidy
Special Market and received
Fund for Quality because of
In
Shenzhen Supervision R & D,
Subsidy Yes No 651,000.00 connection
Standards Commission technology
with income
2016 (Note of Shenzhen updating
②) Municipality and
innovation
Subsidy
received
Fund for
Market and because of
financing In
Quality R & D,
patent Subsidy Yes No 3,000.00 connection
Supervision technology
application with income
Commission updating
(Note③)
and
innovation
Subsidy
obtained for
the defined
trades and
industries
encouraged
Allowance Shenzhen
and In
for Watchmaker
Subsidy supported Yes No 100,000.00 connection
BaselWorld s
by the with income
(Note④) Association
country
(obtained
legally
according to
the national
policy)
Subsidy
Received
Subsidy for obtained for
from
Improving the defined
Economy,
International trades and In
Trade and
ized Subsidy industries Yes No 30,130.00 connection
Information
Operation encouraged with income
Commission
Ability 2016 and
of Shenzhen
(Note⑤) supported
Municipality
by the
country
(obtained
legally
according to
the national
policy)
Subsidy
obtained for
the defined
trades and
Received
Subsidy for industries
from
Improving encouraged
Economy,
International and In
Trade and
ized Subsidy supported Yes No 26,763.00 connection
Information
Operation by the with income
Commission
Ability 2016 country
of Shenzhen
(Note⑥) (obtained
Municipality
legally
according to
the national
policy)
Special
Financial
Subsidy
Support for Nanshan
received
Self-Innovati District
because of
on Industry Sci-Tech In
R & D,
Developme Incubation Subsidy Yes No 60,000.00 connection
technology
nt of Service with income
updating
Nanshan Center,
and
District Shenzhen
innovation
2016(Note
⑦)
Subsidy
Special
Market and received
Financial
Quality because of
Support for In
Supervision R & D,
Shenzhen Subsidy Yes No 92,350.00 connection
Commission technology
Standards with income
of Shenzhen updating
2016
Municipality and
(Note⑧)
innovation
Science & Science & Subsidy In
Technology Technology Subsidy received Yes No 7,800.00 connection
Innovation Innovation because of with income
Commission Commission R & D,
of Shenzhen of Shenzhen technology
Municipality Municipality updating
- Innovation and
(Note⑨) innovation
Subsidy
Special
Market and received
Financial
Quality because of
Support for In
Supervision R & D,
Shenzhen Subsidy Yes No 407,000.00 connection
Commission technology
Standards with income
of Shenzhen updating
2016
Municipality and
(Note⑩)
innovation
1,478,043.0
Total -- -- -- -- -- 815,000.00 --
0
Other notes:
Note①: Cash award of the 18th China Patents Award received according to the Decision of State Intellectual Property
Office on Granting of the 18th China Patents Award (GUO ZHI FA GUAN ZI [2016] No. 95);
Note②: Special fund obtained according to the Circular of Market and Quality Supervision Commission of Shenzhen
Municipality on Issuing of the Financial Support Plan for the Special Fund for Shenzhen to Create Shenzhen Standards
2016 (SHEN SHI [2017] No. 141;
Note③: Fund for financing patent application received according to the Measures of Shenzhen for Management of the
Special Fund for Intellectual Property promulgated by Financial Commission of Shenzhen Municipality and Market and
Quality Supervision Commission of Shenzhen Municipality (SHEN CAI GUI [2014] No. 18;
Note④: The Allowance for BaselWorld 2016 provided by Shenzhen Watchmakers Association;
Note⑤: Subsidy for Improving Internationalized Operation Ability 2016 according to the Circular of Economy, Trade and
Information Commission of Shenzhen Municipality on Publicity of the 11th to 17th Batches of the Subsidy for Supporting the
Improvement of Internationalized Operation Ability 2016 (SHEN JING MAO XINXI YUSUAN ZI [2017] No. 48;
Note⑥: Subsidy for Improving Internationalized Operation Ability 2016 according to the Circular of Economy, Trade and
Information Commission of Shenzhen Municipality on Publicity of the 11th to 17th Batches of the Subsidy for Supporting the
Improvement of Internationalized Operation Ability 2016 (SHEN JING MAO XINXI YUSUAN ZI [2017] No. 48;
Note⑦: Special Financial Support for Self-Innovation Industry Development of Nanshan District according to the Measures
of Nanshan District on Management of the Special Fund for Self-Innovation Industry Development;
Note⑧: Special fund obtained according to the Circular of Market and Quality Supervision Commission of Shenzhen
Municipality on Issuing Issuing of the Financial Support Plan for the Special Fund for Shenzhen to Create Shenzhen
Standards 2016 (SHEN SHI [2017] No. 141;
Note⑨: Financial support with innovation bonds obtained according to the Circular on the Result of Accepting Science &
Technology Innovation Bonds (SHEN KEJI CHUANGXIN JUAN JI ZI [2016] No. 2468.
Note⑩: Special fund obtained according to the Circular of Market and Quality Supervision Commission of Shenzhen
Municipality on Issuing of the Financial Support Plan for the Special Fund for Shenzhen to Create Shenzhen Standards
2016 (SHEN SHI [2017] No. 141.
71. Non-operating expenses
In CNY
Amount counted to the
Amount incurred in the Amount incurred in the
Items current non-operating gain
reporting period previous period
and loss
Total loss from disposal of
16,923.50 94,833.03 16,923.50
non-current assets
including: loss from disposal
16,923.50 94,833.03 16,923.50
of fixed assets
Outward donation 3,000.00 300,000.00 3,000.00
Others 658,190.44 134,135.99 658,190.44
Total 678,113.94 528,969.02
72. Income tax expense
(1) Income tax expenses
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Income tax expenses in the report
24,613,171.31 8,540,581.27
period
Deferred income tax expenses 1,352,213.69 7,239,132.27
Total 25,965,385.00 15,779,713.54
(2) Process of adjustment of accounting profit and income tax expense
In CNY
Items Amount incurred in the reporting period
Total profit 112,577,169.54
Income tax expense calculated based on the statutory/
28,144,292.39
applicable tax rate
Influence of different tax rates applicable to subsidiaries -5,385,034.16
Influence of adjustment of the income tax in the previous
-746,891.62
period
Influence of the non-offsetable costs, expenses and loss 1,071,489.57
Influence from use of the offsetable loss from the deferred
0.00
income tax asset not recognized in the previous period
Influence from the offsetable provisional difference or
offsetable loss of the unrecognized deferred income tax 4,646,212.97
asset at the end of the reporting period
Profit/loss of joint ventures and associates calculated
-47,217.97
according to the equity method.
Influence from the addition of the R & D expenses upon
-1,717,466.18
deduction of tax payment (to be stated with “-“)
Income tax expenses 25,965,385.00
73. Other comprehensive income
For the detail, refer to Note X.57.
74. 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 8,162,746.84 8,451,835.60
Government subsidy 2,778,043.00 1,315,000.00
Deposit in security 1,420,812.66 1,454,782.40
Interest income 1,489,867.45 1,755,470.96
Reserve 1,707,688.82 63,375.00
Others 4,241,136.02 438,659.98
Total 19,800,294.79 13,479,123.94
(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 45,369,388.21 31,982,263.58
Rent 34,532,393.41 32,846,280.51
Payment to supermarkets 30,701,374.17 25,425,759.57
R & D expenses 16,962,271.89 15,484,698.94
Advertisement 12,310,866.95 17,028,769.36
Exhibition fee 10,307,276.23 6,070,786.86
Business travel 7,772,400.58 7,011,217.23
Packaging 6,046,492.43 6,555,952.03
Transportation 5,112,140.83 4,081,083.56
Office expenses 5,004,516.54 5,371,803.27
Others 8,541,131.17 10,192,445.00
Total 182,660,252.41 162,051,059.91
(3) Cash received from other investment related activities
Inapplicable
(4) Cash paid for other investment related activities
In CNY
Inapplicable
(5) Other financing related cash received
Inapplicable
(6) Other financing related cash paid
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Payment of the expenses in connection
0.00 971,661.19
with the raised capital
Others 0.00 21,008.00
Total 0.00 992,669.19
75. Supplementary information of the cash flow statement
(1) Additional information of the cash flow statement
In CNY
Supplemental 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 86,611,784.54 60,363,242.22
Plus: Reserve for impairment of assets 12,783,689.30 1,441,224.55
Depreciation of fixed assets, depletion
of oil and gas asset, depreciation of 21,936,993.35 17,832,320.29
productive biological asset
Amortization of intangible assets 1,594,234.34 702,150.52
Long-term expenses to be apportioned 54,065,432.58 56,454,986.83
Loss (income is stated in “-“) from
disposal of fixed assets, intangible assets 13,352.95 83,873.03
and other long term assets
Financial expenses (income is stated
23,246,930.51 33,210,251.79
with “-“)
Investment loss (income is stated with
-188,871.89 -172.19
“-“)
Decrease of the deferred income tax
1,352,213.69 7,239,132.27
asset (increase is stated with “_”)
Decrease of inventories (Increase is
93,091,588.65 102,198,794.50
stated with “-“)
Decrease of operative items receivable
-12,212,990.56 -18,426,361.60
(Increase is stated with “-“)
Increase of operative items payable
-5,578,696.93 -43,489,709.67
(Decrease is stated with “-“)
Net cash flow arising from operating
276,715,660.53 217,609,732.54
activities
2. Significant investment and
fund-raising activities with no cash -- --
income and expenses involved:
3. Net change in cash and cash
-- --
equivalents:
Ending balance of cash 383,649,003.87 497,096,980.62
Less: Opening balance of cash 427,227,755.81 637,387,875.93
Net increase in cash and cash
-43,578,751.94 -140,290,895.31
equivalents
(2) Net cash paid for acquisition of subsidiary in the reporting period
Inapplicable
(3) Net cash received from disposal of subsidiary in the reporting period
Inapplicable
(4) Composition of cash and cash equivalents
In CNY
Items Ending balance Opening balance
I. Cash 383,649,003.87 427,227,755.81
Incl: Cash in hand 627,500.28 1,342,735.40
Bank deposit available for
383,015,982.73 495,748,724.36
payment at any time
Other monetary fund used for
5,520.86 5,520.86
payment at any time
Due from the central bank
available for payment
Due from banks
Interbank offer
II. Cash equivalents
Where: investment in bonds due within
3 months
III. Ending balance of cash and cash
383,649,003.87 427,227,755.81
equivalents
Including: cash and cash equivalents
restricted for use from the parent
company or other subsidiaries of the
Group
76. Notes to items of statement of change in owner’s equity
Inapplicable
77. Assets restricted in ownership or use right
In CNY
Items Book value at the end of the period Cause of being restricted
Monetary fund 1,575,000.00 Deposit for L/G
Fixed assets 19,901,217.68 Security guarantees
Total 21,476,217.68 --
78. Foreign currency monetary items
(1) Foreign currency monetary items
In CNY
Ending balance of foreign Ending balance of Renminbi
Items Conversion rate
currency converted
Monetary fund -- -- 28,179,213.27
Including: USD 1,229,923.05 6.7744 8,331,990.71
Euro 1,041.45 7.7496 8,070.82
HKD 20,991,536.32 0.86792 18,218,974.20
CHF 226,475.15 7.0888 1,605,437.04
S.＄ 3,000.00 4.9135 14,740.50
Accounts receivable -- -- 10,520,137.51
Including: USD 345,493.67 6.7744 2,340,512.32
Euro 0.00 7.7496 0.00
HKD 9,307,096.02 0.86792 8,077,814.78
CHF 14,362.15 7.0888 101,810.41
Other receivables 5,348,368.49
Including: HKD 333,016.50 0.86792 289,031.68
CHF 713,708.50 7.0888 5,059,336.81
Accounts payable 3,382,217.77
Including: HKD 1,510,671.63 0.86792 1,311,142.12
CHF 292,161.67 7.0888 2,071,075.65
Other payables 6,627,160.00
Including: HKD 1,459,593.93 0.86792 1,266,810.76
CHF 756,171.60 7.0888 5,360,349.24
Short-term Loan 144,942,640.00
Including: HKD 167,000,000.00 0.86792 144,942,640.00
Long-term Loan -- -- 5,615,155.89
Including: USD 0.00 6.7744 0.00
Euro 0.00 7.7496 0.00
HKD 139,800.78 0.86792 121,335.89
CHF 775,000.00 7.0888 5,493,820.00
(2) Note to overseas operating entities, including important overseas operating entities, wich
should be disclosed about its principal business place, function currency for bookkeeping and
basis for the choice. In case of any change in function currency, the cause should be disclosed.
Inapplicable
79. Hedging
Inapplicable
80. Others
Inapplicable
VIII. Change in consolidation scope
1. Consolidation of enterprises not under common control
(1) Consolidation of enterprises not under common control during the reporting period
Inapplicable
(2) Consolidation cost and goodwill
Inapplicable
(3) Purchasee's distinguishable assets and liabilities as at the date of purchase
Inapplicable
(4) Profit or loss of the equity held before the date of purchase arising from re-measurement
based on the fair value
Yes
(5) Note to the consolidation consideration or the fair value of the distinguishable assets and
liabilities of the purchasee which cannot be reasonably identified as at the date of purchase or at
the end of the very period of consolidation
Inapplicable
(6) Other note
Inapplicable
2. Consolidation of enterprises under the common control
(1) Consolidation of enterprises under the common control during the reporting period
Inapplicable
(2) Consolidation costs
Inapplicable
(3) Book value of the consolidatee's assets and liabilities as at the date of consolidation
Inapplicable
3. Counter purchase
Inapplicable
4. Disposal of subsidiaries
Does there exist any such situation that a single disposal may cause the control power over the investment in a subsidiary
lost?
No
Does there exist any such situation that disposal in steps through a number of transactions may cause the control power
over the investment in a subsidiary lost during the reporting period?
No
5. Change of consolidation scope due to other reason
Specify the change of the consolidation scope caused by other reasons (such as establishment of a new subsidiary,
liquidation of a subsidiary, etc.) and the relevant situation:
Inapplicable
6. Others
Inapplicable
IX. Equity in other entities
1. Equity in a subsidiary
(1) Composition of an enterprise group
Main business Place of Nature of Shareholding ratio Way of
Subsidiaries
location registration business Direct Indirect acquisition
Establishment
HARMONY Shenzhen Shenzhen Commerce 100.00%
or investment
Manufacture Establishment
Shenzhen Shenzhen Manufacture 90.00% 10.00%
Co. or investment
FIYTA (Hong Establishment
Hong Kong Hong Kong Commerce 100.00%
Kong) Limited or investment
Establishment
Station 68 Hong Kong Hong Kong Commerce 60.00%
or investment
Harbin Establishment
Harbin Harbin Commerce 25.00% 75.00%
Company or investment
Henglianda Establishment
Beijing Beijing Commerce 100.00%
Company or investment
Technology Establishment
Shenzhen Shenzhen Manufacture 100.00%
Company or investment
Shiyuehui Establishment
Shenzhen Shenzhen Commerce 100.00%
Company or investment
Culture Establishment
Shenzhen Shenzhen Commerce 100.00%
Company or investment
Emile Choureit Establishment
Shenzhen Shenzhen Commerce 100.00%
(Shenzhen) Ltd. or investment
World Watch Establishment
Hong Kong Hong Kong Commerce 100.00%
International Co. or investment
Establishment
FIYTA Sales Co. Shenzhen Shenzhen Commerce 100.00%
or investment
Consolidation of
enterprises
Hengdarui Co. Shenyang Shenyang Commerce 100.00%
under the
common control
Consolidation of
Switzerland enterprises not
Switzerland Switzerland Commerce 100.00%
Company under the
common control
Nature Art
Hong Kong Hong Kong Commerce Note ①
Limited
Note to the proportion of shareholding in a subsidiary different from the proportion of voting power:
Note: ① According to the equity trust agreement concluded among Station 68 and Nature Art Limited, two subsidiaries of
FIYTA (Hong Kong) Limited and the trustee of Baoding Company on December 10, 2009, Station 68, as the trustor, held
shares, benefitial right of equity and other relevant rights in Nature Art Limited and Baoding Company. According to the
contract, the trustee agreed to transfer its rights at any time as ordered by the truster, Station 68 therefore held the control
power over Nature Art Limited and Boading Company and therefore they were brought into the consolidation scope of
Station 68. Baoding Company was cancelled in year 2015.
Basis of holding less than a half of the voting power but still controlling the investee and holding more than a half of the
voting power but not controlling the investee:
Inapplicable
Basis of an important structurized entity being brought to the consolidation scope and being controlled:
Inapplicable
Basis of distinguishing an agent from consignor:
Inapplicable
Other note:
Inapplicable
(2) Important non-wholly-owned subsidiaries
Inapplicable
(3) Key financial information of important non-wholly-owned subsidiaries
Inapplicable
(4) Significant restriction on use of enterprise group’s assets and paying off the enterprise
group’s liabilities
Inapplicable
(5) Financial support or other support provided to the structured entities incorporated in the
scope of consolidated financial statements
Inapplicable
2. Transaction with a subsidiary with the share of the owner’s equity changed but still under
control
(1)Note to change in the share of the owner's equity in subsidiaries
Inapplicable
(2) Affect of the transaction on the minority equity and owner's equity attributable to the parent
company
Inapplicable
3. Equity in joint venture arrangement or associates
(1) Important joint ventures or associates
Shareholding proportion Accounting
treatment
Name of joint Principal
Place of method for
venture or business Business nature
registration Direct Indirect investment in
associate location
joint ventures or
associates
①Associate
Shanghai Watch
Shanghai Shanghai Manufacture 25.00% Equity method
Industry
Note to the proportion of the shareholding in a joint venture or an associate different from voting power therein:
Inapplicable
Basis of holding below 20% voting power but having significant influence or holding more than 20% voting power but not
having significant influence
(2) Key financial information of important joint ventures
Inapplicable
(3) Key financial information of important associates
In CNY
Ending balance/amount incurred in the Opening balance/amount incurred in
reporting period the reporting period
Current assets 89,233,112.52 85,987,663.95
Non-Current Assets 18,805,076.49 19,468,754.45
Total assets 108,038,189.01 105,456,418.40
Current liabilities 9,083,577.19 7,546,723.24
Total liabilities 9,083,577.19 7,546,723.24
Shareholders’ equity attributable to the
98,954,611.82 97,909,695.16
parent company
Share of net assets calculated
according to the shareholding 24,738,652.96 24,477,423.79
proportion
Book value of the equity investment in
43,612,496.76 43,423,624.87
associates
Revenues 43,499,754.20 38,165,667.56
Net profit 755,487.55 688.77
Total comprehensive income 755,487.55 688.77
Dividends received from associates in
0.00 0.00
the current year
(4) Financial information summary of unimportant joint ventures and associates
Inapplicable
(5) Note to significant restriction on the competence of a joint venture or an associate in
transferring funds to the Company
Inapplicable
(6) Excessive loss incurred to a joint venture or an associate
Inapplicable
(7) Unrecognized commitment in connection with investment in a joint venture
Inapplicable
(8) Contingent liabilities in connection with investment in joint ventures or associates
Inapplicable
4. Important joint operation
Inapplicable
5. Equity in the structurized entities not incorporated in the consolidated financial statements
Inapplicable
6. Others
Inapplicable
X. Financial instruments and risk management
The Company’s major financial instruments consist of monetary funds, accounts receivable, notes receivable, other
receivables, other current assets, available-for-sale financial assets, accounts payable, interest payable, dividend payable,
other payables, short term loan, non-current liabilities due within a year, long term loan, bonds payable. The detailed
information about various financial instruments has been disclosed in the corresponding notes. The risks involved in these
financial instruments and the Company’s risk control policies aiming at reducing these risks are stated as follows. The
Company’s management conducts management and monitoring of these risk exposures so as to ensure risks to be
controlled within a specific limitation.
1. Risk management goals and policies
The goal of risk management is to keep proper balance between risk and profit, to reduce negative influence of financial
risk to financial performance of the Company. Based on the goal, the Company has formulated risk management policies to
identify and analyze risks the Company faces, set proper acceptable risk level and design relevant internal control
procedures, to supervise risk level. The Company will regularly review those risk management policies and relevant internal
control system, to adapt to market situation and change of operating activities. The internal audit department of the
Company will also regularly or randomly check whether the execution of internal control system complies with risk
management policies.
Main risks financial instruments of the Company may lead to include credit risks, liquidity risk, market risk, etc.
(1)Credit risk
Credit risk refers to the risk of financial loss of the Company caused due to default of contract obligation of transaction
counterparty.
The Company manages credit risk by portfolio. Credit risk mainly arises from bank deposit and accounts receivable.
Bank deposit of the Company is mainly in state-owned banks and other large and medium listed banks. There are no
significant credit risks of estimated bank deposits.
As for accounts receivable, the Company sets relevant policies to control credit risk exposure. Based on the financial status
of debtor, external rating, guarantee possibility, credit record gained from the third party and other factors such as current
market status, the Company evaluates credit qualification of debtor and set corresponding debt limit and credit period. The
Company will regularly supervise credit record of debtor. For debtor with bad credit record, the Company will ensure the
whole credit risk of the Company within controllable range in the forms of written reminder letter, reducing credit period and
cancelling credit period.
The biggest credit risk exposure undertaken by the Company is carrying amount of each financial asset in balance sheet.
The Company sets guarantees to any other credit risks that the Company may bear.
Amount accounts receivable, the total accounts receivable of top 5 accounts with amount in arrear account for 9.64% of
total accounts receivable of the Company (as at December 31, 2016: 7.32%); in other accounts receivable, the total
accounts receivable of top 5 accounts with amount in arrear account for 19.86% of total accounts receivable of the
Company (as at December 31, 2016: 22.06%).
(2) Liquidity risk
Liquidity risk refers to risk of capital shortage caused when the Group executes obligations of settlement in the manner of
cash payment or other financial assets.
In managing liquidity risk, the Group keeps the cash and cash equivalents that the Group deems sufficient and controls
them to meet operating needs, reduce influence of cash liquidity fluctuation. The Group management monitors the use of
bank loans and ensures to comply with borrowing agreement. At the same time, the Group gains the commitment for
providing sufficient reserve funds from main financial institutions, to meet short-term and long-term capital needs.
The Group finance operation funds through capital and bank and other borrowings incurred in operating business. As at
June 30, 2017, bank borrowing facility that the Group has not yet used is CNY 2,171.68 million (as at December 31, 2016:
CNY 1,742.30 million).
Maturity analysis of financial liabilities and off-balance-sheet guarantee items by undiscounted remaining contract cash flow
at the end of the period (in CNY 10,000):
Items Within a year 1 to 2 years 2 to 3 years Over 3 years Total
Financial assets:
Monetary funds 38,522.40 - - - 38,522.40
Notes receivable 1,197.88 - - - 1,197.88
Accounts receivable 32,926.32 - - - 32,926.32
Other receivables 4,462.41 - - - 4,462.41
Subtotal of financial assets 77,109.01 0 0 0 77,109.01
Financial Liabilities:
Short-term Loan 91,907.82 - - - 91,907.82
Accounts payable 19,948.83 - - - 19,948.83
Interest payable 209.01 - - - 209.01
Other payables 6,431.12 - - - 6,431.12
Other current liabilities (with 1,077.66 - - - 1077.66
deferred income exclusive)
Non-current liabilities due 2,150.00 - - - 2,150.00
within a year
Long term borrowings - 3,398.42 5,100.00 1,295.57 9,793.99
Financial guarantee 30,200.00 - - - 30,200.00
Total financial liabilities and 151,924.44 3,398.42 5,100.00 1,295.57 161,718.43
contingent liabilities
Maturity analysis of financial liabilities and off-balance-sheet guarantee projects held by the Group in the prior period
according to cash flow of undiscounted remaining contracts (in CNY 10,000):
Items Within a year 1 to 2 years 2 to 3 years Over 3 years Total
Financial assets:
Monetary funds 42,880.28 - - - 42,880.28
Notes receivable 766.26 - - - 766.26
Accounts receivable 31,421.28 - - - 31,421.28
Other receivables 3,543.71 - - - 3,543.71
Subtotal of financial assets 78,611.53 - - - 78,611.53
Financial Liabilities:
Short-term Loan 109,843.81 - - - 109,843.81
Accounts payable 21,542.21 - - - 21,542.21
Interest payable 247.60 - - - 247.60
Other payables 5,373.31 - - - 5,373.31
Other current liabilities (with 237.91 - - - 237.91
deferred income exclusive)
Non-current liabilities due 2,611.74 - - - 2,611.74
within a year
Long term borrowings - 3,500.00 3,500.00 4,530.10 11,530.10
Financial guarantee 22,566.53 - 13,789.02 36,355.55
Total financial liabilities and 162,423.11 3,500.00 17,289.02 4,530.10 187,742.23
contingent liabilities
The amount of financial liability disclosed in the above table is undiscounted contract cash flow and thus may be different
with the carrying amount of balance sheet.
(3) Market risk
Market risk refers to the risk of fluctuation of fair value or future cash flow of financial instruments caused due to market
price change, including interest risk, exchange rate risk and other price risk.
Interest risk
Interest risk refers to the risk of fluctuation of fair value or future cash flow of financial instruments caused due to interest
change. Interest risk may arise from confirmed interest accrual financial instrument and unconfirmed financial instrument
(such as some loan commitments)
The interest risk of the Company mainly arises from long-term bank loans and bonds payable and long-term
interest-bearing debt. Financial liabilities with floating rate lead the Company to cash flow interest risk. Fixed interest rate
financial liabilities lead the Company to fair value interest risk. According to current market environment the Company
determines the proportion of fixed interest and floating interest rate contract, maintaining proper fixed and floating interest
instrument combination through regular review and supervision.
As at June 30, 2017, if borrowing rate measured at floating rate rises or drops 50 base points, and other factors keep
unchanged, net profit and shareholders’ equity of the Company will decrease or increase about CNY 0.6465 million (As at
December 31, 2016: CNY 1.4416 million)
Exchange rate risk
Exchange rate risk refers to the risk of fluctuation of fair value or future cash flow of financial instruments caused due to
exchange rate change. Exchange rate risk may arise from the financial instrument measured at foreign currencies other
than recording currency.
The Company's main business activities are is within the territory of the People's Republic of China, and main businesses
are settled in Renminbi. Therefore, the market risk of exchange fluctuations undertaken by the Company is not significant.
For the detail of financial assets and financial liabilities in foreign currencies at the end of the reproting period, refer to Note
VII.78 - Note to Items in Foreign Currencies.
2. Capital management
The capital management policies of the Company are formulated to guarantee the Company can keep operation, and thus
provide returns to shareholders and benefit other stakeholders, and at the same time to keep the optimal capital structure to
reduce capital cost.
To keep or adjust capital structure, the Company may adjust amounts of dividends paid for shareholders, return capital to
shareholders, issue new shares or sell assets to reduce debts.
The Company supervises capital structure based on asset liability ratio (total liabilities divided by total assets). As at June
30, 2017, the asset-liability ratio of the Company is 36.94% (as at December 31, 2016: 40.70%).
XI. Disclosure of Fair Value
1. Fair value at the end of the reporting period of the assets and liabilities measured based on the
fair value
Inapplicable
2. Basis for determining the market price of the items measured based on the continuous and
non-continuous first level fair value
Inapplicable
3. Items measured based on the continuous or uncontinuous 2nd level fair value, valuatoin
technique as used, nature of important parameters and quantitative information
Inapplicable
4. Items measured based on the continuous or uncontinuous 3rd level fair value, valuatoin
technique as used, nature of important parameters and quantitative information
Inapplicable
5. Items measured based on the continuous 3rd level fair value, sensitivity analysis on adjusted
information and unobservable parameters between the book value at beginning and end of the
period
Inapplicable
6. In case items measured based on fair value are converted between different levels incurred in
the current period, state the cause of conversion and determine conversion time point
Inapplicable
7. Change of valuation technique incurred in the current period and cause of such change
Inapplicable
8. Fair value of financial assets and financial liabilities not measured at fair value
The Company's financial assets and liabilities measured based on the amortized cost mainly include: monetary capital,
notes receivable, accounts receivable, other receivables, short term borrowings, notes payable, accounts payable, other
payables and long term accounts payable, etc.
The difference between the book value of financial assets and financial liabilities that are not measured at fair value and fair
value is very small.
9. Others
As at June 30, 2017, there existed no asset and liability measured based on the fair value.
XII. Related parties and transactions
1. Details of the parent company of the Company
Shareholding ratio Ratio of vote right
Name of the parent Place of
Nature of business Registered capital of parent company of parent company
company registration
to the Company to the Company
Investment in
industries,
AVIC International
Shenzhen domestic trade, 116,616.1996 37.15% 37.15%
Holdings
material supply
and distribution
Note to the parent company of the Company:
Note:
CATIC Shenzhen holds 33.93% of the shares in AVIC International Holdings. CATIC Shenzhen is a wholly owned
subsidiary of CATIC International, and China Aviation Industry Corporation (AVIC) directly holds 62.52% of the equity of
CATIC International. Therefore, the eventual controller of the Company is AVIC.
The Company’s eventual controller is Aviation Industry Corporation of China.
2. Subsidiaries of the Company
Refer to Note IX. 1 for details of subsidiaries of the Company
3. Joint venture and association of the Company
Refer to NOTE IX.3 for details of the Company's major joint ventures or associates.
4. Other related parties of the Company
Relationship between other related parties and the
Names of other related parties
Company
CATIC Property Management Co., Ltd.(CATIC Property) Controlled by the same party
Shenzhen CATIC Building Technology Co., Ltd.(CATIC
Controlled by the same party
Building)
Rainbow Supermarket Co., Ltd. (Rainbow Supermarket ) Controlled by the same party
Shennan Circuits Co., Ltd. (Shennan Circuits) Controlled by the same party
CATIC Real Estate Co., Ltd. (CATIC Real Estate) Controlled by the same party
CATIC Securities Co., Ltd.(CATIC 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
Controlled by the same party
Nanguang )
Shenzhen CATIC City Property Development Co.,
Controlled by the same party
Ltd.(CATIC City Property)
Shenzhen CATIC City Development Co., Ltd.(CATIC City
Controlled by the same party
Development)
Shenzhen CATIC Guanlan Property Development Co.,
Controlled by the same party
Ltd.(Guanlan Property )
Shenzhen CATIC Changtai Investment Development Co.,
Controlled by the same party
Ltd.(CATIC Changtai)
Shenzhen CATIC 9 Square Assets Management Co., Ltd.(9
Controlled by the same party
Square Assets)
Shenzhen CATIC City Investment Co., Ltd.(CATIC City
Controlled by the same party
Investment)
Chengdu CATIC Real Estate Development Co.,
Controlled by the same party
Ltd.(Chengdu CATIC Real Estate)
CATIC Electronic Measuring Instruments Co., Ltd(CATIC
Controlled by the same party
Electronic Measuring Instruments)
Shenzhen CATIC Theme Real-estate Co., Ltd (CATIC
Controlled by the same party
Theme Real-estate)
Shenzhen CATIC Group Enterprise Training Center Controlled by the same party
Ganzhou CATIC 9 Square Commerce Co., Ltd.(Ganzhou 9
Controlled by the same party
Square)
Jiujiang CATIC City Real Estate Development Co.,
Controlled by the same party
Ltd.(Jiujiang CATIC Real Estate)
CATIC City Property (Kunshan) Co., Ltd.(CATIC City
Controlled by the same party
Property (Kunshan))
Shenzhen CATIC Huacheng Real Estate Co., Ltd.(CATIC
Controlled by the same party
Huacheng Property )
Shenzhen CATIC Curtain Wall Engineering Co., Ltd.
Controlled by the same party
(CATIC Curtain Wall Engineering )
AVIC Finance Co., Ltd. (AVIC Finance ) Controlled by the same party
Shenzhen CATIC Property Assets Management Co., Ltd.
Controlled by the same party
(CATIC Assets Management Co.)
Jiujiang 9 Square Commerce Management Co., Ltd. (9
Controlled by the same party
Square Commerce Management Co.)
Shenzhen CATIC City Grand Skylight Hotel Co., Ltd.
Controlled by the same party
(Grand Skylight Hotel Co.)
FIYTA Technology Building Management Office of CATIC
Property Management Co., Ltd. (CATIC Property Controlled by the same party
Management Office)
CBD Branch of CATIC Property Management Co., Ltd.
Controlled by the same party
(CBD Branch of CATIC Property)
Xu Dongsheng A senior executive
Wang Mingchuan A senior executive
Fu Debin A senior executive
Zhong Sijun A senior executive
Cao Zhen A senior executive
Chen Libin A senior executive
Zhang Hongguang A senior executive
Zhang Shunwen A senior executive
Wang Yan A senior executive
Wang Baoying A senior executive
Sheng Qing A senior executive
Wang Jingqi A senior executive
Lu Bingqiang A senior executive
Lu Wanjun A senior executive
Liu Xiaoming A senior executive
Pan Bo A senior executive
Li Ming A senior executive
Chen Zhuo A senior executive
5. Related transactions
(1) Related transactions of purchase and sale of commodities and supply and acceptance of labor
services
Statement of purchase of commodities and acceptance of labor services
In CNY
Amount incurred
Details of related Transaction quota Has it exceeded the Amount incurred in
Related party in the reporting
transaction approved transaction quota prior period
period
Rainbow Shopping mall
2,529,676.00 6,000,000.00 No 804,897.94
Supermarket expenses
Property
CATIC Property 3,912,604.61 8,000,000.00 No 1,356,331.47
management fee
CATIC
International Investment in
Shenzhen and its construction-in-pr 0.00 5,000,000.00 No 890,979.82
controlling ocess
shareholder
Shenzhen CATIC Training at
Group Training Managers' 0.00 500,000.00 No 0.00
Center College
Statement of sales of goods/supply of labor services
In CNY
Description of related Amount incurred in the
Related parties Amount incurred in prior period
transaction reporting period
Rainbow Supermarket Products and labor service 37,311,632.36 35,378,435.06
AVIC Sales of products 0.00 92,208.55
Shennan Circuit Co. Sales of materials 1,074,050.91 3,326,724.20
Shenzhen Grand Skylight
Sales of products 2,564.10 0.00
Hotel
(2) Related entrusted management/contracted and mandatory management/contracting
Inapplicable
(3) Related lease
The Company as lessor:
In CNY
Categories of leasehold Rental income recognized in Rental income recognized in
Names of lessees
properties the current period prior period
CATIC Real Estate Building 679,371.90 800,003.94
CATIC Property Building 3,213,521.33 3,745,420.80
CATIC Securities Building 584,228.58 578,548.58
CATIC City Property Building 218,555.04 292,804.66
CATIC City Development Building 8,878.07 11,834.37
Guanlan Property Building 40,199.53 47,337.51
Skytel Hotel Building 2,095,238.09 2,300,000.00
Rainbow Supermarket Building 262,440.80 242,761.30
9 Square Assets Building 192,879.08 178,932.00
CATIC City Investment Building 547,184.70 729,392.16
CATIC Huacheng Property Building 165,498.96 221,560.96
Company as a lessee:
In CNY
Rental expenses charged in Rental expenses charged in
Name of lessor Type of leased assets
current period prior period
CATIC Changtai Building 176,273.10 142,709.78
CATIC City Property
Building 101,827.56 93,690.83
(Kunshan)
Chengdu CATIC Real Estate Building 0.00 400.00
(4) Related guarantee
The Company as a guarantor
In CNY
If the guarantee
Guarantees Amount guaranteed Effective date Expiring date
finished?
HARMONY 85,000,000.00 December 30, 2016 December 29, 2017 No
FIYTA Hong Kong 3,936,240.00 October 14, 2016 October 31, 2017 No
FIYTA Hong Kong 3,936,240.00 November 24, 2016 October 31, 2017 No
FIYTA Hong Kong 20,118,560.00 September 7, 2016 October 31, 2017 No
FIYTA Hong Kong 8,747,200.00 May 23, 2017 May 23, 2018 No
FIYTA Hong Kong 43,736,000.00 August 3, 2016 June 24, 2017 No
FIYTA Hong Kong 65,604,000.00 July 4, 2016 June 24, 2017 No
The Company as the guarantee
In CNY
If the guarantee
Guarantors Amount guaranteed Effective date Expiring date
finished?
CATIC International 10,000,000.00 2015 年 01 月 08 日 June 24, 2020 No
CATIC International 9,361,928.00 2014 年 09 月 05 日 June 24, 2020 No
CATIC International 20,000,000.00 2015 年 01 月 26 日 June 24, 2020 No
CATIC International 6,000,000.00 2015 年 05 月 27 日 June 24, 2021 No
CATIC International 10,000,000.00 2015 年 10 月 28 日 June 24, 2021 No
CATIC International 7,000,000.00 2015 年 12 月 01 日 December 24, 2021 No
CATIC International 15,000,000.00 2016 年 01 月 26 日 June 24, 2022 No
CATIC International 10,000,000.00 2016 年 01 月 18 日 December 24, 2021 No
CATIC International 2,000,000.00 2016 年 04 月 20 日 June 24, 2022 No
CATIC International 7,500,000.00 2016 年 05 月 05 日 December 24, 2022 No
CATIC International 17,000,000.00 2016 年 05 月 19 日 June 24, 2023 No
HARMONY 50,000,000.00 2016 年 10 月 24 日 October 19, 2019 No
(5) Borrowings and lendings among related parties
Inapplicable
(6) Assets assignment and liabilities reorganization of related parties
Inapplicable
(7)Remuneration to senior executives
In CNY
Description Amount incurred in the reporting period Amount incurred in the previous period
Remuneration to senior executives 6,545,286.00 4,230,100.00
(8) Other related transactions
Inapplicable
6. Accounts receivable from and payable to related parties
(1) Receivables
In CNY
Ending balance Opening balance
Description Related parties
Book balance Bad debt provision Book balance Bad debt provision
Accounts Rainbow
5,344,761.80 267,238.09 9,332,325.17 466,616.26
receivable Supermarket
Shennan Circuit
315,019.86 15,750.99 555,224.70 27,761.24
Co.
CATIC Property 504,166.45 25,208.32 0.00 0.00
Ganzhou 9 Square
93,003.00 4,650.15 0.00 0.00
Co.
Shennan Circuit
Notes receivable 415,271.13 0.00 854,616.60 0.00
Co.
Rainbow
Other receivables 802,380.00 40,119.00 687,471.00 34,373.55
Supermarket
Ganzhou 9 Square
122,665.60 61,332.80 122,665.60 6,133.28
Co.
CATIC Changtai 50,000.00 2,500.00 50,000.00 2,500.00
Jiujiang CATIC
0.00 0.00 50,000.00 2,500.00
Real Estate Co.
CATIC City
Property 42,120.00 2,106.00 42,120.00 2,106.00
(Kunshan)
Shenzhen CATIC
Group Enterprise 150,000.00 7,500.00 0.00 0.00
Training Center
Grand Skylight
32,000.00 1,600.00 32,000.00 1,600.00
Hotel
(2) Payables
In CNY
Description Related parties Ending book balance Opening book balance
Advance receipt CATIC Real Estate 0.00 133,848.00
Guanlan Real Estate 0.00 7,920.00
CATIC City Development 0.00 1,980.00
Other payables CATIC Property 472,032.00 1,993,817.45
CATIC Real Estate 424,800.00 424,800.00
CATIC City Investment 244,068.00 244,068.00
CATIC Securities 187,440.00 187,440.00
CATIC Building 89,289.47 103,424.92
CATIC City Property 97,912.32 97,912.32
CATIC Huacheng Property 73,819.68 73,819.68
9 Square Assets 66,666.60 66,666.60
Rainbow Supermarket 60,000.00 60,000.00
CATIC City Development 3,960.00 3,960.00
7. Related parties’ commitments
Inapplicable
8. Others
The Group’s outstanding of deposits with AVIC Finance at the end of the reporting period amounted to CNY 99,922,763.94,
of which the interest of the deposit received in the reporting period amounted to CNY 15,245.11.
XIII. Stock payment
1. General of stock payment
Inapplicable
2. Stock payment for equity settlement
Inapplicable
3. Stock payment for cash settlement
Inapplicable
4. Correction and termination of stock payment
Inapplicable
5. Others
Inapplicable
XIV. Commitments and contingencies
Important commitments existing as at the balance sheet day
(1) Operating lease commitment
Implementation of irrevocable operating lease contract signed by the Company ended the balance sheet date is as follows:
Items Ending balance Opening balance
Minimum rent payment for irrevocable operational lease
1st year after the balance sheet day 17,541,276.92 32,454,718.47
2nd year after the balance sheet day 13,798,395.91 14,752,206.79
3rd year after the balance sheet day 3,491,656.79 3,856,133.62
Subsequent years 3,339,900.00 3,353,900.00
Total 38,171,229.62 54,416,958.88
(2) Other commitments
There existed no other significant commitments necessary to be disclosed ended June 30, 2017.
2. Contingencies
(1) Significant contingencies existing as at the balance sheet day
① Contingent liabitlies arising from debt guarantee for other organizations and the consequent affect on the finance.
For the details about the outward guarantees to various companies within the consolidation and the mutual guarantees with
the parent company and subsidiaries, refer to Note XII.5(4).
② Other contingent liabilities and the financial influence
There existed no other contingenies necessary to be disclosed ended June 30, 2017.
(2) Important contingencies unnecessary to be disclosed but necessary to be explained
There existed no such contingencies in the Company.
3. Others
Inapplicable
XV. Events after balance sheet day
1. Significant non-adjustment events
Inapplicable
2. Profit distribution
Inapplicable
3. Sales return
Inapplicable
4. Note to other matters after the balance sheet date
The 18th session of the Eight Board of Directors held on August 11, 2017 reviewed and approved the Proposal for
Conclusion of Financial Service Agreement with AVIC Finance Co., Ltd. according to which the Company was to conclude a
new Financial Service Agreement with AVIC Finance Co., Ltd.. For the detail, refer to the Announcement on Conclusion of a
Financial Service Agreement with AVIC Finance Co., Ltd., a Related Transaction (Announcement No. 2017-036)
XVI. Other significant events
1. Correction of the accounting errors in the previous period
(1) Retroactive restatement
Inapplicable
(2) Prospective application
Inapplicable
2. Debt restructuring
Inapplicable
3. Replacement of assets
(1) Non-monetary assets exchange
Inapplicable
(2) Other assets exchange
Inapplicable
4. Pension plan
Inapplicable
5. Discontinuing operation
Inapplicable
6. Segment information
(1) Basis for determining the reporting segments and accounting policy
Inapplicable
(2) Financial information of the reporting segments
Inapplicable
(3) In case there is no reporting segment or the total assets and liabilities of the reporting
segments cannot be disclosed, explain the reason
There is no reporting segment in the Company.
(4) Other notes
Inapplicable
7. Other significant transactions and matters that may affect investors' decision making
Inapplicable
8. Others
Inapplicable
XVII. Notes to the parent company’s financial statements
1. Accounts receivable
(1) Disclosure of classification of accounts receivable
In CNY
Ending balance Opening balance
Provision for bad Provision for bad
Book Balance Book Balance
debt debt
Categories Book Book
Provisio
Proporti n value Amoun Proporti Provision value
Amount Amount Amount
on proporti t on proportion
on
Accounts
receivable grouped
based on the credit
1,804,03 100.00 13,473.4 1,790,55 269,46 100.00 13,473.4 255,995.6
risk characteristics 0.75% 5.00%
2.14 % 6 8.68 9.10 % 6 4
for which reserve
for bad debt is
provided
1,804,03 100.00 13,473.4 1,790,55 269,46 100.00 13,473.4 255,995.6
Total 0.75% 5.00%
2.14 % 6 8.68 9.10 % 6 4
Other receivables that are individually significant in amount and provided for bad debt separately at the end of period:
Inapplicable
In the portfolio, other receivables with provision for bad and doubtful debts based on aging analysis method:
In CNY
Ending balance
Age
Other receivables Provision for bad debt Provision proportion
Itemized based on those within 1 year
Sub-total within 1 year 1,804,032.14 13,473.46 0.75%
Total 1,804,032.14 13,473.46 0.75%
Note to the basis for determiing that portfolio:
Inapplicable
In the portfolio, other receivables with provision for bad and doubtful debts based on the balance percentage method:
Inapplicable
In the portfolio, other receivables with provision for bad and doubtful debts based on other method.
Inapplicable
(2) Bad debt provision accrual, received or reversed in current period
Inapplicable
(3) Other receivables actually written off in the current period
Inapplicable
(4) Acounts receivable attributable to the top five debtors of the ending balance
The total amount of the accounts receivable attributable to the top five debtors of the ending balance was CNY
1,568,110.34 taking 86.92% of the total ending balance of the accounts receivable and the total amount of the ending
balance for which reserve for bad debt was provided was CNY 13,473.46.
(5) Accounts receivable wich was determinated for recognition due to transfer of financial assets
Inapplicable
(6) Amount of assets and liabilities formed from transfer of the accounts receivable while
continued to be involved in
Inapplicable
2. Other receivables
(1) Disclosure of other receivables based on categories
In CNY
Categories Ending balance Opening balance
Provision for bad Provision for bad
Book Balance Book Balance
debt debt
Provisio Book Book
Proporti n value Amoun Proporti Provision value
Amount Amount Amount
on proporti t on proportion
on
Other receivables
for which bad debt
reserve has been 1,191,
952,827, 100.00 16,748.6 952,810, 100.00 16,748.6 1,191,947,
provided based on 0.00% 963,80 0.00%
552.19 % 7 803.52 % 7 054.57
the portfolio with 3.24
credit risk
characteristics
1,191,
952,827, 100.00 16,748.6 952,810, 100.00 16,748.6 1,191,947,
Total 0.00% 963,80 0.00%
552.19 % 7 803.52 % 7 054.57
3.24
Other receivables that are individually significant in amount and provided for bad debt separately at the end of period:
Inapplicable
In the portfolio, other receivables with provision for bad and doubtful debts based on aging analysis method:
In CNY
Ending balance
Age
Other receivables Provision for bad debt Provision proportion
Itemized based on those within 1 year
Sub-total within 1 year 1,351,886.99 16,748.67 1.24%
Total 1,351,886.99 16,748.67 1.24%
Note to the basis for determiing that portfolio:
Inapplicable
In the portfolio, other receivables with provision for bad and doubtful debts based on the balance percentage method:
Inapplicable
In the portfolio, other receivables with provision for bad and doubtful debts based on other method.
Name of portfolio Book Balance Provision for bad debt Provision proportion %
Portfolio of specific
951,475,665.20 - -
accounts
Based on historical experience, the Group’s receivables due from petty cash paid to employees, receivables due from
subsidiaries of the Company and accounts receivable for the sales between the last settlement date of the same
department store and the balance sheet date are with high recoverability and low possibility of incurring bad debt, as a
result, no bad debt provisions are provided for such receivables.
(2) Bad debt provision accrual, received or reversed in current period
Inapplicable
(3) Other receivables actually written off in the current period
Inapplicable
(4) Classification of the other receivables based on the nature of fund
In CNY
Nature of Payment Ending book balance Opening book balance
Dealings among related parties within the
950,818,139.55 1,191,058,623.23
consolidation scope
Reserve 657,525.65 737,693.28
Deposit in security 40,050.00 40,050.00
Others 1,311,836.99 127,436.73
Total 952,827,552.19 1,191,963,803.24
(5) Other receivables attributable to the top five debtors of the ending balance
In CNY
Proportion in total Ending balance of
Company names Nature of Payment Ending balance Age ending balance of the provision for
other receivables bad debts
HARMONY Current accounts 705,331,324.09 Within 1 year 74.03% 0.00
Sales Company Current accounts 165,486,164.76 Within 1 year 17.37% 0.00
Emile Choureit
Current accounts 61,622,278.94 Within 1 year 6.47% 0.00
(Shenzhen) Ltd.
Shiyuehui Company Current accounts 13,046,441.57 Within 1 year 1.37% 0.00
Technology
Current accounts 4,557,495.39 Within 1 year 0.48% 0.00
Company
Total -- 950,043,704.75 -- 99.71% 0.00
(6) Accounts receivable in connection with government subsidy
Inapplicable
(7) Other receivables derecognized due to transfer of financial assets
Inapplicable
(8) Amount of assets and liabilities formed due to transfer of other receivables and continuing to
be involved
Inapplicable
3.Long term equity investment
In CNY
Ending balance Opening balance
Items Impairment Impairment
Book Balance Book value Book Balance Book value
reserve reserve
Investment in 1,213,169,720.0 1,213,169,720.0 1,213,169,720.0 1,213,169,720.0
0.00 0.00
subsidiaries 0 0 0 0
Investment in
associates and 43,612,496.76 0.00 43,612,496.76 43,423,624.87 0.00 43,423,624.87
joint ventures
1,256,782,216.7 1,256,782,216.7 1,256,593,344.8 1,256,593,344.8
Total 0.00 0.00
6 6 7 7
(1) Investment in subsidiaries
In CNY
Provision
Ending balance
Opening Increase in the Decrease in the reserve
Investees Ending balance of the provision
balance reporting period reporting period provided in the
for impairment
reporting period
HARMONY 601,307,200.00 0.00 0.00 601,307,200.00 0.00
FIYTA Sales Co. 450,000,000.00 0.00 0.00 450,000,000.00 0.00
Manufacture Co. 9,000,000.00 0.00 0.00 9,000,000.00 0.00
Technology
10,000,000.00 0.00 0.00 10,000,000.00 0.00
Company
FIYTA (Hong
137,737,520.00 0.00 0.00 137,737,520.00 0.00
Kong) Limited
Shiyuehui
5,000,000.00 0.00 0.00 5,000,000.00 0.00
Company
Harbin Company 125,000.00 0.00 0.00 125,000.00 0.00
1,213,169,720. 1,213,169,720.
Total 0.00 0.00 0.00 0.00
00 00
(2) Investment in joint venture and associates
In CNY
Increase/ Decrease (+ / -) in the reporting period
Investment Ending
Announ
gain and Other balance of
ced for
Opening loss comprehe Other Provision Ending the
Investors Additional Investment distributing
balance recognized nsive equity for Others balance provision
investment decreased cash
based on income movement impairment for
dividend or
the equity adjustment impairment
profit
method
I. Joint Venture
II. Associates
Shanghai
43,423,62 188,871.8 43,612,49
Watch 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
4.87 9 6.76
Industry
43,423,62 188,871.8 43,612,49
Sub-total 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
4.87 9 6.76
43,423,62 188,871.8 43,612,49
Total 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
4.87 9 6.76
(3) Other notes
Inapplicable
4. Operating revenue and operating costs
In CNY
Amount incurred in the reporting period Amount incurred in the previous period
Items
Income Cost Income Cost
Principal business 51,281,774.36 8,618,881.55 49,145,205.51 6,783,241.62
Other businesses 72,649.57 0.00 0.00 0.00
Total 51,354,423.93 8,618,881.55 49,145,205.51 6,783,241.62
5. Return on investment
In CNY
Amount incurred in the reporting
Items Amount incurred in the previous period
period
Income from long term equity investment 135,344,660.36
based on cost method
Income from long term equity investment
188,871.89 172.19
based on equity method
Total 188,871.89 135,344,832.55
6. Others
Inapplicable
XVIII. Supplemental Information
1. Details of non-recurring gain or loss for the year
In CNY
Items Amount Note:
It refers to the gain or loss from
Gain/loss from disposal of non-current
-13,352.95 disposal of partial obsolete office fixed
assets
assets
Government grants included in current
profit or loss (except for the fixed or
For the detail, refer to Note VII. And
quantitative government grants, enjoyed
XVIII: Description of government
in a consecutive way, which closely 1,478,043.00
subsidy counted to the current gain or
related to the enterprise businesses and
loss
according to certain state policies and or
on a nation-wide unified standard)
Other non-operating income and Other various non-operating revenue
-515,323.53
expenses other than the above items and expenditure
Less: amount of income tax affected 178,998.70
Total 770,367.82 --
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No. 1 on Information
Disclosure for Companies Offering their Securities to the Public – Non-recurring Gains and Losses and its non-recurring
gain/loss items as illustrated in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering
their Securities to the Public – Non-recurring Gains and Losses which have been defined as recurring gains and losses, it is
necessary to explain the reason.
Inapplicable
2. ROE and EPS
Earnings per share
Net assets-income ratio, weighted
Profit of the report period Basic earnings per Diluted earnings per
average
share, in CNY/share share (CNY/share)
Net profit attributable to the 3.65% 0.1976 0.1976
Company’s shareholders of
ordinary shares
Net profit attributable to the
Company’s shareholders of
3.62% 0.1959 0.1959
ordinary shares less
non-recurring gains and loss
3. Discrepancy in accounting data between IAS and CAS
(1) Discrepancy in net profit and net assets as disclosed in the financial report respectively
according to IAS and CAS
Inapplicable
(2) Discrepancy in net profit and net assets as disclosed in the financial report respectively
according to the accounting standards outside Mainland China and CAS
Inapplicable
(3) Note to the discrepancy in accounting data under the accounting standards outside Mainland
China. In case the discrepancy in data which have been audited by an overseas auditing agent
has been adjusted, please specify the name of the overseas auditing agent.
Inapplicable
4. Others
Inapplicable
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