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飞亚达B：2023年半年度报告(英文版) （下载公告）
公告日期:2023-08-23

FIYTAPrecisionTechnologyCo.,Ltd.

2023Semi-annualReport

August23,2023

Section1ImportantNotice,TableofContentsandDefinitionTheBoardofDirectors,theSupervisoryCommittee,directors,supervisorsandseniorexecutivesherebyindividuallyandcollectivelyacceptresponsibilityforthecorrectness,accuracyandcompletenessofthecontentsofthisreportandconfirmthatthereareneithermaterialomissionsnorerrorswhichwouldrenderanystatementmisleading.ZhangXuhua,theCompanyleader,SongYaoming,chieffinancialofficer,andTianHui,themanageroftheaccountingdepartment(treasurer)herebyconfirmtheauthenticityandcompletenessofthefinancialreportenclosedinthisSemi-annualReport.AllthedirectorsattendedtheBoardMeetingforreviewingtheSemi-annualReport.Anyperspectivedescription,suchasfutureplan,developmentstrategy,etc.involvedintheSemi-annualReportshallnotconstitutetheCompany’ssubstantialcommitmenttotheinvestorsandtheinvestorsshouldpleasepayattentiontotheirinvestmentrisks.Inthisreport,theCompanyhasdescribedindetailtheexistingmacro-economicrisksaswellasoperationrisks.InvestorsareadvisedtorefertothecontentsconcerningriskspossiblytobeconfrontedwithbytheCompanyandthecountermeasurestobetakeninSection3DiscussionandAnalysisoftheManagementTheCompanyintendsneithertodistributeanycashdividendorbonussharesnortoconvertanyreserveintosharecapital.

TableofContents

Section1ImportantNotice,TableofContentsandDefinitionSection2CompanyProfileandFinancialHighlightsSection3DiscussionandAnalysisbytheManagementSection4CorporateGovernanceSection5EnvironmentandSocialResponsibilitySection6SignificantEventsSection7ChangeoftheSharesandParticularsaboutShareholdersSection8AboutthePreferredSharesSection9AboutBondsSection10FinancialReport

DocumentsAvailableforInspectionI.Financialstatementssignedbyandunderthesealofthelegalrepresentative,thechieffinancialofficerandthepersoninchargeoftheaccountingoffice.II.OriginalsofalldocumentsandmanuscriptsofalltheCompany’sdocumentsdisclosedtothepubliconthemediadesignatedbyChinaSecuritiesRegulatoryCommissionduringthereportingperiod.III.Fulltextof2023Semi-annualReportcarryingthesignatureofthelegalrepresentative.

Definitions

TermstobedefinedReferstoDefinition
ThisCompany,theCompanyorFIYTAReferstoFIYTAPrecisionTechnologyCo.,Ltd.
AVICReferstoAviationIndustryCorporationofChina,Ltd.
AVICInternationalReferstoAVICInternationalHoldingCorporation
AVICIHLReferstoAVICInternationalHoldingLimited
AVICFinanceReferstoAVICFinanceCo.,Ltd.
RestrictedStockIncentivePlanPhaseIReferstoRestrictedA-ShareIncentivePlan2018(PhaseI)
RestrictedStockIncentivePlanPhaseIIReferstoRestrictedA-ShareIncentivePlan2018(PhaseII)

Section2CompanyProfileandFinancialHighlights

I.CompanyProfile

Shortformofthestock:FIYTAandFIYTABStockCode000026and200026
Shortformofthestockbeforethechange(ifany)None
StockExchangeListedwithShenzhenStockExchange
CompanyNameinChinese飞亚达精密科技股份有限公司
AbbreviationofRegisteredCompanyNameinChinese飞亚达公司
CompanynameinEnglish(ifany)FIYTAPrecisionTechnologyCo.,Ltd.
AbbreviationoftheCompanynameinEnglish(ifany)FIYTA
LegalRepresentativeZhangXuhua

II.LiaisonPersonsandCommunicationInformation

SecretaryoftheBoardSecuritiesAffairsRepresentative
NamesSongYaomingXiongYaojia
LiaisonAddress20thFloor,FIYTATechnologyBuilding,GaoxinS.RoadOne,NanshanDistrict,Shenzhen18thFloor,FIYTATechnologyBuilding,GaoxinS.RoadOne,NanshanDistrict,Shenzhen
Tel.0755-860136690755-86013669
Fax0755-833483690755-83348369
Emailinvestor@fiyta.com.cninvestor@fiyta.com.cn

III.OtherInformation

1.WayofCommunicationThereisnochangeintheregisteredaddress,officeaddressandpostcode,thecompanywebsite,emailduringthereportingperiod.Forthedetail,referto2022AnnualReport.

2.InformationDisclosureandPlacewheretheRegularReportsarePreparedTherewasnochangeinthewebsite,medianame,thewebsiteoftheStockExchangewheretheCompanydiscloseditsSemi-annualReport,aswellastheplacewheretheCompany'sSemi-annualReportwaspreparedandplacedduringthereportingperiod.Forthedetailedinformation,pleaserefertoour2022AnnualReport.

3.OtherRelevantInformationIsthereanychangeinanyotherrelevantinformationduringthereportingperiodInapplicableIV.SummaryofAccounting/FinancialDataDoestheCompanyneedtomakeretroactiveadjustmentorrestatementoftheaccountingdataofthepreviousyearsNo

ReportingperiodSameperiodofthepreviousyearYear-on-yearincrease/decreaseinthereportingperiod
RevenueinCNY2,364,505,262.562,183,570,749.118.29%
NetprofitattributabletotheCompany’sshareholders,inCNY187,395,067.23140,692,784.2933.19%
NetprofitattributabletotheCompany’sshareholderslessthenon-recurringitems,inCNY177,352,543.66129,931,756.9036.50%
Netcashflowsarisingfromoperatingactivities,inCNY344,659,843.62278,386,263.6023.81%
Basicearningpershare0.45170.335134.80%
(CNY/share)
Dilutedearningpershare(CNY/share)0.45170.335134.80%
Returnonequity,weightedaverage5.80%4.62%1.18%
EndofthereportingperiodEndofthepreviousyearIncrease/decreaseattheendoftheyearovertheendofthepreviousyear
Totalassets(inCNY)4,251,877,900.664,117,143,911.993.27%
NetprofitattributabletotheCompany’sshareholders,inCNY3,229,698,746.533,136,423,492.152.97%

V.DifferenceintheAccountingDatabasedrespectivelyontheChineseAccountingStandards(CAS)andInternationalAccountingStandards(IAS)

1.Differencesinthenetprofitdisclosedinthefinancialreport&thenetassetsattributabletotheCompany’sshareholdersrespectivelyaccordingtotheIASandtheCAS.Inapplicable

2.DifferenceofthenetprofitandnetassetinthefinancialreportdisclosedrespectivelyaccordingtotheIASandtheCAS.InapplicableVI.Non-recurringgain/lossitemsandtheamountinvolved

InCNY

ItemsAmountNotes
Gain/lossfromdisposalofnon-currentassets,includingthepartwritten-offwiththeprovisionforimpairmentofassets.-76,689.73
Thegovernmentsubsidiesincludedintheprofitsandlossesofthecurrentperiod((excludinggovernmentgrantswhicharecloselyrelatedtotheCompany’snormalbusinessandconformwiththenationalstandardamountorquantity)6,691,609.41
Reversalofprovisionforimpairmentofaccountsreceivablethathasbeenseparatelytestedforimpairment5,954,740.99
Othernon-operatingincomeandexpenseswiththeaforesaiditemsexclusive304,922.65
Less:Amountaffectedbytheincometax2,832,059.75
Total10,042,523.57

Detailsofothergainsandlossesincompliancewiththedefinitionofnon-recurringgainsandlosses.InapplicableExplanationofthenon-recurringgainsandlosseslistedintheExplanatoryAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublicasrecurringgainsandlossesInapplicable

Section3DiscussionandAnalysisbytheManagement

I.MainbusinesstheCompanyoperatedduringthereportingperiod(I)MainbusinessactivitiestheCompanycarriedoutTheCompanybasesitsestablishmentanddevelopmentontheaviationprecisiontechnologyandmaterialtechnology.TheCompanyhasbeenadheringtothevaluesof“theleadingroleofbrand,customerorientation,valuecreation,cooperationandresponsibility,learningandinnovation",taking“inheritingofthespiritofaeronauticalpatriotismandcreatingaqualitylife”asitsmission,focusingonthewatchindustry,hasformedacorebusinesslayoutwiththemutualpromotionofownwatchbrandandwatchretailchannels.Inaddition,theCompanyisactivelyexploringandcultivatingnewbusinessessuchasprecisiontechnologyandsmartwears,whichareinthestageofcontinuousdevelopment.TheCompanyisdeeplyinvolvedintheconstructionofprofessionalwatchmakingcapabilitiesandbrandoperations,hasanumberofself-ownedbrandssuchas"Fiyta","EmileChouriet",etc.coveringdifferentdimensionsofmid-to-high-end,popularprofessional,fashionandcoolandsoon.Where,theCompanypositioned“FIYTA”,thecoreself-ownedbrand,as“ahigh-qualityChinesewatchbrandcharacterizedbytheaerospacewatch",adheredtotheconceptof“Home-made”asthecoreand“Trendy”astheform,continuouslycreateddifferentiatedcharacteristics,andupgradingto“youthfulness,high-endandmainstream”;meanwhile,theCompanycontinuouslyincreasedinvestmentintechnologicalinnovationfieldssuchasthedrivingunitsandaviationtechnologyapplications.Relyingontheadvantagesofaviationtechnologyandaerospacequality,theCompanycontinuouslyprovidedprofessionalwatchesforChina'saerospaceindustry,graduallyestablishedaleadingpositioninthedomesticindustry,andexpandedourbrandinfluence.TheCompanyestablished“Harmony”WorldWatchRetailChanneltoseizetheopportunityinthedomesticwatchmarketandpromotetherapiddevelopmentofitsownbrand.“Harmony”iscommittedto“becomingthebestcomprehensiveserviceprovideroffamouswatches”,andhaslong-termandin-depthcooperationwithmanyfamouswatchgroupsandbrands;quencheditsindustry-leadingoperationmanagementabilityandcustomerservicecapabilityandhasbecomeadomesticleadingprofessionalhigh-endchaincommercialbrandoffamouswatches.Inrecentyears,theCompany,basedonthedevelopmentprincipleof“technologybeinghomologous,theindustrybeingsame-rootedandvaluebeingco-directional”andrelyingonthestrengthofprecisiontechnologyandindustrialaccumulation,extendedthedevelopmentofprecisiontechnologybusinessandsmartwearsbusinesswhichhavealreadytakenshape.(II)OverviewofthePrincipalSectorstheCompanyEngagesinDuringthereportingperiod,theexternalmacroenvironmentwascomplexandsevere,andthedomesticconsumermarketfacedmultiplepressuressuchasinsufficientdemands.However,boostedbythetravelrecoveryandaseriesofconsumerpromotionpolicies,theoverallsituationshowedatrendoftortuousrecovery.ThetotalsocialexpenditureannouncedbytheNationalBureauofStatisticsincreasedby8.2%year-on-year,significantlyhigherthantheyear-on-yeargrowthrateofGDP.Thedomesticwatchconsumptionmarketcontinuedtobedifferentiated,andtheconsumptionofmediumandhigh-endwatchescontinuedtogrow.FederationoftheSwissWatchIndustryannouncedthatthecumulativeamountofexportstoMainlandChinainthefirsthalfyearincreasedby26%year-on-year(alowbaseinthesameperiodlastyear).MainlandChinaremainedthesecondlargestconsumermarketofSwisswatches.Theduty-freemarketandHongKongmarketalsoachievedgoodgrowth,andthemarketsizecontinuedtoexpand;Themidtolow-endwatchconsumermarketisunderoverallpressure,withbothdomesticwatchesandsmartwatchesexperiencingadecline,andbrandcompetitionbecomingincreasinglyfierce.II.AnalysisonCoreCompetitiveness(I)Brandoperationandmanagementcapabilitiesofthewhole-industry-chainTheCompanyhasacomprehensiveindustrialchainoperationandmanagementcapabilitybasedonresearchanddevelopment,design,manufacturing,sales,andservice,focusedonresourceallocationandstrengthenedthedifferentiatedconstructionoftheself-ownedcorebrandof“FIYTA”.Duringthereportingperiod,thebrandinfluenceandmarketshareof“FIYTA”wasgraduallyrising.(II)ElaborativechanneloperationandmanagementcapabilitiesBasedonitsleadingchanneloperationcapabilities,theCompanypromotedtheoptimizationofchannelstructureandtheintegrationofonlineandofflineintegration.Duringthereportingperiod,coreindicatorssuchascustomersatisfaction,potentialcustomers’transactions,regularcustomers’repeatedpurchases,andunitoutputofstores,etc.continuedtoimprove,furtheradvancingtowardshigh-qualitydevelopment.(III)DigitalcapabilitiestoempowerbusinessesTheCompanywasbasedonplatformssuchasdigitalretailsystems,CRMsystems,SAPsystems,andcloudstores,graduallydeepeningthedigitalapplicationsinresearchanddevelopment,design,production,sales,andservices;carriedoutprivatedomainoperationsandcustomerlifecyclemanagement,effectivelyimprovedtheefficiencyofonlineandofflinestoreoperationsandproductssales.Duringthereportingperiod,theCompanyachievedayear-on-yeargrowthinrevenueinitsprincipalbusinesses.(IV)CapacityofCorePrecisionTechnology

TheCompanywasbasedonR&DandproductionplatformsinShenzhenandSwitzerland,continuouslystrengtheneditsprofessionalwatchmakingcapabilitiesinthemanufacturingofmovementsandkeycomponents,aerospacewatchdevelopment,andhigh-endwatchmakingtechniques.Ithasachievedcommerciallistingoftheself-mademovementsandcontinuedtoprovideprofessionalchronowatchesforChina’saerospaceindustry.(V)AbilitytoBuildtheTeamofProfessionalTalentsBasedontheconceptof“valuecreation”,theCompanycontinuedtoinvestinthebuildingofatalentteaminordertohaveaprofessionalandstablecorebackboneteam.Therewereanumberofoutstandingindustryrepresentativesincorefieldssuchasdesign,researchanddevelopment,andmanufacturing.Duringthereportingperiod,LiuZhonghua,oneoftheCompany'sseniorclocktechnicians,wasawardedthehonorarytitlesofthe“NationalMayDayLaborMedal”and“NationalTechnicalExpert”.III.AnalysisonPrincipalBusinessesGeneralInthefirsthalfof2023,theinternationalenvironmentremainedcomplexandsevere.Thankstotherecoveryoftravelandpolicyguidance,theeconomyshowedapositivetrendinmultiplechallenges,andthefundamentalsoftheconsumerindustrywereimproved.TheCompanyattachedcloseattentiontoandevaluatedthechangingtrendsintheindustry,firmlyadheredtoitsbrandstrategy,insistedona“defensiveandcounterattack”businessstrategy,andfocusedonriskpreventionandcontrolinkeyareassuchasinventoryandaccountsreceivable.Meanwhile,theCompanydeeplyexploredvariousbusinesscounterattacksbasedoncustomers’needs,usingtechnologicalinnovationanddigitizationasthefocus,promotedthetransformationandupgradingofitsprincipalbusinesses,andpromotedcomprehensiveandhigh-qualitydevelopment.Duringthereportingperiod,theCompanyachievedarevenueofCNY2,364.51million,ayear-on-yearincreaseof8.29%;realizedatotalprofitofCNY244.53million,ayear-on-yearincreaseof37.12%;realizedaweightedaveragereturnonequityof5.80%,ayear-on-yearincreaseof1.18percentagepoints.(I)ContinuouslyPromotingBrandUpgradingandCreatingBrandDifferentiationDuringthereportingperiod,“FIYTA”brand,basedonthepositioningof"high-qualityChinesewatchbrandcharacterizedbyaerospacewatches",strengthenedinternalcollaboration,concentratedonthecoreproductmatrixandresourceinvestment,focusedoncreatingfaddishproducts,andsuccessivelylaunchedJ-20,HarbinZ-20,“Spaceman”flywheel,China-Chic“BlueDragonandWhiteTiger"andotheraerospacethemedwatches.The"aerospace"serieskeptgrowingrapidly;accuratelycarriedoutintegratedmarketing,andeffectivelyenhancedthepopularityanddisseminationeffectofnewproductsbyholdingeventssuchascollaborationwiththefilm“theKingoftheSky”,ChineseBrandDay,andcelebrityevents;relyingonthedisseminationoftheaviation-featuredproductsandaviationculture,theCompanycontinuedtoestablishtheaviationbrandimage,promotedtheincreaseoftheaveragecustomerpriceofthebrand,andrejuvenatedthebrandimage.(II)ContinuouslyPromotingChannelStructureOptimizationandConsolidatingOperationandManagementCapabilityDuringthereportingperiod,“FIYTA”Brandupgradeditsstoreimageentirely,focusedonaerospacethemedstoresandfashioncollectionstores,continuouslyoptimizeditschannelstructure,settledinmainstreamshoppingcentersandcommercialdistrictsinfirstandsecondtiercities,andopenednewaerospaceconceptstoresinShanghai,Zhengzhou,Xi'an,Nanjing,Guiyangandotherplaces,effectivelydrivingtheincreaseinunitstoreoutput;activelycarriedoutstoremembershipsalonactivitiestorevitalizecustomerperceptionandexperience,andcreatedabasestationfordisseminationoftheaviationculture;increasedtheinvestmentinnewmediachannelssuchasTiktokandXiaohongshu,strengthenedthedevelopmentofnewonlineproducts,theconstructionofselfsupportlivebroadcastmatrixandmulti-partycooperation,andacceleratedthebreakthroughinonlinesales.Duringthe“June18”period,GMVgrewbymorethan80%,hittinganewrecord.“HARMONY”WorldWatchRetailcontinuedtoexploretheintegrationofonlineandofflinechannels,withafocusonhigh-qualitydevelopmentinofflinechannels,promotedtheupgradingandexpansionofmid-tohigh-endchannels,andaccumulated17newandupgradedstores;establishedaprivatedomaintrafficmatrixandanewmediaoperationmatrixforonlinechannels,linkedofflinestoresnationwide,promotedfullstaffmarketing,andcultivatedKOCsforwatchbrands;theomnichannelfocusedoncustomerresearch,refinedoperation,andcustomerservices,andconductedfullcyclemanagementofcustomervitalityconsumptiontoenhancecustomerstickiness.(III)ContinuouslyIncreasingInvestmentinTechnologicalInnovationandStrengtheningtheHardcoreStrengthofPrecisionTechnologyDuringthereportingperiod,theCompanyincreaseditsinvestmentintechnologicalinnovationfieldssuchasthemovementsandapplicationofaviationtechnology,relyingontheR&DplatformsinShenzhenandSwitzerland,integratedindustryadvantageoussupplychainresources,andcontinuouslypromotedtheapplicationofthehome-mademovementsbasedonthecommerciallistingoftheindependently-developedmovement.(IV)ContinuouslyPromotingDigitalTransformationandDeepeningPlatformApplicationDuringthereportingperiod,theCompanypromotedindepthdigitalfullvaluechainapplicationsbasedonmultipleplatformssuchasdigitalretailsystem,CRMsystem,andcloudstores,carriedoutprivatedomainmarketing,expandedmembershipscale,promotedrefinedmembershipmanagement,improvedcustomershoppingandserviceexperience,

andcontinuedtoincreasepotentialcustomers’transactionsandregularcustomers’repeatedpurchases.(V)ContinuouslyPromotingNewBusinessExplorationandCultivatingNewGrowthPointsDuringthereportingperiod,fortheprecisiontechnologybusiness,theCompanycontinuedtolaysolidfoundationinitstechnicalstrengthinmatchingcomplexandhigh-precisionproductswithprevisiontechnology,promoteditsexpansionintofieldssuchasaerospaceandmedicaldevices,andachievedbreakthroughsinsomenewcustomers;theCompanycontinuedtoimproveproductsoftwareandhardwarefunctionsinitssmartwearablesbusiness,optimizedchannelstructure,andpromotedthedevelopmentofitsownbrandADASHER.Year-on-yearMovementsoftheKeyFinancialItemsaresummarizedasfollows:

InCNY

ThereportingperiodSameperiodofthepreviousyearYear-on-yearincrease/decreaseCauseofthechange
Operatingrevenue2,364,505,262.56.2,183,570,749.118.29%Inapplicable
Operatingcost1,512,527,481.831,373,664,560.4110.11%Inapplicable
Salescosts456,273,629.20477,806,040.76-4.51%Inapplicable
Administrativeexpenses104,621,729.61116,715,664.69-10.36%Inapplicable
Financialexpenses12,188,216.8211,877,406.982.62%Inapplicable
Incometaxexpenses57,131,519.5637,639,093.7951.79%Mainlyduetoyear-on-yearincreaseofthetotalprofitinthereportingperiod.
R&Dinput28,161,470.5425,026,713.8512.53%Inapplicable
Netcashflowsarisingfromoperatingactivities344,659,843.62278,386,263.6023.81%Inapplicable
Netcashflowarisingfrominvestmentactivities:-36,270,086.24-53,842,038.2032.64%Mainlyduetoayear-on-yeardecreaseinexpensesforstoreupdatingandimprovementduringthereportingperiod.
Netcashflowarisingfromfinancialactivities:-102,629,832.84-41,711,043.76-146.05%Mainlyduetoayear-on-yeardecreaseinthenetborrowingamountduringthereportingperiod.
Netincreaseofcashandcashequivalents205,621,331.48183,619,193.4111.98%Inapplicable

Significantchangeinprofitcompositionorprofitsourcesduringthereportingperiod.InapplicableCompositionofRevenues

InCNY

ThereportingperiodSameperiodofthepreviousyearYear-on-yearincrease/decrease
AmountProportionintherevenueAmountProportionintherevenue
Totaloperatingrevenue2,364,505,262.56100%2,183,570,749.11100%8.29%
Basedonsectors
Watches2,210,238,499.4393.48%2,030,451,582.8492.99%8.85%
Precisiontechnologybusiness67,709,263.282.86%84,809,043.133.88%-20.16%
Leases78,768,763.293.33%61,589,877.272.82%27.89%
Others7,788,736.560.33%6,720,245.870.31%15.90%
Basedonproducts
Watchbrandbusiness396,794,035.9016.78%405,700,843.9218.58%-2.20%
Watchretailandservices1,813,444,463.5376.70%1,624,750,738.9274.41%11.61%
Precisiontechnologybusiness67,709,263.282.86%84,809,043.133.88%-20.16%
Leases78,768,763.293.33%61,589,877.272.82%27.89%
Others7,788,736.560.33%6,720,245.870.31%15.90%
Basedonregions
SouthChina1,085,243,222.0345.89%1,114,400,902.3151.04%-2.62%
NorthwestChina364,119,542.9115.40%313,541,606.4614.36%16.13%
NorthChina127,379,519.355.39%109,155,218.865.00%16.70%
EastChina293,815,408.1812.43%277,109,098.6212.69%6.03%
NortheastChina183,610,107.987.77%133,516,376.906.11%37.52%
SouthwestChina310,337,462.1113.12%235,847,545.9610.80%31.58%

Sector(s),Product(s)orRegion(s)Takingover10%oftheOperatingRevenueorOperatingProfit

InCNY

TurnoverOperatingcostGrossprofitrateYear-on-yearincrease/decreaseofoperatingrevenueoverthepreviousyearYear-on-yearincrease/decreaseofoperatingcostsoverthepreviousyearYear-on-yearincrease/decreaseofgrossprofitrateoverthepreviousyear
Basedonsectors
Watches2,210,238,499.431,434,919,721.9535.08%8.85%11.88%-1.75%
Precisiontechnologybusiness67,709,263.2857,850,777.6014.56%-20.16%-18.44%-1.81%
Leases78,768,763.2919,540,136.0175.19%27.89%-0.62%7.12%
Others7,788,736.56216,846.2797.22%15.90%-55.80%4.52%
Basedonproducts
Watchbrandbusiness396,794,035.90125,298,304.9468.42%-2.20%2.38%-1.41%
Watchretailandservices1,813,444,463.531,309,621,417.0127.78%11.61%12.88%-0.81%
Precisiontechnologybusiness67,709,263.2857,850,777.6014.56%-20.16%-18.44%-1.81%
Leases78,768,763.2919,540,136.0175.19%27.89%-0.62%7.12%
Others7,788,736.56216,846.2797.22%15.90%-55.80%4.52%
Basedonregions
SouthChina1,085,243,222.03684,230,585.9536.95%-2.62%-3.81%0.78%
NorthwestChina364,119,542.91235,459,389.0335.33%16.13%20.55%-2.37%
NorthChina127,379,519.3580,606,032.6336.72%16.70%24.87%-4.14%
EastChina293,815,408.18192,797,330.0434.38%6.03%12.57%-3.81%
NortheastChina183,610,107.98124,031,025.1332.45%37.52%41.26%-1.79%
SouthwestChina310,337,462.11195,403,119.0537.04%31.58%36.26%-2.16%

Whileadjustmentofthestatisticalcaliberfortheprincipalbusinessdatatookplaceinthereportingperiod,theprincipalbusinessdatawiththestatisticalcaliberadjustedattheendofthereportingperiodinthelatestyear.InapplicableIV.AnalysisonNon-PrincipalBusinessesInapplicableV.AnalysisonAssetsandLiabilities

1.SignificantChangesinAssetsComposition

InCNY

EndofthereportingperiodEndofthepreviousyearProportionincrease/decreaseNotetosignificantchanges
AmountProportionintotalassetsAmountProportionintotalassets
Monetaryfund519,368,795.1212.22%313,747,463.647.62%4.60%Inapplicable
Accountsreceivable399,576,267.999.40%305,290,959.687.42%1.98%Inapplicable
Contractassets0.00%0.00%0.00%Inapplicable
Inventories2,085,380,802.4849.05%2,141,320,373.6752.01%-2.96%Inapplicable
Investment-orientedrealestate367,140,251.898.63%374,979,494.719.11%-0.48%Inapplicable
Long-termequityinvestment56,484,605.251.33%58,182,086.901.41%-0.08%Inapplicable
Fixedassets356,142,836.238.38%364,628,765.178.86%-0.48%Inapplicable
Construction-in-process0.00%0.00%0.00%Inapplicable
Right-of-useassets87,234,100.502.05%110,330,512.032.68%-0.63%Inapplicable
Shorttermloans390,273,749.999.18%290,237,111.117.05%2.13%Inapplicable
Contractliabilities19,287,771.810.45%16,844,437.470.41%0.04%Inapplicable
Long-termborrowings0.00%0.00%0.00%Inapplicable
Leaseliabilities30,745,380.620.72%41,642,561.581.01%-0.29%Inapplicable

2.MajorOverseasAssetsInapplicable

3.AssetsandliabilitiesmeasuredbasedonfairvalueInapplicable

4.RestrictiononrightsintheassetsendedthereportingperiodInapplicableVI.AnalysisofInvestmentSituation

1.General

Amountofinvestmentinthereportingperiod(CNY)Amountofinvestmentinthesameperiodofthepreviousyear(CNY)Amountofvariation
0.000.000.00%

2.SignificantEquityInvestmentAcquiredintheReportingPeriodInapplicable

3.Significantnon-equityinvestmentinprocessinthereportingperiodInapplicable

4.Financialassetsinvestment

(1)InvestmentinsecuritiesInapplicable

(2)InvestmentinderivativesInapplicable

5.ApplicationoftheraisedcapitalInapplicableVII.SalesofSignificantAssetsandEquity

1.SalesofSignificantAssetsInapplicable

2.SalesofSignificantEquityInapplicable

VIII.AnalysisonPrincipalSubsidiariesandMutualShareholdingCompaniesParticularsabouttheprincipalsubsidiariesandmutualshareholdingcompanieswhichmayaffecttheCompany’snetprofitbyover10%

InCNY

CompanynameCompanytypePrincipalbusinessRegisteredcapitalTotalassetsNetassetsOperationrevenueOperatingprofitNetprofit
ShenzhenHarmonyWorldWatchesCenterCo.,Ltd.SubsidiariesPurchase&saleandrepairingserviceofwatchesandcomponents600,000,000.002,127,022,924.711,252,957,899.751,778,290,441.83181,514,300.46135,433,561.92
FIYTASalesCo.,Ltd.SubsidiaryDesign,R&Dandsalesofwatchesandcomponents&parts450,000,000.00461,158,135.67321,206,303.22200,804,707.14-17,831,739.54-13,702,858.35
ShenzhenFIYTAPrecisionTechnologyCo.,Ltd.SubsidiaryManufactureandproductionofwatchesandcomponents100,000,000.00324,593,596.44187,350,869.67157,045,977.8824,490,519.0622,908,938.45
ShenzhenFIYTATechnologyDevelopmentCo.,Ltd.SubsidiaryProductionandmachiningofsophisticatedcomponentsandparts50,000,000.00192,063,976.31155,351,494.9977,714,105.395,243,937.335,231,903.19
FIYTA(HongKong)LimitedSubsidiaryTradingofwatchesandaccessoriesandinvestment137,737,520.00257,253,056.41244,312,184.6444,131,741.738,671,263.297,120,581.91
EmileChouriet(Shenzhen)LimitedSubsidiaryDesign,R&Dandsalesofwatchesandcomponents&parts41,355,200.00123,960,804.8152,972,172.6139,206,687.06-1,037,459.14-811,084.45
ShanghaiWatchIndustryCo.,Ltd.MutualshareholdingcompanyProductionandsalesofwatchesandcomponents&parts15,350,000.00181,492,570.35140,256,324.9263,610,760.47-7,264,204.96-6,789,926.61

AcquisitionanddisposalofsubsidiariesinthereportingperiodInapplicableNotetotheprincipalmutualshareholdingcompaniesInapplicableIX.StructurizedEntitiesControlledbytheCompanyInapplicable

X.RisksPossiblytobeConfrontedwithInthefirsthalfof2023,theoverallperformanceofthedomesticeconomywasimproving,andtheconsumermarketwasgraduallyrecovering,showingstrongresilience.However,itstillfacedrisksandchallengessuchascontinuousdiversificationandrationalizationofconsumerpreferences,comprehensiveopeningupofconsumerexports,rapiddevelopmentofoffshoreduty-freechannels,andtherapidriseofnewmediachannelsinthedigitaleconomy.Basedonacomprehensiveanalysisontheabovesituation,theCompanyadheredtobrandstrategy,solidlypromotedvariousbasicworkaroundthebrands,products,channels,marketing,andotheraspects,increasedinvestmentintechnologicalinnovation,accelerateddigitaltransformation,andexploredandcultivatednewbusinessgrowthpoints.Forthespecificmeasures,refertotheSectionof“AnalysisonthePrincipalBusinesses”.Uptonow,theCompanyhasenhancedthecorecompetitivenessoftheCompany'sprincipalbusinessesandasaresult,itsmarketsharehasgraduallyincreased.

Section4CorporateGovernanceI.GeneralMeetingandExtraordinaryGeneralMeetings

1.GeneralMeetings

SessionsMeetingtypeProportionofattendanceoftheinvestorsMeetingdateDateofdisclosureResolutionsofthemeetings
2022AnnualGeneralMeetingAnnualGeneralMeeting42.07%April26,2023April27,2023Forthedetail,refertothe"AnnouncementontheResolutionsof2022AnnualGeneralMeetingNo.2023-024"disclosedonwww.cninfo.com.cn
20231stExtraordinaryGeneralMeetingExtraordinaryGeneralMeeting39.13%May31,2023June01,2023Forthedetail,refertothe"AnnouncementontheResolutionsof20231stExtraordinaryGeneralMeetingNo.2023-031"disclosedonwww.cninfo.com.cn

2.Extraordinarygeneralmeetingrequestedforholdingbythepreferredshareholderswiththevotingpowerrecovered.InapplicableII.PersonnelChangeinDirectors,SupervisorsandSeniorExecutivesNochangehastakenplaceindirectors,supervisorsandseniorexecutivesoftheCompanyduringthereportingperiod.Forthedetail,referto2022AnnualReport.III.ProfitDistributionandConversionofCapitalReserveintoShareCapitalintheReportingPeriodInapplicableIV.ImplementationoftheCompany’sEquityIncentivePlan,EmployeeStockOwnershipPlanorotherEmployeeIncentiveMeasures

1.Equityincentive

(1)RestrictedStockIncentivePlanPhaseIThe3rdsessionoftheNinthBoardofDirectorsheldonNovember12,2018and20191stExtraordinaryGeneralMeetingheldonJanuary11,2019decidedtostart2018A-ShareRestrictedStockIncentiveProgram(PhaseI),whichwaslateronreviewedandapprovedatthe5thsessionoftheNinthBoardofDirectorsheldonJanuary11,2019,andtheCompanyeventuallygranted4.224millionrestrictedA-sharesto128personseligiblefortheincentive.ThegrantpriceofthispartoftherestrictedstockwasCNY4.40pershare,whichwasgrantedandregisteredforlistingonJanuary30,2019.Forthedetail,refertotherelevantannouncementdisclosedonhttp://www.cninfo.com.cn.onJanuary12,2019.Thespecificimplementationduringthereportingperiodissummarizedasfollows:

Reviewedandapprovedatthe10thsessionoftheTenthBoardofDirectors,theCompanysatisfiedtheconditionsforthereleaseoftherestrictionforsalesinthethirdreleaseperiodoftheCompany'sRestrictedStockIncentivePlan(PhaseI)andthe1.16232millionrestrictedA-sharesinvolvedwerelistedfortradingonJanuary31,2023.Forthedetail,refertotheCompany'srelevantannouncementdisclosedonhttp://www.cninfo.com.cn.onJanuary19,2023.

(2)RestrictedStockIncentivePlanPhaseIIThe23rdsessionoftheNinthBoardofDirectorsheldonDecember4,2020and20211stExtraordinaryGeneralMeetingheldonJanuary6,2021decidedtostart2018A-ShareRestrictedStockIncentiveProgram(PhaseII),whichwaslateronreviewedandapprovedatthe25thsessionoftheNinthBoardofDirectorsheldonJanuary15,2021,andtheCompanyeventuallygranted7.66millionrestrictedA-sharesto135personseligiblefortheincentive.ThegrantpriceofthispartoftherestrictedstockwasCNY7.60pershare,whichwasgrantedandregisteredforlistingonJanuary29,2021.Forthedetail,refertotherelevantannouncementdisclosedonhttp://www.cninfo.com.cn.onJanuary16,2021.Thespecificimplementationduringthereportingperiodissummarizedasfollows:

Reviewedandapprovedatthe10thsessionoftheTenthBoardofDirectors,theCompanysatisfiedtheconditionsforthereleaseoftherestrictionforsalesinthefirstreleaseperiodoftheCompany'sRestrictedStockIncentivePlan(PhaseII)andthe2.27439millionrestrictedA-sharesinvolvedwerelistedfortradingonJanuary31,2023.Forthedetail,refertotheCompany'srelevantannouncementdisclosedonhttp://www.cninfo.com.cn.onJanuary19,2023.Reviewedandapprovedatthe11thsessionoftheTenthBoardofDirectors,theCompanydecidedtorepurchaseandcancelthetotalof146,740A-sharerestrictedshareswhichwerealreadygrantedtobutwiththerestrictionnotyetrelievedheldby4retiredincentiverecipients.ConsideringthattheCompanyhadnotsatisfiedtheCompany’s

performanceconditionforliftingrestrictionsduringthesecondperiodoftherestrictedstockincentiveplan,theCompanydecidedtorepurchaseandcancel2,201,130A-sharerestrictedshareswhichhadnotmettheconditionsforliftingtherestriction.Theaforesaidshareshadbeenallcanceled.Forthedetail,refertotheCompany'srelevantannouncementsdisclosedonhttp://www.cninfo.com.cn.onMarch18,2023,April27,2023andJuly8,2023respectively.Reviewedandapprovedatthe13

th

sessionoftheTenthBoardofDirectorsand20231stExtraordinaryGeneralMeeting,theCompanydecidedtorepurchaseandcancelthe13,360restrictedA-shareswhichwerealreadygrantedtobutwiththerestrictionnotyetliftedheldby1retiredincentiverecipient.Forthedetail,refertotheCompany'srelevantannouncementsdisclosedinhttp://www.cninfo.com.cn.onMay16,2023andJune1,2023respectively.

2.ImplementationoftheEmployeeStockOwnershipPlanInapplicable

3.OtheremployeeincentivemeasuresInapplicable

Section5EnvironmentandSocialResponsibility

I.SignificantIssuesconcerningEnvironmentalProtectionDoestheCompanyoranyofitssubsidiariesbelongtoakeypollutantdischargingunitasannouncedtothepublicbytheenvironmentalprotectionauthority?NoAdministrativepenaltiesforenvironmentalissuesduringthereportingperiodInapplicableRefertootherenvironmentalinformationdisclosedbykeypollutantdischargeunits.In2018,YangpuDistrictBureauofEcologyandEnvironmentofShanghaiorganizedacleanproductionauditandevaluationmeetingonShanghaiWatchCo.,Ltd.,oneoftheCompany'sjointstockcompanies.ThemeetingassessedandapprovedtheCompany'scleanproductionwork.ShanghaiWatchCo.,Ltd.passedthepollutiondischargeverificationorganizedbyYangpuDistrictBureauofEcologyandEnvironmentofShanghaiandreceivedthePollutantDischargePermitissuedbythesaidauthorityattheendof2019.Sincetheindividualnon-heavypollutantfactorsoriginallyapprovedinthe"PollutantDischargePermit"didnotbelongtothedischargescopeofShanghaiWatchCo.,Ltd.,theCompanyproposedtochangethe“PollutantDischargePermit",whichwasnowbeenre-examinedbytheYangpuDistrictBureauofEcologyandEnvironmentandwasissuedonOctober20,2021.OnDecember31,2022,ShanghaiWatchCo.,Ltd.shutdownitspollutionrelatedbusinessandcompletedthecancellationofits"PollutionDischargeLicense"onApril24,2023.ShanghaiWatchCo.,Ltd.waschangedfromakeypollutantsdischargeunitintoageneralmanagementunit.MeasurestakentoreducecarbonemissionsduringthereportingperiodandtheireffectInapplicableReasonfornotdisclosingotherenvironmentalinformationInapplicableII.SocialResponsibilitiesTheCompanyhasbeenactivelypracticingsocialresponsibilityformanyyearsandhasdiscloseditsannualsocialresponsibilityreportsuccessivelyfor16years.Forthelatestinformation,pleaserefertothe“2022SocialResponsibilityReport”publishedonwww.cninfo.com.cnonMarch18,2023.

Section6SignificantEvents

I.CommitmentsfinishedinimplementationbytheCompany'sactualcontroller,shareholders,relatedparties,acquirer,theCompany,etc.inthereportingperiodandcommitmentsunfinishedinimplementationattheendofthereportingperiodInapplicableII.Non-operationalOccupancyoftheCompany’sCapitalbytheControllingShareholderanditsRelatedPartiesInapplicableIII.OutwardguaranteeagainstregulationsInapplicableIV.Engagement/DisengagementoftheCPAsHasthefinancialreporttotheSemi-AnnualReportbeenauditedNoV.ExplanationoftheBoardofDirectorsandtheSupervisoryCommitteeontheQualifiedAuditors'ReportforthereportingperiodissuedbytheCPAsInapplicableVI.ExplanationoftheBoardofDirectorsontheQualifiedAuditors'ReportforthepreviousyearissuedbytheCPAsInapplicableVII.MattersconcerningBankruptcyReorganizationInapplicableVIII.LawsuitsInapplicableIX.PenaltyandRectificationInapplicableX.IntegrityoftheCompany,itsControllingShareholderandActualControllerInapplicableXI.SignificantRelatedTransactions

1.RelatedTransactionsRelatedwithDay-to-DayOperationsInapplicable

2.RelatedtransactionsconcerningacquisitionandsalesofassetsorequityInapplicable

3.RelatedtransactionsconcerningjointinvestmentinforeigncountriesInapplicable

4.CurrentassociatedrightsofcreditandliabilitiesInapplicable

5.TransactionswiththefinancecompanywithincidencerelationDepositbusiness

RelatedpartyIncidencerelationMaximumdepositlimitperday(CNY10,000)DepositinterestrangeOpeningbalance(CNY10,000)AmountincurredinthereportingperiodEndingbalance(CNY10,000)
Totalamountdepositedduringthereportingperiod(inCNY10,000)Totalamountwithdrawnduringthereportingperiod(inCNY10,000)
AVICFinanceFinancecompanywithincidencerelation80,0001.25%27,132.70202,170.79181,249.0148,054.48

Loanbusiness

RelatedpartyIncidencerelationLoanamount(inCNY10,000)LoaninterestraterangeOpeningbalance(inCNY10,000)AmountincurredinthereportingperiodEndingbalance(inCNY10,000)
Totalloanduringthereportingperiod(inCNY10,000)Totalrepaymentsduringthereportingperiod(inCNY10,000)
AVICFinanceFinancecompanywithincidencerelation80,0002.7%0000

CreditextensionandotherfinancialbusinessInapplicableDuringthereportingperiod,thebalanceofthedailymaximumrelateddepositsandloansbetweentheCompanyandAVICFinancedidnotexceedtheabove-mentionedlimitasspecifiedinthefinancialserviceagreement,andtherewerenocreditgrantsorotherfinancialservicesincurredfortimebeing.Atthesametime,theCompanyissuedthe"RiskAssessmentReportontheRelatedDepositsandLoanswithAVICFinanceCo.,Ltd."fortheabovematterseverysixmonths.

6.TransactionsbetweenthefinancecompanycontrolledbytheCompanyandtherelatedpartiesInapplicable

7.OtherSignificantRelatedTransactionsThe11thSessionoftheTenthBoardofDirectorsheldonMarch16,2023and2022AnnualGeneralMeetingheldonApril26,2023reviewedandapprovedtheProposalonthePredictionoftheRegularRelatedTransactionsofYear2023.Duringthereportingperiod,thecumulativetransactionamountoftheCompany'srelatedtransactionsrelatedtoitsdailyoperationswaswithintheexpectedrangeoftheyear.Inquiryonthewebsitefordisclosingtheprovisionalreportconcerningsignificantrelatedtransactions

DescriptionoftheprovisionalannouncementsDateofdisclosureDisclosurewebsite
AnnouncementontheResolutionofthe11thSessionoftheTenthBoardofDirectors,2023-007March18,2023http://www.cninfo.com.cn/
AnnouncementofthePredictionoftheRegularRelatedTransactionsin2023,2023-010March18,2023http://www.cninfo.com.cn/
AnnouncementontheResolutionof2022AnnualGeneralMeeting,2023-031April27,2023http://www.cninfo.com.cn/

XII.ImportantContractsandImplementation

1.Custody,ContactingandLeases

(1)CustodyInapplicable

(2)ContractingInapplicable

(3)LeasesInapplicable

2.SignificantGuarantees

InCNY10,000

OutwardguaranteesOfferedbytheCompanyanditsSubsidiaries(excludingguaranteetothesubsidiaries)
NamesofGuaranteesDateoftheannouncementontheguaranteelineGuaranteelineDateofoccurrenceActualamountofguaranteeTypeofguaranteeCollateral(ifany)Counterguarantee(ifany)GuaranteeperiodImplementationstatusGuaranteetorelatedparty?
Inapplicable
Totalamountofoutwardguaranteeapprovedinthereportperiod(A1)0Totalamountofoutwardguaranteeactuallyincurredinthereportperiod(A2)0
Totalamountofoutwardguaranteealreadyapprovedattheendofthereportperiod(A3)0Totalendingbalanceofoutwardguaranteeattheendofthereportperiod(A4)0
Guaranteetothesubsidiaries
NamesofGuaranteesDateoftheannouncementontheguaranteelineGuaranteelineDateofoccurrenceActualamountofguaranteeTypeofguaranteeCollateral(ifany)Counterguarantee(ifany)GuaranteeperiodImplementationstatusGuaranteetorelatedparty?
ShenzhenHarmonyWorldWatchesCenterCo.,Ltd.March10,202235,000December30,202215,000Guaranteewithjointresponsibility1yearNoNo
Totalguaranteequotatothesubsidiariesapprovedinthereportingperiod(B1)60,000Totalamountofguaranteetothesubsidiariesactuallyincurredinthereportingperiod(B2)0
Totalguaranteequotatothesubsidiariesapprovedattheendofthereportingperiod(B3)95,000Totalbalanceofactualguaranteetothesubsidiariesattheendofthereportingperiod(B4)15,000
Guaranteetothesubsidiaries
NamesofGuaranteesDateoftheannouncementontheguaranteelineGuaranteelineDateofoccurrenceActualamountofguaranteeTypeofguaranteeCollateral(ifany)Counterguarantee(ifany)GuaranteeperiodImplementationstatusGuaranteetorelatedparty?
Inapplicable
Totalguaranteequotatothesubsidiariesapprovedinthereportingperiod(C1)0Totalamountofguaranteetothesubsidiariesactuallyincurredinthereportingperiod(C2)0
Totalguaranteequotatothesubsidiariesapprovedattheendofthereportingperiod(C3)0Totalbalanceofactualguaranteetothesubsidiariesattheendofthereportingperiod(C4)0
Totalamountofguarantees(i.e.Totalofthepreviousthreemajoritems)
Totalguaranteequotatothesubsidiariesapprovedinthereportingperiod(A1+B1+C1)60,000Totalamountofoutwardguaranteeactuallyincurredinthereportingperiod(A2+B2+C2)0
Totalamountofguaranteesalreadyapprovedattheendof95,000Totalendingbalanceofguaranteesattheendofthereportingperiod15,000
thereportingperiod(A3+B3+C3)(A4+B4+C4)
ProportionoftheactualguaranteesintheCompany’snetassets(namelyA4+B4+C4)4.64%
where
Amountofguaranteesofferedtotheshareholders,actualcontrolleranditsrelatedparties(D)0
Amountofguaranteeforliabilitiesdirectlyorindirectlyofferedtotheguaranteeswiththeasset-liabilityratioexceeding70%(E)0
Guaranteewithtotalamountexceeding50%ofthenetassets(F)0
Totalamountoftheaforesaidthreeguarantees(D+E+F)0
Fortheguaranteecontractnotyetdue,guaranteeresponsibilityincurredinthereportingperiodorthereisevidenceshowingthedescriptionofthepossiblerelateddischargeduty(ifany)Inapplicable
Notetotheoutwardguaranteeagainsttheestablishedprocedures(ifany)Inapplicable

DescriptionoftheguaranteewithcomplexmethodInapplicable

3.FinanceManagementonCommissionInapplicable

4.OtherImportantContractsInapplicableXIII.NotestoOtherSignificantEvents

1.AboutRenewaloftheAccountingFirmAfterreviewandapprovalattheCompany's11

th

sessionoftheTenthBoardofDirectorsand2022AnnualGeneralMeeting,theCompanydecidedtorenewDaHuaCPAsLLPastheauditorofCompany's2023annualfinancialstatementsandinternalcontrolforanotherfiscalyear.Forthedetail,pleaserefertothe“AnnouncementontheRenewaloftheCPAs2023-012”andthe“AnnouncementontheResolutionof2022AnnualGeneralMeeting2023-024disclosedbytheCompanyonhttp://www.cninfo.com.cn/onMarch18,2023andApril27,2023respectively.

2.AbouttheChangeoftheBusinessScopeandtheAmendmentoftheArticlesofAssociationAfterreviewandapprovalatthe13thmeetingofthe10thBoardofDirectorsand20231stExtraordinaryGeneralMeeting,theCompanydecidedtoaddnewbusinessscope,adjustthestandardizedexpressionoftheexistingbusinessscope,andrevisethecorrespondingprovisionsoftheCompany'sArticlesofAssociationbasedonthechangedbusinessscope.Fordetail,pleaserefertothe“AnnouncementontheResolutionofthe13thSessionofthe10thBoardofDirectors2023-025”andthe“AnnouncementontheChangeoftheBusinessScopeandtheAmendmentoftheArticlesofAssociation2023-027”andthe“AnnouncementontheResolutionof20231stExtraordinaryGeneralMeeting2023-031disclosedbytheCompanyonhttp://www.cninfo.com.cn/onMay16,2023andJune1,2023respectively.XIV.SignificantEventsoftheCompany'sSubsidiariesInapplicable

Section7ChangeoftheSharesandParticularsaboutShareholders

I.ChangeoftheShares

1.ChangeoftheShares

Inshares

BeforethechangeIncrease/decrease(+,-)uponthechangeAfterthechange
QuantityProportionNewissuingBonussharesSharesconvertedfromreserveOthersSub-totalQuantityProportion
I.Restrictedshares8,227,3101.97%000-3,089,460-3,089,4605,137,8501.23%
1.Sharesheldbythestate00.00%0000000.00%
2.Statecorporateshares00.00%0000000.00%
3.Otherdomesticshares8,227,3101.97%000-3,089,460-3,089,4605,137,8501.23%
Including:Domesticcorporateshares00.00%0000000.00%
Sharesheldbydomesticnaturalpersons8,227,3101.97%000-3,089,460-3,089,4605,137,8501.23%
4.Foreigninvestedshares00.00%0000000.00%
Including:Foreigncorporateshares00.00%0000000.00%
Sharesheldbyforeignnaturalpersons00.00%0000000.00%
II.Unrestrictedshares409,400,65098.03%0003,089,4603,089,460412,490,11098.77%
1.CNYordinaryshares359,463,95386.07%0003,089,4603,089,460362,553,41386.81%
2.ForeigninvestedshareslistedinMainlandChina49,936,69711.96%0000049,936,69711.96%
3.Foreigninvestedshareslistedabroad00.00%0000000.00%
4.Others00.00%000000.00%
III.Totalshares417,627,960100.00%00000417,627,960100.00%

Causeofthechangeofshares

1.Duringthereportingperiod,thereleaseconditionsofthethirdrestrictionreleaseperiodfortheCompany’srestrictedstockincentiveplan(PhaseI)andthefirstrestrictionreleaseperiodfortheCompany’srestrictedstockincentiveplan(PhaseII)weresatisfied,andtherestrictedsharescorrespondingtothereleasewerelistedfortradingandasaresult,3,436,710sharesoftherestrictedshareswerereduced(convertedintocirculatingshares);

2.Duringthereportingperiod,347,250restrictedshareswereaddedduetotheadjustmentofthetransferablequotaoftheseniorexecutives;Duetotheabovereasons,thetotalnumberofshareswithrestrictedsalesconditionsoftheCompanydecreasedby3,089,460shares,andthetotalnumberofshareswithoutrestrictedsalesconditionsincreasedby3,089,460shares,withthetotalnumberofsharesremainingunchangedApprovaloftheChangeoftheSharesReviewedandapprovedatthe10thsessionoftheTenthBoardofDirectors,thereleaseconditionsofthethirdrestrictionreleaseperiodfortheCompany’srestrictedstockincentiveplan(PhaseI)andthefirstrestrictionreleaseperiodfortheCompany’srestrictedstockincentiveplan(PhaseII)weresatisfied,theBoardofDirectorsoftheCompanydecidedtohandletheliftingofrestrictionsonthesaleof3,436,710A-sharerestrictedsharesinaccordancewithrelevantregulations,inaccordancewiththeauthorizationof20191stExtraordinaryGeneralMeetingin2019and20211stExtraordinaryGeneralMeeting.TransferoftheSharesChangedInapplicableProgressofimplementationofthestockrepurchaseTheCompany’s11thSessionoftheTenthBoardofDirectorsand2022GeneralMeetingreviewedandapprovedthe“ProposalonRepurchaseofPartialDomesticallyListedForeignShares(B-Shares).Forthedetail,pleaserefertotherelevantannouncementsdisclosedonwww.cninfo.com.onMarch18,2023andApril27,2023respectively.Endedthereportingperiod,theCompanyaccumulativelyrepurchased2,403,565sharesthroughacentralizedbiddingmethodwiththespecialaccountforthesecuritiesrepurchased,accountingfor0.58%oftheCompany’stotalsharecapital.ThehighesttransactionpricewasHK$8.00pershare,andthelowesttransactionpricewasHK$7.48/share,thetotalamountpaidwasHK$18,653,010.10(withthetransactioncostexclusive).ProgressofimplementationofreductionoftheholdingsizeofthesharesrepurchasedbycentralizedbiddingInapplicableInfluenceofthechangeofthesharesuponsuchfinancialindicatorsasthebasicEPSanddilutedEPS,netassetvaluepershareattributabletothecommonstockholdersinthepastyearandthelatestperiodInapplicableOtherinformationtheCompanyconsidersnecessaryorrequiredbythesecuritiesregulatoryauthoritytobedisclosed.Inapplicable

2.ChangeoftheRestrictedShares

Inshares

NamesoftheShareholdersNumberofrestrictedsharesatthebeginningofthereportingperiodNumberofrestrictedsharesrelievedinthereportingperiodNumberofrestrictedsharesincreasedinthereportingperiodNumberofrestrictedsharesattheendofthereportingperiodCauseofrestrictionDateofrelievingtherestriction
LiMing214,25076,67022,500160,080Lockedandnotyetunlockedrestrictedsharesheldbytheseniorexecutives1.AsatJanuary31,2023,76,670equityincentiverestrictedshareswereunlocked.2.TheresidualrestrictedsharesshallbeunlockedsubjecttotheconditionsofthelockedsharesforseniorexecutivesandthemeasuresfortheCompany’sequityincentivemanagement
PanBo214,22076,67022,500160,050Lockedandnotyetunlockedrestrictedsharesheldbytheseniorexecutives1.AsatJanuary31,2023,76,670equityincentiverestrictedshareswereunlocked.2.TheresidualrestrictedsharesshallbeunlockedsubjecttotheconditionsofthelockedsharesforseniorexecutivesandthemeasuresfortheCompany’sequityincentivemanagement
LuWanjun214,22076,67022,500160,050Lockedandnotyetunlockedrestrictedsharesheldbytheseniorexecutives1.AsatJanuary31,2023,76,670equityincentiverestrictedshareswereunlocked.2.TheresidualrestrictedsharesshallbeunlockedsubjecttotheconditionsofthelockedsharesforseniorexecutivesandthemeasuresfortheCompany’sequityincentivemanagement
LiuXiaoming214,22076,67022,500160,050Lockedandnotyetunlockedrestrictedsharesheldbytheseniorexecutives1.AsatJanuary31,2023,76,670equityincentiverestrictedshareswereunlocked.2.TheresidualrestrictedsharesshallbeunlockedsubjecttotheconditionsofthelockedsharesforseniorexecutivesandthemeasuresfortheCompany’sequityincentivemanagement
TangHaiyuan170,04069,9907,500107,550Lockedandnotyetunlockedrestrictedsharesheldbytheseniorexecutives1.AsatJanuary31,2023,69,990equityincentiverestrictedshareswereunlocked.2.TheresidualrestrictedsharesshallbeunlockedsubjecttotheconditionsofthelockedsharesforseniorexecutivesandthemeasuresfortheCompany’sequityincentivemanagement
ChenLibin213,40093,340-59,94060,120Notyetunlockedrestrictedshares1.AsatJanuary31,2023,93,340equityincentiverestrictedshareswereunlocked;2.theresidualrestrictedsharesshallbeunlockedsubjecttothemeasuresfortheCompany’sequityincentivemanagement.
BaoXianyong140,04060,000-39,96040,080Notyetunlockedrestrictedshares1.AsatJanuary31,2023,60,000equityincentiverestrictedshareswereunlocked;2.theresidualrestrictedsharesshallbeunlockedsubjecttothemeasuresfortheCompany’sequityincentivemanagement.
SunLei140,04060,000-39,96040,080Notyetunlockedrestrictedshares1.AsatJanuary31,2023,60,000equityincentiverestrictedshareswereunlocked;2.theresidualrestrictedsharesshallbeunlockedsubjecttothemeasuresfortheCompany’sequityincentivemanagement.
ShengLi140,04060,000-39,96040,080Notyetunlockedrestrictedshares1.AsatJanuary31,2023,60,000equityincentiverestrictedshareswereunlocked;2.theresidualrestrictedsharesshallbeunlockedsubjecttothemeasuresfortheCompany’sequityincentivemanagement.
Othershareholders6,566,8402,786,700429,5704,209,710Lockedandnotyetunlockedrestrictedsharesheldbytheretiredseniorexecutives1.AsatJanuary31,2023,2,786,700equityincentiverestrictedshareswereunlocked.2.TheresidualrestrictedsharesshallbeunlockedsubjecttotheconditionsofthelockedsharesfortheretiredseniorexecutivesandthemeasuresfortheCompany’sequityincentivemanagement.
Total8,227,3103,436,710347,2505,137,850----
Note:AsfouroftheoriginalincentiverecipientsintheRestrictedSharesIncentivePlan(PhaseII)wereretiredandtheconditionsforunlockingtherestrictedsharesattheCompany’slevelforthesecondphaseoftherestrictionliftingperiodhadnotbeensatisfied,theCompanyhandledtherepurchaseandcancellationproceduresfor2,347,870sharesofequityincentiverestrictedsharesinaccordancewithregulations.Asoftheendofthereportingperiod,therelevantshareshadnotbeencancelledandtheywereplacedinthe"SpecialAccountofFIYTAPrecisionTechnologyCo.,Ltd.forRepurchaseofSecurities“andincludedinthe"OtherShareholders".Thesesecuritieswerenotseparatelypresented.

II.IssuingandListingInapplicableIII.NumberofShareholdersandShareholding

Inshares

Totalcommonshareholdersattheendofthereportingperiod29,772Totalpreferenceshareholderswiththevotingpowerrecoveredattheendofthereportingperiod(ifany)(RefertoNote8)0
Sharesheldbythecommonshareholdersholdingover5%sharesorthetop10commonshareholders
NamesoftheShareholdersNatureoftheshareholderShareholdingproportionNumberofcommonsharesheldattheendofthereportingperiodIncrease/decreaseinthereportingperiodNumberoftherestrictedcommonsharesheldNumberoftheunrestrictedcommonsharesheldPledging,markingorfreezing
StatusofthesharesQuantity
AVICInternationalHoldingLimitedStatecorporate39.02%162,977,32700162,977,327
#WuJilinDomesticnaturalperson4.45%18,599,502653,888018,599,502
#XuGuoliangDomesticnaturalperson1.79%7,455,0682,190,30007,455,068
QiuHongDomesticnaturalperson0.59%2,470,000100,00002,470,000
ChinaMerchantsSecurities(HK)Co.,LimitedForeignlegalentity0.43%1,788,0111,538,98801,788,011
ChinaConstructionBankCo.,Ltd.-ChinaUniversalAssetCSIGuoxinCentral-SoesShareholderReturnIndexExchangeTradedFundOthers0.41%1,706,2001,706,20001,706,200
IndustrialandCommercialBankofChinaLTD-RongtongPowerPioneerHybridSecuritiesInvestmentFundOthers0.39%1,639,5341,639,53401,639,534
IndustrialandCommercialBankofChinaLtd-GuangfaCSIGuoxinCentral-SoesShareholderReturnIndexExchangeTradedFundOthers0.37%1,548,2001,548,20001,548,200
BankofJiangsuCo.,Ltd.-BoseraHuirongReturns1-YearHoldingHybridSecuritiesInvestmentFundOthers0.36%1,483,0001,483,00001,483,000
#QuYongjieDomesticnaturalperson0.30%1,266,800001,266,800
Aboutthefactthatastrategicinvestororordinarycorporatebecameoneofthetoptencommonshareholdersduetoplacementofnewshares(ifany)(RefertoNote3)Inapplicable
ExplanationonassociatedrelationshiporconsistentactionofTheCompanyhasnoideaonwhethertheabove10shareholdersareassociatedorareactinginconcert.
theaboveshareholders
Notetotheaforesaidshareholdersinvolvingentrusting/beingentrustedwithvotingpowerandthewaiverofvotingpowerAmongtheaboveshareholders,AVICInternationalHoldingLimitedauthorizedrepresentativestoexercisevotingrightsontheirbehalfintheCompany’s2022AnnualGeneralMeetingand20231stExtraordinaryGeneralMeetingwiththenumberofrepresentativesharesbeing162,977,327shares.Fortheresultofthevoting,refertotherelevantannouncementpublishedbytheCompanyonhttp://www.cninfo.com.cn.
Thereisaspecialrepurchaseaccountamongthetop10shareholders(ifany)(seeNote11)Specialnotetothedesignatedrepurchaseaccountintop10shareholders(ifany)(RefertoNote11)1.IntheCompany'sA-sharesspecialrepurchaseaccount-“theSpecialRepurchaseSecuritiesAccountofFiytaPrecisionTechnologyCo.,Ltd."thenumberofordinarysharesheldattheendofthereportingperiodbeing2,347,870shareswiththeholdingproportionof0.56%wasmainlyduetothattheCompanywasinprocessofhandlingtheproceduresforrepurchaseandcancellationofsomeequityincentiverestrictedshares;2.IntheCompany'sB-sharesspecialrepurchaseaccount-“theSpecialRepurchaseSecuritiesAccountofFiytaPrecisionTechnologyCo.,Ltd."thenumberofordinarysharesheldattheendofthereportingperiodbeing2,403,565shareswiththeholdingproportionof0.58%wasmainlyduetothattheCompanywasinprocessofimplementingrepurchaseofB-shares.Accordingtoregulations,theabove-mentionedrepurchasespecialaccountswerenotincludedinthelistofthetop10shareholders.
Sharesheldbytop10shareholdersofunrestrictedshares
NamesoftheShareholdersQuantityofunrestrictedsharesheldattheendofthereportingperiodSharetype
SharetypeQuantity
AVICInternationalHoldingLimited162,977,327CNYordinaryshares162,977,327
#WuJilin18,599,502CNYordinaryshares18,599,502
#XuGuoliang7,455,068CNYordinaryshares7,455,068
QiuHong2,470,000CNYordinaryshares2,470,000
ChinaMerchantsSecurities(HK)Co.,Limited1,788,011Domesticallylistedforeigninvestmentshares1,788,011
ChinaConstructionBankCo.,Ltd.-ChinaUniversalAssetCSIGuoxinCentral-SoesShareholderReturnIndexExchangeTradedFund1,706,200CNYordinaryshares1,706,200
IndustrialandCommercialBankofChinaLTD-RongtongPowerPioneerHybridSecuritiesInvestmentFund1,639,534CNYordinaryshares1,639,534
IndustrialandCommercialBankofChina,Ltd.-GuangfaCSIGuoxinCentral-SoesShareholderReturnIndexExchangeTradedFund1,548,200CNYordinaryshares1,548,200
BankofJiangsuCo.,Ltd.-BoseraHuirongReturns1-YearHoldingHybridSecuritiesInvestmentFund1,483,000CNYordinaryshares1,483,000
#QuYongjie1,266,800CNYordinaryshares1,266,800
Notetotheassociatedrelationshiporconsistentactionamongthetop10shareholdersofnon-restrictedcommonsharesandthatbetweenthetop10shareholdersofnon-restrictedcommonsharesandtop10commonshareholders.TheCompanyhasnoideaonwhethertheabove10shareholdersareassociatedorareactinginconcert.
Notetothetop10commonshareholdersinvolvedinmarginfinancing&securitieslending(ifany)(RefertoNote4)1.Inadditiontothe10,593,376sharesheldthroughtheordinarysecuritiesaccount,WuJilin,oneoftheshareholdersoftheCompany,alsoholds8,006,126sharesthroughtheclientcredittransactionguaranteesecuritiesaccountofChinaCICCWealthSecuritiesCo.,Ltd.Therefore,WuJilinisactuallyholding18,599,502shares;2.Inadditiontothe6,853,168sharesheldthroughtheordinarysecuritiesaccount,XuGuoliang,oneoftheshareholdersoftheCompany,alsoholds601,900sharesthroughtheclientcredittransactionguaranteesecuritiesaccountofGuosenSecuritiesCo.,Ltd.Therefore,XuGuoliangisactuallyholding7,455,068shares;3.Inadditiontothe22,800sharesheldthroughtheordinarysecuritiesaccount,QuYongjie,oneoftheshareholdersoftheCompany,alsoholds1,244,000sharesthroughtheclientcredittransactionguaranteesecuritiesaccountofShanxiSecuritiesCo.,Ltd.Therefore,QuYongjieisactuallyholding1,266,800shares;

Didthetoptencommonshareholdersortoptenshareholdersofunrestrictedcommonsharesconductcontractualrepurchaseduringthereportingperiod?NoIV.ChangeinSharesHeldbyDirectors,SupervisorsandSeniorExecutives

NameTitleOfficeStatusNumberofsharesheldShareholdingShareholdingNumberofsharesNumberofrestrictedNumberofrestrictedNumberofrestricted
atthebeginningofthereportingperiod(shares)increasedinthereportingperiod(shares)decreasedinthereportingperiod(shares)heldatendofthereportingperiod(shares)sharesgrantedatthebeginningofthereportingperiod(shares)sharesgrantedduringthereportingperiod(shares)sharesgrantedattheendofthereportingperiod(shares)
ZhangXuhuaChairmanoftheBoardInoffice0000000
XiaoYiDirectorInoffice0000000
XiaoZhanglinDirectorInoffice0000000
LiPeiyinDirectorInoffice0000000
DengJianghuDirectorInoffice0000000
PanBoManagingDirectorInoffice280,00000230,050176,720050,100
WangJianxinIndependentDirectorInoffice0000000
ZhongHongmingIndependentDirectorInoffice0000000
TangXiaofeiIndependentDirectorInoffice0000000
ZhengQiyuanChairmanoftheSupervisoryCommitteeInoffice0000000
CaoZhenSupervisorInoffice0000000
HuJingSupervisorInoffice9,000009,000000
LuWanjundeputyGMandchieflawadviserInoffice280,000070,000160,050176,720050,100
LiuXiaomingDeputyGMInoffice280,00000230,050176,720050,100
LiMingDeputyGMInoffice280,040070,000160,090176,720050,100
SongYaomingChiefAccountant,DeputyGMandtheSecretaryoftheBoardInoffice0000000
TangHaiyuanDeputyGMInoffice210,000052,500107,550170,040050,100
Total----1,339,0400192,500896,790876,9200250,500

V.ChangeoftheControllingShareholderorActualControllerChangeofthecontrollingshareholderinthereportingperiodInapplicableChangeoftheactualcontrollerinthereportingperiodInapplicable

Section8AboutthePreferredSharesInapplicable

Section9AboutBonds

Inapplicable

Section10FinancialReport

I.Auditors’ReportHasthesemi-annualreportbeenauditedNoII.FinancialStatementsThecurrencyappliedinthefinancialnotesandstatementsisRenminbi(CNY)

1.ConsolidatedBalanceSheetPreparedbyFIYTAPrecisionTechnologyCo.,Ltd.

June30,2023

InCNY

ItemsJune30,2023January01,2023
Currentassets:
Monetarycapital519,368,795.12.313,747,463.64
Settlementreserve
Inter-banklending
Transactionalfinancialassets
Derivativefinancialassets
Notesreceivable14,629,298.90.32,214,912.10
Accountsreceivable399,576,267.99305,290,959.68
Financingwithaccountsreceivable
Advancepayment8,005,894.20.8,039,794.97
Receivablepremium
Reinsuranceaccountsreceivable
Reserveforreinsurancecontractreceivable
Otherreceivables57,386,850.68.56,918,019.48
Including:Interestreceivable
Dividendsreceivable
Redemptorymonetarycapitalforsale
Inventories2,085,380,802.482,141,320,373.67
Contractassets
Held-for-saleassets
Non-currentassetsduewithinayear
Othercurrentassets39,308,621.80.66,339,505.32
Totalcurrentassets3,123,656,531.17.2,923,871,028.86
Non-currentassets:
Loanissuingandadvanceincash
Equityinvestment
Otherdebtinvestment
Longtermaccountsreceivable
Long-termequityinvestments56,484,605.2558,182,086.90
Investmentinotherequityinstruments85,000.00.
Othernon-currentfinancialassets
Investment-orientedrealestate367,140,251.89374,979,494.71
Fixedassets356,142,836.23364,628,765.17
Construction-in-progress
Productivebiologicalasset
OilandGasAssets
Userightassets87,234,100.50.110,330,512.03
Intangibleassets31,559,015.75.33,200,218.63
Developmentexpenses
Goodwill
Longtermexpensestobeapportioned124,953,334.60.144,488,452.18
Deferredincometaxasset92,102,693.23.95,784,611.94
Othernon-currentassets12,604,532.0411,593,741.57
Totalnon-currentassets1,128,221,369.49.1,193,272,883.13
Totalassets4,251,877,900.66.4,117,143,911.99
Currentliabilities:
Shorttermborrowings390,273,749.99.290,237,111.11
Borrowingsfromcentralbank
Loansfromotherbanks
Transactionalfinancialliabilities
Derivativefinancialliabilities
Notespayable2,000,600.00
Accountspayable191,488,208.83.170,589,456.67
AdvanceReceipts9,945,161.7216,960,128.83
Contractliabilities19,287,771.81.16,844,437.47
Moneyfromsaleoftherepurchasedfinancialassets
Depositstakingandinterbankplacement
Actingtradingsecurities
Incomefromsecuritiesunderwritingoncommission
Payrollpayabletotheemployees111,187,240.92136,587,939.38
Taxespayable73,848,183.25.60,770,168.30
Otherpayables129,167,556.82.165,060,122.58
Including:interestpayable
Dividendspayable2,889,585.486,324,013.97
Servicechargeandcommissionpayable
Payablereinsurance
Held-for-saleliabilities
Non-currentliabilitiesduewithinayear57,351,473.17.71,546,316.16
Othercurrentliabilities2,146,851.311,686,806.01
Totalcurrentliabilities984,696,197.82.932,283,086.51
Non-currentliabilities:
Reserveforinsurancecontract
Long-termborrowings
Bondspayable
Including:preferredshares
Perpetualbond
Leaseliabilities30,745,380.62.41,642,561.58
Long-termaccountspayable
Longtermpayrollpayabletoemployees
Estimatedliabilities
Deferredincome1,295,926.80.1,295,926.80
Deferredincometaxliability5,441,648.895,498,844.95
Othernon-currentliabilities
Totalnon-currentliabilities37,482,956.31.48,437,333.33
Totalliabilities1,022,179,154.13.980,720,419.84
Owner’sequity:
Capitalstock417,627,960.00.417,627,960.00
Otherequityinstruments
Including:preferredshares
Perpetualbond
Capitalreserve1,003,354,306.96.1,007,086,643.48
Less:sharesinstock47,129,717.65.50,759,806.16
Othercomprehensiveincome15,144,598.965,739,589.89
Specialreserve2,747,263.00.2,012,064.91
Surplusreserve275,010,401.50.275,010,401.50
Reserveagainstgeneralrisks
Retainedearnings1,562,943,933.76.1,479,706,638.53
Totalowners’equityattributabletotheparentcompany3,229,698,746.53.3,136,423,492.15
Minorityshareholders’equity
Totalowner’sequity3,229,698,746.53.3,136,423,492.15
Totalliabilitiesandowners’equity4,251,877,900.66.4,117,143,911.99

Legalrepresentative:ZhangXuhuaChiefFinancialOfficer:SongYaoming

PersoninchargeoftheAccountingDepartment:TianHui

2.BalanceSheet(ParentCompany)

InCNY

ItemsJune30,2023January01,2023
Currentassets:
Monetarycapital413,234,945.06.274,691,023.16
Transactionalfinancialassets
Derivativefinancialassets
Notesreceivable
Accountsreceivable9,527,390.87603,216.03
Financingwithaccountsreceivable
Advancepayment
Otherreceivables667,253,750.44.839,782,543.07
Including:Interestreceivable
Dividendsreceivable
Inventories
Contractassets
Held-for-saleassets
Non-currentassetsduewithinayear
Othercurrentassets12,544,185.27.14,107,604.63
Totalcurrentassets1,102,560,271.64.1,129,184,386.89
Non-currentassets:
Equityinvestment
Otherdebtinvestment
Longtermaccountsreceivable
Long-termequityinvestments1,546,969,980.931,552,310,486.50
Investmentinotherequityinstruments85,000.00.
Othernon-currentfinancialassets
Investment-orientedrealestate299,208,476.85305,676,084.09
Fixedassets205,123,588.08209,495,642.59
Construction-in-progress
Productivebiologicalasset
OilandGasAssets
Userightassets
Intangibleassets22,808,397.38.23,522,355.93
Developmentexpenses
Goodwill
Longtermexpensestobeapportioned6,440,459.33.8,240,653.62
Deferredincometaxasset712,027.80.1,904,597.73
Othernon-currentassets5,530,288.432,051,932.75
Totalnon-currentassets2,086,793,218.80.2,103,286,753.21
Totalassets3,189,353,490.44.3,232,471,140.10
Currentliabilities:
Shorttermborrowings390,273,749.99.290,237,111.11
Transactionalfinancialliabilities
Derivativefinancialliabilities
Notespayable
Accountspayable4,256,200.53.1,048,201.41
AdvanceReceipts9,945,161.7216,960,128.83
Contractliabilities
Payrollpayabletoemployees24,918,704.2427,139,007.97
Taxespayable7,843,400.85.778,299.01
Otherpayables239,551,661.30.299,198,966.56
Including:interestpayable
Dividendspayable2,889,585.486,324,013.97
Held-for-saleliabilities
Non-currentliabilitiesduewithinayear
Othercurrentliabilities
Totalcurrentliabilities676,788,878.63.635,361,714.89
Non-currentliabilities:
Long-termborrowings
Bondspayable
Including:preferredshares
Perpetualbond
Leaseliabilities
Long-termaccountspayable
Longtermpayrollpayabletoemployees
Estimatedliabilities
Deferredincome1,295,926.80.1,295,926.80
Deferredincometaxliability
Othernon-currentliabilities
Totalnon-currentliabilities1,295,926.80.1,295,926.80
Totalliabilities678,084,805.43.636,657,641.69
Owner’sequity:
Capitalstock417,627,960.00.417,627,960.00
Otherequityinstruments
Including:preferredshares
Perpetualbond
Capitalreserve1,006,232,802.77.1,010,917,776.19
Less:sharesinstock47,129,717.65.50,759,806.16
Othercomprehensiveincome
Specialreserve
SurplusReserve275,010,401.50.275,010,401.50
Retainedearnings859,527,238.39.943,017,166.88
Totalowner’sequity2,511,268,685.01.2,595,813,498.41
Totalliabilitiesandowners’equity3,189,353,490.44.3,232,471,140.10

Legalrepresentative:ZhangXuhuaChiefFinancialOfficer:SongYaoming

PersoninchargeoftheAccountingDepartment:TianHui

3.ConsolidatedProfitStatement

InCNY

ItemsThefirsthalfyearof2023Thefirsthalfyearof2022
I.Turnover2,364,505,262.56.2,183,570,749.11
Including:operatingincome2,364,505,262.56.2,183,570,749.11
Interestincome
Earnedinsurancepremium
Servicechargeandcommissionincome
II.Totaloperatingcosts2,129,534,984.072,019,291,580.02
Including:Operatingcosts1,512,527,481.83.1,373,664,560.41
Interestpayment
Servicechargeandcommissionpayment
SurrenderValue
Compensationexpenses,net
Provisionofreserveforinsuranceliabilities,net
Paymentofpolicydividend
Reinsuranceexpenses
Taxesandsurcharges15,762,456.07.14,201,193.33
Salescosts456,273,629.20477,806,040.76
Administrativeexpenses104,621,729.61116,715,664.69
R&Dexpenditures28,161,470.5425,026,713.85
Financialexpenses12,188,216.8211,877,406.98
Where:Interestcost6,690,859.35.9,731,247.68
Interestincome2,432,180.031,981,825.39
Plus:Otherincome6,691,609.41.13,369,782.95
Investmentincome(lossisstatedwith“-”)-1,697,481.65.2,462,626.52
Including:returnoninvestmentinassociateandjointventure-1,697,481.65.2,462,626.52
Gainfromthederecognitionofthefinancialassetsmeasuredatamortisedcost
Exchangeincome(lossstatedwith“-“)
Netexposurehedgeincome(lossstatedwith“-“)
Incomefromchangeoffairvalue(lossisstatedwith“-”)
Lossfromimpairmentofcredit(lossisstatedwith“-”)4,333,947.62.1,848.85
Lossfromimpairmentofassets(lossisstatedwith“-”)-348,218.69.
Incomefromdisposalofassets(lossisstatedwith“-“)-76,689.73.-816,021.16
III.OperatingProfit(lossisstatedwith“-“)244,221,664.14.178,949,187.56
Plus:Non-operatingincome596,523.83.208,587.88
Less:Non-operatingexpenses291,601.18.825,897.36
IV.Totalprofit(totallossisstatedwith“-”)244,526,586.79.178,331,878.08
Less:Incometaxexpense57,131,519.56.37,639,093.79
V.NetProfit(netlossisstatedwith“-“)187,395,067.23.140,692,784.29
(I)Classificationbasedonoperationsustainability
1.NetProfitfromsustainableoperation(netlossisstatedwith“-”)187,395,067.23.140,692,784.29
2.NetProfitfromterminationofoperation(netlossisstatedwith“-”)
(II)Classificationbyownership
1.Netprofitattributabletotheparentcompany’sshareholder(netlossisstatedwith“-”)187,395,067.23.140,692,784.29
2.Minorityshareholders’gain/loss(netlossisstatedwith“-”)
VI.Netofothercomprehensiveincomeaftertax9,405,009.07.424,855.72
Netofothercomprehensiveincomeaftertaxattributabletotheparentcompany’sowner9,405,009.07.424,855.72
(I)Othercomprehensiveincomewhichcannotbere-classifiedintogainandloss
1.Remeasurementofthechangeamountinthedefinedbenefitplan
2.Othercomprehensiveincomewhichcannotbeconvertedintogainandlossbasedontheequitymethod
3.Movementofthefairvalueoftheinvestmentinotherequityinstruments
4.MovementofthefairvalueoftheCompany’sowncreditrisk
5.Others
(II)Othercomprehensiveincomewhichshallbere-classifiedintogainandloss9,405,009.07.424,855.72
1.Othercomprehensiveincomewhichcanbeconvertedintogainandlossbasedontheequitymethod
2.Movementofthefairvalueoftheinvestmentinotherdebtinstruments
3.Amountofthereclassifiedfinancialassetscountedtotheothercomprehensiveincome
4.Provisionforimpairmentofthecreditoftheothercreditor'srightinvestment
5.Reserveforcashflowhedge
6.Conversiondifferenceinforeigncurrencystatements9,405,009.07.424,855.72
7.Others
Netamountofothercomprehensiveincomeaftertaxattributabletominorityshareholders
VII.Totalcomprehensiveincome196,800,076.30.141,117,640.01
Totalcomprehensiveincomeattributabletotheparentcompany’sowner196,800,076.30.141,117,640.01
Totalcomprehensiveincomeattributabletominorityshareholders
VIII.Earningspershare:
(I)Basicearningspershare0.4517.0.3351
(II)Dilutedearningspershare0.4517.0.3351

Legalrepresentative:ZhangXuhuaChiefFinancialOfficer:SongYaoming

PersoninchargeoftheAccountingDepartment:TianHui

4.StatementofProfit,ParentCompany

InCNY

ItemsThefirsthalfyearof2023Thefirsthalfyearof2022
I.Operatingrevenue92,042,875.14.91,642,614.69
Less:Operatingcost22,121,058.14.19,190,036.95
Taxesandsurcharges3,858,296.21.3,830,748.17
Salescosts510,613.70630,681.48
Administrativeexpenses29,511,087.7032,867,677.72
R&Dexpenditures5,986,203.219,134,485.17
Financialexpenses-103,859.98-613,920.42
Where:Interestcost1,476,552.70.1,770,519.63
Interestincome1,953,770.611,830,268.89
Plus:Otherincome753,278.99.587,709.30
Investmentincome(lossisstatedwith“-”)-1,697,481.652,462,626.52
Including:returnoninvestmentinassociateandjointventure-1,697,481.652,462,626.52
Gainfromthederecognitionofthefinancialassetsmeasuredatamortisedcost(lossisstatedwith“-”)
Netexposurehedgeincome(lossstatedwith“-“)
Incomefromchangeoffairvalue(lossisstatedwith“-”)
Lossfromimpairmentofcredit(lossisstatedwith“-”)-362,763.81-186,946.13
Lossfromimpairmentofassets(lossisstatedwith“-”)
Incomefromdisposalofassets(lossisstatedwith“-“)-37,783.55-13,335.34
II.OperatingProfit(lossisstatedwith“-“)28,814,726.1429,452,959.97
Plus:Non-operatingincome8,037.20104,980.99
Less:Non-operatingexpenses837.183,084.22
III.Totalprofit(totallossisstatedwith“-“)28,821,926.1629,554,856.74
Less:Incometaxexpense8,154,082.656,788,603.54
IV.NetProfit(netlossisstatedwith“-“)20,667,843.5122,766,253.20
(I)NetProfitfromsustainableoperation(netlossisstatedwith“-”)20,667,843.5122,766,253.20
(II)NetProfitfromterminationofoperation(netlossisstatedwith“-”)
V.Netofothercomprehensiveincomeaftertax
(I)Othercomprehensiveincomewhichcannotbere-classifiedintothegainandloss
1.Remeasurementofthechangeamountinthedefinedbenefitplan
2.Othercomprehensiveincomewhichcannotbeconvertedintogainandlossbasedontheequitymethod
3.Movementofthefairvalueoftheinvestmentinotherequityinstruments
4.MovementofthefairvalueoftheCompany’sowncreditrisk
5.Others
(II)Othercomprehensiveincomewhichshallbere-classifiedintogainandloss
1.Othercomprehensiveincomewhichcanbeconvertedintogainandlossbasedontheequitymethod
2.Movementofthefairvalueoftheinvestmentinotherdebtinstruments
3.Amountofthereclassifiedfinancialassetscountedtotheothercomprehensiveincome
4.Provisionforimpairmentofthecreditoftheothercreditor'srightinvestment
5.Reserveforcashflowhedge
6.Conversiondifferenceinforeigncurrencystatements
7.Others
VI.Totalcomprehensiveincome20,667,843.5122,766,253.20
VII.Earningspershare:
(I)Basicearningspershare
(II)Dilutedearningspershare

Legalrepresentative:ZhangXuhuaChiefFinancialOfficer:SongYaoming

PersoninchargeoftheAccountingDepartment:TianHui

5.ConsolidatedCashFlowStatement

InCNY

ItemsThefirsthalfyearof2023Thefirsthalfyearof2022
I.Cashflowsarisingfromoperatingactivities:
Cashreceivedfromsalesofgoodsandsupplyofservices2,544,494,031.572,393,028,123.16
Netincreaseofcustomers’depositandduefrombanks
Netincreaseofborrowingsfromthecentralbank
Netincreaseofborrowingsfromotherfinancialinstitutions
Cashreceivedfromthepremiumoftheoriginalinsurancecontract
Netcashreceivedfromthereinsurancebusiness
Netincreaseofthereservefrompolicyholdersandinvestment
Cashreceivedfrominterest,servicechargeandcommission
Netincreaseofloanfromotherbanks
Netincreaseoffundfromrepurchasebusiness
Netcashreceivedfromsecuritiestradingoncommission
Rebatedtaxesreceived850,371.864,558,409.98
Otheroperationactivityrelatedcashreceipts37,298,851.1937,580,077.51
Subtotalofcashflowinfromoperatingactivity2,582,643,254.622,435,166,610.65
Cashpaidforpurchaseofgoodsandreceptionoflaborservices1,584,272,785.871,500,723,327.63
Netincreaseofloansandadvancestocustomers
Netincreaseofduefromcentralbankandduefromotherbanks
Cashfrompaymentforsettlementoftheoriginalinsurancecontract
Netincreaseofthelendingcapital
Cashpaidforinterest,servicechargeandcommission
Cashforpaymentofpolicydividend
Cashpaidtoandforstaff336,029,420.86367,134,428.28
Taxespaid135,231,581.42133,532,633.53
Otherbusinessactivityrelatedcashpayments182,449,622.85155,389,957.61
Subtotalofcashflowoutfromoperatingactivity2,237,983,411.002,156,780,347.05
Netcashflowsarisingfromoperatingactivities344,659,843.62278,386,263.60
II.Cashflowarisingfrominvestmentactivities:
Cashreceivedfromrecoveryofinvestment
Cashreceivedfrominvestmentincome
Netcashfromdisposaloffixedassets,intangibleassetsandrecoveryofotherlongtermassets3,545.41119,998.33
Netcashreceivedfromdisposalofsubsidiariesandotheroperatingunits
Otherinvestmentactivityrelatedcashreceipts
Subtotalofcashflowinfrominvestmentactivity3,545.41119,998.33
Cashpaidforpurchase/constructionoffixedassets,Intangibleassetsandotherlongtermassets36,273,631.6553,962,036.53
Cashpaidforinvestment
Netincreaseofthepledgedloan
Netcashpaidforacquisitionofsubsidiariesandotheroperationunits
Otherinvestmentactivityrelatedcashpayments
Subtotalofcashflowoutfrominvestmentactivity36,273,631.6553,962,036.53
Netcashflowarisingfrominvestmentactivities:-36,270,086.24-53,842,038.20
III.Cashflowarisingfromfund-raisingactivities:
Cashreceivedfromabsorbinginvestment
Incl.:Cashreceivedfromthesubsidiaries’absorptionofminorityshareholders’investment
Cashreceivedfromloans250,000,000.00705,155,704.29
Otherfinancingactivityrelatedcashreceipts
Subtotalofcashflowinfromfundraisingactivity250,000,000.00705,155,704.29
Cashpaidfordebtrepayment150,000,000.00500,174,365.00
Cashpaidfordividend/profitdistributionorrepaymentofinterest110,259,489.52129,988,270.60
Including:Dividendandprofitpaidbythesubsidiariestominorityshareholders
Otherfinancingactivityrelatedcashpayments92,370,343.32116,704,112.45
Sub-totalcashflowpaidforfinancingactivities352,629,832.84746,866,748.05
Netcashflowarisingfromfund-raisingactivities-102,629,832.84-41,711,043.76
IV.Changeofexchangerateinfluencingthecashandcashequivalent-138,593.06786,011.77
V.Netincreaseofcashandcashequivalents205,621,331.48183,619,193.41
Plus:Openingbalanceofcashandcashequivalents313,747,463.64210,254,737.14
VI.Endingbalanceofcashandcashequivalents519,368,795.12393,873,930.55

Legalrepresentative:ZhangXuhuaChiefFinancialOfficer:SongYaoming

PersoninchargeoftheAccountingDepartment:TianHui

6.CashFlowStatement,ParentCompany

InCNY

ItemsThefirsthalfyearof2023Thefirsthalfyearof2022
I.Cashflowsarisingfromoperatingactivities
Cashreceivedfromsalesofgoodsandsupplyofservices84,192,699.4683,213,751.44
Rebatedtaxesreceived7,647.56
Otheroperationactivityrelatedcashreceipts2,141,372,420.702,152,559,822.69
Subtotalofcashflowinfromoperatingactivity2,225,565,120.162,235,781,221.69
Cashpaidforpurchaseofgoodsandreceptionoflaborservices
Cashpaidtoandforstaff29,190,598.8131,495,381.68
Taxespaid5,480,282.088,848,751.02
Otherbusinessactivityrelatedcashpayments2,002,201,028.422,023,994,609.32
Subtotalofcashflowoutfromoperatingactivity2,036,871,909.312,064,338,742.02
Netcashflowsarisingfromoperatingactivities188,693,210.85171,442,479.67
II.Cashflowarisingfrominvestmentactivities:
Cashreceivedfromrecoveryofinvestment
Cashreceivedfrominvestmentincome
Netcashfromdisposaloffixedassets,intangibleassetsandrecoveryofotherlongtermassets200.003,973,162.69
Netcashreceivedfromdisposalofsubsidiariesandotheroperatingunits
Otherinvestmentactivityrelatedcashreceipts
Subtotalofcashflowinfrominvestmentactivity200.003,973,162.69
Cashpaidforpurchase/constructionoffixedassets,Intangibleassetsandotherlongtermassets4,515,871.592,196,743.47
Cashpaidforinvestment
Netcashpaidforacquisitionofsubsidiariesandotheroperationunits
Otherinvestmentactivityrelatedcashpayments
Subtotalofcashflowoutfrominvestmentactivity4,515,871.592,196,743.47
Netcashflowarisingfrominvestmentactivities:-4,515,671.591,776,419.22
III.Cashflowarisingfromfund-raisingactivities:
Cashreceivedfromabsorbinginvestment
Cashreceivedfromloans250,000,000.00690,000,000.00
Otherfinancingactivityrelatedcashreceipts
Subtotalofcashflowinfromfundraisingactivity250,000,000.00690,000,000.00
Cashpaidfordebtrepayment150,000,000.00500,000,000.00
Cashpaidfordividend/profitdistributionorrepaymentofinterest110,259,489.52129,931,071.56
Otherfinancingactivityrelatedcashpayments35,483,644.8653,318,818.77
Sub-totalcashflowpaidforfinancingactivities295,743,134.38683,249,890.33
Netcashflowarisingfromfund-raisingactivities-45,743,134.386,750,109.67
IV.Changeofexchangerateinfluencingthecashandcashequivalent109,517.02323,297.27
V.Netincreaseofcashandcashequivalents138,543,921.90180,292,305.83
Plus:Openingbalanceofcashandcashequivalents274,691,023.16171,022,392.92
VI.Endingbalanceofcashandcashequivalents413,234,945.06351,314,698.75

Legalrepresentative:ZhangXuhuaChiefFinancialOfficer:SongYaoming

PersoninchargeoftheAccountingDepartment:TianHui

7.ConsolidatedStatementofChangesinOwner’sEquityAmountinthereportingperiod

InCNY

ItemsThefirsthalfyearof2023
Owners’equityattributabletotheparentcompanyMinorityshareholders’equityTotalowner’sequity
CapitalstockOtherequityinstrumentsCapitalreserveLess:treasurystockOthercomprehensiveincomeSpecialreserveSurplusReserveProvisionforgeneralrisksRetainedearningsOthersSub-total
PreferredsharesPerpetualbondOthers
I.Endingbalanceofthepreviousyear417,627,960.001,007,086,643.4850,759,806.165,739,589.892,012,064.91275,010,401.501,479,706,638.533,136,423,492.153,136,423,492.15
Plus:Changeinaccountingpolicy
Correctionofpreviouserrors
Consolidationofenterprisesunderthecommoncontrol
Others
II.Openingbalanceofthereportingyear417,627,960.001,007,086,643.4850,759,806.165,739,589.892,012,064.91275,010,401.501,479,706,638.533,136,423,492.153,136,423,492.15
III.Decrease/increaseofthereportyear(decreaseisstatedwith“-“)-3,732,336.52-3,630,088.519,405,009.07735,198.0983,237,295.2393,275,254.3893,275,254.38
(I)Totalcomprehensiveincome9,405,009.07187,395,067.23196,800,076.30196,800,076.30
(II)Owners’inputanddecreaseofcapital-3,732,336.52-3,630,088.51-102,248.01-102,248.01
1.Commonsharescontributedbytheowner17,007,830.70-17,007,830.70-17,007,830.70
2.Capitalcontributedbyotherequityinstrumentsholders
3.Amountofpaymentforsharescountedtoowners’equity-3,729,602.11-20,637,919.2116,908,317.1016,908,317.10
4.Others-2,734.41-2,734.41-2,734.41
(III)ProfitDistribution-104,157,772.00-104,157,772.00-104,157,772.00
1.Provisionofsurplusreserve
2.Provisionforgeneralrisks
3.Distributionstotheowners(orshareholders)-104,157,772.00-104,157,772.00-104,157,772.00
4.Others
(IV)Internalcarry-overofowners’equity
1.Capitalizationofcapitalreserve(orcapitalstock)
2.Capitalizationofsurplusreserve(orcapitalstock)
3.Lossmadeupforwithsurplusreserve
4.Settingoftheamountinvolvedinthemovementofthebeneficialplancarriedovertotheretainedearnings
5.Othercomprehensiveincomecarried-overtotheretainedearnings
6.Others
(V)Specialreserve735,198.09735,198.09735,198.09
1.Provisioninthereportingperiod816,618.92816,618.92816,618.92
2.Appliedinthereportingperiod-81,420.83-81,420.83-81,420.83
(VI)Others
IV.Endingbalanceofthereportingperiod417,627,960.001,003,354,306.9647,129,717.6515,144,598.962,747,263.00275,010,401.501,562,943,933.763,229,698,746.533,229,698,746.53

Amountofthepreviousyear

InCNY

ItemsThefirsthalfyearof2022
Owners’equityattributabletotheparentcompanyMinorityshareholders’equityTotalowner’sequity
CapitalstockOtherequityinstrumentsCapitalreserveLess:treasurystockOthercomprehensiveincomeSpecialreserveSurplusReserveProvisionforgeneralrisksRetainedearningsOthersSub-total
PreferredsharesPerpetualbondOthers
I.Endingbalanceofthepreviousyear426,051,015.001,040,908,194.1360,585,678.92-7,658,346.401,062,731.13275,010,401.501,338,444,326.093,013,232,642.533,013,232,642.53
Plus:Changeinaccountingpolicy
Correctionofpreviouserrors
Consolidationofenterprisesunderthecommoncontrol
Others
II.Openingbalanceofthereportingyear426,051,015.001,040,908,194.1360,585,678.92-7,658,346.401,062,731.13275,010,401.501,338,444,326.093,013,232,642.533,013,232,642.53
III.Decrease/increaseofthereportyear(decreaseisstatedwith“-“)5,596,697.4943,255,975.92424,855.72491,246.4415,273,644.89-21,469,531.38-21,469,531.38
(I)Totalcomprehensiveincome424,855.72140,692,784.29141,117,640.01141,117,640.01
(II)Owners’inputanddecreaseofcapital5,596,697.4943,255,975.92-37,659,278.43-37,659,278.43
1.Commonsharescontributedbytheowner50,252,831.88-50,252,831.88-50,252,831.88
2.Capitalcontributedbyotherequityinstrumentsholders
3.Amountofpaymentforsharescountedtoowners’equity5,611,740.66-6,996,855.9612,608,596.6212,608,596.62
4.Others-15,043.17-15,043.17-15,043.17
(III)ProfitDistribution-125,419,139.40-125,419,139.40-125,419,139.40
1.Provisionofsurplusreserve
2.Provisionforgeneralrisks
3.Distributionstotheowners(orshareholders)-125,419,139.40-125,419,139.40-125,419,139.40
4.Others
(IV)Internalcarry-overofowners’equity
1.Capitalizationofcapitalreserve(orcapitalstock)
2.Capitalizationofsurplusreserve(orcapitalstock)
3.Lossmadeupforwithsurplusreserve
4.Settingoftheamountinvolvedinthemovementofthebeneficialplancarriedovertotheretainedearnings
5.Othercomprehensiveincomecarried-overtotheretainedearnings
6.Others
(V)Specialreserve491,246.44491,246.44491,246.44
1.Provisioninthereportingperiod600,000.00600,000.00600,000.00
2.Appliedinthereportingperiod-108,753.56-108,753.56-108,753.56
(VI)Others
IV.Endingbalanceofthereportingperiod426,051,015.001,046,504,891.62103,841,654.84-7,233,490.681,553,977.57275,010,401.501,353,717,970.982,991,763,111.152,991,763,111.15

Legalrepresentative:ZhangXuhuaChiefFinancialOfficer:SongYaoming

PersoninchargeoftheAccountingDepartment:TianHui

8.ConsolidatedStatementofChangesinOwner’sEquity,ParentCompanyAmountinthereportingperiod

InCNY

ItemsThefirsthalfyearof2023
CapitalstockOtherequityinstrumentsCapitalreserveLess:treasurystockOthercomprehensiveincomeSpecialreserveSurplusReserveRetainedearningsOthersTotalowners’equity
PreferredsharesPerpetualbondOthers
I.Endingbalanceofthepreviousyear417,627,960.001,010,917,776.1950,759,806.16275,010,401.50943,017,166.882,595,813,498.41
Plus:Changeinaccountingpolicy
Correctionofpreviouserrors
Others
II.Openingbalanceofthereportingyear417,627,960.001,010,917,776.1950,759,806.16275,010,401.50943,017,166.882,595,813,498.41
III.Decrease/increaseofthereportyear(decreaseisstatedwith“-“)-4,684,973.42-3,630,088.51-83,489,928.49-84,544,813.40
(I)Totalcomprehensiveincome20,667,843.5120,667,843.51
(II)Owners’inputanddecreaseofcapital-4,684,973.42-3,630,088.51-1,054,884.91
1.Commonsharescontributedbytheowner17,007,830.70-17,007,830.70
2.Capitalcontributedbyotherequityinstrumentsholders
3.Amountofpaymentforsharescountedtoowners’equity-4,682,239.01-20,637,919.2115,955,680.20
4.Others-2,734.41-2,734.41
(III)ProfitDistribution-104,157,772.00-104,157,772.00
1.Provisionofsurplusreserve
2.Distributionstotheowners(orshareholders)-104,157,772.00-104,157,772.00
3.Others
(IV)Internalcarry-overofowners’equity
1.Capitalizationofcapitalreserve(orcapitalstock)
2.Capitalizationofsurplusreserve(orcapitalstock)
3.Lossmadeupforwithsurplusreserve
4.Settingoftheamountinvolvedinthemovementofthebeneficialplancarriedovertotheretainedearnings
5.Othercomprehensiveincomecarried-overtotheretainedearnings
6.Others
(V)Specialreserve
1.Provisioninthereportingperiod
2.Appliedinthereportingperiod
(VI)Others
IV.Endingbalanceofthereportingperiod417,627,960.001,006,232,802.7747,129,717.65275,010,401.50859,527,238.392,511,268,685.01

Amountofthepreviousyear

InCNY

ItemsThefirsthalfyearof2022
CapitalstockOtherequityinstrumentsCapitalreserveLess:treasurystockOthercomprehensiveincomeSpecialreserveSurplusReserveRetainedearningsOthersTotalowners’equity
PreferredsharesPerpetualbondOthers
I.Endingbalanceofthepreviousyear426,051,015.001,045,449,410.6760,585,678.92275,010,401.50806,441,654.462,492,366,802.71
Plus:Changeinaccountingpolicy
Correctionofpreviouserrors
Others
II.Openingbalanceofthereportingyear426,051,015.001,045,449,410.6760,585,678.92275,010,401.50806,441,654.462,492,366,802.71
III.Decrease/increaseofthereportyear(decreaseisstatedwith“-“)4,886,613.6643,255,975.92-102,652,886.20-141,022,248.46
(I)Totalcomprehensiveincome22,766,253.2022,766,253.20
(II)Owners’inputanddecreaseofcapital4,886,613.6643,255,975.92-38,369,362.26
1.Commonsharescontributedbytheowner50,252,831.88-50,252,831.88
2.Capitalcontributedbyotherequityinstrumentsholders
3.Amountofpaymentforsharescountedtoowners’equity4,901,656.83-6,996,855.9611,898,512.79
4.Others-15,043.17-15,043.17
(III)ProfitDistribution-125,419,139.40-125,419,139.40
1.Provisionofsurplusreserve
2.Distributionstotheowners(orshareholders)-125,419,139.40-125,419,139.40
3.Others
(IV)Internalcarry-overofowners’equity
1.Capitalizationofcapitalreserve(orcapitalstock)
2.Capitalizationofsurplusreserve(orcapitalstock)
3.Lossmadeupforwithsurplusreserve
4.Settingoftheamountinvolvedinthemovementofthebeneficialplancarriedovertotheretainedearnings
5.Other
comprehensiveincomecarried-overtotheretainedearnings
6.Others
(V)Specialreserve
1.Provisioninthereportingperiod
2.Appliedinthereportingperiod
(VI)Others
IV.Endingbalanceofthereportingperiod426,051,015.001,050,336,024.33103,841,654.84275,010,401.50703,788,768.262,351,344,554.25

Legalrepresentative:ZhangXuhuaChiefFinancialOfficer:SongYaoming

PersoninchargeoftheAccountingDepartment:TianHuiIII.CompanyProfile

1.PlaceofRegistration,OrganizationFormandAddressoftheHeadOfficeFIYTAPrecisionTechnologyCo.,Ltd.(the“Company”)wasfounded,undertheapprovalofShenFuBanFu(1992)1259issuedbytheGeneralOfficeofShenzhenMunicipalGovernment,throughtherestructuringofformerShenzhenFIYTATimeIndustrialCompanybythepromoterofChinaNationalAero-TechnologyImportandExportShenzhenIndustry&TradeCenter(namechangedto“ChinaNationalAero-TechnologyShenzhenCo.,Ltd”lately)on25December1992.On3June1993,theCompanywaslistedonShenzhenStockExchange.TheCompanyholdsbusinesslicensewiththeUnifiedSocialCreditCodeof91440300192189783K.Afterthedistributionofbonusshares,placementofnewshares,conversiontosharecapital,additionalissuanceofnewshares,andsharerepurchaseandcancellationovertheyears,asofJune30,2023,theCompanyhasissuedatotalof417,627,960shares,witharegisteredcapitalofCNY417,627,960.TheCompany’sregisteredaddressisFIYTATechnologyBuilding,GaoxinS.RoadOne,NanshanDistrict,Shenzhen,China.Headofficeaddress:FIYTATechnologyBuilding,GaoxinS.RoadOne,NanshanDistrict,Shenzhen,GuangdongProvince;theParentCompanyisAVICInternationalHoldingLimited;theActualControllerisAviationIndustryCorporationofChinaLtd.

2.BusinessNatureandPrincipalBusinessActivitiesAsofJune30,2023,theprincipalbusinessactivitiesoftheCompanyanditssubsidiariesare:productionandsalesofvariouspointertypemechanicalwatches,quartzwatchesandtheirdrivingunits,sparesandparts,varioustimingapparatus,processingandwholesaleofKaratgoldornamentwatchesandsmartwatches;domestictrade,materialssupplyandsales(excludingthecommoditiesforexclusiveoperation,exclusivecontrolandmonopoly);propertymanagementandlease;designservice;self-runimport&exportbusiness.AsofJuly5,2023,thebusinessnatureandprincipalbusinessactivitiesoftheCompanyanditssubsidiarieshavechangedto:salesofwatches;manufacturingofwatchesandtiminginstruments;salesofwatchesandtiminginstruments;wholesaleofjewelry;retailofjewelry;manufacturingofsmartwearables;salesofsmartwearables;propertymanagement;leaseofnonresidentialrealestate;professionaldesignservices;importandexportofgoods;salesofhouseholdappliances;salesofsatellitemobilecommunicationterminals.

3.ApprovalfortheFinancialStatementsforIssuingThefinancialstatementswereapprovedandissuedbytheBoardofDirectorsdatedAugust21,2023.Therewere12subsidiariesconsolidatedinthefinancialstatementsduringthereportingperiod.Forthedetail,refertoNoteIX."EquityinOtherEntities".Theentitiesincludedinthescopeoftheconsolidatedfinancialstatementsinthereportingperiodremainunchangedcomparedwiththepreviousperiod.FordetailspleaserefertoNoteVIII“Changesoftheconsolidationscope”.IV.Basisforpreparationofthefinancialstatements

1.PreparationBasisTheCompanymakesrecognitionsandmeasurementsaccordingtotheactualtransactionsandeventsinthelightofthe"AccountingStandardsforBusinessEnterprises-BasicStandards"promulgatedbytheMinistryofFinanceandspecificaccountingstandards,guidelinesfortheapplicationofaccountingstandardsforenterprises,interpretationsof

accountingstandardsforenterprisesandotherrelevantregulations(hereinaftercollectivelyreferredtoasthe"AccountingStandardsforEnterprises");onthisbasis,preparesthefinancialstatementswithconsiderationoftherelevantprovisionsoftheChinaSecuritiesRegulatoryCommission-"PreparationRulesforInformationDisclosurebyCompaniesOfferingSecuritiestothePublicNo.15—GeneralProvisionsonFinancialReports(2014Revision).

2.OperationonGoingConcernBasisTheCompanyhasassesseditsgoing-concernabilityfor12monthsfromtheendofthereportingperiod,andhasnotfoundanymattersorcircumstancesthatmayleadtosignificantdoubtsaboutthegoing-concernability.Asaresult,thefinancialstatementsoftheCompanyhavebeenpreparedongoingconcernbasis.V.ImportantaccountingpoliciesandaccountingestimatesPresentationonspecificaccountingpoliciesandaccountingestimates:

1.TheCompanymakesspecificaccountingpoliciesandestimatesaccordingtoitsnatureofbusinessandaccountingpoliciesandestimatesmainlyinclude:methodofestimatedcreditlossaccrual(NoteV.11,NoteV.12andNoteV.14),measurementofinventory(NoteV.15),depreciationofinvestmentpropertyandfixedassetandamortizationofintangibleasset(NoteV.23,NoteV.24andNoteV.30),revenue(NoteV.39)etc.

2.Basedonhistoricalexperienceandotherfactors,includingreasonableexpectationsforfutureevents,theCompanycontinuouslyevaluatestheimportantestimatesandkeyassumptionsused.Ifmaterialchangestofollowingaccountingestimateandkeyassumptionincurred,materialimpactwouldhappenedtothecarryingvalueoftheCompany’sassetsandliabilitiesincomingaccountingyear：

(1)ProvisionforbaddebtofaccountsreceivableandotherreceivablesItisnecessarytodescribethatthemanagementestimatesimpairmentlossprovisiontoaccountsreceivableandotherreceivablesbasedonthejudgmentstoestimatedcreditlossofaccountsreceivableandotherreceivables.IfanyeventsoccurredthatindicatedtheCompanymaynotbeabletorecoverthebalanceamount,estimationisneededinprovisionaccrual.Iftheexpectednumberisdifferentwiththeestimatedfigure,thedifferencewillaffectthecarryingvalueofaccountsreceivableandotherreceivablesandtheimpairmentlossexpensesincorrespondingaccountingperiod.

(2)Impairmentofinventory.TheCompanyrecognizesprovisionforobsoleteinventoriesbasedontheexcessofthecostofinventoryoveritsnetrealizablevalue.Indeterminingthenetrealizablevalueofinventories,themanagementusessignificantjudgmentstoestimatethesellingprice,costtofinishmanufacturing,andsellingexpensesandassociatedtaxes.Ifthemanagementrevisesestimatedsellingpriceandcosttofinishmanufacturingandsellingexpenses,theNAVestimationwouldbeaffectedandthedifferencewouldhaveaneffecttotheinventoryprovision.

(3)Estimationoflong-termassetimpairment.Whenevaluatingwhetherthereisimpairmenttolong-termasset,themanagementmainlyconsidersthefollowing:(1)whethertheeventsaffecttheassetimpairmenthavealreadyincurred;

(2)whetherthediscountedcashflowfromcontinueusageoftheassetordisposalislowerthanitscarryingamount;and

(3)whethermajorassumptionusedinestimatingthefuturecashflowisappropriate.Changestorelatedassumptionadoptedindeterminingimpairmentsuchasprofitability,discountingrateandgrowthratemayhavematerialimpacttothepresentvalueusedinimpairmenttestandresultinimpairmenttoabovementionedlong-termassets.

(4)Depreciationandamortization.Theestimatedresidualvalueandusefullifeofinvestmentproperty,fixedassetandintangibleassetthatusedbytheCompanyarebasedonhistoricalactualusefullifeandactualresidualvalueofassetswithsimilarnatureorfunctions.Intheprocessofusingsuchassets,estimatedusefullifeandresidualvaluemayvarydependingontheeconomicenvironment,technologicalenvironmentandotherenvironmentthattheassetslocated.Ifthereisdifferencebetweentheexpectationandpreviousestimation,properadjustmentswillbemadebythemanagement.

(5)Share-basedpaymentsThemanagementmakesbestestimationbasedonup-to-datenumberofemployeeswhohaveexercisablesharesandadjustingthenumberofexercisableequityinstrumentoneachbalancesheetdateinthevestingperiod.Ifthereisdifferencebetweencurrentyearexercisableemployeeandpreviousestimation,properadjustmentswillbemadebythemanagement.

(6)Deferredincometaxasset.Deferredincometaxassetoftaxablelossesshallberecognizedtotheextentthattherewillhavesufficienttaxableincometooffset.Thisinvolvessignificantjudgmentstoestimatethetimingandamountoffuturetaxableprofitandtakingintoconsiderationoftaxplanningsoastodeterminetheamountofdeferredtaxasset.

(7)Incometax.Itshouldbedescribedthatthefinaltaxtreatmentofmanytransactionandeventsarewithuncertaintyinthenormalcourseofoperation.Significantjudgmentsnecessarytobemadewhencalculatingtheincometax.Ifthereis

differencebetweenthefinaldiscretionandtheamountrecordedinbooks,thedifferencewillaffecttheamountoftaxintheperiodoffinaldiscretion.

1.StatementoncomplyingwiththeaccountingstandardsforbusinessenterpriseThefinancialstatementsoftheCompanyhavebeenpreparedinaccordancewiththerequirementsofAccountingStandardsforBusinessEnterprises.Thesefinancialstatementspresenttrulyandcompletelythefinancialposition,theresultsofoperationsandthecashflowsforreportingperiodoftheCompany.

2.AccountingperiodTheaccountingperiodoftheCompanyisthecalendaryear,i.e.from1Januaryto31Decemberofeachyear.

3.OperatingcycleTheoperatingcyclerefertotheperiodfrompurchasingassetsforprocesstorealizingcashorcashequivalent.TheCompany’soperatingcycleis12monthswhichisalsousedasstandardtodeterminetheliquidityofassetandliabilities.

4.RecordingCurrencyTheCompanyanditsdomesticsubsidiariesuseRenminbi(CNY)asthefunctioncurrencyforbookkeeping.FIYTAHongKongCo.,Ltd.,oneoftheCompany'soverseassubsidiaries,oneofthesubsidiariesofFIYTAHK(hereinafterreferredtoas“Station-68”)hasdeterminedHongKongDollarsasitsrecordingcurrencyforaccountinginaccordancewiththecurrenciesavailableinitsmajoreconomicenvironmentwhereitisoperated.MontresChourietSA,oneofthesubsidiariesofFIYTAHongKong,determinesSwissFrancasitsrecordingcurrencyforaccountinginaccordancewiththecurrenciesavailableinitsmajoreconomicenvironmentwhereitisoperatedandSwissFranceisconvertedintoRenminbiinpreparingitsfinancialstatements.ThecurrencytheCompanytakesinpreparationofthesefinancialstatementsisRenminbi.

5.Theaccountingtreatmentonconsolidationoftheenterprisesunderthesamecontrolandnotunderthesamecontrol

1.Ifabusinesscombinationisachievedthroughmultiplesteps,ofwhichtheterms,conditionandeconomicaleffectisinlinewithoneormorecriteriaasfollowed,themultipletransactionsshallbedealtwithasone-baskettransaction.

(1)thetransactionswereenteredintoatthesametimeorbyconsideringeachother’sinfluence;

(2)acompletebusinessresultcanonlybeachievedbycombiningallthesetransactionstogether;

(3)theperformingofonetransactionisdependedonatleastoneothertransaction;

(4)atransactionisnoteconomicalifitisconsideredstandalongbutitwillbecomeeconomicalifitisconsideredincombinationwithothertransactions.

2.BusinesscombinationinvolvingentitiesundercommoncontrolTheassetsandliabilitiesobtainedbytheCompanyinabusinessmergeraremeasuredatthecarryingamountofthemergedparty'sassetsandliabilities(includinggoodwillformedbytheeventualcontroller'sacquisitionofthemergedparty)onthemergerdateintheeventualcontroller’sconsolidatedfinancialstatements.Thedifferencebetweenthecarryingamountofthenetassetsacquiredandtheconsiderationpaidforthecombination(orthetotalparvalueofsharesissued)isadjustedagainstsharepremiuminthecapitalreserve,withanyexcessadjustedagainstretainedearnings.Ifthereiscontingentconsiderationandprovisionorassetsarerequiredtoberecognized,thedifferencebetweentheprovisionorassetsandthecontingentconsiderationshalladjustthecapitalreserve,withanyexcessadjustedagainstretainedearnings.Ifbusinesscombinationsinvolvingentitiesundercommoncontrolachievedinstagesthatinvolvesmultipletransactionsbelongstoone-baskettransaction,alltransactionsshallbedealtwithasonetransaction.Ifnot,theaccountingtreatmentisasfollows:Initialinvestmentcostistheacquirer’sshareofthecarryingamountofthenetassetsoftheacquireeintheconsolidatedfinancialstatementsoftheultimatecontrollingpartyatthecombinationdate.Thedifferencebetweentheinitialinvestmentcostandthesumofcarryingamountofinvestmentpriortocombinationdateandcarryingamountofnewconsiderationspaidforthecombinationatthecombinationdateisadjustedtocapital

reserve(sharepremium).Ifthecapitalreserveisnotsufficienttoabsorbthedifference,anyexcessisadjustedagainstretainedearnings.thedifferencebetweenthecarryingamountofthenetassetsacquiredandthesumofcarryingamountofinvestmentpriortocombinationdateandcarryingamountofnewconsiderationspaidforthecombinationatthecombinationdateisadjustedtocapitalreserve(sharepremium).Ifthecapitalreserveisnotsufficienttoabsorbthedifference,anyexcessisadjustedagainstretainedearnings.Theprofitorloss,othercomprehensiveincomeandchangesinotherowner’sequityrecognizedbytheacquirerduringtheperiodfromthelaterofinitialinvestmentdateandthedatethattheacquirerandacquireebothundercommonultimatecontroltothecombinationdateareoffsettheopeningretainedearningsorprofitforlossforthecurrentperiodinthecomparativestatements.

3.BusinesscombinationinvolvingentitiesnotundercommoncontrolThepurchasedatereferstothedatethattheCompanyactuallyacquiredcontrolovertheacquirei.e.thedatewhenthecontrolovertheacquiree’snetassetsordecisionofbusinessoperationhasbeentransferredtotheCompany.IftheCompanyfulfillsthefollowingconditionsatthesametime,itisconsideredthatthecontrolhasbeentransferred:

①thecontractoragreementofbusinesscombinationhasbeenapprovedbyinternalpowerdepartment;

②relatedmattershasbeenapprovedbystatesupervisoryauthorities,ifneeded;

③proceduresofassettransferhasbeencompleted;

④theCompanyhasbeenmademajorityofpaymentsandhastheabilityandplantomaketheresidualpayments;

⑤theCompanyisinsubstancesacquiredthebusinessandoperatingpoliciesandenjoyedcorrespondinginterestsandundertakingrisksoftheacquire.Onthepurchasedate,assetstransferred,liabilitiesincurredorassumedastheconsiderationpaidshallbemeasuredatfairvalue.Thedifferencebetweenthefairvalueandcarryingamountshallbechargedtocurrentperiodprofitorloss.Wherethecombinationcostexceedstheacquirer’sinterestinthefairvalueoftheacquiree’sidentifiablenetassets,thedifferenceisrecognizedasgoodwill,andsubsequentlymeasuredonthebasisofitscostlessaccumulatedimpairmentprovisions.Wherethecombinationcostislessthantheacquirer’sinterestinthefairvalueoftheacquiree’sidentifiablenetassets,thedifferenceisrecognizedinprofitorlossforthecurrentperiodafterreassessment.Ifbusinesscombinationsinvolvingentitiesnotundercommoncontrolachievedinstagesthatinvolvesmultipletransactionsbelongtoone-baskettransaction,allthetransactionsshallbetreatedasone.Otherwise,iftheequityinvestmentheldbeforethecombinationdateisaccountedforbytheequitymethod,thesumofthebookvalueoftheequityinvestmentoftheacquireeheldbeforetheacquisitiondateandthenewinvestmentcostontheacquisitiondateshallberegardedastheinitialinvestmentcostoftheinvestment;Othercomprehensiveincomerecognizedbytheequityinvestmentheldbeforetheacquisitiondateduetoaccountingbytheequitymethodshallbeaccountedforonthesamebasisastheinvestee'sdirectdisposaloftherelevantassetsorliabilitieswhentheinvestmentisdisposedof.Iftheequityinvestmentheldbeforethecombinationdateisaccountedforbytherecognitionandmeasurementstandardsoffinancialinstruments,thesumofthefairvalueoftheequityinvestmentonthecombinationdateplusthenewinvestmentcostshallberegardedastheinitialinvestmentcostonthecombinationdate.Thedifferencebetweenthefairvalueandbookvalueoftheoriginallyheldequityandtheaccumulatedchangesinfairvalueoriginallyincludedinothercomprehensiveincomeshouldbefullytransferredtothecurrentreturnoninvestmentonthecombinationdate.

4.TransactioncostsforbusinesscombinationTheoverheadforthebusinesscombination,includingtheexpensesforaudit,legalservices,valuationadvisory,andotheradministrativeexpenses,arerecordedinprofitorlossforthecurrentperiodwhenincurred.Thetransactioncostsofequityordebtsecuritiesissuedastheconsiderationsofbusinesscombinationareincludedintheinitialrecognitionamountoftheequityordebtsecurities.

6.Methodofpreparingconsolidatedfinancialstatements

1.ScopeofconsolidationThescopeofconsolidatedfinancialstatementsisbasedoncontrol.Allsubsidiaries(includingstandaloneentitythatcontrolledbytheCompany)areallincludedinthescopeofconsolidation.

2.ProceduresofconsolidationTheconsolidatedfinancialstatementsarepreparedbytheCompanybasedonthefinancialstatementsoftheCompanyanditssubsidiariesandotherrelevantinformation.Thewholeenterpriseisconsideredasoneaccountingbodywhenpreparingconsolidatedfinancialstatementandreflectthewholegroup’sfinancialposition,performanceandcashflowaccordingtounifiedaccountingpoliciesbasedonaccountingstandards.Allsubsidiariesthatareincludedinthescopeofconsolidationadoptsameaccountingpolicies,andaccountingperiod.Iftherearedifferences,thesubsidiariesshalladjustitspoliciesandaccountingperiodaccordingly.

Whenpreparingconsolidatedfinancialstatements,theaccountingpoliciesandaccountingperiodsofthesubsidiariesshouldbeconsistentwiththoseestablishedbytheCompany,andallsignificantintra-groupbalancesandtransactionsareeliminated.Ifthetreatmentbasedonenterprisegroupangleisdifferentwiththeanglefromsubsidiaries’,itshallbetreatedbasedonenterprisegroupangle.Thesharesbelongingtominorityshareholdersintheowner'sequity,currentnetprofitandloss,andcurrentcomprehensiveincomeofsubsidiariesareseparatelypresentedundertheowner'sequityintheconsolidatedbalancesheet,netprofitintheconsolidatedincomestatement,andtotalcomprehensiveincomeitem.Ifthecurrentlosssharedbytheminorityshareholdersofasubsidiaryexceedstheshareoftheminorityshareholdersintheinitialowner'sequityofthesubsidiary,thebalanceformedshallstilloffsettheminorityshareholders'equity.Forsubsidiariesacquiredthroughbusinesscombinationsunderthecommoncontrol,adjustmentsaremadetotheirfinancialstatementsbasedonthecarryingamountoftheirassetsandliabilities(includinggoodwillformedbytheeventualcontroller’sacquisitionofthesubsidiary)intheeventualcontroller'sfinancialstatements.Whereasubsidiaryorbusinesshasbeenacquiredthroughabusinesscombinationnotinvolvingenterprisesundercommoncontrolinthereportingperiod,thefinancialstatementsofsubsidiariesshallbeadjustedonthebasisoffairvalueofidentifiablenetassetsonpurchasedate.

(1)AdditionofsubsidiariesorbusinessoperationWhereasubsidiaryorbusinesshasbeenacquiredthroughabusinesscombinationinvolvingenterprisesundercommoncontrolinthereportingperiod,thesubsidiaryorbusinessisdeemedtobeincludedintheconsolidatedfinancialstatementsfromthedatetheyarecontrolledbytheultimatecontrollingparty.Theiroperatingresultsandcashflowsareincludedintheconsolidatedincomestatementandconsolidatedcashflowstatementrespectivelyfromthedatetheyarecontrolledbytheultimatecontrollingparty.IftheCompanycanexertcontrolovertheinvesteeundercommoncontrolbecauseofadditionofinvestment,adjustmentsshallbemadeasifallthecombiningpartyareatthecurrentconditionintheangleofultimatecontrolledparty.Equityinvestmentheldbeforeacquiredcontrol,profitorloss,othercomprehensiveincomeandothernetassetchangesthathavealreadyrecognizedbetweenthelaterofacquiringoriginalequityandthedateundercommoncontrol,andcombinationdateshalloffsetopeningretainedearningsorcurrentperiodprofitorlossrespectively.Inthereportingperiod,ifthereissubsidiaryorbusinessadditioninvolvingentitiesnotundercommoncontrol,noadjustmentsshallbemadetotheconsolidatedbalancesheet.Therevenue,expensesandprofitfromthepurchasingdatetoperiodendshallbeincludedinconsolidatedincomestatement.Thecashflowsfromthepurchasingdatetoperiodendshallbeincludedinconsolidatedcashflowstatement.Ifitispossibletoexercisecontroloveraninvesteenotunderthecommoncontrolduetoadditionalinvestmentorotherreasons,theCompanyremeasurestheequityoftheinvesteeheldbeforethepurchasedatebasedonitsfairvalueonthepurchasedate,andthedifferencebetweenthefairvalueanditsbookvalueisincludedinthecurrentreturnoninvestment.Changesrelatedtoequitymethodsuchasothercomprehensiveincomeandotherequitychangesbesidenetprofit,othercomprehensiveincomeandprofitdistributionshallbetransferredtocurrentperiodinvestmentgain.

(2)Disposalofsubsidiaries

1)GeneraldisposalmethodInthereportingperiod,iftheCompanydisposedasubsidiaryorbusiness,thesubsidiary’srevenue,expenses,profitandcashflowsfromthebeginningoftheperiodtothedisposaldatewouldbeincludedinconsolidatedfinancialstatements;thecashflowofthesubsidiaryorbusinessfromthebeginningoftheperiodtothedateofdisposalisincludedintheconsolidatedcashflowstatement.Whenthecontrolrighttotheinvesteeislostduetodisposalofpartialequityinvestmentorotherreasons,theCompanyremeasuresresidualequityinvestmentafterthedisposalatitsfairvalueonthedateoflosingthecontrolright.Thedifferencebetweenthesumoftheconsiderationacquiredfromdisposalofequityandthefairvalueofresidualequityminustheportionofnetassetsoftheoriginalsubsidiaryascontinuallycalculatedfromthedateofpurchaseordateofcombinationattheoriginalshareholdingratioandthegoodwillisincludedintheinvestmentincomeinthecurrentperiodoflosingthecontrolright.Againorlossisrecognizedinthecurrentperiodandiscalculatedbytheaggregateofconsiderationreceivedindisposalandthefairvalueofremainingpartoftheequityinvestmentdeductingtheshareofnetassetsinproportiontopreviousshareholdingpercentageintheformersubsidiarysinceacquisitiondateandthegoodwill.

2)DisposalofsubsidiarythroughmultiplestepsIntheeventthattheCompanylossescontroloverasubsidiarythroughmultipletransactions,ifoneormoreconditionsbelowarefulfilled,itshallbetreatedasone-baskettransaction:

A.thetransactionswereenteredintoatthesametimeorbyconsideringeachother’sinfluence;B.acompletebusinessresultcanonlybeachievedbycombiningallthesetransactionstogether;

C.theperformingofonetransactionisdependedonatleastoneothertransaction;D.atransactionisnoteconomicalifitisconsideredstandalongbutitwillbecomeeconomicalifitisconsideredincombinationwithothertransactions.Ifthevarioustransactionsdisposingtheinvestmentonthesubsidiary'sequityuntillosingcontrolpowerarepackagedeals,varioustransactionsundergoaccountingtreatmentasatransactionofdisposingthesubsidiaryandlosingcontrolpower;however,beforelosingcontrolpower,thedifferencebetweeneverydisposalamountandtheshareofthesubsidiary'snetassetsenjoyedcorrespondingtodisposalofinvestmentisrecognizedasothercomprehensiveincomeintheconsolidatedfinancialstatements,andisincludedinthecurrentprofitandlosscorrespondingtolossofcontrolpower.Ifdisposeoftheequityinvestmentinthesubsidiaryuntilthelossofcontroldoesnotbelongtoone-baskettransaction,beforethelossofcontrol,theaccountingtreatmentshallbecarriedoutinaccordancewiththerelevantpoliciesforpartialdisposaloftheequityinvestmentinthesubsidiarywithoutlosingcontrol;whenthecontrolislost,accountingtreatmentshallbecarriedoutaccordingtothegeneraltreatmentmethodofdisposalofsubsidiaries.

(3)Purchaseoftheminorityshareholders’equityofsubsidiariesThedifferencebetweenthelongtermequityinvestmentnewlyacquiredresultedfrompurchaseofminorityequityandtheshareofthenetassetcontinuouslycalculatedcommencingfromthedateofpurchase(ordateofconsolidation)enjoyablebythesubsidiaryshallbeusedtoadjustthecapitalstockpremiuminthecapitalreserve.Incasethecapitalstockpremiuminthecapitalreserveisnotenoughforwriting-down,theretainedearningsshallbeadjusted.

(4)PartialdisposalofequityinvestmentinsubsidiarywithoutlossofcontrolThedifferencebetweenthedisposalincomeobtainedfromthepartialdisposalofthelong-termequityinvestmentinasubsidiarywithoutlossofcontrolandthecorrespondingportionofthesubsidiary'snetassetscalculatedfromtheacquisitiondateorthecombinationdatecorrespondingtothedisposalofthelong-termequityinvestmentisusedtoadjustthesharepremiuminthecapitalreserveintheconsolidatedbalancesheet,andadjusttheretainedearningsifthecapitalstockpremiuminthecapitalreserveisinsufficienttooffset.

7.Classificationofjointventurearrangementsandaccountingtreatmentmethodofjointmanagement

1.ClassificationofJointVentureArrangementTheCompanyclassifiesjointventurearrangementsintojointoperationsandjointventuresbasedonthestructure,legalform,termsandconditionsinthearrangement,andotherrelatedfacts.Jointoperationsmeansjointarrangementthatdoesnotrealizedthroughindependententity.Jointarrangementthatrealizedthroughindependententityisnormallyrecognizedasjointventurebutitalsocanbeclassifiedasjointoperationifclearevidenceshowedthatoneofthefollowingconditionismet:

(1)Thelegalformofanjointarrangementshowedthatthejointpartiesenjoyedrightsoverrelatedassetsandundertakeliabilityrespectively.

(2)Thecontractshowedthatthejointpartiesenjoyedrightsoverrelatedassetsandundertakeliabilityrespectively.

(3)Otherfactsandsituationindicatedthatthejointpartiesenjoyedrightsoverrelatedassetsandundertakeliabilityrespectively.Ifthejointventurepartyenjoyssubstantiallyalloftheoutputassociatedwiththejointarrangement,andthesettlementoftheliabilitiesinthearrangementcontinuestodependonthejointventureparty'ssupport.

2.AccountingtreatmenttojointoperationTheCompanyconfirmsthefollowingitemsrelatedtotheCompanyintheportionofinterestsinjointoperation,andconductsaccountingtreatmentinaccordancewiththerelevantaccountingstandardsforenterprises:

(1)torecognizetheassetsheldseparately,andrecognizetheassetsheldjointlybytheirshares;

(2)torecognizetheliabilitiesborneindividuallyandtheliabilitiesbornejointlyaccordingtotheirshare;

(3)torecognizetheincomegeneratedfromthesaleofitsshareofjointmanagementoutput;

(4)torecognizetheincomegeneratedbythejointoperationfromthesaleofoutputaccordingtoitsportion;

(5)torecognizetheexpensesincurredseparately,andrecognizetheexpensesincurredinjointmanagementaccordingtotheirshare.BeforetheCompanydeliversorsellsassetstothejointoperation(excepttheassetsconstitutingbusiness),orthejointoperationsellssuchassetstoathirdparty,theCompanyonlyconfirmsthepartsintheprofitandlossarisingfromsuch

transactionandbelongingtootherparticipantsofthejointoperation.IfoccurrenceofsuchassetsisinconformitywiththeimpairmentlossasstatedintheAccountingStandardsforBusinessEnterprisesNo.8-ImpairmentofAssets,theCompanyfullyconfirmstheloss;BeforetheCompanysellsanassetinthejointoperation,etc.(excepttheassetsconstitutingbusiness)toathirdparty,theCompanyonlyconfirmsthepartintheprofitandlossarisingfromsuchtransactionandbelongingtootherparticipantsofthejointoperation.IfoccurrenceofpurchaseofanassetisinconformitywiththeimpairmentlossasstatedintheAccountingStandardsforBusinessEnterprisesNo.8-ImpairmentofAssets,theCompanyfullyrecognizesthispartoflossbasedontheportiontheCompanyshouldtake.TheCompanydoesnotenjoyjointcontroltojointoperation.IftheCompanyenjoysjointoperation’sassetandundertakingrelatedliabilities,theaccountingtreatmentisthesame.Otherwise,itshallbeaccountedforbasedonaccountingstandards.

8.CashandcashequivalentsTheterm“cash”referstocashonhandanddepositsthatarereadilyavailableforpaymentinpreparationofthecashflowstatement.Theterm“cashequivalents”referstoshort-term(generallyduewithin3monthsfromthepurchasedate)andhighlyliquidinvestmentsthatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangeinvalue.

9.Foreigncurrencytransactionsandtranslationofforeigncurrencystatements

1.ForeignCurrencyTransactionsIntheinitialrecognitionofforeigncurrencytransactions,thespotexchangerateonthetransactiondateisusedastheratetotranslatetheforeigncurrencyamountintoRenminbiforbookkeeping.Onthedateofbalancesheet,theforeigncurrencymonetaryitemsaretranslatedbasedonthespotrateasatthedateofbalancesheetandthebalanceofexchangearisingtherefromiscountedtothecurrentgainsandlossesexceptthebalanceofexchangearisingfromthespecialforeigncurrencyborrowingsinconnectionwiththeassetssatisfyingthecapitalizationconditionswhichistreatedbasedontheprincipleofcapitalizationofborrowingexpensesTheforeigncurrencynon-monetaryitemsmeasuredathistoricalcostshallstillbetranslatedatthespotexchangerateonthedateoftransaction,withoutchangeoftheamountofthefunctionalcurrencyforbookkeeping.Thenon-monetaryitemsinforeigncurrencymeasuredatfairvaluearetranslatedattheexchangerateonthedateofrecognizingfairvalue,andthedifferencebetweentheamountinbookkeepingbasecurrencyandthepreviousamountinbookkeepingbasecurrencyaftertranslatedistreatedaschangeoffairvalue(includingchangeofexchangerate)andincludedinthecurrentprofitsandlossesorrecognizedasothercomprehensiveincomes.

2.TranslationofForeignCurrencyFinancialStatementsTheassetandliabilityitemsinthebalancesheetaretranslatedbymeansofthespotrateofthebalancesheet;alltheotherowner'sequitytypeitems,withtheexceptionof"retainedearnings"item,aretranslatedbymeansofthespotrateofthedaywhenthetransactiontakesplace.Theitemsofincomesandexpensesintheprofitstatementaretranslatedatthecurrentaverageexchangerateonthetransactionoccurringdate.Theforeigncurrencyfinancialstatementtranslationdifferencearisingfromtheaboveconversioniscountedtotheothercomprehensiveincome.Indisposalofoverseasbusiness,thetranslationdifferenceoftheforeigncurrencyfinancialstatementsrelatedtotheforeignbusinesslistedinothercomprehensiveincomeitemsinthebalancesheetistransferredfromtheothercomprehensiveincomeitemstothecurrentprofitandloss;incasetheproportionoftheequityintheoverseasbusinessheldbytheCompanydropsduetodisposalofpartialequityinvestmentorotherreasonbutthecontrolpowerovertheoverseasbusinesshasnotlost,thetranslationdifferenceoftheforeigncurrencystatementsinconnectionwiththedisposedpartoftheoverseasbusinessshallbeattributabletotheminorityshareholders’equityinsteadofbeingtransferredintothecurrentprofitandloss.Whenthedisposalofoverseasoperationisinvolvedwiththepartialequityofajointventureoracooperativeenterprise,thetranslateddifferenceofforeigncurrencystatementsrelatedtotheoverseasoperationistransferredattheratioofdisposingtheoverseasoperationintothecurrentprofitsandlossesfromdisposal.

10.FinancialinstrumentsAfinancialassetorfinancialliabilityisrecognizedwhentheCompanybecomesapartyoffinancialinstrumentcontract.Theeffectiveinterestratemethodreferstothemethodforcalculatingtheamortizedcostoffinancialassetsorfinancialliabilitiesandapportioningtheinterestincomeorinterestexpenseofeachperiodintoeachaccountingperiod.Effectiveinterestratereferstosuchinterestratewithwhichthefuturecashflowofanyfinancialassetorfinancialliabilityintheexpectedperiodofexistenceisdiscountedtothecurrentbookvalueofsuchfinancialassetorfinancialliability.Whendeterminingtheeffectiveinterestrate,thefuturecashflowshallbepredictedonthebasisoftakingintoaccountallthecontractualstipulations(Suchasprepayment,rollover,calloptionorothersimilaroptions)concerningthefinancialassetorfinancialliability,butthefuturecreditlossesshallnotbetakenintoaccount.

Amortizedcostoffinancialassetsorfinancialliabilitiesistheinitialrecognitionamountdeductprincipalandaddorlessaccumulatedamortizationtothedifferencebetweeninitialrecognitionandtheamountatmaturityandlessaccumulatedlossprovision(forfinancialassetsonly).

1.Classification,confirmationandmeasurementoffinancialassetsFinancialassetsareclassifiedintothefollowingthreecategoriesdependingontheCompany’sbusinessmodeofmanagingfinancialassetsandcashflowcharacteristicsoffinancialassets:

A.Financialassetsmeasuredatamortizedcost.B.Financialassetthatismeasuredatfairvalueandwhosechangeisincludedinothercomprehensiveincome.C.Thefinancialassetmeasuredatfairvalueswiththechangecountedtothecurrentprofitandloss.Financialassetsaremeasuredattheirfairvalueatthetimeofinitialrecognition,butiftheaccountsreceivableornotesreceivablegeneratedfromthesaleofcommoditiesorprovisionofservicesdonotcontainsignificantfinancingelementsorthefinancingelementsnotexceedingoneyeararenotconsidered,theinitialmeasurementshallbemadeaccordingtothetransactionprice.Forthefinancialassetsmeasuredatfairvaluewiththechangecountedtothecurrentprofitsandlosses,therelevanttransactionexpensesaredirectlyincludedinthecurrentprofitandloss;therelevanttransactionexpensesforothercategoriesoffinancialassetsarecountedtotheamountoftheinitialrecognition.Thesubsequentmeasurementoffinancialassetsdependsontheirclassification,andallaffectedrelevantfinancialassetsshallbereclassifiedifandonlyiftheCompanychangesitsbusinessmodelformanagingfinancialassets.

1)ClassifiedasfinancialassetsmeasuredbasedontheamortizedcostAccordingtothecontractualtermsofthefinancialasset，thecashflowcreatedonthespecificdateisexclusivelyforpaymentoftheprincipalandtheinterestbasedontheoutstandingamountoftheprincipal，whileifthebusinessmodelofmanagingthefinancialassetistotakethecollectionofcontractualcashflowasthegoal,theCompanyshallclassifythefinancialassetasafinancialassetmeasuredatamortizedcost.Suchfinancialassetsincludemonetaryfund,notesreceivable,accountsreceivableandotherreceivables.TheCompanyrecognizestheinterestincomeofsuchfinancialassetsbasedontheeffectiveinterestratemethod,subsequentmeasurementiscarriedoutatamortizedcost,andthegainorlossarisingfromderecognitionormodificationwhenimpairmentoccurs,shallbeincludedinthecurrentprofitandloss.Exceptforthefollowingcircumstances,theCompanycalculatesanddeterminesinterestincomebasedonthebookbalanceoffinancialassetsmultipliedbytheactualinterestrate:

A.Forpurchasedororiginatedcredit-impairedfinancialassets,theCompanycalculatesanddeterminestheinterestincomefromtheinitialrecognitionbasedontheamortizedcostofthefinancialassetsandthecredit-adjustedeffectiveinterestrate.B.Forpurchasedororiginatedfinancialassetswithoutcreditimpairmentbutbecomecredit-impairedinthesubsequentperiod,theCompanycalculatesanddeterminestheinterestincomebasedontheamortizedcostandeffectiveinterestrateofthefinancialassetinthesubsequentperiod.Ifthefinancialinstrumentnolongerhascreditimpairmentduetotheimprovementofitscreditriskinthesubsequentperiod,theCompanycalculatesanddeterminestheinterestincomebymultiplyingtheactualinterestratebythebookbalanceofthefinancialasset.

2)Classifiedasfinancialassetthatismeasuredatfairvalueandwhosechangeisincludedinothercomprehensiveincome.Accordingtothecontractualtermsofthefinancialasset，thecashflowcreatedonthespecificdateisexclusivelyforpaymentoftheprincipalandtheinterestbasedontheoutstandingamountoftheprincipal;whileifthebusinessmodelformanagingthefinancialassetisaimedatbothcollectingcontractualcashflowandsellingthefinancialasset,theCompanyclassifiesthefinancialassetasafinancialassetmeasuredatfairvaluewhosechangeisincludedinothercomprehensiveincome.TheCompanyrecognizesinterestincomeofsuchfinancialassetsbytheeffectiveinterestratemethod.Exceptforinterestincome,impairmentlossesandexchangedifferences,whicharerecognizedasprofitorlossforthecurrentperiod,otherchangesinfairvalueareincludedinothercomprehensiveincome.Whentherecognitionofthesaidfinancialassetsisterminated,theaccumulatedgainsorlossespreviouslyincludedinothercomprehensiveincomearetransferredoutfromothercomprehensiveincomeandincludedinthecurrentprofitandloss.Notesandaccountsreceivablemeasuredatfairvaluewhosechangeisincludedinothercomprehensiveincomearepresentedasreceivablesfinancingandothersuchfinancialassetsarepresentedasothercreditor'srightsinvestments,

whereotherdebtinvestmentsthatmaturewithinoneyearasofthebalancesheetdatearereportedasnon-currentassetsthatmaturewithinoneyear,andothercreditor'srightsinvestmentswhoseoriginalmaturityiswithinoneyeararepresentedasothercurrentassets.

3)Designatedasfinancialassetmeasuredatfairvalueandwhosechangeisincludedinothercomprehensiveincome.Attheinitialrecognition,theCompanymayirrevocablydesignatenon-tradingequityinstrumentinvestmentsasfinancialassetsatfairvaluethroughothercomprehensiveincomeonthebasisofindividualfinancialassets.Changesinfairvalueofsuchfinancialassetsareincludedinothercomprehensiveincome,andnoprovisionforimpairmentisrequired.Whentherecognitionofthesaidfinancialassetsisterminated,theaccumulatedgainsorlossespreviouslyincludedinothercomprehensiveincomearetransferredoutfromothercomprehensiveincomeandincludedintheretainedearnings.DuringtheperiodwhentheCompanyholdstheinvestmentintheequityinstrument,whentheCompany'srighttoreceivedividendshasbeenestablished,theeconomicbenefitsrelatedtodividendsarelikelytoflowintotheCompany,andtheamountofdividendscanbemeasuredreliably,dividendincomeisrecognizedandincludedinthecurrentprofitandloss.TheCompanyrepresentssuchfinancialassetsunderotherequityinstrumentinvestmentitems.Anequityinstrumentinvestmentthatsatisfiesoneofthefollowingconditionsisafinancialassetmeasuredatfairvalueanditschangesareincludedinthecurrentprofitandloss:thepurposeofobtainingthefinancialassetismainlyforrecentsales;itispartofacentrallymanagedportfolioofidentifiablefinancialassetsandinstrumentsatinitialrecognition,andthereisobjectiveevidencethatthereisashort-termprofitmodelinthenearfuture;itisaderivativeinstrument(withaderivativeinstrumentthatmeetsthedefinitionofafinancialguaranteecontractandisdesignatedasaneffectivehedginginstrumentexclusive).

4)Thefinancialassetmeasuredatfairvaluewiththechangecountedtothecurrentprofitandloss.Financialassetsthatdonotmeetthecriteriaforclassificationasfinancialassetsmeasuredatamortizedcostoratfairvaluewhosechangeisconcludedinothercomprehensiveincome,nordesignatedasfinancialassetsmeasuredatfairvaluewhosechangeisincludedinothercomprehensiveincomeareallclassifiedasfinancialassetsmeasuredatfairvaluewhosechangeisincludedinthecurrentprofitandloss.TheCompanymakessubsequentmeasurementofthesefinancialassetsatfairvalueandtheirprofitorlossformedduetochangeoffairvalueandthedividendsandinterestsrelatedtosuchfinancialassetsareincludedinthecurrentprofitsandlosses.TheCompanypresentthefinancialassetsasfinancialassetheldfortrade,othernon-currentfinancialassets.

5)Thefinancialassetdesignatedformeasurementatfairvaluewiththechangecountedtothecurrentprofitandloss.Atinitialrecognition,inordertoeliminateorsignificantlyreducetheaccountingmismatchcanbeeliminatedorsignificantlyreduced,theCompanymayirrevocablydesignatethefinancialassetsasthatmeasuredatfairvaluewiththechangecountedtothecurrentprofitandlossbasedontheindividualfinancialassets.Ifthehybridcontractincludesoneormoreembeddedderivativesandthemaincontractdoesnotbelongtotheabovefinancialassets,theCompanymaydesignatethewholeasafinancialinstrumentthatismeasuredatfairvaluethroughprofitorloss,exceptinthefollowingcases:

A.Embeddedderivativesdonotmateriallychangethecashflowofahybridcontract.B.Whenitisfirstdeterminedwhetherasimilarhybridcontractrequiresaspin-off,thereislittleneedforanalysistomakeitclearthattheembeddedderivativesitcontainsshouldnotbesplit.Iftheprepaymentrightoftheembeddedloanallowstheholdertorepaytheloaninadvancewithanamountclosetotheamortizedcost,theprepaymentrightdoesnotneedtobesplit.TheCompanymakessubsequentmeasurementofthesefinancialassetsatfairvalueandtheirprofitorlossformedduetochangeoffairvalueandthedividendsandinterestsrelatedtosuchfinancialassetsareincludedinthecurrentprofitsandlosses.TheCompanypresentthefinancialassetsasfinancialassetheldfortrade,othernon-currentfinancialassets.

2.Classification,recognitionandmeasurementoffinancialliabilitiesTheCompanycategorizessuchfinancialinstrumentsortheircomponentsasfinancialliabilitiesorequityinstrumentattheinitialrecognitionbasedonthecontracttermsforissuingsuchfinancialinstrumentsandeconomicalnaturetheyhavereflectedratherthansolelyonitslegalformwiththecombinationofthedefinitionoffinancialliabilitiesandequityinstrument.Intheinitialrecognition,financialliabilitiesareclassifiedasthefinancialliabilitiesthataremeasuredatfairvalueandwhosechangeisincludedinthecurrentprofitsandlosses,otherfinancialliabilitiesandderivativeinstrumentdesignatedaseffectivehedginginstrument.

Financialliabilitiesaremeasuredatfairvalueattheinitialrecognitiontime.Forfinancialliabilitiesthataremeasuredatfairvalueandwhichchangeisincludedinthecurrentprofitsandlosses,therelevanttransactionexpensesaredirectlyincludedinthecurrentprofitsandlosses;forotherfinancialliabilities,relevanttransactionexpensesareincludedintheinitiallyrecognizedamount.Thesuccessivemeasurementoffinancialliabilitiesdependsontheirclassification:

1)Thefinancialliabilitiesdesignatedformeasurementatfairvaluewiththechangecountedtothecurrentprofitandloss.Suchfinancialliabilitiesincludefinancialliabilitiesheldfortrade(includingthederivativeinstrumentsbelongingtofinancialliabilities)andthefinancialliabilitiesmeasuredatfairvaluewiththechangecountedtothecurrentprofitsandlossesdirectlydesignatedattheinitialrecognition.TheCompanyclassifiesfinancialliabilitiesthatmeetoneofthefollowingconditions:thepurposeofassumingtherelevantfinancialliabilitiesismainlyforrecentsaleorrepurchase;iftheybelongtopartoftheportfolioofidentifiablefinancialinstrumentsunderconcentratedmanagement,andobjectiveevidencesshowingthattheCompanyhasrecentlyadoptedshort-termprofitmakingmode;theybelongtoaderivativeinstrument,exceptthederivativeinstrumentsdesignatedasandbeingeffectivehedginginstrumentswiththederivativeinstrumentsincompliancewithfinancialguaranteecontractexcluded.Financialliabilitiesheldfortrade(includingthederivativeinstrumentsbelongingtofinancialliabilities)aremeasuredatfairvaluesubsequentlyandallfairvaluechangesexceptforhedgingaccountingshallbeincludedincurrentperiodprofitorloss.Atinitialrecognition,inordertoprovidemorerelevantaccountinginformation,theCompanyclassifiesfinancialliabilitiesthatmeetoneofthefollowingconditionsasfinancialliabilitiesdesignatedatfairvaluethroughprofitorloss(thedesignationcannotberevokedonceitismade):

A.accountingmismatchescanbeeliminatedorsignificantlyreduced.B.accordingtothecorporateriskmanagementorinvestmentstrategyspecifiedintheformalwrittendocuments,thefinancialliabilityportfolioorthefinancialassetandfinancialliabilityportfolioismanagedandperformanceevaluatedonthebasisoffairvalue,andreportedtokeymanagementpersonnelwithintheCompanyonthisbasis.WhentheCompanyinitiallyrecognizesafinancialliabilityanddesignatesitatfairvaluethroughprofitorlossaccordingtostipulationsofstandards,thechangesinthefairvalueofthefinancialliabilityarisingfromchangesinthecompany’sowncreditriskareincludedinothercomprehensiveincome,andotherchangesinfairvaluearerecognizedinprofitorlossfortheperiod.However,iftheaccountingcausesorexpandstheaccountingmismatchinprofitorloss,theentiregainorlossofthefinancialliability(includingtheaffectedamountfromchangesinthecompany’sowncreditrisk)isincludedinthecurrentprofitorloss.

2)OtherfinancialliabilitiesExceptforthefollowingitems,theCompanyclassifiesfinancialliabilitiesasfinancialliabilitiesmeasuredatamortizedcost.Theeffectiveinterestmethodisadoptedforsuchfinancialliabilities,andthesubsequentmeasurementiscarriedoutaccordingtotheamortizedcost,andtheprofitorlossesarisingfromthederecognitionoramortizationareincludedinthecurrentprofitandloss:

A.Thefinancialliabilitiesdesignatedformeasurementatfairvaluewiththechangecountedtothecurrentprofitandloss.B.Thetransferoffinancialassetsdoesnotmeettheconditionsforderecognitionorfinancialliabilitiesarisingfromthecontinuedinvolvementinthetransferredfinancialassets.C.Financialguaranteecontractsthatarenotinthefirsttwocategoriesofthisarticle,andloancommitmentsgrantedataratelowerthanmarketinterestratesandthatarenotinthefirstcategoryofthisarticle.Afinancialguaranteecontractreferstoacontractthatrequirestheissuertopayaspecificamounttothecontractholderwhohassufferedlosseswhenaspecificdebtorfailstorepaythedebtinaccordancewiththeoriginalorrevisedtermsoftheliabilityinstrument.Forfinancialguaranteecontractsthatarenotdesignatedasfinancialliabilitiesmeasuredatfairvalueandwhosechangesareincludedinthecurrentprofitandloss,theinitialrecognitionshallbecarriedoutatthehigheroftheprovisionforlossandthebalanceafterdeductingtheaccumulatedamortizationduringtheguaranteeperiodfromtheinitialrecognitionamount.

3.Derecognitionoffinancialassetsandfinancialliabilities

1)Ifafinancialassetmeetsoneofthefollowingconditions,itshallbederecognized:

A.Thecontractualrighttoreceivethecashflowofthefinancialassetisterminated.

B.Thecontractualrighttoreceivethecashflowofthefinancialassetisterminated.

2)ConditionsforderecognitionoffinancialliabilitiesIfthecurrentobligationofafinancialliability(orapartthereof)hasbeendischarged,thefinancialliability(orsuchpartoffinancialliability)isderecognized.WhentheCompanyandthelendersignanagreementtoreplacetheoriginalfinancialliabilitywithanewfinancialliability,andthenewfinancialliabilityissubstantiallydifferentfromtheoriginalfinancialliability,theoriginalfinancialliabilityisderecognizedandanewfinancialliabilityisrecognized.Thedifferencebetweenthecarryingamountandtheconsiderationpaid(includingthetransferrednon-cashassetsorliabilitiesassumed)isrecognizedinprofitorloss.IftheCompanyrepurchasespartofthefinancialliabilities,thecarryingamountofthefinancialliabilitiesasawholeisallocatedbasedontheproportionofthefairvalueofthecontinuingrecognitionportionandthederecognitionportionontherepurchasedate.Thedifferencebetweenthecarryingamountassignedtothederecognitionportionandtheconsiderationpaid(includingthetransferrednon-cashassetsorliabilitiesassumed)shallbeincludedinthecurrentprofitorloss.

4.RecognitionbasisandmeasurementmethodfortransferoffinancialassetsIntheeventoftransferoffinancialassets,theCompanyassessestheextenttowhichitretainstherisksandrewardsofownershipofthefinancialassetsandtreatstheminthefollowingcases:

(1)Ifalmostallrisksandrewardsofownershipoffinancialassetsaretransferred,thefinancialassetsarederecognizedandtherightsandobligationsarisingfromorretainedinthetransferareseparatelyrecognizedasassetsorliabilities.

(2)Ifalmostalltherisksandrewardsofownershipoffinancialassetsareretained,thefinancialassetsshallcontinuetoberecognized

(3)Ifthereisneithertransfernorretentionofalmostallrisksandrewardsofownershipoffinancialassets(i.e.,otherthan(1)and(2)ofthisarticle),thendependingonwhetherornottheyretaincontroloverfinancialassets:

A.Ifthecontrolofthefinancialassetisnotretained,thefinancialassetshallbederecognized,andtherightsandobligationsarisingorretainedduringthetransfershallbeseparatelyrecognizedasassetsorliabilities.B.Ifthecontroloverthefinancialassetsisretained,therelevantfinancialassetsshallbecontinuouslyrecognizedaccordingtothedegreeofitscontinuedinvolvementinthetransferredfinancialassets,andtherelevantliabilitiesshallberecognizedaccordingly.ThedegreeofcontinuedinvolvementinthetransferredfinancialassetsreferstothedegreetowhichtheCompanyundertakestherisksorrewardsofchangesinthevalueofthetransferredfinancialassets.Whenjudgingwhetherthetransferoffinancialassetsmeetstheaboveconditionsforderecognitionoffinancialassets,theprincipleofsubstanceoverformisadopted.TheCompanydistinguishesthetransferoffinancialassetsintooveralltransferandpartialtransferoffinancialassets.Iftheoveralltransferoffinancialassetsmeetstheconditionsforterminationofrecognition,thedifferencebetweenthefollowingtwoamountsshallbeincludedinthecurrentprofitandloss:

A.Thecarryingamountofthetransferredfinancialassetsonthedateofderecognition.B.Thesumoftheconsiderationreceivedinrespectofthetransferoffinancialassetsandtheamountcorrespondingtothederecognizedportionintheaccumulatedchangesinthefairvalueoriginallyanddirectlyrecognizedinothercomprehensiveincome(thefinancialassetsinvolvedinthetransferaremeasuredatfairvaluethroughothercomprehensiveincome).Ifthetransferofpartialfinancialassetswhiletheparttobetransferredoverallysatisfytheconditionsofderecognition,theentirebookvalueofthetransferredfinancialassetshall,betweentheportionderecognizedandtheportionnotderecognized(insuchacase,theretainedserviceassetsshallbedeemedtobepartofthecontinuedrecognitionoffinancialassets),beapportionedaccordingtotheirrespectiverelativefairvalue,andthedifferencebetweentheamountsofthefollowing2itemsshallbeincludedintotheprofitsandlossesofthecurrentperiod:

A.Thecarryingamountoftheportionderecognizedonthedateofderecognition.B.Thesumoftheconsiderationreceivedinrespectofthederecognitionofthefinancialassetsandtheamountcorrespondingtothederecognizedportionintheaccumulatedchangesinthefairvalueoriginallyanddirectlyrecognizedinothercomprehensiveincome(thefinancialassetsinvolvedinthetransferaremeasuredatfairvaluethroughothercomprehensiveincome).Ifthetransferoffinancialassetsdoesnotsatisfytheconditionsforterminationofrecognition,continuetorecognizethefinancialasset,andthereceivedconsiderationisrecognizedasafinancialliability.

5.ThemethodofdeterminingthefairvalueoffinancialassetsandfinancialliabilitiesForthefinancialassetsorfinancialliabilitiesexistingintheactivemarket,thefairvalueisdeterminedbythequotationintheactivemarket,unlessthereisarestrictedperiodforthefinancialassetitself.Forafinancialassetwithrestrictedsalesoftheassetitself,itisdeterminedaccordingtothequotationintheactivemarketafterdeductingthecompensationamountrequiredbymarketparticipantsforbearingtheriskofnotbeingabletosellthefinancialassetintheopenmarketwithinaspecifiedperiod.Thequotationintheactivemarketincludesthequotationthatisreadilyandregularlyavailablefromexchanges,dealers,brokers,industrygroups,pricingagenciesorregulators,etc.fortherelevantassetsorliabilities,andarerepresentativeofactualandfrequentlyoccurringmarketsonanarm'slengthbasistrade.Fortheinitiallyacquiredorderivedfinancialassetsorassumedfinancialliabilities,themarkettransactionpriceisusedasthebasisfordeterminingtheirfairvalue.Forfinancialassetsorfinancialliabilitiesnotexistingintheactivemarket,thefairvalueisdeterminedusingvaluationtechniques.Atthetimeofvaluation,theBankadoptsvaluationtechniquesthatareapplicableunderthecurrentcircumstancesandhavesufficientdataandotherinformationtosupport,andtheselectionisconsistentwiththecharacteristicsoftheassetsorliabilitiesconsideredbymarketparticipantsinthetransactionsofrelevantassetsorliabilitiesandittakesprioritytousetherelevantobservableinputvalueasfaraspossible.Whentherelevantobservableinputvaluecannotbeobtainedoritisnotfeasibletoobtain,theunobservableinputvalueisused.

6.ImpairmentoffinancialinstrumentsBasedontheexpectedcreditlosses,theCompanyassessestheexpectedcreditlossesofthefinancialassetsmeasuredatamortizedcostandfinancialassetsatfairvaluethroughothercomprehensiveincome,leasereceivables,contractassets,loancommitmentandfinancialliabilitiesthatarenotmeasuredatfairvaluethroughprofitorloss,andfinancialguaranteecontractetc.,andmakesimpairmentaccountingandrecognizeslossprovisions.Expectedcreditlossreferstotheweightedaverageofthecreditlossesoffinancialinstrumentsbasedontheriskofdefault.CreditlossreferstothedifferencebetweenallcontractualcashflowsreceivableunderthecontractandallcashflowsexpectedtobereceivedbytheCompanydiscountedattheoriginaleffectiveinterestrate,thatis,thepresentvalueofallcashshortages.Where,forthepurchasedororiginatedcredit-impairedfinancialassets,theCompanydiscountsbasedonthecredit-adjustedeffectiveinterestrateaccordingtothecreditofthefinancialassets.Foraccountsreceivable,contractassets,andleasereceivables,theCompanyshallalwaysmeasurethelossallowanceforthematanamountequaltothelifetimeexpectedcreditlosses.Forfinancialassetsthathavebeenpurchasedorgeneratedwithcreditimpairment,lossprovisionisrecognizedonlyforthecumulativechangesinlifetimeexpectedcreditlossesaftertheinitialrecognitiononthebalancesheetdate.Oneachbalancesheetdate,theamountofchangesinlifetimeexpectedcreditlossesisincludedinprofitorlossasanimpairmentlossorgain.Evenifthelifetimeexpectedcreditlossdeterminedonthebalancesheetdateislessthantheexpectedcreditlossreflectedintheestimatedcashflowattheinitialrecognition,thepositivechangeinexpectedcreditlossisalsorecognizedasanimpairmentgain.Exceptfortheprovisionforlossoffinancialinstrumentsinitem(3)ofthisarticle,theCompanyassesseswhetherthecreditriskoftherelevantfinancialinstrumentshasincreasedsignificantlysincetheinitialrecognitiononeachbalancesheetdate,andseparatelymeasuresitslossprovision,recognizesexpectedcreditlossanditschangesbasedonthefollowingcircumstances：

A.Ifthecreditriskofthefinancialinstrumentshasincreasedsignificantlysincetheinitialrecognition,thelossprovisionismeasuredattheamountequivalenttothelifetimeexpectedcreditlossofthefinancialinstruments,regardlessofwhetherthebasistheCompanyassessesthecreditlossesisonindividualfinancialinstrumentoracombinationoffinancialinstruments,andtheincreaseorreversalofthelossprovisionresultingtherefromshouldbeincludedinthecurrentprofitorlossasanimpairmentlossorgainB.Ifthecreditriskofthefinancialinstrumentshasnotincreasedsignificantlysincetheinitialrecognition,thelossprovisionismeasuredattheamountequivalenttotheexpectedcreditlossofthefinancialinstrumentsinthenext12months,regardlessofwhetherthebasistheCompanyassessesthecreditlossisonindividualfinancialinstrumentorthecombinationoffinancialinstruments,andtheincreaseorreversalofthelossprovisionresultingtherefromshallbeincludedinthecurrentprofitorlossasanimpairmentlossorgain.C.Forfinancialinstrumentsinthethirdstage,theCompanymeasureslossprovisiononthebasisoflife-timeexpectedcreditlossandcalculatinginterestincomeaccordingtotheirbookbalanceminustheimpairmentprovisionandtheactualinterestrate.Incrementalorreversalofcreditlossprovisionshallbeincludedincurrentprofitorlossasimpairmentlossorgain.Exceptforfinancialassetatfairvaluethroughothercomprehensiveincome,creditlossprovisionistooffsetthecarryingamountoffinancialassets.Forfinancialassetsatfairvaluethroughothercomprehensiveincome,thecredit

lossprovisionisrecognizedinothercomprehensiveincomeandwillnotoffsetthefinancialasset’scarryingamountinbalancesheet.Inthepreviousfiscalperiod,thelossprovisionwasmeasuredatanamountequivalenttotheexpectedcreditlossduringtheentiredurationofthefinancialinstrument,butonthecurrentbalancesheetdate,thefinancialinstrumentisnolongerinasituationwherethecreditriskhassignificantlyincreasedsincetheinitialrecognition;if,onthecurrentbalancesheetdate,thelossprovisionofthefinancialinstrumentwasmeasuredattheamountequivalenttotheexpectedcreditlossinthenext12months,andtheresultinglossprovisionwasreversedastheimpairmentgainandincludedinthecurrentprofitandloss.

1)AssessmentofsignificantincreaseofcreditriskBycomparingthedefaultriskoffinancialinstrumentsonbalancesheetdatewiththatoninitialrecognitionday,theCompanydeterminestherelativechangeofdefaultriskoffinancialinstrumentsduringtheexpectedlifeoffinancialinstruments,toevaluatewhetherthecreditriskoffinancialinstrumentshasincreasedsignificantlysincetheinitialrecognition.Forfinancialguaranteecontracts,whenapplyingtheprovisionsonimpairmentoffinancialinstruments,theCompanytakesthedatewhentheCompanybecomesthepartythathasmadetheirrevocablecommitmentastheinitialrecognitiondate.Todeterminewhethercreditriskhasincreasedsignificantlysincetheinitialrecognition,factorsconsideredbytheCompanyincludes:

A.Whetherthereisseriousdeteriorationofthedebtor’soperatingresultsthathaveoccurredorareexpectedtooccur;B.Changesintheexistingoranticipatedtechnological,market,economicortechnicalenvironmentwillhaveasignificantnegativeimpactonthedebtor’srepaymentcapacity;C.Whethertherehavebeensignificantchangesinthevalueofcollateralusedascollateralforthedebtorthequalityofguaranteesorcreditenhancementsprovidedbythirdpartiesthatareexpectedtoreducethedebtor'seconomicincentivetorepaywithinthecontractualtermsoraffecttheprobabilityofdefault;D.Whethertheexpectedperformanceandrepaymentofdebtorchangessignificantly;E.WhethertheCompanychangedthewayofmanagingfinancialassets,etc.Onthebalancesheetdate,iftheCompanyassessesthatthefinancialinstrumentonlyhaslowerlevelofcreditrisk,theCompanyassumesthatthecreditriskassociatedwiththefinancialinstrumentdoesnotincreasedaftertheinitialrecognition.Ifthedefaultrateofafinancialinstrumentislowandthedebtor’sabilitytofulfillitscashflowliabilityisstrong,thefinancialinstrumentwillberegardedwithlowercreditriskeveniftherewillbeadversechangedineconomicandoperatingenvironmentinlong-termwhichmaynotnecessarilydecreasethedebtor’sabilityoffulfillingitscashflowliabilities.

2)FinancialassetswithcreditimpairmentalreadyincurredWhenoneormoreeventsthathaveanadverseeffectontheexpectedfuturecashflowofafinancialassetoccur,thefinancialassetbecomesafinancialassetthathasbeencredit-impaired.Evidenceofcreditimpairmentoffinancialassetsincludesthefollowingobservableinformation:

A.Theissuerordebtorhasexperiencedmajorfinancialdifficulty;B.Thedebtorhasviolatedthecontract,suchasfailureinorlatepaymentoftheinterestortheprincipal;C.TheCreditor,outofeconomicorcontractualconsiderationsrelatedtothedebtor’sfinancialdifficulties,givesthedebtorconcessionsthattheGroupshallnevermakeunderanyothercircumstances;D.Thedebtorislikelytogobankruptorcarryoutotherfinancialrestructuring;E.Theissuerordebtor’sfinancialdifficultiescausedthedisappearanceoftheactivemarketforthefinancialasset.F.Purchaseororiginateafinancialassetatasubstantialdiscountthatreflectsthefactthatacreditlosshasoccurred;Credit-impairmentofafinancialassetmaybecausedbythecombinedactionofmultipleevents,notnecessarilybyanindividuallyidentifiableevent.

3)Determiningexpectedcreditloss(ECL)TheCompanyevaluatesECLbasedonsingleorportfoliooffinancialinstrument.WhenevaluatingECL,theCompanyconsiderspastevents,currentsituationandfutureeconomiccondition.TheCompanycategorizesfinancialinstrumentintodifferentportfoliosbasedoncommoncreditriskcharacteristics.Commoncreditriskcharacteristicsincludes:typesoffinancialinstruments,agingportfolio,settlementperiod,debtor’s

industriesetc.Refertoaccountingpoliciesoffinancialinstrumentsforstandardforsingleevaluationandcreditriskcharacteristics.TheCompanyusesthefollowingwaytodeterminetheECLoffinancialinstruments:

A.Forfinancialassets,creditlossisthepresentvalueofdifferencebetweenallcontractualcashflowsreceivablefromthecontractandallcashflowsexpectedtobereceivedbytheCompany.B.Forleasereceivable,creditlossisthepresentvalueofdifferencebetweenallcontractualcashflowsreceivablefromthecontractandallcashflowsexpectedtobereceivedbytheCompany.C.Forfinancialguaranteecontract,creditlossisthepresentvalueofexpectedpaymentamountduetocreditlosseshappenedtotheownerofthecontractandlessanyamountthattheCompanyexpectedtoreceivefromthecontractowner,debtororotherparties.D.Forfinancialassetsthatalreadyimpairedonbalancesheetdatebutnotimpairedwhenpurchasing,thecreditlossisthedifferenceofcarryingamountandpresentvalueoffuturecashflowsdiscountedatoriginaleffectiveinterestrate.FactorsthattheCompanymeasuresECLoffinancialinstrumentincludes:assessingaseriesofpossibleresultsandtodetermineaweightedaverageamountwithoutbias;timevalueofmoney;informationofpastevent,currentsituationandfutureeconomicconditionforecastthatcanbeobtainedwithoutpayingextracostoreffortsonbalancesheetdate.

4)WriteoffTheCompanynolongerreasonablyexpectsthatthecontractualcashflowofthefinancialassetcanberecoveredwhollyorpartially,itwilldirectlywritedownthebookbalanceofthefinancialasset.Thiswrite-downconstitutesthederecognitionofrelatedfinancialassets.

7.OffsetoffinancialassetsandfinancialliabilitiesFinancialassetsandfinancialliabilitiesarepresentedinthebalancesheetrespectivelyandarenotoffsetwitheachother.However,thenetvalueafteroffsetispresentedinthebalancesheetwhenthefollowingconditionsaresatisfied:

A.TheCompanyhasthelegalrighttooffsettherecognisedamountandsuchrightisexercisable;B.TheCompanyplanstosettlebynetamountorrealizethefinancialassetsandrepaythefinancialliabilitiesatthesametime.

11.NotesreceivableForthedeterminationmethodandaccountingtreatmentmethodoftheexpectedcreditlossoftheCompany'snotesreceivable,pleaserefertoNoteV.10IftheCompanyhassufficientevidencetoevaluatetheECLofnotesreceivableonsinglebasis,itwillbeassessedonsinglebasis.IfthereisnotsufficientevidencetoevaluatetheECLonsinglebasis,theCompanywillmakejudgmentbasedonhistoricallossexperience,currentsituationandfutureeconomicsituation,andclassifyingthebillreceivableintodifferentportfolios.Thebasisforportfoliosisdeterminedasfollows:

PortfolioDescriptionThebasisforportfoliosisdeterminedasfollows:Provisionmethod
Risk-freebankacceptanceportfolioTheissuerhashigherlevelofcreditratingandnodefaultinpastandhasstrongabilitytofulfillitscontractualcashfollowobligationReferencinghistoricalimpairmentexperienceandtakingintoconsiderationofcurrentsituationandestimationoffutureconditions
BusinessacceptancenoteNotesreceivableswithsameaginghavesimilarcreditriskcharacteristicsProvisionbasedontheECLchecklistofagingagainstthelossratethroughouttheduration

12.AccountsreceivableForthedeterminationmethodandaccountingtreatmentmethodoftheexpectedcreditlossoftheCompany'snotesreceivable,pleaserefertoNoteV.10IftheCompanyhassufficientevidencetoevaluatetheECLofaccountsreceivableonsinglebasis,itwillbeassessedonsinglebasis.IfthereisnotsufficientevidencetoevaluatetheECLonsinglebasis,theCompanywillmakejudgmentbasedonhistoricallossexperience,currentsituationandfutureeconomicsituation,andclassifyingtheaccountsreceivableintodifferentportfolios.Thebasisforportfoliosisdeterminedasfollows:

PortfolioDescriptionThebasisforportfoliosisdeterminedasfollows:Provisionmethod
ReceivablesforrelatedpartiesinscopeofconsolidationAccountreceivablesforrelatedpartiesinscopeofconsolidationhavesimilarcreditriskcharacteristicsReferencinghistoricalimpairmentexperienceandtakingintoconsiderationofcurrentsituationandestimationoffutureconditions
AccountsreceivablesfromotherpartiesNotesreceivableswithsameaginghavesimilarcreditriskcharacteristicsProvisionbasedontheECLchecklistofagingagainstthelossratethroughouttheduration

13.FinancingwithaccountsreceivableInapplicable

14.OtherreceivablesMethodfordeterminationandaccountingtreatmentoftheexpectedcreditlossofotherreceivablesMethodfordeterminationandaccountingtreatmentoftheexpectedcreditlossofotherreceivablesForthedeterminationmethodandaccountingtreatmentmethodoftheexpectedcreditlossoftheCompany'snotesreceivable,pleaserefertoNoteV.10IftheCompanyhassufficientevidencetoevaluatetheECLofotherreceivablesonsinglebasis,itwillbeassessedonsinglebasis.IfthereisnotsufficientevidencetoevaluatetheECLonsinglebasis,theCompanywillmakejudgmentbasedonhistoricallossexperience,currentsituationandfutureeconomicsituation,andclassifyingtheotherreceivablesintodifferentportfolios.Thebasisforportfoliosisdeterminedasfollows:

PortfolioDescriptionThebasisforportfoliosisdeterminedasfollows:Provisionmethod
ReceivablesofdownpaymentandguaranteeTheportfoliohassimilarcreditriskcharacteristicsbasedonthebusinessnature,downpaymentandguaranteeProvisionbasedontheECLchecklistofagingagainstthelossratethroughouttheduration
PettycashforemployeesTheportfoliohassimilarcreditriskcharacteristicsbasedonthebusinessnatureReferencinghistoricalimpairmentexperienceandtakingintoconsiderationofcurrentsituationandestimationoffutureconditions
Socialsecuritypaymentpaidon-behalfofemployeesTheportfoliohassimilarcreditriskcharacteristicsbasedonthebusinessnatureReferencinghistoricalimpairmentexperienceandtakingintoconsiderationofcurrentsituationandestimationoffutureconditions
ReceivablesforrelatedpartiesinscopeofconsolidationAccountreceivablesforrelatedpartiesinscopeofconsolidationhavesimilarcreditriskcharacteristicsReferencinghistoricalimpairmentexperienceandtakingintoconsiderationofcurrentsituationandestimationoffutureconditions
PortfolioofotherreceivablesNotesreceivableswithsameaginghavesimilarcreditriskcharacteristicsProvisionbasedontheECLchecklistofagingagainstthelossratethroughouttheduration

15.Inventories

1.ClassificationofInventoriesTheCompany’sinventoriesrefertothefinishedproductsorcommoditiesheldforsale,productsinprocessandthematerialsandsuppliesconsumedinprocessofproductionorrenderingofservices,etc.intheCompany’sdailyactivities,whichareclassifiedintothreecategories,includingrawmaterials,products-in-processandcommoditystocks.whichareclassifiedintothreecategories,Inventoriesmainlyincluderawmaterials,products-in-process,finishedproducts(commoditystocks),etc.

2.ValuationmethodofinventoriesWheninventoryisacquired,itisinitiallymeasuredatcost,includingprocurementcosts,processingcostsandothercosts.Rawmaterialsandmerchandiseinventoryarepricedrespectivelyaccordingtotheweightedaverage(exceptforbrandedwatches),specificidentification(forbrandedwatches)atthetimeofdelivery.

3.BasisfordeterminingnetrealizablevalueofinventoriesandmethodforprovidingreserveforpricefallingofinventoriesAftertheinventoryisthoroughlyinspectedattheendoftheperiod,theprovisionshallbeprovidedoradjustedatthelowerofthecostoftheinventoryanditsnetrealizablevalue.Thenetrealizablevalueofinventoryofgoodsdirectlyusedforsale,suchasfinishedgoods,stockedgoodsandmaterialsforsaleinthenormalproductionandoperationprocess,isdeterminedbytheestimatedsellingpriceoftheinventoryminustheestimatedsellingexpensesandrelatedtaxes;netrealizablevalueofinventoryofmaterialsthatneedtobeprocessedisdeterminedbasedontheestimatedsellingpriceofthefinishedproductsproducedminustheestimatedcosttillcompletion,estimatedsellingexpensesandrelatedtaxesandfeesinthenormalproductionandoperationprocess;thenetrealizablevalueoftheinventoryheldfortheexecutionofasalescontractorlabourcontractiscalculatedonthebasisofthecontractprice.Ifthequantityoftheinventoryheldexceedsthequantityorderedbythesalescontract,thenetrealizablevalueoftheexcessinventoryiscalculatedbasedonthegeneralsalesprice.

Theprovisionisaccruedaccordingtotheindividualinventoryprojectattheendoftheperiod;butforalargenumberofinventorieswithlowerunitprice,theprovisionisaccruedaccordingtothecategoryofinventory;forthoserelatedtotheproductseriesproducedandsoldinthesameregion,havethesameorsimilarenduseorpurposeandthataredifficulttomeasureseparatelyfromotherprojects,theyarecombinedforprovisionforinventorydepreciationIftheinfluencingfactorsofthewrite-downofinventoryvaluehavedisappeared,theamountofwritedownwillberestoredandwillbereversedwithintheamountoftheprovisionfordeclineinvalueoftheinventorythathasbeenaccrued.Theamountofthereversalisincludedinthecurrentprofitorloss

4.InventorycountsystemTheinventorysystemfortheinventoriesistheperpetualinventorysystem

5.Amortizationmethodsoflow-valueconsumablesandpackagingmaterialsA.Lowcostandshortlivedarticlesareamortizedbyonce-writing-offmethod.B.Packagingmaterialsareamortizedbyonce-writing-offmethod.

16.ContractassetsTheCompanyhastherighttoreceivetheconsiderationforthetransferofgoodstothecustomers.Iftherightdependsonfactorsotherthanthepassageoftime,itisrecognizedasacontractasset.IftheCompanyhastheright(onlydependsonpassageoftime)toreceiveconsiderationfromclient,accountsreceivableshallberecognized.ForthedeterminationmethodandaccountingtreatmentmethodoftheexpectedcreditlossoftheCompany'scontractassets,pleaserefertoNoteV.10

17.Contractcost

1.ContractperformancecostsIfthecostincurredtofulfillthecontractdoesnotfallwithinthescopeofotheraccountingstandardsforenterprisesotherthanthestandardsforrevenueandmeetsthefollowingconditionsatthesametime,theCompanyrecognizesitasthecontractperformancecostasanasset:

A.Thecostisdirectlyrelatedtoacurrentoranticipatedcontract,includingdirectlabor,directmaterials,manufacturingexpenses(orsimilarexpenses),costsclearlybornebythecustomer,andothercostsincurredsolelyduetothecontract;B.ThecosthasincreasedtheresourcetheCompanyshallusetofulfillitsperformanceobligationinthefuture.C.Thecostisexpectedtoberecoverable.Theassetispresentedininventoryorothernon-currentassetsbasedonwhethertheamortizationperiodatinitialrecognitionexceedsonenormaloperatingcycle.

2.ContractacquisitioncostIftheincrementalcostincurredtotheCompanyforobtainingthecontractisexpectedtoberecoverable,itisrecognizedasanassetasthecostofobtainingthecontract.TheincrementalcostreferstothecostthatnocostmayincuriftheCompanydoesnotobtainthecontract(suchassalescommission,etc.)Iftheamortizationperioddoesnotexceedoneyear,itshallbeincludedinthecurrentprofitandlosswhenitincurs.

3.AmortizationofcontractcostTheaboveassetsrelatedtocontractcostsarerecognizedonthesamebasisastheincomefromgoodsorservicesrelatedtotheasset,andareamortizedatthetimewhentheperformanceobligationsareperformedorinaccordancewiththeprogressoftheperformanceobligations,andareincludedinthecurrentprofitandloss.

4.ImpairmentofcontractcostFortheabove-mentionedassetsrelatedtocontractcosts,ifthebookvalueishigherthanthedifferencebetweentheremainingconsiderationexpectedtobeobtainedbytheCompanyduetothetransferofcommoditiesrelatedtotheassetsandtheestimatedcosttoincurforthetransferoftherelatedcommodities,theexcessshallbeprovidedforimpairment,andrecognizedasassetimpairmentloss.Afterprovisionfortheimpairment,ffthefactorsofimpairmentinthepreviousperiodchangeafterward,sothatthedifferenceoftheabovetwoitemsishigherthanthebookvalueoftheasset,theoriginalprovisionforassetimpairmentshouldbereversedandincludedinthecurrentprofitandloss,butthebookvalueoftheassetafterthereversalshouldnotexceedthebookvalueoftheassetonthereversaldateifnoprovisionforimpairmentismade.

18.Held-for-saleassetsInapplicable

19.EquityinvestmentInapplicable

20.OtherequityinvestmentInapplicable

21.LongtermaccountsreceivableInapplicable

22.Long-termequityinvestments

1.DeterminationoftheinitialinvestmentcostA.Forthelong-termequityinvestmentformedbybusinesscombination,thespecificaccountingpoliciesaredetailedintheaccountingtreatmentofbusinesscombinationundercommoncontrolandnotundercommoncontrolassetoutinthisNote(6).B.Long-termequityinvestmentobtainedbyothermeansForlong-termequityinvestmentsobtainedbypayingcash,theactualpurchasepricepaidshallbeusedastheinitialinvestmentcost.Theinitialinvestmentcostincludesexpensesdirectlyrelatedtotheacquisitionoflong-termequityinvestments,taxesandothernecessaryexpenses.Theinitialinvestmentcostofthelong-termequityinvestmentobtainedbyissuingequitysecuritiesisthefairvalueoftheissuedequitysecurities;thetransactioncostincurredintheissuanceoracquisitionofitsownequityinstrumentsisdeductedfromequityifitisdirectlyattributabletoequitytransactions.Underthepremisethatthenon-monetaryassetexchangehasthecommercialsubstanceandthefairvalueoftheassetsreceivedorsurrenderedcanbereliablymeasured,theinitialinvestmentcostofthelong-termequityinvestmentexchangedfornon-monetaryassetsisdeterminedbasedonthefairvalueoftheassetsexchangedandrelevanttaxespayable,unlessthereisconclusiveevidencethatthefairvalueoftheassetstransferredismorereliable;fortheexchangeofnon-monetaryassetthatdoesnotmeettheabovepremise,theinitialinvestmentcostoflong-termequityinvestmentisthecarryingamountoftheassetsexchangedandtherelatedtaxesandfeespayable.Theinitialinvestmentcostofalong-termequityinvestmentobtainedthroughdebtrestructuringincludesthefairvalueofthewaiveddebt,taxesthatcanbedirectlyattributabletotheassetandothercosts.

2.SubsequentmeasurementandprofitandlossrecognitionA.CostmethodThelong-termequityinvestmentthattheCompanycancontrolovertheinvesteeisaccountedforusingthecostmethod,andthecostofthelong-termequityinvestmentisadjustedbyaddingorrecoveringtheinvestmentaccordingtotheinitialinvestmentcost.Exceptfortheactualpaymentorthecashdividendsorprofitsincludedintheconsiderationthathavebeenannouncedbutnotyetpaidatthetimeofacquiringtheinvestment,theCompanyrecognizesthecurrentinvestmentincomeaccordingtoitsshareofcashdividendsorprofitsdeclaredtobedistributedbytheinvestee.B.EquitymethodTheCompany’slong-termequityinvestmentsinassociatesandjointventuresareaccountedforusingtheequitymethod,andsomeoftheequityinvestmentsinassociatesthatareindirectlyheldbyventurecapitalinstitutions,mutualfunds,trustcompaniesorsimilarentitiesincludinginvestment-linkedinsurancefundsaremeasuredatfairvaluethroughprofitorloss.Whentheinitialinvestmentcostofalong-termequityinvestmentisgreaterthantheinvestment,theinitialinvestmentcostofthelong-termequityinvestmentshallnotbeadjustedbythedifferencebetweenthefairvalueoftheidentifiablenetassetsoftheinvestee;iftheinitialinvestmentcostislessthantheinvestment,thedifferencebetweenthefairvalueoftheidentifiablenetassetsoftheinvesteeshouldbeincludedinthecurrentprofitorloss.AftertheCompanyhasacquiredthelongtermequityinvestment,thenetgainsandlossesrealizedbytheinvesteeandtheshareoftheothercomprehensiveincomeenjoyableorsharableshouldberespectivelyusedtorecognizethe

returnoninvestmentandothercomprehensiveincomeandatthesametimethebookvalueofthelongtermequityinvestmentisadjusted;accordingtotheprofitannouncedfordistributionbytheinvesteeorthepartofthecashdividendenjoyableuponcalculation,thebookvalueofthelongtermequityinvestmentisreducedcorrespondingly.Forotherchangeinthenetprofitandloss,othercomprehensiveincomeandowner'sequityotherthantheprofitdistribution,thebookvalueofthelongtermequityinvestmentisadjustedandcountedtothecapitalreserve.Indeterminingthenetprofitandlossintheinvesteeenjoyable,withthefairvalueofvariousidentifiableassets,etc.intheinvesteewhentheinvestmentisacquiredasthebase,thenetprofitoftheinvesteeisrecognizedafteradjustment.ForthetransactionsbetweentheCompanyanditsassociatesorjointventures,thepartcalculatedbasedontheproportionoftheunrealizedinternaltransactiongainsandlossesattributabletotheCompanyshallbeoffsetandthegainsandlossesontheinvestmentshallberecognizedonthisbasis.WhentheCompanyrecognizesthelossesincurredbytheinvesteethatitshouldbear,itshalldealwithitinthefollowingorder:Firstly,offsetthecarryingamountofthelong-termequityinvestment.Secondly,ifthecarryingamountofthelong-termequityinvestmentisnotenoughtobeoffset,theinvestmentlosswillcontinuetoberecognizedtotheextentofcarryingamountofotherlong-termequitythatvirtuallyconstitutesanetinvestmentintheinvestee,andthecarryingamountofthelong-termreceivablesisoffset.Finally,aftertheabove-mentionedtreatment,iftheenterprisestillbearsadditionalobligationsinaccordancewiththeinvestmentcontractoragreement,theprojectedliabilitiesarerecognizedaccordingtotheestimatedobligationsandincludedinthecurrentinvestmentlosses.Iftheinvesteerealizesprofitinthefutureperiod,afterdeductingtheunrecognizedlossshare,andthereductionofbookbalanceoftherecognizedprojectedliabilitiesandrecoveryofotherlong-termequitythatvirtuallyconstitutesanetinvestmentintheinvesteeandcarryingamountoflong-termequityinvestmentasoppositetotheorderabove,theCompanyshallrestoretheinvestmentincome.

3.Conversionofaccountingmethodsforlong-termequityinvestment

1)FairvaluemeasurementtoequitymethodaccountingIftheequityinvestmentoriginallyheldbytheCompanythatdoesnothavecontrol,jointcontrolorsignificantinfluenceontheinvestee,whichisaccountedforaccordingtotherecognitionandmeasurementcriteriaoffinancialinstruments,canexertsignificantinfluenceontheinvesteeorjointlycontrolbutdoesnotconstitutecontroloveritduetoadditionalinvestmentandotherwise,itsinitialinvestmentcostshallbethesumofthefairvalueoftheequityinvestmentoriginallyheldinaccordancewiththe“AccountingStandardsforBusinessEnterprisesNo.22–RecognitionandMeasurementofFinancialInstruments”andnewinvestmentcostafterbeingaccountedforundertheequitymethod.Iftheinitialinvestmentcostaccountedforundertheequitymethodislessthanthefairvalueshareoftheidentifiablenetassetsoftheinvesteeontheadditionalinvestmentdatedeterminedbythenewshareholdingratioaftertheadditionalinvestment,thecarryingamountofthelong-termequityinvestmentisadjustedandincludedinthecurrentnon-operatingincome.

2)FairvaluemeasurementorequitymethodaccountingtocostmethodaccountingIftheequityinvestmentoriginallyheldbytheCompany,thatdoesnothavecontrol,jointcontrolorsignificantinfluenceontheinvesteeandwhichisaccountedforinaccordancewiththefinancialinstrumentrecognitionandmeasurementcriteria,orthelong-termequityinvestmentoriginallyheldinassociatesorjointventure,canexercisecontrolovertheinvesteenotundercommoncontrolduetoadditionalinvestmentorotherwise,inthepreparationofindividualfinancialstatements,thesumofthecarryingamountoftheequityinvestmentoriginallyheldplusthenewinvestmentcostshallberegardedastheinitialinvestmentcostafterbeingaccountedforunderthecostmethod.Theothercomprehensiveincomerecognizedbytheequitymethodinrespectoftheequityinvestmentoriginallyheldbeforethepurchasedateisaccountedforonthesamebasisastheinvesteedirectlydisposesoftherelevantassetsorliabilitieswhentheinvestmentisdisposedof.Iftheequityinvestmentheldbeforethepurchasedateisaccountedforinaccordancewiththerelevantprovisionsofthe“AccountingStandardsforBusinessEnterprisesNo.22–RecognitionandMeasurementofFinancialInstruments”,thecumulativefairvaluechangesoriginallyincludedinothercomprehensiveincomearetransferredtocurrentprofitorlosswhenthecostmethodisadopted.

3)EquitymethodaccountingtofairvaluemeasurementIftheCompanylosesjointcontrolorsignificantinfluenceontheinvesteeduetothedisposalofpartoftheequityinvestmentorotherwise,theremainingequityafterdisposalshallbeaccountedforaccordingtothe“AccountingStandardsforBusinessEnterprisesNo.22–RecognitionandMeasurementofFinancialInstruments”.Thedifferencebetweenthefairvalueandthecarryingamountonthedateoflosingjointcontrolorsignificantimpactisrecognizedinprofitorloss.Theothercomprehensiveincomerecognizedinrespectoftheoriginalequityinvestmentusingtheequitymethodisaccountedforonthesamebasisastheinvesteedirectlydisposesoftherelevantasset.

4)Costmethodtoequitymethod

WheretheCompanylosescontrolovertheinvesteeduetothedisposalofpartoftheequityinvestment,etc.,inthepreparationofindividualfinancialstatements,iftheremainingequityafterdisposalcanexercisejointcontrolorsignificantinfluenceontheinvestee,theequitymethodisadoptedforaccounting,andtheremainingequityisdeemedtobeadjustedundertheequitymethodwhenitisacquired.

5)CostmethodtofairvaluemeasurementWheretheCompanylosescontrolovertheinvesteeduetothedisposalofpartoftheequityinvestment,etc.,inthepreparationofindividualfinancialstatements,iftheremainingequityafterdisposalcannotjointlycontrolorexertsignificantinfluenceontheinvestee,therelevantprovisionsofthe“AccountingStandardsforBusinessEnterprisesNo.22–RecognitionandMeasurementofFinancialInstruments”areadopted.Thedifferencebetweenthefairvalueandthecarryingamountonthedateoflossofcontrolisrecognizedinprofitorlossforthecurrentperiod.

4.Disposaloflong-termequityinvestmentForthedisposaloflong-termequityinvestment,thedifferencebetweenthecarryingamountandtheactualpurchasepriceshallbeincludedinthecurrentprofitorloss.Forthelong-termequityinvestmentaccountedforusingtheequitymethod,whentheinvestmentisdisposedof,thepartthatisoriginallyincludedintheothercomprehensiveincomeisaccountedforinthesameproportionbasedonthesamebasisastheinvesteedirectlydisposesoftherelevantassetsorliabilities.Iftheterms,conditionsandeconomicimpactofeachtransactionondisposaloftheequityinvestmentinasubsidiarysatisfyoneormoreofthefollowingcases,themultipletransactionsaretreatedasapackagetransaction:

A.thetransactionswereenteredintoatthesametimeorbyconsideringeachother’sinfluence;B.acompletebusinessresultcanonlybeachievedbycombiningallthesetransactionstogether;C.theperformingofonetransactionisdependedonatleastoneothertransaction;D.atransactionisnoteconomicalifitisconsideredstandalongbutitwillbecomeeconomicalifitisconsideredincombinationwithothertransactions.Wherethelossofcontrolovertheoriginalsubsidiaryduetodisposalofpartoftheequityinvestmentorotherwisewhichisnotapackagetransaction,theindividualfinancialstatementsandconsolidatedfinancialstatementsshallbeclassifiedforrelevantaccountingtreatment:

1)Inindividualfinancialstatements,thedifferencebetweenthebookvalueofthedisposedequityandtheactualacquisitionpriceisrecordedinthecurrentprofitandloss.Iftheremainingequityafterdisposalcanexertjointcontrolorsignificantinfluenceontheinvestee,itshallbeaccountedforundertheequitymethod,andtheresidualequityshallbedeemedtobeadjustedbyequitymethodwhenitisacquired;iftheremainingequityafterdisposalcannotexertjointcontrolorsignificantinfluenceovertheinvestee,itshallbeaccountedforbytherelevantprovisionsofthe“AccountingStandardsforBusinessEnterprisesNo.22–RecognitionandMeasurementofFinancialInstruments”,andthedifferencebetweenthefairvalueandthecarryingamountonthedateoflossofcontrolisincludedinthecurrentprofitorloss.

2)Intheconsolidatedfinancialstatements,foreachtransactionbeforethelossofcontroloverthesubsidiary,capitalreserve(sharepremium)isadjustedforthedifferencebetweenthedisposalpriceandtheshareofthenetassetscorrespondingtothedisposedlong-termequityinvestmentthatthesubsidiaryhascontinuouslycalculatedfromthedateofpurchaseorthemergerdate;ifthecapitalreserveisinsufficienttooffset,theretainedearningswillbeadjusted;whenthecontrolofthesubsidiaryislost,theremainingequityshallbere-measuredaccordingtoitsfairvalueonthedateoflossofcontrol.Thesumoftheconsiderationforthedisposaloftheequityandthefairvalueoftheremainingequity,lesstheshareofthenetassetsthatthattheoriginalsubsidiaryhascontinuouslycalculatedfromthedateofpurchasecalculatedbasedontheoriginalshareholding,isincludedintheinvestmentincomefortheperiodoflossofcontrol,whilereducinggoodwill.Othercomprehensiveincomerelatedtotheoriginalsubsidiary’sequityinvestmentwillbeconvertedintocurrentinvestmentincomewhencontrolislost.Ifeachtransactionondisposaloftheequityinvestmentinasubsidiaryuntilthelossofcontrolisapackagetransaction,eachtransactionisaccountedforasatransactiontodisposeoftheequityinvestmentinthesubsidiarywithlossofcontrol,whichisdistinguishedbetweenindividualfinancialstatementsandconsolidatedfinancialstatements:

1)Intheindividualfinancialstatements,thedifferencebetweeneachdisposalpriceandthecarryingamountofthelong-termequityinvestmentcorrespondingtothedisposedequitybeforethelossofcontrolisrecognizedasothercomprehensiveincome,andwhenthecontrolislost,itistransferredtoprofitorlossfortheperiodofthelossofcontrol.

2)Intheconsolidatedfinancialstatements,thedifferencebetweeneachdisposalpriceandthedisposalinvestmentthathastheshareofthenetassetsofthesubsidiarybeforethelossofcontrolisrecognizedasothercomprehensiveincome,andtransferredtoprofitorlossfortheperiodofthelossofcontrol.

5.JudgingcriteriaforjointcontrolandsignificantinfluenceIftheCompanycollectivelycontrolsanarrangementwithotherpartiesinaccordancewiththerelevantagreement,andtheactivitydecisionthathasasignificantimpactonthereturnofthearrangementneedstobeunanimouslyagreeduponbythepartiessharingthecontrol,itisconsideredthattheCompanyandotherpartiesjointlycontrolanarrangement,whichisajointarrangement.IfthejointarrangementisreachedthroughaseparateentityanditdeterminesthattheCompanyhasrightstothenetassetsoftheseparateentityinaccordancewiththerelevantagreement,theseparateentityisregardedasajointventureandisaccountedforusingtheequitymethod.IfitisjudgedaccordingtotherelevantagreementthattheCompanydoesnothaverightstothenetassetsoftheseparateentity,theseparateentityactsasajointoperation,andtheCompanyrecognizestheitemsrelatedtotheshareoftheinterestsofthejointoperationandconductsaccountingtreatmentinaccordancewiththerelevantASBEs.Significantinfluencereferstotheinvestor'spowerofparticipationinmakinganinvestee'sfinancialandoperationpoliciesbuttheCompanycannotcontrolorjointlycontrolwithotherpartiestomakethesepolicies.TheCompanyhasasignificantinfluenceontheinvesteeunderoneormoreofthefollowingsituationsandtakingintoaccountallfactsandcircumstances:(1)itisrepresentedontheboardofdirectorsorsimilarauthoritiesoftheinvestee;(2)itinvolvesintheformulationoffinancialandoperatingpolicyoftheinvestee;(3)ithasimportanttransactionswiththeinvestee;(4)itdispatchesmanagementpersonneltotheinvestee;(5)itprovideskeytechnicalinformationtotheinvestee.

23.InvestmentPropertyMeasurementmodelforinvestmentpropertyMeasuredbasedonthecostmethodDepreciationoramortizationmethodInvestmentpropertyreferstorealestateheldtoearnrentalsorforcapitalappreciation,orboth,includingthelanduserightwhichhasalreadybeenletout,thelanduserightheldandtobeassignedafterappreciation,buildingwhichhasbeenleasedout,etc.Inaddition,iftheBoardofDirectorshasawrittenresolutiononthevacantbuildingsheldbytheCompanyforthepurposeofoperatingthelease,itisclearlystatedthattheywillbeusedforoperatingleasesandthattheintentiontoholdisnolongerchangedintheshorttermandtheyarepresentedasinvestmentproperty.TheCompany’sinvestmentpropertyisrecordedatitscost,andthecostofpurchasedinvestmentpropertyincludesthepurchaseprice,relatedtaxesandotherexpensesdirectlyattributabletotheasset;thecostofself-builtinvestmentpropertyiscomposedofthenecessaryexpensesincurredbeforetheassetisreadyforexpecteduse.TheCompanyadoptsthecostmodelforsubsequentmeasurementofinvestmentproperty,anddepreciatesoramortizesbuildingsandlanduserightsaccordingtotheirestimatedservicelifeandnetresidualvalue.Expectedusefullife,residualvalueandannualdepreciationrateareasfollows:

CategoriesExpectedusefullife(years)Expectedresidualvaluerate(%)Annualdepreciation(amortization)(%)
Housing&buildings20-355.004.80-2.70

Whentheuseofinvestmentpropertyischangedtoself-use,theCompanyconvertstheinvestmentpropertyintofixedassetsorintangibleassetsfromthedateofchange.Whentheuseofself-usepropertychangestorentalearningorcapitalappreciation,theCompanyconvertsfixedassetsorintangibleassetsintoinvestmentpropertyfromthedateofchange.Whenaconversionoccurs,thecarryingamountbeforeconversionisusedastheconvertedvalue.Theinvestmentpropertyisderecognizedwhentheinvestmentpropertyisdisposedof,orpermanentlywithdrawnfromuseandisnotexpectedtoobtaineconomicbenefitsfromitsdisposal.Theamountofdisposalincomefromthesale,transfer,retirementordamageoftheinvestmentpropertyafterdeductingitscarryingamountandrelatedtaxesandexpensesisrecognizedinprofitorlossforthecurrentperiod.

24.Fixedasset

(1)RecognitionconditionsoffixedassetsFixedassetsaretangibleassetsthatareheldforproductionofgoods,supplyofservices,forrentaltoothers,orforadministrativepurposesandhaveusefullivesmorethanoneaccountingyear.Fixedassetsarerecognizedwhenthefollowingconditionsaremetatthesametime:

1)Theeconomicbenefitrelatedtothefixedassetislikelytoflowintotheenterprise;

2)Thecostofthefixedassetcanbereliablymeasured.

(2)Depreciationmethods

CategoriesDepreciationmethodsDepreciationlifeResidualrateYearlydepreciationrate
Plant&buildingsAverageservicelifemethod20-355.004.80-2.70
Machinery&equipmentStraight-linemethod105.00-10.009.50-9.00
ElectronicequipmentStraight-linemethod55.0019.00
MotorvehicleStraight-linemethod55.0019.00
OtherequipmentStraight-linemethod55.0019.00

Depreciationoffixedassetsisaccruedovertheestimatedusefullifebasedonitsrecordedvaluelesstheestimatednetresidualvalue.Thefixedassetsthathavebeenprovidedforimpairmentlossesaredepreciatedinthefutureperiodbasedonthecarryingamountafterdeductingtheimpairmentprovisionandtheremainingusefullife.TheCompanydeterminestheservicelifeandestimatednetresidualvalueoffixedassetsbasedonthenatureandusageoffixedassets.TheCompanyrecheckstheservicelife,predictednetresidualvalueanddepreciationmethodofthefixedassetattheendofayear.Incasethereexistsanydifferencewiththeoriginalestimate,thecorrespondingadjustmentshouldbemade.

(3)Basisforrecognizingthefixedassetsunderfinancinglease,PricingandDepreciationMethodsInapplicable

25.Construction-in-progress

1.Construction-in-progressTheself-builtconstructioninprogressoftheCompanyismeasuredattheactualcost,whichisdeterminedbythenecessaryexpensesincurredbeforetheconstructionoftheassetreachestheintendedusablecondition,includingthecostofengineeringmaterials,labourcostsandrelevanttaxespayable,capitalizedborrowingcostsandindirectcoststhatshouldbeapportioned.

2.CriteriaforandtimepointofconstructioninprogresstoconvertintofixedassetForaconstruction-in-progress,itsentryvalueshallbethetotalexpensesincurredbeforethebuiltassetreachestheexpectedusecondition.Whereaconstructioninprogresshasreachedtheexpecteduseconditionbutthefinalaccountsoftheas-builtprojecthavenotbeensettled,fromthedaywhenthefixedassetreachestheexpectedusecondition,valuesestimatedaccordingtotheconstructionbudgetandcostortheactualconstructioncostshallbeassignedtothefixedasset,andthefixedassetshallbedepreciatedunderthefixedassetdepreciationprovisions.Thedepreciationamountalreadyprovidedisnotadjusted.

26.BorrowingCosts

1.RecognitionprincipleofcapitalizationofborrowingcostsIftheborrowingcostsincurredtotheCompanycanbedirectlyattributabletotheacquisition,constructionorproductionofassetsthatmeettheconditionsforcapitalization,theyshallbecapitalizedandincludedinthecostoftherelevantassets;otherborrowingcostsshallberecognizedasexpensesbasedontheamountincurredwhentheyincurandincludedinthecurrentprofitandloss.Theassetsincompliancewiththecapitalizationconditionsrefertosuchassetsasfixedassets,investmentbasedrealestate,inventories,etc.whichneedtoundergolongtimeofacquisitionorconstructionorproductionactivitiesbeforetheycanreachthepredictedapplicableorsellablestatus.Assoonastheborrowingcostsmeetthefollowingconditions,capitalizationstarts:

A.Assetexpenditureshavealreadyoccurred,includingexpendituresintheformofpayingcash,transferringnon-cashassets,orassuminginterest-bearingdebtsforthepurchase,constructionorproductionofassetsthatmeetthecapitalizationconditions;B.Borrowingcostshaveincurred;C.Thepurchase,constructionorproductionactivitiesnecessaryfortheassetstoreachtheexpectedusableormarketablestatehavealreadybegun.

2.PeriodofcapitalizationofborrowingcostsThecapitalizationperiodreferstotheperiodfromthetimewhenthecapitalizationofborrowingcostsstartstothetimewhenthecapitalizationisstopped,excludingtheperiodduringwhichthecapitalizationofborrowingcostsissuspended.Whentheacquisition,constructionorproductionofassetsthatmeetthecapitalizationconditionsreachestheintendedusableorsaleablestate,thecapitalizationofborrowingcostsshallcease.Whenapartoftheassetspurchasedorproducedthatmeetthecapitalizationconditionsarecompletedandcanbeusedalone,suchpartoftheassetsshallstopcapitalizationofborrowingcosts.

Whereeachpartoftheassetspurchasedorproducediscompletedseparately,butmustwaituntilthewholeiscompletedorcanbesoldexternally,thecapitalizationoftheborrowingcostsshallbestoppedwhentheassetsarecompletedasawhole.

3.SuspensionofcapitalizationperiodIfanabnormalinterruptionoccursduringtheacquisition,constructionorproductionofanassetthatmeetsthecapitalizationconditions,andtheinterruptionlastsformorethan3months,thecapitalizationofborrowingcostsshallbesuspended;iftheinterruptionisanecessaryprocedurefortheacquired,constructedorproducedassetseligibleforcapitalizationtoreachtheintendeduseorsalestate,theborrowingcostsmaycontinuetobecapitalized.Theborrowingcostsincurredduringtheinterruptionperiodarerecognizedasthecurrentprofitandloss,andtheborrowingcostscontinuetobecapitalizedaftertheacquisition,constructionorproductionactivitiesoftheassetareresumed.

4.CalculationmethodforthecapitalizedamountofborrowingcostsInterestchargesonspecialborrowings(excludinginterestincomeonunusedborrowingsdepositedinthebank,orinvestmentincomeontemporaryinvestment)andtheirancillaryexpensesshallbecapitalizedbeforetheassetspurchasedorproducedthatmeetthecapitalizationconditionsarereadyforintendeduseorsale.Theamountofcapitalizedinterestongeneralborrowingsiscalculatedbytheweightedaverageoftheexcessportionoftheaccumulativeassetexpendituresoverthespecialborrowingsmultipliedbythecapitalizationrateofgeneralborrowings.Thecapitalizationrateisdeterminedbasedontheweightedaverageinterestrateofgeneralborrowings.Thecapitalizationrateisdeterminedbasedontheweightedaverageinterestrateofgeneralborrowings.Wherethereisadiscountorpremiumintheborrowings,theinterestamountshallbeadjustedinaccordancewiththeeffectiveinterestratemethodtodeterminethediscountorpremiumamountthatshallbeamortizedduringeachaccountingperiod.

27.BiologicalAssetsInapplicable

28.OilandGasAssetsInapplicable

29.Right-of-useAssetsTheCompanyinitiallymeasurestheright-to-useassetsatcost,whichincludes:

1)initialmeasurementamountofleaseliabilities;

2)leasepaymentsmadebeforeoratthebeginningoftheleaseterm,anddeductionoftherelevantamountofrentalincentivesifany;

3)initialdirectexpensesincurredbytheCompany;

4)expectedcoststobeincurredbytheCompanyfordismantlingandremovingleasedassets,restoringthesiteofleasedassetsorrestoringleasedassetstothestateagreedintheleaseterms(excludingcostsincurredfortheproductionofinventory)Afterthestartingdateoftheleaseterm,theCompanyadoptsthecostmodelforsubsequentmeasurementoftheassetwithuseright.Ifitcanbereasonablydeterminedtoobtaintheownershipoftheleasedassetattheexpirationoftheleaseterm,theCompanyshallaccruedepreciationduringtheremainingusefullifeoftheleasedasset.Ifitisimpossibletoreasonablydeterminethattheownershipoftheleasedassetcanbeobtainedwhentheleasetermexpires,theCompanyshallaccruedepreciationduringtheshorterperiodoftheleasetermandtheremainingusefullifeoftheleasedasset.Fortheright-of-useassetswithimpairmentprovision,depreciationshallbecalculatedbasedonthebookvalueafterdeductionofimpairmentprovisioninaccordingwiththeaboveprinciplesinfutureperiods.

30.Intangibleassets

(1)Pricingmethod,servicelifeandimpairmenttestIntangibleassetsrefertotheidentifiablenon-monetaryassetsownedorcontrolledbytheCompanywhichhavenophysicalform,includinglanduserights,softwareandtrademarkuserights.

1)InitialmeasurementofintangibleassetsThecostofoutsourcingintangibleassetsincludesthepurchaseprice,relevanttaxes,andotherexpendituresdirectlyattributabletotheasset'sintendeduse.Ifthepaymentforthepurchaseofintangibleassetsisdelayedbeyondthenormalcreditconditionsandisofafinancingnature,thecostoftheintangibleassetsisdeterminedonthebasisofthepresentvalueofthepurchaseprice.Foranintangibleassetacquiredthroughdebtrestructuringbythedebtorforthepurposeofrepayingdebts,theCompanydeterminesitsentryvalueonthebasisofthefairvalueoftheintangibleassets,andincludesthedifferencebetweenthebookvalueoftherestructureddebtandthefairvalueofthefixedassetsusedtorepaythedebtsinthecurrentperiodprofitandloss.Onthepremisethattheexchangeofnon-monetaryassetshascommercialsubstanceandthefairvalueoftheexchangedassetsorexchangedassetscanbereliablymeasured,theintangibleassetsexchangedinwithnon-monetaryassetsaredeterminedonthebasisofthefairvalueoftheexchangedassets,unlessthereisconclusiveevidenceshowingthatthefairvalueoftheassetsexchangedinismorereliable;fornon-monetaryassetexchangesthatdonotmeettheabovepremises,thebookvalueoftheassetsexchangedandtherelevanttaxesandfeespayableshallbeusedasthecostoftheexchangeofintangibleassets,andnoprofitorlossisrecognized.Forintangibleassetobtainedthroughbusinessabsorptionorcombinationundercommoncontrol,itsbookvalueisdeterminedbythecarryingamountofthecombinedparty;forintangibleassetobtainedthroughbusinessabsorptionormergernotundercommoncontrol,itsbookvalueisdeterminedbythefairvalueoftheintangibleasset.Thecostsofintangibleassetsdevelopedinternallyincludes:materialsusedinthedevelopmentoftheintangibleasset,laborcosts,registrationfees,amortizationofotherpatentsandfranchisesusedinthedevelopmentprocess,andinterestexpensesthatmeetthecapitalizationconditions,andotherdirectexpensesincurredbeforetheintangibleassetreachesitsintendeduse.

2)SubsequentmeasurementofintangibleassetsTheCompanydeterminestheusefullifeofintangibleassetsonacquisition,whichareclassifiedasintangibleassetswithlimitedusefullifeandindefiniteusefullife.IntangibleassetswithalimitedusefullifeIntangibleassetswithalimitedusefullifearedepreciatedusingstraightlinemethodoverthetermduringwhichtheybringeconomicbenefitstotheCompany.Theestimatedlifeandbasisfortheintangibleassetswithalimitedusefullifeareasfollows:

ItemsEstimatedusefullifeBasis
Landuseright50Straight-linemethod
Softwaresystem5Straight-linemethod
Trademarkrights5-10Straight-linemethod

Theusefullifeanddepreciationmethodofintangibleassetswithalimitedusefullifearereassessedattheendofeachperiod.Ifthereisadifferencefromtheoriginalestimate,correspondingadjustmentswillbemade.Uponre-assessment,therewasnodifferenceintheusefullifeanddepreciationmethodofintangibleassetsfromthepreviousestimatesattheendoftheperiod.

(2)Accountingpolicyforinternalresearchanddevelopmentexpenditure

1)SpecificbasisfordeterminingtheresearchstageanddevelopmentstageofinternalresearchanddevelopmentprojectsoftheCompanyResearchphase:Thephaseoforiginalplannedinvestigations,researchactivitiestoacquireandunderstandnewscienceortechnologyknowledge,etc.Developmentphase:Itisthephaseinwhichtheresearchresultorotherknowledgeisappliedinsomeplanordesignsothatneworsubstantiallyimprovedmaterials,devices,products,etc.areproducedpriortocommercialproductionoruse.Theexpenditureoftheresearchstageoftheinternalresearchanddevelopmentprojectisincludedinthecurrentprofitorlossatthetimeofoccurrence

2)Specificstandardforcapitalizationofexpenditureinthedevelopmentstage

Theexpenditureofaninternalresearchanddevelopmentprojectinthedevelopmentstageisrecognizedasanintangibleassetwhenmeetingallofthefollowingconditions:

A.Itistechnicallyfeasibletocompletetheintangibleassetsothatitcanbeusedorsold;B.Withanintentiontocompletetheintangibleassetandtouseorsellit;C.Thewaytheintangibleassetgenerateseconomicbenefitscanprovetheexistenceofamarketfortheproductsproducedusingtheintangibleassetoramarketfortheintangibleassetitself,andiftheintangibleassetwillbeusedinternally,itsusefulnesscanbeproven;D.Havingsufficienttechnical,financialresourcesandotherresourcesupporttocompletethedevelopmentoftheintangibleasset,andhavingtheabilitytouseorselltheintangibleasset;E.Expenditureattributabletothedevelopmentstageoftheintangibleassetcanbereliablymeasured.Expendituresincurredinthedevelopmentstagethatdonotmeettheaboveconditionsshallbeincludedinthecurrentprofitorlossatthetimeofoccurrence.Thedevelopmentexpenditureswhichhavebeenincludedintheprofitorlossinthepreviousperiodswillnotberecognizedasanassetinthefutureperiod.Thecapitalizedexpendituresinthedevelopmentphaseareshowninthebalancesheetasdevelopmentexpendituresandareconvertedintointangibleassetsfromthedateoftheproject’sintendeduse.

31.ImpairmentoflongtermassetsOnthebalancesheetdate,theCompanydetermineswhethertheremaybeasignofimpairmentonlong-termassets.Ifthereisasignofimpairmentonlong-termassets,therecoverableamountisestimatedonthebasisofasingleasset.Ifitisdifficulttoestimatetherecoverableamountofasingleasset,thendeterminetherecoverableamountoftheassetgrouponthebasisoftheassetgrouptowhichtheassetbelongs.Theestimatedrecoverableamountofanassetisthehigherofitsfairvaluelessthecostofdisposalandthepresentvalueoftheexpectedfuturecashflowoftheasset.Themeasurementresultsofrecoverableamountshowthatwhentherecoverableamountofanlong-termassetislowerthanitsbookvalue,thebookvalueofthelong-termassetisreducedtoitsrecoverableamount.Thereducedamountisrecognizedasanimpairmentlossontheassetandincludedinthecurrentprofitorloss,atthesametime,assetimpairmentprovisionwillbemadeaccordingly.Assetimpairmentlossshallnotbereversedduringthesubsequentaccountingperiodoncerecognized.Afterthelossofassetimpairmenthasbeenrecognized,thedepreciationoramortizationexpensesoftheimpairedassetshallbeadjustedaccordinglyinthefutureperiodssoastoamortizethepost-adjustmentcarryingvalueoftheassetsystematically(deductingtheexpectednetsalvagevalue)withintheresidualservicelifeoftheasset.Forthegoodwillformedfromconsolidationofanenterpriseandintangibleassetwiththeundeterminedservicelife,regardlesswhetherthereexistsanyevidenceofimpairment,impairmenttestingisconductedeveryyear.Intheimpairmenttestofgoodwill,thebookvalueofgoodwillwouldbeapportionedtoassetgrouporportfolioofassetgroupexpectedtobenefitfromthesynergyeffectofanenterprisemerger.Whentakinganimpairmenttestontherelevantassetgrouporportfolioofassetgroupcontaininggoodwill,ifthereisasignofimpairmentontheassetgrouporportfolioofassetgrouprelatedtothegoodwill,theCompanyfirstcalculatestherecoverableamountaftertestingtheassetgrouporportfolioofassetgroupwhichdoesnotcontainthegoodwillforimpairment,andthencomparesitwiththerelatedbookvaluetorecognizethecorrespondingimpairmentloss.Next,theCompanyconductsanimpairmenttestontheassetgrouporportfolioofassetgroupwhichcontainsthegoodwillandcomparesthebookvalueoftherelatedassetgrouporportfolioofassetgroup(bookvalueincludestheshareofgoodwill)withtherecoverableamount.Iftherecoverableamountoftherelatedassetgrouporportfolioofassetgroupislowerthanthebookvalue,theCompanywillrecognizetheimpairmentlossofgoodwill.

32.Longtermexpensestobeapportioned

1.AmortizationMethodLongtermexpensestobeapportionedrefertoexpensesthathavealreadybeenspentbytheCompany,butshallbeapportionedinthecurrentperiodandthefutureperiodsandthebenefitperiodisover1year.Longtermexpensestobeapportionedareamortizedinbenefitperiod.

2.Amortizationperiod

CategoriesAmortizationperiod
Counterfabricationexpenses2-3
Decorationexpenses3-5
CategoriesAmortizationperiod
Others2-3

33.ContractliabilitiesTheobligationtotransfergoodstoacustomerforwhichconsiderationhasbeenreceivedorreceivableisrecognizedinpartasacontractliability.

34.PayrolltoEmployees

(1)AccountingtreatmentofshorttermsalariesShort-termremunerationreferstotheremunerationoftheemployeesthatneedstobefullypaidwithin12monthsaftertheendoftheannualreportingperiodinwhichtheemployeesproviderelatedservices,exceptforpost-employmentbenefitsandterminationbenefits.Duringtheaccountingperiodinwhichemployeesprovideservices,theCompanyrecognizestheshort-termremunerationpayableasaliabilityandaccountsfortherelevantassetcostsandexpensesbasedonthebeneficiariesoftheservicesprovidedbytheemployees.

(2)Post-employmentbenefitsPost-employmentbenefitsrefertothecompensationandbenefitsprovided,afteremployees’retirementandterminationofemployment,bytheCompanyinordertoobtainservicesfromemployees,exceptfortheshort-termcompensationandemployeebenefits.TheCompany’spost-employmentbenefitsisclassifiedascontributionplan.ThedefinedcontributionplanoftheCompanyreferstothebasicendowmentinsurance,unemploymentinsurancepaidfortheemployeesaccordingtorelevantregulationbylocalgovernments.DuringtheaccountingperiodwhenemployeesrenderservicestotheCompany,amountpayablecalculatedbythebaseandratioinconformitywithlocalregulationisrecognizedasliabilityandaccountedforprofitandlossorrelatedcostofassets.Afterpayingtheabove-mentionedfundsregularlyinaccordancewiththestandardsandannuityplansstipulatedbythestate,theCompanydoesnothaveotherpaymentobligations.

(3)TerminationbenefitsTerminationbenefitsrefertothecompensationpaidtoanemployeewhentheCompanyterminatestheemploymentrelationshipwiththeemployeebeforetheexpiryoftheemploymentcontractorprovidescompensationasanoffertoencouragetheemployeetoacceptvoluntaryredundancy.TheCompanyrecognizestheliabilitiesarisingfromthecompensationpaidtoterminatetheemploymentrelationshipwithemployeesandincludesthesameinthecurrentprofitorlossattheearlierdateofthefollowing:whentheCompanycannotreversetheterminationbenefitsduetotheplanofcancellingthelabourrelationshiportheterminationbenefitsprovidedbytheadviceofreducingstaff;andtheCompanyrecognizesthecostorexpenserelativetothepaymentofterminationbenefitsofrestructuringintothecurrentprofitorloss.TheCompanyprovidesinternalretirementbenefitstoemployeeswhoacceptinternalretirementarrangements.TheinternalretirementbenefitsrefertotheremunerationandthesocialinsurancepremiumspaidtotheemployeeswhohavenotreachedtheretirementagesetbytheState,andvoluntarilywithdrewfromthejobafterapprovaloftheCompany’smanagement.TheCompanypaysinternalretiredbenefitstoaninternalretiredemployeefromthedaywhentheinternalretirementarrangementbeginstilltheemployeereachesthenormalretirementage.Forinternalretirementbenefits,theCompanyconductsaccountingtreatmentincontrasttotheterminationbenefits.Whentherelatedrecognitionconditionsofterminationbenefitsaremet,theCompanywillrecognizetheremunerationandthesocialinsurancepremiumsoftheinternalretiredemployeetobepaidduringtheperiodbetweentheemployee’sterminationofserviceandnormalretirementdateasliabilitiesandincludethesameinthecurrentprofitorlossinonetime.Changesinactuarialassumptionsofinternalretirementbenefitsanddifferencesarisingfromtheadjustmentofwelfarestandardsareincludedincurrentprofitorlosswhenincurred.

(4)OtherlongtermemployeebenefitsOtherlong-termemployeebenefitsrefertoallemployeebenefitsexceptforshort-termremuneration,post-employmentbenefits,andterminationbenefits.Forotherlong-termemployeebenefitsthatmeettheconditionsofthedefinedcontributionplan,duringtheaccountingperiodinwhichtheemployeesprovideservicesfortheCompany,theamountthatshouldbepaidisrecognizedasaliabilityandisincludedinthecurrentprofitorlossorrelatedassetcosts.Inadditiontotheabovesituations,otherlong-termemployeebenefitsareactuariallycalculatedbytheindependentactuaryusingtheexpectedcumulativewelfareunitmethodonthebalancesheetdate,andthewelfareobligationsarisingfromthedefinedbenefitplansare

attributedtotheperiodduringwhichtheemployeesprovideservicesandareincludedinthecurrentprofitorlossorrelatedassetcosts.

35.LeaseliabilitiesTheCompanyinitiallymeasurestheleaseliabilitiesaccordingtothepresentvalueoftheunpaidleasepaymentsatthebeginningoftheleaseterm.Incalculatingthepresentvalueofleasepayments,theCompanyadoptstheinterestrateimplicitintheleaseasthediscountrate.Ifitisimpossibletodeterminetheinterestrateimplicitinthelease,theincrementalborrowingrateoftheCompanyshallbeusedasthediscountrate.Leasepaymentsinclude:

1)Fixedpaymentsandsubstantivefixedpaymentsafterdeductingtherelevantamountofleaseincentives;

2)Variableleasepaymentsdependingonanindexorrate;

3)WheretheCompanyreasonablydeterminesthattheoptionwillbeexercised,theamountoftheleasepaymentincludestheexercisepriceofpurchaseoption;

4)WheretheleasetermreflectsthattheCompanywillexercisetheoptiontoterminatethelease,theamountoftheleasepaymentincludestheamounttobepaidfortheexerciseoftheoptiontoterminatethelease;

5)ExpectedpaymentsbasedontheguaranteedresidualvalueprovidedbytheCompany.TheCompanycalculatestheinterestchargesoftheleaseliabilitiesforeachperiodoftheleasetermatafixeddiscountrateandincludesthesameintheprofitorlossofthecurrentperiodortherelatedassetcosts.Variableleasepaymentsnotincludedinthemeasurementofleaseliabilitiesshallbeincludedinthecurrentprofitorlossortherelatedassetcostswhentheyactuallyoccur.

36.Estimatedliabilities

1.BasisforrecognitionofprojectedliabilitiesTheCompanywillrecognizeprojectedliabilitiesiftheobligationrelatingtocontingentmattersmeetsallofthefollowingconditions:

ThisobligationisapresentobligationassumedbytheCompany;ThefulfillmentofthisobligationwillprobablycausetheoutflowofeconomicbenefitsfromtheCompany;Theamountofthisobligationcanbemeasuredreliably.

2.MeasurementmethodofprojectedliabilitiesTheinitialmeasurementofprojectedliabilitiesoftheCompanyisbasedonthebestestimateoftheexpenditurerequiredfortheperformanceoftherelatedpresentobligations.Whendeterminingthebestestimate,theCompanycomprehensivelyconsiderstherisks,uncertaintiesrelatingtothecontingentmattersandtimevalueofcurrency.Ifthetimevalueofcurrencyhasagreatinfluence,theCompanydeterminesthebestestimatebydiscountingtherelatedfuturecashoutflows.Thebestestimateisdeterminedindifferentsituationsasfollow:

Ifthereisacontinuousrange(orinterval)oftherequiredexpenditureandtheprobabilityoftheoccurrenceofalltheresultsintherangeisthesame,thebestestimateisdeterminedaccordingtothemedianvalueoftherange,whichistheaverageoftheupperandlowerlimit.Wherethereisnotacontinuousrange(orinterval)oftherequiredexpenditure,orthereisacontinuousrange,buttheprobabilityoftheoccurrenceofalltheresultsintherangeisdifferent,ifthecontingenciesinvolveasingleproject,thebestestimateisdeterminedbytheamountwhichismostlikelytooccur;ifthecontingenciesinvolveanumberofprojects,thebestestimateisdeterminedbasedonvariouspossibleresultsandrelatedprobabilitycalculation.IfallorpartoftheexpensesoftheCompanyrequiredtosettleprojectedliabilitiesareexpectedtobecompensatedbyathirdpartyanditisbasicallycertaintoreceivetheamountofcompensation,itisindependentlyrecognizedasanasset.Theamountofcompensationrecognizedwillnotexceedthebookvalueoftheprojectedliabilities.

37.Share-basedpayments

1.Categoryofshare-basedpaymentTheCompany’sshare-basedpaymentsincludeequity-settledshare-basedpaymentsandcashsettledshare-basedpayments.

2.Methodfordeterminingthefairvalueofequityinstruments

ForoptionsandotherequityinstrumentsgrantedbytheCompanywithanactivemarket,thefairvalueisdeterminedattheactivemarketquotations.ForoptionsandotherequityinstrumentsgrantedbytheCompanywithnoactivemarket,optionpricingmodelshallbeusedtoestimatethefairvalueoftheequityinstruments.Factorsasfollowsshallbetakenintoaccountusingoptionpricingmodels:(1)theexercisepriceoftheoption;(2)thevalidityoftheoption;(3)thecurrentpriceofthetargetshare;(4)theexpectedvolatilityoftheshareprice:(5)predicteddividendoftheshare;(6)risk-freerateoftheoptionwithinthevalidityperiod.Indeterminingthefairvalueoftheequityinstrumentsatthedateofgrant,theCompanyshallconsidertheimpactofmarketconditionsinthevestingconditionsandnon-vestingconditionsstatedintheshare-basedpaymentagreement.Iftherearenovestingconditionsintheshare-basedpayments,aslongastheemployeesorotherpartiessatisfythenon-marketconditionsinallofthevestingconditions(suchastermofservice),theCompanyshallrecognizetheservicesrenderedasanexpenseaccordingly.

3.RecognitionbasisforthebestestimateofexercisableequityinstrumentsOneachbalancesheetdatewithinthevestingperiod,theestimatednumberofexercisableequityinstrumentsisamendedbasedonthebestestimatemadebytheCompanyaccordingtothelatestavailablesubsequentinformationastochangesinthenumberofemployeeswithexercisablerights.Asattheexercisedate,thefinalestimatednumberofexercisableequityinstrumentsshouldequaltheactualnumberofexercisableequityinstruments.

4.AccountingtreatmentEquity-settledshare-basedpaymentsaremeasuredatthefairvalueoftheequityinstrumentsgrantedtoemployees.Iftherightcanbeexercisedimmediatelyafterthegrant,thefairvalueoftheequityinstrumentshallbeincludedintherelevantcostsorexpensesonthedateofgrant,andthecapitalreserveshallbeincreasedaccordingly.Iftherightisexercisedafterthecompletionofthewaitingperiodservicesortheachievementofthespecifiedperformanceconditions,oneachbalancesheetdateduringthewaitingperiod,basedonthebestestimateofthenumberofexerciseableequityinstruments,thefairvalueoftheequityinstrumentsisgrantedonthebasisofvalue,includingtheservicesobtainedinthecurrentperiodintorelatedcostsorexpensesandcapitalreserves.Noadjustmentwillbemadetotherecognizedrelatedcostsorexpensesandthetotalowner'sequityafterthevestingdate.Thecash-settledshare-basedpaymentismeasuredatthefairvalueoftheliabilitiesassumedbytheCompanydeterminedandbasedonsharesandotherequityinstruments.Iftherightcanbeexercisedimmediatelyafterthegrant,thefairvalueoftheliabilitiesassumedbytheCompanyshallbeincludedintherelevantcostsorexpensesonthedateofgrant,andtheliabilitiesshallbeincreasedaccordingly.Cash-settledshare-basedpaymentsthatcanonlybeexercisedafterthecompletionofthewaitingperiodservicesorthespecifiedperformanceconditionsareexercised.Ateachbalancesheetdateduringthewaitingperiod,thebestestimateoftheexerciseisbasedonthefairvalueoftheliabilitiesassumedbytheCompany,includingtheservicesobtainedinthecurrentperiodascostsorexpensesandcorrespondingliabilities.Thefairvalueoftheliabilitiesisre-measuredandthemovementiscountedinthecurrentprofitsandlossesoneachbalancesheetdateandsettlementdaybeforethesettlementofrelatedliabilities.IftheCompanycancelsthegrantedequityinstrumentduringthevestingperiod,theCompanyshalltreatitasacceleratedvesting,theamountwhichshouldberecognizedduringtheremainingvestingperiodiscountedtothecurrentprofitandlossimmediatelyandatthesametimethecapitalreserveisrecognized.Ifanemployeeorotherpartycanchoosetomeetthenon-vestingconditionsbutfailstomeetthevestingperiod,theCompanytreatsitasacancellationofthegrantedequityinstrument.

38.Otherfinancialinstruments,suchaspreferredshares,perpetualliabilities,etc.Inapplicable

39.RevenueAccountingpoliciesusedinrevenuerecognitionandmeasurementTheCompany’srevenuemainlycomefrom:

1)Salesofwatch

2)Precisionmanufacturing

3)Propertyleasing

1.GeneralprincipleofrevenuerecognitionTheCompanyrecognizesrevenuewhenthecontractperformanceobligationshavebeenfulfilledi.e.thecustomerhasgainedcontrolovertherelevantgoodsorservices.PerformanceobligationsmeanstheCompany’scommitmenttotransferidentifiablegoodsorservicetoclients.Obtainingcontroloftherelevantgoodsmeansthatitisabletodominatetheuseofthegoodsandderivealmostalleconomicbenefitstherefrom.

TheCompanyassessescontractsatthebeginningdateofacontracttoidentifyeachperformanceobligationscontainedinacontractandtodeterminewhethereachperformanceobligationistobefinishedoveraperiodoftimeoratapointoftime.TheCompanysatisfiesaperformanceobligationovertimeifoneofthefollowingcriteriaismet;orotherwise,aperformanceobligationissatisfiedatacertainpointintime:(1)thecustomersimultaneouslyreceivesandconsumesthebenefitsprovidedbytheCompany’sperformanceastheCompanyperforms;(2)thecustomercancontrolthegoodsunderconstructionduringtheCompany’sperformance;(3)theCompany’sperformancedoesnotcreategoodswithanalternativeusetoitandtheCompanyhasarighttopaymentforperformancecompletedtodatethroughoutthecontractterm.Otherwise,theCompanyrecognizesrevenueatthepointoftime.Forperformanceobligationsatisfiedovertime,theCompanyrecognizesrevenueovertimebymeasuringtheprogresstowardscompletesatisfactionofthatperformanceobligation.Theoutputmethoddeterminestheprogressofperformancebasedonthevalueofthegoodstransferredtothecustomers(TheinputmethodistodeterminetheperformanceprogressbasedontheCompany'sinputforfulfillingitsperformanceobligations.)Whentheoutcomeofthatperformanceobligationcannotbemeasuredreasonably,buttheCompanyexpectstorecoverthecostsincurredinsatisfyingtheperformanceobligation,theCompanyrecognizesrevenueonlytotheextentoftheamountofcostsincurreduntilitcanreasonablymeasuretheoutcomeoftheperformanceobligation.

2.DetailedmethodofrevenuerecognitionTheCompanyhasthreemainbusinesssectors:salesofwatch,precisionmanufacturingandpropertyleasing.BasedontheCompany’sbusinessmodeandtermsofsettlement,theCompanysetdetailedmethodofrevenuerecognitionmethodasfollows:

1)SalesofwatchSaleofwatchbelongstofulfillingperformanceobligationsatapointoftime.

①OnlinesalesRevenueshallberecognizedatthepointthatthegoodsaredispatchedandthecustomerconfirmedreceivedthegoods.

②OfflinesalesRevenueshallberecognizedatthepointwhenthegoodsaredeliveredandpaymentbycustomeriscollected.

③ConsignmentsaleTheCompanyrecognizesrevenuewhentheCompanyreceivesthedetailofthesaleslistfromdistributorsandconfirmsthatthecontrolovergoodsownershipweretransferredtothepurchaser.

④SaleofconsignedgoodsfromothersUndersaleofconsignedgoodsfromothers,theGrouprecognizesrevenueinnetamountwhenitdeliveredconsignedsalegoodstocustomerandconfirmsthatcontrolovertheownershipofgoodsweretransferredtothepurchaser.

2)PrecisionmanufacturingPrecisionmanufacturingbusinessbelongstofulfillingperformanceobligationsatapointoftime.RevenuefromdomesticsalesshallberecognizedwhenthegoodsaredeliveredandtheeconomicbenefitassociatedwiththegoodsisprobabletoflowintotheCompany.Revenuefromexportshallberecognizedwhenthefollowingcriteriaissatisfied:

TheCompanydeclaredthegoodatcustom;obtainedbilloflading;therightofcollectingpaymentisobtainedanditsprobablethattheeconomicbenefitassociatedwiththegoodsflowsintotheCompany.

3)PropertyleasingRefertoNoteV42fordetails:accountingtreatmentwiththeCompanyasthelessor

3.Revenuetreatmentprinciplesforspecifictransactions

1)ContractswithsalesreturnprovisionsWhenthecustomerobtainscontroloftherelevantgoods,revenueisrecognizedbasedontheamountofconsiderationexpectedtobereceivedduetothetransferofgoodstothecustomers(exclusiveoftheamountexpectedtoberefundedduetothereturnofsales),whileliabilityisrecognizedbasedontheamountexpectedtoberefundedduetothereturnofsales.Thecarryingamountofgoodsexpectedtobereturnedatsalesofgoods,afterdeductionofcostsexpectedtoincurforrecoveryofsuchgoods(includingimpairmentofvalueofthereturnedgoods),willbeaccountedforundertheitemof“Rightofreturnassets”.

2)ContractswithqualityassuranceprovisionsTheCompanyassesseswhetheraseparateserviceisrenderedinrespectofthequalityassurancebesidesguaranteeingthesalesofgoodstocustomersareinlinewiththedesignatedstandards.WhenadditionalserviceisprovidedbytheCompany,itisconsideredasasingleperformanceobligationandunderaccountingtreatment

accordingtothestandardsonrevenue;otherwise,qualityassuranceobligationswillbeunderaccountingtreatmentaccordingtotheaccountingstandardsoncontingentmattersDifferencesinaccountingpoliciesforrevenuerecognitioncausedbytheadoptionofdifferentbusinessmodelsforsimilarbusinessesNil

40.Governmentsubsidies

1.ClassificationGovernmentsubsidiesrefertomonetaryandnon-monetaryassetsreceivedfromthegovernmentwithoutcompensation,howeverexcludingthecapitalinvestedbythegovernmentasacorporateowner.Accordingtothesubsidyobjectsstipulatedinthedocumentsofrelevantgovernment,governmentsubsidiesaredividedintosubsidiesrelatedtoassetsandsubsidiesrelatedtoincome.GovernmentsubsidiesrelatedtoassetsareobtainedbytheCompanyforthepurposesofacquiring,constructingorotherwiseforminglong-termassets.Governmentsubsidiesrelatedtoincomerefertothegovernmentsubsidiesotherthanthoserelatedtoassets.

2.RecognitionofgovernmentsubsidiesWhereevidenceshowsthattheCompanycomplieswithrelevantconditionsofpoliciesforfinancialsupportsandisexpectedtoreceivethefinancialsupportfundsattheendoftheperiod,theamountreceivableisrecognizedasgovernmentsubsidies.Otherwise,thegovernmentsubsidyisrecognizeduponactualreceipt.Governmentsubsidiesintheformofmonetaryassetsarestatedattheamountreceivedorreceivable.Governmentsubsidiesintheformofnon-monetaryassetsaremeasuredatfairvalue;iffairvaluecannotbereliablyobtained,anominalamount(CNY1)isused.Governmentsubsidiesthataremeasuredatnominalamountshallberecognizedinthecurrentprofitorlossdirectly.

3.AccountingtreatmentTheCompanydetermineswhetheragovernmentsubsidyshallusegrossmethodornetmethodbasedonitseconomicalsubstance.Ingeneral,onlyonemethodisusedforonecategoryorsimilargovernmentsubsidyanditshallbeusedinaconsistentway.Governmentsubsidiesrelatedtoassetsshouldbeusedtooffsetthebookvalueofrelatedassetsorberecognizedasdeferredincome.underreasonableandsystematicapproach,inprofitandlossineachperiodovertheusefullifeoftheconstructedorpurchasedassets;Governmentsubsidiesrelatedtoincomeaimingatcompensatingforrelevantexpensesorlossestobeincurredbytheenterpriseinsubsequentperiodsarerecognizedasdeferredincome,andarerecognizedincurrentprofitorlosswhenrelevantexpensesorlossesarerecognized.Governmentsubsidiesaimingatcompensatingforrelevantexpensesorlossesoftheenterprisethatarealreadyincurredarechargedtocurrentprofitorlossoncereceived.Governmentsubsidiesrelatedtodailyactivitiesofenterprisesareincludedinotherincome;governmentsubsidiesthatarenotrelatedtodailyactivitiesofenterprisesareincludedinnon-operatingincomeandexpense.Governmentsubsidiesrelatedtothediscountinterestreceivedfrompolicy-relatedpreferentialloansoffsettherelevantborrowingcosts;ifthepolicy-basedpreferentialinterestrateloanprovidedbythelendingbankisobtained,theborrowingamountactuallyreceivedshallbetakenastherecordingvalueoftheborrowings,andborrowingcostshouldbecalculatedusingthepreferentialinterestrateaccordingtotheloanprincipalandthepolicy.Whenitisrequiredtoreturnrecognizedgovernmentsubsidy,ifsuchsubsidyisusedtowritedownthecarryingvalueofrelevantassetsoninitialrecognition,thecarryingvalueoftherelevantassetsshallbeadjusted;ifthereisbalanceofrelevantdeferredincome,itshallbewrittendowntothebookbalanceofrelevantdeferredincome,andtheexcessisincludedinthecurrentprofitorloss;wherethereisnorelevantdeferredincome,itshallbedirectlyincludedinthecurrentprofitorloss

41.DeferredIncomeTaxAssetsandDeferredIncomeTaxLiabilitiesDeferredincometaxassetsanddeferredincometaxliabilitiesaremeasuredandrecognizedbasedonthedifference(temporarydifference)betweenthetaxablebaseofassetsandliabilitiesandbookvalue.Onbalancesheetdate,thedeferredincometaxassetsanddeferredincometaxliabilitiesaremeasuredattheapplicabletaxrateduringtheperiodwhenitisexpectedtorecoversuchassetsorsettlesuchliabilities.

1.CriteriaforrecognitionofdeferredincometaxassetsTheCompanyrecognizesdeferredincometaxassetsarisingfromdeductibletemporarydifferencetotheextentitisprobablythatfuturetaxableamountwillbeavailableagainstwhichthedeductibletemporarydifferencecanbeutilized,anddeductiblelossesandtaxescanbecarriedforwardtosubsequentyears.However,thedeferredincometaxassets

arisingfromtheinitialrecognitionofassetsorliabilitiesinatransactionwiththefollowingfeaturesarenotrecognized:(1)thetransactionisnotabusinesscombination;(2)neithertheaccountingprofitorthetaxableincomeordeductiblelosseswillbeaffectedwhenthetransactionoccurs.Fordeductibletemporarydifferenceinrelationtoinvestmentintheassociates,correspondingdeferredincometaxassetsarerecognizedinthefollowingconditions:thetemporarydifferenceisprobablyreversedinaforeseeablefutureanditislikelythattaxableincomeisobtainedfordeductionofthedeductibletemporarydifferenceinthefuture.

2.CriteriaforrecognitionofdeferredincometaxliabilitiesTheCompanyrecognizesdeferredincometaxliabilitiesonthetemporarydifferencebetweenthetaxablebutnotyetpaidtaxationinthecurrentandpreviousperiods,excluding:

1)temporarydifferencearisingfromtheinitialrecognitionofgoodwill;

2)atransactionoreventarisingfromnon-businesscombination,andneithertheaccountingprofitorthetaxableincome(ordeductiblelosses)willbeaffectedwhenthetransactionoreventoccurs;

3)fortaxabletemporarydifferenceinrelationtoinvestmentinsubsidiariesorassociates,thetimeforreversalofthetemporarydifferencecanbecontrolledandthetemporarydifferenceisprobablynotreversedinaforeseeablefuture

3.Whenallofthefollowingconditionsaresatisfied,deferredincometaxassetsanddeferredincometaxliabilitiesshallbepresentedonanetbasis

1)Anenterprisehasthestatutoryrighttosettlethecurrentincometaxassetsandcurrentincometaxliabilitiesattheirnetamounts;

2)Thedeferredincometaxassetsanddeferredincometaxliabilitiesrelatetoincometaxesleviedbythesametaxationauthorityoneitherthesametaxableentityordifferenttaxableentitieswhichintendeithertosettlecurrentincometaxassetsandcurrentincometaxliabilitiesonanetbasis,ortorealizetheassetsandsettletheliabilitiessimultaneously,ineachfutureperiodinwhichsignificantamountsofdeferredtaxassetsorliabilitiesareexpectedtoberecoveredorsettled.

42.Lease

(1)AccountingprocessforoperatingleaseTheCompanyadoptsthestraight-linemethodorothersystematicandreasonablemethodineachperiodoftheleaseterm,andrecognizestheleasereceiptsfromoperatingleasesasrentalincome;theinitialdirectexpensesincurredinrelationtooperatingleasesarecapitalizedandamortizedonthesamebasisasrentalincomerecognitionduringtheleaseterm,andincludedinthecurrentprofitandlossininstallments;thevariableleasepaymentsobtainedinrelationtooperatingleasesthatarenotincludedintheleasereceiptsareincludedinthecurrentprofitandlosswhenactuallyincurred.

(2)AccountingtreatmentmethodforfinanceleaseIfaleasehasoneormoreofthefollowingcharacteristics,theCompanyusuallyclassifiesitasafinanciallease：

1)Attheexpiryoftheleaseterm,theownershipoftheleasedassetsistransferredtothelessee.

2)Thelesseehastheoptiontopurchasetheleasedassets,andthepurchasepricesetbythelesseeislowenoughcomparedwiththeexpectedfairvalueoftheleasedassetswhenexercisingtheoption.Therefore,itcanbereasonablydeterminedontheleasestartdatethatthelesseewillexercisetheoption.

3)Althoughtheownershipoftheassetsisnottransferred,theleasetermaccountsforthemajorityofthelifeoftheleasedassets.

4)Onthecommencementdateofthelease,thepresentvalueoftheleasereceiptsisalmostequaltothefairvalueoftheleasedassets.

5)Thenatureofleasedassetsisspecial.Ifthereisnomajortransformation,onlythelesseecanusethem.Ifoneormoreofthefollowingconditionsexistinalease,itmayalsobeclassifiedasafinanciallease:

1)Ifthelesseestopsthelease,thelesseeshallbearthelossescausedbytheterminationoftheleasetothelessor.

2)Theprofitsorlossescausedbythefluctuationofthefairvalueofthebalanceofassetsbelongtothelessee.

3)Thelesseecancontinuetoleasefarbelowthemarketlevelforthenextperiod.

Onthecommencementdateofleaseterm,theCompanyrecognizesthefinancialleasereceivableonthefinancialleasesandderecognizesthefinancialleaseassets.Whentheinitialmeasurementofthefinancialleasereceivableismade,thebookvalueofthefinancialleasereceivableisthesumoftheunsecuredbalanceandthepresentvalueofleasereceiptsthathavenotyetbeenreceivedatthebeginningoftheleasetermdiscountedattheinterestrateimplicitinthelease.Theleasereceiptsinclude:

1)Fixedpaymentsandsubstantivefixedpaymentsafterdeductingtherelevantamountofleaseincentives;

2)Variableleasepaymentsdependingonanindexorrate;

3)Inthecaseofreasonablydeterminingthatthelesseewillexercisethepurchaseoption,theleasereceiptsincludetheexercisepriceofpurchaseoption;

4)Iftheleasetermreflectsthatthelesseewillexercisetheoptiontoterminatethelease,theleasereceiptsincludetheamounttobepaidbythelesseeinexercisingtheoptiontoterminatethelease;

5)Guaranteeresidualvalueprovidedtothelessorbythelessee,thepartyconcernedwiththelesseeandanindependentthirdpartywithfinancialcapacitytofulfilltheguaranteeobligation.TheCompanycalculatesandrecognizestheinterestincomeforeachperiodoftheleasetermbasedonthefixedinterestrateimplicitinthelease,andthevariableleasepaymentswhichareobtainedandnotincludedinthenetrentalinvestmentamountareincludedintheprofitorlossoftheperiodwhentheyactuallyoccur.

43.OtherimportantaccountingpolicyandaccountingestimateInapplicable

44.Changesinsignificantaccountingpoliciesandaccountingestimates

(1)ChangeinsignificantaccountingpoliciesInapplicable

(2)ChangeinsignificantaccountingestimatesInapplicable

(3)TheCompanystartedimplementingtheupdatedaccountingstandardscommencingfrom2023andadjustedtherelevantitemsofthefinancialstatementsatthebeginningoftheveryyearinvolvedintheinitialimplementationofthesaidstandardsInapplicable

45.OthersInapplicableVI.Taxation

1.Typesofmajortaxesandtaxrates

TypeoftaxesTaxationbasisTaxrates
Value-addedtaxDomesticsalesandprovisionofprocessing,repairingandrepairingservices;propertyleaseservices;othertaxablesalesserviceactivities;simplifiedmethod13%,9%,6%and5%
ConsumptiontaxHigh-gradewatches20%
UrbanmaintenanceandconstructiontaxAmountoftheturnovertaxactuallypaid7%and5%
EnterpriseincometaxTaxableincomeamountForthedetail,refertothefollowingtable

Incasethereexisttaxpayerssubjecttodifferentcorporateincometaxrates,disclosetheinformation.

TaxpayersIncometaxrates
ShenzhenHarmonyWorldWatchesCenterCo.,Ltd.(①)25%
FIYTASalesCo.,Ltd.(①)25%
ShenzhenFIYTAPrecisionTechnologyCo.,Ltd.(②③)15%
ShenzhenFIYTATechnologyDevelopmentCo.,Ltd.(②③)15%
HarmonyWorldWatchesCenter(Hainan)Ltd.(⑥)20%
ShenzhenXUNHANGPrecisionTechnologyCo.,Ltd.(⑥)20%
EmileChouriet(Shenzhen)Limited25%
LiaoningHengdaruiCommerce&TradeCo.,Ltd.25%
ShiyuehuiBoutique(Shenzhen)Co.,Ltd.25%
ShenzhenHarmonyE-CommerceLimited(⑥)20%
FIYTA(HongKong)Limited(④)16.5%
MontresChourietSA(⑤)30%

2.TaxPreferencesNote①:Accordingtotheregulationsstatedin“InterimAdministrationMethodforLevyofCorporateIncomeTaxtoEnterprisethatOperatesCross-regionally”,theheadofficeoftheCompanyanditsbranchoffices,theheadofficeofHARMONYCompanyanditsbranchoffices,andtheheadofficeofSalesCompanyanditsbranchofficesadopttaxsubmissionmethodof“unifiedcalculation,managingbyclasses,pre-paidinitsregisteredplace,settlementintotal,andadjustmentbyfinanceauthorities”.Branchofficesmentionedaboveshare50%oftheenterpriseincometaxandprepaylocally;and50%willbeprepaidbytheheadofficesmentionedabove;Note②:Accordingto“NoticeoftheMinistryofFinance,theStateAdministrationofTaxationandMinistryofScienceonFurtherPerfectionofthePre-taxSuperDeductionRatioofResearchandDevelopmentExpenses”(CaiShui(2021)No.

13),iftheresearchanddevelopmentcostsarenotcapitalizedasintangibleassetsbutchargedtocurrentprofitorloss,alloftheseentitiescanenjoya100%superdeductionontopoftheR&Dexpensesthatallowedtodeductbeforeincometaxsince1stJanuary2021.Note③:TheCompanyenjoyedfor“ReductionandExemptioninCorporateIncomeTaxRateforHighandNewTechnologyEnterprisesthatRequireKeySupportfromtheState”;Note④:ThesecompaniesareregisteredinHongKongandtheincometaxrateofHongKongapplicableis16.50%thisyear.Note⑤:Thecomprehensivetaxrateof30%isapplicableforSwissCompanyasitregisteredinSwitzerland.Note⑥:Thesecompaniesaresmallandlow-profitenterprises,whichenjoy20%taxrate.PreferentialtreatmentandcorrespondingapprovalAccordingtotheAnnouncementoftheMinistryofFinanceandtheStateAdministrationofTaxationonthePreferentialIncomeTaxPoliciesforMicroandSmallEnterprisesandIndividualIndustrialandCommercialHouseholds(CAISHUI(2023)No.6)and“ProclamationofMinistryofFinanceandStateAdministrationofTaxationinImplementingPreferentialTaxRatetoSmallandLowProfitEnterprisesandSole-proprietors”(Caishui(2022)No.13),theportionofannualtaxableincomeofsmalllow-profitenterprisethatisbelowRMB1,000,000.00willbeincludedintaxableincomeat25%andtobetaxedatarateof20%;andforannualtaxableincomethatisgreaterthanRMB1,000,000.00butnotexceedingRMB3,000,000.00,ofwhich25%willbeincludedintaxableincomeandtobetaxedat20%.InaccordancewithNoticeoftheMinistryofFinanceandtheStateAdministrationofTaxationonExtendingtheLossCarryoverPeriodforHighandNewTechnologyEnterprisesandSmallandMedium-SizedTechnologicalEnterprises(CAISHUI(2018)No.76),commencingfromJanuary1,2018,theunrecoveredlossesincurredinthe5fiscalyearsbeforebeingqualifiedforbecomingahigh-techenterpriseareallowedtobecarriedforwardtomakeupforsubsequentyears,andthelongestcarry-forwardperiodhasbeenextendedfrom5yearsto10years.Accordingto“NoticeoftheMinistryofFinance,theStateAdministrationofTaxationandMinistryofScienceonFurtherPerfectionofthePre-taxSuperDeductionRatioofResearchandDevelopmentExpenses”(CaiShui(2023)No.7),iftheresearchanddevelopmentcostsarenotcapitalizedasintangibleassetsbutchargedtocurrentprofitorloss,alloftheseentitiescanenjoya100%superdeductionontopoftheR&Dexpensesthatallowedtodeductbeforeincometaxsince1stJanuary2021;commencingfromJanuary1,2023,theintangibleassetsformedshallbeamortizedat200%ofthecostofintangibleassetsbeforetax.

3.OthersInapplicable

VII.Notestoitemsofconsolidatedfinancialstatements

1.Monetarycapital

InCNY

ItemsEndingbalanceOpeningbalance
Cashinstock63,562.14173,368.68
Bankdeposit514,412,146.09312,433,893.29
Othermonetaryfunds4,893,086.891,140,201.67
Total519,368,795.12313,747,463.64
Including:totalamountdepositedoverseas398,877.12716,733.44
Thetotalamountoffundswithrestrictionsonuseduetomortgage,pledge,orfreezing9,074.00

OthernotesAsat30thJune2023,theCompanydidnothavebalanceofcashorothermonetaryfundsthatarerestrictedbecausebeingpledgedassecurity,frozenorhavepotentialriskinrecovery.

2.TransactionalfinancialassetsInapplicable

3.DerivativefinancialassetsInapplicable

4.Notesreceivable

(1)Presentationofclassificationofnotesreceivable

InCNY

ItemsEndingbalanceOpeningbalance
Bankacceptance4,917,352.6210,690,221.03
Tradeacceptance9,711,946.2821,524,691.07
Total14,629,298.9032,214,912.10

InCNY

CategoriesEndingbalanceOpeningbalance
BookbalanceBaddebtreserveBookvalueBookbalanceBaddebtreserveBookvalue
AmountProportionAmountProvisionproportionAmountProportionAmountProvisionproportion
Including:
Notesreceivableforwhichbaddebtreservehasbeenprovidedbasedonportfolios15,140,453.97100.00%511,155.073.38%14,629,298.9033,347,790.58100.00%1,132,878.483.40%32,214,912.10
Including:
Businessacceptancenote10,223,101.3567.52%511,155.075.00%9,711,946.2822,657,569.5567.94%1,132,878.485.00%21,524,691.07
Risk-freebankacceptanceportfolio4,917,352.6232.48%0.00%4,917,352.6210,690,221.0332.06%0.00%10,690,221.03
Total15,140,453.97100.00%511,155.073.38%14,629,298.9033,347,790.58100.00%1,132,878.483.40%32,214,912.10

Provisionforbaddebtsbasedonportfolio:commercialacceptanceportfolio

InCNY

DescriptionEndingbalance
BookbalanceBaddebtreserveProvisionproportion
Businessacceptancenote10,223,101.35511,155.075.00%
Total10,223,101.35511,155.07

Notetothebasisfordeterminingthecombination:

TheissuerhashigherlevelofcreditratingandnodefaultinpastandhasstrongabilitytofulfillitscontractualcashfollowobligationProvisionforbaddebtsbasedonportfolio:risk-freebankacceptanceportfolio

InCNY

DescriptionEndingbalance
BookbalanceBaddebtreserveProvisionproportion
Risk-freebankacceptanceportfolio4,917,352.620.00%
Total4,917,352.62

Notetothebasisfordeterminingthecombination:

TheissuerhashigherlevelofcreditratingandnodefaultinpastandhasstrongabilitytofulfillitscontractualcashfollowobligationIftheprovisionforbaddebtsofnotesreceivableisaccruedinaccordancewiththegeneralexpectedcreditlossmodel,pleaserefertothedisclosureofotherreceivablestodisclosetherelevantinformationoftheprovisionforbaddebts:

Inapplicable

(2)Provision,recoveryorreversalofreserveforbaddebtsduringthereportingperiodProvisionforbaddebtduringthereportingperiod

InCNY

CategoriesOpeningbalanceAmountofmovementduringthereportingperiodEndingbalance
ProvisionRecoveryorreversalWritten-offOthers
Notesreceivableforwhichbaddebtreservehasbeenprovidedbasedonindividualitems
Notesreceivableforwhichbaddebtreservehasbeenprovidedbasedonportfolios1,132,878.48621,723.41511,155.07
Total1,132,878.48621,723.41511,155.07

Wherethesignificantamountofthereserveforbaddebtrecoveredorreversed:

Inapplicable

(3)NotesreceivablealreadypledgedbytheCompanyattheendofthereportingperiodInapplicable

(4)Endorsedordiscountednotesreceivableattheendofthereportingperiod,butnotyetdueonthebalancesheetdate

InCNY

ItemsAmountinvolvedintheterminationofrecognitionattheendofthereportingperiodAmountwithoutterminationofrecognitionattheendofthereportingperiod
Bankacceptance3,867,105.40
Total3,867,105.40

(5)Notestransferredtoreceivablesduetoissuer’sdefaultattheendofthereportingperiodInapplicable

(6)NotesreceivableactuallywrittenoffincurrentperiodInapplicable

5.Accountsreceivable

(1)Accountsreceivabledisclosedbycategory

InCNY

CategoriesEndingbalanceOpeningbalance
BookbalanceBaddebtreserveBookvalueBookbalanceBaddebtreserveBookvalue
AmountProportionAmountProvisionproportionAmountProportionAmountProvisionproportion
Accountsreceivableforwhichbaddebtreservehasbeenprovidedbasedonindividualitems26,826,283.996.14%23,787,082.6288.67%3,039,201.3734,982,967.6810.12%29,705,797.1384.92%5,277,170.55
Including:
Accountsreceivableforwhichbaddebtreservehasbeenprovidedbasedonportfolios409,787,377.8893.86%13,250,311.263.23%396,537,066.62310,770,290.6489.88%10,756,501.513.46%300,013,789.13
Including:
Accountsreceivablefromothercustomers409,787,377.8893.86%13,250,311.263.23%396,537,066.62310,770,290.6489.88%10,756,501.513.46%300,013,789.13
Total436,613,661.87100.00%37,037,393.888.48%399,576,267.99345,753,258.32100.00%40,462,298.6411.70%305,290,959.68

Baddebtreserveprovidedbasedonindividualitems:Accountsreceivablefromothercustomers

InCNY

DescriptionEndingbalance
BookbalanceBaddebtreserveProvisionproportionProvisionreason
Accountsreceivablefromothercustomers26,826,283.9923,787,082.6288.67%Smallpossibilityofrecovery
Total26,826,283.9923,787,082.62

Baddebtreserveprovidedbasedonportfolio:Accountsreceivablefromothercustomers

InCNY

DescriptionEndingbalance
BookbalanceBaddebtreserveProvisionproportion
Accountsreceivablefromothercustomers409,787,377.8813,250,311.263.23%
Total409,787,377.8813,250,311.26

Notetothebasisfordeterminingthecombination:

AccountsreceivablewithsameaginghavesimilarcreditriskcharacteristicsIftheprovisionforbaddebtsofaccountsreceivableisaccruedinaccordancewiththegeneralexpectedcreditlossmodel,pleaserefertothedisclosureofotherreceivablestodisclosetherelevantinformationoftheprovisionforbaddebts:

InapplicableDisclosedbasedonaging

InCNY

AgingEndingbalance
Within1year(with1yearinclusive)406,593,079.37
1to2years4,977,810.21
2to3years6,691,774.94
Over3years18,350,997.35
3to4years18,350,997.35
Total436,613,661.87

(2)Provision,recoveryorreversalofreserveforbaddebtsduringthereportingperiodProvisionforbaddebtduringthereportingperiod

InCNY

CategoriesOpeningbalanceAmountofmovementduringthereportingperiodEndingbalance
ProvisionRecoveryorreversalWritten-offOthers
Accountsreceivablewithsingleprovisionforexpectedcreditloss29,705,797.1385,000.005,954,740.9985,000.0036,026.4823,787,082.62
Accountsreceivablewithprovisionforexpectedcreditlossbyportfolio10,756,501.512,501,374.43130,612.05123,047.3713,250,311.26
Total40,462,298.642,586,374.436,085,353.0485,000.00159,073.8537,037,393.88

Wherethesignificantamountofthereserveforbaddebtrecoveredorreversed:

InCNY

OrganizationnamesAmountrecoveredorreversedWayofrecovery
FuzhouCangshanSuninge-buyPlazaCo.,Ltd.3,981,455.50Banktransfer
FuzhouSuninge-buyPlazaCo.,Ltd.706,157.30Banktransfer
XiangyangZizhenSuninge-buyPlazaBusinessManagementCo.,Ltd.517,576.18Banktransfer
Total5,205,188.98

(3)Accountsreceivableactuallywrittenoffinthereportingperiod

InCNY

ItemsAmountwritten-off
Xi'anTangchengGroupCo.,Ltd.85,000.00

Where,theimportantaccountsreceivablewritten-off:

Inapplicable

(4)Accountsreceivableowedbythetopfivedebtorsbasedontheendingbalance

InCNY

OrganizationnameEndingbalanceoftheaccountsreceivableProportionintotalendingbalanceofaccountsreceivableEndingbalanceoftheprovisionforbaddebts
Summaryofthetopfiveaccountsreceivableintheendingbalance104,324,362.7723.89%2,278,271.19
Total104,324,362.7723.89%

(5)AccountreceivablewithrecognitionterminatedduetotransferoffinancialassetsInapplicable

(6)AmountofassetsandliabilitiesformedthroughtransferofaccountsreceivableandcontinuingtobeinvolvedInapplicable

6.FinancingwithaccountsreceivableInapplicable

7.Advancepayments

(1)Advancepaymentsarepresentedbasedonages

InCNY

AgingEndingbalanceOpeningbalance
AmountProportionAmountProportion
Within1year8,005,894.20100.00%8,039,794.97100.00%
Total8,005,894.208,039,794.97

Notetothereasonwhyadvancepaymentswithanageexceeding1yearandsignificantamountarenotsettledintime:

Inapplicable

(2)Advancepaymenttothetopfivepayeesintheendingbalancecollectedbasedonthepayeesoftheadvancepayment

OrganizationnameEndingbalanceProportioninthetotaladvancepayments(%)
Summaryoftheadvancepaymentsintheendingbalancetothetop5payees4,308,626.8653.82%

8.Otherreceivables

InCNY

ItemsEndingbalanceOpeningbalance
Otherreceivables57,386,850.6856,918,019.48
Total57,386,850.6856,918,019.48

(1)Interestreceivable

1)ClassificationofinterestreceivableInapplicable

2)SignificantoverdueinterestInapplicable

3)ProvisionforbaddebtsInapplicable

(2)Dividendsreceivable

1)ClassificationofdividendsreceivableInapplicable

2)Significantdividendsreceivablewithageexceeding1yearInapplicable

3)ProvisionforbaddebtsInapplicable

(3)Otherreceivables

1)Classificationofotherreceivablesbasedonnatureofpayment

InCNY

NatureofthefundEndingbookbalanceOpeningbookbalance
Reserveforemployees5,093,048.282,841,915.70
Collateral,deposit49,899,834.8849,430,408.24
Others6,505,130.458,910,245.87
Total61,498,013.6161,182,569.81

2)Provisionforbaddebts

InCNY

ProvisionforbaddebtStage1Stage2Stage3Total
Expectedcreditlossinfuture12monthsExpectedcreditlossinthewholeduration(nocreditimpairmentincurred)Expectedcreditlossinthewholeduration(creditimpairmentalreadyincurred)
BalanceasatJanuary01,20232,850,206.431,414,343.904,264,550.33
BalanceasatJanuary01,2023inthereportingperiod
Provisioninthereportingperiod32,519.0525.0032,544.05
Reversalinthereportingperiod130,851.0255,230.00186,081.02
Otherchanges149.57149.57
BalanceasatJune30,20232,752,024.031,359,138.904,111,162.93

Provisionforloss-ChangeofthebookbalancewithsignificantamountduringthereportingperiodInapplicableDisclosedbasedonaging

InCNY

AgingEndingbalance
Within1year(with1yearinclusive)59,512,781.85
1to2years498,803.32
2to3years702,029.90
Over3years784,398.54
3to4years784,398.54
Total61,498,013.61

3)Provision,recoveryorreversalofreserveforbaddebtsduringthereportingperiodProvisionforbaddebtduringthereportingperiod

InCNY

CategoriesOpeningbalanceAmountofmovementduringthereportingperiodEndingbalance
ProvisionRecoveryorreversalWritten-offOthers
Provisionforbaddebt4,264,550.3332,544.05186,081.02149.574,111,162.93
Total4,264,550.3332,544.05186,081.02149.574,111,162.93

Whereasignificantamountofthereserveforbaddebtrecoveredorreversedduringthereportingperiod:

Inapplicable

4)OtherreceivablesactuallywrittenoffinthereportingperiodInapplicable

5)Accountsreceivableowedbythetopfivedebtorsbasedontheendingbalance

InCNY

OrganizationnameNatureofPaymentEndingbalanceAgingProportionintotalendingbalanceofotherreceivablesEndingbalanceoftheprovisionforbaddebts
SummaryofthetopfiveotherreceivablesintheendingbalanceCollateralanddeposit9,157,527.22Within1year14.89%457,876.36
Total9,157,527.2214.89%457,876.36

6)AccountsreceivableinvolvinggovernmentsubsidyInapplicable

7)OtherreceivablesderecognizedduetotransferoffinancialassetsInapplicable

8)AmountofassetsandliabilitiesformedthroughtransferofotherreceivablesandcontinuingtobeinvolvedInapplicable

9.InventoriesDoestheCompanyneedtocomplywiththerequirementsoninformationdisclosureforrealestateindustryNo

(1)Classificationofinventories

InCNY

ItemsEndingbalanceOpeningbalance
BookbalanceProvisionforpricefallingofinventoryorprovisionforimpairmentofcontractperformancecostsBookvalueBookbalanceProvisionforpricefallingofinventoryorprovisionforimpairmentofcontractperformancecostsBookvalue
Rawmaterials161,850,331.5417,653,314.17144,197,017.37162,338,704.6517,241,512.65145,097,192.00
Productsinprocess10,056,978.4410,056,978.447,204,699.117,204,699.11
Commoditiesinstock2,027,169,791.0796,042,984.401,931,126,806.672,085,640,712.3796,622,229.811,989,018,482.56
Total2,199,077,101.05113,696,298.572,085,380,802.482,255,184,116.13113,863,742.462,141,320,373.67

(2)Provisionforpricefallingofinventoryorprovisionforimpairmentofcontractperformancecosts

InCNY

ItemsOpeningbalanceAmountincreasedinthereportingperiodDecreaseinthereportingperiodEndingbalance
ProvisionOthersReversalorwrite-offOthers
Rawmaterials17,241,512.65411,801.5217,653,314.17
Commoditiesinstock96,622,229.8134,011.93613,257.3496,042,984.40
Total113,863,742.46445,813.45613,257.34113,696,298.57

Items

ItemsEvidenceofdetermineNRVandfuturesellingcostReversalorwrite-offduringthereportingperiodCauseoftheprovisionforpricefallingofinventories
RawmaterialsEstimatedsellingpricelessestimatedcosttocompleteandsellinganddistributionexpensesandassociatedtaxesFactorsthatcausedimpairmenthasbeendisappearedandtheNAVishigherthanitscarryingamount
CommoditiesinstockEstimatedsellingpricelessestimatedsellinganddistributingexpensesandassociatedtaxesInventorythatalreadyprovidedforwassoldorusedincurrentperiod

(3)NotetotheamountofcapitalizedborrowingcostsinvolvedintheendingbalanceofinventoriesInapplicable

(4)DescriptionofthecurrentamortizationamountofcontractperformancecostsInapplicable

10.ContractassetsInapplicable

11.Held-for-saleassetsInapplicable

12.Non-currentassetsduewithinayearInapplicable

13.Othercurrentassets

InCNY

ItemsEndingbalanceOpeningbalance
excessVATpaid13,493,362.6712,967,188.47
InputVATtobecertified13,402,110.4739,454,283.19
Incometaxpaidinadvance2,299,239.633,419,026.38
Others10,113,909.0310,499,007.28
Total39,308,621.8066,339,505.32

14.EquityinvestmentInapplicable

15.OtherequityinvestmentInapplicable

16.Longtermaccountsreceivable

(1)AboutlongtermaccountsreceivableInapplicable

(2)LongtermaccountreceivablederecognizedduetotransferoffinancialassetsInapplicable

(3)AmountofassetsandliabilitiesformedthroughtransferoflongtermaccountsreceivableandcontinuingtobeinvolvedInapplicable

17.Long-termequityinvestments

InCNY

InvesteesOpeningbalance(bookvalue)Increase/Decrease(+/-)inthereportingperiodEndingbalance(bookvalue)Endingbalanceoftheprovisionforimpairment
AdditionalinvestmentDecreaseofinvestmentIncomefromequityinvestmentrecognizedunderequitymethodAdjustmentofothercomprehensiveincomeOtherequitymovementAnnouncedfordistributingcashdividendorprofitProvisionforimpairmentOthers
I.JointVenture
II.Associates
ShanghaiWatchIndustryCo.,Ltd.58,182,086.90-1,697,481.6556,484,605.25
Sub-total58,182,086.90-1,697,481.6556,484,605.25
Total58,182,086.90-1,697,481.6556,484,605.25

18.Investmentinotherequityinstruments

InCNY

ItemsEndingbalanceOpeningbalance
Xi'anTangchengGroupCo.,Ltd.0.0085,000.00
Total0.0085,000.00

Itemizeddisclosureofinvestmentinnon-transactionalequityinstrumentsinthereportingperiodInapplicable

19.Othernon-currentfinancialassetsInapplicable

20.Investmentbasedrealestate

(1)Investmentpropertymeasuredbasedonthecostmethod

InCNY

ItemsHousing&buildingsLanduserightConstruction-in-progressTotal
I.Originalbookvalue
1.Openingbalance619,762,618.36619,762,618.36
2.Amountincreasedinthereportingperiod
(1)Purchased
(2)Inventories\fixedassets/construction-in–progresstransferredin
(3)Increaseofenterpriseconsolidation
3.Amountdecreasedinthereportingperiod
(1)Disposal
(2)Othertransferout
4.Endingbalance619,762,618.36619,762,618.36
II.Accumulativedepreciationandaccumulativeamortization
1.Openingbalance244,783,123.65244,783,123.65
2.Amountincreasedinthereportingperiod7,839,242.827,839,242.82
(1)Provisionoramortization7,839,242.827,839,242.82
3.Amountdecreasedinthereportingperiod
(1)Disposal
(2)Othertransferout
4.Endingbalance252,622,366.47252,622,366.47
III.Provisionforimpairment
1.Openingbalance
2.Amountincreasedinthereportingperiod
(1)Provision
3.Amountdecreasedinthereportingperiod
(1)Disposal
(2)Othertransferout
4.Endingbalance
IV.Bookvalue
1.Bookvalueattheendofthereportingperiod367,140,251.89367,140,251.89
2.Bookvalueatthe374,979,494.71374,979,494.71

(2)InvestmentpropertymeasuredbasedonfairvalueInapplicable

(3)InvestmentpropertythatdoesnothavecertificateforpropertyrightInapplicable

21.Fixedasset

InCNY

beginningofthereportingperiodItems

ItemsEndingbalanceOpeningbalance
Fixedasset356,142,836.23364,628,765.17
Total356,142,836.23364,628,765.17

(1)Aboutfixedassets

InCNY

ItemsHousing&buildingsMachinery&equipmentMotorvehicleElectronicequipmentOthersTotal
I.Originalbookvalue
1.Openingbalance436,320,947.20117,552,809.3814,472,510.3847,600,350.6545,458,802.97661,405,420.58
2.Amountincreasedinthereportingperiod4,073,026.962,546,928.3322,133.50967,232.86565,462.838,174,784.48
(1)Purchase913,540.151,010,713.5222,133.50910,214.97426,929.903,283,532.04
(2)Construction-in-processtransferredin
(3)Increaseofbusinesscombination
(4)Translationdifferenceinforeigncurrencystatements3,159,486.811,536,214.8157,017.88138,532.934,891,252.43
3.Amountdecreasedinthereportingperiod442,670.051,107,530.63827,091.612,377,292.29
(1)Disposalorscrapping442,670.051,107,530.63827,091.612,377,292.29
4.Endingbalance440,393,974.16120,099,737.7114,051,973.8347,460,052.8845,197,174.19667,202,912.77
II.Accumulativedepreciation
1.Openingbalance135,388,740.9871,466,324.7412,901,120.8937,167,150.6039,853,318.20296,776,655.41
2.Amountincreasedinthereportingperiod8,633,075.145,362,220.14166,731.151,291,766.11780,574.7316,234,367.28
(1)Provision6,577,515.704,073,216.85166,731.151,246,360.85643,223.8212,707,048.37
(2)Translationdifferenceinforeigncurrencystatements2,055,559.451,289,003.2945,405.26137,350.913,527,318.91
3.Amountdecreasedinthereportingperiod420,536.55916,580.94613,828.661,950,946.15
(1)Disposalorscrapping420,536.55916,580.94613,828.661,950,946.15
4.Endingbalance144,021,816.1276,828,544.8812,647,315.4937,542,335.7740,020,064.27311,060,076.54
III.Provisionforimpairment
1.Openingbalance
2.Amountincreasedinthereportingperiod
(1)Provision
3.Amountdecreasedinthereportingperiod
(1)Disposalorscrapping
4.Endingbalance
IV.Bookvalue
1.Bookvalueattheendofthereportingperiod296,372,158.0443,271,192.831,404,658.349,917,717.115,177,109.92356,142,836.23
2.Bookvalueatthebeginningofthereportingperiod300,932,206.2246,086,484.641,571,389.4910,433,200.055,605,484.77364,628,765.17

(2)AbouttemporarilyidlefixedassetsInapplicable

(3)FixedassetsleasedthroughoperatingleaseInapplicable

(4)Fixedassetsthatdonothavecertificateforpropertyright

InCNY

ItemsBookvalueThereasonwhythetitlecertificatehasnotbeengranted
Housing&buildings30,941,254.14Notyetcompleted
Housing&buildings198,768.71Thereexistedprobleminownership

(5)DisposaloffixedassetsInapplicable

22.Construction-in-progressInapplicable

(1)Aboutconstruction-in-progressInapplicable

(2)Movementsofimportantconstruction-in-progressprojectsinthereportingperiodInapplicable

(3)ProvisionforimpairmentofconstructioninprogressinthecurrentperiodInapplicable

(4)EngineeringmaterialsInapplicable

23.Productivebiologicalasset

(1)ProductivebiologicalassetbyusingthecostmeasurementmodelInapplicable

(2)ProductivebiologicalassetbyusingthefairvaluemeasurementmodelInapplicable

24.OilandGasAssetsInapplicable

25.Right-of-useAssets

InCNY

ItemsHousing&buildingsTotal
I.Originalbookvalue
1.Openingbalance362,417,078.85362,417,078.85
2.Amountincreasedinthereportingperiod27,157,628.9227,157,628.92
(1)Lease27,156,080.8027,156,080.80
(2)Translationdifferenceinforeigncurrencystatements1,548.121,548.12
3.Amountdecreasedinthereportingperiod40,531,858.3440,531,858.34
(1)Expiryoftenancy38,437,066.3838,437,066.38
(2)Otherdecreases2,094,791.962,094,791.96
4.Endingbalance349,042,849.43349,042,849.43
II.Accumulativedepreciation
1.Openingbalance252,086,566.82252,086,566.82
2.Amountincreasedinthereportingperiod50,579,624.7950,579,624.79
(1)Provision50,579,624.7950,579,624.79
3.Amountdecreasedinthereportingperiod40,857,442.6840,857,442.68
(1)Disposal1,160,251.391,160,251.39
(2)Expiryoftenancy39,308,277.3339,308,277.33
(3)Otherdecreases388,913.96388,913.96
4.Endingbalance261,808,748.93261,808,748.93
III.Provisionforimpairment
1.Openingbalance
2.Amountincreasedinthereportingperiod
(1)Provision
3.Amountdecreasedinthereportingperiod
(1)Disposal
4.Endingbalance
IV.Bookvalue
1.Bookvalueattheendofthereportingperiod87,234,100.5087,234,100.50
2.Bookvalueatthebeginningofthereportingperiod110,330,512.03110,330,512.03

26.Intangibleassets

(1)Abouttheintangibleassets

InCNY

ItemsLanduserightPatentRightNon-patenttechnologySoftwaresystemTrademarkrightsTotal
I.Originalbookvalue
1.Openingbalance34,933,822.4033,197,692.5116,518,590.2984,650,105.20
2.Amountincreasedinthereportingperiod90,000.00122,616.24212,616.24
(1)Purchase90,000.00122,616.24212,616.24
(2)InternalR&D
(3)Increaseofbusinesscombination
3.Amountdecreasedinthereportingperiod
(1)Disposal
4.Endingbalance35,023,822.4033,320,308.7516,518,590.2984,862,721.44
II.Accumulativeamortization
1.Openingbalance16,515,922.0125,903,908.159,030,056.4151,449,886.57
2.Amountincreasedinthereportingperiod366,776.65874,444.06612,598.411,853,819.12
(1)Provision366,776.65874,444.06612,598.411,853,819.12
3.Amountdecreasedinthereportingperiod
(1)Disposal
4.Endingbalance16,882,698.6626,778,352.219,642,654.8253,303,705.69
III.Provisionforimpairment
1.Openingbalance
2.Amountincreasedinthereportingperiod
(1)Provision
3.Amountdecreasedinthereportingperiod
(1)Disposal
4.Endingbalance
IV.Bookvalue
1.Bookvalueattheendofthereportingperiod18,141,123.746,541,956.546,875,935.4731,559,015.75
2.Bookvalueatthebeginningofthereportingperiod18,417,900.397,293,784.367,488,533.8833,200,218.63

Attheendofthereportingperiod,theintangibleassetsformedthroughtheCompany'sinternalresearchanddevelopmentaccountedfor0.00%ofthebalanceofintangibleassets.

(2)AboutthelanduserightthatdoesnothavecertificateoftitleInapplicable

27.DevelopmentexpenditureInapplicable

28.Goodwill

(1)OriginalbookvalueofthegoodwillInapplicable

(2)ProvisionforimpairmentofthegoodwillInapplicable

29.Longtermexpensestobeapportioned

InCNY

ItemsOpeningbalanceAmountincreasedinthereportingperiodAmountamortizedinthereportingperiodOtherdecreaseEndingbalance
Chargeoffabricationofspecialcounters22,247,070.175,191,622.6810,324,598.3117,114,094.54
Decorationexpenses116,030,323.6121,605,559.1030,885,043.21106,750,839.50
Others6,211,058.40288,304.215,410,962.051,088,400.56
Total144,488,452.1827,085,485.9946,620,603.57124,953,334.60

30.Deferredtaxassetsanddeferredtaxliabilities

(1)Deferredincometaxassetwithoutoffsetting

InCNY

ItemsEndingbalanceOpeningbalance
OffsetableprovisionaldifferenceDeferredincometaxasset.OffsetableprovisionaldifferenceDeferredincometaxasset.
Assetimpairmentreserve128,613,031.3828,990,110.15143,503,292.9430,225,885.07
Unrealizedprofitfromtheintracompanytransactions62,320,154.0215,530,810.8175,781,866.0918,681,772.44
Offsetableloss173,670,367.9742,693,574.15157,860,317.7537,779,977.71
Equityincentive6,771,029.721,594,027.7423,141,270.855,411,762.47
Promotionexpensesavailableforcarrying-forwardtothenextyear515,068.99128,767.25
Leaseliabilities98,448,712.6324,583,069.44113,136,916.0028,284,229.00
Others7,895,926.801,973,981.707,295,926.801,823,981.80
Total477,719,222.52115,365,573.99521,234,659.42122,336,375.74

(2)Deferredincometaxliabilitieswithoutoffsetting

InCNY

ItemsEndingbalanceOpeningbalance
ProvisionaldifferenceoftaxespayableDeferredincometaxliabilityProvisionaldifferenceoftaxespayableDeferredincometaxliability
Fixedassetsdeductedinonce-and-for-allwaybeforetaxation28,913,730.114,337,059.5229,872,344.914,480,851.74
Right-of-useAssets97,585,959.3524,367,470.13110,279,028.0227,569,757.01
Total126,499,689.4628,704,529.65140,151,372.9332,050,608.75

(3)Deferredincometaxassetorliabilitiesstatedwithnetamountafteroffsetting

InCNY

ItemsAmountmutuallyoffsetbetweenthedeferredincometaxassetsandliabilitiesattheendofthereportingperiodEndingbalanceofthedeferredincometaxassetorliabilitiesafteroffsettingAmountmutuallyoffsetbetweenthedeferredincometaxassetsandliabilitiesatthebeginningofthereportingperiodOpeningbalanceofthedeferredincometaxassetorliabilitiesafteroffsetting
Deferredincometaxasset.23,262,880.7692,102,693.2326,551,763.8095,784,611.94
Deferredincometaxliability23,262,880.765,441,648.8926,551,763.805,498,844.95

(4)Statementofdeferredincometaxassetnotrecognized

InCNY

ItemsEndingbalanceOpeningbalance
Provisionforimpairmentofassets17,012,250.3016,220,176.97
Offsetableloss47,715,557.1450,761,915.00
Total64,727,807.4466,982,091.97

(5)Unrecognizeddeferredincometaxassetavailableforoffsettinglossisgoingtoexpireinthefollowingyears

InCNY

YearAmountattheendofthereportingperiodAmountattheyearbeginningRemarks
20245,410,461.098,456,818.95
202518,449,678.5018,449,678.50
202623,855,417.5523,855,417.55
Total47,715,557.1450,761,915.00

31.Othernon-currentassets

InCNY

ItemsEndingbalanceOpeningbalance
BookbalanceProvisionforimpairmentBookvalueBookbalanceProvisionforimpairmentBookvalue
Advancepaymentforlongtermassets12,604,532.0412,604,532.0411,593,741.5711,593,741.57
Total12,604,532.0412,604,532.0411,593,741.5711,593,741.57

32.Shorttermborrowings

(1)Classificationofshort-termborrowings

InCNY

ItemsEndingbalanceOpeningbalance
Creditloan390,000,000.00290,000,000.00
Undueinterestpayable273,749.99237,111.11
Total390,273,749.99290,237,111.11

(2)Short-termborrowingsoverduebutstillremainingoutstandingInapplicable

33.TransactionalfinancialliabilitiesInapplicable

34.DerivativefinancialliabilitiesInapplicable

35.Notespayable

InCNY

CategoryEndingbalanceOpeningbalance
Commercialacceptancebills2,000,600.00
Total2,000,600.00

ThetotalamountofduebutoutstandingnotespayableattheendofthereportingperiodisCNY0.00.

36.Accountspayable

(1)Presentationofaccountspayable

InCNY

ItemsEndingbalanceOpeningbalance
Paymentforgoods168,155,513.01149,811,781.06
Paymentformaterials22,297,895.2919,729,474.20
Engineeringpaymentpayable1,034,800.531,048,201.41
Total191,488,208.83170,589,456.67

(2)Significantaccountspayablewithageexceeding1yearInapplicable

37.AdvanceReceipts

(1)Statementofadvancesfromcustomers

InCNY

ItemsEndingbalanceOpeningbalance
Rentreceivedinadvance9,945,161.7216,960,128.83
Total9,945,161.7216,960,128.83

(2)Significantadvancesfromcustomerswithageexceeding1yearInapplicable

38.Contractliabilities

InCNY

ItemsEndingbalanceOpeningbalance
Paymentforgoods19,287,771.8116,844,437.47
Total19,287,771.8116,844,437.47

TheamountinvolvedinthesignificantchangeofthebookvalueandthecauseduringthereportingperiodInapplicable

39.Payrollpayabletoemployees

(1)Presentationofpayrollpayabletotheemployees

InCNY

ItemsOpeningbalanceIncreaseinthereportingperiodDecreaseinthereportingperiodEndingbalance
I.Shorttermremuneration122,389,603.47285,457,917.07305,981,244.68101,866,275.86
II.Post-employmentbenefitprogram-definedcontributionplan.9,282,692.0023,046,218.6023,781,610.478,547,300.13
III.Dismissalwelfare4,915,643.912,054,382.526,196,361.50773,664.93
Total136,587,939.38310,558,518.19335,959,216.65111,187,240.92

(2)Presentationofshorttermremuneration

InCNY

ItemsOpeningbalanceIncreaseinthereportingperiodDecreaseinthereportingperiodEndingbalance
1.Salaries,bonus,allowancesandsubsidies121,169,046.53255,699,465.59275,765,045.21101,103,466.91
2.Staff’swelfare10,643.284,904,729.504,910,920.784,452.00
3.Socialsecuritypremium404,028.2911,030,921.0611,404,082.7930,866.56
Including:medicalinsurancepremium404,028.2910,401,071.6910,774,233.4230,866.56
Workinjuryinsurance467,199.86467,199.86
MaternityInsurance359,188.24359,188.24
4.Publicreserveforhousing169,121.0010,040,520.8410,187,999.8421,642.00
5.Tradeunionfundandstaffeducationfund636,764.373,782,280.083,713,196.06705,848.39
Total122,389,603.47285,457,917.07305,981,244.68101,866,275.86

(3)Presentationofthedefinedcontributionplan

InCNY

ItemsOpeningbalanceIncreaseinthereportingperiodDecreaseinthereportingperiodEndingbalance
1.Basicendowmentinsurancepremium290,781.9520,757,450.8720,786,597.50261,635.32
2.Unemploymentinsurancepremium581.68550,463.15550,581.89462.94
3.Contributiontotheenterpriseannuityscheme8,991,328.371,738,304.582,444,431.088,285,201.87
Total9,282,692.0023,046,218.6023,781,610.478,547,300.13

40.Taxespayable

InCNY

ItemsEndingbalanceOpeningbalance
Value-addedtax38,636,532.4339,086,878.23
Enterpriseincometax29,802,234.4816,751,872.66
Individualincometax1,104,976.431,070,872.15
Urbanmaintenanceandconstructiontax350,547.551,353,097.21
EducationSurcharge169,969.72966,809.02
Others3,783,922.641,540,639.03
Total73,848,183.2560,770,168.30

41.Otherpayables

InCNY

ItemsEndingbalanceOpeningbalance
Dividendspayable2,889,585.486,324,013.97
Otherpayables126,277,971.34158,736,108.61
Total129,167,556.82165,060,122.58

(1)InterestpayableInapplicable

(2)Dividendpayable

InCNY

ItemsEndingbalanceOpeningbalance
Dividendsofcommonshares2,889,585.486,324,013.97
Total2,889,585.486,324,013.97

Othernotes,includingthatifsignificantdividendspayablehavenotbeenpaidformorethan1year,itisnecessarytodisclosethereasonsfornon-payment：

Inapplicable

(3)Otherpayables

1)Otherpaymentsstatedbasedonnatureoffund

InCNY

ItemsEndingbalanceOpeningbalance
Cashpledgeorcashdeposit35,883,820.0938,319,837.05
Fundforshop-frontactivities25,644,797.8716,105,216.84
Refurbishment10,668,322.9212,827,532.03
Obligationofrepurchaseofrestrictedshares13,829,399.9550,759,806.16
Others40,251,630.5140,723,716.53
Total126,277,971.34158,736,108.61

2)Otherpayablesinsignificantamountandwithagingover1year

InCNY

ItemsEndingbalanceCauseoffailureinrepaymentorcarry-over
Depositforpropertyrent16,810,342.85Settlementnotdueyet
Total16,810,342.85

42.Held-for-saleliabilitiesInapplicable

43.Non-currentliabilitiesduewithinayear

InCNY

ItemsEndingbalanceOpeningbalance
Long-termrentliabilitiesduewithinoneyear57,351,473.1771,546,316.16
Total57,351,473.1771,546,316.16

44.Othercurrentliabilities

InCNY

ItemsEndingbalanceOpeningbalance
PendingoutputVAT2,146,851.311,686,806.01
Total2,146,851.311,686,806.01

Increase/decreaseoftheshorttermbondspayable:

Inapplicable

45.Long-termLoan

(1)ClassificationofLong-termBorrowingsInapplicable

46.Bondspayable

(1)BondspayableInapplicable

(2)Increase/Decreaseofbondspayable(excludingotherfinancialinstrumentsclassifiedasfinancialliabilities,suchaspreferredshares,perpetualbonds,etc.)Inapplicable

(3)NotetotheconditionsandtimeofshareconversionofconvertiblecompanybondsInapplicable

(4)NotetootherfinancialinstrumentsclassifiedasfinancialliabilitiesInapplicable

47.Rentliabilities

InCNY

ItemsEndingbalanceOpeningbalance
Housing&buildings88,096,853.79113,188,877.74
Less:Long-termrentliabilitiesduewithinoneyear-57,351,473.17-71,546,316.16
Total30,745,380.6241,642,561.58

48.Longtermaccountspayable

(1)LongtermaccountspayablestatedbasedonthenatureInapplicable

(2)SpecialaccountspayableInapplicable

49.Longtermpayrollpayabletoemployees

(1)StatementoflongtermpayrollpayabletoemployeesInapplicable

(2)ChangeofdefinedbenefitplansInapplicable

50.EstimatedliabilitiesInapplicable

51.Deferredincome

InCNY

ItemsOpeningbalanceIncreaseinthereportingperiodDecreaseinthereportingperiodEndingbalanceCauseofformation
Governmentsubsidies1,295,926.801,295,926.80
Total1,295,926.801,295,926.80

Itemsinvolvinggovernmentsubsidies:

InCNY

LiabilitiesOpeningbalanceAmountofnewlyaddedsubsidyinthereportingperiodAmountcountedtothenon-operatingincomeinthereportingperiodAmountcountedtotheotherincomeinthereportingperiodAmountoffsettingcostsandexpensesinthereportingperiodOtherchangesEndingbalanceRelatedwithassets/relatedwithincome
SpecialpurposefundofShenzhenindustrialdesigndevelopment314,539.36314,539.36Relatedwithassets
Fundingprojectforconstructionofenterprisetechnologycenterdesignatedbythestate338,833.33338,833.33Relatedwithassets
SpecialpurposefundfortheIndustryandInformationizationatProvincialLevel642,554.11642,554.11Relatedwithassets

52.Othernon-currentliabilitiesInapplicable

53.Capitalstock

InCNY

OpeningbalanceIncrease/Decrease(+/-)Endingbalance
NewissuingBonussharesSharesconvertedfromreserveOthersSub-total
TotalShares417,627,960.00417,627,960.00

54.Otherequityinstruments

(1)Basicinformationontheoutstandingotherfinancialinstruments,includingpreferredshares,perpetualbonds,etc.attheendofthereportingperiodInapplicable

(2)Movementoftheoutstandingfinancialinstruments,includingpreferredshares,perpetualbonds,etc.attheendofthereportingperiodInapplicable

55.Capitalreserve

InCNY

ItemsOpeningbalanceIncreaseinthereportingperiodDecreaseinthereportingperiodEndingbalance
Capitalpremium(capitalstockpremium)969,665,728.3612,799,265.102,734.41982,462,259.05
Othercapitalreserve37,420,915.121,359,195.7517,888,062.9620,892,047.91
Total1,007,086,643.4814,158,460.8517,890,797.371,003,354,306.96

Othernotes,includingthenotetoitsincrease/decreaseandthecause(s)ofitsmovementinthereportingperiod:

1.Accordingtothe"ProposalonGrantingRestrictedStockstotheIncentiveRecipientsof2018A-shareRestrictedStockIncentivePlan(PhaseII)"andthe"ProposalontheFailureinSatisfyingtheConditionsforLiftingtheRestrictionsduringtheSecondPeriodofthe2018A-shareRestrictedStockIncentivePlan(PhaseII)andtheRepurchaseandCancellationofSomeRestrictedStocks"passedbytheCompany'sBoardofDirectorsandtheGeneralMeeting,inthefirsthalfof2023,theservicesobtainedbytheCompanyfromtheabove-mentionedincentiverecipientswereincludedinrelevantcostsorexpenses,andthecorrespondingreductionincapitalreserveamountedtoCNY5,088,797.86.

2.AccordingtothePlanforRepurchasingsomeDomesticallyListedForeignShares(B-shares)oftheCompanyapprovedbytheBoardofDirectorsandtheGeneralMeeting,inthefirsthalfyearof2023，theCompanyrepurchaseditsownsharesthroughacentralizedbiddingmethodwiththespecialaccountforthesecuritiesrepurchasedatexpenseequivalenttoCNY2,734.41whichhaswrittenoffcapitalreserveamountingtoCNY2,734.41.

3.Differences,causedbyfairvaluedifferentwhenunlocktherestrictedshares,betweenCITdeductedamountandcostorexpensesrecognizedinvestingperiodincreasedthecapitalreservebyCNY1,359,195.75.Meanwhile,thereclassificationofcapitalreserveswasadjustedfortheunlockedpart,othercapitalreservesdecreasedbyCNY12,799,265.10,andcapitalpremiumincreasedbyCNY12,799,265.10.

56.Treasuryshares

InCNY

ItemsOpeningbalanceIncreaseinthereportingperiodDecreaseinthereportingperiodEndingbalance
Decreaseoftherepurchaseoftheregisteredcapital17,007,830.7017,007,830.70
Paymentforrestrictedshares50,759,806.1620,637,919.2130,121,886.95
Total50,759,806.1617,007,830.7020,637,919.2147,129,717.65

Othernotes,includingthenotetoitsincrease/decreaseandthecause(s)ofitsmovementinthereportingperiod:

1.Inthefirsthalfyearof2023，theCompanyrepurchasedaccumulatively2,403,565sharesoftheCompany'sB-sharesthroughacentralizedbiddingmethodwithShenzhenStockExchangeandpaidHKD18,653,010.10(withtradingcostexclusive)whichwasequivalenttoCNY17,007,830.70.Asaresult,thetreasurystockincreasedbyCNY17,007,830.70.

2.Inthefirsthalfyearof2023,thecashdividendscorrespondingtotheremainingrestrictedshareswerereducedbyCNY1,138,902.50fortreasuryshares.

3.AccordingtotheProposalontheAchievementofLiftingRestrictionsduringtheThirdPeriodofthe2018A-shareRestrictedStockIncentivePlan(PhaseI)andtheProposalontheAchievementofLiftingRestrictionsduringtheFirstPeriodofthe2018A-shareRestrictedStockIncentivePlan(PhaseII),whichwerereviewedandapprovedbytheCompany'sBoardofDirectorsandtheGeneralMeeting,theCompanysatisfiedtheconditionsforliftingtherestrictionsforthethirdrestrictionliftingperiodof2018A-shareRestrictedStockIncentivePlan(PhaseI)aswellastheconditionsforliftingtherestrictionsforthefirstrestrictionliftingperiodof2018A-shareRestrictedStockIncentivePlan(PhaseII).AuthorizedbytheGeneralMeeting,theBoardofDirectorsoftheCompanyhandledtheliftingofsalesrestrictionforincentiverecipientsthathadmeettheconditionsforliftingsalesrestrictioninaccordancewithrelevantregulations.ThesharesthathadsatisfiedtheconditionsforliftingsalesrestrictionswerelistedfortradingonJanuary31,2023,andthecorrespondingdividendsamountingtoCNY19,499,016.71werereducedbytreasuryshares.

57.Othercomprehensiveincome

InCNY

ItemsOpeningbalanceAmountincurredinthereportingperiodEndingbalance
AmountincurredbeforeincometaxinthereportingperiodLess:theamountcountedtotheothercomprehensiveprofitofthepreviousperiodwastransferredtotheprofitandlossofthereportingperiod.Less:theamountcountedtotheothercomprehensiveprofitofthepreviousperiodwastransferredtotheretainedearningsofthecurrentperiod.Less:IncometaxexpenseAttributabletotheparentcompanyaftertaxAttributabletominorityshareholdersaftertax
I.Othercomprehensiveincomewhichcannotbere-classifiedintoprofitandloss
Where:Amountofchangeofthebeneficialplanremeasuredforsetting
Othercomprehensiveincomewhichcannotbeconvertedintogainandlossbasedontheequitymethod
Movementofthefairvalueoftheinvestmentinotherequityinstruments
MovementofthefairvalueoftheCompany’sowncreditrisk
II.Othercomprehensiveincomewhichshallbere-classifiedintoprofitandloss5,739,589.899,405,009.079,405,009.0715,144,598.96
Whereothercomprehensiveincomewhichcanbeconvertedintogainandlossbasedontheequitymethod
Changeofthefairvalueoftheinvestmentinothercreditorinvestment
Amountofthereclassified
financialassetscountedtotheothercomprehensiveincome
Provisionforimpairmentofthecreditoftheotherdebtinvestment
Reserveforcashflowhedge
Conversiondifferenceinforeigncurrencystatements5,739,589.899,405,009.079,405,009.0715,144,598.96
Totalothercomprehensiveincome5,739,589.899,405,009.079,405,009.0715,144,598.96

58.Specialreserve

InCNY

ItemsOpeningbalanceIncreaseinthereportingperiodDecreaseinthereportingperiodEndingbalance
Safetyproductioncosts2,012,064.91816,618.9281,420.832,747,263.00
Total2,012,064.91816,618.9281,420.832,747,263.00

59.SurplusReserve

InCNY

ItemsOpeningbalanceIncreaseinthereportingperiodDecreaseinthereportingperiodEndingbalance
Statutorysurplusreserve213,025,507.50213,025,507.50
Discretionarysurplusreserve61,984,894.0061,984,894.00
Total275,010,401.50275,010,401.50

Notetosurplusreserve,includingthenotetoitsincrease/decreaseandthecause(s)ofitsmovementinthereportingperiod:

AccordingtotheCompanyLawandtheArticlesofAssociation,theCompanyprovidedstatutorysurplusreservebasedon10%ofthenetprofit.Whentheaccumulativeamountofthestatutorysurplusreserveexceeds50%oftheCompany’sregisteredcapital,nosuchreserveshallbeprovidedanylonger.Afterprovisionofthestatutorysurplusreserve,theCompanymayprovidefreesurplusreserve.Withauthorization,thefreesurplusreservemaybeusedtomakeupforthedeficitsofpreviousyearsorincreasecapitalstock.

60.Retainedearnings

InCNY

ItemsReportingperiodPreviousperiod
Retainedearningsattheendofthepreviousperiodbeforetheadjustment1,479,706,638.531,338,444,326.09
Afteradjustment:Retainedearningsatthebeginningofthereportingperiod1,479,706,638.531,338,444,326.09
Plus:Netprofitattributabletotheparentcompany’sownerinthereportperiod187,395,067.23266,681,451.84
Dividendsofcommonsharespayable104,157,772.00125,419,139.40
Retainedearningsattheendofthereportingperiod1,562,943,933.761,479,706,638.53

Statementofadjustmentofretainedearningsatthebeginningofthereportingperiod:

1).TheamountinvolvedintheretroactiveadjustmentaccordingtotheEnterpriseAccountingStandardsandtherelevantnewprovisionsinfluencingtheretainedearningsatthebeginningofthereportingperiodwasCNY0.00.

2).TheamountinvolvedinchangeoftheaccountingpolicyinfluencingtheretainedearningsatthebeginningofthereportingperiodwasCNY0.00.

3).TheamountinvolvedincorrectionofthesignificantaccountingerrorsinfluencingtheretainedearningsatthebeginningofthereportingperiodwasCNY0.00.

4).TheamountinvolvedinchangeoftheconsolidationscopecausedbythecommoncontrolinfluencingtheretainedearningsatthebeginningofthereportingperiodwasCNY0.00.

5).ThetotalamountinvolvedinotheradjustmentsinfluencingtheretainedearningsatthebeginningofthereportingperiodwasCNY0.00.

61.OperationIncomeandCosts

InCNY

ItemsAmountincurredinthereportingperiodAmountincurredinthepreviousperiod
IncomeCostIncomeCost
Principalbusiness2,356,716,526.001,512,310,635.562,176,850,503.241,373,173,952.09
Otherbusinesses7,788,736.56216,846.276,720,245.87490,608.32
Total2,364,505,262.561,512,527,481.832,183,570,749.111,373,664,560.41

Informationinconnectionwiththerevenue:

InCNY

ClassificationofContractsSegment1Segment2Total
Typesofcommodities
Including:
Watchbrandbusiness396,794,035.90396,794,035.90
Watchretailandservices1,813,444,463.531,813,444,463.53
Precisiontechnology67,709,263.2867,709,263.28
Leases78,768,763.2978,768,763.29
Others7,788,736.567,788,736.56
Classificationbasedontheoperationregions
Including:
SouthChina1,085,243,222.031,085,243,222.03
NorthwestChina364,119,542.91364,119,542.91
NorthChina127,379,519.35127,379,519.35
EastChina293,815,408.18293,815,408.18
NortheastChina183,610,107.98183,610,107.98
SouthwestChina310,337,462.11310,337,462.11

Informationconcerningobligationperformance:

Forthedetail,refertoNoteV.39.Informationrelatedtothetransactionpriceallocatedtotheremainingobligationsperformance:

Attheendofthereportingperiod,theamountofrevenuecorrespondingtotheperformanceobligationsofthecontractswhichhavebeensigned,butnotyetperformedornotyetcompletedisCNY0.00,ofwhichCNY0.00isexpectedtoberecognizedasrevenueinyear_____,CNY0.00isexpectedtoberecognizedasrevenueinyear______,andCNY0.00isexpectedtoberecognizedasrevenueinyear_____.

62.Taxesandsurcharges

InCNY

ItemsAmountincurredinthereportingperiodAmountincurredinthepreviousperiod
Consumptiontax1,764,057.541,080,093.60
Urbanmaintenanceandconstructiontax4,791,269.834,471,185.46
EducationSurcharge3,381,982.773,176,217.12
Realestatetax3,557,771.543,617,599.55
Landusetax186,994.62202,038.96
Taxonusingvehicleandboat2,880.002,880.00
Stampduty1,492,951.961,271,846.47
Others584,547.81379,332.17
Total15,762,456.0714,201,193.33

63.Salesexpenses

InCNY

ItemsAmountincurredinthereportingperiodAmountincurredinthepreviousperiod
Payrolltoemployees184,843,963.06207,143,891.55
Shoppingmallandrentalfees82,289,084.2976,494,295.56
Advertising,exhibitionandmarketpromotionfee66,569,380.8857,874,652.62
Depreciationandamortization91,843,176.93107,506,179.52
Packingexpenses4,588,450.004,439,070.05
Water&powersupplyandpropertymanagementfee11,172,272.7111,198,105.55
Freight2,972,928.762,865,405.58
Officeexpenses2,929,620.972,712,847.35
Businesstravelexpenses3,826,254.032,022,337.58
Businessentertainment1,947,349.511,346,935.04
Others3,291,148.064,202,320.36
Total456,273,629.20477,806,040.76

64.Administrativeexpenses

InCNY

ItemsAmountincurredinthereportingperiodAmountincurredinthepreviousperiod
Payrolltoemployees83,415,424.9290,844,037.52
Depreciationandamortization11,499,296.1311,956,926.63
Businesstravelexpenses2,036,742.28610,091.19
Officeexpenses1,561,690.782,112,092.81
Servicefeetointermediaryagencies1,750,354.691,632,375.61
Water,electricity,propertyandrent1,735,898.861,529,714.92
Businessentertainment567,726.27288,878.74
Trucksandfreight919,436.00631,799.40
Communicationfee195,521.76376,723.40
Others939,637.926,733,024.47
Total104,621,729.61116,715,664.69

65.R&Dexpenditures

InCNY

ItemsAmountincurredinthereportingperiodAmountincurredinthepreviousperiod
Payrolltoemployees22,913,768.6319,230,230.93
Sampleandmaterialcharges663,576.68797,464.23
Costofmoulds-4,970.1398,716.00
Depreciationandamortization2,243,045.932,501,878.19
Technicalcooperationfee444,619.97-136,897.08
Others1,901,429.462,535,321.58
Total28,161,470.5425,026,713.85

66.Financialexpenses

InCNY

ItemsAmountincurredinthereportingperiodAmountincurredinthepreviousperiod
Interestpayment6,690,859.359,731,247.68
Less:Interestincome2,432,180.031,981,825.39
Exchangegain&loss1,335,231.32-1,648,258.56
Servicechargesandmiscellaneous6,594,306.185,776,243.25
Total12,188,216.8211,877,406.98

67.Otherincome

InCNY

SourceofarisingofotherincomeAmountincurredinthereportingperiodAmountincurredinthepreviousperiod
Governmentsubsidies6,691,609.4113,369,782.95

68.Returnoninvestment

InCNY

ItemsAmountincurredinthereportingperiodAmountincurredinthepreviousperiod
Incomefromlongtermequityinvestmentbasedonequitymethod-1,697,481.652,462,626.52
Total-1,697,481.652,462,626.52

69.NetexposurehedgeincomeInapplicable

70.IncomefromchangeofthefairvalueInapplicable

71.Lossfromimpairmentofcredit

InCNY

ItemsAmountincurredinthereportingperiodAmountincurredinthepreviousperiod
Provisionforbaddebtofotherreceivables153,871.31174,478.00
Lossfrombaddebtofnotesreceivable621,723.41463,943.28
Lossfrombaddebtofaccountsreceivable3,558,352.90-636,572.43
Total4,333,947.621,848.85

72.Lossfromimpairmentofassets

InCNY

ItemsAmountincurredinthereportingperiodAmountincurredinthepreviousperiod
I.Lossfromimpairmentofassets
II.Lossfrompricefallingofinventoryandlossfromimpairmentofcontractperformancecosts-348,218.69
III.Lossfromimpairmentoflong-termequityinvestment
IV.Lossfromimpairmentofinvestmentproperty
V.Lossfromimpairmentoffixedassets
VI.Lossfromimpairmentofengineeringsupplies
VII.Lossfromimpairmentofconstruction-in-progress
VIII.Lossofimpairmentofproductivebiologicalasset
IX.Lossfromimpairmentofoilandgasassets
X.Lossfromimpairmentofintangibleassets
XI.Lossfromimpairmentofgoodwill
XII.Lossfromimpairmentofassets
XIII.Others
Total-348,218.69

73.Incomefromdisposalofassets

InCNY

SourceofincomefromdisposalofassetsAmountincurredinthereportingperiodAmountincurredinthepreviousperiod
Profitorlossfromdisposaloffixedassets-89,254.33-14,180.88
Profitorlossfromdisposalofright-of-useassets12,564.60-801,840.28

74.Non-operatingincome

InCNY

ItemsAmountincurredinthereportingperiodAmountincurredinthepreviousperiodAmountcountedtothecurrentnon-operatinggainandloss
Defaultcompensationincome286,740.28146,132.71286,740.28
Accountspayableunnecessarytobepaid226,699.030.40226,699.03
Others83,084.5262,454.7783,084.52
Total596,523.83208,587.88596,523.83

Governmentsubsidycountedtothecurrentprofitandloss:

Inapplicable

75.Non-operatingexpenditure

InCNY

ItemsAmountincurredinthereportingperiodAmountincurredinthepreviousperiodAmountcountedtothecurrentnon-operatinggainandloss
Lossfromnon-monetaryassetsexchange
Outwarddonation
Fineandoverduefine208,833.3815,080.06208,833.38
defaultfine54,416.71693,689.7254,416.71
Others28,351.09117,127.5828,351.09
Total291,601.18825,897.36291,601.18

76.Incometaxexpense

(1)Incometaxexpense

InCNY

ItemsAmountincurredinthereportingperiodAmountincurredinthepreviousperiod
Incometaxexpensesinthereportingperiod52,147,601.1643,213,735.62
Deferredincometaxexpense4,983,918.40-5,574,641.83
Total57,131,519.5637,639,093.79

(2)Processofadjustmentofaccountingprofitandincometaxexpenses

InCNY

ItemsAmountincurredinthereportingperiod
Totalprofit244,526,586.79
Incometaxexpensecalculatedbasedonthestatutory/applicabletaxrate61,131,646.70
Influenceofdifferenttaxratesapplicabletosubsidiaries-3,026,153.58
Influenceofadjustmentoftheincometaxinthepreviousperiod474,249.39
Influenceofthenon-taxableincome424,370.41
Influenceofthenon-offsetablecosts,expensesandloss842,051.77
Theeffectofusingdeductiblelossesofdeferredincometaxassetsthathavenotbeenrecognizedinthepreviousperiod-257,100.89
InfluencefromtheadditionoftheR&Dexpensesupondeductionoftaxpayment(tobestatedwith“-“)-2,457,544.24
Incometaxexpense57,131,519.56

77.OthercomprehensiveincomeForthedetail,refertoNoteVII.57.

78.CashFlowStatementItems

(1)Otheroperationactivitiesrelatedcashreceipts

InCNY

ItemsAmountincurredinthereportingperiodAmountincurredinthepreviousperiod
Collateralanddeposit4,310,663.926,532,789.76
Governmentsubsidies6,623,312.6913,193,456.48
Commoditypromotionfee6,824,544.074,611,388.01
Interestincome2,432,180.031,985,621.79
Reserve3,098,754.092,740,310.90
Others14,009,396.398,516,510.57
Total37,298,851.1937,580,077.51

(2)Otheroperationactivitiesrelatedcashpayments

InCNY

ItemsAmountincurredinthereportingperiodAmountincurredinthepreviousperiod
Collateralanddeposit8,763,786.627,419,015.67
Reserve6,711,750.045,082,764.84
Periodexpenses162,631,345.85138,375,768.78
Others4,342,740.344,512,408.32
Total182,449,622.85155,389,957.61

(3)OtherinvestmentactivityrelatedcashreceiptsInapplicable

(4)OtherinvestmentactivityrelatedcashpaymentsInapplicable

(5)OtherfinancingactivityrelatedcashreceiptsInapplicable

(6)Otherfinancingactivityrelatedcashpayments

InCNY

ItemsAmountincurredinthereportingperiodAmountincurredinthepreviousperiod
Rentcashflowout56,886,698.4663,385,293.68
Paymentforrepurchaseofshares35,483,644.8653,318,818.77
Total92,370,343.32116,704,112.45

79.Supplementaryinformationofthecashflowstatement

(1)Supplementaryinformationofthecashflowstatement

InCNY

SupplementaryinformationAmountinthereportingperiodAmountinthepreviousperiod
1Adjustmentofnetprofitintocashflowsofoperatingactivities:
Netprofit187,395,067.23140,692,784.29
Plus:Provisionforimpairmentofassets-4,333,947.62346,369.84
Depreciationoffixedassets,depletionofoilandgasasset,depreciationofproductivebiologicalasset20,546,291.1920,129,448.57
Depreciationofuserightassets50,579,624.7957,747,319.25
Amortizationofintangibleassets1,853,819.122,750,043.18
Amortizationoflongtermexpensestobeapportioned46,620,603.5752,053,443.19
Loss(incomeisstatedin“-”)fromdisposaloffixedassets,intangibleassetsandotherlongtermassets76,689.73816,021.16
Lossonscrappingoffixedassets(profitisstatedwith“-”)
Lossfromchangeoffairvalue(profitisstatedwith“-”)
Financialexpenses(incomeisstatedwith“-”)8,026,090.678,082,989.12
Investmentloss(incomeisstatedwith“-”)1,697,481.65-2,462,626.52
Decreaseofthedeferredincometaxasset(increaseisstatedwith“_”)3,681,918.71-5,564,912.60
Increaseofdeferredincometaxliability(decreaseisstatedwith“-”)-57,196.06-327,370.24
Decreaseofinventories(Increaseisstatedwith“-”)56,107,015.0874,801,604.17
Decreaseofoperativeitemsreceivable(Increaseisstatedwith“-”)-73,392,204.29-23,794,469.22
Increaseofoperativeitemspayable(Decreaseisstatedwith“-”)45,858,589.85-46,884,380.59
Others
Netcashflowsarisingfromoperatingactivities344,659,843.62278,386,263.60
2Significantinvestmentandfund-raisingactivitieswithnocashincomeandexpensesinvolved:
Capitalconvertedfromliabilities
Convertiblecompanybondsduewithinayear
Fixedassetsunderfinancinglease
3Netchangeincashandcashequivalents:
Endingcashbalance519,368,795.12393,873,930.55
Less:Openingbalanceofcash313,747,463.64210,254,737.14
Plus:Endingbalanceofcashequivalent
Less:Openingbalanceofcashequivalent
Netincreaseofcashandcashequivalents205,621,331.48183,619,193.41

(2)NetcashpaidforacquisitionofsubsidiaryinthereportingperiodInapplicable

(3)NetcashreceivedfromdisposalofsubsidiaryinthereportingperiodInapplicable

(4)Compositionofcashandcashequivalents

InCNY

ItemsEndingbalanceOpeningbalance
I.Cash519,368,795.12313,747,463.64
Including:Cashinstock63,562.14173,368.68
Bankdepositavailableforpaymentatanytime514,412,146.09312,433,893.29
Othermonetaryfundusedforpaymentatanytime4,893,086.891,131,127.67
Duefromcentralbankavailableforpayment
Duefrombanks
Callloantobanks
II.Cashequivalents
Including:bondinvestmentduewithinthreemonths
III.Endingbalanceofcashandcashequivalents519,368,795.12313,747,463.64
Including:cashandcashequivalentsrestrictedforusefromtheparentcompanyorothersubsidiariesoftheGroup398,877.12716,733.44

80.Notestoitemsofstatementofchangeinowner’sequityInapplicable

81.Assetsrestrictedinownershiporright-of-useInapplicable

82.Foreigncurrencymonetaryitems

(1)Foreigncurrencymonetaryitems

InCNY

ItemsEndingbalanceofforeigncurrencyConversionrateEndingbalanceofRenminbiconverted
Monetarycapital
Including:USD224,202.417.22581,620,041.77
Euro505,646.077.87713,983,024.66
HKD1,501,051.230.92201,383,939.21
SF49,732.928.0614400,916.96
Accountsreceivable
Including:USD848,686.027.22586,132,435.44
Euro34,286.547.8771270,078.50
HKD2,951,437.540.92202,721,166.38
SF23,815.438.0614191,985.71
Long-termLoan
Including:USD
Euro
HKD
Accountspayable
Including:USD1,019.007.22587,363.09
HKD737,465.210.9220679,928.17
Otherreceivables
Including:HKD116,037.610.9220106,984.36
SF66,754.638.0614538,135.77
Otherpayables
Including:USD5,672.967.225840,991.67
Euro489.337.87713,854.50
HKD54,776.050.922050,502.42
SF68,432.878.0614551,664.74

(2)Notetooverseasoperatingentities,includingimportantoverseasoperatingentities,whichshouldbedisclosedaboutitsprincipalbusinessplace,functioncurrencyforbookkeepingandbasisforthechoice.Incaseofanychangeinfunctioncurrency,thecauseshouldbedisclosed.TheCompanyanditsdomesticsubsidiariesuseRenminbi(CNY)asthefunctioncurrencyforbookkeeping.FIYTA(HongKong)Limited,oneoftheCompany'soverseassubsidiaries,hasdeterminedHongKongDollarsasitsrecordingcurrencyforaccountinginaccordancewiththecurrenciesavailableinitsmajoreconomicenvironmentwhereitisoperated.MontresChourietSA,oneofthesubsidiariesofFIYTAHongKong,determinesSwissFrancasitsrecordingcurrencyforaccountinginaccordancewiththecurrenciesavailableinitsmajoreconomicenvironmentwhereitisoperatedandSwissFranceisconvertedintoRenminbiinpreparingitsfinancialstatements.ThecurrencytheCompanytakesinpreparationofthesefinancialstatementsisRenminbi.

83.HedgingInapplicable

84.Governmentsubsidies

(1)Basicinformationofgovernmentsubsidies

InCNY

CategoryAmountItemspresentedAmountcountedtothecurrentprofitandloss
SpecialsubsidyforthefieldofstandardsinShenzhen790,936.00Otherincome790,936.00
Refundoftheservicechargeforindividualincometax588,360.90Otherincome588,360.90
Subsidyforstabilizingemployment724,612.04Otherincome724,612.04
Othersubsidies3,802.58Otherincome3,802.58
Subsidyforspecialfundingprojectsforstablecommercialgrowth1,251,400.00Otherincome1,251,400.00
One-offsubsidyforretainedemployeestraining1,500.00Otherincome1,500.00
Refundof51job.comCOVID-19subsidy12,000.00Otherincome12,000.00
“Welfare-to-work”basedapplication-freedirectsubsidy4,900.00Otherincome4,900.00
Special-purposefundsubsidyforeconomicdevelopment100,000.00Otherincome100,000.00
Awardsubsidyforrecognitionofhi-techenterprise100,000.00Otherincome100,000.00
Firstsubsidyforfinancingthefosteringofhi-techenterprise120,000.00Otherincome120,000.00
Subsidyforemployingthedisabled9,669.71Otherincome9,669.71
Heavyprecisionprojectsfortechnologicalbreakthrough1,000,000.00Otherincome1,000,000.00
Governmentsubsidyfortechnologicalinnovationprojects1,000,000.00Otherincome1,000,000.00
Financialsupportforthefosteringofhi-techenterprise100,000.00Otherincome100,000.00
Centralgovernmentappropriationfortechnologicalbreakthroughandapplicationprojectofbreathingmachineandkeyparts868,178.18Otherincome868,178.18
Taxrebatedtothekeyorganizationsfromthecentralgovernment16,250.00Otherincome16,250.00

(2)RefundingofthegovernmentsubsidiesInapplicable

85.OthersInapplicableVIII.Changeinconsolidationscope

1.Businesscombinationinvolvingentitiesnotundercommoncontrol

(1)ConsolidationofenterprisesnotundercommoncontrolduringthereportingperiodInapplicable

(2)ConsolidationcostandgoodwillInapplicable

(3)Purchasee'sdistinguishableassetsandliabilitiesasatthedateofpurchaseInapplicable

(4)Profitorlossoftheequityheldbeforethedateofpurchasearisingfromre-measurementbasedonthefairvalueDoesthereexistanytransactioninwhichtheenterpriseconsolidationisrealizedstepbystepthroughseveraltransactionsandthecontrolpowerisobtainedwithinthereportingperiod.No

(5)NotetotheconsolidationconsiderationorthefairvalueofthedistinguishableassetsandliabilitiesofthepurchaseewhichcannotbereasonablyidentifiedasatthedateofpurchaseorattheendoftheveryperiodofconsolidationInapplicable

(6)OthernoteInapplicable

2.Businesscombinationinvolvingentitiesundercommoncontrol

(1)ConsolidationofenterprisesundercommoncontrolduringthereportingperiodInapplicable

(2)ConsolidationcostInapplicable

(3)Bookvalueoftheconsolidatee'sassetsandliabilitiesasatthedateofconsolidationInapplicable

3.CounterpurchaseInapplicable

4.DisposalofsubsidiariesDoesthereexistanysuchsituationthatasingledisposalmaycausethecontrolpowerovertheinvestmentinasubsidiarylost?NoDoesthereexistanysuchsituationthatdisposalinstepsthroughanumberoftransactionsmaycausethecontrolpowerovertheinvestmentinasubsidiarylostduringthereportingperiod?No

5.ChangeofconsolidationscopeduetootherreasonInapplicable

6.OthersInapplicableIX.Equityinotherentities

1.Equityinasubsidiary

(1)Compositionofanenterprisegroup

SubsidiariesMainbusinesslocationPlaceofregistrationNatureofbusinessShareholdingproportionWayofacquisition
DirectIndirect
ShenzhenHarmonyWorldWatchesCenterCo.,Ltd.ShenzhenShenzhenCommerce100.00%Establishmentorinvestment
FIYTASalesCo.,Ltd.ShenzhenShenzhenCommerce100.00%Establishmentorinvestment
ShenzhenFIYTAPrecisionTechnologyCo.,Ltd.ShenzhenShenzhenManufacture99.00%1.00%Establishmentorinvestment
ShenzhenFIYTATechnologyDevelopmentCo.,Ltd.ShenzhenShenzhenManufacture100.00%Establishmentorinvestment
HarmonyWorldWatchesCenter(Hainan)Ltd.SanyaSanyaCommerce100.00%Establishmentorinvestment
ShenzhenXUNHANGPrecisionTechnologyCo.,Ltd.ShenzhenShenzhenManufacture100.00%Establishmentorinvestment
EmileChouriet(Shenzhen)LimitedShenzhenShenzhenCommerce100.00%Establishmentorinvestment
LiaoningHengdaruiCommerce&TradeShenyangShenyangCommerce100.00%Consolidationofenterprisesunder
Co.,Ltd.thecommoncontrol
ShiyuehuiBoutique(Shenzhen)Co.,Ltd.ShenzhenShenzhenCommerce100.00%Establishmentorinvestment
ShenzhenHarmonyE-CommerceLimitedShenzhenShenzhenCommerce100.00%Establishmentorinvestment
FIYTA(HongKong)LimitedHongKongHongKongCommerce100.00%Establishmentorinvestment
MontresChourietSASwitzerlandSwitzerlandManufacture100.00%Businesscombinationinvolvingentitiesnotundercommoncontrol

Notetotheproportionofshareholdinginasubsidiarydifferentfromtheproportionofvotingpower:

InapplicableBasisofholdinglessthanahalfofthevotingpowerbutstillcontrollingtheinvesteeandholdingmorethanahalfofthevotingpowerbutnotcontrollingtheinvestee:

InapplicableBasisofanimportantstructurizedentitybeingbroughttotheconsolidationscopeandbeingcontrolled:

InapplicableBasisofdistinguishinganagentfromconsignor:

Inapplicable

(2)Importantnon-wholly-ownedsubsidiariesInapplicable

(3)Keyfinancialinformationofimportantnon-wholly-ownedsubsidiariesInapplicable

(4)Significantrestrictiononuseofenterprisegroup’sassetsandpayingofftheenterprisegroup’sliabilitiesInapplicable

(5)FinancialsupportorothersupportprovidedtothestructuredentitiesincorporatedinthescopeofconsolidatedfinancialstatementsInapplicable

2.Transactionwithasubsidiarywiththeshareoftheowner’sequitychangedbutstillundercontrol

(1)Notetochangeintheshareoftheowner'sequityinsubsidiariesInapplicable

(2)Affectofthetransactionontheminorityequityandowner'sequityattributabletotheparentcompanyInapplicable

3.Equityinjointventurearrangementorassociates

(1)Importantjointventuresorassociates

NameofjointventureorassociateMainbusinesslocationPlaceofregistrationNatureofbusinessShareholdingproportionAccountingtreatmentmethodforinvestmentinjointventuresorassociates
DirectIndirect
ShanghaiWatchShanghaiShanghaiCommerce25.00%Equitymethod

Notetotheproportionoftheshareholdinginajointventureoranassociatedifferentfromvotingpowertherein:

InapplicableBasisofholdingbelow20%votingpowerbuthavingsignificantinfluenceorholdingmorethan20%votingpowerbutnothavingsignificantinfluenceInapplicable

(2)KeyfinancialinformationofimportantjointventuresInapplicable

(3)Keyfinancialinformationofimportantassociates

InCNY

IndustryCo.,Ltd.Endingbalance/amountincurredinthe

reportingperiod

Endingbalance/amountincurredinthereportingperiodOpeningbalance/amountincurredinthereportingperiod
Currentassets165,681,315.89175,890,077.66
Non-currentassets15,811,254.4621,637,323.67
Totalassets181,492,570.35197,527,401.33
Currentliabilities41,236,245.4344,595,566.75
Non-currentliabilities5,885,583.05
Totalliabilities41,236,245.4350,481,149.80
Minorityshareholders’equity
Equityattributabletotheparentcompany’sshareholders140,256,324.92147,046,251.53
Shareofnetassetscalculatedaccordingtotheshareholdingproportion35,064,081.2336,761,562.88
Adjustmentevents21,420,524.0221,420,524.02
--Goodwill21,420,524.0221,420,524.02
--Unrealizedprofitfromtheintracompanytransactions
--Others
Bookvalueoftheequityinvestmentinassociates56,484,605.2558,182,086.90
Fairvalueofequityinvestmentsinassociateswithpublicquotation
OperationRevenue63,610,760.4765,530,729.89
Netprofit-6,789,926.619,850,506.06
Netprofitfromoperationtermination
Othercomprehensiveincome
Totalcomprehensiveincome-6,789,926.619,850,506.06
Dividendsreceivedfromassociatesduringtheyear

(4)FinancialinformationsummaryofunimportantjointventuresandassociatesInapplicable

(5)NotetosignificantrestrictiononthecompetenceofajointventureoranassociateintransferringfundstotheCompanyInapplicable

(6)ExcessivelossincurredtoajointventureoranassociateInapplicable

(7)UnrecognizedcommitmentinconnectionwithinvestmentinajointventureInapplicable

(8)ContingentliabilitiesinconnectionwithinvestmentinjointventuresorassociatesInapplicable

4.ImportantjointoperationInapplicable

5.EquityinthestructurizedentitiesnotincorporatedintheconsolidatedfinancialstatementsInapplicable

6.OthersInapplicableX.RiskdisclosurerelatedtofinancialinstrumentThemajorfinancialinstrumentsoftheCompanyprimarilyincludecashatbankandonhand,equityinvestments,borrowings,accountsreceivable,accountspayables,etc.TheCompanyisexposedtorisksfromvariousfinancialinstrumentsinday-to-dayoperation,mainlyincludingcreditrisk,liquidityriskandmarketrisk.TherisksinconnectionwithsuchfinancialinstrumentsandtheriskmanagementpoliciesadoptedbytheCompanytomitigatesuchrisksaresummarizedasfollows:

TheboardofdirectorsisresponsibleforplanningandestablishingtheriskmanagementstructurefortheCompany,developingriskmanagementpoliciesandtherelatedguidelinesacrosstheCompany,andsupervisingtheperformanceofriskmanagementmeasures.TheCompanyhasformulatedriskmanagementpoliciestoidentifyandanalyzetherisksfacedbytheCompany.Theseriskmanagementpoliciesclearlystipulatespecificrisks,coveringmanyaspectssuchasmarketrisk,creditriskandliquidityriskmanagement.TheGroupregularlyevaluatesthemarketenvironmentandchangesintheCompany'soperatingactivitiestodeterminewhethertoupdatetheriskmanagementpolicyandsystem.TheCompany'sriskmanagementiscarriedoutbytheRiskManagementCommitteeinaccordancewiththepoliciesapprovedbytheBoardofDirectors.TheRiskManagementCommitteeworkscloselywithotherbusinessdepartmentsoftheCompanytoidentify,evaluateandavoidrelatedrisks.TheinternalauditdepartmentoftheCompanyconductsregularauditsonriskmanagementcontrolsandprocedures,andreportstheauditresultstotheauditcommitteeoftheCompany.TheCompanydiversifiestherisksoffinancialinstrumentsthroughappropriatediversifiedinvestmentandbusinessportfolios,andformulatescorrespondingriskmanagementpoliciestoreducetherisksconcentratedinasingleindustry,aspecificregionoraspecificcounterparty.

1.CreditriskCreditriskreferstotheriskoffinanciallossestotheCompanyasaresultofthefailureofperformanceofcontractualobligationsbythecounterparties.Themanagementhasdevelopedpropercreditpoliciesandcontinuouslymonitorscreditriskexposures.TheCompanyhasadoptedthepolicyoftransactingwithcreditworthycounterpartiesonly.Inaddition,theCompanyevaluatesthecreditqualificationofcustomersandsetsupcorrespondingcredittermbasedonthefinancialstatusofcustomers,thepossibilityofobtainingguaranteesfromthirdparties,creditrecordsandotherfactorssuchascurrentmarketconditions.TheCompanymonitorsthebalancesandrecoveryofbillsandaccountsreceivable,andcontractassetsonacontinualbasis.Asforbadcreditcustomers,theCompanywillusethewrittenreminders,shortenthecredittermorcancelthecredittermtoensurethattheCompanyisfreefrommaterialcreditlosses.Inaddition,theCompanyreviewstherecoveryoffinancialassetsoneachbalancesheetdatetoensureadequateexpectedcreditlossprovisionismadeforrelevantfinancialassets.TheCompany'sotherfinancialassetsincludemonetarycapital,accountsreceivableandotherreceivables.Thecreditriskofthesefinancialassetsisderivedfromthedefaultofthecounterparty,andthemaximumcreditexposureisthecarryingamountofeachfinancialassetonthebalancesheet.TheCompanydoesnotprovideanyotherguaranteethatmayexposetheCompanytocreditrisk.ThemonetaryfundsheldbytheCompanyaremainlydepositedwithfinancialinstitutionssuchasstate-ownedbanksandotherlargeandmedium-sizedcommercialbanks.Themanagementbelievesthatthesecommercialbankshaveahigherreputationandassets,sothereisnomajorcreditriskandtheCompanywouldnothaveanysignificantlosses

causedbythedefaultbytheseinstitutions.TheCompany’spolicyistocontroltheamountdepositedwiththesefamousfinancialinstitutionsbasedontheirmarketreputation,operatingsizeandfinancialbackground,tolimitthecreditriskamountofanysinglefinancialinstitution.Asapartofitscreditriskassetmanagement,theCompanyassessesthecreditlossofreceivablesusingaging.TheCompany’sreceivableandotherreceivablesinvolvelargeamountofcustomers.Aginginformationcanreflecttheabilitytorepayandriskofbaddebtofthesecustomers.TheCompanydeterminedexpectedlossratebycalculatinghistoricalbaddebtrateforreceivableswithdifferentagingbasedonhistoricaldataandalsotakingforecastoffutureeconomicconditionintoconsiderationsuchasGDPgrowthrate,statecurrencypolicyetc.Forlong-termreceivables,theCompanyassessesexpectedcreditlossreasonablybyconsideringsettlementperiod,contractedpaymentterms,debtor’sfinancialsituationandtheeconomicsituationofthedebtor’sindustry.AsatJune30,2023,thecarryingamountofrelatedassetsandcorrespondingECLisasfollows:

AgingBookbalanceProvisionforimpairment
Notesreceivable15,140,453.97511,155.07
Accountsreceivable436,613,661.8737,037,393.88
Otherreceivables61,498,013.614,111,162.93
Total513,252,129.4441,659,711.88

AstheCompany’scustomerbaseislarge,thereexistsnomaterialcreditconcentrationrisk.AsatJune302023,thebalanceoftop5receivableaccountsaccountedfor23.89%oftotalaccountsreceivables(2022:

32.76%).

2.LiquidityrisksLiquidityriskreferstotheriskofshortoffundswhenthecompanyperformsitsobligationofcashpaymentorsettlementbyotherfinancialassets.TheCompany’ssubordinatemembercompaniesareresponsiblefortheirrespectivecashflowprojections.Basedontheresultsthereof,thesubordinatefinancialmanagementdepartmentcontinuallymonitorsitsshort-termandlong-termcapitalneedsatthecompanyleveltoensureadequatecashreserves;inthemeantime,continuallymonitorsthecompliancewithloanagreementsandsecuresundertakingsforsufficientreservefundsfrommajorfinancialinstitutions,toaddressitsshort-termandlong-termcapitalneeds.Besides,theCompanymainlysignsfinancingagreementswithbanksthathavebusinesstransactionstoprovidesupporttofulfillcommercialbillobligation.AsatJune30,2023,theCompanyhadfinancingfacilitiesfromseveralbanksamountingtoCNY1,987.24million.Amongst,CNY482.24millionhadalreadybeenused.AsatJune30,2023,thediscountedcontractualcashflowsforfinancialliabilitiesandoff-balancesheetguaranteethatpresentedinmaturityareasfollows:

ItemsEndingbalance(CNY10,000)
Within1year1-2years2-3yearsOver3yearsTotal
Short-termborrowings39,566.5639,566.56
Accountspayable19,148.8219,148.82
Otherpayables12,627.80113.8970.63104.4312,916.76
Total71,343.18113.8970.63104.4371,632.14

3.MarketRisks

1)ExchangerateriskExceptthattheCompany’ssubsidiaryinHongKongusesHKDassettlementcurrencyandsub-subsidiaryinSwissusedCHFassettlementcurrency,theprincipalplacesofoperationsoftheCompanyarelocatedinChinaandthemajorbusinessesaresettledinRenminbi.However,theCompany’srecognizedforeigncurrencyassetsandliabilitiesaswellastheforeigncurrencytransactionsinthefuture(thefunctionalcurrenciesofforeignassetsandliabilitiesaswellasthetransactionsaremainlyHKDandSF)remainexposedtoexchangerateriskAsatJune302023,theRenminbiequivalentoffinancialassetsandfinancialliabilitiesdenominatedinforeigncurrenciesareasfollows:

ItemsEndingbalance
HKDUSDEUROSFTotal
Financialassetdenominatedinforeign
currency:
Monetarycapital1,383,939.211,620,041.773,983,024.66400,916.967,387,922.61
Accountsreceivable2,721,166.386,132,435.44270,078.50191,985.719,315,666.04
Otherreceivables106,984.36538,135.77645,120.13
Sub-total4,212,089.957,752,477.224,253,103.161,131,038.4417,348,708.77
Financialliabilitiesdenominatedinforeigncurrency:
Accountspayable679,928.177,363.09687,291.26
Otherpayables50,502.4240,991.673,854.50551,664.74647,013.34
Non-currentliabilitiesduewithinayear-
Sub-total730,430.6048,354.763,854.50551,664.741,334,304.60

Sensitivityanalysis:

AsatJune30,2023,forfinancialassetsandfinancialliabilitiesthatdenominatedinforeigncurrency,ifRenminbiappreciateordepreciateof5%toforeigncurrencyandotherfactorsremainunchanged,thenetprofitwilldecreaseorincreaseaboutCNY0.6005million(2022:CNY1.419million).

2)InterestrateriskTheinterestrateriskoftheCompanymainlyassociateswithbankborrowings.FloatingratefinancialliabilitiesexposetheCompanytocash-flowinterestraterisk,whilefixedratefinancialliabilitiesexposetheCompanytofair-valueinterestraterisk.TheCompanydeterminesthecomparativeproportionoffixedratecontractsandfloatingratecontractsbasedonthethenmarketconditions.ThefinancialdepartmentoftheCompanycontinuouslymonitorstheCompany’sinterestratelevel.Riseofinterestratesmayincreasethecostofnewinterest-bearingliabilitiesandinterestcostsontheCompany'soutstandinginterest-bearingliabilitiesatvariablerates,andhaveamaterialadverseeffectontheCompany'sfinancialresults.Themanagementmaymaketimelyadjustmentsbasedonthelatestmarketconditionstoreduceinterestraterisk.Sensitivityanalysis:

Incasetheloaninterestratecalculatedbasedonthefloatinginterestraterisesorfallsby50basepointsasatJune30,2023,whiletheotherfactorskeepunchanged,theCompany'snetprofitshalldecreaseorincreasebyCNY1.95million(asat2022aboutCNY1.20million).TheabovesensitivityanalysisisbasedontheassumptionthatchangehastakenplaceintheinterestratesonthebalancesheetdateandthechangehasbeenappliedtoallborrowingsobtainedbytheCompanyatfloatinginterestrates.XI.DisclosureofFairValue

1.FairvalueattheendofthereportingperiodoftheassetsandliabilitiesmeasuredbasedonthefairvalueInapplicable

2.Basisfordeterminingthemarketpriceoftheitemsmeasuredbasedonthecontinuousandnon-continuousfirstlevelfairvalueInapplicable

3.Itemsmeasuredbasedonthecontinuousoruncontinuous2ndlevelfairvalue,valuationtechniqueasused,natureofimportantparametersandquantitativeinformationInapplicable

4.Itemsmeasuredbasedonthecontinuousoruncontinuous3rdlevelfairvalue,valuationtechniqueasused,natureofimportantparametersandquantitativeinformationInapplicable

5.Itemsmeasuredbasedonthecontinuous3rdlevelfairvalue,sensitivityanalysisonadjustedinformationandunobservableparametersbetweenthebookvalueatbeginningandendoftheperiodInapplicable

6.Incaseitemsmeasuredbasedonfairvalueareconvertedbetweendifferentlevelsincurredinthecurrentperiod,statethecauseofconversionanddetermineconversiontimepointInapplicable

7.ChangeofvaluationtechniqueincurredinthecurrentperiodandcauseofsuchchangeInapplicable

8.FairvalueoffinancialassetsandfinancialliabilitiesnotmeasuredatfairvalueInapplicable

9.OthersInapplicableXII.Relatedpartiesandtransactions

1.DetailsoftheparentcompanyoftheCompany

NameoftheparentcompanyPlaceofregistrationNatureofbusinessRegisteredcapitalShareholdingratiooftheparentcompanyintheCompanyRatioofvoterightoftheparentcompanyintheCompany
AVICInternationalHoldingLimitedShenzhenBusinessserviceindustryCNY1,166.162million39.02%39.02%

Notetotheparentcompany:

AVICIHLisasubsidiary100%indirectlyheldbyAVICInternationalHoldingCorporation.AviationIndustryCorporationofChinaLimited(AVIC)holds91.14%equityinAVICInternationalHoldingCorporation.Therefore,theeventualcontrolleroftheCompanyisAVIC.

2.SubsidiariesoftheCompanyRefertoNoteIX.1fordetailsofsubsidiariesoftheCompany.

3.JointventureandassociationoftheCompanyInapplicable

4.Otherrelatedparties

NamesofotherrelatedpartiesRelationshipbetweenotherrelatedpartiesandtheCompany
AVICPropertyManagementCo.,Ltd.(AVICProperty)Anassociateoftheultimatecontroller
ShenzhenAVICBuildingTechnologyCo.,Ltd.(AVICBuilding)Anassociateoftheultimatecontroller
ShenzhenAVICNanguangElevatorCo.,Ltd.(AVICNanguang)Anassociateoftheultimatecontroller
AVICCityProperty(Kunshan)Co.,Ltd.(AVICCityProperty(Kunshan))Anassociateoftheultimatecontroller
ShenzhenAVICSecurityServiceCo.,Ltd.(AVICSecurityService)Anassociateoftheultimatecontroller
Jiujiang9SquareCommerceManagementCo.,Ltd.(9SquareCommerceManagement)Anassociateoftheultimatecontroller
RainbowDigitalCommercialCo.,Ltd.(RAINBOW)Controlledbythesameparty
ShennanCircuitCo.,Ltd.(ShennanCircuit)Controlledbythesameparty
AVICHuadongPhotoelectric(Shanghai)Co.,Ltd.(HuadongPhotoelectric(Shanghai))Controlledbythesameparty
ShenyangXinghuaAero-ElectricApplianceCorp.Ltd.(ShenyangXinghuaAero-ElectricAppliance)Controlledbythesameparty
AVICHuadongPhotoelectricCo.,Ltd.(HuadongPhotoelectric)Controlledbythesameparty
ShenzhenLingzhiDigitalTechnologyCo.,Ltd.(LingzhiDigitalTechnology)Controlledbythesameparty
ShenzhenAVICGrandSkylightHotelManagementCo.,Ltd.(GrandSkylightHotelManagement)Controlledbythesameparty
AVICSecuritiesCo.,Ltd.(AVICSecurities)Controlledbythesameparty
ShenzhenAVICTrainingCenter(AVICTrainingCenter)Controlledbythesameparty
AVICFinanceCo.,Ltd.(AVICFinance)Controlledbythesameparty
GongqingchengCATICCulturalInvestmentCo.,Ltd.(GongqingchengCATICCulturalInvestment)Controlledbythesameparty
AVICJonhonOptronicTechnologyCo.,Ltd.(AVICOptronic)Controlledbythesameparty
AVICGeneralAircraftCo.,Ltd.(AVICGeneralAircraft)Controlledbythesameparty
GuizhouHuayangElectricCo.,Ltd.(GUIZHOUHUAYANGELECTRIC)Controlledbythesameparty
ZhuhaiLinghangCompositeMaterialTechnologyCo.,Ltd.(ZhuhaiLinghangTechnology)Controlledbythesameparty
GuangdongInternationalBuildingIndustrialCompany(GuangdongInternationalBuilding)Controlledbythesameparty
Director,Manager,ChiefFinancialOfficerandSecretaryoftheBoardoftheCompany(seniorexecutives)Aseniorexecutive

5.Relatedtransactions

(1)RelatedtransactionsofpurchaseandsaleofcommoditiesandsupplyandacceptanceoflaborservicesStatementofpurchaseofcommoditiesandacceptanceoflaborservices

InCNY

RelatedpartyDescriptionofRelatedTransactionsAmountincurredinthereportingperiodTransactionquotaasapprovedHasitexceededthetransactionquotaAmountincurredinthepreviousperiod
AVICPropertyWater&powersupplyandpropertymanagementfee5,600,171.4245,000,000.00No5,674,190.55
RainbowLtd.Shoppingmallfees/purchaseofgoods1,939,136.26No2,205,812.33
AVICCityProperty(Kunshan)Shoppingmallfees32,726.23No23,584.90
9SquareCommerceManagementCo.,Ltd.Shoppingmallfees45,347.58No45,264.34
AVICNanguangElevatormaintenance18,000.00No

Statementofsalesofgoods/supplyofservices

InCNY

RelatedpartyDescriptionofRelatedTransactionsAmountincurredinthereportingperiodAmountincurredinthepreviousperiod
RainbowLtd.Productsandlaborservices30,348,264.1329,104,305.23
ShennanCircuitSalesofmaterialsandsupplyofservices460.80228,541.46
GongqingchengCATICCulturalInvestmentSalesofproducts154,635.87192,621.21
AVICOptronicSalesofproducts406,907.87379,058.98
AVICGeneralAircraftSalesofproducts554,207.98
HuadongPhotoelectric(Shanghai)Salesofproducts21,238.94
GuizhouHuayangElectricSalesofproducts50,353.97
ZhuhaiLinghangTechnologySalesofproducts75,711.51
ShenyangXinghuaAero-ElectricApplianceSalesofproducts145,831.01

NotetotherelatedtransactionsofpurchaseandsaleofcommoditiesandsupplyandacceptanceoflaborservicesTheabovetransactionvolumedoesnotcontaintaxamount.

(2)Relatedentrustedmanagement/contractedandmandatorymanagement/contractingInapplicable

(3)RelatedleaseTheCompanyaslessor:

InCNY

NamesoflesseesCategoriesofleaseholdpropertiesRentalincomerecognizedinthecurrentperiodRentalincomerecognizedinthepreviousperiod
AVICPropertyHousing2,677,492.915,220,338.61
AVICSecuritiesHousing705,942.84705,942.84
RainbowLtd.Housing309,104.34309,104.34
CATICPublicSecurityServiceCo.Housing453,202.26

TheCompanyaslessee:

InCNY

NameoflessorCategoriesofleaseholdpropertiesRentalchargesforshort-termleasesandleasesoflow-valueassetsforsimplifiedprocessing(ifapplicable)Variablerentalpaymentnotincludedinthemeasurementoftherentliability(ifapplicable)RentpaidPaymentoftherentalliabilityinterestundertakenIncreasedright-of-useassets
AmountincurredinthereportingperiodAmountincurredinthepreviousperiodAmountincurredinthereportingperiodAmountincurredinthepreviousperiodAmountincurredinthereportingperiodAmountincurredinthepreviousperiodAmountincurredinthereportingperiodAmountincurredinthepreviousperiodAmountincurredinthereportingperiodAmountincurredinthepreviousperiod
AVICCityProperty(Kunshan)Housing71,100.0075,600.00580.083,504.11-66,767.11-71,606.28
9SquareCommerceManagementCo.,Ltd.Housing41,544.0337,267.73136,406.96129,495.424,179.588,636.46145,907.09-124,732.08
RainbowLtd.Housing218,271.00255,127.006,473.237,561.36-195,898.05-241,122.00

(4)RelatedguaranteeInapplicable

(5)Borrowingsandlendingsamongrelatedparties

InCNYInapplicable

(6)AssetsassignmentandliabilitiesreorganizationofrelatedpartiesInapplicable

(7)RemunerationtoseniorexecutivesInapplicable

(8)OtherrelatedtransactionsTheCompany’sdepositbalancedepositedwithAVICFinanceattheendofthecurrentyearamountedtoCNY480,544,819.75,ofwhichthedepositinterestreceivedduringtheyearamountedtoCNY137,837.70.

6.Accountsreceivablefromandpayabletorelatedparties

(1)Receivables

InCNY

ProjectnameRelatedpartiesEndingbalanceOpeningbalance
BookbalanceProvisionforbaddebtBookbalanceProvisionforbaddebt
Bankdeposit
AVICFinance480,544,819.75271,327,031.83
Accountsreceivable
RainbowLtd.6,971,407.56259,780.043,808,470.31219,873.20
ShennanCircuit7,255.14544.14
AVICOptronic117,068.0516,639.44649,797.1648,734.79
GongqingchengCATICCulturalInvestment45,430.15682.4427,297.281,364.88
9SquareCommerceManagementCo.,Ltd.3,430.00171.5045,762.002,288.10
AVICTrainingCenter2,772.00207.90
ShenyangXinghuaAero-ElectricAppliance166,077.249,134.25
AVICProperty453,084.3122,654.2255,910.002,795.50
GUIZHOUHUAYANGELECTRIC59,528.004,464.60
ZhuhaiLinghangTechnology735,622.0040,459.211,412,045.00105,903.38
Notesreceivable
AVICOptronic639,591.82262,429.22
Otherreceivables
RainbowLtd.834,092.4341,704.621,055,557.4352,777.87
AVICCityProperty(Kunshan)56,000.002,800.0073,000.002,800.00
GongqingchengCATICCulturalInvestment6,500.00325.006,500.00325.00
9SquareCommerceManagementCo.,Ltd.91,751.754,587.5950,000.002,500.00
AVICIHL49.322.4749.322.47

(2)Payables

InCNY

ProjectnameRelatedpartiesEndingbookbalanceOpeningbookbalance
Accountspayable
AVICBuildingCo.32,992.35
AVICOptronic19,411.27
Otherpayables
AVICProperty1,203,983.882,375,070.47
JingzhiDigitalTechnology830,000.00
AVICSecurities247,080.00247,080.00
AVICBuildingCo.14,808.41
RainbowLtd.108,186.52108,186.52
CATICPublicSecurityServiceCo.158,620.80158,620.80
AVICNanguang26,424.4723,432.43
Advancefromcustomers
AVICSecurities123,540.00
RainbowLtd.162,324.03

7.Relatedparties’commitmentsInapplicable

8.OthersInapplicable

XIII.Stockpayment

1.General

InCNY

TotalamountofvariousequityinstrumentsgrantedbytheCompanyduringthereportingperiod0.00
TotalamountofvariousequityinstrumentsoftheCompanyexercisableduringthereportingperiod3,436,710.00
TotalamountofvariousequityinstrumentsoftheCompanyexpiredduringthereportingperiod2,201,130.00
ThescopeoftheexercisepriceofstockoptionsissuedattheendofthereportingperiodandtheremainingtimeofthecontractInapplicable
ThescopeoftheexercisepriceofotherequityinstrumentsissuedattheendofthereportingperiodandtheremainingtimeofthecontractInapplicable

2.Stockpaymentforequitysettlement

InCNY

MethodfordeterminingthefairvalueofequityinstrumentsonthegrantdateClosingpriceoftheCompany'sstockonthegrantdate
BasisfordeterminingthequantityofexercisableequityinstrumentsEmployeeserviceperiod,achievementrateofperformanceindicators,andemployeeindividualperformanceevaluationresult
CauseofsignificantdifferencebetweentheestimationofthereportingperiodandthatofthepreviousperiodNil
Accumulatedamountoftheequity-settledshare-basedpaymentcountedtothecapitalreserve26,899,484.20
Totalexpensesrecognizedintheequity-settledshare-basedpaymentduringthereportingperiod-5,088,797.85

3.StockpaymentforcashsettlementInapplicable

4.CorrectionandterminationofstockpaymentInapplicable

5.OthersInapplicableXIV.Commitmentsandcontingencies

1.ImportantcommitmentsImportantcommitmentsexistingasatthebalancesheetdateLeasecontractthatalreadysignedorpreparedtofulfillanditsfinancialeffectDisclosureasthelessee:

(1)LeaseactivitiesTheCompany'sleasecategoriesareallhousingandbuildings,includingsimplifiedshort-termleaseandleasesotherthanshort-termrentwhereright-of-useassetsandleaseliabilitiesarerecognized.

(2)Simplifiedtreatmentofshort-termleaseandleasesoflow-valueassetsShort-termleasesaretreatedusingsimplifiedmethod.Short-termleasesincludeleasetermthatisshorterthan12monthandnorenewoptionsattached,andleasesthatwillbematuredin12monthafterfirstadoptionofCAS21–Lease.Short-termleaseexpenseschargedtoprofitorlosswasCNY496,529.80.

(3)Futurepotentialcashoutflowsthatdoesnotincludedinleaseliabilities

1)VariableleasepaymentThelesseeleasedalotofretailshopswhichcontainsvariableleasepaymenttermsinconnectionwithsales.ManyoftheCompany’spropertyleasecontainvariableleasepaymenttermsinconnectionwithsales.Inmostcircumstances,theCompanyusesthesetermstomatchesleasepaymenttoshopsthatcangeneratemorecashflowsleasepayment.Forstandaloneshops,variablecanreach100%ofallleasepaymentatmostandthatthescopeof

percentageofsalesusedisquitelarge.Insomecircumstances,variablepaymenttermsincludeannualbottompaymentandupperlimit.Inthefirsthalfyearof2023,theamountofvariableleasepaymentsincludedinthecurrentprofitandlosswasCNY45,887,165.30.

2)OptiontorenewManyleasecontractsenteredbytheCompanyhasoptiontorenew.TheCompanyhasalreadyestimatedtheoptiontorenewreasonablywhendeterminingleasetermsinmeasuringleaseliabilities.

3)OptiontodiscontinueleaseSomeoftheleasecontractenteredbytheCompanyhasoptiontodiscontinue.TheCompanyhasalreadyestimatedtheoptiontodiscontinuereasonablywhendeterminingleasetermsinmeasuringleaseliabilities.

4)ResidualvalueguaranteeTheCompany’sleasedoesnotinvolveresidualvalueguarantee.

5)LeasethatthelesseehasalreadymadecommitmentbutnotyetstartedTheCompanydoesnothaveleasethathasalreadymadecommitmentbutnotyetstarted.Disclosureasalessor:

(1)LeaseactivitiesTheCompany’sleasesareallproperties

(2)RiskmanagementstrategyofretainingrightsoverleaseassetsToreducerisksoflease,theCompanynormallyaskslesseetopayrentalinadvanceandcollects1-3monthsrentalasdeposit.

2.Contingencies

(1)SignificantcontingenciesexistingasatthebalancesheetdateInapplicable

(2)ImportantcontingenciesunnecessarytobedisclosedbutnecessarytobeexplainedInapplicable

3.OthersInapplicableXV.Eventsafterthebalancesheetdate

1.Significantnon-adjustmenteventsInapplicable

2.ProfitdistributionInapplicable

3.SalesreturnInapplicable

4.NotetoothermattersafterthebalancesheetdateInapplicable

XVI.Othersignificantevents

1.Correctionoftheaccountingerrorsinthepreviousperiod

(1)RetroactiverestatementInapplicable

(2)ProspectiveapplicationInapplicable

2.LiabilitiesrestructuringInapplicable

3.Replacementofassets

(1)Non-monetaryassetsexchangeInapplicable

(2)OtherassetsexchangeInapplicable

4.AnnuityplanInapplicable

5.DiscontinuingoperationInapplicable

6.Segmentinformation

(1)BasisfordeterminingthereportingsegmentsandaccountingpolicyOperatingsegmentsoftheCompanyareidentifiedonthebasisofinternalorganizationstructure,managementrequirementsandinternalreportingsystem.AnoperatingsegmentrepresentsacomponentoftheCompanythatsatisfiedthefollowingcriteriasimultaneously:

(1)Itsbusinessactivitiesareengagedtoearnrevenueandincurexpenses;

(2)ItsoperatingresultsareregularlyreviewedbytheCompany’smanagementtomakedecisionsonresourcesallocationandperformanceassessment;

(3)Itsfinancialconditions,operatingresults,cashflowandrelatedaccountinginformationareavailabletotheCompany.TheCompanydeterminesthereportingsegmentbasedontheoperatingsegment,andtheoperatingsegmentthatmeetsanyofthefollowingconditionsisdeterminedasthereportingsegment:

(1)Thesegmentincomeoftheoperatingsegmentaccountsfor10.00%ormoreoftotalincomeofallsegments;

(2)Theabsoluteamountofprofits(losses)ofthesegmentaccountfor10.00%ormoreofthehigheroftheabsoluteamountoftotalprofitsoftheprofitingsegmentandtheabsoluteamountoftotallossesoftheunprofitablesegment.

(2)FinancialinformationofthereportingsegmentsInapplicable

(3)Incasethereisnoreportingsegmentorthetotalassetsandliabilitiesofthereportingsegmentscannotbedisclosed,explainthereasonTheCompany’sbusinessissimple.Thebusinessmainlyinvolvesmanufacturingandsalesofwatch.Themanagementconsidersthebusinessasawholeinimplementingmanagementandassessingitsperformance.Asaresult,nosegmentinformationisdisclosedinthisfinancialstatement.

(4)OthernoteInapplicable

7.Othersignificanttransactionsandmattersthatmayaffectinvestors'decisionmakingInapplicable

8.OthersInapplicableXVII.Notestotheparentcompany’sfinancialstatements

1.Accountsreceivable

(1)Accountsreceivabledisclosedbycategory

InCNY

CategoriesEndingbalanceOpeningbalance
BookbalanceProvisionforbaddebtBookvalueBookbalanceProvisionforbaddebtBookvalue
AmountProportionAmountProvisionproportionAmountProportionAmountProvisionproportion
Accountsreceivableforwhichbaddebtreservehasbeenprovidedbasedonindividualitems
Including:
Accountsreceivableforwhichbaddebtreservehasbeenprovidedbasedonportfolios9,837,158.31100.00%309,767.443.15%9,527,390.87635,132.16100.00%31,916.135.03%603,216.03
Including:
Accountsreceivablefromothercustomers9,837,158.31100.00%309,767.443.15%9,527,390.87635,132.16100.00%31,916.135.03%603,216.03
Total9,837,158.31100.00%309,767.443.15%9,527,390.87635,132.16100.00%31,916.135.03%603,216.03

Baddebtreserveprovidedbasedonportfolio:Groupingofaccountsreceivablefromothercustomers

InCNY

DescriptionEndingbalance
BookbalanceProvisionforbaddebtProvisionproportion
Accountsreceivablefromothercustomers9,837,158.31309,767.443.15%
Total9,837,158.31309,767.44

Notetothebasisfordeterminingthecombination:

InapplicableIftheprovisionforbaddebtsofaccountsreceivableisaccruedinaccordancewiththegeneralexpectedcreditlossmodel,pleaserefertothedisclosureofotherreceivablestodisclosetherelevantinformationoftheprovisionforbaddebts:

InapplicableDisclosedbasedonaging

InCNY

AgingEndingbalance
Within1year(with1yearinclusive)9,837,158.31
Total9,837,158.31

(2)Provision,recoveryorreversalofreserveforbaddebtsduringthereportingperiodProvisionforbaddebtduringthereportingperiod

InCNY

CategoriesOpeningbalanceAmountofmovementduringthereportingperiodEndingbalance
ProvisionRecoveryorreversalWritten-offOthers
Accountsreceivablewithsingleprovisionforexpectedcreditloss85,000.0085,000.00
Accountsreceivablewithprovisionforexpectedcreditlossbyportfolio31,916.13309,576.0131,724.70309,767.44
Total31,916.13394,576.0131,724.7085,000.00309,767.44

Wherethesignificantamountofthereserveforbaddebtrecoveredorreversed:

Inapplicable

(3)Accountsreceivableactuallywrittenoffinthereportingperiod

InCNY

ItemsAmountwritten-off
Xi'anTangchengGroupCo.,Ltd.85,000.00

Where,theimportantaccountsreceivablewritten-off:

InapplicableNotetowriting-ofofaccountsreceivable:

Inapplicable

(4)Accountsreceivableowedbythetopfivedebtorsbasedontheendingbalance

InCNY

OrganizationnameEndingbalanceoftheaccountsreceivableProportionintotalendingbalanceofaccountsreceivableEndingbalanceoftheprovisionforbaddebts
Summaryofthetopfiveaccountsreceivableintheendingbalance4,754,574.4348.33%237,728.73
Total4,754,574.4348.33%

(5)AccountreceivablewithrecognitionterminatedduetotransferoffinancialassetsInapplicable

(6)AmountofassetsandliabilitiesformedthroughtransferofaccountsreceivableandcontinuingtobeinvolvedInapplicable

2.Otherreceivables

InCNY

ItemsEndingbalanceOpeningbalance
Otherreceivables667,253,750.44839,782,543.07
Total667,253,750.44839,782,543.07

(1)Interestreceivable

1)ClassificationofinterestreceivableInapplicable

2)SignificantoverdueinterestInapplicable

3)ProvisionforbaddebtsInapplicable

(2)Dividendsreceivable

1)ClassificationofdividendsreceivableInapplicable

2)Significantdividendsreceivablewithageexceeding1yearInapplicable

3)ProvisionforbaddebtsInapplicable

(3)Otherreceivables

1)Classificationofotherreceivablesbasedonnatureofpayment

InCNY

NatureofthefundEndingbookbalanceOpeningbookbalance
Reserveforemployees1,120.8824,542.88
Collateral,deposit537,615.90537,615.90
OtherreceivableswithinFIYTA666,767,491.31839,271,199.44
Others13,105.9514,855.95
Total667,319,334.04839,848,214.17

2)Provisionforbaddebts

InCNY

ProvisionforbaddebtStage1Stage2Stage3Total
Expectedcreditlossinfuture12monthsExpectedcreditlossinthewholeduration(nocreditimpairmentincurred)Expectedcreditlossinthewholeduration(creditimpairmentalreadyincurred)
BalanceasatJanuary65,671.1065,671.10
01,2023
BalanceasatJanuary01,2023inthereportingperiod
Reversalinthereportingperiod87.5087.50
BalanceasatJune30,202365,583.6065,583.60

Provisionforloss-ChangeofthebookbalancewithsignificantamountduringthereportingperiodInapplicableDisclosedbasedonaging

InCNY

AgingEndingbalance
Within1year(with1yearinclusive)666,780,480.72
1to2years498,803.32
2to3years0.00
Over3years40,050.00
3to4years40,050.00
Total667,319,334.04

3)Provision,recoveryorreversalofreserveforbaddebtsduringthereportingperiodProvisionforbaddebtduringthereportingperiod

InCNY

CategoriesOpeningbalanceAmountofmovementduringthereportingperiodEndingbalance
ProvisionRecoveryorreversalWritten-offOthers
Provisionforbaddebt65,671.1087.5065,583.60
Total65,671.1087.5065,583.60

4)OtherreceivablesactuallywrittenoffinthereportingperiodInapplicable

5)Accountsreceivableowedbythetopfivedebtorsbasedontheendingbalance

InCNY

OrganizationnameNatureofPaymentEndingbalanceAgingProportionintotalendingbalanceofotherreceivablesEndingbalanceoftheprovisionforbaddebts
TopfivedebtorsoftheendingbalanceSummaryofotherreceivablesWithinthescopeofconsolidationofreceivablesDuefromrelatedparties664,807,340.64Within1year99.62%0.00
Total664,807,340.6499.62%0.00

6)AccountsreceivableinvolvinggovernmentsubsidyInapplicable

7)OtherreceivablesderecognizedduetotransferoffinancialassetsInapplicable

8)AmountofassetsandliabilitiesformedthroughtransferofotherreceivablesandcontinuingtobeinvolvedInapplicable

3.Long-termequityinvestments

InCNY

ItemsEndingbalanceOpeningbalance
BookbalanceProvisionforimpairmentBookvalueBookbalanceProvisionforimpairmentBookvalue
Investmentinsubsidiaries1,490,485,375.681,490,485,375.681,494,128,399.601,494,128,399.60
Investmentinassociatesandjointventures56,484,605.2556,484,605.2558,182,086.9058,182,086.90
Total1,546,969,980.931,546,969,980.931,552,310,486.501,552,310,486.50

(1)Investmentinsubsidiaries

InCNY

InvesteesOpeningbalance(bookvalue)Increase/Decrease(+/-)inthereportingperiodEndingbalance(bookvalue)Endingbalanceoftheprovisionforimpairment
AdditionalinvestmentDecreaseofinvestmentProvisionforimpairmentOthers
ShenzhenHarmonyWorldWatchesCenterCo.,Ltd.610,354,397.34-1,376,597.97608,977,799.37
FIYTASalesCo.,Ltd.458,083,251.89-1,233,973.05456,849,278.84
ShenzhenFIYTAPrecisionTechnologyCo.,Ltd.102,482,069.76-561,875.76101,920,194.00
ShenzhenFIYTATechnologyDevelopmentCo.,Ltd.51,224,974.98-210,708.3151,014,266.67
FIYTA(HongKong)Limited137,737,520.00137,737,520.00
ShiyuehuiBoutique(Shenzhen)Co.,Ltd.5,000,000.005,000,000.00
ShenzhenHarmonyE-CommerceLimited11,684,484.3911,684,484.39
LiaoningHengdaruiCommerce&TradeCo.,Ltd.36,867,843.9636,867,843.96
EmileChouriet(Shenzhen)Limited80,693,857.28-259,868.8380,433,988.45
Total1,494,128,399.60-3,643,023.921,490,485,375.68

(2)Investmentinassociatesandjointventures

InCNY

InvesteesOpeningbalance(bookvalue)Increase/Decrease(+/-)inthereportingperiodEndingbalance(bookvalue)Endingbalanceoftheprovisionforimpairment
AdditionalinvestmentDecreaseofinvestmentIncomefromequityinvestmentrecognizedunderequitymethodAdjustmentofothercomprehensiveincomeOtherequitymovementAnnouncedfordistributingcashdividendorprofitProvisionforimpairmentOthers
I.JointVenture
II.Associates
ShanghaiWatchIndustryCo.,Ltd.58,182,086.90-1,697,481.6556,484,605.25
Sub-total58,182,086.90-1,697,481.6556,484,605.25
Total58,182,086.90-1,697,481.6556,484,605.25

(3)OthernoteInapplicable

4.OperationIncomeandCosts

InCNY

ItemsAmountincurredinthereportingperiodAmountincurredinthepreviousperiod
IncomeCostIncomeCost
Principalbusiness90,155,946.2122,121,058.1490,020,775.9019,190,036.95
Otherbusinesses1,886,928.931,621,838.79
Total92,042,875.1422,121,058.1491,642,614.6919,190,036.95

5.Returnoninvestment

InCNY

ItemsAmountincurredinthereportingperiodAmountincurredinthepreviousperiod
Incomefromlongtermequityinvestmentbasedonequitymethod-1,697,481.652,462,626.52
Total-1,697,481.652,462,626.52

6.OthersInapplicableXVIII.Supplementaryinformation

1.Statementofnon-recurringgainsandlossesinthereportingperiod

InCNY

ItemsAmountNotes
Gain/lossfromdisposalofnon-currentassets,includingthepartwritten-offwiththeprovisionforimpairmentofassets.-76,689.73
Thegovernmentsubsidiesincludedintheprofitsandlossesofthecurrentperiod((excludinggovernmentgrantswhicharecloselyrelatedtotheCompany’snormalbusinessandconformwiththenationalstandardamountorquantity)6,691,609.41
Reversalofprovisionforimpairmentofaccountsreceivablethathasbeenseparatelytestedforimpairment5,954,740.99
Othernon-operatingincomeandexpenseswiththeaforesaiditemsexclusive304,922.65
Less:Amountaffectedbytheincometax2,832,059.75
Total10,042,523.57--

Detailsofothergainsandlossesincompliancewiththedefinitionofnon-recurringgainsandlosses.InapplicableExplanationofthenon-recurringgainsandlosseslistedintheExplanatoryAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublicasrecurringgainsandlossesInapplicable

2.ROEandEPS

ProfitinthereportingperiodReturnonequity,weightedaverageEarningspershare
Basicearningpershare(CNY/share)Dilutedearningpershare(CNY/share)
NetprofitattributabletotheCompany’sshareholdersofordinaryshares5.80%0.45170.4517
NetprofitattributabletotheCompany’sshareholdersofordinaryshareslessnon-recurringgainsandloss5.49%0.42740.4274

3.DiscrepancyinaccountingdatabetweenIASandCAS

(1)Differencesinthenetprofitdisclosedinthefinancialreport&thenetassetsattributabletotheCompany’sshareholdersrespectivelyaccordingtotheIASandtheCAS.Inapplicable

(2)Differencesinthenetprofit&thenetassetsdisclosedinthefinancialreportrespectivelyaccordingtotheIASandtheCASInapplicable

(3)NotetothediscrepancyinaccountingdataundertheIASandtheCAS.Incasethediscrepancyindatawhichhavebeenauditedbyanoverseasauditingagenthasbeenadjusted,pleasespecifythenameoftheoverseasauditingagent.Inapplicable

4.OthersInapplicable

FIYTAPrecisionTechnologyCo.,Ltd.

BoardofDirectorsAugust23,2023
  附件：公告原文
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