2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
FIYTAPrecisionTechnologyCo.,Ltd.
2023AnnualReport
March2024
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
2023AnnualReport
Section1ImportantTips,TableofContents,andInterpretationsTheCompany'sBoardofDirectors,BoardofSupervisors,Directors,Supervisors,andSeniorOfficersguaranteetheauthenticity,accuracy,andcompletenessoftheannualreport,withoutanyfalserecords,misleadingstatements,orsignificantomissions,andshallbearindividualandjointlegalresponsibilities.TheCompany'spersonincharge,ZhangXuhua,thepersoninchargeofaccountingwork,SongYaoming,andtheheadoftheaccountingagency(accountingsupervisor),TianHui,declarethattheyguaranteetheauthenticity,accuracy,andcompletenessofthefinancialreportsinthisyear'sreport.AllDirectorshaveattendedtheMeetingoftheBoardofDirectorstoreviewthisreport.Theforward-lookingdescriptionsoffutureplansanddevelopmentstrategiesinvolvedinthisannualreportdonotconstituteasubstantivecommitmentoftheCompanytoinvestors.Investorsareadvisedtopayattentiontoinvestmentrisks.TheCompanyhasprovidedadetaileddescriptionoftheexistingmacroeconomicandoperationalrisksinthisreport.PleaserefertothediscussionandanalysisofthemanagementinthethirdsectionregardingtheCompany'sfuturedevelopmentprospects.TheCompany'sprofitdistributionplandeliberatedandapprovedbytheBoardofDirectorsisasfollows:basedonthetotalsharecapitalontheequityregistrationdatewhentheprofitdistributionplanisimplementedinthefuture(excludingthesharesinspecialrepurchasesecuritiesaccount),acashdividendofRMB4.00willbedistributedtoallshareholdersforevery10shares.(taxincluded),0bonusshareswillbegiven(taxincluded),andtheprovidentfundwillnotbeconvertedintosharecapital.
ThisreportispreparedinbothChineseandEnglishversions.Ifthereisanyambiguityinunderstandingthereport,theChineseversionshallprevail.
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
Contents
Section1ImportantTips,TableofContents,andInterpretations ...... 2
Section2ProfileandMainFinancialIndicators ...... 6
Section3DiscussionandAnalysisoftheManagement ...... 9
Section4CorporateGovernance ...... 26
Section5EnvironmentalandSocialResponsibility ...... 51
Section6ImportantMatters ...... 53
Section7ChangesinSharesandShareholders ...... 60
Section8InformationRelatedtoPreferredShares ...... 71
Section9BondRelatedInformation ...... 71
Section10FinancialReporting ...... 72
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
ContentsofReferenceFile
I.Thefinancialstatementsbearingthesignaturesandsealsofthelegalrepresentative,chiefaccountant,andaccountingsupervisor.II.Theoriginalauditreportcontainingthesealoftheaccountingfirm,thesignatureandsealoftheregisteredaccountant.III.TheoriginalcopiesofalldocumentsandannouncementsoftheCompanypubliclydisclosedduringthereportingperiod.
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
Interpretations
Items
| Items | Refersto | Interpretations |
| TheCompany,Company,FIYTA | Refersto | FIYTAPrecisionTechnologyCo.,Ltd. |
| Aviationindustry | Refersto | AviationIndustryCorporationofChina,Ltd. |
| AVICInternational | Refersto | AVICInternationalHoldingCorporation |
| AVICINTL | Refersto | AVICInternationalHoldingLimited |
| AVICFinance | Refersto | AVICFinanceCo.,Ltd. |
| Restrictedshareincentivescheme(PhaseI) | Refersto | TheCompany's2018A-sharerestrictedshareIncentivescheme(PhaseI) |
| Restrictedshareincentivescheme(PhaseII) | Refersto | TheCompany's2018A-sharerestrictedshareIncentiveScheme(PhaseII) |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
Section2ProfileandMainFinancialIndicators
I.Profile
Stockabbreviation
| Stockabbreviation | FIYTA,FIYTAB | Stockcode | 000026、200026 |
| Stockabbreviationbeforechange(ifany) | None | ||
| Stockexchangesforstocklisting | ShenzhenStockExchange | ||
| ChinesenameoftheCompany | FIYTAPrecisionTechnologyCo.,Ltd. | ||
| ChineseabbreviationoftheCompany | FIYTACompany | ||
| ForeignnameoftheCompany(ifany) | FIYTAPrecisionTechnologyCo.,Ltd. | ||
| AbbreviationsoftheCompany'sforeignname(ifany) | FIYTA | ||
| LegalrepresentativeoftheCompany | ZhangXuhua | ||
| Registeredaddress | FIYTATechnologyBuilding,GaoxinSouth1stRoad,NanshanDistrict,Shenzhen | ||
| Postalcode(registeredaddress) | 518057 | ||
| HistoricalchangesintheregisteredaddressoftheCompany | OnJanuary30,1997,theregisteredaddressoftheCompanywaschangedfromBuilding6,ZhonghangYuan,ShennanMiddleRoad,ShenzhentoBuilding6,ZhonghangYuan,ShennanMiddleRoad,FutianDistrict,Shenzhen;OnApril5,2000,theregisteredaddresswaschangedto"FIYTABuilding,No.163ZhenhuaRoad,FutianDistrict,Shenzhen";OnFebruary20,2004,theregisteredaddresswaschangedto"FIYTATechnologyBuilding,GaoxinSouth1stRoad,NanshanDistrict,Shenzhen". | ||
| Officeaddress | 20thFloor,FIYTATechnologyBuilding,GaoxinSouth1stRoad,NanshanDistrict,Shenzhen | ||
| Postalcode(officeaddress) | 518057 | ||
| Website | www.fiytagroup.com | ||
| investor@fiyta.com.cn | |||
II.Contactpersonandcontactinformation
| SecretaryoftheBoardofDirectors | SecuritiesAffairsRepresentative | |
| Name | SongYaoming | XiongYaojia |
| Address | 20thFloor,FIYTATechnologyBuilding,GaoxinSouth1stRoad,NanshanDistrict,Shenzhen | 18thFloor,FIYTATechnologyBuilding,GaoxinSouth1stRoad,NanshanDistrict,Shenzhen |
| Tel. | 0755－86013669 | 0755－86013669 |
| Fax | 0755－83348369 | 0755－83348369 |
| investor@fiyta.com.cn | investor@fiyta.com.cn |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
III.Informationdisclosureandpreparationlocation
ThewebsiteofthestockexchangewheretheCompanydisclosesitsannualreport
| ThewebsiteofthestockexchangewheretheCompanydisclosesitsannualreport | http://www.szse.cn |
| NameandwebsiteofthemediainwhichtheCompanydisclosesitsannualreport | STCN,HongKongCommercialDaily,andCNINF(www.cninfo.com.cn) |
| LocationforpreparingtheCompany'sannualreport | TheDepartmentofCapitalPlanningandOperation |
IV.Registrationchanges
| UnifiedSocialCreditCode | 91440300192189783K |
| ChangesinthemainbusinessoftheCompanysinceitslisting(ifany) | Nochanges |
| Previouschangesincontrollingshareholders(ifany) | Nochanges |
V.Others
TheaccountingfirmhiredbytheCompany
| Name | DaHuaCPAsLLP(SpecialGeneralPartnership) |
| Address | Room1101,Building7,No.16WestFourthRingMiddleRoad,HaidianDistrict,Beijing |
| Name(accountants) | LongJiao,WangDong |
RecommendationagencieshiredbytheCompanytoperformcontinuoussupervisionresponsibilitiesduringthereportingperiodNotapplicableFinancialadvisorshiredbytheCompanytoperformcontinuoussupervisiondutiesduringthereportingperiodNotapplicable
VI.Mainaccountingdataandfinancialindicators
DoestheCompanyneedtoretrospectivelyadjustorrestateaccountingdatafrompreviousyearsNo
| 2023 | 2022 | Changescomparedtothepreviousyearinthisyear | 2021 | |
| Operatingrevenue(RMB) | 4,569,690,002.99 | 4,354,096,880.36 | 4.95% | 5,243,733,540.93 |
| Netprofitattributabletoshareholdersofthelistedcompany(RMB) | 333,178,102.37 | 266,681,451.84 | 24.93% | 387,840,282.95 |
| Netprofitattributabletoshareholdersofthelistedcompanyafterdeductingnonrecurringgainsandlosses(RMB) | 316,806,208.13 | 249,791,455.73 | 26.83% | 369,418,754.83 |
| Netcashflowsfromoperatingactivities | 632,401,487.98 | 476,228,776.52 | 32.79% | 547,249,108.45 |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
(RMB)
| (RMB) | ||||
| Basicearningspershare(RMB/share) | 0.8082 | 0.6398 | 26.32% | 0.9036 |
| Dilutedearningspershare(RMB/share) | 0.8075 | 0.6398 | 26.21% | 0.9036 |
| WeightedaverageROE | 10.28% | 8.68% | 1.60% | 13.39% |
| Attheendof2023 | Attheendof2022 | Changesattheendofthisyearcomparedtotheendofthepreviousyear | Attheendof2021 | |
| Totalassets(RMB) | 4,204,260,897.08 | 4,117,143,911.99 | 2.12% | 4,110,579,952.49 |
| Netassetsattributabletoshareholdersofthelistedcompany(RMB) | 3,333,805,752.19 | 3,136,423,492.15 | 6.29% | 3,013,232,642.53 |
Thelowerofthenetprofitsbeforeandafterdeductingnon-recurringgainsandlossesoftheCompanyinrecentthreeaccountingyearsareallnegative,andtheauditreportoftherecentyearshowsthattheCompany'sgoingconcernisuncertain.NoThelowerofthenetprofitbeforeandafterdeductingnonrecurringgainsandlossesisanegativevalueNoVII.Differencesinaccountingdataunderdomesticandoverseasaccountingstandards
1.DifferencesinnetprofitandnetassetsdisclosedinfinancialreportsunderbothinternationalaccountingstandardsandChineseaccountingstandards
Notapplicable
2.DifferencesinnetprofitandnetassetsinfinancialreportsdisclosedinaccordancewithoverseasaccountingstandardsandChineseaccountingstandards
NotapplicableVIII.QuarterlymainfinancialindicatorsUnit:RMB
| Q1 | Q2 | Q3 | Q4 | |
| Operatingrevenue | 1,200,095,568.76 | 1,164,409,693.80 | 1,162,738,360.51 | 1,042,446,379.92 |
| Netprofitattributabletoshareholdersofthelistedcompany | 103,189,489.23 | 84,205,578.00 | 78,162,925.58 | 67,620,109.56 |
| Netprofitattributabletoshareholdersofthelistedcompanyafterdeductingnonrecurringgainsandlosses | 95,484,229.79 | 81,868,313.87 | 75,522,620.72 | 63,931,043.75 |
| Netcashflowsfromoperatingactivities | 80,169,964.00 | 264,489,879.62 | 134,414,639.49 | 153,327,004.87 |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
IsthereasignificantdifferencebetweentheabovefinancialindicatorsortheirtotalamountandthefinancialindicatorsrelatedtothedisclosedquarterlyandsemiannualreportsoftheCompanyNo
IX.Non-recurringprofitandlossitemsandamounts
Unit:RMB
Items
| Items | Amountfor2023 | Amountfor2022 | Amountfor2021 | Note |
| Noncurrentassetdisposalgainsandlosses(includingtheoffsettingportionoftheprovisionforimpairmentofassets) | 685,868.57 | 91,925.06 | 730,134.87 | |
| Governmentsubsidiesincludedinthecurrentperiod'sprofitandloss(excludingthosethatarecloselyrelatedtothenormalbusinessoperationsoftheCompany,incompliancewithnationalpolicyregulations,entitledtoestablishedstandards,andhaveasustainedimpactonthecompany'sprofitsandlosses). | 8,665,506.85 | 18,648,210.06 | 23,476,186.50 | |
| Reversalofimpairmentprovisionsforaccountsreceivablesubjecttoseparateimpairmenttesting | 7,570,975.54 | 4,389,902.44 | 2,225,653.32 | |
| Othernonoperatingrevenueandexpensesotherthantheaboveitems | 3,910,736.70 | -1,064,064.23 | -3,058,731.52 | |
| Less:incometaximpactamount | 4,461,193.42 | 5,175,977.22 | 4,951,715.05 | |
| Total | 16,371,894.24 | 16,889,996.11 | 18,421,528.12 | -- |
Detailsofotherprofitandlossitemsthatmeettheinterpretationofnon-recurringgainsandlosses:
NotapplicableExplanationondefiningthenon-recurringprofitandlossitemslistedinNo.1ExplanatoryAnnouncementonInformationDisclosureofCompaniesIssuingSecuritiestothePublicasrecurringprofitandlossitemsNotapplicable
Section3DiscussionandAnalysisoftheManagement
I.IndustryconditionsoftheCompanyduringthereportingperiod
In2023,theNationalBureauofStatisticsannouncedaYoYGDPgrowthof5.2%.Drivenbypoliciessuchasexpandingdomesticdemandandpromotingconsumption,coupledwiththegrowthofhouseholdincome,thedrivingforceofconsumptiononeconomicgrowthcontinuestoincrease,graduallybecomingthemaindrivingforceofeconomicgrowth.
ThedomesticwatchconsumptionmarketisstillunderoverallpressureduetothediversionofHongKongandsomeoverseasregions,aswellastherationalizationofconsumerpreferences.Amongthem,themiddleandhigh-endwatchconsumermarketisfacingperiodicfluctuations.AccordingtothedatareleasedbytheSwissWatchAssociation,thecumulativeamountofSwissexportstoChineseMainlandincreasedbyabout8%YoY,andChineseMainlandisstillthesecondlargestconsumermarketofSwisswatches;Theconsumermarketformidtolow-endwatchesisstillsluggish,withfiercecompetitioninsegmentedfields.In
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
anuncertaineconomicenvironment,thedifferentiationofwatchbrandsisfurtherhighlighted.Brandswithhighreputation,differentiatedcharacteristics,andqualityserviceshavestrongerconsumerresilience.TheCompany'smainwatchbusinesscoversmedium,high,andfashionbrands,withmultipletypesofchannelscomplementingeachother.Itcontinuestoattachimportancetoinvestmentinbranddifferentiation,channeloperation,customerservice,andotheraspects.Facedwithmarketfluctuations,themainbusinessmaintainsahealthydevelopmenttrendasawhole.II.MainbusinessesengagedbytheCompanyduringthereportingperiodTheCompany'sestablishmentanddevelopmentoriginatedfromaviationprecisiontechnologyandmaterialtechnology.Adheringtothevaluesof"brandleadership,customerorientation,valuecreation,cooperationandresponsibility,andlearningandinnovation",withthemissionof"inheritingthespiritofservingthecountrybyaviationandcreatingaqualitylife",itfocusesonthewatchindustryandformsacorebusinesslayoutwhereitsself-ownedwatchbrandandtheretailchanneloffamouswatchespromoteeachother.Inaddition,theCompanyactivelyexploresandcultivatesnewbusinessessuchasprecisiontechnologyandsmartwearables,andisinastageofcontinuousdevelopment.TheCompanyisdeeplycommittedtoprofessionalwatchmakingcapacitybuildingandbrandoperation,andhasmultipleself-ownedbrandssuchas"FIYTA"and"EMILECHOORIET",coveringdifferentdimensionssuchasmidtohighend,massprofessional,andfashioncool.Amongthem,thecoreself-ownedbrandpositioningof"FIYTA"is"ahigh-qualityChinesewatchbrandwithaviationandaerospacewatchesasitscharacteristic",adheringtotheconceptof"nation"asthecoreand"trendy"astheform,continuouslycreatingdifferentiatedcharacteristics,andupgradingto"youthfulness,high-end,andmainstream";Atthesametime,itcontinuouslyincreasesinvestmentintechnologicalinnovationfieldssuchasmovementandaviationtechnologyapplications,relyingontheadvantagesofaviationtechnologyandaerospacequality,andcontinuouslyprovideprofessionaltimingwatchesforChina'saerospaceindustry,graduallyestablishingaleadingpositioninthedomesticindustryandexpandingourbrandinfluence.Inordertoseizetheopportunitiesinthedomesticwatchmarketandpromotethelong-termdevelopmentofitsself-ownbrand,theCompanyhasestablishedthe"Harmony"watchretailchannel."Harmony"iscommittedtobecomingthebestcomprehensiveserviceproviderforluxurywatches,andhaslong-termandin-depthcooperationwithnumerouswatchgroupsandbrands.Ithashonedindustry-leadingoperationalmanagementandcustomerservicecapabilities,andhasbecomealeadingprofessionalcommercialbrandinhigh-endchainforluxurywatchesinChina.
Inrecentyears,theCompanyhasadheredtothedevelopmentprincipleof"technologysharingthesameorigin,industrysharingthesameroots,andvaluesharingthesamedirection".Withthestrengthofprecisiontechnologyandindustrialaccumulation,theCompanyhasextendedandexpandeditsprecisiontechnologybusinessandsmartwearablebusiness,andhasnowbeguntotakeshape.
III.Corecompetitivenessanalysis
(I)Brandoperationandmanagementcapabilitiesthroughouttheentireindustrychain
TheCompanyhastheabilitytooperateandmanagetheentireindustrychain,integratingresearchanddevelopment,design,manufacturing,salesandservice.Throughresourceintegrationandbusinesscollaboration,ithascontinuouslystrengthenedthedifferentiationofthecoreself-ownedbrandof"FIYTA".Duringthereportingperiod,the"FIYTA"brand'saerospacecharacteristicproducts,channelsandmarketingactivitiescontinuedtoinnovate,andthebrand'smarketsharegraduallyincreased.
(II)Refinedchanneloperationandmanagementcapabilities
TheCompanyhassaleschannelscoveringthewholecountryandsomeoverseascountriesandregions.Throughitsleadingchanneloperationandmanagementcapabilities,theCompanyhascontinuouslyimprovedtheefficiencyofchanneloperation.Duringthereportingperiod,thechannelstructurecontinuedtobeoptimizedandtheunitproductionofasinglestorecontinuedtoincrease.
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
(III)DigitalcapabilitiestoempowerbusinessTheCompanyhasdigitalretailsystem,CRMsystem,SAPsystem,cloudstores,andotherdigitalplatforms.Throughdeepeningdigitalapplicationsinresearchanddevelopment,design,production,salesandservice,ithasempoweredbusinessdevelopmentandefficiencyimprovement,continuouslystrengthenedprivatedomainoperationsandintegrationofonlineandofflineoperations,enhancedcustomerlifecyclemanagementcapabilities,andcontinuouslyimprovedcoreindicatorssuchaspotentialcustomertransactionsandrepeatpurchasesduringthereportingperiod.(IV)CoretechnologicalcapabilitiesinprecisiontechnologyAsanationalenterprisetechnologycenter,theCompanyhasR&DandproductionplatformsinShenzhenandSwitzerland.Bycontinuouslypromotingbreakthroughsinmovementtechnology,aerospacematerialapplications,andthedevelopmentandapplicationofaerospaceprecisiontimingtechnology,theCompanyacceleratedthelocalizationofkeycomponentssuchasmovements.Duringthereportingperiod,ithasachievedcommerciallaunchofitsself-developedmovements,andthetechnologydevelopmentcompanyhasbeenrecognizedasanational"specialized,refined,unique,andnewsmallgiant"enterprise.(V)ProfessionaltalentteambuildingcapabilitiesTheCompanyhasaprofessionalandstabletalentteam,andcontinuouslyinvestsintalentteamconstructionbasedontheconceptof"valuecreation".Ithascultivatedmultipleoutstandingrepresentativesincorefieldssuchasdesign,R&D,manufacturing,etc.Duringthereportingperiod,LiuZhonghua,aseniorwatchtechnicianoftheCompany,wasawardedthe"NationalMayDayLaborMedal"andthehonorarytitleof"NationalTechnicalExpert";TheCompanyhaswontheOutstandingContributionAwardintheNationalIndustryVocationalSkillsCompetitionLightIndustryCompetitionissuedbytheChinaNationalLightIndustryCouncilforitsaccumulationofinnovativetalentsintechnology.
IV.Mainbusinessanalysis
1.OverviewIn2023,theCompanyadherestotheprincipleofhigh-qualitydevelopment,adherestothebusinessstrategyof"seekingprogresswhilemaintainingstability"and"defendingandcounterattacking",strictlycontrolscostsandexpenses,preventsassetrisks,deeplyexploresbusinesscounterattacks,andorderlycarriesoutvariousbusinessmanagementwork,achievingsteadygrowthinoverallbusinessperformance.Duringthereportingperiod,theCompanyachievedanoperatingrevenueofRMB4,569.69million,ayear-on-yearincreaseof4.95%;thetotalprofitwasRMB437million,ayear-on-yearincreaseof28.86%;thebasicearningspersharewereRMB0.8082,ayear-on-yearincreaseof26.32%;theweightedaverageROEwas10.28%,ayear-on-yearincreaseof1.6percentagepoints.
(I)ContinuouslypromotingtheupgradingofbrandpositioningandcreatingbranddifferentiationDuringthereportingperiod,basedonthepositioningof"ahigh-qualityChinesewatchbrandwithaerospacewatchasitsfeature","FIYTA"hasmadeconcertedefforts,focusedonthecoreproductmatrix,concentratedresourceinvestment,strengthenedIPcooperation,reachedstrategiccooperationwithCNNC,etc.,andsuccessivelylaunchedanumberofaerospace-themedwatchessuchasJ-20,Z-20,Y-20,"Spaceman"tourbillon,spaceyacht,China-Chic"GreenDragonandWhiteTiger".Theaerospaceserieshasexperiencedrapidyear-on-yeargrowthandhasbecomethesecondbest-sellingseriesofthebrand,helpingtoincreasetheaveragecustomerpriceandrejuvenatethebrandimage;theCompanyalsocloselyfollowedhoteventstocarryoutintegratedmarketing,combiningwithmoviecooperationofBorntoFly,ChinaBrandDayandcelebrityactivities,etc.,toenhancethepopularityofnewproductsandpromoteaviationbrandculture.
(II)ContinuouslypromotingchannelstructureoptimizationandleveragingoperationalmanagementadvantagesDuringthereportingperiod,the"FIYTA"brandupgradeditsstoreimagewithafocusonaerospace-themedstores,BrandGallerystoreswithoveralldecoration,andfashioncollectionstores,continuedtooptimizeitschannelstructure,enteredthemainstreamshoppingcentersinfirstandsecondtiercities,andopenedmorethan20aerospace-themedstores,whicheffectivelyimprovedtheaveragecustomerpriceandunitproductionofitsstores;seizingtheopportunityoftaxexemption,theCompanyhas
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
openednewduty-freestoresinHongKong,Macao(thefirstoverseaaerospace-themedstore),Haikouandotherplaces,withgoodsales;theCompanyhasalsoincreasedinvestmentinnewchannelssuchasDouyin,andstrengthenedonlinenewproductdevelopment,self-ownedlivebroadcastmatrixbuildingandmulti-partycooperation.Duringthe"618"shoppingfestival,e-commerceGMVgrewbymorethan80%.Duringthe"Double11"shoppingfestival,itrankedtop1inTmall'sdomesticwatchcategory,withayear-on-yeargrowthofmorethan200%onDouyin.
For"Harmony"WatchRetail,theCompanycontinuedtodeepenitsrefinedoperations,developingmid-to-high-endbrandsandcorehigh-qualitychannelsaroundthefourelementsof"city,brand,businessformatandpartners",andithasopenedandupgradedatotalof48newstores;itpromotedtheintegrationofonlineandofflineoperationtobuilda"1+N+X"HarmonymarketingmatrixonDouyin,andcontinuedtoimprovethecomprehensiveservicecapabilityoffamouswatches.
(III)Continuouslyincreasinginvestmentintechnologicalinnovationandstrengtheningthehardcorestrengthofprecisiontechnology
Duringthereportingperiod,theCompanyincreasedinvestmentinareassuchasmovement-relatedtechnologies,aerospacematerialapplications,andprecisiontimingequipment,achievingthelocalizationofmovementsinsomeproducts;itrealizedmarketapplicationsofaerospacealuminumalloys,Z-20genesteelandothermaterials;italsoprovidedtimingequipmentforastronautsinShenzhouXVIandXVIImissions.
(IV)Continuouslypromotingdigitaltransformationanddeepeningplatformapplications
Duringthereportingperiod,theCompanycontinuedtofocusondigitalmanagementandprivatedomainoperations,andcarriedoutmultipledigitalinfrastructureconstructionandmanagementdigitizationprojects;focusingoncustomerserviceandcustomervalueexploration,itdeepenedtherefinementofmemberoperationsandmadeimprovementincoreindicatorslikepotentialcustomertransactionsandrepeatpurchasesbyexistingcustomers;itpromotedtheoperationofprivatedomaintrafficmatrix,usingminiprogramsasthestartingpointtoincreaseprivatedomaintraffic;throughonlineandofflinejointmarketing,newretailmodeloflivestreamingsalesandothermodels,itachievedstoretrafficattractionandconversion.
(V)Continuouslypromotingnewbusinessexplorationandcultivatingnewgrowthdrivers
Duringthereportingperiod,theCompany'sprecisiontechnologybusinesscontinuedtostrengthenitstechnicalstrengthinmatchingcomplexandhigh-precisionproducts,promotingexpansionintofieldssuchasaerospaceandmedicaldevices,andcontinuingtopushforbreakthroughsinnewcustomers;forsmartwearablebusiness,theCompanycontinuedtoenhanceitstechnologicalresearchanddevelopmentcapabilities,continuouslyimprovedsoftwareandhardwarefunctionsforitsproducts,andfocusedonnewcategories,newbusinesses,andnewchannels.Itsself-ownedbrandADASHERhasachievedrapidgrowth.Year-on-yearchangesinkeyfinancialdataItemsinbalancesheet
Items
| Items | Closingbalance | Openingbalance | Changeratio | Reasonforchange |
| Monetaryfunds | 504,629,153.71 | 313,747,463.64 | 60.84% | Mainlyduetoanincreaseincashflowsfromoperatingactivities. |
| Notesreceivable | 18,268,972.37 | 32,214,912.10 | -43.29% | Mainlyduetotheexpirationofsomecommercialbills. |
| Advancesfromcustomers | 10,267,758.31 | 16,960,128.83 | -39.46% | Mainlyduetoadecreaseinadvancesfromcustomersfromthepropertybusiness. |
| Treasurystock | 78,645,532.23 | 50,759,806.16 | 54.94% | MainlyduetotheimpactofrepurchaseofB-sharesandunlockingofequityincentives. |
| Othercomprehensiveincome | 19,325,335.93 | 5,739,589.89 | 236.70% | Mainlyduetochangesintranslationdifferencesofforeigncurrencystatements. |
Itemsinincomestatementfromthebeginningoftheyeartotheendofthereportingperiod
| Items | Currentamount | Amountincurredinthe | Changeratio | Reasonforchange |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
incurred
| incurred | previousperiod | |||
| Otherincome | 11,435,373.78 | 18,648,210.06 | -38.68% | Mainlyduetoadecreaseingovernmentsubsidiesreceived. |
| Investmentincome | -5,819,479.60 | 3,026,481.59 | -292.29% | Mainlyduetothelossesincurredbytheheldcompaniesthisyear. |
| Creditimpairmentloss | 6,827,575.82 | 4,845,379.45 | 40.91% | Mainlyduetoanincreaseintheamountofoffsettingtheprovisionforbaddebts. |
| Assetsimpairmentloss | 571,980.37 | -37,625,482.96 | 101.52% | Mainlyduetotheimpactofthewrite-backoftheinventorydepreciationprovisionforthewatchbusinessinthepreviousyear. |
| Incometaxexpenses | 103,826,161.94 | 72,440,220.01 | 43.33% | Mainlyduetotheincreaseinincometaxexpensescausedbytheincreaseintotalprofit. |
Itemsinstatementofcashflowsfromthebeginningoftheyeartotheendofthereportingperiod
| Items | Currentamountincurred | Amountincurredinthepreviousperiod | Changeratio | Reasonforchange |
| Refundsoftaxes | 1,937,203.71 | 7,793,409.24 | -75.14% | MainlyduetothelargeamountofVATcreditrefundsreceivedinthepreviousperiod. |
| Cashreceivedfromborrowings | 250,000,000.00 | 845,155,704.29 | -70.42% | Mainlyduetodecreaseintheamountofborrowingsobtainedthisyearcausedbychangesinborrowingmethods. |
| Cashpaidfordebtrepayment | 290,000,000.00 | 794,083,975.00 | -63.48% | Mainlyduetodecreaseintheamountofrepaymentofloansthisyearcausedbychangesinborrowingmethods. |
2.Revenueandcost
(1)Compositionofoperatingrevenue
Unit:RMB
| 2023 | 2022 | Year-on-yearchanges | |||
| Amount | Proportioninoperatingrevenue | Amount | Proportioninoperatingrevenue | ||
| Totaloperatingrevenue | 4,569,690,002.99 | 100% | 4,354,096,880.36 | 100% | 4.95% |
| Byindustry | |||||
| Watchbusiness | 4,267,371,133.82 | 93.38% | 4,044,205,847.74 | 92.88% | 5.52% |
| Precisiontechnologybusiness | 135,950,405.45 | 2.98% | 163,114,009.23 | 3.75% | -16.65% |
| Leasebusiness | 150,361,811.22 | 3.29% | 129,266,616.76 | 2.97% | 16.32% |
| Other | 16,006,652.50 | 0.35% | 17,510,406.63 | 0.40% | -8.59% |
| Byproduct | |||||
| Watchbrandbusiness | 797,083,010.50 | 17.44% | 725,388,535.22 | 16.66% | 9.88% |
| Watchretailservicebusiness | 3,470,288,123.32 | 75.94% | 3,318,817,312.52 | 76.22% | 4.56% |
| Precision | 135,950,405.45 | 2.98% | 163,114,009.23 | 3.75% | -16.65% |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
technologybusiness
| technologybusiness | |||||
| Leasebusiness | 150,361,811.22 | 3.29% | 129,266,616.76 | 2.97% | 16.32% |
| Other | 16,006,652.50 | 0.35% | 17,510,406.63 | 0.40% | -8.59% |
| Byregion | |||||
| SouthChina | 2,111,088,618.01 | 46.20% | 2,142,082,539.80 | 49.20% | -1.45% |
| Northwestregion | 704,042,804.95 | 15.41% | 610,765,393.07 | 14.03% | 15.27% |
| NorthChina | 217,315,524.00 | 4.76% | 231,541,393.72 | 5.32% | -6.14% |
| EastChina | 570,830,728.85 | 12.49% | 572,584,950.61 | 13.15% | -0.31% |
| Northeastregion | 357,656,639.08 | 7.83% | 281,347,840.46 | 6.46% | 27.12% |
| Southwestregion | 608,755,688.10 | 13.31% | 515,774,762.70 | 11.84% | 18.03% |
| Bysalesmodel | |||||
| Directsales | 4,429,357,639.21 | 96.93% | 4,196,696,430.85 | 96.39% | 5.54% |
| Distribution | 140,332,363.78 | 3.07% | 157,400,449.51 | 3.61% | -10.84% |
(2)Dataofindustries,products,regions,andsalesmodelsthataccountformorethan10%oftheCompany'soperatingrevenueorprofitUnit:RMB
| Operatingrevenue | Operatingcosts | Grossprofitmargin | Changesinoperatingrevenuecomparedtothesameperiodlastyear | Changesinoperatingcostscomparedtothesameperiodlastyear | Changesingrossprofitmargincomparedtothesameperiodlastyear | |
| Byindustry | ||||||
| Watchbusiness | 4,267,371,133.82 | 2,745,624,708.72 | 35.66% | 5.52% | 7.39% | -1.12% |
| Leasebusiness | 150,361,811.22 | 44,370,528.09 | 70.49% | 16.32% | -3.62% | 6.10% |
| Byproduct | ||||||
| Watchbrandbusiness | 797,083,010.50 | 263,771,395.75 | 66.91% | 9.88% | 23.41% | -3.63% |
| Watchretailservicebusiness | 3,470,288,123.32 | 2,481,853,312.97 | 28.48% | 4.56% | 5.93% | -0.93% |
| Leasebusiness | 150,361,811.22 | 44,370,528.09 | 70.49% | 16.32% | -3.62% | 6.10% |
| Byregion | ||||||
| SouthChina | 2,111,088,618.01 | 1,337,000,230.43 | 36.67% | -1.45% | 1.30% | -1.72% |
| Northwestregion | 704,042,804.95 | 447,894,168.60 | 36.38% | 15.27% | 14.33% | 0.52% |
| NorthChina | 217,315,524.00 | 131,696,421.10 | 39.40% | -6.14% | -8.37% | 1.47% |
| EastChina | 570,830,728.85 | 367,848,607.72 | 35.56% | -0.31% | -0.58% | 0.18% |
| Northeastregion | 357,656,639.08 | 240,261,877.28 | 32.82% | 27.12% | 25.46% | 0.89% |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
Southwestregion
| Southwestregion | 608,755,688.10 | 380,762,169.68 | 37.45% | 18.03% | 18.18% | -0.08% |
| Bysalesmodel | ||||||
| Directsales | 4,429,357,639.21 | 2,848,424,998.86 | 35.69% | 5.54% | 6.85% | -0.79% |
| Distribution | 140,332,363.78 | 57,038,475.95 | 59.35% | -10.84% | -22.14% | 5.89% |
TheCompany'smainbusinessdataforthepastyearadjustedbasedondataoftheendofthereportingperiod(ifthestatisticaldataoftheCompany'smainbusinessisadjustedduringthereportingperiod)Notapplicable
(3)WhethertheCompany'srevenuefromphysicalsaleswasgreaterthanitsrevenuefromlaborservicesYes
| Industrycategory | Items | Unit | 2023 | 2022 | Year-on-yearchanges |
| Brandwatch | Salesvolume | Piece | 902,955 | 771,846 | 16.99% |
| Productionvolume | Piece | 868,480 | 592,041 | 46.69% | |
| Inventory | Piece | 782,514 | 816,989 | -4.22% |
Explanationforrelevantdatawithanyear-on-yearchangeofmorethan30%Theproductionofbrandwatchesfortheyearincreasedby46.69%year-on-year,mainlyduetothegrowthinproductionofFIYTAandJeepbrands.
(4)PerformancestatusofmajorsalescontractsandmajorprocurementcontractssignedbytheCompanyasofthereportingperiodNotapplicable
(5)CompositionofoperatingcostsIndustryandproductcategoriesUnit:RMB
| Industrycategory | Items | 2023 | 2022 | Year-on-yearchanges | ||
| Amount | Proportioninoperatingcosts | Amount | Proportioninoperatingcosts | |||
| Watchbusiness | Costofpurchasinggoods | 2,481,853,312.97 | 85.42% | 2,342,868,173.39 | 85.54% | 5.93% |
| Rawmaterials | 239,031,937.74 | 8.23% | 191,690,987.81 | 7.00% | 24.70% | |
Unit:RMB
| Productcategory | Items | 2023 | 2022 | Year-on-yearchanges | ||
| Amount | Proportioninoperatingcosts | Amount | Proportioninoperatingcosts | |||
| Watchbrand | Rawmaterials | 239,031,937.74 | 8.23% | 191,690,987.81 | 7.00% | 24.70% |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
business
| business | ||||||
| Watchretailservicebusiness | Costofpurchasinggoods | 2,481,853,312.97 | 85.42% | 2,342,868,173.39 | 85.54% | 5.93% |
(6)WhethertherewereanychangesinthescopeofconsolidationduringthereportingperiodNo
(7)SignificantchangesoradjustmentsintheCompany'sbusiness,productsorservicesduringthereportingperiodNotapplicable
(8)MainsalescustomersandsuppliersMainsalescustomersoftheCompany
| Totalsalesofthetopfivecustomers(RMB) | 838,712,019.86 |
| Theproportionofthetotalsalesofthetopfivecustomerstotheannualtotalsales | 18.35% |
| Theproportionofrelatedpartysalestoannualtotalsalesamongthetopfivecustomers | 0.00% |
InformationontheCompany'stop5customers
| No. | Name | Salesrevenue(RMB) | Proportiontoannualtotalsales |
| 1 | Firstplace | 241,354,458.49 | 5.28% |
| 2 | Secondplace | 152,642,841.47 | 3.34% |
| 3 | Thirdplace | 150,856,332.33 | 3.30% |
| 4 | Fourthplace | 147,569,135.47 | 3.23% |
| 5 | Fifthplace | 146,289,252.10 | 3.20% |
| Total | -- | 838,712,019.86 | 18.35% |
OtherinformationofmaincustomersNotapplicableMainsuppliersoftheCompany
| Totalprocurementamountofthetopfivesuppliers(RMB) | 2,263,893,779.57 |
| Theproportionofthetotalprocurementamountofthetopfivesupplierstothetotalannualprocurementamount | 80.19% |
| Theproportionofrelatedpartyprocurementtothetotalannualprocurementamountamongthetopfivesuppliers | 0.00% |
InformationontheCompany'stop5suppliers
| No. | Name | Procurementamount(RMB) | Proportiontoannualtotalprocurementamount |
| 1 | Firstplace | 981,561,875.51 | 34.77% |
| 2 | Secondplace | 702,988,090.37 | 24.90% |
| 3 | Thirdplace | 220,483,210.73 | 7.81% |
| 4 | Fourthplace | 182,125,111.63 | 6.45% |
| 5 | Fifthplace | 176,735,491.33 | 6.26% |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
Total
| Total | -- | 2,263,893,779.57 | 80.19% |
3.Costs
Unit:RMB
| 2023 | 2022 | Year-on-yearchanges | Significantchanges | |
| Salesexpenses | 924,009,179.32 | 931,832,830.40 | -0.84% | Notapplicable |
| Managementexpenses | 205,359,277.24 | 219,014,508.52 | -6.23% | Notapplicable |
| Financialexpenses | 21,469,772.77 | 21,188,742.11 | 1.33% | Notapplicable |
| R&Dexpenses | 57,802,244.08 | 61,088,585.61 | -5.38% | Notapplicable |
4.R&Dinvestment
| NameofmainR&Dprojects | Purpose | Progress | Intendedgoals | ExpectedimpactonthefuturedevelopmentoftheCompany |
| AseriesofnewproductswithFIYTAcharacteristics | Provideinnovativeproductswithaerospacebrandcharacteristicsforthemarket | Completedthecurrentyear'stask | DevelopmultipleseriesofproductswithFIYTAcharacteristicswithaerospaceasthetheme,andlaunchandsellthemasplanned | Provideinnovativeproducts |
| Newproductinnovationstructuredevelopment | Enhancetheperformanceandmarketcompetitivenessofnewproducts | Completedthecurrentyear'stask | Innovateanddevelopnewproductstructuresbasedontheneedsofthemenewproductdevelopment | Enhancetheperformanceandmarketcompetitivenessofnewproducts |
| Developmentofmechanicalwatchmovementswithbranddifferentiationfeatures | Enhancetheperformanceandmarketcompetitivenessofnewproducts | Completedthecurrentyear'stask | Developmechanicalwatchmovementsandrelatedkeycomponentswithspecialfunctionsandindicationmethodsbasedonbranddifferentiationneeds | Enhancetheperformanceandmarketcompetitivenessofnewproducts |
| Developmentofadedicatedwatchformannedspaceflight | Providespecializedequipmentwatchesformannedspaceflight | Completethetaskfortheyearanddelivermultiplebatchesofproducts | Developanddeliverspecializedequipmentwatchesaccordingtotherequirementsofmannedspacemissions | Providespecializedequipmentwatchesformannedspaceflight |
| Asmartwatchproductwithfunctionssuchasshooting,payment,exerciseandhealth,andmonitoringofhumansigns | Enhancetheperformanceandmarketcompetitivenessofnewproducts | Completedthecurrentyear'stask | Buildaserviceecosystemaroundsmartwearables,deepeneffortsinsmartAI,mobilepayments,transportation,music,andenvironmentalmonitoringfunctions,andbuildrelevantservicesupportplatformsbasedonhumanhealth,sleep,andotherfields;widelyapplyresearchtechnologiestorelatedlistedproducts | Enhancetheperformanceandmarketcompetitivenessofnewproducts |
R&DpersonnelintheCompany
| 2023 | 2022 | Changeratio | |
| Number(person) | 119 | 115 | 3.48% |
| Proportion | 2.81% | 2.66% | 0.15% |
| Educationalstructure | |||
| Undergraduate | 62 | 61 | 1.64% |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
Master
| Master | 18 | 18 | 0.00% |
| Doctor | 2 | 2 | 0.00% |
| Juniorcollegeeducationorbelow | 37 | 34 | 8.82% |
| Agecomposition | |||
| Under30yearsold | 28 | 38 | -26.32% |
| 30-40yearsold | 64 | 51 | 25.49% |
| Over40yearsold | 27 | 26 | 3.85% |
R&DinvestmentoftheCompany
| 2023 | 2022 | Changeratio | |
| Investmentamount(RMB) | 57,802,244.08 | 61,088,585.61 | -5.38% |
| ProportionofR&Dinvestmenttooperatingrevenue | 1.26% | 1.40% | -0.14% |
| CapitalizedamountofR&Dinvestment(RMB) | 0.00 | 0.00 | 0.00% |
| ProportionofcapitalizedR&DinvestmenttoR&Dinvestment | 0.00% | 0.00% | 0.00% |
ReasonsandimpactsofsignificantchangesinthecompositionofR&DpersonnelintheCompanyNotapplicableReasonsforthesignificantchangeintheproportionoftotalR&DinvestmenttooperatingrevenuecomparedtothepreviousyearNotapplicableReasonsforsignificantchangesincapitalizationrateofR&DinvestmentandtheirrationalexplanationNotapplicable
5.Cashflow
Unit:RMB
| Items | 2023 | 2022 | Year-on-yearchanges |
| Sub-totalofcashinflowsfromoperatingactivities | 5,095,999,854.92 | 4,997,924,003.93 | 1.96% |
| Sub-totalofcashoutflowsfromoperatingactivities | 4,463,598,366.94 | 4,521,695,227.41 | -1.28% |
| Netcashflowsfromoperatingactivities | 632,401,487.98 | 476,228,776.52 | 32.79% |
| Sub-totalofcashinflowsfrominvestmentactivities | 1,778,284.57 | 138,721.29 | 1,181.91% |
| Sub-totalofcashoutflowsfrominvestmentactivities | 91,104,776.03 | 114,090,573.97 | -20.15% |
| Netcashflowsfrominvestmentactivities | -89,326,491.46 | -113,951,852.68 | 21.61% |
| Sub-totalofcashinflowsfromfinancingactivities | 250,000,000.00 | 845,155,704.29 | -70.42% |
| Sub-totalofcashoutflowsfromfinancingactivities | 602,163,687.52 | 1,106,081,523.22 | -45.56% |
| Netcashflowsfromfinancingactivities | -352,163,687.52 | -260,925,818.93 | -34.97% |
| Netincreaseincashandcash | 190,890,764.07 | 103,483,652.50 | 84.46% |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
equivalents
ExplanationofthemaininfluencingfactorsforsignificantYoYchangesinrelevantdataNotapplicableExplanationofthesignificantdifferencebetweenthenetcashflowfromtheoperatingactivitiesduringthereportingperiodandthenetprofitofthecurrentyearNotapplicable
V.Non-mainbusinessanalysis
Notapplicable
VI.Analysisofassetandliabilities
1.Significantchangesinassetcomposition
Unit:RMB
equivalentsAttheendof2023
| Attheendof2023 | Atthebeginningof2023 | Changesinproportion | Significantchanges | |||
| Amount | Proportiontototalassets | Amount | Proportiontototalassets | |||
| Monetaryfunds | 504,629,153.71 | 12.00% | 313,747,463.64 | 7.62% | 4.38% | Notapplicable |
| Accountsreceivable | 323,142,761.64 | 7.69% | 305,290,959.68 | 7.42% | 0.27% | Notapplicable |
| Contractassets | 0.00 | 0.00% | 0.00 | 0.00% | 0.00% | Notapplicable |
| Inventory | 2,100,666,175.28 | 49.97% | 2,141,320,373.67 | 52.01% | -2.04% | Notapplicable |
| Investmentrealestate | 360,255,832.14 | 8.57% | 374,979,494.71 | 9.11% | -0.54% | Notapplicable |
| Long-termequityinvestment | 51,862,607.30 | 1.23% | 58,182,086.90 | 1.41% | -0.18% | Notapplicable |
| Fixedassets | 355,785,354.68 | 8.46% | 364,628,765.17 | 8.86% | -0.40% | Notapplicable |
| Constructioninprogress | 0.00 | 0.00% | 0.00 | 0.00% | 0.00% | Notapplicable |
| Assetsofrightofuse | 109,452,481.64 | 2.60% | 110,330,512.03 | 2.68% | -0.08% | Notapplicable |
| Short-termloans | 250,187,763.87 | 5.95% | 290,237,111.11 | 7.05% | -1.10% | Notapplicable |
| Contractliabilities | 12,286,243.62 | 0.29% | 16,844,437.47 | 0.41% | -0.12% | Notapplicable |
| Long-termloans | 0.00 | 0.00% | 0.00 | 0.00% | 0.00% | Notapplicable |
| Leaseliabilities | 43,526,352.52 | 1.04% | 41,642,561.58 | 1.01% | 0.03% | Notapplicable |
HighproportionofoverseasassetsNotapplicable
2.Assetsandliabilitiesmeasuredatfairvalue
Notapplicable
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
3.Restrictedassetrightsasoftheendofthereportingperiod
Notapplicable
VII.Investmentanalysis
1.Overallsituation
Investmentamountduringthereportingperiod(RMB)
| Investmentamountduringthereportingperiod(RMB) | Investmentamountforthesameperiodlastyear(RMB) | Variation |
| 80,000,000.00 | 0.00 | 100.00% |
Note:duringthereportingperiod,theCompanyincreasedthecapitalofRMB80millionforitswholly-ownedsubsidiaryShenzhenFIYTAPrecisionTechnologyCo.,Ltd.PleaserefertotherelevantannouncementsdisclosedbytheCompanyonAugust23,2023andDecember1,2023onCNINFfordetails.
2.Significantequityinvestmentsobtainedduringthereportingperiod
Notapplicable
3.Significantnonequityinvestmentsongoingduringthereportingperiod
Notapplicable
4.Financialassetinvestment
(1)SecuritiesinvestmentNotapplicable
(2)DerivativeinvestmentNotapplicable
5.UsageofraisedfundsNotapplicable
VIII.Significantassetandequitysales
1.SaleofsignificantassetsNotapplicable
2.Saleofsignificantequity
Notapplicable
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
XI.AnalysisofmainholdingandparticipatingcompaniesMainsubsidiariesandparticipatingcompanieswithanetprofitimpactofover10%ontheCompany
Unit:RMB
Name
| Name | Type | Mainbusiness | Registeredcapital | Totalassets | Netassets | Operatingrevenue | Operatingprofit | Netprofit |
| ShenzhenHarmonyWorldWatchCenterCo.,Ltd. | Subsidiary | Purchaseandsalesofwatchesandspareandaccessoryparts,andmaintenanceservices. | 600,000,000 | 2,076,571,866.37 | 1,162,132,954.12 | 3,405,187,991.94 | 322,421,713.57 | 242,290,924.83 |
| FIYTASalesCo.,Ltd. | Subsidiary | Design,development,andsalesofwatchesandspareandaccessoryparts. | 450,000,000 | 450,015,837.37 | 332,583,223.76 | 421,566,166.83 | 3,261,715.88 | -2,469,115.15 |
| ShenzhenFIYTAPrecisionTechnologyCo.,Ltd. | Subsidiary | Manufacturingandproductionofwatchesandspareandaccessoryparts. | 180,000,000 | 368,788,920.21 | 286,495,846.07 | 367,913,873.64 | 44,214,426.68 | 41,929,647.65 |
| ShenzhenFIYTATechnologyDevelopmentCo.,Ltd. | Subsidiary | Productionandprocessingofprecisionspareandaccessoryparts. | 50,000,000 | 199,259,950.58 | 162,613,018.73 | 164,445,123.56 | 12,355,709.45 | 11,968,906.87 |
| FIYTA(HongKong)Co.,Ltd. | Subsidiary | Tradeandinvestmentinwatchesandaccessories. | 137,737,520 | 268,028,322.96 | 252,131,956.46 | 87,223,517.20 | 13,195,774.65 | 10,121,009.50 |
| EmileChourietHorologe(Shenzhen)Co.,Ltd. | Subsidiary | Design,development,andsalesofwatchesandspareandaccessoryparts. | 41,355,200 | 132,484,518.55 | 54,153,791.88 | 79,250,452.61 | 543,615.96 | 310,562.68 |
Acquisitionanddisposalofsubsidiariesduringthereportingperiod
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
NotapplicableExplanationofmaincompanieswithholdingsandsharesNotapplicable
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
X.SituationofstructuredentitiescontrolledbytheCompany
NotapplicableXI.OutlookforthefuturedevelopmentoftheCompany
(I)DevelopmentstrategyandoutlookIn2024,theCompanywillcontinuetoimplementthenationalbrandstrategy,focusonvaluecreationgoals,take"high-qualitydevelopment"astheguidingprinciple,adheretotheprincipleofseekingprogresswhilemaintainingstability,strengthenandexpandthewatchindustry,andimprovecorecompetitiveness;adheretotechnologicalinnovation,acceleratetransformationandupgrading,andenhancecorefunctions.Solidlycarryoutthefollowingtasks:
1.ContinuetopromotebrandpositioningupgradeandincreasemarketshareThe"FIYTA"brandwillfirmlyestablishitsbrandpositioningasahigh-qualityChinesewatchbrandwithaerospacewatchesasitscharacteristic,optimizeitsmarketingandcommunicationsystem,andhighlightthecharacteristicsoftheaviationbrand;Strengthenproductplanningandoperation,integratehardcoretechnology,anduseaerospaceseriestodrivebrandenhancement.
2.ContinuetopromotechannelstructureoptimizationandstrengthenrefinedoperationsThe"FIYTA"brandwillfocusonthreekeystoretypes,aerospace-themedstores,BrandGallerystoreswithoveralldecoration,andfashioncollectionstores,seizeopportunitiesforchanneltransformation,andpromotetheentryofshoppingcenters;deepenthe"dualexcellence"operationsystemofstoresandincreasetheoutputofsinglestores.
"Harmony"watchretailwillfocusondevelopingmidtohighendchannelsandbrands;deeplycultivateexcellentoperationsandimproveservicequality;promotetheintegrateddevelopmentofonlineandoffline.
3.Continuetoincreaseinvestmentintechnologicalinnovationandenhancetechnologicalattributes
TheCompanywillacceleratethelocalizationofmovements,high-endcustomizedmovementssuchastourbillons,andthedevelopmentofindependentkeycomponents,continuouslypromotetheapplicationofaerospacematerialsandtechnology,andcreateahardcorecapabilitythatmatches"aerospacequality".
4.Continuetopromotetransformationandupgrading,andpromotethedevelopmentofnewbusinesses
TheCompanywilladheretotheprincipleof"technologysharingthesameorigin,industrysharingthesameroots,andvaluesharingthesamedirection",acceleratethecultivationprocessofstrategicemergingindustries,andenhancethetechnologicalattributesandscaleofprecisiontechnologyandsmartwearablebusiness.
Theprecisiontechnologybusinesswillfocusonimprovingitsprocesstechnologyandprecisionmanufacturingsolutioncapabilities,strivingforbreakthroughsinindustryexpansionandcustomerdevelopment;Thesmartwearablebusinesswillcontinuetoenhanceitsphysicaloperationcapabilities,achievingscaleandefficiencyimprovement.
(II)Risksandcountermeasures
1.Consumermarketrisk
Currently,thedomesticconsumermarketisinaweakrecoverystate,andresidentshaverationalandcautiousconsumptionpreferences.ThewatchconsumptionindustrywheretheCompanyislocatedisstillunderpressure.Ontheonehand,theCompanywillcontinuetofocusonitsmainbusiness,strengthendifferentiatedproductdevelopment,increasetheproportionofaerospaceseries,strengthenrefinedmanagementcapabilities,improvechanneloperationefficiency,andpromotetheexpansionofbrandmarketshare;Ontheotherhand,theCompanywillacceleratethecultivationofstrategicemergingindustriesandseekbreakthroughsinindustrialtransformationandupgrading.
2.Consumptionoutflowrisk
WiththerecoveryoftravelinHongKongandoverseas,thedomesticconsumermarketisfacingpressuretodiversify.TheCompanywillcontinuetostrengthendigitalconstructionandapplication,enhancecustomerlifecyclemanagementandservicecapabilities,andenhancecustomerstickiness;seizemarketopportunitiesandcontinuetoexploreoverseasandduty-freechannels.
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
XII.Reception,research,communication,interviewsandotheractivitiesduringthereportingperiod
Time
| Time | Address | Method | Typeofobject | Object | Maincontentofthediscussionandthematerialsprovided | Indexofbasicinformationofresearch |
| February8,2023 | ConferenceroomofFIYTATechnologyBuilding | Fieldresearch | Agency | HuachuangSecuritiesCo.,Ltd.,EssenceSecuritiesCo.,Ltd.,QianhaiReinsuranceCo.,Ltd.,ShenzhenQianhaiJinhongCapitalManagementCo.,Ltd.,PingAnPensionInsuranceCo.,Ltd. | TheCompanycommunicatedandexchangedideaswithinvestorsonbusinessoperations,watchbrandmanagement,retailofluxurywatches,anddevelopmentofprecisiontechnologybusiness. | http://irm.cninfo.com.cn/ircs/company/companyDetail?stockcode=000026&orgId=gssz0000026 |
| April3,2023 | https://eseb.cn/1379ifdveEw | Communicationononlineplatforms | Other | Thevastnumberofinvestorsparticipatinginthe2022onlineperformancebriefingoftheCompanythroughremotenetworkparticipation | Inordertoprovideinvestorswithacomprehensiveandin-depthunderstandingoftheCompany'ssituation,theCompanyheldanonlineperformancebriefingfortheyear2022,wherediscussionsandexchangeswereheldwithinvestorsontheCompany'sbusinesssituation,developmentstrategy,watchbrandmanagementbusiness,watchretailbusiness,precisiontechnologybusiness,andsmartwearablebusiness |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
developmentfortheyear2022.
| developmentfortheyear2022. | |||||
| FromMay24toMay25,2023 | ConferenceroomofFIYTATechnologyBuilding | Fieldresearch | Agency | ShenwanHongyuanSecuritiesCo.,Ltd.,NewChinaFundManagementCo.,Ltd.,ChinaAssetManagementCompanyLimited,GuotaiJunanSecuritiesCo.,Ltd.,ChinaLifePensionCompanyLimited,KaiyuanSecuritiesCo.,Ltd.,ShenzhenQianhaiAllianceAssetManagementCo.,Ltd.,andZhongtaiSecuritiesCo.,Ltd. | TheCompanycommunicatedandexchangedideaswithinvestorsregardingbusinessoperations,watchbrandmanagement,retailofluxurywatches,andthedevelopmentofsmartwearablebusinesses. |
| August31,2023 | ConferenceroomofFIYTATechnologyBuilding | Fieldresearch | Agency | CindaSecuritiesCo.,Ltd.andZhongtaiSecuritiesCo.,Ltd. | TheCompanycommunicatedandexchangedideaswithinvestorsregardingbusinessoperations,watchbrandmanagement,andthedevelopmentofluxurywatchretailbusiness. |
| November15,2023 | "PanoramaRoadshow"website,WeChatofficialaccount,APP | Communicationononlineplatforms | Other | Investorswhoparticipatedinthisonlinecollectivereceptiondayeventforinvestors. | TheCompanyhascommunicatedandexchangedideaswithinvestorsregardingtheCompany'sdevelopmentstrategy,businessdevelopmentsituation,etc. |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
Section4CorporateGovernance
I.BasicsituationofcorporategovernanceIn2023,theCompanywillcontinuetostrictlycomplywiththerequirementsoftheCompanyLaw,SecuritiesLaw,andnormativedocumentsrelatedtolistedcompanygovernanceissuedbytheChinaSecuritiesRegulatoryCommission,continuouslyimprovethecorporategovernancestructure,andstrivetostrengthentheconstructionofmodernenterprisesystems,enhancethelevelofstandardizedoperationoftheCompany.Thecompany'sgovernancestatusisnodifferentfromthenormativedocumentsrelatedtolistedcompanygovernanceissuedbytheChinaSecuritiesRegulatoryCommission.
TheCompanyhasstrictlyfollowedtheprovisionsoftheCompanyLaw,otherlaws,regulations,normativedocuments,andtheArticlesofAssociationtoestablishandimprovearelativelystandardizedcorporategovernancestructureandrulesofprocedure.Ithasformedadecision-makingandoperationalmanagementsystemwiththeGeneralMeeting,BoardofDirectors,BoardofSupervisors,andcompanymanagementasthemainstructure,andhasfulfilledallresponsibilitiesstipulatedintheCompanyLawandArticlesofAssociationinaccordancewiththelaw.
TheGeneralMeetingisthepowerorganoftheCompany,whichdecidestheCompany'sbusinesspoliciesandinvestmentplans,reviewsandapprovestheannualfinancialbudgetplan,finalaccountsplan,profitdistributionplan,plantomakeupforlosses,changetheuseofraisedfunds,equityincentiveplansandothermatters,makesresolutionsontheincreaseorreductionoftheCompany'sregisteredcapital,theissuanceofcorporatebondsandotherfinancinginstrumentssuchasbonds,themerger,division,dissolution,liquidationorchangeoftheCompany'sform,formulatesorapprovestheArticlesofAssociationandtheplanforamendingtheArticlesofAssociation,electsandreplacesDirectorsandSupervisorswhoarenotrepresentedbyemployees,anddecidesontheremunerationmattersoftherelevantDirectorsandSupervisors.
TheBoardofDirectorsplaystheroleof"settingstrategies,makingdecisions,andpreventingrisks",isresponsibleforexecutingtheresolutionsoftheGeneralMeeting,conveningtheGeneralMeeting,andreportingtheBoardofDirectors'worktotheGeneralMeeting.WithinthescopeauthorizedbytheGeneralMeeting,theBoardofDirectorscandecideonmatterssuchasexternalinvestment,acquisitionandsaleofassets,assetmortgage,externalguarantees,relatedtransactions,etc.,determinetheestablishmentoftheCompany'sinternalmanagementstructureandbranchoffices,andappointordismisstheCompany'sGeneralManager,SecretaryoftheBoardofDirectors,andotherSeniorOfficers.TheBoardofDirectorsoftheCompanyiscomposedofnineDirectors,includingthreeIndependentDirectors.TheBoardofDirectorshasthreespecializedcommittees:Strategy,AuditandNomination,andCompensationandAssessment.
TheBoardofSupervisorsistheSupervisorybodyoftheCompany,responsibleforreviewingtheCompany'sregularreports,inspectingtheCompany'sfinances,supervisingtheDirectorsandSeniorOfficersoftheCompanytoperformtheirdutiesinaccordancewiththelaw,andmakingrecommendationsfortheremovalofDirectorsandSeniorOfficerswhoviolatelaws,administrativeregulations,theCompany'sArticlesofAssociation,orresolutionsoftheGeneralMeeting.TheBoardofSupervisorsoftheCompanyiscomposedofthreeSupervisors,includingoneEmployeeRepresentativeSupervisor.
Themanagementteamisresponsiblefor"seekingbusiness,implementing,andstrengtheningmanagement".TheGeneralManagerisresponsibletotheBoardofDirectors,presidingovertheCompany'sproductionandoperationmanagementundertheleadershipoftheBoardofDirectors,organizingtheimplementationofresolutionsofthemeetingsoftheBoardofDirectors,reportingtotheBoardofDirectors,organizingtheimplementationoftheCompany'sannualdevelopmentplanandbusinessplan,draftingtheCompany'sinvestmentplan,annualfinancialbudgetplan,finalaccountplan,profitdistributionplan,andlossrecoveryplan,andplantoincreaseordecreasetheregisteredcapitaloftheCompany,etc.Isthereasignificantdifferencebetweentheactualsituationofcorporategovernanceandlaws,administrativeregulations,andtheprovisionsoncorporategovernanceissuedbytheChinaSecuritiesRegulatoryCommissionforlistedcompaniesNo
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
II.TheindependentsituationoftheCompanyrelativetoitscontrollingshareholdersandactualcontrollersinensuringtheCompany'sassets,personnel,finance,institutions,business,etc.
TheCompanyhasstrictlyseparatedfromitscontrollingshareholdersintermsofbusiness,personnel,assets,institutions,finance,etc.TheCompanyhasindependentandcompletebusinessandindependentoperationcapabilities.Intermsofbusiness:theCompanymainlyoperatesintheclockandwatchindustry,withindependentproduction,auxiliaryproduction,supportingfacilities,andprocurementandsalessystems.ThereisnoindustrycompetitionbetweentheCompanyanditscontrollingshareholders.Intermsofpersonnel:theCompanyhasindependentinstitutionsandsoundsystemsinlabor,personnel,andsalarymanagement.ExceptforMr.XiaoYi,Mr.LiPeiyin,Mr.DengJianghu,Mr.GuoGaohang,theDirectorsaswellasMs.HuMin,ChairmanoftheBoardofSupervisors,andMr.YuanTianbo,theSupervisor,whoserveascontrollingshareholders,nootherDirectorsorSeniorOfficershavehelddualpositionsinshareholderunits,andthefinancialstaffhasnotheldanypart-timepositionsinaffiliatedcompanies.
Intermsofassets:theCompanyhasclearpropertyrightswithitscontrollingshareholders,andhasindependentlegalpersonpropertyrightsovertheCompany'sassets.TheCompany'sassetsarecompletelyindependentofitscontrollingshareholders,anditindependentlyownstrademarkssuchas"FIYTA"and"Harmony".
Intermsofinstitutions:TheCompany'sBoardofDirectors,BoardofSupervisors,andotherinternalinstitutionsaresound,operateindependently,andthereisnosubordinaterelationshiporjointofficesituationwiththefunctionaldepartmentsofitscontrollingshareholders.Thecontrollingshareholdershallexerciseitsrightsandassumecorrespondingobligationsinaccordancewiththelaw,andshallnotdirectlyorindirectlyinterferewiththeCompany'soperatingactivitiesbeyondthescopeoftheGeneralMeeting.
Intermsoffinance:theCompanyhasestablishedanindependentfinancedepartment,asoundandindependentfinancialaccountingsystemandfinancialmanagementsystem,openedanindependentbankaccount,andthecontrollingshareholderhasnotinterferedwiththeCompany'sfinancialaccountingactivities.III.Peercompetition
NotapplicableIV.RelevantinformationonAnnualandExtraordinaryGeneralMeetingsheldduringthereportingperiod
1.InformationontheGeneralMeetingsduringthisreportingperiod
Sessions
| Sessions | Type | Investors'participationratio | Date | Disclosuredate | Resolution |
| 2022AnnualGeneralMeeting | AnnualGeneralMeeting | 42.07% | April26,2023 | April27,2023 | AnnouncementontheResolutionsofthe2022AnnualGeneralMeeting2023-024 |
| The1stExtraordinaryGeneralMeetingin2023 | ExtraordinaryGeneralMeeting | 39.13% | May31,2023 | June1,2023 | AnnouncementontheResolutionsofthe1stExtraordinaryGeneralMeetingin2023-031 |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
The2ndExtraordinaryGeneralMeetingin2023
| The2ndExtraordinaryGeneralMeetingin2023 | ExtraordinaryGeneralMeeting | 39.35% | September12,2023 | September13,2023 | AnnouncementontheResolutionsofthe2ndExtraordinaryGeneralMeetingin2023-051 |
| The3rdExtraordinaryGeneralMeetingin2023 | ExtraordinaryGeneralMeeting | 39.36% | December28,2023 | December29,2023 | AnnouncementontheResolutionsofthe3rdExtraordinaryGeneralMeetingin2023-067 |
II.PreferredshareholderswithrestoredvotingrightsrequesttoconveneanExtraordinaryGeneralMeetingNotapplicable
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
V.SituationofDirectors,Supervisors,andSeniorOfficers
1.Basicinformation
Name
| Name | Position | Employmentstatus | Gender | Age | From | To | Initialholdings(shares) | Sharesaddedinthisperiod(shares) | Sharesreducedinthisperiod(shares) | Otherchanges(shares) | Finalholdings(shares) | Reasonsforchangesinshares |
| ZhangXuhua | Chairman | Current | Male | 47 | July1,2021 | September8,2024 | 0 | 0 | 0 | 0 | 0 | |
| XiaoYi | Director | Current | Male | 50 | February24,2021 | September8,2024 | 0 | 0 | 0 | 0 | 0 | |
| LiPeiyin | Director | Current | Male | 38 | February24,2021 | September8,2024 | 0 | 0 | 0 | 0 | 0 | |
| DengJianghu | Director | Current | Male | 40 | September8,2021 | September8,2024 | 0 | 0 | 0 | 0 | 0 | |
| GuoGaohang | Director | Current | Male | 37 | December28,2023 | September8,2024 | 0 | 0 | 0 | 0 | ||
| PanBo | Director | Current | Male | 48 | February24,2021 | September8,2024 | 280,000 | 0 | 0 | -49,950 | 230,050 | TheCompanyrepurchasedandcancelledaportionofitsA-sharerestrictedsharesthatdidnotmeettheperformanceconditionsforliftingrestrictionsatthecompanylevel,resultinginadecreaseof49,950shares. |
| GeneralManager | January15,2021 | September8,2024 | ||||||||||
| WangJianxin | IndependentDirector | Current | Male | 54 | September11,2018 | September8,2024 | 0 | 0 | 0 | 0 | 0 | |
| ZhongHongming | IndependentDirector | Current | Male | 49 | September11,2018 | September8,2024 | 0 | 0 | 0 | 0 | 0 | |
| TangXiaofei | IndependentDirector | Current | Male | 50 | September11,2018 | September8,2024 | 0 | 0 | 0 | 0 | 0 | |
| HuMin | ChairmanoftheBoardofSupervisors | Current | Female | 39 | January4,2024 | September8,2024 | 0 | 0 | 0 | 0 | 0 | |
| Supervisor | December28,2023 | September8,2024 |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
YuanTianbo
| YuanTianbo | Supervisor | Current | Male | 44 | December28,2023 | September8,2024 | 0 | 0 | 0 | 0 | 0 | |
| HuJing | Supervisor | Current | Female | 53 | September7,2021 | September8,2024 | 9,000 | 0 | 0 | 0 | 9,000 | |
| LuWanjun | DeputyGeneralManager | Current | Male | 57 | August8,2014 | September8,2024 | 280,000 | 0 | 70,000 | -49,950 | 160,050 | 1.Reduced70,000sharesduetopersonalfinancialneeds;2.TheCompanyrepurchasedandcancelledaportionofitsA-sharerestrictedsharesthatdidnotmeettheperformanceconditionsforliftingrestrictionsatthecompanylevel,resultinginadecreaseof49,950shares. |
| GeneralCounsel | October25,2021 | September8,2024 | ||||||||||
| LiuXiaoming | DeputyGeneralManager | Current | Male | 53 | October17,2016 | September8,2024 | 280,000 | 0 | 70,000 | -49,950 | 160,050 | 1.Reduced70,000sharesduetopersonalfinancialneeds;2.TheCompanyhascompletedtherepurchaseandcancellationofsomeA-sharerestrictedsharesitholdsthathavenotmettheperformanceconditionsforliftingrestrictionsatthecompanylevel,resultinginadecreaseof49,950shares. |
| LiMing | DeputyGeneralManager | Current | Male | 51 | October17,2016 | September8,2024 | 280,040 | 0 | 70,000 | -49,950 | 160,090 | 1.Reduced70,000sharesduetopersonalfinancialneeds;2.TheCompanyhascompletedtherepurchaseandcancellationofsomeA-sharerestrictedsharesitholdsthathavenotmettheperformanceconditionsforliftingrestrictionsatthecompanylevel,resultinginadecreaseof49,950shares. |
| SongYaoming | ChiefAccountant | Current | Male | 57 | February6,2022 | September8,2024 | 0 | 0 | 0 | 0 | 0 | |
| DeputyGeneralManager | April21,2022 | September8,2024 |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
andSecretaryoftheBoardofDirectors
| andSecretaryoftheBoardofDirectors | ||||||||||||
| TangHaiyuan | DeputyGeneralManager | Current | Male | 51 | September29,2019 | September8,2024 | 210,000 | 0 | 52,500 | -49,950 | 107,550 | 1.Reduced52,500sharesduetopersonalfinancialneeds;2.TheCompanyhascompletedtherepurchaseandcancellationofsomeA-sharerestrictedsharesitholdsthathavenotmettheperformanceconditionsforliftingrestrictionsatthecompanylevel,resultinginadecreaseof49,950shares. |
| XiaoZhanglin | Director | Resigned | Male | 48 | September20,2017 | December11,2023 | 0 | 0 | 0 | 0 | 0 | |
| ZhengQiyuan | ChairmanoftheBoardofSupervisors | Resigned | Male | 61 | March8,2021 | December28,2023 | 0 | 0 | 0 | 0 | 0 | |
| Supervisor | February24,2021 | December28,2023 | ||||||||||
| CaoZhen | Supervisor | Resigned | Female | 53 | February24,2021 | December28,2023 | 0 | 0 | 0 | 0 | 0 | |
| Total | -- | -- | -- | -- | -- | -- | 1,339,040 | 0 | 262,500 | -249,750 | 826,790 | -- |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
IsthereanysituationwhereDirectorsandSupervisorshaveresignedandSeniorOfficershavebeendismissedduringtheirtermofofficeduringthereportingperiodInDecember2023,Mr.XiaoZhanglin,Non-independentDirectoroftheCompany,resignedfromhispositionasaNon-independentDirectorofthe10thBoardofDirectorsandmemberoftheSpecialCommitteeoftheBoardofDirectorsduetoworkreasons.Afterresigning,hewillnotholdanypositionintheCompany;Mr.ZhengQiyuan,Non-employeeRepresentativeSupervisorandChairmanoftheCompany'sBoardofSupervisors,andMs.CaoZhen,Non-employeeRepresentativeSupervisor,resignedfromtheaforementionedpositionsinthe10thBoardofSupervisorsduetoworkreasons.Afterresigning,theywillnotholdanypositionsintheCompany.Duringthereportingperiod,theCompanyhascompletedtheworkoffillingthevacanciesofDirectorsandSupervisorsinaccordancewithrelevantlawsandregulations.ChangesinDirectors,Supervisors,andSeniorOfficersoftheCompany
Name
| Name | Position | Type | Date | Reason |
| GuoGaohang | Director | Elected | December28,2023 | ElectedastheNon-independentDirectorofthe10thBoardofDirectorsatthe16thMeetingofthe10thBoardofDirectorsandthe3rdExtraordinaryGeneralMeetingin2023. |
| HuMin | Supervisor | Elected | December28,2023 | ElectedasaNon-employeeRepresentativeSupervisorofthe10thBoardofSupervisorsatthe14thMeetingofthe10thBoardofSupervisorsandthe3rdExtraordinaryGeneralMeetingin2023. |
| HuMin | ChairmanoftheBoardofSupervisors | Elected | January4,2024 | ElectedastheChairmanofthe10thBoardofSupervisorsatthe15thMeetingofthe10thBoardofSupervisors. |
| YuanTianbo | Supervisor | Elected | December28,2023 | ElectedasaNon-employeeRepresentativeSupervisorofthe10thBoardofSupervisorsatthe14thMeetingofthe10thBoardofSupervisorsandthe3rdExtraordinaryGeneralMeetingin2023. |
| XiaoZhanglin | Director | Resigned | December11,2023 | ResignedfromthepositionofNon-independentDirectorofthe10thBoardofDirectorsduetoworkreasons. |
| ZhengQiyuan | ChairmanoftheBoardofSupervisors,Supervisor | Resigned | December28,2023 | ResignedfromthepositionofSupervisorofthe10thBoardofSupervisorsduetoworkreasons. |
| CaoZhen | Supervisor | Resigned | December28,2023 | ResignedfromthepositionofSupervisorofthe10thBoardofSupervisorsduetoworkreasons. |
2.Employmentsituation
Professionalbackgrounds,mainworkexperiences,andcurrentmainresponsibilitiesofthecurrentDirectors,Supervisors,andSeniorOfficersoftheCompany.Mr.ZhangXuhua,borninMarch1977,holdsaMasterofBusinessAdministrationfromXi'anJiaotongUniversityandanEMBAfromChinaEuropeInternationalBusinessSchool.HeiscurrentlytheChairmanoftheCompany.HeonceservedastheManagingDirector,DeputyGeneralManager,AssistantGeneralManager,GeneralManageroftheShoppingCenterBusinessDepartment,GeneralManagerofChengduBranch,GeneralManageroftheCommodityCenter,GeneralManageroftheDreams-onDepartmentStore,ManageroftheProcurementDepartment,HeadoftheInvestmentPromotionDepartmentofRainbowDigitalCommercialCo.,Ltd.,andemployeeoftheMarketingDepartmentofVankeIndustryCo.,Ltd.Mr.XiaoYi,borninMarch1974,holdsanMBAdegreefromtheSchoolofEconomicsandManagementofBeihangUniversity.HeiscurrentlyaDirectoroftheCompany,HeadofthePartyCommitteeOrganizationDepartment/HumanResourcesDepartmentofAVICInternationalHoldingCorporation,DirectorofTianmaMicroelectronicsCo.,Ltd.,andDirectorofShennanCircuitCo.,
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
Ltd.HeonceservedastheProjectManageroftheTechnologyTransferCenterofBUAAHoldingsCo.,Ltd.,SupervisorBusinessManageroftheManagerDepartment,AssistantDirectoroftheAdministrativeManagementDepartment,DeputyHeadandHeadoftheComprehensiveManagementDepartmentofAVICInternationalHoldingCorporation.Mr.LiPeiyin,borninSeptember1986,isacertifiedpublicaccountantandsenioraccountant.HeholdsaMaster'sDegreeinAccountingfromXiamenUniversityandanMBAfromMissouriStateUniversity.HeiscurrentlyaDirectoroftheCompany,HeadoftheFinanceManagementDepartmentofAVICInternationalHoldingCorporation,DirectorofRainbowDigitalCommercialCo.,Ltd.,DirectorofShennanCircuitCo.,Ltd.,andDirectorofTianmaMicroelectronicsCo.,Ltd.HeonceservedastheBusinessManager,AssistantHead,andDeputyHeadoftheFinanceManagementDepartmentofAVICInternationalHoldingCorporation.Mr.DengJianghu,borninJuly1984,holdsaMaster'sDegreeinBusinessAdministrationfromNortheastNormalUniversity.HeiscurrentlyaDirectoroftheCompany,HeadoftheBusinessManagementDepartmentofAVICInternationalHoldingCorporation,DirectorofAVICSupplyCorporation,DirectorofAVICInternationalHolding(Zhuhai)Corporation,DirectorofTianmaMicroelectronicsCo.,Ltd.,DirectorofShennanCircuitCo.,Ltd.,DirectorofRainbowDigitalCommercialCo.,Ltd.,andDirectorofAVICHuadongOptoelectronicsCo.,Ltd.HeonceservedastheDeputyHeadofthePlanningandDevelopmentDepartmentandtheBusinessManagementDepartmentofAVICInternationalHoldingCorporation(inchargeofwork),DeputyManagerandManagerofthePlanningandOperationsDepartmentoftheCompany,HeadoftheModernServiceIndustryOfficeofAVICShenzhenCo.,Ltd.,SeniorProjectManageroftheBusinessManagementDepartmentofAVICInternationalHoldingCorporation,andSeniorStrategicOperationsandManagementProjectManageroftheStrategicDevelopmentDepartmentofShennanCircuitCo.,Ltd.Mr.GuoGaohang,borninMarch1987,holdsaMaster'sDegreeinMaterialsPhysicsandChemistryfromHarbinInstituteofTechnology.HeiscurrentlyaDirectoroftheCompany,DeputyHeadofthePlanningandDevelopmentDepartmentofAVICInternationalHoldingCorporation(inchargeofwork),DirectorofCastic-SMPMachineryCorp.,Ltd,DirectorofAVICSupplyCorporation,andDirectorofTianmaMicroelectronicsCo.,Ltd.HeonceservedastheAssistantHeadofthePlanningandDevelopmentDepartmentandAssistantHeadoftheBusinessManagementDepartmentofAVICInternationalHoldingCorporation,StrategicOperationsandManagementProjectManagerofthePlanningandOperationsDepartmentofAVICShenzhenCo.,Ltd.,SemiconductorIndustryAnalystandSeniorSemiconductorIndustryAnalystofTrendForce(Shenzhen)Co.,Ltd.,andSealingandTestingProcessDesignEngineeratShenzhenSTSMicroelectronicsCo.,Ltd.Mr.PanBo,borninMarch1976,isanengineer.HeholdsaBachelor'sDegreeinMechanicalandElectricalEngineeringfromBeihangUniversityandanEMBAfromChinaEuropeInternationalBusinessSchool.HeiscurrentlytheManagingDirectoroftheCompany.HeonceservedastheDeputyGeneralManager,SecretaryoftheBoardofDirectors,andAssistantGeneralManageroftheCompany,aswellastheGeneralManager,DeputyGeneralManager,AssistantGeneralManager,ManageroftheSalesDepartment,ManageroftheLogisticsDepartment,andManageroftheAfterSalesDepartmentofFIYTASalesCo.,Ltd.Mr.WangJianxin,borninJune1970,isacertifiedpublicaccountantandholdsaBachelor'sDegreeinAuditingfromZhongnanUniversityofEconomicsandLaw.HeiscurrentlyanIndependentDirectoroftheCompany,partnerofShineWingCPAs(SpecialGeneralPartnership),IndependentDirectorofShenzhenMeHowChuangyiMedicalTechnologyCo.,Ltd.,andIndependentDirectorofFortiorTechnology(Shenzhen)Co.,Ltd.Mr.ZhongHongming,borninJanuary1975,holdsaDoctorateinCivilandCommercialLawfromRenminUniversityofChinaandaPostdoctoralDegreeinCivilandCommercialLawfromSouthwestUniversityofPoliticalScienceandLaw.HeiscurrentlyanIndependentDirectoroftheCompany,anAssociateResearcherattheLawResearchInstituteofSichuanAcademyofSocial
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
Sciences,anIndependentDirectorofChengduShengbangSealsCo.,Ltd.,andalsoservesasaDirectoroftheChinaCommercialLawSociety,aDirectoroftheInstituteofSecuritiesLawofCLS,andtheSecretaryGeneraloftheCommercialLawSocietyofSichuanLawSociety.Mr.TangXiaofei,borninMay1974,holdsaDoctorateinManagementfromSouthwestJiaotongUniversity.HeiscurrentlyanIndependentDirectoroftheCompany,ProfessorandDoctoralSupervisorattheSchoolofBusinessAdministrationatSouthwestUniversityofFinanceandEconomics,DirectoroftheInstituteofUrbanBrandStrategyatSouthwestUniversityofFinanceandEconomics,anoutstandingtalentinthenewcenturyrecognizedbytheMinistryofEducation,DirectoroftheChinaMarketingAssociation,andIndependentDirectorofQianheCondimentandFoodCo.,Ltd.Ms.HuMin,borninMay1985,isaneconomistandholdsaMaster'sDegreeinCivilProcedureLawfromPekingUniversity.SheiscurrentlytheChairmanoftheBoardofSupervisorsoftheCompany,HeadandChiefAuditoroftheAuditandLegalDepartmentofAVICInternationalHoldingCorporation.SheformerlyservedastheDeputyHeadandChiefAuditoroftheAuditandLegalDepartmentofAVICInternationalHoldingCorporation,DeputyHeadoftheAuditandLegalDepartment,GeneralCounselofChinaNationalAero-technologyInternationalEngineeringCorporationandGeneralManageroftheLegalAffairsandDisciplineInspectionAuditDepartment,DeputyGeneralCounselandGeneralManageroftheLegalAffairsandContractManagementDepartment,GeneralManageroftheLegalAffairsandContractManagementandAuditSupervisionDepartment,andDeputyGeneralManageroftheLegalAffairsandContractManagementDepartment,LegalAdvisoroftheLegalAffairsDepartmentofAVICInternationalHoldingCorporation.Mr.YuanTianbo,borninOctober1980,isaneconomistandholdsaMaster'sDegreeinManagementScienceandEngineeringfromNorthwesternPolytechnicalUniversity.HeiscurrentlyaSupervisoroftheCompany,andDeputyHeadoftheDepartmentofDisciplineInspectionofAVICInternationalHoldingCorporation(inchargeofwork).HeformerlyservedastheDeputyGeneralManager(inchargeofwork)andAssistantGeneralManagerofOrientalJadeCo.,Ltd.,GeneralManagerandDeputyGeneralManagerofQinghaiAVIC,DirectoroftheAdministrativeandHumanResourcesDepartmentandDirectoroftheExpansionDepartmentofOrientalJadeCo.,Ltd.,OrganizationandPerformanceManagementoftheHumanResourcesDepartmentofAVICInternationalHoldingCorporation,andRecruitmentManagementoftheHumanResourcesDepartmentofAVICShenzhenCo.,Ltd.Ms.HuJing,borninSeptember1971,isanaccountantandholdsaBachelor'sDegreeinAccountingfromJiangxiUniversityofFinanceandEconomics.SheiscurrentlyanEmployeeRepresentativeSupervisoroftheCompanyandSeniorTaxManageroftheFinanceDepartment.SheformerlyservedastheSeniorBusinessManageroftheAuditDepartment,TaxSupervisoroftheFinanceDepartment,andFundManageroftheCompany.Mr.LuWanjun,borninFebruary1967,isanaccountantandholdsanEMBAdegreefromChinaEuropeInternationalBusinessSchool.HeiscurrentlyaDeputyGeneralManagerandGeneralCounseloftheCompany.HeformerlyservedastheAssistantGeneralManageroftheCompany,ExecutiveDeputyGeneralManager,DeputyGeneralManager,AssistantGeneralManager,andManageroftheFinanceDepartmentofShenzhenHarmonyWorldWatchCenterCo.,Ltd.Mr.LiuXiaoming,borninJuly1971,isanengineerandeconomist,andholdsaBachelor'sDegreeinManufacturingEngineeringfromBeihangUniversityandanEMBAdegreefromChinaEuropeInternationalBusinessSchool.HeiscurrentlyaDeputyGeneralManageroftheCompany.HeformerlyservedastheGeneralManagerAssistantoftheCompany,DeputyGeneralManagerandAssistantGeneralManagerofShenzhenHarmonyWorldWatchCenterCo.,Ltd.Mr.LiMing,borninSeptember1973,holdsaBachelor'sDegreeinMarketingfromZhongnanUniversityofEconomicsandLawandanEMBAdegreefromChinaEuropeInternationalBusinessSchool.HeiscurrentlyaDeputyGeneralManageroftheCompany.HeformerlyservedastheAssistantGeneralManagerandHRDirectoroftheCompany,DeputyGeneralManager,AssistantGeneralManagerandManagerofHumanResourcesDepartmentofShenzhenHarmonyWorldWatchCenterCo.,Ltd.;
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
HRDirectorandGeneralManagerofMarketingCenterofChinaNetcomShenzhenCompany;KeyAccountManagerandMarketingPlanningManagerofChinaTelecomShenzhenCompany.Mr.SongYaoming,borninJuly1967,isasenioraccountant,andholdsaMaster'sDegreeinEconomicsfromShaanxiInstituteofFinance&EconomicsandanEMBAdegreefromChinaEuropeInternationalBusinessSchool.HeiscurrentlytheChiefAccountant,DeputyGeneralManager,andSecretaryoftheBoardofDirectorsoftheCompany.HeformerlyservedastheDeputyGeneralManagerandChiefAccountantofRainbowDigitalCommercialCo.,Ltd.,DirectorofShenzhenAoxuanInvestmentCo.,Ltd.,DirectorofShenzhenAoerInvestmentDevelopmentCo.,Ltd.,andDeputyManagerandAccountantoftheFinanceDepartmentofShenyangFAWJinbeiAutomobileCo.,Ltd.Mr.TangHaiyuan,borninFebruary1973,isaseniorengineer,andholdsaBachelor'sDegreeinPlasticMoldingTechnologyandEquipmentfromHefeiUniversityofTechnologyandanEMBAdegreefromChinaEuropeInternationalBusinessSchool.HeiscurrentlyaDeputyGeneralManageroftheCompany.HeformerlyservedastheGeneralManager,DeputyGeneralManager,AssistantGeneralManager,ManageroftheQualityDepartment,ManagerandDeputyManageroftheEngineeringTechnologyDepartmentofShenzhenFIYTAPrecisionTimingManufacturingCo.,Ltd.,aswellastheAssistantTechnicalGeneralManagerandManagerofTechnicalDepartmentofShenzhenFIYTATechnologyDevelopmentCo.,Ltd.Employmentinshareholderunits
Nameofemployee
| Nameofemployee | Nameofshareholderunits | Positionheldinshareholderunits | From | To | Whetherornotremunerationallowanceisreceivedfromshareholderunits |
| XiaoYi | AVICInternationalHoldingCorporation | HeadofPartyCommitteeOrganizationDepartment/HumanResourcesDepartment | January18,2021 | Yes | |
| LiPeiyin | AVICInternationalHoldingCorporation | HeadoftheFinanceManagementDepartment | February28,2022 | Yes | |
| DengJianghu | AVICInternationalHoldingCorporation | HeadoftheBusinessManagementDepartment | August28,2023 | Yes | |
| GuoGaohang | AVICInternationalHoldingCorporation | DeputyHeadofthePlanningandDevelopmentDepartment(inchargeofwork) | October9,2023 | Yes | |
| HuMin | AVICInternationalHoldingCorporation | HeadoftheAuditandLegalDepartment | August28,2023 | Yes | |
| HuMin | AVICInternationalHoldingCorporation | ChiefAuditor | June26,2023 | ||
| YuanTianbo | AVICInternationalHoldingCorporation | DeputyHeadoftheDisciplineInspectionDepartment(inchargeofwork) | May29,2023 | Yes | |
| Explanationofemploymentin | Notapplicable | ||||
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
shareholderunits
Employmentinotherunits
shareholderunitsNameofemployee
| Nameofemployee | Nameofotherunits | Positionheldinotherunits | From | To | Whetherornotremunerationallowanceisreceivedfromotherunits |
| XiaoYi | TianmaMicroelectronicsCo.,Ltd. | Director | February26,2021 | No | |
| ShennanCircuitCo.,Ltd. | Director | April6,2021 | No | ||
| LiPeiyin | RainbowDigitalCommercialCo.,Ltd. | Director | February24,2021 | No | |
| ShennanCircuitCo.,Ltd. | Director | April6,2021 | No | ||
| TianmaMicroelectronicsCo.,Ltd. | Director | July8,2022 | No | ||
| DengJianghu | AVICSupplyCorporation | Director | July19,2021 | No | |
| AVICInternationalHolding(Zhuhai)Corporation | Director | December27,2021 | No | ||
| TianmaMicroelectronicsCo.,Ltd. | Director | November29,2021 | No | ||
| ShennanCircuitCo.,Ltd. | Director | April7,2022 | No | ||
| RainbowDigitalCommercialCo.,Ltd. | Director | September9,2022 | No | ||
| AVICHuadongOptoelectronicsCo.,Ltd. | Director | November27,2023 | No | ||
| GuoGaohang | Castic-SMPMachineryCorp.,Ltd | Director | June28,2021 | No | |
| AVICSupplyCorporation | Director | November27,2023 | No | ||
| TianmaMicroelectronicsCo.,Ltd. | Director | March6,2024 | No | ||
| WangJianxin | ShineWingCPAs(SpecialGeneralPartnership) | Partner | December1,2006 | Yes | |
| ShenzhenMeHowChuangyiMedicalTechnologyCo.,Ltd. | IndependentDirector | February23,2023 | Yes | ||
| FortiorTechnology(Shenzhen)Co.,Ltd. | IndependentDirector | June16,2020 | Yes | ||
| ZhongHongming | LawResearchInstituteofSichuanAcademyofSocialSciences | AssociateResearcher | November24,2017 | Yes | |
| ChengduShengbangSealsCo.,Ltd. | IndependentDirector | November17,2022 | Yes | ||
| TangXiaofei | SchoolofBusinessAdministrationatSouthwestUniversityofFinanceandEconomics | ProfessorandDoctoralSupervisor | September1,2008 | Yes | |
| QianheCondimentandFoodCo.,Ltd. | IndependentDirector | November30,2022 | Yes | ||
| Explanationofemploymentinotherunits | Notapplicable | ||||
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
PenaltiesimposedbysecuritiesregulatoryauthoritiesinthepastthreeyearsontheCompany'scurrentanddepartingDirectors,Supervisors,andSeniorOfficersduringthereportingperiodNotapplicable
3.RemunerationofDirectors,Supervisors,andSeniorOfficersDecision-makingprocess,determinationbasis,andactualpaymentofremunerationforDirectors,Supervisors,andSeniorOfficers
TheremunerationofinternalDirectorsandSeniorOfficersoftheCompanyisbasedonanannualsalarysystem,withanannualsalarystructureofbasicannualsalaryandperformance-basedannualsalary.TheremunerationofinternalDirectorsisimplementedafterapprovalbytheGeneralMeeting,andtheremunerationofSeniorOfficersisimplementedafterapprovalbytheBoardofDirectors.TheassessmentofSeniorOfficersiscarriedoutinaccordancewiththeManagementMeasuresforPerformanceAssessmentofManagementMembersandtheManagementMeasuresforRemunerationofManagementMembersoftheCompany.
ExceptforIndependentDirectorswhoreceiveallowancesintheCompany,otherexternalDirectorsandNon-employeeRepresentativeSupervisorsdonotreceiveremunerationintheCompany.TheremunerationofEmployeeRepresentativeSupervisorsshallbeimplementedinaccordancewiththeCompany'semployeeremunerationmanagementmeasures.RemunerationofDirectors,Supervisors,andSeniorOfficersduringthereportingperiodUnit:RMBtenthousand
Name
| Name | Position | Gender | Age | Employmentstatus | Totalpre-taxremunerationreceivedfromtheCompany | WhethertoreceiveremunerationfromrelatedpartiesoftheCompany |
| ZhangXuhua | Chairman | Male | 47 | Current | 198.35 | No |
| XiaoYi | Director | Male | 50 | Current | Yes | |
| LiPeiyin | Director | Male | 38 | Current | Yes | |
| DengJianghu | Director | Male | 40 | Current | Yes | |
| GuoGaohang | Director | Male | 37 | Current | Yes | |
| PanBo | ManagingDirector | Male | 48 | Current | 187.49 | No |
| WangJianxin | IndependentDirector | Male | 54 | Current | 9 | No |
| ZhongHongming | IndependentDirector | Male | 49 | Current | 9 | No |
| TangXiaofei | IndependentDirector | Male | 50 | Current | 9 | No |
| HuMin | ChairmanoftheBoardofSupervisors | Female | 39 | Current | Yes | |
| YuanTianbo | Supervisor | Male | 44 | Current | Yes | |
| HuJing | Supervisor | Female | 53 | Current | 37.46 | No |
| LuWanjun | DeputyGeneralManagerandGeneralCounsel | Male | 57 | Current | 185.79 | No |
| LiuXiaoming | DeputyGeneralManager | Male | 53 | Current | 229.61 | No |
| LiMing | DeputyGeneralManager | Male | 51 | Current | 180.31 | No |
| SongYaoming | ChiefAccountant,DeputyGeneralManagerandSecretaryoftheBoardofDirectors | Male | 57 | Current | 185.82 | No |
| TangHaiyuan | DeputyGeneral | Male | 51 | Current | 191.42 | No |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
Manager
| Manager | ||||||
| XiaoZhanglin | Director | Male | 48 | Resigned | Yes | |
| ZhengQiyuan | ChairmanoftheBoardofSupervisors | Male | 61 | Resigned | Yes | |
| CaoZhen | Supervisor | Female | 53 | Resigned | Yes | |
| Total | -- | -- | -- | -- | 1,423.25 | -- |
VI.PerformanceofdutiesbyDirectorsduringthereportingperiod
1.SituationoftheBoardofDirectorsduringthisreportingperiod
| Sessions | Date | Disclosuredate | Resolution |
| The11thMeetingofthe10thBoardofDirectors | March16,2023 | March18,2023 | PleaserefertotheAnnouncementontheResolutionsofthe11thMeetingofthe10thBoardofDirectors2023-007disclosedbytheCompanyonCNINF. |
| The12thMeetingofthe10thBoardofDirectors | April21,2023 | April25,2023 | ThemeetingconsideredandapprovedtheCompany's2023Q1Report. |
| The13thMeetingofthe10thBoardofDirectors | May15,2023 | May16,2023 | PleaserefertotheAnnouncementonthe13thMeetingofthe10thBoardofDirectors2023-025disclosedbytheCompanyonCNINF. |
| The14thMeetingofthe10thBoardofDirectors | August21,2023 | August23,2023 | PleaserefertotheAnnouncementonthe14thMeetingofthe10thBoardofDirectors2023-044disclosedbytheCompanyonCNINF. |
| The15thMeetingofthe10thBoardofDirectors | October19,2023 | October21,2023 | ThemeetingconsideredandapprovedtheCompany's2023Q3Report. |
| The16thMeetingofthe10thBoardofDirectors | December11,2023 | December13,2023 | PleaserefertotheAnnouncementontheResolutionsofthe16thMeetingofthe10thBoardofDirectors2023-062disclosedbytheCompanyonJCNINF. |
2.AttendanceofDirectorsatthemeetingsoftheBoardofDirectorsandtheGeneralMeetings
| AttendanceofDirectorsatthemeetingsoftheBoardofDirectorsandtheGeneralMeetings | |||||||
| NameofDirector | NumberofattendancesrequiredatthemeetingsoftheBoardofDirectorsduringthisreportingperiod | Numberofon-siteattendancesatthemeetingsoftheBoardofDirectors | NumberofattendancesatthemeetingsoftheBoardofDirectorsthroughcommunication | NumberofentrustedattendancesatthemeetingsoftheBoardofDirectors | NumberofabsencesfromthemeetingsoftheBoardofDirectors | HaveyounotpersonallyattendedthemeetingsoftheBoardofDirectorsfortwoconsecutivetimes | NumberofattendancesattheGeneralMeetings |
| ZhangXuhua | 6 | 2 | 4 | 0 | 0 | No | 4 |
| XiaoYi | 6 | 1 | 5 | 0 | 0 | No | 0 |
| LiPeiyin | 6 | 1 | 5 | 0 | 0 | No | 0 |
| DengJianghu | 6 | 0 | 6 | 0 | 0 | No | 0 |
| GuoGaohang | 0 | 0 | 0 | 0 | 0 | No | 0 |
| PanBo | 6 | 2 | 4 | 0 | 0 | No | 1 |
| WangJianxin | 6 | 2 | 4 | 0 | 0 | No | 4 |
| Zhong | 6 | 1 | 5 | 0 | 0 | No | 0 |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
Hongming
| Hongming | |||||||
| TangXiaofei | 6 | 1 | 5 | 0 | 0 | No | 0 |
| XiaoZhanglin(Resigned) | 5 | 0 | 5 | 0 | 0 | No | 0 |
ExplanationofnotattendingthemeetingsoftheBoardofDirectorsfortwoconsecutivetimesNotapplicable
3.ObjectionsraisedbyDirectorsregardingmattersrelatedtotheCompany
WhethertheDirectorshaveraisedanyobjectionsregardingmattersrelatedtotheCompanyNo
4.OtherexplanationsontheperformanceofdutiesbyDirectors
WhethertheDirector'ssuggestionstotheCompanyhavebeenadoptedYesExplanationonwhethertheDirector'ssuggestionstotheCompanyhavebeenadoptedornot
Duringthereportingperiod,theBoardofDirectorsfullyplayedtheroleof"settingstrategies,makingdecisions,andpreventingrisks",andtheCompany'sDirectorsstrictlyfollowedtheprovisionsoflawsandregulationssuchastheCompanyLawandtheCodeofGovernanceforListedCompanies,aswellastheArticlesofAssociation,attendedmeetingsoftheBoardofDirectorsontime,diligentlyandresponsiblyperformedtheirdutiesandexercisedrightsasDirectors,andthoroughlyconsidered,providedsuggestionson,andvotedonresolutionsoftheBoardofDirectors.TheCompanyfullyconsideredandadoptstheconstructiveopinionsproposedbytheDirectorsonthedevelopmentstrategy,businessdecision-making,internalcontrolmanagement,andotheraspects.
VII.ThesituationofspecialcommitteesundertheBoardofDirectorsduringthereportingperiod
| Name | Members | Numberofmeetingsheld | Date | Meetingcontent | Importantopinionsandsuggestionsputforward | Otherperformanceofduties | Specificsituationofobjectionmatters(ifany) |
| StrategicCommittee | Chairman:ZhangXuhuaMembers:DengJianghu,PanBo,TangXiaofei,XiaoZhanglin(resigned) | 1 | March16,2023 | Itconsideredandapprovedthe2022WorkReportoftheBoardofDirectors. | Allmembersstrictlyfollowedrelevantlawsandregulationsintheirwork,diligentlyandresponsiblycommunicatedanddiscussedthecontentoftheproposals,and |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
unanimouslypassedtherelevantproposals.
| unanimouslypassedtherelevantproposals. | |||||
| AuditCommittee | Chairman:WangJianxinMembers:LiPeiyin,ZhongHongming,TangXiaofei,XiaoZhanglin(resigned) | 4 | March16,2023 | ItconsideredandapprovedtheCompany's2022annualreport,2022profitdistribution,2022internalcontrolandself-assessmentreport,2022internalauditworkreport,theplantorepurchasesomedomesticallylistedforeignshares(B-shares)andotherproposals. | Allmembersofthecommitteestrictlyfollowedrelevantlawsandregulationsintheirwork,diligentlyandresponsiblycommunicatedanddiscussedthecontentsoftheCompany'sinternalandexternalauditwork,internalcontrolmanagement,andsharerepurchaseplan,andunanimouslyapprovedtherelevantproposals. |
| April21,2023 | DeliberatedandapprovedtheCompany's2023Q1Reportandthe2023Q1AuditWorkReportoftheDisciplineInspection,Audit,andLegalDepartment. | ||||
| August21,2023 | DeliberatedandapprovedtheCompany's2023Semi-annualReportandabstract,capitalincreasetowholly-ownedsubsidiaries,andthe2023Q2AuditWorkReport |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
oftheDisciplineInspection,Audit,andLegalDepartment.
| oftheDisciplineInspection,Audit,andLegalDepartment. | |||||
| October19,2023 | DeliberatedandapprovedtheCompany'sQ3Reportandthe2023Q3AuditWorkReport. | ||||
| Nomination,CompensationandAssessmentCommittee | Chairman:ZhongHongmingMembers:XiaoYi,WangJianxin,TangXiaofei,XiaoZhanglin(resigned) | 4 | March16,2023 | DeliberatedandapprovedtheproposalontheremunerationofDirectorsandSeniorOfficersfor2022,aswellastherepurchaseandcancellationofsomerestrictedshares | Allmembersofthecommitteestrictlyfollowedrelevantlawsandregulationsintheirwork,diligentlyandresponsiblyreviewedandapprovedtheremunerationplanforDirectorsandSeniorOfficers,theimplementationoftheCompany'srestrictedshareincentivescheme,andthequalificationsofcandidatesforNon-independentDirectors.Theyfullycommunicatedanddiscussedthecontentoftheproposal,andunanimouslypassedtherelevantproposals. |
| May15,2023 | Deliberatedandapprovedtheproposalonrepurchasingandcancelingsomerestrictedshares | ||||
| August21,2023 | Deliberatedandapprovedtheproposalonrepurchasingandcancelingsomerestrictedshares | ||||
| Chairman:ZhongHongmingMembers:XiaoYi,WangJianxin,TangXiaofei | December11,2023 | Deliberatedandapprovedtheproposalonchangeinnon-independentDirectors |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
VIII.WorkoftheBoardofSupervisors
Duringthereportingperiod,theBoardofSupervisorsdiscoveredanyrisksintheCompany'ssupervisoryactivitiesNoIX.Employees
1.Number,professionalcompositionandeducationbackground
Numberofcurrentemployeesoftheparentcompanyattheendofthereportingperiod(person)
| Numberofcurrentemployeesoftheparentcompanyattheendofthereportingperiod(person) | 200 |
| Numberofemployeesinmajorsubsidiariesattheendofthereportingperiod(person) | 4,038 |
| Totalnumberofin-serviceemployeesattheendofthereportingperiod(person) | 4,238 |
| Totalnumberofemployeesreceivingsalaryinthecurrentperiod(person) | 4,238 |
| Numberofretiredemployeeswhoseexpensesneedtobebornebytheparentcompanyandmajorsubsidiaries(person) | 0 |
| Professionalcomposition | |
| Professionalcompositioncategory | Numberofprofessionalmembers(person) |
| Productionpersonnel | 338 |
| Salespersonnel | 2,964 |
| Technicalpersonnel | 333 |
| Financialpersonnel | 114 |
| Administrativepersonnel | 489 |
| Total | 4,238 |
| Educationbackground | |
| Educationbackground | Quantity(person) |
| Master'sdegreeorabove | 77 |
| Undergraduate | 791 |
| Juniorcollege | 1,309 |
| Belowjuniorcollege | 2,061 |
| Total | 4,238 |
2.Remuneration
Basedonbusinessdevelopmentplanningandmanagementpractices,theCompanyadherestothecoreconceptofvaluecreation,followstheprinciplesofhierarchicalmanagement,budgetregulation,performanceorientation,efficiencypriority,fairness,positiveincentivesandlong-termfocustoformulateremunerationpolicies.Continuouslyestablishandimproveasalarysystembasedonannualsalaryassessmentformiddleandseniormanagementpersonnel,performance-basedsalarysystemforemployeepositions,andajointproductionandefficiencyremunerationsystemforproductionandoperationpersonnel,andimplementthefollowingmanagementmeasures:
Managementoftotalsalary:Basedontheannualbusinessplan,conductanannualremunerationbudget,comprehensivelyconsiderfactorssuchasmarketsalarylevel,organizationalefficiencyimprovement,andtalentteamadjustmenttoregulatethetotalsalary,andachievemanagementgoalsofbenefitorientation,positiveincentives,classifiedmanagementandadjustmentofdistribution;
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
Classifiedandhierarchicalmanagement:Establishadifferentiatedjobranksystembasedonjobcharacteristics,andestablishastandardizedremunerationframeworkthatmatchesmarketconditionsonthisbasis;Valueorientation,co-creationandsharing:TheCompanydesignsanincentivesystembasedonaclosed-loopvaluechainofvaluecreation,evaluation,anddistribution.Byestablishingavalueevaluationsystemandreal-timeincentivesystemthatisconsistentwithstrategicdevelopmentgoals,ithasformedanincentivemechanismwhereremunerationfollowstheCompany'sbenefitsandindividualperformance,withincrementalremunerationtiltedtowardscorekeypositionsandoutstandingtalents.
3.Trainingplan
Talentsaretheprimaryproductiveforceforthedevelopmentofacompany.TheCompanyattachesgreatimportancetothedevelopmentandtrainingoftalents.Inordertocultivateahigh-qualitytalentteam,supporttheimplementationofthecompany'sstrategy,andcreateanorganizationallearningatmosphere,theCompanyhasformulatedtheEmployeeTrainingManagementSystem,establishedacomprehensiveandsystematicemployeetrainingsystemandtrainingmanagementsystem,andbuiltanonlinelearningplatform+offlinetrainingcentertoprovidecontinuousgrowthspaceforemployees.Fordetails,pleaserefertoChapterVTrainingDevelopmentonEmployeeintheCompany'sEnvironmental,Social,andGovernance(ESG)Report2023disclosedonCNINFonMarch14,2024.
4.Laboroutsourcing
Notapplicable
X.TheCompany'sprofitdistributionandconversionofcapitalreservesintosharecapital
Thedevelopment,implementation,oradjustmentofprofitdistributionpolicies,especiallyforcashdividendpolicies,duringthereportingperiod
The2022profitdistributionplanoftheCompanyhasbeendeliberatedandapprovedatthe11thMeetingofthe10thBoardofDirectorsheldonMarch16,2023,andthe2022AnnualGeneralMeetingheldonApril26,2023.TheresolutionistodistributeacashdividendofRMB2.50(includingtax)toallshareholdersforevery10shares,basedonthetotalnumberofsharesontheequityregistrationdateoftheprofitdistributionplan,afterdeductingthenumberofsharesinthespecialrepurchasesecuritiesaccount.AtotalofcashdividendsofnomorethanRMB104,406,990.00willbedistributed,with0bonussharestobeissuedandwithoutcapitalincreasethroughconversionofprovidentfund.
Duringtheperiodfromdisclosuretoimplementationofthisequitydistributionplan,theCompanyrepurchasedatotalof996,872B-sharesthroughaspecialrepurchasesecuritiesaccount.TheCompanydistributescashdividendsofRMB2.50(includingtax)toallshareholdersforevery10sharesbasedon416,631,088sharesofdistributablesharecapital(totalsharecapitalof417,627,960sharesontheequityregistrationdate,excluding996,872repurchasedB-shares).TheactualtotalamountofcashdividendstobedistributedisRMB104,157,772.00.
TheprofitdistributionplanwasimplementedonJune19,2023.Pleaserefertothe2022EquityDistributionImplementationAnnouncement2023-035disclosedbytheCompanyonCNINF.
SpecialExplanationonCashDividendPolicy
| SpecialExplanationonCashDividendPolicy | |
| WhetheritcomplieswiththeArticlesofAssociationortheresolutionsoftheGeneralMeeting: | Yes |
| Arethedividendstandardsandratiosclearandexplicit: | Yes |
| Aretherelevantdecision-makingprocessesandmechanismscomplete | Yes |
| WhetherIndependentDirectorshavefulfilledtheirdutiesandplayedtheirduerole: | Yes |
| IftheCompanydoesnotdistributecashdividends,specificreasons,aswellasthemeasurestobetakentoenhanceinvestorreturnsshouldbedisclosed: | Notapplicable |
| Whethersmallandmedium-sizedshareholdershavesufficientopportunitiestoexpresstheiropinionsanddemands,andhavetheirlegitimaterightsandinterestsbeenfullyprotected: | Yes |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
Whethertheconditionsandproceduresforadjustingorchangingcashdividendpoliciesarecompliantandtransparent:
| Whethertheconditionsandproceduresforadjustingorchangingcashdividendpoliciesarecompliantandtransparent: | Notapplicable |
Duringthereportingperiod,theCompanywasprofitableandtheparentcompanyhadapositiveprofitavailableforshareholderdistribution,butnocashdividenddistributionplanwasproposedNotapplicableProfitdistributionandconversionofcapitalreservetosharecapitalduringthisreportingperiod
| Numberofdividendsharesper10shares(shares) | 0 |
| Dividendpayoutper10shares(RMB)(includingtax) | 4.00 |
| Distributionplan'ssharecapitalbase(shares) | Thetotalnumberofsharecapitalontheequityregistrationdatewhentheprofitdistributionplanisimplementedinthefuture(excludingsharesinthespecialrepurchasesecuritiesaccount) |
| Cashdividendamount(RMB)(includingtax) | 166,087,988.00 |
| Cashdividendamountinotherways(suchasrepurchaseofshares)(RMB) | 64,340,669.42 |
| Totalcashdividends(includingothermethods)(RMB) | 230,428,657.42 |
| Distributableprofit(RMB) | 1,063,629,83.35 |
| Theproportionoftotalcashdividends(includingothermethods)tototalprofitdistribution | 100% |
| Currentcashdividend | |
| Other | |
| Detailedexplanationofprofitdistributionorcapital-reserveconversionplan | |
| The2023profitdistributionplanoftheCompanyhasbeendeliberatedandapprovedatthe18thMeetingofthe10thBoardofDirectorsheldonMarch12,2024.ItisproposedtodistributeacashdividendofRMB4.00(includingtax)toallshareholdersforevery10sharesbasedonthetotalnumberofregisteredsharecapitalonthefutureimplementationoftheprofitdistributionplan(excludingsharesinthespecialrepurchasesecuritiesaccount),with0bonussharestobeissuedandwithoutcapitalincreasethroughconversionofprovidentfund.IfthereisachangeinthetotalsharecapitaloftheCompanyfromthedisclosureofthisprofitdistributionplantoitsimplementation,theCompanyplanstoadjustthetotaldistributionamountaccordingtotheprincipleoffixeddistributionratio.TheprofitdistributionplanforthistimeneedstobedeliberatedandapprovedbytheGeneralMeetingbeforeimplementation. | |
XI.ImplementationoftheCompany'sequityincentiveplans,employeestockownershipplans,orotheremployeeincentivemeasures
1.Equityincentives
(1)Restrictedshareincentivescheme(PhaseI)TheCompanydecidedtolaunchtherestrictedshareincentivescheme(PhaseI)atthe3rdMeetingofthe9thBoardofDirectorsheldonNovember12,2018andthe1stExtraordinaryGeneralMeetingheldonJanuary11,2019.Afterdeliberationandapprovalatthe5thMeetingofthe9thBoardofDirectorsheldonJanuary11,2019,theCompanyultimatelygranted4.224millionA-sharerestrictedsharesto128incentiveobjects,withagrantpriceofRMB4.40/share,whichweregrantedandregisteredforlistingonJanuary30,2019.Fordetails,pleaserefertotherelevantannouncementdisclosedontheCNINFonJanuary12,2019.Thespecificimplementationduringthereportingperiodisasfollows:
Afterdeliberationandapprovalbythe10thMeetingofthe10thBoardofDirectorsoftheCompany,theCompany'srestrictedshareincentivescheme(PhaseI)hasmetthethirdconditionforliftingrestrictionsoftheperiod.The1,162,320A-sharerestrictedsharesinvolvedinliftingtherestrictionshavebeenlistedandcirculatedonJanuary31,2023.PleaserefertotherelevantannouncementdisclosedbytheCompanyonCNINFonJanuary19,2023.
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
Asoftheendofthereportingperiod,theCompany'srestrictedshareincentivescheme(PhaseI)hasmetthreeconditionsforliftingrestrictionsoftheperiod.ThethreebatchesofA-sharerestrictedsharesinvolvedinliftingrestrictionshavebeenliftedfromrestrictionsandlistedforcirculation.
(2)Restrictedshareincentivescheme(PhaseII)
TheCompanydecidedtolaunchtherestrictedshareincentivescheme(PhaseII)atthe23rdMeetingofthe9thBoardofDirectorsheldonDecember4,2020andthe1stExtraordinaryGeneralMeetingheldonJanuary6,2021.Afterbeingreviewedandapprovedatthe25thMeetingofthe9thBoardofDirectorsheldonJanuary15,2021,theCompanyfinallygranted7.66millionA-sharesofrestrictedstockto135incentiveobjects,withagrantpriceofRMB7.60/share,whichweregrantedandregisteredforlistingonJanuary29,2021.Forspecificdetails,pleaserefertotherelevantannouncementdisclosedonCNINFonJanuary16,2021.Thespecificimplementationduringthereportingperiodisasfollows:
Afterdeliberationandapprovalatthe10thMeetingofthe10thBoardofDirectorsoftheCompany,theCompanyhasmetthefirstconditionforliftingtherestrictionfortheCompany'srestrictedshareincentivescheme(PhaseII).The2,274,390A-sharerestrictedsharesinvolvedinliftingtherestrictionhavebeenlistedandcirculatedonJanuary31,2023.PleaserefertotherelevantannouncementdisclosedbytheCompanyonCNINFonJanuary19,2023.
Afterdeliberationandapprovalbythe11thMeetingofthe10thBoardofDirectorsandthe2022AnnualGeneralMeeting,theCompanyhasdecidedtorepurchaseandcancelthe146,740A-sharerestrictedsharesheldbythefourformerincentiveobjectswhohaveresigned,whichhavebeengrantedbuthavenotyetliftedtherestrictions;ConsideringthattheCompanyhasnotmetthesecondcompany-levelperformanceconditionforliftingrestrictionsduringtherestrictedshareincentivescheme(PhaseII),theCompanyhasdecidedtorepurchaseandcancel2,201,130A-sharerestrictedstocksthathavenotmettheconditionsforliftingrestrictions.Theabove-mentionedshareshaveallbeenderegistered.PleaserefertotherelevantannouncementsdisclosedbytheCompanyonCNINFonMarch18,2023,April27,2023,andJuly8,2023.
Afterdeliberationandapprovalbythe13thMeetingofthe10thBoardofDirectorsandthe1stExtraordinaryGeneralMeetingin2023,theCompanyhasdecidedtorepurchaseandcancel13,360restrictedA-sharerestrictedsharesheldbyoneformerincentiveobjectwhohasresignedandhasbeengrantedbutnotyetliftedtherestrictions.PleaserefertotherelevantannouncementsdisclosedbytheCompanyonCNINFonMay16,2023,June1,2023,andAugust2,2023.
Afterdeliberationandapprovalbythe14thMeetingofthe10thBoardofDirectorsandthe2ndExtraordinaryGeneralMeetingin2023,theCompanyhasdecidedtorepurchaseandcancelthe46,760restrictedA-sharescollectivelyheldbythetwoformerincentiverecipientswhohaveresigned.ThesaidA-shareshavebeengrantedbuttherestrictionshavenotyetbeenlifted.PleaserefertotherelevantannouncementsdisclosedbytheCompanyonAugust23,2023,September13,2023,andNovember8,2023,onCNINF.
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
EquityincentivesreceivedbytheDirectorsandSeniorOfficersUnit:shares
Name
| Name | Position | Numberofstockoptionsheldatthebeginningoftheyear | Numberofnewlygrantedstockoptionsduringthereportingperiod | Numberofexercisablesharesduringthereportingperiod | Numberofexercisedsharesduringthereportingperiod | Exercisepricesofexercisedsharesduringthereportingperiod(RMB/share) | Numberofstockoptionsheldattheendoftheperiod | Marketpriceattheendofthereportingperiod(RMB/share) | Numberofrestrictedstocksheldatthebeginningoftheperiod | Numberofunlockedsharesinthisperiod | Numberofnewlygrantedrestrictedstocksduringthereportingperiod | Priceforgrantingrestrictedshares(RMB/share) | Numberofrestrictedstocksheldattheendoftheperiod |
| ZhangXuhua | Chairman | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| XiaoYi | Director | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| LiPeiyin | Director | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| DengJianghu | Director | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| GuoGaohang | Director | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| PanBo | ManagingDirector | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 176,720 | 76,670 | 0 | 50,100 | |
| WangJianxin | IndependentDirector | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| ZhongHongming | IndependentDirector | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| TangXiaofei | IndependentDirector | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| LuWanjun | DeputyGeneralManagerandGeneralCounsel | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 176,720 | 76,670 | 0 | 50,100 | |
| LiuXiaoming | DeputyGeneralManager | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 176,720 | 76,670 | 0 | 50,100 |
2023AnnualReportofFIYTAPrecisionTechnologyCo.,Ltd.
LiMing
| LiMing | DeputyGeneralManager | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 176,720 | 76,670 | 0 | 50,100 | |
| SongYaoming | ChiefAccountant,DeputyGeneralManagerandSecretaryoftheBoardofDirectors | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| TangHaiyuan | DeputyGeneralManager | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 170,040 | 69,990 | 0 | 50,100 | |
| XiaoZhanglin | Director(resigned) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| Total | -- | 0 | 0 | 0 | 0 | -- | 0 | -- | 876,920 | 376,670 | 0 | -- | 250,500 |
| Notes(ifany) | GiventhefailuretoliftthesellingrestrictionsattheCompanylevelduringthesecondliftingrestrictionperiodoftheRestrictedShareIncentiveSchemePhaseII,theCompanyhascompletedtherepurchaseandcancellationofrestrictedA-sharesthathavenotreachedtheliftingrestrictionconditions,andthenumberofthesaidrestrictedA-shareshasbeendeductedfromthequantityofrestrictedstocksheldbytherelevantDirectorsandSeniorOfficersattheendoftheperiod. | ||||||||||||
TheevaluationmechanismandincentivesforSeniorOfficersToestablishasoundincentiveandconstraintmechanismforSeniorOfficers,fullyleverageandmobilizetheworkenthusiasmoftheCompany'sSeniorExecutives,improvetheCompany'soperationalabilityandeconomicbenefits,andensuretheachievementoftheCompany'sstrategicgoals,theCompanycontinuouslyimprovesthetermsystemandcontractualmanagementofSeniorExecutives,conductsannual/term-basedperformanceassessments,andcontinuouslypromotestheimplementationofrigidrewardsandpunishmentsbasedonassessmentresults,useadditionalincomeasthestrongincentivesandhardconstraints,adheretoperformanceorientation,andstrengtheneffectiveincentivesthroughpreciseassessment.
2.Implementationstatusofemployeestockownershipplan
Notapplicable
3.OtheremployeeincentivemeasuresNotapplicableXII.Constructionandimplementationoftheinternalcontrolsystemduringthereportingperiod
1.Constructionandimplementationoftheinternalcontrolsystem
Tostrengthentheinternalcontrol,promotestandardizedoperationandhealthydevelopmentoftheCompany,andprotectthelegitimaterightsandinterestsofshareholders,theCompanyhasestablished,improved,andeffectivelyimplementeditsinternalcontrolsystembylawsandregulationsoftheCompanyLawandtheSecuritiesLaw.Duringthereportingperiod,theCompanycontinuedtopromotetheintegrationandoptimizationofinternalcontrol,riskmanagement,andcompliancemanagementsupervision,andtherewerenomajororsignificantdeficienciesininternalcontrol.
2.Specificconditionsofmajorinternalcontroldeficienciesdiscoveredduringthereportingperiod
NoXIII.ManagementandcontrolofsubsidiariesbytheCompanyduringthereportingperiodNotapplicableXIV.Internalcontrolevaluationreportorinternalcontrolauditreport
1.Internalcontrolevaluationreport
Disclosuredateofthefulltextoftheinternalcontrolevaluationreport
| Disclosuredateofthefulltextoftheinternalcontrolevaluationreport | March14,2024 |
| Disclosureindexofthefulltextoftheinternalcontrolevaluationreport | www.cninfo.com.cn |
| Theproportionoftotalassetsof | 100.00% |
unitsincludedintheevaluationscopetothetotalassetsintheCompany'sconsolidatedfinancialstatements
| unitsincludedintheevaluationscopetothetotalassetsintheCompany'sconsolidatedfinancialstatements | ||
| TheproportionofoperatingrevenueofunitsincludedintheevaluationscopetotheoperatingrevenueintheCompany'sconsolidatedfinancialstatements | 100.00% | |
| Defectidentificationcriteria | ||
| Category | Financialreports | Non-financialreporting |
| Qualitativecriteria | (1)ThisdefectinvolvesfraudbyDirectors,Supervisors,andSeniorOfficers;(2)Correctingdisclosedfinancialstatements;(3)Certifiedpublicaccountantshavediscoveredsignificantmisstatementsinthecurrentfinancialstatements,whichwerenotdetectedwhileconductinginternalcontrol;(4)ThesupervisionofinternalcontrolbytheCompany'sAuditCommitteeandtheDisciplineInspection,Audit,andLegalDepartmentisineffective. | (1)Seriousviolationsofnationallaws,administrativeregulations,andnormativedocuments;(2)Thefollowingmatters,namely,the"decision-makingonmajormatters,appointmentandremovalofimportantcadres,decisionsoninvestingmajorprojects,andtheuseoflargeamountsoffunds"havenotgonethroughthecollectivedecision-makingprocess;(3)Theseriouslossofmanagementandtechnicalpersonnelinkeypositions;(4)SystemcontrollacksinimportantbusinessrelatedtotheCompany'sproductionandoperationorthesystemfails;(5)ThefailureofinternalcontroloverinformationdisclosurehasledtotheCompanybeingpubliclycondemnedbyregulatoryauthorities;(6)Theresultsofinternalcontrolevaluation,especiallysignificantdefectsorsignificantdeficiencieshavenotbeenrectified. |
| Quantitativestandards | (1)Majordefect:misreporting≥5%ofpre-taxprofit(2)Importantdeficiency:1%ofpre-taxprofit≤misreporting＜5%ofpre-taxprofit(3)Generaldefect:misreporting<1%ofpre-taxprofit | (1)Majordefect:misreporting≥5%ofpre-taxprofit(2)Importantdeficiency:1%ofpre-taxprofit≤misreporting＜5%ofpre-taxprofit(3)Generaldefect:misreporting<1%ofpre-taxprofit |
| Numberofmajordefectsinfinancialreports(entries) | 0 | |
| Numberofmajordefectsinnon-financialreports(entries) | 0 | |
| Numberofsignificantdefectsinfinancialreports(entries) | 0 | |
| Numberofsignificantdefectsinnon-financialreports(entries) | 0 | |
2.Internalcontrolauditreport
| Columnofdeliberationsintheinternalcontrolauditreport |
| WebelievethatFIYTACompanyhasmaintainedeffectiveinternalcontroloverfinancialreportinginallmaterialaspectsasof |
December31,2023,followingtheBasicStandardsforEnterpriseInternalControlandrelevantregulations.
| December31,2023,followingtheBasicStandardsforEnterpriseInternalControlandrelevantregulations. | |
| Disclosureofinternalcontrolauditreport | Disclosure |
| Disclosuredateofthefulltextoftheinternalcontrolauditreport | March14,2024 |
| Disclosureindexofthefulltextoftheinternalcontrolauditreport | www.cninfo.com.cn |
| Typesofopinionsoninternalcontrolauditreports | Standardunqualifiedopinions |
| Whetherthereweresignificantdeficienciesinnon-financialreports | No |
Didtheaccountingfirmissueaninternalcontrolauditreportwithnon-standardopinionsNoWastheinternalcontrolauditreportissuedbytheaccountingfirmconsistentwiththeself-evaluationreportoftheboardofDirectorsYesXV.Rectificationofself-inspectionissuesinthespecialactiononcorporategovernanceofListedCompaniesTheCompanyhasfullycompletedtheself-inspectionworkfollowingtherequirementsoftheAnnouncementonCarryingouttheSpecialActiononCorporateGovernanceofListedCompaniesissuedbytheChinaSecuritiesRegulatoryCommissionandhasrectifiedtheproblemsfoundduringtheself-inspection.ThecorporategovernancecomplieswiththerequirementsoflawsandregulationsoftheCompanyLaw,SecuritiesLaw,andCodeofConductforListedCompanies.Thegovernancestructureisrelativelycompleteandtheoperationisstandardized.
Section5EnvironmentalandSocialResponsibilityI.Majorenvironmentalissues
ArethelistedcompanyanditssubsidiariesincludedinthekeypollutingunitsannouncedbytheEnvironmentalProtectionDepartmentNoAdministrativepenaltiesimposedduetoenvironmentalissuesduringthereportingperiodNotapplicableRefertootherenvironmentalinformationdisclosedbykeypollutingunits
TheCompanystrictlycomplieswiththelawsandregulationsoftheLawofthePeople'sRepublicofChinaonthePreventionandControlofAtmosphericPollution,theLawofthePeople'sRepublicofChinaonthePreventionandControlofEnvironmentalPollutionbySolidWaste,andtheLawofthePeople'sRepublicofChinaonPreventionandControlofWaterPollution,andcarriesoutpollutantmanagementwork.Itssubsidiariesarenotclassifiedaskeypollutingunits.TheCompanyhasestablishedtheWastewater,ExhaustGas,Dust,andNoiseControlProcedure,WasteManagementandControlProcedure,andChemicalManagementandControlProcedureinternally,andentrustsexternalqualifiedinstitutionstomonitortheemissionofexhaustgas,slag,wastewater,andnoiseeveryyeartoensurethatthedischargeofexhaustgas,slagandwastewatermeetsemissionstandards.
OnDecember31,2022,ShanghaiWatchCo.,Ltd.,ajointventureoftheCompany,shutdownbusinessesrelatedtopollutiondischargeandcompletedthecancellationoftheSewageDischargePermissiononApril24,2023.Ithasbeendowngradedfromakeypollutingunittoageneralmanagementunit.Measurestakentoreduceitscarbonemissionsduringthereportingperiodandeffects
TheCompanyactivelyrespondstothecallof"achievingcarbonpeakby2030andcarbonneutralityby2060",andhasdevelopedaResourceandEnergyConservationControlProceduretoconductdailyinspectionsandcontrolsonresourceandenergyconsumption,explorespaceforenergyconservationandwaterconservation,encourageallemployeestoexploretheselectionandapplicationofenergy-savingtechnologies,andprioritizeenergy-savingandconsumptionreducingproductswhenpurchasingequipment,suchaswater-savingfaucets,high-energyefficiencyhouseholdappliances,etc.Intermsoftheuseofrawmaterials,productionauxiliarymaterials,andofficesupplies,theCompanyevaluatestheusagebeforeprocurementtodeterminetheappropriatepurchasequantityandavoidexpirationandwasteofmaterials.ReasonsfornotdisclosingotherenvironmentalinformationNotapplicable
II.Socialresponsibilitysituation
Fordetails,pleaserefertotheCompany'sEnvironmental,Social,andGovernance(ESG)Report2023disclosedonCNINF(www.cninfo.com.cn)onMarch14,2024.
III.ConsolidateandexpandtheachievementsinpovertyalleviationandruralrevitalizationDuringthereportingperiod,theCompanyactivelyrespondedtothepoliciesoftheCentralCommitteeoftheCommunistPartyofChinaandtheStateCounciloncomprehensivelypromotingruralrevitalization,fullyleveragedthejointeffortsofstate-ownedenterprisesinpovertyalleviationbyconsumingproductsandservicesfrompoorareas,alleviatingtheproblemofunsoldfarmproductsinpoverty-strickenareas,formulatedtheAviationIndustry'sRuralRevitalizationWorkPlan2023,andorganizedparticipationinthe"State-ownedEnterprises'EffortstoAlleviatePovertythroughConsumptionofFarmProductstoGreettheSpringFestival".Onthee-commerceplatformandtheCourtesy·Aviationplatformofstate-ownedenterprisesforpovertyalleviationthroughconsumption,state-ownedenterprisesprovidetargetedassistancethroughcentralizedprocurementandsalesassistance,andpairingassistancetosellcountyfarmproducts.
Section6ImportantMattersI.Fulfillmentofcommitments
1.Commitmentsthathavebeenfulfilledduringthereportingperiodandcommitmentsthathavenotbeenfulfilledasoftheendofthereportingperiodbytheactualcontroller,shareholders,relatedparties,acquirersoftheCompany,theCompany,andotherinterestedparties
Notapplicable
2.IfthereisaprofitforecastontheCompany'sassetsorprojects,andthereportingperiodisstillintheprofitforecastperiod,theCompanyshallexplainthereasonsfortheassetsorprojectslivinguptotheoriginalprofitforecast
Notapplicable
II.Non-operatingcapitaloccupationbycontrollingshareholdersandotherrelatedpartiesofthelistedcompanyNotapplicable
III.ProvisionofexternalguaranteesinviolationofregulationsNotapplicableⅣ.ExplanationbytheBoardofDirectorsonthelatestNon-standardAuditReportNotapplicable
V.ExplanationbytheBoardofDirectors,BoardofSupervisors,andIndependentDirectors(ifany)ontheNon-standardAuditReportoftheaccountingfirmforthecurrentreportingperiodNotapplicableVI.Explanationofchangesinaccountingpolicies,estimates,orsignificantaccountingerrorscomparedtothepreviousyear'sfinancialreportNotapplicable
VII.Explanationofchangesinthescopeofconsolidatedfinancialstatementscomparedtothepreviousyear'sfinancialreportNotapplicable
VIII.AppointmentanddismissaloftheaccountingfirmTheaccountingfirmcurrentlyemployed
Name
| Name | DaHuaCPAsLLP(SpecialGeneralPartnership) |
| Remunerationfordomesticaccountingfirms(RMBtenthousand) | 120 |
| Continuousyearsofauditservicesprovidedbythedomesticaccountingfirm | 3 |
| NameofCPAs | LongJiao,WangDong |
| ContinuousyearsofauditservicesprovidedbyCPAsofthedomesticaccountingfirms | 3 |
WhethertohireanewaccountingfirminthecurrentaccountingperiodNoEmploymentofinternalcontrolauditandaccountingfirms,financialadvisors,orsponsorsDeliberatedandapprovedbythe2022AnnualGeneralMeeting,theCompanyappointedDaHuaCPAsLLP(SpecialGeneralPartnership)astheauditingbodyfortheCompany'sfinancialstatementsandinternalcontrolfortheyear2023.
Ⅸ.FacingdelistingafterthedisclosureoftheannualreportNotapplicable
X.Relatedmattersaboutbankruptcyreorganization
Notapplicable
XI.Majorlitigationandarbitrationmatters
NotapplicableXII.Punishmentandrectificationsituation
NotapplicableXIII.IntegritystatusoftheCompany,itscontrollingshareholders,andactualcontrollers
NotapplicableXIV.Significantrelatedtransactions
1.Relatedtransactionsrelatedtodailyoperations
Notapplicable
2.Relatedtransactionsarisingfromtheacquisitionorsaleofassetsorequity
Notapplicable
3.RelatedtransactionsforjointoutwardinvestmentNotapplicable
4.RelateddebtandcredittransactionsNotapplicable
5.TransactionswithrelatedfinancecompaniesDepositbusiness
Relatedparties
| Relatedparties | Relatedrelationships | Dailymaximumdepositlimit(RMBtenthousand) | Rangeofdepositinterestrates | Openingbalance(RMBtenthousand) | Currentamountincurred | Closingbalance(RMBtenthousand) | |
| Totaldepositamountforthisperiod(RMBtenthousand) | Totalwithdrawalamountforthisperiod(RMBtenthousand) | ||||||
| AVICFinance | Financecompanywithrelatedrelationships | 80,000 | 1.15%-1.25% | 27,133 | 462,596 | 442,955 | 46,774 |
Loanbusiness
| Relatedparties | Relatedrelationships | Maximumloanamount(RMBtenthousand) | Loaninterestraterange | Openingbalance(RMBtenthousand) | Currentamountincurred | Closingbalance(RMBtenthousand) | |
| Totalloanamountfortheperiod(RMBtenthousand) | Totalrepaymentamountfortheperiod(RMBtenthousand) | ||||||
| AVICFinance | Financecompanywithrelatedrelationships | 80,000 | 2.7% | 0 | 0 | 0 | 0 |
Creditorotherfinancialservices
Duringthereportingperiod,themaximumdailyamountofrelateddepositsandloanbalancesincurredbytheCompanywithAVICFinancedidnotexceedthelimitspecifiedinthefinancialserviceagreement,andtherehavebeennocreditorotherfinancialtransactions.Atthesametime,theCompanyissuedtheRiskAssessmentReportonRelatedDepositsandLoanswithAVICFinanceCo.,Ltd.everysixmonthsinrespectoftheaforementionedmatters.
6.TransactionsbetweenfinancecompaniescontrolledbytheCompanyandrelatedpartiesNotapplicable
7.Othersignificantrelatedtransactions
Atthe11thMeetingofthe10thBoardofDirectorsheldonMarch16,2023andthe2022AnnualGeneralMeetingheldonApril26,2023,theCompanyreviewedandapprovedtheProposalontheEstimationofDailyRelatedTransactionsfor2023.Duringthe
reportingperiod,thecumulativetransactionamountsofvariousrelatedtransactionsrelatedtotheCompany'sdailyoperationswerewithintheexpectedannualrange.Relatedqueriesonthewebsitefordisclosureofinterimreportsonmajorrelatedtransactions
Interimannouncementname
| Interimannouncementname | Interimannouncementdisclosuredate | Nameofwebsitefordisclosureofinterimannouncements |
| AnnouncementontheResolutionsofthe11thMeetingofthe10thBoardofDirectors2023-007 | March18,2023 | http://www.cninfo.com.cn/ |
| AnnouncementontheEstimationofDailyRelatedTransactionsin20232023-010 | March18,2023 | http://www.cninfo.com.cn/ |
| AnnouncementontheResolutionsofthe2022AnnualGeneralMeeting2023-031 | April27,2023 | http://www.cninfo.com.cn/ |
XV.Majorcontractsandtheirperformance
1.Custody,contracting,andleasematters
(1)CustodyNotapplicable
(2)ContractingNotapplicable
(3)LeaseNotapplicable
2.Significantguarantee
Unit:RMBtenthousand
| ExternalguaranteesprovidedbytheCompanyanditssubsidiaries(excludingguaranteesforsubsidiaries) | ||||||||||
| Guaranteecompany | Disclosuredateofannouncementsrelatingtoguaranteelimit | Guaranteelimit | Actualoccurrencedate | Actualguaranteeamount | Guaranteetype | Collateral(ifany) | Counterguarantee(ifany) | Guaranteeperiod | Completedornot | Whetherit'sarelated-partyguarantee |
| Notapplicable | ||||||||||
| Totalamountofexternalguaranteelimitapprovedduringthereportingperiod(A1) | 0 | Totalactualamountofexternalguaranteesincurredduringthereportingperiod(A2) | 0 | |||||||
| Totalamountofexternalguarantee | 0 | Totalactualbalanceofexternal | 0 | |||||||
limitapprovedattheendofthereportingperiod(A3)
| limitapprovedattheendofthereportingperiod(A3) | guaranteesattheendofthereportingperiod(A4) | |||||||||
| GuaranteetoitssubsidiariesbytheCompany | ||||||||||
| Guaranteecompany | Disclosuredateofannouncementsrelatingtoguaranteelimit | Guaranteelimit | Actualoccurrencedate | Actualguaranteeamount | Guaranteetype | Collateral(ifany) | Counterguarantee(ifany) | Guaranteeperiod | Completedornot | Whetherit'sarelated-partyguarantee |
| ShenzhenHarmonyWorldWatchCenterCo.,Ltd. | March18,2023 | 30,000 | December30,2023 | 12,000 | Jointandseveralliabilityguarantee | Oneyear | No | No | ||
| Totalamountofguaranteelimitforsubsidiariesapprovedduringthereportingperiod(B1) | 30,000 | Totalactualamountofguaranteesprovidedtosubsidiariesduringthereportingperiod(B2) | 12,000 | |||||||
| Totalamountofguaranteelimittosubsidiariesapprovedattheendofthereportingperiod(B3) | 30,000 | Totalbalanceofactualguaranteestosubsidiariesattheendofthereportingperiod(B4) | 12,000 | |||||||
| Guaranteetosubsidiariesbyothersubsidiaries | ||||||||||
| Guaranteecompany | Disclosuredateofannouncementsrelatingtoguaranteelimit | Guaranteelimit | Actualoccurrencedate | Actualguaranteeamount | Guaranteetype | Collateral(ifany) | Counterguarantee(ifany) | Guaranteeperiod | Completedornot | Whetherit'sarelated-partyguarantee |
| Notapplicable | ||||||||||
| Totalamountofguaranteelimitforsubsidiariesapprovedduringthereportingperiod(C1) | 0 | Totalactualamountofguaranteesprovidedtosubsidiariesduringthereportingperiod(C2) | 0 | |||||||
| Totalamountofguaranteelimittosubsidiariesapprovedattheendofthereporting | 0 | Totalactualguaranteebalanceforsubsidiariesattheendofthereportingperiod | 0 | |||||||
period(C3)
| period(C3) | (C4) | ||
| TotalamountoftheCompany'sguarantees(i.e.thetotaloftheabovethreemainitems) | |||
| Totalamountofguaranteelimitapprovedduringthereportingperiod(A1+B1+C1) | 30,000 | Totalactualamountofguaranteesincurredduringthereportingperiod(A2+B2+C2) | 12,000 |
| Totalamountofguaranteelimitapprovedattheendofthereportingperiod(A3+B3+C3) | 30,000 | Totalactualguaranteebalanceattheendofthereportingperiod(A4+B4+C4) | 12,000 |
| Theproportionofactualtotalguaranteeamount(i.e.A4+B4+C4)totheCompany'snetassets | 3.60% | ||
| Amongthem: | |||
| Balanceofguaranteesprovidedtoshareholders,actualcontrollersandtheiraffiliates(D) | 0 | ||
| Balanceofdebtguaranteesprovideddirectlyorindirectlytotheguaranteedobjectwithanassetliabilityratioexceeding70%(E) | 0 | ||
| Theamountofguaranteeexceeding50%ofnetassets(F) | 0 | ||
| Thetotalamountofthethreeguaranteesmentionedabove(D+E+F) | 0 | ||
| Situationswherethereisguaranteeliabilityorevidenceindicatingthepossibilityofjointandseveralrepaymentliabilityforunexpiredguaranteecontractsduringthereportingperiod(ifany) | Notapplicable | ||
| Externalguaranteesprovidedinviolationofprescribedprocedures(ifany) | Notapplicable | ||
SpecificsituationoftheuseofcompositeguaranteesNotapplicable
3.Cashassetmanagemententrustedtoothers
(1)EntrustedfinancialmanagementNotapplicable
(2)EntrustedloanNotapplicable
4.Othermajorcontracts
Notapplicable
XVI.Othersignificantmatters
1.Repurchasesomedomesticallylistedforeignshares(BShares)Atthe11thMeetingofthe10thBoardofDirectorsandthe2022AnnualGeneralMeeting,theCompanyapprovedtheProgramontheRepurchaseofSomeDomesticallyListedForeignShares(BShares),andsubsequentlydisclosedtherepurchasereportandaseriesofprogressannouncementsinaccordancewithrelevantregulations.AsofDecember31,2023,theCompanyhascumulativelyrepurchased9,355,763sharesofBsharesthroughaspecialrepurchasesecuritiesaccountthroughcentralizedbidding,withatotalamountpaidofHKD70,401,771.17(excludingtransactionfees).Fordetails,pleaserefertotherelevantprogressannouncementsdisclosedbytheCompanyonCNINF.
2.ChangeofbusinessscopeandrevisionoftheArticlesofAssociationAfterdeliberationandapprovalbythe13thMeetingofthe10thBoardofDirectorsandthe1stExtraordinaryGeneralMeetingin2023,theCompanyhasdecidedtoexpanditsbusinessscope,adjustthestandardizedexpressionoftheexistingbusinessscope,andrevisethecorrespondingprovisionsoftheArticlesofAssociationbasedonthechangedbusinessscope.Fordetails,pleaserefertotheAnnouncementontheResolutionsofthe13thMeetingofthe10thBoardofDirectors2023-025,AnnouncementonChangingtheBusinessScopeandAmendingtheArticlesofAssociation2023-027,andAnnouncementonResolutionsofthe1stExtraordinaryGeneralMeeting2023-031,whichweredisclosedbytheCompanyonMay16,2023andJune1,2023onCNINF.
3.Capitalincreasetowholly-ownedsubsidiariesAtthe14thMeetingofthe10thBoardofDirectors,theCompanyapprovedtheProposalonCapitalIncreasetoWholly-ownedSubsidiaryShenzhenFIYTAPrecisionTechnologyCo.,Ltd.,anddecidedtoincreasethecapitalofitswholly-ownedsubsidiaryShenzhenFIYTAPrecisionTechnologyCo.,Ltd.byRMB80million.Fordetails,pleaserefertotheAnnouncementonCapitalIncreasetoWholly-ownedSubsidiaryShenzhenFIYTAPrecisionTechnologyCo.,Ltd.2023-047andAnnouncementonCompletionofIndustrialandCommercialChangeRegistrationforCapitalIncreaseofWholly-ownedSubsidiary2023-059disclosedbytheCompanyonAugust23,2023andDecember1,2023onCNINF.
4.RevisionoftheCompany'sinternalsystemmattersThe16thMeetingofthe10thBoardofDirectorsandthe3rdExtraordinaryGeneralMeetingin2023reviewedandapprovedtheProposalonAmendingtheArticlesofAssociation,ProposalonAmendingtheRulesofProcedureoftheGeneralMeeting,ProposalonAmendingtheRulesofProcedureoftheBoardofDirectors,ProposalonAmendingtheWorkingSystemofIndependentDirectors,andProposalonAmendingtheRelatedTransactionManagementSystem.Fordetails,pleaserefertotherelevantannouncementsdisclosedbytheCompanyonDecember13,2023andDecember29,2023onCNINF.XVII.MaterialmattersoftheCompany'ssubsidiaries
Notapplicable
Section7ChangesinSharesandShareholdersI.Changesinshares
1.ChangesinsharesUnit:shares
Beforethischange
| Beforethischange | Increase/decreaseinthischange(+,-) | Afterthischange | |||||||
| Quantity | Proportion | Newissue | Bonusissue | Conversionfromreserves | Other | Subtotal | Quantity | Proportion | |
| I.Shareswithsellingrestrictions | 8,227,310 | 1.97% | 0 | 0 | 0 | -5,497,450 | -5,497,450 | 2,729,860 | 0.66% |
| 1.Stateshareholding | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 2.State-ownedlegalpersonshareholding | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 3.Otherdomesticshareholding | 8,227,310 | 1.97% | 0 | 0 | 0 | -5,497,450 | -5,497,450 | 2,729,860 | 0.66% |
| Including:sharesheldbydomesticlegalpersons | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Domesticnaturalpersonshareholding | 8,227,310 | 1.97% | 0 | 0 | 0 | -5,497,450 | -5,497,450 | 2,729,860 | 0.66% |
| 4.Foreignshareholding | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Including:sharesheldbyoverseaslegalpersons | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Overseasnatural | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
personshareholding
| personshareholding | |||||||||
| II.Shareswithoutsellingrestrictions | 409,400,650 | 98.03% | 0 | 0 | 0 | 3,089,460 | 3,089,460 | 412,490,110 | 99.34% |
| 1.RMB-denominatedordinaryshares | 359,463,953 | 86.07% | 0 | 0 | 0 | 3,089,460 | 3,089,460 | 362,553,413 | 87.31% |
| 2.Domesticallylistedforeignshares | 49,936,697 | 11.96% | 0 | 0 | 0 | 0 | 0 | 49,936,697 | 12.03% |
| 3.Foreignshareslistedoverseas | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 4.Other | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| III.Totalnumberofshares | 417,627,960 | 100.00% | 0 | 0 | 0 | -2,407,990 | -2,407,990 | 415,219,970 | 100.00% |
Reasonsforchangesinshares
1.Duringthereportingperiod,theunlockingconditionsforthethirdunlockingperiodoftheCompany'srestrictedshareincentivescheme(PhaseI)andthefirstunlockingperiodoftherestrictedshareincentivescheme(PhaseII)havebeensatisfied,andthecorrespondingunlockedshareshavebeenlistedandcirculated,resultinginadecreaseof3,436,710shareswithsellingrestrictions(withacorrespondingincreaseinshareswithoutsellingrestrictions);
2.Duringthereportingperiod,duetotheCompany'sfailuretomeetthecompany-levelperformanceconditionsforunlockingofrestrictedsharesduringthesecondunlockingperiodoftherestrictedshareincentivescheme(PhaseII),theCompanyrepurchasedandcancelled2,201,130restrictedAsharethatdidnotmeettheunlockingconditionsinaccordancewithregulations;Duetotheresignationof7formerincentiverecipients,theCompanyrepurchasedandcancelled206,860A-sharerestrictedsharesheldbytheminaggregateinaccordancewithregulations,resultinginatotalreductionof2,407,990shareswithsellingrestrictions(withacorrespondingdecreaseinthetotalsharecapitaloftheCompany);
3.Duringthereportingperiod,duetotheadjustmentofthetransferlimitforSeniorExecutives,347,250shareswithsellingrestrictionswereadded(acorrespondingdecreaseinshareswithoutsellingrestrictions).
Duetotheabovereasons,attheendofthereportingperiod,thetotalnumberofshareswithsellingrestrictionsoftheCompanydecreasedby5,497,450;thetotalnumberofshareswithoutsellingrestrictionsincreasedby3,089,460;andthetotalnumberofsharesdecreasedby2,407,990.Approvalstatusofsharechanges
Approvedbythe10thMeetingofthe10thBoardofDirectorsoftheCompany,theBoardofDirectors,inaccordancewiththeauthorizationofthe1stExtraordinaryGeneralMeetingin2019andthe1stExtraordinaryGeneralMeetingin2021,hasprocessedtheliftingofrestrictionson3,436,710Asharesthatmeettheconditionsforliftingrestrictions.Approvedbythe2022AnnualGeneralMeeting,the1stExtraordinaryGeneralMeetingin2023,andthe2ndExtraordinaryGeneralMeetingin2023,theCompanyhasprocessedtherepurchaseandcancellationof2,407,990restrictedA-shares.Transfersituationofsharechanges
Duringthereportingperiod,thetransferofchangesintheCompany'sshares,asauditedandconfirmedbytheShenzhenBranchofChinaSecuritiesDepositoryandClearingCorporationLimited,wereasfollows:
onJuly6,2023,therepurchaseandcancellationof2,347,870restrictedAshareswerecompleted;
onJuly31,2023,therepurchaseandcancellationof13,360restrictedAshareswerecompleted;
onNovember3,2023,therepurchaseandcancellationof46,760restrictedAshareswerecompleted.Impactofsharechangesonfinancialindicatorssuchasbasicearningspershare,dilutedearningspershare,andnetassetspershareattributabletocommonshareholdersoftheCompanyforthemostrecentyearandperiod
WeightedaverageROE(%)
| WeightedaverageROE(%) | Earningspershare | ||||
| Basicearningspershare(RMB/share) | Dilutedearningspershare(RMB/share) | ||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
| 10.28% | 8.68% | 0.8082 | 0.6398 | 0.8075 | 0.6398 |
OtherdisclosuresdeemednecessarybytheCompanyorrequiredbysecuritiesregulatoryauthoritiesNotapplicable
2.ChangesinrestrictedsharesUnit:shares
| NameofShareholders | Numberofrestrictedsharesatthebeginningoftheperiod | Increaseinrestrictedsharesduringtheperiod(note) | Numberofrestrictedsharesliftedduringtheperiod | Numberofrestrictedsharesattheendoftheperiod | Reasonforrestrictedsales | Dateofliftingsalesrestrictions |
| LiMing | 214,250 | 22,500 | 76,670 | 160,080 | LockedsharesheldbySeniorExecutivesandrestrictedsharesthathavenotyetbeenunlocked | 1.OnJanuary31,2023,76,670restrictedsharesundertheincentiveschemewereunlocked;2.TheremainingrestrictedshareswillbeunlockedinaccordancewiththeconditionsforlockedsharesheldbySeniorExecutivesandtheCompany'sequityincentivemanagementmeasures. |
| PanBo | 214,220 | 22,500 | 76,670 | 160,050 | Lockedsharesheld | 1.OnJanuary31,2023,76,670restrictedsharesundertheincentive |
bySeniorExecutivesandrestrictedsharesthathavenotyetbeenunlocked
| bySeniorExecutivesandrestrictedsharesthathavenotyetbeenunlocked | schemewereunlocked;2.TheremainingrestrictedshareswillbeunlockedinaccordancewiththeconditionsforlockedsharesheldbySeniorExecutivesandtheCompany'sequityincentivemanagementmeasures. | |||||
| LuWanjun | 214,220 | 22,500 | 76,670 | 160,050 | LockedsharesheldbySeniorExecutivesandrestrictedsharesthathavenotyetbeenunlocked | 1.OnJanuary31,2023,76,670restrictedsharesundertheincentiveschemewereunlocked;2.TheremainingrestrictedshareswillbeunlockedinaccordancewiththeconditionsforlockedsharesheldbySeniorExecutivesandtheCompany'sequityincentivemanagementmeasures. |
| LiuXiaoming | 214,220 | 22,500 | 76,670 | 160,050 | LockedsharesheldbySeniorExecutivesandrestrictedsharesthathavenotyetbeenunlocked | 1.OnJanuary31,2023,76,670restrictedsharesundertheincentiveschemewereunlocked;2.TheremainingrestrictedshareswillbeunlockedinaccordancewiththeconditionsforlockedsharesheldbySeniorExecutivesandtheCompany'sequityincentivemanagementmeasures. |
| TangHaiyuan | 170,040 | 7,500 | 69,990 | 107,550 | LockedsharesheldbySeniorExecutivesandrestrictedsharesthathavenotyetbeenunlocked | 1.OnJanuary31,2023,69,990restrictedsharesundertheincentiveschemewereunlocked;2.TheremainingrestrictedshareswillbeunlockedinaccordancewiththeconditionsforlockedsharesheldbySeniorExecutivesandtheCompany'sequityincentivemanagementmeasures. |
| ChenLibin | 213,400 | -59,940 | 93,340 | 60,120 | Unlockedrestrictedshares | 1.OnJanuary31,2023,93,340restrictedsharesundertheincentiveschemewereunlocked;2.TheremainingrestrictedsharesshallbeunlockedinaccordancewiththeCompany'sequityincentivemanagementmeasures. |
| BaoXianyong | 140,040 | -39,960 | 60,000 | 40,080 | Unlockedrestrictedshares | 1.OnJanuary31,2023,60,000restrictedsharesundertheincentiveschemewereunlocked;2.TheremainingrestrictedsharesshallbeunlockedinaccordancewiththeCompany'sequityincentivemanagementmeasures. |
| SunLei | 140,040 | -39,960 | 60,000 | 40,080 | Unlockedrestrictedshares | 1.OnJanuary31,2023,60,000restrictedsharesundertheincentiveschemewereunlocked;2.TheremainingrestrictedsharesshallbeunlockedinaccordancewiththeCompany'sequityincentive |
managementmeasures.
| managementmeasures. | ||||||
| ShengLi | 140,040 | -39,960 | 60,000 | 40,080 | Unlockedrestrictedshares | 1.OnJanuary31,2023,60,000restrictedsharesundertheincentiveschemewereunlocked;2.TheremainingrestrictedsharesshallbeunlockedinaccordancewiththeCompany'sequityincentivemanagementmeasures. |
| Othershareholders | 6,566,840 | -1,978,420 | 2,786,700 | 1,801,720 | LockedsharesheldbyoutgoingSeniorExecutivesandrestrictedsharesthathavenotyetbeenunlocked | 1.OnJanuary31,2023,2,786,700restrictedsharesundertheincentiveschemewereunlocked;2.TheremainingrestrictedsharesshallbeunlockedinaccordancewiththeconditionsforlockedsharesheldbyoutgoingSeniorExecutivesandtheCompany'sequityincentivemanagementmeasures. |
| Total | 8,227,310 | -2,060,740 | 3,436,710 | 2,729,860 | -- | -- |
Note:theincreaseinthenumberofrestrictedsharesintheperiodhasdeductedtherestrictedAsharethatwererepurchasedandcancelledduetothefailuretomeettheunlockingconditionsduringthesecondunlockingperiodoftheCompany'srestrictedshareincentivescheme(PhaseII).II.Securitiesissuanceandlisting
1.Securitiesissuance(excludingpreferredshares)duringthereportingperiod
Notapplicable
2.ChangesinthetotalnumberofsharesandshareholderstructureoftheCompany,aswellaschangesintheCompany'sassetandliabilitystructureAsdescribedinthe"Reasonsforchangesinshares"section.
3.Existinginternalemployeeshares
Notapplicable
III.Shareholdersandactualcontrollers
1.NumberofshareholdersandtheirholdingsUnit:shares
| Totalnumberofcommonshareholdersattheendofthereportingperiod | 28,145 | Totalnumberofcommonshareholdersattheendofthepreviousmonth | 28,183 | Totalnumberofpreferredshareholderswithrestoredvotingrightsattheendofthereportingperiod(ifany)(seeNote8) | 0 |
Totalnumberofpreferredshareholderswithrestoredvotingrightsattheendofthepreviousmonthpriortothedisclosuredateoftheannualreport(ifany)(seeNote8)
priortothedisclosuredateoftheannualreport
| priortothedisclosuredateoftheannualreport | ||||||||
| Shareholdingsofshareholdersholdingmorethan5%orthetop10shareholders(excludingshareslentthroughrefinancing) | ||||||||
| NameofShareholders | Natureofshareholders | Holdingratio | Numberofsharesheldattheendofthereportingperiod | Changesduringthereportingperiod | Numberofsharesheldwithlimitedsalesconditions | Numberofsharesheldwithunlimitedsalesconditions | Situationsofpledge,markingorfreezing | |
| Sharestatus | Quantity | |||||||
| AVICInternationalHoldingLimited | State-ownedlegalperson | 39.25% | 162,977,327 | 0 | 0 | 162,977,327 | Notapplicable | 0 |
| #WuJilin | Domesticnaturalpersons | 4.35% | 18,043,627 | 98,013 | 0 | 18,043,627 | Notapplicable | 0 |
| #XuGuoliang | Domesticnaturalpersons | 1.74% | 7,242,768 | 1,978,000 | 0 | 7,242,768 | Notapplicable | 0 |
| QiuHong | Domesticnaturalpersons | 0.59% | 2,470,000 | 100,000 | 0 | 2,470,000 | Notapplicable | 0 |
| #ZhuRui | Domesticnaturalpersons | 0.34% | 1,407,100 | -295,500 | 0 | 1,407,100 | Notapplicable | 0 |
| CITICSecuritiesCompanyLimited | State-ownedlegalperson | 0.33% | 1,368,078 | 1,248,109 | 0 | 1,368,078 | Notapplicable | 0 |
| #QuYongjie | Domesticnaturalpersons | 0.31% | 1,286,800 | 20,000 | 0 | 1,286,800 | Notapplicable | 0 |
| IndustrialandCommercialBankofChinaLtd.-GFCSIGuoxinCentral-SOEsShareholderReturnETF | Other | 0.29% | 1,212,700 | 1,212,700 | 0 | 1,212,700 | Notapplicable | 0 |
| ChenHao | Domesticnaturalpersons | 0.27% | 1,101,643 | 12,700 | 0 | 1,101,643 | Notapplicable | 0 |
| ChinaConstructionBankCorporation-ChinaUniversalCSIGuoxin | Other | 0.26% | 1,071,900 | 1,071,900 | 0 | 1,071,900 | Notapplicable | 0 |
Central-SOEsShareholderReturnETF
| Central-SOEsShareholderReturnETF | |||||
| Situationwherestrategicinvestorsorgenerallegalpersonsbecomethetop10shareholdersduetotheplacementofnewshares(ifany)(seeNote3) | Notapplicable | ||||
| Explanationofrelatedrelationshipsorconcertedactionsoftheaboveshareholders | TheCompanyisunawareofwhetherthe10shareholdersmentionedabovehaveanyrelatedrelationshipsorareconcertedactors. | ||||
| Explanationoftheabove-mentionedshareholders'involvementinthedelegation/entrustmentofvotingrightsorthewaiverofvotingrights | TheshareholderAVICInternationalHoldingLimitedhadauthorizedrepresentativestoexercisevotingrightsonbehalfofthecompanyatthe2022AnnualGeneralMeeting,the1stExtraordinaryGeneralMeetingof2023,the2ndExtraordinaryGeneralMeetingof2023,andthe3rdExtraordinaryGeneralMeetingof2023.Thenumberofrepresentativeshareswas162,977,327,andthevotingresultsweredetailedintherelevantannouncementsdisclosedbytheCompanyonCNINF. | ||||
| Specialexplanationfortheexistenceofspecialrepurchaseaccountsamongthetop10shareholders(ifany)(seeNote10) | ThenumberofcommonsharesheldbytheCompany'sB-sharespecialrepurchaseaccount,"FIYTAPrecisionTechnologyCo.,Ltd.SpecialRepurchaseSecuritiesAccount",attheendofthereportingperiod,is9,355,763shares,andtheholdingratiois2.25%,mainlyduetotheCompany'simplementationofB-sharerepurchase.Accordingtoregulations,thespecialrepurchaseaccountisnotincludedinthelistofthetop10shareholders. | ||||
| Holdingsofthetop10shareholderswithoutsellingrestrictions | |||||
| NameofShareholders | Numberofsharesheldwithoutsellingrestrictionsattheendofthereportingperiod | Typesofshares | |||
| Typesofshares | Quantity | ||||
| AVICInternationalHoldingLimited | 162,977,327 | Renminbicommonshares | 162,977,327 | ||
| #WuJilin | 18,043,627 | Renminbicommonshares | 18,043,627 | ||
| #XuGuoliang | 7,242,768 | Renminbicommonshares | 7,242,768 | ||
| QiuHong | 2,470,000 | Renminbicommonshares | 2,470,000 | ||
| #ZhuRui | 1,407,100 | Renminbicommonshares | 1,407,100 | ||
| CITICSecuritiesCompanyLimited | 1,368,078 | Renminbicommonshares | 1,368,078 | ||
| #QuYongjie | 1,286,800 | Renminbicommonshares | 1,286,800 | ||
| IndustrialandCommercialBankofChinaLtd.-GFCSIGuoxinCentral-SOEsShareholderReturnETF | 1,212,700 | Renminbicommonshares | 1,212,700 | ||
| ChenHao | 1,101,643 | Renminbicommonshares | 1,101,643 | ||
| ChinaConstructionBankCorporation-ChinaUniversalCSIGuoxinCentral-SOEsShareholderReturnETF | 1,071,900 | Renminbicommonshares | 1,071,900 | ||
| Explanationoftherelatedrelationshipsorconcertedactionsamongthetop10shareholdersofunrestrictedshares,aswellasbetweenthetop10shareholdersofunrestrictedsharesandthetop10shareholders | TheCompanyisunawareofwhetherthe10shareholdersmentionedabovehaveanyrelatedrelationshipsorareconcertedactors. | ||||
| Explanationoftheparticipationofthetop10 | 1.Inadditiontoholding10,597,777sharesthroughtheordinarysecurities | ||||
commonshareholdersinthemargintradingandsecuritieslendingbusiness(ifany)(seeNote4)
| commonshareholdersinthemargintradingandsecuritieslendingbusiness(ifany)(seeNote4) | account,shareholderWuJilinalsoholds7,445,850sharesthroughthecustomercredittradingguaranteesecuritiesaccountofChinaCICCWealthManagementSecuritiesCompanyLimited,totaling18,043,627shares;2.Inadditiontoholding6,640,868sharesthroughtheordinarysecuritiesaccount,shareholderXuGuoliangalsoholds601,900sharesthroughthecustomercredittradingguaranteesecuritiesaccountofGuosenSecuritiesCo.,Ltd.,totaling7,242,768shares;3.Inadditiontoholding62,000sharesthroughtheordinarysecuritiesaccount,shareholderZhuRuialsoholds1,345,100sharesthroughthecustomercredittradingguaranteesecuritiesaccountofFirstCapitalSecuritiesCo.,Ltd.,totaling1,407,100shares;4.Inadditiontoholding42,800sharesthroughtheordinarysecuritiesaccount,shareholderQuYongjiealsoholds1,244,000sharesthroughthecustomercredittradingguaranteesecuritiesaccountofShanxiSecuritiesCompanyLimited,totaling1,286,800shares. |
Top10shareholdersparticipatinginthelendingofsharesthroughrefinancingbusinessNotapplicableChangesinthetop10shareholderscomparedtothepreviousperiodUnit:shares
| Changesinthetop10shareholderscomparedtotheendofthepreviousperiod | |||
| NameofShareholders(FullName) | Newadditions/exitsduringthisreportingperiod | Numberofshareslentthroughrefinancingandnotyetrepaidattheendoftheperiod | |
Numberofsharesheldintheordinaryaccountandcreditaccountofshareholders,aswellastheshareslentthroughrefinancingandnotyetrepaidattheendoftheperiod
| Totalquantity | Proportiontothetotalsharecapital | Totalquantity | Proportiontothetotalsharecapital | ||
| CITICSecuritiesCompanyLimited | Newaddition | 0 | 0.00% | 1,368,078 | 0.33% |
| IndustrialandCommercialBankofChinaLtd.-GFCSIGuoxinCentral-SOEsShareholderReturnETF | Newaddition | 0 | 0.00% | 1,212,700 | 0.29% |
| ChinaConstructionBankCorporation-ChinaUniversalCSIGuoxinCentral-SOEsShareholderReturnETF | Newaddition | 0 | 0.00% | 1,071,900 | 0.26% |
| LiShuyuan | Exit | 0 | 0.00% | 811,500 | 0.20% |
| ZhangMingrong | Exit | 0 | 0.00% | 0 | 0.00% |
| LvShaowen | Exit | 0 | 0.00% | 0 | 0.00% |
Whetherthetop10commonshareholdersandthetop10commonshareholderswithoutsellingrestrictionsengagedinagreedrepurchasetransactionsduringthereportingperiodNo
2.Informationaboutthecontrollingshareholder
Nature:centralstate-ownedholdingType:legalperson
| Name | Legalrepresentative/Personinchargeoftheunit | Establishmentdate | Organizationcode | Mainbusinesses |
| AVICInternationalHoldingLimited | LiBin | June20,1997 | 91440300279351229A | Investmentinindustrialdevelopment(specificprojectstobedeclaredseparately);Domestic |
commercialandmaterialsupplyandmarketingindustries(excludingexclusive,controlled,andsoldgoods);Engaginginimportandexportbusiness(excludingprojectsprohibitedbylaws,administrativeregulations,anddecisionsoftheStateCouncil,andrestrictedprojectsshallobtainpermissionbeforeoperation).
| commercialandmaterialsupplyandmarketingindustries(excludingexclusive,controlled,andsoldgoods);Engaginginimportandexportbusiness(excludingprojectsprohibitedbylaws,administrativeregulations,anddecisionsoftheStateCouncil,andrestrictedprojectsshallobtainpermissionbeforeoperation). | ||
| Equitysituationofotherdomesticandforeignlistedcompaniescontrolledandparticipatedinbythecontrollingshareholderduringthereportingperiod | AVICINTLholds11.86%oftheequityinTianmaMicroelectronicsCo.,Ltd.(STM000050)and63.97%oftheequityinShennanCircuitCo.,Ltd.(SNDL002916). | |
ChangesinthecontrollingshareholderduringthereportingperiodNotapplicable
3.ActualcontrolleranditsconcertedactorNature:centralstate-ownedassetmanagementagency
| Name | Legalrepresentative/Personinchargeoftheunit | Establishmentdate | Organizationcode | Mainbusinesses |
| AviationIndustryCorporationofChina,Ltd. | TanRuisong | November6,2008 | 91110000710935732K | Operatingstate-ownedassetswithinthescopeauthorizedbytheStateCouncil;Research,design,development,testing,production,sales,maintenance,support,andserviceofmilitaryaircraftandengines,guidedweapons,militarygasturbines,weaponequipmentsupportingsystemsandproducts;Investmentandmanagementinindustriessuchasfinance,leasing,generalaviationservices,transportation,healthcare,engineeringsurveyanddesign,engineeringcontractingandconstruction,andrealestatedevelopment;Design,R&D,testing,production,sales,andmaintenanceservicesforcivilaircraftandengines,onboardequipmentandsystems,gasturbines,automobilesandmotorcyclesandengines |
Type:legalperson
(includingcomponents),refrigerationequipment,electronicproducts,environmentalprotectionequipment,andnewenergyequipment;Equipmentleasing;Engineeringsurveyanddesign;Engineeringcontractingandconstruction;Realestatedevelopmentandoperation;Technologytransferandtechnicalservicesrelatedtotheabovebusinesses;Importandexportbusiness;Technologicaldevelopmentandsalesofships;Developmentofengineeringequipmenttechnology;Technologicaldevelopmentofnewenergyproducts.(Enterprisesshallindependentlychoosetheirbusinessprojectsandcarryoutbusinessactivitiesinaccordancewiththelaw.Forprojectsthatrequireapprovalaccordingtothelaw,theyshallcarryoutbusinessactivitiesinaccordancewiththeapprovedcontentafterobtainingapprovalfromrelevantdepartments.Theyshallnotengageinbusinessactivitiesprohibitedorrestrictedbytheindustrialpoliciesofthiscity.)
| (includingcomponents),refrigerationequipment,electronicproducts,environmentalprotectionequipment,andnewenergyequipment;Equipmentleasing;Engineeringsurveyanddesign;Engineeringcontractingandconstruction;Realestatedevelopmentandoperation;Technologytransferandtechnicalservicesrelatedtotheabovebusinesses;Importandexportbusiness;Technologicaldevelopmentandsalesofships;Developmentofengineeringequipmenttechnology;Technologicaldevelopmentofnewenergyproducts.(Enterprisesshallindependentlychoosetheirbusinessprojectsandcarryoutbusinessactivitiesinaccordancewiththelaw.Forprojectsthatrequireapprovalaccordingtothelaw,theyshallcarryoutbusinessactivitiesinaccordancewiththeapprovedcontentafterobtainingapprovalfromrelevantdepartments.Theyshallnotengageinbusinessactivitiesprohibitedorrestrictedbytheindustrialpoliciesofthiscity.) | ||
| Equitysituationofotherdomesticandforeignlistedcompaniescontrolledbytheactualcontrollerduringthereportingperiod | InadditiontoholdingequityintheCompany,AVICdirectlyorindirectlyholdsandcontrolsthesharesofdomesticandforeignlistedcompanies,including:1.TianmaMicroelectronicsCo.,Ltd.(SZ.00050),withaholdingratioof28%;2.AVICXi'anAircraftIndustryGroupCompanyLtd.(SZ.000768),withaholdingratioof55%;3.AVICJonhonOptronicTechnologyCo.,Ltd.(SZ.002179),withaholdingratioof40%;4.ChengfeiIntegrationTechnologyCo.,Ltd.(SZ.002190),withaholdingratioof51%;5.RainbowDigitalCommercialCo.,Ltd.(SZ.002419),withaholdingratioof45%;6.AVICZhonghangElectronicMeasuringInstrumentsCo.,Ltd.(SZ.300114),withaholdingratioof54%;7.AVICOPTERPLC(SH.600038),withaholdingratioof50%;8.JiangxiHongduAviationIndustryCo.,Ltd.(SH.600316),withaholdingratioof48%;9.AVICAirborneSystemsCo.,Ltd.(SH.600372),withaholdingratioof56%;10.GuizhouGuihangAutomotiveComponentsCo.,Ltd.(SH.600523),withaholdingratioof46%;11.AVICIndustry-FinanceHoldingsCo.,Ltd.(SH.600705),withaholdingratioof51%;12.AVICShenyangAircraftCompanyLimited(SH.600760),withaholdingratioof69%;13.AVICHeavyMachineryCo.,Ltd.(SH.600765),withaholdingratioof37%;14.BaoshengScience&TechnologyInnovationCo.,Ltd.(SH.600973),withaholdingratioof40%;15.AVICAviationHigh-TechnologyCo.,Ltd.(SH.600862),withaholdingratioof45%;16.ShennanCircuitCo.,Ltd.(002916),withaholdingratioof64%;17.HefeiJianghangAircraftEquipmentCo.,Ltd.(SH.688586),withaholdingratioof56%;18.AVIC(Chengdu)UASCo.,Ltd.(688297.SH),withaholdingratioof54%;19.AVICForstarS&TCo.,Ltd.(BJ.835640),withaholdingratioof47%;20.NexteerAutomotiveGroupLtd.(HK.1316),withaholdingratioof44%;21.AVIChinaIndustryandTechnologyCo.,Ltd.(HK.2357),withaholdingratioof60%;22.ContinentalAerospaceTechnologiesHoldingLimited(HK.0232),withaholdingratioof46%;23.KHDHumboldtWedagInternationalAG(KWG:GR),withaholdingratioof89%;24.FACCAG(AT00000FACC),withaholdingratioof55%. | |
ChangesinactualcontrollerduringthereportingperiodNotapplicableBlockdiagramofpropertyrightsandcontrolrelationshipbetweentheCompanyandtheactualcontroller
TheactualcontrollercontrolstheCompanythroughtrustorotherassetmanagementmethodsNotapplicable
4.ThecumulativenumberofpledgedsharesheldbythecontrollingshareholderorthelargestshareholderoftheCompanyandtheirconcertedactorsaccountsfor80%ofthesharestheyholdintheCompany
Notapplicable
5.Othercorporateshareholdersholdingmorethan10%ofthesharesNotapplicable
6.Restrictedreductionofsharesheldbythecontrollingshareholder,actualcontroller,restructuringparties,andothercommittedentities
Notapplicable
IV.SpecificimplementationofsharerepurchaseduringthereportingperiodProgressintheimplementationofsharerepurchase
Disclosuredateoftheplan
| Disclosuredateoftheplan | Numberofsharestoberepurchased(shares) | Proportiontothetotalsharecapital | Proposedrepurchaseamount(RMBtenthousand) | Proposedrepurchaseperiod | Purposeofrepurchase | Repurchasedquantity(shares) | Proportionofrepurchasedsharestotheunderlyingshares |
involvedintheequityincentiveplan(ifany)
| involvedintheequityincentiveplan(ifany) | |||||||
| March18,2023 | 6.66millionto13.32millionshares | 1.59%to3.19% | NolessthanRMB50millionandnomorethanRMB100million | April27,2023toApril26,2024 | Cancellationandreductionofregisteredcapitalinaccordancewiththelaw | 9,355,763 |
ProgressintheimplementationofreducingandrepurchasingsharesthroughcentralizedbiddingtradingNotapplicable
Section8InformationRelatedtoPreferredShares
Notapplicable
Section9BondRelatedInformation
Notapplicable
DaHuaCertifiedPublicAccountants（SpecialGeneralPartnership）
FIYTAPrecisionTechnologyCo.,Ltd.
| FIYTAPrecisionTechnologyCo.,Ltd. |
| IndependentAuditor’sReport |
| D.H.S.Z.[2024]0011000766 |
FIYTAPrecisionTechnologyCo.,Ltd.IndependentAuditor’sReportandFinancialStatements
(1January2023to31December2023)
| Content | Page | ||
| I. | IndependentAuditor’sReport | 1-7 | |
| II. | AuditedFinancialStatements | ||
| ConsolidatedBalanceSheet | 1-2 | ||
| ConsolidatedStatementofComprehensiveIncome | 3 | ||
| ConsolidatedCashFlowStatement | 4 | ||
| ConsolidatedStatementofChangesinEquity | 5-6 | ||
| ParentCompany’sBalanceSheet | 7-8 | ||
| ParentCompany’sStatementofComprehensiveIncome | 9 | ||
| ParentCompany’sCashFlowStatement | 10 | ||
| ParentCompany’sStatementofChangesinEquity | 11-12 | ||
| NotestoFinancialStatements | 13-121 |
DaHuaCertifiedPublicAccountants(SpecialGeneralPartnership)12thFloor,Building7,No.16,XisihuanMiddleRoad,HaidianDistrict,Beijing[100039]
Tel:86(10)58350011Fax:86(10)58350006
www.dahua-cpa.com
IndependentAuditor’sReport-Page1
IndependentAuditor’sReport
D.H.S.Z.[2024]0011000766
TotheShareholdersofFIYTAPrecisionTechnologyCo.,Ltd.:
I.AuditOpinion
WehaveauditedtheaccompanyingfinancialstatementsofFIYTAPrecisionTechnologyCo.,Ltd.(hereinafter“FIYTALtd.”ortheCompany),whichcomprisetheconsolidatedandtheparentcompany’sbalancesheetasat31December2023,theconsolidatedandtheparentcompany’sstatementofcomprehensiveincome,theconsolidatedandtheparentcompany’scashflowstatementsandtheconsolidatedandtheparentcompany’sstatementofchangesinequityfortheyearthenended,andnotestothefinancialstatements.Inouropinion,theaccompanyingfinancialstatementspresentinallmaterialrespectsinaccordancewiththerequirementsofAccountingStandardsforBusinessEnterprises,andfairlyreflectFIYTALtd.’sfinancialpositionat31December2023andthefinancialperformanceandcashflowsfortheyearthenended.II.BasisforAuditOpinionWeconductedourauditinaccordancewithCICPAStandardsonAuditing(“CSAs”).In‘CertifiedPublicAccountant’sResponsibilitiesfortheAuditofFinancialStatements’ofthisreport,ourresponsibilitiesunderthesestandardsaredescribed.ThosestandardsrequirethatwecomplywithCICPAprofessionalethicalrequirements,thatweareindependentfromFIYTALtd.andhavefulfilledallotherethicalobligations.Webelievethatwehaveobtainedsufficientandappropriateauditevidenceasbasisofforouropinion.
III.KeyAuditMatters
D.H.S.Z.[2023]000189
IndependentAuditor’sReport-Page
Keyauditmattersarethosemattersthat,inourprofessionaljudgment,wereofmostsignificanceinourauditofthefinancialstatementsofthecurrentperiod.Thesematterswereaddressedinthecontextofourauditofthefinancialstatementsasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.Wehavedeterminedthefollowingkeyauditmattersthatneedtobecommunicatedinauditreport.(I)Existenceofinventoryanditsnetrealizablevalue
1.Description
Asat31December2023,thebookbalance,provisionfordeclineinvalue,andcarryingamountofinventorywereRMB2,172.58million,RMB71.91millionandRMB2,100.67millionrespectively.Thecarryingamountofinventoryaccountsfor
49.97%ofthetotalassetsoftheCompany.
(i)AsthemainbusinessofFIYTALtdissellingFIYTAbrandwatchesandotherbrandedwatches,themaininventoryofFIYTALtdarefinishedwatchesandwatchcomponents.Theinventoriesaredistributedinstores,regionalwarehouses,resellers’warehousesandtheCompany’swarehouseswhichcauseddifficultyininventoryphysicalobservation;
(ii)ThemanagementofFIYTALtdmeasuresinventoryatlowerofcostandnetrealizablevalue(NRV)atbalancesheetdate.WherethecostofaninventoryexceedsitsNRV,thedifferenceisrecognizedasprovisionfordeclineinvalue.ThedeterminationofNRVinvolvessignificantjudgmentandestimatesbytheManagement.
InventoryvalueissignificanttotheCompany’sassetsanditrequiressignificantjudgementbytheManagement,asaresult,weidentifiedexistenceofinventoryanditsnetrealizablevalueaskeyauditmatters.
2.Howourauditaddressedthekeyauditmatter
Majorauditprocedureswehaveconductedinclude:
(i)Understanding,evaluatingandtestingthedesignandoperatingeffectivenessofinternalcontrolsofprocurementandpayment,productionandstorage,andtheprovisionfordeclineinvalueofinventory;
(ii)UsingtheworkofexpertstoconductITaudittoinformationsystemandevaluatingtheauthenticityandaccuracyofbusinessdatawhichrelatedtofinancial
D.H.S.Z.[2023]000189
IndependentAuditor’sReport-Page
statements.
(iii)UnderstandingandevaluatingtheappropriatenessoftheCompany’spolicyinprovisionfordeclineinvalue;
(iv)Understandingandinquiringthelocationsofinventorystorage,measurementmethodofinventorysoastodeterminingthescopeofinventoryphysicalobservation;
(v)DiscussingphysicalinventorycountstatuswiththeManagementandattendingthephysicalinventorycountandconductingobservationandtestcountonsitetocheckthequantityoftheinventoriesandobservetheircondition.
(vi)Obtainingtheageingreportofinventoryandtakingintoconsiderationofinventoryconditioninordertoperformanalyticalreviewontheageingaswellasanalyzethereasonablenessofprovisionfordeclineinvalue;
(vii)ReviewingandevaluatingtheappropriatenessofsignificantestimatesmadebytheManagementindeterminingtheNRVofinventory;
(viii)Obtainingthecalculationofprovisionfordeclineinvalueofinventory,reviewingwhethertheprovisionwasmadeincompliancewithrelevantaccountingpoliciesandperformingrecalculationofprovision.Checkingthemovementsofprioryear’sprovisionandanalyzingwhethertheprovisionwasadequatelyaccruedinpriorperiod.
(ix)Tracingsamplesoflargepurchasesincurrentperiodtotheircorrespondingcontractsandtaxinvoices,andinspectingtheirpurchaserequisitionformandgoodsreceiptnotes.
Basedonauditworkconductedabove,webelievethattheinventoryexistsandthemeasurementisreasonablestatedaccordingtotheCompany’spolicies.
(II)Revenuerecognition
1.Description
In2023,theCompany’sincomefrommainbusinesswasRMB4,553.71million.TheCompany’srevenuemainlycomesfromsalesofFIYTAbrandwatchesanddistributionofotherbrandedwatches.ExceptforsmallamountofsalesbydirectsalesandconsignmentsalesofFIYTAbrandwatches,mostofthesalesofFIYTAbrandwatchesandotherbrandedwatchesaresoldthroughshopsindepartmentstoreandon-lineshops.RefertoNoteIII32foraccountingpolicyrelatingtorevenuerecognition.
D.H.S.Z.[2023]000189
IndependentAuditor’sReport-Page
Operatingrevenuerepresentsmajorlineiteminincomestatementandismainsourceofprofit,theaccuracyandcompletenessofrevenuerecognitionhavesignificantimpacttotheCompany’sprofit,asaresult,weidentifiedrevenuerecognitionasakeyauditmatter.
2.Howourauditaddressedthekeyauditmatter
Majorauditprocedureswehaveconductedinclude:
(i)Understanding,evaluatingandtestingthedesignandoperatingeffectivenessofinternalcontrolsrelatingtorevenuerecognition;
(ii)UsingtheworkofexpertstoconductITaudittoinformationsystemandevaluatingtheauthenticityandaccuracyofbusinessdatawhichrelatedtofinancialstatements.
(iii)Obtainingandunderstandingaccountingpoliciesrelatingtorevenuerecognition,andreviewingandevaluatingwhetherthepointintimeofcontrolrighttransfer,measurementoftransactionpriceandaccountingforspecialtransactionsarecompliedwiththeaccountingstandards;
(iv)Selectingsamplesfromcurrentyear’stransactionrecords,andtracingthemtosupportingdocumentssuchascontract,taxinvoiceandgoodsdispatchnote(ifapplicable)andcourierwaybill(ifapplicable);
(v)Inconnectionwithauditofaccountsreceivable,selectingmajorcustomersandconfirmingcorrespondingsalesincurrentyearandyear-endbalance,andprocedureswereimplementedtocheckforpost-datedreturns;
(vi)Conductingcut-offtesttorevenuerecognizedbeforeandafterthebalancesheetdatebyselectingsamplestochecksupportingdocumentssuchascontract,taxinvoiceandgoodsdispatchnote(ifapplicable)andcourierwaybill(ifapplicable)toevaluatewhethertherevenuewasrecordedinappropriateaccountingperiod.
Basedonauditworkconductedabove,webelievethattheCompany’srevenuerecognitionisinconformitytoitsrevenuerecognitionpolicy.IV.OtherInformation
ThemanagementofFIYTALtd(the“Management”)areresponsiblefortheOtherInformation.TheOtherInformationcomprisesalloftheinformationincludedintheCompany’sannualreportotherthanthefinancialstatementsandourauditors’reportthereon.
OuropinionexpressedonthefinancialstatementsdoesnotcovertheOther
D.H.S.Z.[2023]000189
IndependentAuditor’sReport-Page
Informationandwedonotexpressanyformofassuranceconclusionthereon.Inconnectionwithourauditofthefinancialstatements,ourresponsibilityistoreadtheOtherInformationand,indoingso,considerwhethertheOtherInformationismateriallyinconsistentwiththefinancialstatementsorourknowledgeobtainedintheauditorotherwiseappearstobemateriallymisstated.
If,basedontheworkwehaveperformed,weconcludethatthereisamaterialmisstatementofthisOtherInformation,wearerequiredtoreportthatfact.Wehavenothingtoreportinthisregard.V.ResponsibilitiesoftheManagementandthoseChargedwithGovernancefortheFinancialStatements
TheManagementoftheCompanyisresponsibleforthepreparationofthefinancialstatementsthatgiveafairviewinaccordancewithAccountingStandardsforBusinessEnterprisesandforthedesign,implementationandmaintenanceofsuchinternalcontrolsastheManagementdetermineisnecessarytoenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.
Inpreparingthefinancialstatements,theManagementisresponsibleforassessingtheCompany’sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisofaccountingunlesstheManagementeitherintendtoliquidatetheCompanyortoceaseoperations,orhavenorealisticalternativebuttodoso.
ThosewhochargedwithgovernanceisresponsibleforoverseeingtheCompany’sfinancialreportingprocess.
VI.Auditors’ResponsibilitiesfortheAuditoftheFinancialStatements
Ourobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsasawholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditors’reportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewithChinaStandardsonAuditingwillalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandareconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybe
D.H.S.Z.[2023]000189
IndependentAuditor’sReport-Page
expectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstatements.
AspartofanauditinaccordancewithChinaStandardsonAuditing,weexerciseprofessionaljudgmentandmaintainprofessionalskepticismthroughouttheaudit.Wealso:
1.Identifyandassesstherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror,designandperformauditproceduresresponsivetothoserisks,andobtainauditevidencethatissufficientandappropriatetoprovideabasisforouropinion.Theriskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol.
2.Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatareappropriateinthecircumstances.
3.EvaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesandrelateddisclosuresmadebytheManagement.
4.ConcludeontheappropriatenessoftheManagement’suseofthegoingconcernbasisofaccountingand,basedontheauditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtontheCompany’sabilitytocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,wearerequired,accordingtoChinaStandardsonAuditing,todrawattentioninourauditors’reporttotherelateddisclosuresinthefinancialstatementsor,ifsuchdisclosuresareinadequate,tomodifyouropinion.Ourconclusionsarebasedontheauditevidenceobtaineduptothedateofourauditors’report.However,futureeventsorconditionsmaycausetheCompanytoceasetocontinueasagoingconcern.
5.Evaluatetheoverallpresentation,structureandcontentofthefinancialstatements,includingthedisclosures,andwhetherthefinancialstatementsrepresenttheunderlyingtransactionsandeventsinamannerthatachievesfairpresentation.
6.ObtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentitiesorbusinessactivitieswithinFIYTALtdtoexpressanopiniononthefinancialstatements.Weareresponsibleforthedirection,supervision
D.H.S.Z.[2023]000189
IndependentAuditor’sReport-Page
andperformanceofthegroupaudit.Weremainsolelyresponsibleforourauditopinion.Wecommunicatewiththosechargedwithgovernanceregarding,amongothermatters,theplannedscopeandtimingoftheauditandsignificantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit.Wealsoprovidethosechargedwithgovernancewithastatementthatwehavecompliedwithrelevantethicalrequirementsregardingindependence,andtocommunicatewiththemallrelationshipsandothermattersthatmayreasonablybethoughttobearonourindependence,andwhereapplicable,relatedsafeguards.
Fromthematterscommunicatedwiththosechargedwithgovernance,wedeterminethosemattersthatwereofmostsignificanceintheauditofthefinancialstatementsofthecurrentperiodandarethereforethekeyauditmatters.Wedescribethesemattersinourauditor’sreportunlesslaworregulationprecludespublicdisclosureaboutthematterorwhen,inextremelyrarecircumstances,wedeterminethatamattershouldnotbecommunicatedinourreportbecausetheadverseconsequencesofdoingsowouldreasonablybeexpectedtooutweighthepublicinterestbenefitsofsuchcommunication.
| DaHuaCertifiedPublicAccountants(SpecialGeneralPartnership) | CICPA: | ||
| Beijing,China | Engagementpartner | LongJiao | |
| CICPA: | |||
| WangDong | |||
| 12March2024 | |||
Page
II.AuditedFinancialStatements
| ConsolidatedBalanceSheet | ||
| Asat31December2023 | ||
| Preparedby:FIYTAPrecisionTechnologyCo.,Ltd. | (Unlessotherwiseindicated,thecurrencyisexpressedinRMB) | |
Assets
| Assets | NoteV | ClosingBalance | ClosingBalanceofpriorperiod |
Currentassets:
| Currentassets: | |||||||
| Monetaryfunds | note1 | 504,629,153.71 | 313,747,463.64 | ||||
| Financialassetsheldfortrading | |||||||
| Derivativefinancialassets | |||||||
| Notesreceivable | note2 | 18,268,972.37 | 32,214,912.10 | ||||
| Accountsreceivable | note3 | 323,142,761.64 | 305,290,959.68 | ||||
| Accountsreceivablefinancing | |||||||
| Prepayments | note4 | 6,571,239.98 | 8,039,794.97 | ||||
| Otherreceivables | note5 | 57,725,792.00 | 56,918,019.48 | ||||
| Inventories | note6 | 2,100,666,175.28 | 2,141,320,373.67 | ||||
| Contractassets | |||||||
| Held-for-saleassets | |||||||
| Currentportionofnon-currentassets | |||||||
| Othercurrentassets | note7 | 72,249,391.81 | 66,339,505.32 | ||||
| Totalcurrentassets | 3,083,253,486.79 | 2,923,871,028.86 | |||||
Non-currentassets:
| Non-currentassets: | |||||||
| Debtinvestments | |||||||
| Otherdebtinvestments | |||||||
| Long-termreceivables | |||||||
| Long-termequityinvestments | note8 | 51,862,607.30 | 58,182,086.90 | ||||
| Investmentinotherequityinstruments | note9 | 85,000.00 | |||||
| Othernon-currentfinancialassets | |||||||
| Investmentproperties | note10 | 360,255,832.14 | 374,979,494.71 | ||||
| Fixedassets | note11 | 355,785,354.68 | 364,628,765.17 | ||||
| Constructioninprogress | |||||||
| Productivebiologicalassets | |||||||
| Oilandgasassets | |||||||
| Right-of-useassets | note12 | 109,452,481.64 | 110,330,512.03 | ||||
| Intangibleassets | note13 | 31,664,380.77 | 33,200,218.63 | ||||
| Developmentexpenditure | |||||||
| Goodwill | |||||||
| Long-termdeferredexpenses | note14 | 122,324,355.13 | 144,488,452.18 | ||||
| Deferredtaxassets | note15 | 80,227,771.46 | 95,784,611.94 | ||||
| Othernon-currentassets | note16 | 9,434,627.17 | 11,593,741.57 | ||||
| Totalnon-currentassets | 1,121,007,410.29 | 1,193,272,883.13 | |||||
Totalassets
| Totalassets | 4,204,260,897.08 | 4,117,143,911.99 |
LegalRepresentative:ZhangXuhuaFinanceOfficer(CFO):SongYaomingFinancialManager:TianHui
Page
| ConsolidatedBalanceSheet(Continued) | ||||||
| Asat31December2023 | ||||||
| Preparedby:FIYTAPrecisionTechnologyCo.,Ltd. | (Unlessotherwiseindicated,thecurrencyisexpressedinRMB) | |||||
| LiabilityandEquity | NoteV | ClosingBalance | ClosingBalanceofpriorperiod | |||
Currentliabilities:
| Currentliabilities: | |||||||
| Short-termborrowings | note17 | 250,187,763.87 | 290,237,111.11 | ||||
| Financialliabilitiesheldfortrading | |||||||
| Derivativefinancialliabilities | |||||||
| Notespayable | note18 | 2,000,600.00 | |||||
| Accountspayable | note19 | 173,825,907.71 | 170,589,456.67 | ||||
| Paymentsreceivedinadvance | note20 | 10,267,758.31 | 16,960,128.83 | ||||
| Contractliabilities | note21 | 12,286,243.62 | 16,844,437.47 | ||||
| Employeebenefitspayable | note22 | 120,084,810.60 | 136,587,939.38 | ||||
| Taxpayables | note23 | 64,188,161.31 | 60,770,168.30 | ||||
| Otherpayables | note24 | 121,937,801.07 | 165,060,122.58 | ||||
| Held-for-saleliabilities | |||||||
| Currentportionofnon-currentliabilities | note25 | 66,399,004.20 | 71,546,316.16 | ||||
| Othercurrentliabilities | note26 | 1,589,635.30 | 1,686,806.01 | ||||
| Totalcurrentliabilities | 820,767,085.99 | 932,283,086.51 | |||||
Non-currentliabilities:
| Non-currentliabilities: | |||||||
| Long-termborrowings | |||||||
| Bondspayable | |||||||
| Including:Preferredstock | |||||||
| Including:Perpetualdebt | |||||||
| Leaseliabilities | note27 | 43,526,352.52 | 41,642,561.58 | ||||
| Long-termpayables | |||||||
| Long-termemployeebenefitspayable | |||||||
| Provisions | |||||||
| Deferredincome | note28 | 952,785.69 | 1,295,926.80 | ||||
| Deferredtaxliabilities | note15 | 5,208,920.69 | 5,498,844.95 | ||||
| Othernon-currentliabilities | |||||||
| Totalnon-currentliabilities | 49,688,058.90 | 48,437,333.33 | |||||
| Totalliabilities | 870,455,144.89 | 980,720,419.84 | |||||
Equity:
| Equity: | |||||||
| Sharecapital | note29 | 415,219,970.00 | 417,627,960.00 | ||||
| Otherequityinstruments | |||||||
| Including:Preferredstock | |||||||
| Including:Perpetualdebt | |||||||
| Capitalreserves | note30 | 990,159,033.17 | 1,007,086,643.48 | ||||
| Less:Treasurystock | note31 | 78,645,532.23 | 50,759,806.16 | ||||
| Othercomprehensiveincome | note32 | 19,325,335.93 | 5,739,589.89 | ||||
| Specialreserves | note33 | 3,223,158.06 | 2,012,064.91 | ||||
| Surplusreserve | note34 | 275,010,401.50 | 275,010,401.50 | ||||
| Retainedearnings | note35 | 1,709,513,385.76 | 1,479,706,638.53 | ||||
| Equityattributabletoparentcompany | 3,333,805,752.19 | 3,136,423,492.15 | |||||
| Non-controllinginterests | |||||||
| Totalshareholders'equity | 3,333,805,752.19 | 3,136,423,492.15 | |||||
| Totalliabilitiesandshareholders'equity | 4,204,260,897.08 | 4,117,143,911.99 | |||||
| LegalRepresentative:ZhangXuhuaFinanceOfficer(CFO):SongYaomingFinancialManager:TianHui | |||||||
Page
| ConsolidatedStatementofComprehensiveIncome | ||||||||
| Fortheyearended31December2023 | ||||||||
| Preparedby:FIYTAPrecisionTechnologyCo.,Ltd. | (Unlessotherwiseindicated,thecurrencyisexpressedinRMB) | |||||||
| Items | NoteV | CurrentPeriod | PriorPeriod | |||||
| 1.Operatingrevenue | note36 | 4,569,690,002.99 | 4,354,096,880.36 | |||||
| Less: | Operatingcosts | note36 | 2,905,463,474.81 | 2,738,972,791.11 | ||||
| Taxesandsurcharges | note37 | 36,193,846.10 | 30,800,199.73 | |||||
| Sellingexpenses | note38 | 924,009,179.32 | 931,832,830.40 | |||||
| Administrativeexpenses | note39 | 205,359,277.24 | 219,014,508.52 | |||||
| Researchanddevelopmentexpenses | note40 | 57,802,244.08 | 61,088,585.61 | |||||
| Financeexpenses | note41 | 21,469,772.77 | 21,188,742.11 | |||||
| Including:Interestexpenses | 12,824,222.06 | 16,846,749.14 | ||||||
| Interestincome | 5,722,586.39 | 3,923,999.48 | ||||||
| Add: | Otherincome | note42 | 11,435,373.78 | 18,648,210.06 | ||||
| Incomefrominvestments | note43 | -5,819,479.60 | 3,026,481.59 | |||||
| Including:Investmentincomefromassociatesandjointventures | -5,819,479.60 | 3,026,481.59 | ||||||
| Derecognitionoffinancialassetsatamortizedcost | ||||||||
| Gainsorlossesfromnetexposurehedging | ||||||||
| Gainsorlossesfromchangesinfairvalues | ||||||||
| Creditimpairmentlosses | note44 | 6,827,575.82 | 4,845,379.45 | |||||
| Impairmentlosses | note45 | 571,980.37 | -37,625,482.96 | |||||
| Gainsorlossesfromassetdisposals | note46 | 685,868.57 | 91,925.06 | |||||
| 2.Operatingprofit | 433,093,527.61 | 340,185,736.08 | ||||||
| Add:Non-operatingincome | note47 | 4,770,506.80 | 1,287,202.08 | |||||
| Less:Non-operatingexpenses | note48 | 859,770.10 | 2,351,266.31 | |||||
| 3.Profitbeforetax | 437,004,264.31 | 339,121,671.85 | ||||||
| Less:Incometax | note49 | 103,826,161.94 | 72,440,220.01 | |||||
| 4.Netprofit | 333,178,102.37 | 266,681,451.84 | ||||||
| Including:Netprofitrealizedbeforebusinesscombinationsundercommoncontrol | ||||||||
| I.Netprofitclassifiedbygoingconcern | ||||||||
| Netprofitfromcontinuingoperations（"-"fornetloss) | 333,178,102.37 | 266,681,451.84 | ||||||
| Netprofitfromdiscontinuingoperations（"-"fornetloss) | ||||||||
| II.Netprofitclassifiedbyownership | ||||||||
| Netprofitattributabletoparentcompany | 333,178,102.37 | 266,681,451.84 | ||||||
| Netprofitattributabletonon-controllinginterests | ||||||||
| 5.Othercomprehensiveincomeaftertax | 13,585,746.04 | 13,397,936.29 | ||||||
| Othercomprehensiveincomeaftertaxattributabletoparentcompany | 13,585,746.04 | 13,397,936.29 | ||||||
| I.Itemsofothercomprehensiveincomethatwillnotbereclassifiedtoprofitorloss | ||||||||
| i. | Changesinremeasurementofdefinedbenefitplans | |||||||
| ii. | Othercomprehensiveincomethatcannotbetransferredtoprofitorlossundertheequitymethod | |||||||
| iii. | Changesinfairvalueofinvestmentsinequityinstruments | |||||||
| iv. | ChangesinfairvalueoftheCompany'sowncreditrisk | |||||||
| II.Itemsofothercomprehensiveincomethatwillbereclassifiedtoprofitorloss | 13,585,746.04 | 13,397,936.29 | ||||||
| i. | Othercomprehensiveincomethatcanbetransferredtoprofitorlossundertheequitymethod | |||||||
| ii. | Changesinfairvalueofotherdebtinvestments | |||||||
| iii. | Amountoffinancialassetsreclassifiedintoothercomprehensiveincome | |||||||
| iv. | Provisionsforcreditimpairmentofotherdebtinvestments | |||||||
| v. | Theeffectiveportionofgainsorlossesarisingfromcashflowhedging | |||||||
| vi. | Translationdifferencesarisingfromfinancialstatementsinforeigncurrencies | 13,585,746.04 | 13,397,936.29 | |||||
| Othercomprehensiveincomeattributabletonon-controllinginterestsaftertax | ||||||||
| 6.Totalcomprehensiveincome | 346,763,848.41 | 280,079,388.13 | ||||||
| Totalcomprehensiveincomeattributabletoparentcompany | 346,763,848.41 | 280,079,388.13 | ||||||
| Totalcomprehensiveincomeattributabletonon-controllinginterests | ||||||||
| 7.Earningspershare | ||||||||
| I.Basicearningspershare | 0.8082 | 0.6398 | ||||||
| II.Dilutedearningspershare | 0.8075 | 0.6398 | ||||||
| (Attachednotestostatementsarepartoftheconsolidatedfinancialstatements) | ||||||||
| LegalRepresentative:ZhangXuhuaFinanceOfficer(CFO):SongYaomingFinancialManager:TianHui | ||||||||
Page
| ConsolidatedCashFlowsStatement | |||||||
| Fortheyearended31December2023 | |||||||
| Preparedby:FIYTAPrecisionTechnologyCo.,Ltd. | (Unlessotherwiseindicated,thecurrencyisexpressedinRMB) | ||||||
| Items | NoteV | CurrentPeriod | PriorPeriod | ||||
| 1.Cashflowsfromoperatingactivities | |||||||
| Cashreceivedfromsalesandservices | 5,025,883,440.00 | 4,910,473,741.41 | |||||
| Taxandsurchargerefunds | 1,937,203.71 | 7,793,409.24 | |||||
| Othercashreceiptsrelatedtooperatingactivities | note50 | 68,179,211.21 | 79,656,853.28 | ||||
| Totalcashinflowsfromoperatingactivities | 5,095,999,854.92 | 4,997,924,003.93 | |||||
| Cashpaidforgoodsandservices | 3,155,385,386.12 | 3,266,497,299.47 | |||||
| Cashpaidtoandforemployees | 624,495,756.20 | 659,058,385.84 | |||||
| Taxesandsurchargespaid | 296,079,135.93 | 272,103,882.56 | |||||
| Othercashpaymentsrelatedtooperatingactivities | note50 | 387,638,088.69 | 324,035,659.54 | ||||
| Totalcashoutflowsfromoperatingactivities | 4,463,598,366.94 | 4,521,695,227.41 | |||||
| Netcashflowsfromoperatingactivities | 632,401,487.98 | 476,228,776.52 | |||||
| 2.Cashflowsfrominvestingactivities | |||||||
| Cashreceivedfromwithdrawalofinvestments | |||||||
| Cashreceivedfrominvestmentincome | 500,000.00 | ||||||
| Netproceedsfromdisposalsoffixedassets,intangibleassetsandotherlong-termassets | 1,278,284.57 | 138,721.29 | |||||
| Netproceedsfromdisposalofsubsidiariesandotherbusinessunits | |||||||
| Othercashreceiptsrelatedtoinvestingactivities | |||||||
| Totalcashinflowsfrominvestingactivities | 1,778,284.57 | 138,721.29 | |||||
| Cashpaidforfixedassets,intangibleassetsandotherlong-termassets | 91,104,776.03 | 114,090,573.97 | |||||
| Cashpaidforinvestments | |||||||
| Netcashpaidforacquiringsubsidiariesandotherbusinessunits | |||||||
| Othercashpaymentsrelatedtoinvestingactivities | |||||||
| Totalcashoutflowsfrominvestingactivities | 91,104,776.03 | 114,090,573.97 | |||||
| Netcashflowsfrominvestingactivities | -89,326,491.46 | -113,951,852.68 | |||||
| 3.Cashflowsfromfinancingactivities | |||||||
| Cashreceivedfrominvestmentsbyothers | |||||||
| Including:Cashreceivedbysubsidiariesfromnon-controllinginvestors | |||||||
| Cashreceivedfromborrowings | 250,000,000.00 | 845,155,704.29 | |||||
| Othercashreceiptsrelatedtootherfinancingactivities | |||||||
| Totalcashinflowsfromfinancingactivities | 250,000,000.00 | 845,155,704.29 | |||||
| Cashrepaymentsfordebts | 290,000,000.00 | 794,083,975.00 | |||||
| Cashpaidfordistributionofdividendsandprofitandforinterestexpenses | 114,106,711.75 | 134,519,807.76 | |||||
| Including:Dividendsorprofitpaidbysubsidiariestonon-controllinginvestors | |||||||
| Othercashpaymentsrelatedtofinancingactivities | note50 | 198,056,975.77 | 177,477,740.46 | ||||
| Totalcashoutflowsfromfinancingactivities | 602,163,687.52 | 1,106,081,523.22 | |||||
| Netcashflowsfromfinancingactivities | -352,163,687.52 | -260,925,818.93 | |||||
| 4.Effectofchangesinforeignexchangeratesoncashandcashequivalents | -20,544.93 | 2,132,547.59 | |||||
| 5.Netincreaseincashandcashequivalents | 190,890,764.07 | 103,483,652.50 | |||||
| Add:Openingbalanceofcashandcashequivalents | 313,738,389.64 | 210,254,737.14 | |||||
| 6.Closingbalanceofcashandcashequivalents | note51 | 504,629,153.71 | 313,738,389.64 | ||||
| (Attachednotestostatementsarepartoftheconsolidatedfinancialstatements) | |||||||
| LegalRepresentative:ZhangXuhuaFinanceOfficer(CFO):SongYaomingFinancialManager:TianHui | |||||||
Page
| ConsolidatedStatementofChangesinEquity | |||||
| Fortheyearended31December2023 | |||||
| Preparedby:FIYTAPrecisionTechnologyCo.,Ltd. | (Unlessotherwiseindicated,thecurrencyisexpressedinRMB) | ||||
| Items | CurrentPeriod | ||||
| Equityattributabletoparentcompany | Non-controllinginterests | Totalshareholders'equity | |||
Sharecapital
| Sharecapital | Capitalreserves | Less:Treasurystock | Othercomprehensiveincome | Specialreserves | Surplusreserves | Retainedearnings | ||||||||||
| 1.Closingbalanceofprioryear | 417,627,960.00 | 1,007,086,643.48 | 50,759,806.16 | 5,739,589.89 | 2,012,064.91 | 275,010,401.50 | 1,479,706,638.53 | 3,136,423,492.15 | ||||||||
| Add:Increase/decreaseduetochangesinaccountingpolicies | ||||||||||||||||
| Increase/decreaseduetocorrectionsoferrorsinpriorperiod | ||||||||||||||||
| Businesscombinationundercommoncontrol | ||||||||||||||||
| Others | ||||||||||||||||
| 2.Openingbalanceofcurrentyear | 417,627,960.00 | 1,007,086,643.48 | 50,759,806.16 | 5,739,589.89 | 2,012,064.91 | 275,010,401.50 | 1,479,706,638.53 | 3,136,423,492.15 | ||||||||
| 3.Increase/decreaseforcurrentyear | -2,407,990.00 | -16,927,610.31 | 27,885,726.07 | 13,585,746.04 | 1,211,093.15 | 229,806,747.23 | 197,382,260.04 | |||||||||
| I.Totalcomprehensiveincome | 13,585,746.04 | 333,178,102.37 | 346,763,848.41 | |||||||||||||
| II.Owner'scontributionstoandwithdrawalsofcapital | -2,407,990.00 | -16,927,610.31 | 27,885,726.07 | -47,221,326.38 | ||||||||||||
| i.Commonstockcontributed/paid-incapitalbyshareholders/owners | 64,340,669.42 | -64,340,669.42 | ||||||||||||||
| ii.Capitalcontributedbyotherequityinstrumentsholders | ||||||||||||||||
| iii.Share-basedpaymentstoowners'equity | -2,407,990.00 | -16,915,253.76 | -36,454,943.35 | 17,131,699.59 | ||||||||||||
| iv.Others | -12,356.55 | -12,356.55 | ||||||||||||||
| III.Profitsdistribution | -103,371,355.14 | -103,371,355.14 | ||||||||||||||
| i.Appropriationofsurplusreserve | ||||||||||||||||
| ii.Distributiontoowners | -103,371,355.14 | -103,371,355.14 | ||||||||||||||
| iii.Others | ||||||||||||||||
| IV.Transferswithinowners'equity | ||||||||||||||||
| i.Capitalreservestransferredtopaid-incapital | ||||||||||||||||
| ii.Surplusreservetransferredtopaid-incapital | ||||||||||||||||
| iii.Useofsurplusreservetocoverpreviouslosses | ||||||||||||||||
| iv.Changesinremeasurementofdefinedbenefitplanstransferredtoretainedearnings | ||||||||||||||||
| v.Othercomprehensiveincometransferredtoretainedearnings | ||||||||||||||||
| vi.Others | ||||||||||||||||
| V.Specialreserves | 1,211,093.15 | 1,211,093.15 | ||||||||||||||
| i.Appropriatedduringcurrentyear | 1,537,825.22 | 1,537,825.22 | ||||||||||||||
| ii.Usedduringcurrentyear | -326,732.07 | -326,732.07 | ||||||||||||||
| VI.Others | ||||||||||||||||
| 4.Closingbalanceofcurrentyear | 415,219,970.00 | 990,159,033.17 | 78,645,532.23 | 19,325,335.93 | 3,223,158.06 | 275,010,401.50 | 1,709,513,385.76 | 3,333,805,752.19 | ||||||||
| LegalRepresentative:ZhangXuhuaFinanceOfficer(CFO):SongYaomingFinancialManager:TianHui | ||||||||||||||||
Page
| ConsolidatedStatementofChangesinEquity | ||||||||||||||||||
| Fortheyearended31December2023 | ||||||||||||||||||
| Preparedby:FIYTAPrecisionTechnologyCo.,Ltd. | (Unlessotherwiseindicated,thecurrencyisexpressedinRMB) | |||||||||||||||||
| Items | PriorPeriod | |||||||||||||||||
| Equityattributabletoparentcompany | Non-controllinginterests | Totalshareholders'equity | ||||||||||||||||
| Sharecapital | Capitalreserves | Less:Treasurystock | Othercomprehensiveincome | Specialreserves | Surplusreserves | Retainedearnings | ||||||||||||
| 1.Closingbalanceofprioryear | 426,051,015.00 | 1,040,908,194.13 | 60,585,678.92 | -7,658,346.40 | 1,062,731.13 | 275,010,401.50 | 1,338,444,326.09 | 3,013,232,642.53 | ||||||||||
| Add:Increase/decreaseduetochangesinaccountingpolicies | ||||||||||||||||||
| Increase/decreaseduetocorrectionsoferrorsinpriorperiod | ||||||||||||||||||
| Businesscombinationundercommoncontrol | ||||||||||||||||||
| Others | ||||||||||||||||||
| 2.Openingbalanceofcurrentyear | 426,051,015.00 | 1,040,908,194.13 | 60,585,678.92 | -7,658,346.40 | 1,062,731.13 | 275,010,401.50 | 1,338,444,326.09 | 3,013,232,642.53 | ||||||||||
| 3.Increase/decreaseforcurrentyear | -8,423,055.00 | -33,821,550.65 | -9,825,872.76 | 13,397,936.29 | 949,333.78 | 141,262,312.44 | 123,190,849.62 | |||||||||||
| I.Totalcomprehensiveincome | 13,397,936.29 | 266,681,451.84 | 280,079,388.13 | |||||||||||||||
| II.Owner'scontributionstoandwithdrawalsofcapital | -8,423,055.00 | -33,821,550.65 | -9,825,872.76 | -32,418,732.89 | ||||||||||||||
| i.Commonstockcontributed/paid-incapitalbyshareholders/owners | -7,987,217.00 | -42,265,614.88 | -50,252,831.88 | |||||||||||||||
| ii.Capitalcontributedbyotherequityinstrumentsholders | ||||||||||||||||||
| iii.Share-basedpaymentstoowners'equity | -435,838.00 | 8,459,107.40 | -9,825,872.76 | 17,849,142.16 | ||||||||||||||
| iv.Others | -15,043.17 | -15,043.17 | ||||||||||||||||
| III.Profitsdistribution | -125,419,139.40 | -125,419,139.40 | ||||||||||||||||
| i.Appropriationofsurplusreserve | ||||||||||||||||||
| ii.Distributiontoowners | -125,419,139.40 | -125,419,139.40 | ||||||||||||||||
| iii.Others | ||||||||||||||||||
| IV.Transferswithinowners'equity | ||||||||||||||||||
| i.Capitalreservestransferredtopaid-incapital | ||||||||||||||||||
| ii.Surplusreservetransferredtopaid-incapital | ||||||||||||||||||
| iii.Useofsurplusreservetocoverpreviouslosses | ||||||||||||||||||
| iv.Changesinremeasurementofdefinedbenefitplanstransferredtoretainedearnings | ||||||||||||||||||
| v.Othercomprehensiveincometransferredtoretainedearnings | ||||||||||||||||||
| vi.Others | ||||||||||||||||||
| V.Specialreserves | 949,333.78 | 949,333.78 | ||||||||||||||||
| i.Appropriatedduringcurrentyear | 1,246,390.69 | 1,246,390.69 | ||||||||||||||||
| ii.Usedduringcurrentyear | -297,056.91 | -297,056.91 | ||||||||||||||||
| VI.Others | ||||||||||||||||||
| 4.Closingbalanceofcurrentyear | 417,627,960.00 | 1,007,086,643.48 | 50,759,806.16 | 5,739,589.89 | 2,012,064.91 | 275,010,401.50 | 1,479,706,638.53 | 3,136,423,492.15 | ||||||||||
| LegalRepresentative:ZhangXuhuaFinanceOfficer(CFO):SongYaomingFinancialManager:TianHui | ||||||||||||||||||
Page
| ParentCompany'sBalanceSheet | ||
| Asat31December2023 | ||
| Preparedby:FIYTAPrecisionTechnologyCo.,Ltd. | (Unlessotherwiseindicated,thecurrencyisexpressedinRMB) | |
Assets
| Assets | NoteXVI | ClosingBalance | ClosingBalanceofpriorperiod |
Currentassets:
| Currentassets: | |||||||
| Monetaryfunds | 308,230,255.35 | 274,691,023.16 | |||||
| Financialassetsheldfortrading | |||||||
| Derivativefinancialassets | |||||||
| Notesreceivable | |||||||
| Accountsreceivable | note1 | 1,822,916.61 | 603,216.03 | ||||
| Accountsreceivablefinancing | |||||||
| Prepayments | |||||||
| Otherreceivables | note2 | 696,328,419.85 | 839,782,543.07 | ||||
| Inventories | |||||||
| Contractassets | |||||||
| Held-for-saleassets | |||||||
| Currentportionofnon-currentassets | |||||||
| Othercurrentassets | 15,886,769.82 | 14,107,604.63 | |||||
| Totalcurrentassets | 1,022,268,361.63 | 1,129,184,386.89 | |||||
Non-currentassets:
| Non-currentassets: | |||||||
| Debtinvestments | |||||||
| Otherdebtinvestments | |||||||
| Long-termreceivables | |||||||
| Long-termequityinvestments | note3 | 1,633,041,716.11 | 1,552,310,486.50 | ||||
| Investmentinotherequityinstruments | 85,000.00 | ||||||
| Othernon-currentfinancialassets | |||||||
| Investmentproperties | 293,695,692.68 | 305,676,084.09 | |||||
| Fixedassets | 207,209,890.94 | 209,495,642.59 | |||||
| Constructioninprogress | |||||||
| Productivebiologicalassets | |||||||
| Oilandgasassets | |||||||
| Right-of-useassets | |||||||
| Intangibleassets | 23,460,211.70 | 23,522,355.93 | |||||
| Developmentexpenditure | |||||||
| Goodwill | |||||||
| Long-termdeferredexpenses | 4,795,846.73 | 8,240,653.62 | |||||
| Deferredtaxassets | 640,783.05 | 1,904,597.73 | |||||
| Othernon-currentassets | 710,807.49 | 2,051,932.75 | |||||
| Totalnon-currentassets | 2,163,554,948.70 | 2,103,286,753.21 | |||||
Totalassets
| Totalassets | 3,185,823,310.33 | 3,232,471,140.10 |
LegalRepresentative:ZhangXuhuaFinanceOfficer(CFO):SongYaomingFinancialManager:TianHui
Page
| ParentCompany'sBalanceSheet(Continued) | ||
| Asat31December2023 | ||
| Preparedby:FIYTAPrecisionTechnologyCo.,Ltd. | (Unlessotherwiseindicated,thecurrencyisexpressedinRMB) | |
LiabilityandEquity
| LiabilityandEquity | NoteXVI | ClosingBalance | ClosingBalanceofpriorperiod |
Currentliabilities:
| Currentliabilities: | |||||
| Short-termborrowings | 250,187,763.87 | 290,237,111.11 | |||
| Financialliabilitiesheldfortrading | |||||
| Derivativefinancialliabilities | |||||
| Notespayable | |||||
| Accountspayable | 2,285,657.88 | 1,048,201.41 | |||
| Paymentsreceivedinadvance | 10,267,758.31 | 16,960,128.83 | |||
| Contractliabilities | |||||
| Employeebenefitspayable | 25,886,702.67 | 27,139,007.97 | |||
| Taxpayables | 3,322,241.54 | 778,299.01 | |||
| Otherpayables | 224,668,548.77 | 299,198,966.56 | |||
| Held-for-saleliabilities | |||||
| Currentportionofnon-currentliabilities | |||||
| Othercurrentliabilities | |||||
| Totalcurrentliabilities | 516,618,673.04 | 635,361,714.89 | |||
Non-currentliabilities:
| Non-currentliabilities: | |||||
| Long-termborrowings | |||||
| Bondspayable | |||||
| Including:Preferredstock | |||||
| Including:Perpetualdebt | |||||
| Leaseliabilities | |||||
| Long-termpayables | |||||
| Long-termemployeebenefitspayable | |||||
| Provisions | |||||
| Deferredincome | 952,785.69 | 1,295,926.80 | |||
| Deferredtaxliabilities | |||||
| Othernon-currentliabilities | |||||
| Totalnon-currentliabilities | 952,785.69 | 1,295,926.80 | |||
| Totalliabilities | 517,571,458.73 | 636,657,641.69 | |||
Equity:
| Equity: | |||||
| Sharecapital | 415,219,970.00 | 417,627,960.00 | |||
| Otherequityinstruments | |||||
| Including:Preferredstock | |||||
| Including:Perpetualdebt | |||||
| Capitalreserves | 993,037,528.98 | 1,010,917,776.19 | |||
| Less:Treasurystock | 78,645,532.23 | 50,759,806.16 | |||
| Othercomprehensiveincome | |||||
| Specialreserves | |||||
| Surplusreserve | 275,010,401.50 | 275,010,401.50 | |||
| Retainedearnings | 1,063,629,483.35 | 943,017,166.88 | |||
| Totalowners'equity | 2,668,251,851.60 | 2,595,813,498.41 | |||
Totalliabilitiesandowners'equity
| Totalliabilitiesandowners'equity | 3,185,823,310.33 | 3,232,471,140.10 | ||
| LegalRepresentative:ZhangXuhuaFinanceOfficer(CFO):SongYaomingFinancialManager:TianHui | ||||
Page
| ParentCompany'sStatementofComprehensiveIncome | ||||||
| Fortheyearended31December2023 | ||||||
| Preparedby:FIYTAPrecisionTechnologyCo.,Ltd. | (Unlessotherwiseindicated,thecurrencyisexpressedinRMB) | |||||
| Items | NoteXVI | CurrentPeriod | PriorPeriod | |||
1.Operatingrevenue
| 1.Operatingrevenue | note4 | 180,874,926.74 | 155,284,801.05 | |||||
| Less: | Operatingcosts | note4 | 49,729,440.87 | 41,765,441.70 | ||||
| Taxesandsurcharges | 7,815,174.54 | 5,984,017.16 | ||||||
| Sellingexpenses | 16,395,826.35 | 4,340,253.59 | ||||||
| Administrativeexpenses | 53,755,060.51 | 64,698,540.45 | ||||||
| Researchanddevelopmentexpenses | 12,959,491.24 | 16,464,924.76 | ||||||
| Financeexpenses | -947,061.34 | -1,030,335.57 | ||||||
| Including:Interestexpenses | 2,405,575.67 | 3,264,769.63 | ||||||
| Interestincome | 4,460,371.04 | 3,699,364.22 | ||||||
| Add: | Otherincome | 1,097,603.80 | 1,221,085.39 | |||||
| Incomefrominvestments | note5 | 192,180,520.40 | 243,622,178.29 | |||||
| Including:Investmentincomefromassociatesandjointventures | -5,819,479.60 | 3,026,481.59 | ||||||
| Derecognitionoffinancialassetsatamortizedcost | ||||||||
| Gainsorlossesfromnetexposurehedging | ||||||||
| Gainsorlossesfromchangesinfairvalues | ||||||||
| Creditimpairmentlosses | -104,859.73 | 108,040.61 | ||||||
| Impairmentlosses | ||||||||
| Gainsorlossesfromassetdisposals | 635,033.80 | -14,615.44 | ||||||
| 2.Operatingprofit | 234,975,292.84 | 267,998,647.81 | ||||||
| Add:Non-operatingincome | 8,037.20 | 191,981.02 | ||||||
| Less:Non-operatingexpenses | 312,375.33 | 21,262.34 | ||||||
| 3.Profitbeforetax | 234,670,954.71 | 268,169,366.49 | ||||||
| Less:Incometax | 10,687,283.10 | 6,174,714.67 | ||||||
| 4.Netprofit | 223,983,671.61 | 261,994,651.82 | ||||||
| Netprofitfromcontinuingoperations（"-"fornetloss) | 223,983,671.61 | 261,994,651.82 | ||||||
| Netprofitfromdiscontinuingoperations（"-"fornetloss) | ||||||||
| 5.Othercomprehensiveincomeaftertax | ||||||||
| I.Itemsofothercomprehensiveincomethatwillnotbereclassifiedtoprofitorloss | ||||||||
| i. | Changesinremeasurementofdefinedbenefitplans | |||||||
| ii. | Othercomprehensiveincomethatcannotbetransferredtoprofitorlossundertheequitymethod | |||||||
| iii. | Changesinfairvalueofinvestmentsinequityinstruments | |||||||
| iv. | ChangesinfairvalueoftheCompany'sowncreditrisk | |||||||
| II.Itemsofothercomprehensiveincomethatwillbereclassifiedtoprofitorloss | ||||||||
| i. | Othercomprehensiveincomethatcanbetransferredtoprofitorlossundertheequitymethod | |||||||
| ii. | Changesinfairvalueofotherdebtinvestments | |||||||
| iii. | Amountoffinancialassetsreclassifiedintoothercomprehensiveincome | |||||||
| iv. | Provisionsforcreditimpairmentofotherdebtinvestments | |||||||
| v. | Theeffectiveportionofgainsorlossesarisingfromcashflowhedging | |||||||
| vi. | Translationdifferencesarisingfromfinancialstatementsinforeigncurrencies | |||||||
| 6.Totalcomprehensiveincome | 223,983,671.61 | 261,994,651.82 | ||||||
| LegalRepresentative:ZhangXuhuaFinanceOfficer(CFO):SongYaomingFinancialManager:TianHui | ||||||||
Page
| ParentCompany'sCashFlowsStatement | ||
| Fortheyearended31December2023 | ||
| Preparedby:FIYTAPrecisionTechnologyCo.,Ltd. | (Unlessotherwiseindicated,thecurrencyisexpressedinRMB) | |
Items
| Items | NoteXVI | CurrentPeriod | PriorPeriod |
1.Cashflowsfromoperatingactivities
| 1.Cashflowsfromoperatingactivities | ||||||
| Cashreceivedfromsalesandservices | 189,464,980.58 | 166,402,067.64 | ||||
| Taxandsurchargerefunds | 7,647.56 | |||||
| Othercashreceiptsrelatedtooperatingactivities | 4,225,525,553.06 | 4,309,971,160.78 | ||||
| Totalcashinflowsfromoperatingactivities | 4,414,990,533.64 | 4,476,380,875.98 | ||||
| Cashpaidforgoodsandservices | 9,573,850.00 | |||||
| Cashpaidtoandforemployees | 61,402,333.15 | 59,513,788.17 | ||||
| Taxesandsurchargespaid | 20,428,198.75 | 20,686,403.89 | ||||
| Othercashpaymentsrelatedtooperatingactivities | 4,154,707,540.94 | 4,383,872,472.45 | ||||
| Totalcashoutflowsfromoperatingactivities | 4,246,111,922.84 | 4,464,072,664.51 | ||||
| Netcashflowsfromoperatingactivities | 168,878,610.80 | 12,308,211.47 | ||||
| 2.Cashflowsfrominvestingactivities | ||||||
| Cashreceivedfromwithdrawalofinvestments | ||||||
| Cashreceivedfrominvestmentincome | 198,500,000.00 | 240,595,696.70 | ||||
| Netproceedsfromdisposalsoffixedassets,intangibleassetsandotherlong-termassets | 1,146,737.46 | 3,973,887.69 | ||||
| Netproceedsfromdisposalofsubsidiariesandotherbusinessunits | ||||||
| Othercashreceiptsrelatedtoinvestingactivities | ||||||
| Totalcashinflowsfrominvestingactivities | 199,646,737.46 | 244,569,584.39 | ||||
| Cashpaidforfixedassets,intangibleassetsandotherlong-termassets | 7,686,801.71 | 5,810,205.37 | ||||
| Cashpaidforinvestments | 90,000,000.00 | |||||
| Netcashpaidforacquiringsubsidiariesandotherbusinessunits | ||||||
| Othercashpaymentsrelatedtoinvestingactivities | ||||||
| Totalcashoutflowsfrominvestingactivities | 97,686,801.71 | 5,810,205.37 | ||||
| Netcashflowsfrominvestingactivities | 101,959,935.75 | 238,759,379.02 | ||||
| 3.Cashflowsfromfinancingactivities | ||||||
| Cashreceivedfrominvestmentsbyothers | ||||||
| Cashreceivedfromborrowings | 250,000,000.00 | 830,000,000.00 | ||||
| Othercashreceiptsrelatedtootherfinancingactivities | ||||||
| Totalcashinflowsfromfinancingactivities | 250,000,000.00 | 830,000,000.00 | ||||
| Cashrepaymentsfordebts | 290,000,000.00 | 790,000,000.00 | ||||
| Cashpaidfordistributionofdividendsandprofitandforinterestexpenses | 114,106,711.75 | 134,389,016.01 | ||||
| Othercashpaymentsrelatedtofinancingactivities | 83,148,230.83 | 53,390,338.09 | ||||
| Totalcashoutflowsfromfinancingactivities | 487,254,942.58 | 977,779,354.10 | ||||
| Netcashflowsfromfinancingactivities | -237,254,942.58 | -147,779,354.10 | ||||
| 4.Effectofchangesinforeignexchangeratesoncashandcashequivalents | -44,371.78 | 380,393.85 | ||||
| 5.Netincreaseincashandcashequivalents | 33,539,232.19 | 103,668,630.24 | ||||
| Add:Openingbalanceofcashandcashequivalents | 274,691,023.16 | 171,022,392.92 | ||||
| 6.Closingbalanceofcashandcashequivalents | 308,230,255.35 | 274,691,023.16 | ||||
| LegalRepresentative:ZhangXuhuaFinanceOfficer(CFO):SongYaomingFinancialManager:TianHui | ||||||
Page
| ParentCompany'sStatementofChangesinEquity | ||||||||||||||||
| Fortheyearended31December2023 | ||||||||||||||||
| Preparedby:FIYTAPrecisionTechnologyCo.,Ltd. | (Unlessotherwiseindicated,thecurrencyisexpressedinRMB) | |||||||||||||||
| Items | CurrentPeriod | |||||||||||||||
| Sharecapital | Capitalreserves | Less:Treasurystock | Othercomprehensiveincome | Specialreserves | Surplusreserves | Retainedearnings | Totalshareholders'equity | |||||||||
| 1.Closingbalanceoflastyear | 417,627,960.00 | 1,010,917,776.19 | 50,759,806.16 | 275,010,401.50 | 943,017,166.88 | 2,595,813,498.41 | ||||||||||
| Add:Increase/decreaseduetochangesinaccountingpolicies | ||||||||||||||||
| Increase/decreaseduetocorrectionsoferrorsinpriorperiod | ||||||||||||||||
| Others | ||||||||||||||||
| 2.Openingbalanceofcurrentyear | 417,627,960.00 | 1,010,917,776.19 | 50,759,806.16 | 275,010,401.50 | 943,017,166.88 | 2,595,813,498.41 | ||||||||||
| 3.Increase/decreaseforcurrentyear | -2,407,990.00 | -17,880,247.21 | 27,885,726.07 | 120,612,316.47 | 72,438,353.19 | |||||||||||
| I.Totalcomprehensiveincome | 223,983,671.61 | 223,983,671.61 | ||||||||||||||
| II.Owner'scontributionstoandwithdrawalsofcapital | -2,407,990.00 | -17,880,247.21 | 27,885,726.07 | -48,173,963.28 | ||||||||||||
| i.Commonstockcontributed/paid-incapitalbyshareholders/owners | 64,340,669.42 | -64,340,669.42 | ||||||||||||||
| ii.Capitalcontributedbyotherequityinstrumentsholders | ||||||||||||||||
| iii.Share-basedpaymentstoowners'equity | -2,407,990.00 | -17,867,890.66 | -36,454,943.35 | 16,179,062.69 | ||||||||||||
| iv.Others | -12,356.55 | -12,356.55 | ||||||||||||||
| III.Profitsdistribution | -103,371,355.14 | -103,371,355.14 | ||||||||||||||
| i.Appropriationofsurplusreserve | ||||||||||||||||
| ii.Distributiontoowners | -103,371,355.14 | -103,371,355.14 | ||||||||||||||
| iii.Others | ||||||||||||||||
| IV.Transferswithinowners'equity | ||||||||||||||||
| i.Capitalreservestransferredtopaid-incapital | ||||||||||||||||
| ii.Surplusreservetransferredtopaid-incapital | ||||||||||||||||
| iii.Useofsurplusreservetocoverpreviouslosses | ||||||||||||||||
| iv.Changesinremeasurementofdefinedbenefitplanstransferredtoretainedearnings | ||||||||||||||||
| v.Othercomprehensiveincometransferredtoretainedearnings | ||||||||||||||||
| vi.Others | ||||||||||||||||
| V.Specialreserves | ||||||||||||||||
| i.Appropriatedduringcurrentyear | ||||||||||||||||
| ii.Usedduringcurrentyear | ||||||||||||||||
| VI.Others | ||||||||||||||||
| 4.Closingbalanceofcurrentyear | 415,219,970.00 | 993,037,528.98 | 78,645,532.23 | 275,010,401.50 | 1,063,629,483.35 | 2,668,251,851.60 | ||||||||||
LegalRepresentative:ZhangXuhuaFinanceOfficer(CFO):SongYaomingFinancialManager:TianHui
Page
| ParentCompany'sStatementofChangesinEquity | |||||||||||||||
| Fortheyearended31December2023 | |||||||||||||||
| Preparedby:FIYTAPrecisionTechnologyCo.,Ltd. | (Unlessotherwiseindicated,thecurrencyisexpressedinRMB) | ||||||||||||||
| Items | PriorPeriod | ||||||||||||||
| Sharecapital | Capitalreserves | Less:Treasurystock | Othercomprehensiveincome | Specialreserves | Surplusreserves | Retainedearnings | Totalshareholders'equity | ||||||||
| 1.Closingbalanceoflastyear | 426,051,015.00 | 1,045,449,410.67 | 60,585,678.92 | 275,010,401.50 | 806,441,654.46 | 2,492,366,802.71 | |||||||||
| Add:Increase/decreaseduetochangesinaccountingpolicies | |||||||||||||||
| Increase/decreaseduetocorrectionsoferrorsinpriorperiod | |||||||||||||||
| Others | |||||||||||||||
| 2.Openingbalanceofcurrentyear | 426,051,015.00 | 1,045,449,410.67 | 60,585,678.92 | 275,010,401.50 | 806,441,654.46 | 2,492,366,802.71 | |||||||||
| 3.Increase/decreaseforcurrentyear | -8,423,055.00 | -34,531,634.48 | -9,825,872.76 | 136,575,512.42 | 103,446,695.70 | ||||||||||
| I.Totalcomprehensiveincome | 261,994,651.82 | 261,994,651.82 | |||||||||||||
| II.Owner'scontributionstoandwithdrawalsofcapital | -8,423,055.00 | -34,531,634.48 | -9,825,872.76 | -33,128,816.72 | |||||||||||
| i.Commonstockcontributed/paid-incapitalbyshareholders/owners | -7,987,217.00 | -42,265,614.88 | -50,252,831.88 | ||||||||||||
| ii.Capitalcontributedbyotherequityinstrumentsholders | |||||||||||||||
| iii.Share-basedpaymentstoowners'equity | -435,838.00 | 7,749,023.57 | -9,825,872.76 | 17,139,058.33 | |||||||||||
| iv.Others | -15,043.17 | -15,043.17 | |||||||||||||
| III.Profitsdistribution | -125,419,139.40 | -125,419,139.40 | |||||||||||||
| i.Appropriationofsurplusreserve | |||||||||||||||
| ii.Distributiontoowners | -125,419,139.40 | -125,419,139.40 | |||||||||||||
| iii.Others | |||||||||||||||
| IV.Transferswithinowners'equity | |||||||||||||||
| i.Capitalreservestransferredtopaid-incapital | |||||||||||||||
| ii.Surplusreservetransferredtopaid-incapital | |||||||||||||||
| iii.Useofsurplusreservetocoverpreviouslosses | |||||||||||||||
| iv.Changesinremeasurementofdefinedbenefitplanstransferredtoretainedearnings | |||||||||||||||
| v.Othercomprehensiveincometransferredtoretainedearnings | |||||||||||||||
| vi.Others | |||||||||||||||
| V.Specialreserves | |||||||||||||||
| i.Appropriatedduringcurrentyear | |||||||||||||||
| ii.Usedduringcurrentyear | |||||||||||||||
| VI.Others | |||||||||||||||
| 4.Closingbalanceofcurrentyear | 417,627,960.00 | 1,010,917,776.19 | 50,759,806.16 | 275,010,401.50 | 943,017,166.88 | 2,595,813,498.41 | |||||||||
| LegalRepresentative:ZhangXuhuaFinanceOfficer(CFO):SongYaomingFinancialManager:TianHui | |||||||||||||||
Page
FIYTAPrecisionTechnologyCo.,Ltd.NotestotheFinancialStatementsFortheyearended31December2023
I.Companystatus
1.Registeredplace,organizationandaddressofheadquartersFIYTAPrecisionTechnologyCo.,Ltd.(the“Company”)wasfounded,undertheapprovalofShenFuBanFu(1992)1259issuedbytheGeneralOfficeofShenzhenMunicipalGovernment,throughtherestructuringofformerShenzhenFIYTATimeIndustrialCompanybythepromoterofChinaNationalAero-TechnologyImportandExportShenzhenIndustry&TradeCenter(namechangedto“ChinaNationalAero-TechnologyShenzhenCo.,Ltd”lately)on25December1992.On3June1993,boththeCompanywaslistedonShenzhenStockExchange.TheCompanyholdsbusinesslicensewiththeUnifiedSocialCreditCodeof91440300192189783K.Asat31December2023,theoutstandingsharesissuedbytheCompanywas415.22millionsharesandtheregisteredcapitalwasRMB415.22millionafteraseriesofsharedividend,rightoffering,sharecapitalconversionfromretainedearnings,andissuingofnewshares.TheCompany’sregisteredaddressisFIYTAHi-TechBuilding,GaoXinNanYiDao,NanshanDistrict,Shenzhen,GuangdongProvince,wheretheCompany’sheadquarterslocates.TheparentcompanyoftheCompanyisCATICShenzhenHoldingsLimited(CATICShenzhen)andtheultimatecontrollingpartyoftheCompanyisAviationIndustryCorporationofChina,Ltd.(AVIC).
2.NatureoftheCompany’sbusinessandmainoperatingactivitiesThebusinessnatureandmainoperatingactivitiesoftheCompanyanditssubsidiariesmainlyinclude:WatchandClockSales;WatchandTimingInstrumentManufacturing;WatchandTimingInstrumentSales;JewelryWholesale;JewelryRetail;WearableIntelligentDevicesManufacturing;WearableIntelligentDevicesSales;PropertyManagement;Non-residentialRealEstateLeasing;ProfessionalDesignServices;ImportandExportofGoods;SalesofHouseholdElectricalAppliances;SalesofSatelliteMobileCommunicationTerminals;ImportandExportBusiness(accordingtoShenMaoJinZhunZiNo.2001-2204).
3.ScopeofconsolidationTherewere12subsidiariesthatareincludedintheCompany’sscopeofconsolidationforyear2023,seeNoteVIfordetails.Thescopeofconsolidationwasthesameaslastyear.
4.AuthorizationforissueThefinancialstatementshavebeenapprovedandauthorizedforissuebytheBoardof
Page
Directorson12March2024.II.Basisofpreparation
1.BasisofpreparationThefinancialstatementispreparedinaccordancewiththerequirementsofAccountingStandardsforBusinessEnterprisesandassociatedapplicationguidance,illustrationstothestandardsandrelatedpronouncements(collectivelyknownas“AccountingStandardsforBusinessEnterprises”or“CAS”).Thesefinancialstatementsalsocomplywiththedisclosurerequirementsof“RegulationonthePreparationofInformationDisclosureofCompaniesIssuingPublicShares,No.15:GeneralRequirementsforFinancialReports”(revisedin2023)issuedbyChinaSecuritiesRegulatoryCommission(CSRC).
2.GoingconcernTheCompanyassessesthegoingconcernabilitytotheextentof12monthafterthebalancesheetdate.NoissuesthatwouldresultinsignificantdoubtabouttheCompany’sgoingconcernisnoted.Asaresult,thefinancialstatementsoftheCompanyhavebeenpreparedongoingconcernbasis.
3.BasisandprinciplesofaccountingAccrualbasisisadoptedfortheGroup’saccountingactivity.Exceptforsomefinancialinstruments,thefinancialstatementsaremeasuredusinghistoricalcost.Incaseofimpairmentoccurredonassets,provisionsforimpairmentareprovidedforinaccordancewithrelatedregulations.III.Significantaccountingpoliciesandaccountingestimates
1.Highlighttospecificaccountingpoliciesandestimates
(1)TheCompanymakespecificaccountingpoliciesandestimatesaccordingtoitsnatureofbusiness.Accountingpoliciesandestimatesmainlyincludes:methodofestimatedcreditlossaccrual(NoteIII.13,NoteIII.14andNoteIII.15),measurementofinventory(NoteIII.16),depreciationofinvestmentpropertyandfixedassetandamortizationofintangibleasset(NoteIII.19,NoteIII.20andNoteIII.24),revenue(NoteIII,32)etc.
(2)Basedonhistoricalexperienceandotherfactorsincludingreasonableestimationtofutureevents,theCompanycontinuestoevaluatesignificantaccountingestimatesandkeyassumptions.Ifmaterialchangestofollowingaccountingestimateandkeyassumptionincurred,materialimpactwouldhappenedtothecarryingvalueoftheCompany’sassetsandliabilitiesincomingaccountingyear.
1)MeasurementofExpectedCreditLossofaccountsreceivableandotherreceivables
Themanagementestimatesimpairmentlossprovisiontoaccountsreceivableandother
Page
receivablesbasedonthejudgmentstoestimatedcreditlossofaccountsreceivableandotherreceivables.IfanyeventsoccurredthatindicatedtheCompanymaynotbeabletorecoverthebalanceamount,estimationisneededinprovisionaccrual.Iftheexpectednumberisdifferentwiththeestimatedfigure,thedifferencewillaffectthecarryingvalueofaccountsreceivableandotherreceivablesandtheimpairmentlossexpensesincorrespondingaccountingperiod.
2)Impairmenttoinventory.TheCompanyrecognizesprovisionforobsoleteinventoriesbasedontheexcessofthecostofinventoryoveritsnetrealizablevalue.Indeterminingthenetrealizablevalueofinventories,themanagementusessignificantjudgmentstoestimatethesellingprice,costtofinishmanufacturing,andsellingexpensesandassociatedtaxes.Ifthemanagementrevisesestimatedsellingpriceandcosttofinishmanufacturingandsellingexpenses,theNAVestimationwouldbeaffectedandthedifferencewouldhaveaneffecttotheinventoryprovision.
3)Estimationoflong-termassetimpairment.Whenevaluatingwhetherthereisimpairmenttolong-termasset,themanagementmainlyconsidersthefollowing:(a)whethertheeventsaffecttheassetimpairmenthavealreadyincurred;(b)whetherthediscountedcashflowfromcontinueusageoftheassetordisposalislowerthanitscarryingamount;and(c)whethermajorassumptionusedinestimatingthefuturecashflowisappropriate.
Changestorelatedassumptionadoptedindeterminingimpairmentsuchasprofitability,discountingrateandgrowthratemayhavematerialimpacttothepresentvalueusedinimpairmenttestandresultinimpairmenttoabovementionedlong-termassets.
(a)Depreciationandamortization.Theestimatedresidualvalueandusefullifeofinvestmentproperty,fixedassetandintangibleassetthatusedbytheCompanyarebasedonhistoricalactualusefullifeandactualresidualvalueofassetswithsimilarnatureorfunctions.Intheprocessofusingsuchassets,estimatedusefullifeandresidualvaluemayvarydependingontheeconomicenvironment,technologicalenvironmentandotherenvironmentthattheassetslocated.Ifthereisdifferencebetweentheexpectationandpreviousestimation,properadjustmentswillbemadebythemanagement.
(b)Share-basedpayments.Themanagementmakesbestestimationbasedonup-to-datenumberofemployeeswhohaveexercisablesharesandadjustingthenumberofexercisableequityinstrumentoneachbalancesheetdateinthevestingperiod.Ifthereisdifferencebetweencurrentyearexercisableemployeeandpreviousestimation,properadjustmentswillbemadebythemanagement.
(c)Deferredtaxasset.Deferredtaxassetoftaxablelossesshallberecognizedtotheextentthattherewillhavesufficienttaxableincometooffset.Thisinvolvessignificantjudgmentstoestimatethetimingandamountoffuturetaxableprofitandtakingintoconsiderationoftaxplanningsoastodeterminetheamountofdeferredtaxasset.
(d)Corporateincometax.Thefinaltaxtreatmentofmanytransactionandeventsarewith
Page
uncertaintyinthenormalcourseofoperation.Significantjudgmentsinvolvesinaccrualofcorporateincometax.Ifthereisdifferencebetweenthefinaldiscretionandtheamountrecordedinbooks,thedifferencewillaffecttheamountoftaxintheperiodoffinaldiscretion.
2.StatementofcompliancewithAccountingStandardsforBusinessEnterprisesThefinancialstatementsoftheCompanyhavebeenpreparedinaccordancewiththerequirementsofAccountingStandardsforBusinessEnterprises.Thesefinancialstatementspresenttrulyandcompletelythefinancialpositionasat31December2023,theresultsofoperationsandthecashflowsfortheyearthenendedoftheCompany.
3.AccountingperiodTheaccountingperiodoftheCompanyisthecalendaryear,i.e.from1Januaryto31Decemberofeachyear.
4.OperatingcycleTheoperatingcyclerefertotheperiodfrompurchasingassetsforprocesstorealizingcashorcashequivalent.TheCompany’soperatingcycleis12monthswhichisalsousedasstandardtodeterminetheliquidityofassetandliabilities.
5.RecordingcurrencyTheCompanyanditsdomesticsubsidiariesadoptRenminbi(“RMB”)astherecordingcurrency.FIYTA(HongKong)Limited(“FIYTAHongKong”),asubsidiaryoftheCompanyoutsidemainlandChina,andStation68Limited(“Station68”),asubsidiaryofFIYTAHongKong,useHongKongDollar(“HKD”)astherecordingcurrencyaccordingtothemaineconomicenvironmentwherethecompaniesoperatedin.MontresChourietSA,asubsidiaryofFIYTAHongKong(“SwissCompany”),usesSwissFrancastherecordingcurrencyaccordingtothemaineconomicenvironmentwheretheSwissCompanyoperatedin.TherecordingcurrenciesmentionedabovewillbetranslatedtoRenminbiwhenpreparingfinancialstatements.ThecurrencyusedinpreparingtheGroup’sfinancialstatementsisRenminbi.
6.Methodologyfordeterminingmaterialitycriteriaandbasisforselection
| Item | Materialitycriteria |
| Accountsreceivablewithsignificantamountofbaddebtprovisionreversedorrecoveredduringtheperiod | Individualclosingbalanceof0.50millionormore |
| Significantotheraccountspayableagedoveroneyear | Individualclosingbalanceof1.00millionormore |
7.Accountingtreatmentforbusinesscombinationsinvolvingentitiesundercommoncontrolandnotundercommoncontrol
(1)Ifabusinesscombinationisachievedthroughmultiplesteps,ofwhichtheterms,conditionandeconomicaleffectisinlinewithoneormorecriteriaasfollowed,themultipletransactionsshallbedealtwithasone-baskettransaction.
1)thetransactionswereenteredintoatthesametimeorbyconsideringeachother’s
Page
influence;
2)acompletebusinessresultcanonlybeachievedbycombiningallthesetransactionstogether;
3)theperformingofonetransactionisdependedonatleastoneothertransaction;
4)atransactionisnoteconomicalifitisconsideredstandalongbutitwillbecomeeconomicalifitisconsideredincombinationwithothertransactions.
(2)Businesscombinationinvolvingentitiesundercommoncontrol
Forabusinesscombinationinvolvingenterprisesundercommoncontrol,theassetsacquiredandliabilitiesassumedaremeasuredbasedontheircarryingamountsintheconsolidatedfinancialstatementsoftheultimatecontrollingpartyatthecombinationdate,exceptforadjustmentsduetodifferentaccountingpolicies.Thedifferencebetweenthecarryingamountofthenetassetsacquiredandtheconsiderationpaidforthecombination(orthetotalparvalueofsharesissued)isadjustedagainstsharepremiuminthecapitalreserve,withanyexcessadjustedagainstretainedearnings.
Ifthereiscontingentconsiderationandprovisionorassetsarerequiredtoberecognized,thedifferencebetweentheprovisionorassetsandthecontingentconsiderationshalladjustthecapitalreserve,withanyexcessadjustedagainstretainedearnings.
Ifbusinesscombinationsinvolvingentitiesundercommoncontrolachievedinstagesthatinvolvesmultipletransactionsbelongstoone-baskettransaction,alltransactionsshallbedealtwithasonetransaction.Ifnot,theaccountingtreatmentisasfollows:Initialinvestmentcostistheacquirer’sshareofthecarryingamountofthenetassetsoftheacquireeintheconsolidatedfinancialstatementsoftheultimatecontrollingpartyatthecombinationdate.Thedifferencebetweentheinitialinvestmentcostandthesumofcarryingamountofinvestmentpriortocombinationdateandcarryingamountofnewconsiderationspaidforthecombinationatthecombinationdateisadjustedtocapitalreserve(sharepremium).Ifthecapitalreserveisnotsufficienttoabsorbthedifference,anyexcessisadjustedagainstretainedearnings.hedifferencebetweenthecarryingamountofthenetassetsacquiredandthesumofcarryingamountofinvestmentpriortocombinationdateandcarryingamountofnewconsiderationspaidforthecombinationatthecombinationdateisadjustedtocapitalreserve(sharepremium).Ifthecapitalreserveisnotsufficienttoabsorbthedifference,anyexcessisadjustedagainstretainedearnings.Theprofitorloss,othercomprehensiveincomeandchangesinotherowner’sequityrecognizedbytheacquirerduringtheperiodfromthelaterofinitialinvestmentdateandthedatethattheacquirerandacquireebothundercommonultimatecontroltothecombinationdateareoffsettheopeningretainedearningsorprofitforlossforthecurrentperiodinthecomparativestatements.
(3)Businesscombinationsinvolvingentitiesnotundercommoncontrol
ThepurchasedatereferstothedatethattheCompanyactuallyacquiredcontrolovertheacquirei.e.thedatewhenthecontrolovertheacquiree’snetassetsordecisionofbusiness
Page
operationhasbeentransferredtotheCompany.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,itshallbetreatedasfollows:Intheseparatefinancialstatements,theinitialinvestmentcostisthesumofthecarryingamountofequityinvestmentoftheacquireeheldpriortotheacquisitiondateandadditionalinvestmentcostattheacquisitiondate.Whenthepreviously-heldequityinvestmentwhichwasaccountedforundertheeAccountingtreatmentforbusinesscombinationsinvolvingentitiesundercommoncontrolandnotundercommoncontrolequitymethodbeforetheacquisitiondate,anyothercomprehensiveincomepreviouslyrecognizedisnotadjustedonacquisitiondate.Whentheinvestmentisdisposedofinlaterdate,theamountthatwasrecognizedinothercomprehensiveincomeisrecognizedonthesamebasisaswouldberequirediftheinvesteehaddisposeddirectlyoftherelatedassetsorliabilities.Theowners’equityrecognizedasthechangesoftheinvestee’sotherowners’equityexceptfornetprofitorloss,othercomprehensiveincomeandprofitdistribution,aretransferredtoprofitorlossforthecurrentperiodwhendisposingtheinvestment.Whenthepreviously-heldequityinvestmentwhichwasmeasuredatfairvaluebeforetheacquisitiondate,theaccumulatedchangesinfairvalueincludedinothercomprehensiveincomeistransferredtoprofitorlossforthecurrentperioduponcommencementofthecostmethod.
(4)Transactioncostsforbusinesscombination
Page
Theoverheadforthebusinesscombination,includingtheexpensesforaudit,legalservices,valuationadvisory,andotheradministrativeexpenses,arerecordedinprofitorlossforthecurrentperiodwhenincurred.Thetransactioncostsofequityordebtsecuritiesissuedastheconsiderationsofbusinesscombinationareincludedintheinitialrecognitionamountoftheequityordebtsecurities.
8.Criteriaforjudgingcontrolandthepreparationofconsolidatedfinancialstatements
(1)Criteriafordeterminingcontrol
Controlmeansthattheinvestorhaspowerovertheinvestee,enjoysvariablereturnsthroughparticipationintheinvestee'srelevantactivities,andhastheabilitytouseitspowerovertheinvesteetoinfluencetheamountofitsreturns.
TheCompanymakesajudgmentonwhetherornottocontrolaninvesteebasedonacomprehensiveconsiderationofallrelevantfactsandcircumstances.TheCompanyre-evaluatesitsjudgmentoncechangesinrelevantfactsandcircumstancesresultinachangeintherelevantelementsinvolvedinthedefinitionofcontrol.Relevantfactsandcircumstancesmainlyinclude：
①thepurposeforwhichtheinvesteewasestablished;
②relevantactivitiesoftheinvesteeandhowdecisionsaremadeaboutrelevantactivities;
③whethertheinvestorenjoysrightsthatcurrentlygiveittheabilitytodominatetheinvestee'srelevantactivities;
④whethertheinvestorenjoysavariablereturnthroughparticipationintheinvestee'srelevantactivities;
⑤theabilityoftheinvestortouseitspowerovertheinvesteetoinfluencetheamountofitsreturn;
⑥relationshipsbetweeninvestorsandotherparties.
(2)
Thescopeofconsolidatedfinancialstatementsisbasedoncontrol.Allsubsidiaries(includingstandaloneentitythatcontrolledbytheCompany)areallincludedinthescopeofconsolidation.
(3)Proceduresofconsolidation
TheconsolidatedfinancialstatementsarepreparedbytheCompanybasedonthefinancialstatementsoftheCompanyanditssubsidiariesandotherrelevantinformation.Thewholeenterpriseisconsideredasoneaccountingbodywhenpreparingconsolidatedfinancialstatementandreflectthewholegroup’sfinancialposition,performanceandcashflowaccordingtounifiedaccountingpoliciesbasedonaccountingstandards.
Allsubsidiariesthatareincludedinthescopeofconsolidationadoptsameaccounting
Page
policies,andaccountingperiod.Iftherearedifferences,thesubsidiariesshalladjustitspoliciesandaccountingperiodaccordingly.Whenpreparingconsolidatedfinancialstatements,theaccountingpoliciesandaccountingperiodsofthesubsidiariesshouldbeconsistentwiththoseestablishedbytheCompany,andallsignificantintra-groupbalancesandtransactionsareeliminated.Ifthetreatmentbasedonenterprisegroupangleisdifferentwiththeanglefromsubsidiaries’,itshallbetreatedbasedonenterprisegroupangle.Theportionofasubsidiary’sequitythatisnotattributabletotheparentistreatedasnon-controllinginterestsandpresentedseparatelyintheconsolidatedbalancesheetwithinshareholders’equity.Theportionofnetprofitorlossofsubsidiariesfortheperiodattributabletonon-controllinginterestsispresentedseparatelyintheconsolidatedincomestatementbelowthe“netprofit”lineitem.Whentheamountoflossforthecurrentperiodattributabletothenon-controllingshareholdersofasubsidiaryexceedsthenon-controllingshareholders’shareoftheopeningowners’equityofthesubsidiary,theexcessisstillallocatedagainstthenon-controllinginterests.Whereasubsidiaryorbusinesshasbeenacquiredthroughabusinesscombinationinvolvingenterprisesundercommoncontrolinthereportingperiod,thesubsidiaryorbusinessisdeemedtobeincludedintheconsolidatedfinancialstatementsfromthedatetheyarecontrolledbytheultimatecontrollingparty.Theiroperatingresultsandcashflowsareincludedintheconsolidatedincomestatementandconsolidatedcashflowstatementrespectivelyfromthedatetheyarecontrolledbytheultimatecontrollingparty.
Whereasubsidiaryorbusinesshasbeenacquiredthroughabusinesscombinationnotinvolvingenterprisesundercommoncontrolinthereportingperiod,thefinancialstatementsofsubsidiariesshallbeadjustedonthebasisoffairvalueofidentifiablenetassetsonpurchasedate.
1)Additionofsubsidiariesorbusinessoperation
Whereasubsidiaryorbusinesshasbeenacquiredthroughabusinesscombinationinvolvingenterprisesundercommoncontrolinthereportingperiod,thesubsidiaryorbusinessisdeemedtobeincludedintheconsolidatedfinancialstatementsfromthedatetheyarecontrolledbytheultimatecontrollingparty.Theiroperatingresultsandcashflowsareincludedintheconsolidatedincomestatementandconsolidatedcashflowstatementrespectivelyfromthedatetheyarecontrolledbytheultimatecontrollingparty.
IftheCompanycanexertcontrolovertheinvesteeundercommoncontrolbecauseofadditionofinvestment,adjustmentsshallbemadeasifallthecombiningpartyareatthecurrentconditionintheangleofultimatecontrolledparty.Equityinvestmentheldbeforeacquiredcontrol,profitorloss,othercomprehensiveincomeandothernetassetchangesthathavealreadyrecognizedbetweenthelaterofacquiringoriginalequityandthedateundercommoncontrol,and
Page
combinationdateshalloffsetopeningretainedearningsorcurrentperiodprofitorlossrespectively.Inthereportingperiod,ifthereissubsidiaryorbusinessadditioninvolvingentitiesnotundercommoncontrol,noadjustmentsshallbemadetotheconsolidatedbalancesheet.Therevenue,expensesandprofitfromthepurchasingdatetoperiodendshallbeincludedinconsolidatedincomestatement.Thecashflowsfromthepurchasingdatetoperiodendshallbeincludedinconsolidatedcashflowstatement.
Whereasubsidiaryorbusinesshasbeenacquiredthroughabusinesscombinationnotinvolvingenterprisesundercommoncontrolbymeansofinvestmentadditioninthereportingperiod,equityheldbeforethepurchasedateshallbere-measuredatfairvalue.Differencebetweenthefairvalueandthecarryingamountshallbechargedtocurrentperiodinvestmentgain.Changesrelatedtoequitymethodsuchasothercomprehensiveincomeandotherequitychangesbesidenetprofit,othercomprehensiveincomeandprofitdistributionshallbetransferredtocurrentperiodinvestmentgain.
2)Disposalsubsidiaryorbusiness
a)Generalprincipal
Inthereportingperiod,iftheCompanydisposeofsubsidiaryorbusiness,thesubsidiary’srevenue,expenses,profitandcashflowsfromthebeginningoftheperiodtothedisposaldateshallbeincludedinconsolidatedfinancialstatements.
WhentheCompanylosescontroloverasubsidiarybecauseofdisposingpartofequityinvestmentorotherreasons,theremainingpartoftheequityinvestmentisre-measuredatfairvalueatthedatewhenthecontrolislost.Againorlossisrecognizedinthecurrentperiodandiscalculatedbytheaggregateofconsiderationreceivedindisposalandthefairvalueofremainingpartoftheequityinvestmentdeductingtheshareofnetassetsinproportiontopreviousshareholdingpercentageintheformersubsidiarysinceacquisitiondateandthegoodwill.
b)Disposalofsubsidiarythroughmultiplesteps
IntheeventthattheCompanylossescontroloverasubsidiarythroughmultipletransactions,ifoneormoreconditionsbelowarefulfilled,itshallbetreatedasone-baskettransaction:
i)thetransactionswereenteredintoatthesametimeorbyconsideringeachother’sinfluence;
ii)acompletebusinessresultcanonlybeachievedbycombiningallthesetransactions
together;
iii)theperformingofonetransactionisdependedonatleastoneothertransaction;
iv)atransactionisnoteconomicalifitisconsideredstandalongbutitwillbecome
economicalifitisconsideredincombinationwithothertransactions.
Ifthedisposalwascategorizedasone-baskettransaction,theCompanydealtwithall
Page
transactionsasonetransactionthatresultedinlostcontroloversubsidiary.But,beforelosingcontrol,thedifferencebetweendisposalconsiderationandtheportionofnetassetofthedisposalpartshallberecognizedinothercomprehensiveincomeeachtimeofdisposalandchargedtoincomestatementinwholeintheperiodlosscontrol.Ifthedisposaldoesnotbelongtoone-baskettransaction,theaccountingtreatmentbeforelostcontrolshallbeinaccordancewithpoliciesofdisposalequitybutnotlosingcontrol.Atthetimecontrollost,dealwithasnormalsubsidiarydisposal.
3)Acquiringnon-controllinginterestsofsubsidiaryWheretheCompanyacquiresanon-controllinginterestfromasubsidiary’snon-controllingshareholders,thebookvalueofshareholder’sequityattributedtotheCompanyandtothenon-controllinginterestisadjustedtoreflectthechangeintheCompany’sinterestinthesubsidiaries.Thedifferencebetweentheproportioninterestsofthesubsidiary’snetassetsbeingacquiredordisposedandtheamountoftheconsiderationpaidorreceivedisadjustedtothecapitalreserveintheconsolidatedbalancesheet,withanyexcessadjustedtoretainedearnings.
4)PartiallydisposalsubsidiaryequitywithoutlosingcontrolThedifferencebetweentheconsiderationreceivedfrompartialdisposalofthelong-termequityinvestmentinthesubsidiarywithoutlosingcontrolandtheshareofnetassetsofthesubsidiarythatiscontinuouslycalculatedfromthepurchasedateorthemergerdatecorrespondingtothedisposalofthelong-termequityinvestment,toadjustthesharepremiuminthecapitalreserveintheconsolidatedbalancesheet,ifthesharepremiuminthecapitalreserveisinsufficienttooffset,adjusttheretainedearnings.
9.Jointarrangementclassificationandaccountingtreatmentforjointoperation
(1)ClassificationTheCompanyclassifiesjointarrangementsintojointoperationsandjointventuresbasedonthestructure,legalform,termsandconditionsinthearrangement,andotherrelatedfacts.Jointoperationsmeansjointarrangementthatdoesnotrealizedthroughindependententity.Jointarrangementthatrealizedthroughindependententityisnormallyrecognizedasjointventurebutitalsocanbeclassifiedasjointoperationifclearevidenceshowedthatoneofthefollowingconditionismet:
1)Thelegalformofanjointarrangementshowedthatthejointpartiesenjoyedrightsoverrelatedassetsandundertakeliabilityrespectively;
2)Thecontractshowedthatthejointpartiesenjoyedrightsoverrelatedassetsandundertakeliabilityrespectively;
3)Otherfactsandsituationindicatedthatthejointpartiesenjoyedrightsoverrelatedassetsandundertakeliabilityrespectively;
(2)Accountingtreatmenttojointoperation
Page
TheCompanyrecognizesthefollowingitemsrelatingtoitsinterestinajointoperation,andaccountfortheminaccordancewithrelevantaccountingstandards:
1)itssolely-heldassets,anditsshareofanyassetsheldjointly;
2)itssolely-assumedliabilities,anditsshareofanyliabilitiesassumedjointly;
3)itsrevenuefromthesaleofitsshareoftheoutputarisingfromthejointoperation;
4)itsshareoftherevenuefromthesaleoftheoutputbythejointoperation;and
5)itssolely-incurredexpenses,anditsshareofanyexpensesincurredjointly.
TheCompanycontributeordisposalofassets(exceptthatassetconstitutebusiness).Beforetheseassetsaresoldtothirdparty,theCompanyonlyrecognizestheportionofprofitorlossesthatattributestotheotherparty.Iftheassetsincurredimpairment(meetstherequirementsofthe"AccountingStandardsforBusinessEnterprisesNo.8-ImpairmentofAssets"),theCompanyrecognizeslossesinfull.
Fortheassetspurchasedfromjointoperation(exceptthatconstitutesbusiness),beforeitissoldtothirdparty,onlytheportionthatattributabletotheotherparties.Ifassetsincurredimpairment(meetstherequirementsofthe"AccountingStandardsforBusinessEnterprisesNo.8-ImpairmentofAssets"),theCompanyrecognizeslossesbasedonitsshare.
TheCompanydoesnotenjoyjointcontroltojointoperation.IftheCompanyenjoysjointoperation’sassetandundertakingrelatedliabilities,theaccountingtreatmentisthesame.Otherwise,itshallbeaccountedforbasedonaccountingstandards.
10.Cashandcashequivalents
Whenpreparingcashflowstatement,theCompanyrecognizescashinhandandbankdepositthatavailableforpaymentascash.Cashequivalentsincludeshort-term(generallyexpireswithinthreemonthsfromthedateofpurchase),highlyliquidinvestmentsthatarereadilyconvertibletoknownamountsofcashandaresubjecttoaninsignificantriskofchangeinvalue.
11.Foreigncurrencytransactionsandtranslationofforeigncurrencyfinancialstatements
(1)Foreigncurrencytransactions
ForeigncurrencytransactionsaretranslatedintothefunctionalcurrencyoftheCompany,usingtheexchangeratesprevailingatthedatesofthetransactions.
MonetaryitemsdenominatedinforeigncurrenciesaretranslatedtoRenminbiatthespotexchangerateatthebalancesheetdate.Theresultingexchangedifferencesbetweenthespotexchangerateonbalancesheetdateandthespotexchangerateoninitialrecognitionoronthepreviousbalancesheetdatearerecognizedinprofitorloss.Non-monetaryitemsthataremeasuredathistoricalcostinforeigncurrenciesaretranslatedtoRenminbiusingtheexchange
Page
rateatthetransactiondate.Non-monetaryitemsthataremeasuredatfairvalueinforeigncurrenciesaretranslatedusingtheexchangerateatthedatethefairvalueisdetermined.Theresultingexchangedifferencesarerecognizedinprofitorlossorothercomprehensiveincome.
(2)TranslationofforeigncurrencyfinancialstatementsWhentranslatingtheforeigncurrencyfinancialstatementsofoverseassubsidiaries,assetsandliabilitiesofforeignoperationaretranslatedtoRenminbiatthespotexchangerateatthebalancesheetdate.Equityitems,excluding“retainedearnings”,aretranslatedtoRenminbiatthespotexchangeratesatthetransactiondates.
Whendisposingoverseasoperations,foreigntranslationdifferencethatrelatedtotheoverseasbusinessshallbechargedtocurrentperiodprofitorlossesfromothercomprehensiveincome.Ifthedisposalresultedindecreaseinshareholdingbutstillmaintaincontrol,thetranslationdifferencewillbeincludedinnon-controllinginterest.Ifthedisposalrelatedtoassociateentityorjointventureentities,thetranslationdifferencewillbeincludedincurrentperiodprofitorloss.
12.Financialinstruments
TheCompanyrecognizesfinancialassetsorfinancialliabilitieswhentheCompanybecomeapartyofthefinancialinstruments.
Effectiveinterestratemethodrefertocalculatingtheamortizedcostoffinancialassetsorliabilitiesandamortizesinterestincomeorexpensesintocorrespondingaccountingperiodaccordingly.
Effectiveinterestratereferstotheinterestthatisusedtodiscounttheestimatedfuturecashflowsofexistingfinancialassetsorfinancialliabilitiestoitsamortizedcost.Whendeterminingtheeffectiveinterestrate,thecashflowisestimatedtakingconsiderationofallcontractualtermsoffinancialassetsorfinancialliabilitiesbutdoesnotincludingestimatedcreditloss.
Amortizedcostoffinancialassetsorfinancialliabilitiesistheinitialrecognitionamountdeductprincipalandaddorlessaccumulatedamortizationtothedifferencebetweeninitialrecognitionandtheamountatmaturityandlessaccumulatedlossprovision(forfinancialassetsonly).
(1)Recognitionandderecognitionoffinancialinstruments
FinancialassetsareclassifiedintothefollowingthreecategoriesdependsontheCompany’sbusinessmodeofmanagingfinancialassetsandcashflowcharacteristicsoffinancialassets
1)Financialassetsmeasuredatamortizedcost
2)Financialassetsatfairvaluethroughothercomprehensiveincome
3)Financialassetsatfairvaluethroughprofitorloss
Financialassetsaremeasuredatfairvalueatinitialrecognition.Butitisrecognizedusing
Page
tradingpriceforaccountsreceivableornotesreceivablearosefromsaleofgoodsorprovidingofservicethatdoesnotincludingmaterialfinancingcomponentordoesnotconsiderfinancingcomponentwithinoneyear.Forfinancialassetsatfairvaluethroughprofitorloss,therelatedtransactioncostsaredirectlyrecognizedthroughprofitorloss,andtherelatedtransactioncostsofothertypesoffinancialassetsareincludedintheinitialrecognitionamounts.OnlywhentheCompanychangesitsbusinessmodelofmanagingfinancialassets,allthefinancialassetsaffectedshallbereclassifiedonthefirstdayofthefirstreportingperiodafterthebusinessmodelchanges.
1)FinancialassetsmeasuredatamortizedcostTheCompanyshallclassifyfinancialassetsthatmeetthefollowingconditionsandarenotdesignatedasfinancialassetsatfairvaluethroughprofitorlossasfinancialassetsmeasuredatamortizedcost:TheCompany’sbusinessmodelformanagingthefinancialassetsistocollectcontractualcashflows;Thetermsofthefinancialassetcontractstipulatethatcashflowsgeneratedonaspecificdateareonlypaymentsofprincipalandinterestbasedontheamountofoutstandingprincipal.FinancialassetsmeasuredatamortizedcostoftheCompanyincludescashandbankbalances,notesreceivable,accountsreceivablesandotherreceivables.
Afterinitialrecognition,theeffectiveinterestratemethodisusedtomeasuretheamortizedcostofsuchfinancialassets.Profitsorlossesarisingfromfinancialassetsmeasuredatamortizedcostsandnotpartofanyhedgingrelationshipareincludedincurrentprofitorlosswhentherecognitionisterminated,amortizedorimpairedaccordingtotheeffectiveinterestrate.
a)forfinancialassetsthatalreadyimpairedwhenitisacquired,theCompanydeterminesitsinterestincomeusingadjustedeffectiveinterestratebasedonitsamortizedcost.
b)forfinancialassetsthatdoesnotimpairedwhenitisacquiredbutimpairedlatterly,theCompanydeterminesitsinterestincomeusingadjustedeffectiveinterestratebasedonitsamortizedcost.Ifthereisnocreditimpairmentinlaterperiodduetochangestoriskfactors,theCompanyuseseffectiveinterestratetimesofcarryingamountofthefinancialassettodetermineinterestincome.
2)Financialassetsatfairvaluethroughothercomprehensiveincome
TheCompanyshallclassifyfinancialassetsthatmeetthefollowingconditionsandarenotdesignatedasfinancialassetsmeasuredatfairvalueandwhosechangesarerecordedincurrentprofitorlossasfinancialassetsmeasuredatfairvaluethroughothercomprehensiveincome:TheGroup’sbusinessmodelformanagingthefinancialassetsisbothtocollectcontractualcashflowsandtosellthefinancialassets,andthetermsofthefinancialassetcontractstipulatethatcashflowsgeneratedonaspecificdateareonlypaymentsofprincipalandinterestbasedontheamountofoutstandingprincipal.
Page
Afterinitialrecognition,financialassetsaresubsequentlymeasuredatfairvalue.Interest,impairmentlossesorgainsandexchangegainscalculatedbytheeffectiveinterestratemethodarerecognizedinprofitorloss,whileothergainsorlossesarerecognizedinothercomprehensiveincome.Whenderecognized,theaccumulatedgainsorlossespreviouslyrecognizedinothercomprehensiveincomearetransferredfromothercomprehensiveincomeandrecordedincurrentprofitorloss.Notesreceivableandaccountsreceivablemeasuredatfairvaluethroughothercomprehensiveincomearelistedasreceivablesfinancing,andothersuchfinancialassetsarelistedasotherdebtinvestments,ofwhich:oneyearfromthebalancesheetdateOtherdebtinvestmentsduewithinoneyeararelistedasnon-currentassetsduewithinoneyear,andotherdebtinvestmentswithanoriginalmaturitydatewithinoneyeararelistedasothercurrentassets.
3)Financialassetsdesignatedasfairvaluethroughothercomprehensiveincome
Atinitialrecognition,theCompanymaydesignatenon-tradingequityinstrumentinvestmentsasfinancialassetsatfairvaluethroughothercomprehensiveincome,presentedasotherequityinstrumentinvestment,andrecognizedividendincomewhentheconditionsaremet(thedesignationcannotberevokedonceitismade).
Thefairvaluechangesofthiskindoffinancialassetshallbeincludedinothercomprehensiveincomeandnoimpairmentprovisionisneeded.Whende-recognizingthefinancialasset,accumulatedgainorlossinothercomprehensiveincomeshallbetransferredoutofothercomprehensiveincomeandchargedtoretainedearnings.DuringtheinvestingperiodwhentheCompanyholdsequityinstruments,theCompanyrecognizesdividendsincurrentperiodprofitorlosswhentherightofreceivingdividendsisconfirmedandtheassociatedeconomicbenefitisprobabletoflowintotheCompanyandthattheamountcanbemeasuredreliably.TheCompanytreatedthiskindoffinancialinstrumentunderotherequityinvestment.
Thedesignatedequityinstrumentinvestmentdoesnotbelongtothefollowing:thepurposeofobtainingthefinancialassetismainlyfortherecentsale;itispartoftheidentifiablefinancialassetinstrumentcombinationundercentralizedmanagementatinitialrecognition,andthereisobjectiveevidencethattheshort-termgainactuallyexistsinthenearfuture;itisaderivative(exceptforderivativesthatmeetthedefinitionofafinancialguaranteecontractandaredesignatedaseffectivehedginginstruments).
4)Financialassetsatfairvaluethroughprofitorloss
Thefinancialassetsotherthanfinancialassetsmeasuredatamortizedcostandfinancialassetsatfairvaluethroughothercomprehensiveincomeareclassifiedasfinancialassetsatfairvaluethroughprofitorloss.
Afterinitialrecognition,thefinancialassetsaresubsequentlymeasuredatfairvalue,andtheprofitsorlossesgeneratedfromwhicharerecognizedinprofitorloss.
Page
TheCompanypresentthefinancialassetsasfinancialassetheldfortrade,othernon-currentfinancialassets.
5)Financialassetsdesignatedatfairvaluethroughprofitorloss.
Atinitialrecognition,iftheaccountingmismatchcanbeeliminatedorsignificantlyreduced,thefinancialassetscanbedesignatedasfinancialassetsatfairvaluethroughprofitorloss.
Ifthehybridcontractincludesoneormoreembeddedderivativesandthemaincontractdoesnotbelongtotheabovefinancialassets,theCompanymaydesignatethewholeasafinancialinstrumentthatismeasuredatfairvaluethroughprofitorloss,exceptinthefollowingcases:
a)Embeddedderivativesdonotmateriallychangethecashflowofahybridcontract
b)Whenitisfirstdeterminedwhetherasimilarhybridcontractrequiresaspin-off,thereislittleneedforanalysistomakeitclearthattheembeddedderivativesitcontainsshouldnotbesplit.Iftheprepaymentrightoftheembeddedloanallowstheholdertorepaytheloaninadvancewithanamountclosetotheamortizedcost,theprepaymentrightdoesnotneedtobesplit.
Afterinitialrecognition,thefinancialassetsaresubsequentlymeasuredatfairvalue,andtheprofitsorlossesgeneratedfromwhicharerecognizedinprofitorloss.
TheCompanypresentthefinancialassetsasfinancialassetheldfortrade,othernon-currentfinancialassets.
(2)Classificationandmeasurementoffinancialliabilities
TheCompanycategorizesfinancialliabilitiesintofinancialliabilitiesandequityinstrumentbasedonthecontracttermsandeconomicalnatureratherthansolelyonitslegalform.Financialliabilitiesinitiallyrecognizedasfinancialliabilitiesatfairvaluethroughprofitorloss,otherfinancialliabilitiesandderivativeinstrumentdesignatedaseffectivehedginginstrument.
ThefinancialliabilitiesoftheCompanyareinitiallymeasuredatfairvalue.Therelatedtransactioncostsoffinancialliabilitiesatfairvaluethroughprofitorlossaredirectlyrecognizedinprofitorloss.Therelatedtransactioncostsofothercategoriesoffinancialliabilitiesareincludedintheinitialrecognitionamount.
Subsequentmeasurementoffinancialliabilitiesdependsonitscategory:
1)Financialliabilitiesatfairvaluethroughprofitorloss
Thiscategoryincludesfinancialliabilitiesheldfortrade(includingderivativesthatarefinancialliabilities)andfinancialliabilitiesdesignatedatfairvaluethroughprofitorloss.
Atinitialrecognition,inordertoprovidemorerelevantaccountinginformation,theCompanyclassifiesfinancialliabilitiesthatmeetoneofthefollowingconditionsasfinancialliabilitiesatfairvaluethroughprofitorloss(thedesignationcannotberevokedonceitismade):
theaimofundertakingrelatedfinancialliabilitiesistosellorrepurchaseintheshortrun;itispartofidentifiablefinancialinstrumentsandthereisobjectiveevidenceindicatedthattheenterpriseadoptsshort-termprofitabilitymode;belongtoderivativeinstrumentexceptforderivativeinstrumentdesignatedaseffectivehedginginstrumentandfinancialguaranteecontract.Financial
Page
liabilitiesheldfortradearemeasuredatfairvaluesubsequentlyandallfairvaluechangesexceptforhedgingaccountingshallbeincludedincurrentperiodprofitorloss.Atinitialrecognition,inordertoprovidemorerelevantaccountinginformation,theCompanyclassifiesfinancialliabilitiesthatmeetoneofthefollowingconditionsasfinancialliabilitiesdesignatedatfairvaluethroughprofitorloss(thedesignationcannotberevokedonceitismade):
a)accountingmismatchescanbeeliminatedorsignificantlyreduced.b)managementandperformanceevaluationoffinancialliabilityportfoliosorcombinationsoffinancialassetsandfinancialliabilitiesbasedonfairvalueaccordingtocorporateriskmanagementorinvestmentstrategiesasstatedinformalwrittendocuments,andreporttokeymanagementpersonnelonthisbasis.WhentheCompanyinitiallyrecognizesafinancialliabilityanddesignatesitatfairvaluethroughprofitorlossaccordingtostipulationsofstandards,thechangesinthefairvalueofthefinancialliabilityarisingfromchangesinthecompany’sowncreditriskareincludedinothercomprehensiveincome,andotherchangesinfairvaluearerecognizedinprofitorlossfortheperiod.However,iftheaccountingcausesorexpandstheaccountingmismatchinprofitorloss,theentiregainorlossofthefinancialliability(includingtheaffectedamountfromchangesinthecompany’sowncreditrisk)isincludedinthecurrentprofitorloss.
2）OtherfinancialliabilitiesExceptforthefollowingitems,theCompanyclassifiesfinancialliabilitiesasfinancialliabilitiesmeasuredatamortizedcost:
a)Financialliabilitiesatfairvaluethroughprofitorloss.b)Thetransferoffinancialassetsdoesnotmeettheconditionsforderecognitionorfinancialliabilitiesarisingfromthecontinuedinvolvementinthetransferredfinancialassets.
c)Financialguaranteecontractsthatarenotinthefirsttwocategoriesofthisarticle,andloancommitmentsgrantedataratelowerthanmarketinterestratesandthatarenotinthefirstcategoryofthisarticle
Financialguaranteecontractsthatarenotdesignatedasfinancialliabilitiesmeasuredatfairvaluethroughprofitorlossareinitiallyrecognizedatfairvalue.Subsequenttoinitialrecognition,thesubsequentmeasurementisdeterminedaccordingtothehigherlossallowanceofcontingentliabilitiesunderexpectedcreditlossmodelandtheinitialrecognitionamountdeductingbytheaccumulatedamortization.
(3)Derecognitionoffinancialinstruments
1）Ifafinancialassetmeetsoneofthefollowingconditions,itshallbederecognized:
a)Thecontractualrighttoreceivethecashflowofthefinancialassetisterminated.
b)Thefinancialassethasbeentransferred,andthetransfermeetstherequirementsofthe
Page
“AccountingStandardsforBusinessEnterprisesNo.23–TransferofFinancialAssets”regardingderecognitionoffinancialassets.
2)ConditionsofderecognitionoffinancialliabilitiesIfthecurrentobligationofafinancialliability(orapartthereof)hasbeendischarged,thefinancialliability(orsuchpartoffinancialliability)isderecognized.WhentheCompanyandthelendersignanagreementtoreplacetheoriginalfinancialliabilitywithanewfinancialliability,andthenewfinancialliabilityissubstantiallydifferentfromtheoriginalfinancialliability,theoriginalfinancialliabilityisderecognizedandanewfinancialliabilityisrecognized.Thedifferencebetweenthecarryingamountandtheconsiderationpaid(includingthetransferrednon-cashassetsorliabilitiesassumed)isrecognizedinprofitorloss
IftheCompanyrepurchasespartofthefinancialliabilities,thecarryingamountofthefinancialliabilitiesasawholeisallocatedbasedontheproportionofthefairvalueofthecontinuingrecognitionportionandthederecognitionportionontherepurchasedate.Thedifferencebetweenthecarryingamountassignedtothederecognitionportionandtheconsiderationpaid(includingthetransferrednon-cashassetsorliabilitiesassumed)shallbeincludedinthecurrentprofitorloss.
(4)Recognitionbasisandmeasurementfortransferoffinancialassets
Intheeventoftransferoffinancialassets,theCompanyassessestheextenttowhichitretainstherisksandrewardsofownershipofthefinancialassetsandtreatstheminthefollowingcases:
1)Ifalmostallrisksandrewardsofownershipoffinancialassetsaretransferred,thefinancialassetsarederecognizedandtherightsandobligationsarisingfromorretainedinthetransferareseparatelyrecognizedasassetsorliabilities.
2)Ifalmostalltherisksandrewardsofownershipoffinancialassetsareretained,thefinancialassetsshallcontinuetoberecognized
3)Ifthereisneithertransfernorretentionofalmostallrisksandrewardsofownershipoffinancialassets(i.e.,otherthan(1)and(2)ofthisarticle),thendependingonwhetherornottheyretaincontroloverfinancialassets
a)Ifcontroloverthefinancialassetisnotretained,thefinancialassetshallbederecognized,andtherightsandobligationsarisingorretainedduringthetransfershallbeseparatelyrecognizedasassetsorliabilities.
b)Ifthecontroloverthefinancialassetisretained,therelevantfinancialassetshallbecontinuouslyrecognizedaccordingtothedegreeofitscontinuousinvolvementinthetransferredfinancialasset,andtherelevantliabilitiesshallberecognizedaccordingly.Thedegreeofcontinuedinvolvementinthetransferredfinancialassetsreferstothedegreetowhichthecompanybearstheriskorrewardofthevaluechangeofthetransferredfinancialassets
Whenjudgingwhetherthetransferoffinancialassetssatisfiestheconditionsfor
Page
derecognitionabove,theprincipleofsubstanceoverformisadopted.TheCompanydividesthetransferoffinancialassetsintotheoveralltransferandpartialtransferoffinancialassets:
1)Iftheoveralltransferoffinancialassetsmeetstheconditionsforderecognition,thedifferencebetweenthefollowingisincludedinthecurrentprofitorloss:
a)Thecarryingamountofthetransferredfinancialassetsonthedateofderecognition.
b)Thesumoftheconsiderationreceivedinrespectofthetransferoffinancialassetsandtheamountcorrespondingtothederecognizedportionintheaccumulatedchangesinthefairvalueoriginallyanddirectlyrecognizedinothercomprehensiveincome(thefinancialassetsinvolvedinthetransferaremeasuredatfairvaluethroughothercomprehensiveincome)
Ifthetransferofafinancialassetdoesnotmeettheconditionsforderecognition,thefinancialassetwillcontinuetoberecognizedandtheconsiderationreceivedisrecognizedasafinancialliability
(5)Methodfordeterminingthefairvalueoffinancialassetsandfinancialliabilities
Thefairvalueoffinancialassetsorfinancialliabilitieswithactivemarketisdeterminedbyactivemarketquotations;activemarketquotationsincludequotationsthatarereadilyandregularlyavailablefromexchanges,dealers,brokers,industrygroups,pricingagenciesorregulatoryauthoritiesforrelatedassetsorliabilities,andrepresentactualandfrequentlyoccurringmarkettransactionsonafairtradebasis.
Thefairvalueoffinancialassetsinitiallyacquiredorderivedorfinancialliabilitiesassumedshallbedeterminedonthebasisofthemarkettransactionprice.
Thefairvalueoffinancialassetsorfinancialliabilitieswithoutactivemarketisdeterminedusingvaluationtechniques.Invaluation,theCompanyadoptsvaluationtechniquesthatareapplicableundercurrentcircumstancesandthataresupportedbyadequateavailabledataandotherinformation,selectsinputswithconsistentassetorliabilitycharacteristicsconsideredbymarketparticipantsintradingrelatedassetorliability,andusesrelevantobservableinputswherepossible.Unobservableinputsareusedwheretherelevantobservableinputsarenotavailableorareimpracticable.
(6)Provisionforimpairmentoffinancialassets
Basedontheexpectedcreditlosses,theCompanyassessestheexpectedcreditlossesofthefinancialassetsmeasuredatamortizedcostandfinancialassetsatfairvaluethroughothercomprehensiveincome,leasereceivables,contractassets,loancommitmentandfinancialliabilitiesthatarenotmeasuredatfairvaluethroughprofitorloss,andfinancialguaranteecontractetc.,andmakesimpairmentaccountingandrecognizeslossprovisions.
Theexpectedcreditlossreferstotheweightedaverageofthecreditlossesoffinancialinstrumentsthatareweightedbytheriskofdefault.Creditlossreferstothedifferencebetweenall
Page
contractualcashflowsdiscountedattheoriginaleffectiveinterestrateandreceivablefromthecontractandallcashflowsexpectedtobereceivedbytheCompany,andthepresentvalueofallcashshortages.Forfinancialassetsthathavebeenpurchasedorgeneratedwithcreditimpairment,lossprovisionisrecognizedonlyforthecumulativechangesinlifetimeexpectedcreditlossesaftertheinitialrecognitiononthebalancesheetdate.Foraccountsreceivable,contractassets,andleasereceivables,theCompanyshallalwaysmeasurethelossallowanceforthematanamountequaltothelifetimeexpectedcreditlosses.Forfinancialassetsthathavebeenpurchasedorgeneratedwithcreditimpairment,lossprovisionisrecognizedonlyforthecumulativechangesinlifetimeexpectedcreditlossesaftertheinitialrecognitiononthebalancesheetdate.Oneachbalancesheetdate,theamountofchangesinlifetimeexpectedcreditlossesisincludedinprofitorlossasanimpairmentlossorgain.Evenifthelifetimeexpectedcreditlossdeterminedonthebalancesheetdateislessthantheexpectedcreditlossreflectedintheestimatedcashflowattheinitialrecognition,thepositivechangeinexpectedcreditlossisalsorecognizedasanimpairmentgainExceptfortheabove-mentionedsimplifiedmeasurementmethodsandpurchasedororiginatedcredit-impairedassets,theCompanyassesseswhetherthecreditriskoftheotherfinancialassetshasincreasedsignificantlysincetheinitialrecognitiononeachbalancesheetdate,andseparatelymeasuresitslossprovision,recognizesexpectedcreditlossanditschangesbasedonthefollowingcircumstances：
a)Ifthecreditriskofthefinancialinstrumentshasnotincreasedsignificantlysincetheinitialrecognition,thelossprovisionismeasuredattheamountequivalenttotheexpectedcreditlossofthefinancialinstrumentsinthenext12months,regardlessofwhetherthebasistheCompanyassessesthecreditlossisonindividualfinancialinstrumentorthecombinationoffinancialinstruments,andtheincreaseorreversalofthelossprovisionresultingtherefromshallbeincludedinthecurrentprofitorlossasanimpairmentlossorgain.
b)Ifthecreditriskofthefinancialinstrumentshasincreasedsignificantlysincetheinitialrecognitionbutnoimpairmenthasoccurred,thelossprovisionismeasuredattheamountequivalenttothelifetimeexpectedcreditlossofthefinancialinstruments,regardlessofwhetherthebasistheCompanyassessesthecreditlossesisonindividualfinancialinstrumentoracombinationoffinancialinstruments,andtheincreaseorreversalofthelossprovisionresultingtherefromshouldbeincludedinthecurrentprofitorlossasanimpairmentlossorgain.
c)Forfinancialinstrumentsinthethirdstagewhichthefinancialinstrumenthasbeenimpairedsinceinitialrecognition,theCompanymeasureslossprovisiononthebasisoflife-timeexpectedcreditlossandcalculatinginterestincomeaccordingtotheirbookbalanceminustheimpairmentprovisionandtheactualinterestrate.
Incrementalorreversalofcreditlossprovisionshallbeincludedincurrentprofitorlossas
Page
impairmentlossorgain.Exceptforfinancialassetatfairvaluethroughothercomprehensiveincome,creditlossprovisionistooffsetthecarryingamountoffinancialassets.Forfinancialassetsatfairvaluethroughothercomprehensiveincome,thecreditlossprovisionisrecognizedinothercomprehensiveincomeandwillnotoffsetthefinancialasset’scarryingamountinbalancesheet.IftheCompanyrecognizedcreditlossprovisioninprioraccountingperiodintermsoflife-timecreditloss,butoncurrentperiodbalancesheetdate,theassociatedfinancialassetdoesnotbelongtothesituationofriskincreasedaftertheinitialrecognition,theCompanyshallaccruecreditlossprovisionforthisfinancialassetbasedonthenext12monthexpectedcreditloss.Differencearosefromabovechangesshallbeincludedincurrentperiodprofitorlossasimpairmentgain.
1)AssessmentofsignificantincreaseofcreditriskBycomparingthedefaultriskoffinancialinstrumentsonbalancesheetdaywiththatoninitialrecognitionday,theCompanydeterminestherelativechangeofdefaultriskoffinancialinstrumentsduringtheexpectedlifeoffinancialinstruments,toevaluatewhetherthecreditriskoffinancialinstrumentshasincreasedsignificantlysincetheinitialrecognition.
Todeterminewhethercreditriskhasincreasedsignificantlysincetheinitialrecognition,factorsconsideredbytheCompanyincludes:
a)Whetherthereisseriousdeteriorationofthedebtor’soperatingresultsthathaveoccurred
orareexpectedtooccur;
b)Changesintheexistingoranticipatedtechnological,market,economicorlegal
environmentwillhaveasignificantnegativeimpactonthedebtor’srepaymentcapacity.
c)Seriousdeteriorationofexternalorinternalcreditratings(ifany)offinancialinstruments
thathaveoccurredorareexpectedtooccur;
d)Whethertheexpectedperformanceandrepaymentofdebtorchangessignificantly.
e)WhethertheCompanychangedthewayofmanagingfinancialassets.
Onthebalancesheetdate,iftheCompanyassessesthatthefinancialinstrumentonlyhaslowerlevelofcreditrisk,theCompanyassumesthatthecreditriskassociatedwiththefinancialinstrumentdoesnotincreasedaftertheinitialrecognition.Ifthedefaultrateofafinancialinstrumentislowandthedebtor’sabilitytofulfillitscashflowliabilityisstrong,thefinancialinstrumentwillberegardedwithlowercreditriskeveniftherewillbeadversechangedineconomicandoperatingenvironmentinlong-termwhichmaynotnecessarilydecreasethedebtor’sabilityoffulfillingitscashflowliabilities.
2)Provisionforimpairmentoffinancialassets
Whenoneormoreeventsthatadverselyaffecttheexpectedfuturecashflowsofafinancial
Page
assetoccur,thefinancialassetbecomesafinancialassetthathassufferedcreditimpairment.Evidencethatcreditimpairmenthasoccurredinafinancialassetincludesthefollowingobservableinformation:
a)significantfinancialdifficultiesoftheissuerordebtor;b)thedebtorbreachesthecontract,suchasfailuretopayordelayinthepaymentofinterestorprincipal;c)thecreditorgivesthedebtoraconcessionwhichwouldnothavebeenmadeunderanyothercircumstancesforeconomicorcontractualconsiderationsrelatingtothefinancialdifficultiesofthedebtor;d)thedebtorislikelytogobankruptorcarryoutotherfinancialrestructurings;e)thefinancialdifficultiesoftheissuerorthedebtorcausetheactivemarketofthefinancialassettodisappear;
f)purchaseorsourceafinancialassetatasubstantialdiscountthatreflectsthefactthatcreditlosseshaveoccurred.Thecreditimpairmentoffinancialassetsmaybecausedbythejointactionofmultipleevents,andmaynotbecausedbyseparatelyidentifiableevent
3)Determiningexpectedcreditloss(ECL)
TheCompanyevaluatesECLbasedonsingleorportfoliooffinancialinstrument.WhenevaluatingECL,theCompanyconsiderspastevents,currentsituationandfutureeconomiccondition.
TheCompanycategorizesfinancialinstrumentintodifferentportfoliosbasedoncommoncreditriskcharacteristics.Commoncreditriskcharacteristicsincludes:typesoffinancialinstruments,agingportfolio,settlementperiod,debtor’sindustriesetc…Refertoaccountingpoliciesoffinancialinstrumentsforstandardforsingleevaluationandcreditriskcharacteristics.
TheCompanyusesthefollowingwaytodeterminetheECLoffinancialinstruments:
a)Forfinancialassets,creditlossisthepresentvalueofdifferencebetweenallcontractualcashflowsreceivablefromthecontractandallcashflowsexpectedtobereceivedbytheCompany.
b)Forleasereceivable,creditlossisthepresentvalueofdifferencebetweenallcontractualcashflowsreceivablefromthecontractandallcashflowsexpectedtobereceivedbytheCompany.
c)Forfinancialguaranteecontract,creditlossisthepresentvalueofexpectedpaymentamountduetocreditlosseshappenedtotheownerofthecontractandlessanyamountthattheCompanyexpectedtoreceivefromthecontractowner,debtororotherparties.
d)Forfinancialassetsthatalreadyimpairedonbalancesheetdatebutnotimpairedwhenpurchasing,thecreditlossisthedifferenceofcarryingamountandpresentvalueoffuturecash
Page
flowsdiscountedatoriginaleffectiveinterestrate.FactorsthattheCompanymeasuresECLoffinancialinstrumentincludes:assessingaseriesofpossibleresultsandtodetermineaweightedaverageamountwithoutbias;timevalueofmoney;informationofpastevent,currentsituationandfutureeconomicconditionforecastthatcanbeobtainedwithoutpayingextracostoreffortsonbalancesheetdate.
4)WriteoffIftheCompanynolongerreasonablyexpectsthatthefinancialassetscontractcashflowcanberecoveredfullyorpartially,thefinancialassetsbookbalancewillbereduceddirectly.Suchreductionconstitutesthederecognitionofthefinancialassets.
(7)OffsetoffinancialassetsandfinancialliabilitiesFinancialassetsandfinancialliabilitiesarepresentedseparatelyinthebalancesheetandarenotoffset.However,ifallofthefollowingconditionsaremet,thenetamountoffsetbyeachotherispresentedinthebalancesheet:
1)TheCompanyhasastatutoryrighttooffsettherecognizedamount,andsuchlegalrightiscurrentlyenforceable;
2)TheCompanyplanstosettleinnetamountortorealizethefinancialassetsandsettlethefinancialliabilitiesatthesametime.
13.Billreceivables
RefertoNoteXII.6FinancialinstrumentimpairmentfordetailsofECLdeterminationandaccountingmethodtobillreceivable.
IftheCompanyhassufficientevidencetoevaluatetheECLofbillreceivableonsinglebasis,itwillbeassessedonsinglebasis.
IfthereisnotsufficientevidencetoevaluatetheECLonsinglebasis,theCompanywillmakejudgmentbasedonhistoricallossexperience,currentsituationandfutureeconomicsituation,andclassifyingthebillreceivableintodifferentportfolios.Thebasisforportfoliosisdeterminedasfollows:
| Portfolio | Basis | method |
| Risk-freebanker’sacceptancenote | Theissuerhashigherlevelofcreditratingandnodefaultinpastandhasstrongabilitytofulfilitscontractualcashfollowobligation | Referencinghistoricalimpairmentexperienceandtakingintoconsiderationofcurrentsituationandestimationoffutureconditions |
| Businessacceptancenote | Billreceivableswithsameaginghavesimilarcreditriskcharacteristics | Basedonaginganalysis |
14.Accountsreceivables
RefertoNoteXII.6FinancialinstrumentimpairmentfordetailsofECLdeterminationandaccountingmethodtoaccountsreceivable.
Page
IftheCompanyhassufficientevidencetoevaluatetheECLofaccountreceivableonsinglebasis,itwillbeassessedonsinglebasis.IfthereisnotsufficientevidencetoevaluatetheECLonsinglebasis,theCompanywillmakejudgmentbasedonhistoricallossexperience,currentsituationandfutureeconomicsituation,andclassifyingtheaccountreceivableintodifferentportfolios.Thebasisforportfoliosisdeterminedasfollows:
| Portfolio | Basis | method |
| Receivablesforrelatedpartiesinscopeofconsolidation | Accountreceivablesforrelatedpartiesinscopeofconsolidationhavesimilarcreditriskcharacteristics | Referencinghistoricalimpairmentexperienceandtakingintoconsiderationofcurrentsituationandestimationoffutureconditions |
| Accountsreceivablesfromotherparties | Accountreceivableswithsameaginghavesimilarcreditriskcharacteristics | Basedonaginganalysis |
15.Otherreceivables
RefertoNoteXII.6FinancialinstrumentimpairmentfordetailsofECLdeterminationandaccountingmethodtootherreceivables.
IftheCompanyhassufficientevidencetoevaluatetheECLofotherreceivablesonsinglebasis,itwillbeassessedonsinglebasis.
IfthereisnotsufficientevidencetoevaluatetheECLonsinglebasis,theCompanywillmakejudgmentbasedonhistoricallossexperience,currentsituationandfutureeconomicsituation,andclassifyingtheotherreceivableintodifferentportfolios.Thebasisforportfoliosisdeterminedasfollows:
| Portfolio | Basis | method |
| Receivablesofdownpaymentandguarantee | Theportfoliohassimilarcreditriskcharacteristics | BasedonagingandECLrate |
| Pettycashforemployees | Theportfoliohassimilarcreditriskcharacteristics | Referencinghistoricalimpairmentexperienceandtakingintoconsiderationofcurrentsituationandestimationoffutureconditions |
| Socialsecuritypaymentpaidon-behalfofemployees | Theportfoliohassimilarcreditriskcharacteristics | Referencinghistoricalimpairmentexperienceandtakingintoconsiderationofcurrentsituationandestimationoffutureconditions |
| Receivablesfromrelatedpartieswithinscopeofconsolidation | Theportfoliohassimilarcreditriskcharacteristics | Referencinghistoricalimpairmentexperienceandtakingintoconsiderationofcurrentsituationandestimationoffutureconditions |
| Others | Theportfoliohassimilarcreditriskcharacteristics | BasedonagingandECLrate |
16.Inventory
(1)Inventorycategories,issuevaluationmethod,inventorysystem,amortizationmethodforlowvalueconsumablesandpackages.
1)Classification
InventoryreferstothefinishedproductsorcommoditiesthattheCompanyholdsforsalein
Page
itsdailyactivities,semi-productsintheproductionprocess,materialsandconsumablesusedintheproductionprocessortheprovisionoflabourservices.Inventoriesincluderawmaterials,workinprogress,andfinishedgoods.
2)ValuationmethodofinventoryWheninventoryisacquired,itisinitiallymeasuredatcost,includingprocurementcosts,processingcostsandothercosts.Whentheinventoryisissued,itismeasuredbytheweightedaveragemethod(exceptforbrandedwatches)andspecificidentificationmethod(forbrandedwatches).
3)InventorycountsystemTheCompanymaintainsaperpetualinventorysystem.
4)Amortizationmethodsoflow-valueconsumablesandpackagingmaterialsLow-valueconsumablesandpackagingmaterialsarechargedtoprofitorlosswhentheyareused.
(2)BasisfordeterminingandmethodforprovisionforobsoleteinventoriesAftertheinventoryisthoroughlyinspectedattheendoftheperiod,theprovisionshallbeprovidedoradjustedatthelowerofthecostoftheinventoryanditsnetrealizablevalue.Thenetrealizablevalueofinventoryofgoodsdirectlyusedforsale,suchasfinishedgoods,stockedgoodsandmaterialsforsaleinthenormalproductionandoperationprocess,isdeterminedbytheestimatedsellingpriceoftheinventoryminustheestimatedsellingexpensesandrelatedtaxes;netrealizablevalueofinventoryofmaterialsthatneedtobeprocessedisdeterminedbasedontheestimatedsellingpriceofthefinishedproductsproducedminustheestimatedcosttillcompletion,estimatedsellingexpensesandrelatedtaxesandfeesinthenormalproductionandoperationprocess;thenetrealizablevalueoftheinventoryheldfortheexecutionofasalescontractorlabourcontractiscalculatedonthebasisofthecontractprice.Ifthequantityoftheinventoryheldexceedsthequantityorderedbythesalescontract,thenetrealizablevalueoftheexcessinventoryiscalculatedbasedonthegeneralsalesprice.
Theprovisionisaccruedaccordingtotheindividualinventoryprojectattheendoftheperiod;butforalargenumberofinventorieswithlowerunitprice,theprovisionisaccruedaccordingtothecategoryofinventory;forthoserelatedtotheproductseriesproducedandsoldinthesameregion,havethesameorsimilarenduseorpurposeandthataredifficulttomeasureseparatelyfromotherprojects,theyarecombinedforprovisionforinventorydepreciationIftheinfluencingfactorsofthewrite-downofinventoryvaluehavedisappeared,theamountofwritedownwillberestoredandwillbereversedwithintheamountoftheprovisionfordeclineinvalueoftheinventorythathasbeenaccrued.Theamountofthereversalisincludedinthecurrentprofitorloss.
Provisionfordeclineinvalueofinventoriesbyportfolioisasfollows:
Page
| categories | Basisforcategorydetermination | Basisfordeterminingnetrealizablevalueforthiscategory |
| Inventoryageingportfolio | Newproductslaunchedinthecurrentyearunderourownbrand | Noprovisionfordeclineinvalue |
17.ContractassetsTheCompanyhastherighttoreceivetheconsiderationforthetransferofgoodstothecustomers.Iftherightdependsonfactorsotherthanthepassageoftime,itisrecognizedasacontractasset.IftheCompanyhastheright(onlydependsonpassageoftime)toreceiveconsiderationfromclient,accountsreceivableshallberecognized.RefertoNoteXII6forimpairmenttocontractasset.
18.Long-termEquityInvestment
(1)Determinationofinvestmentcost
1)Forthelong-termequityinvestmentformedbybusinesscombination,thespecificaccountingpoliciesaredetailedintheaccountingtreatmentofbusinesscombinationundercommoncontrolandnotundercommoncontrolassetoutinthisNoteVII.
2)Long-termequityinvestmentobtainedbyothermeans
Theinitialinvestmentcostofthelong-termequityinvestmentobtainedbycashpaymentistheactualpurchaseprice.Theinitialinvestmentcostincludesexpensesdirectlyrelatedtotheacquisitionoflong-termequityinvestments,taxesandothernecessaryexpenses
Theinitialinvestmentcostofthelong-termequityinvestmentobtainedbyissuingequitysecuritiesisthefairvalueoftheissuedequitysecurities;thetransactioncostincurredintheissuanceoracquisitionofitsownequityinstrumentsisdeductedfromequityifitisdirectlyattributabletoequitytransactions.
Underthepremisethatthenon-monetaryassetexchangehasthecommercialsubstanceandthefairvalueoftheassetsreceivedorsurrenderedcanbereliablymeasured,theinitialinvestmentcostofthelong-termequityinvestmentexchangedfornon-monetaryassetsisdeterminedbasedonthefairvalueoftheassetsexchangedandrelevanttaxespayable,unlessthereisconclusiveevidencethatthefairvalueoftheassetstransferredismorereliable;fortheexchangeofnon-monetaryassetthatdoesnotmeettheabovepremise,theinitialinvestmentcostoflong-termequityinvestmentisthecarryingamountoftheassetsexchangedandtherelatedtaxesandfeespayable.
Theinitialinvestmentcostofalong-termequityinvestmentobtainedthroughdebtrestructuringincludesthefairvalueofthewaiveddebt,taxesthatcanbedirectlyattributabletotheassetandothercosts
(2)Subsequentmeasurementandprofitandlossrecognition
1)Costmethod
Page
Thelong-termequityinvestmentthattheCompanycancontrolovertheinvesteeisaccountedforusingthecostmethod,andthecostofthelong-termequityinvestmentisadjustedbyaddingorrecoveringtheinvestmentaccordingtotheinitialinvestmentcost.Exceptfortheactualpaymentorthecashdividendsorprofitsincludedintheconsiderationthathavebeenannouncedbutnotyetpaidatthetimeofacquiringtheinvestment,theCompanyrecognizesthecurrentinvestmentincomeaccordingtoitsshareofcashdividendsorprofitsdeclaredtobedistributedbytheinvestee.
2)Equitymethod
TheCompany’slong-termequityinvestmentsinassociatesandjointventuresareaccountedforusingtheequitymethod,andsomeoftheequityinvestmentsinassociatesthatareindirectlyheldbyventurecapitalinstitutions,mutualfunds,trustcompaniesorsimilarentitiesincludinginvestment-linkedinsurancefundsaremeasuredatfairvaluethroughprofitorloss.
Whentheinitialinvestmentcostofalong-termequityinvestmentisgreaterthantheinvestment,theinitialinvestmentcostofthelong-termequityinvestmentshallnotbeadjustedbythedifferencebetweenthefairvalueoftheidentifiablenetassetsoftheinvestee;iftheinitialinvestmentcostislessthantheinvestment,thedifferencebetweenthefairvalueoftheidentifiablenetassetsoftheinvesteeshouldbeincludedinthecurrentprofitorloss
Afterobtainingthelong-termequityinvestment,theCompanyshallrecognizetheinvestmentincomeandothercomprehensiveincomeaccordingtotheshareofnetprofitandlossandothercomprehensiveincomerealizedbytheinvesteethatisentitledorshouldbesharedrespectively,andadjustthecarryingamountofthelong-termequityinvestment;andreducesthecarryingamountofthelong-termequityinvestmentbasedonportionoftheprofitorcashdividenddeclaredtobedistributedbytheinvestee;andforotherchangesintheowners’equityotherthanthenetprofitorloss,othercomprehensiveincomeandprofitdistributionoftheinvestee,thecarryingamountofthelong-termequityinvestmentisadjustedandincludedintheowners’equity.
Whenrecognizingtheshareofthenetprofitorlossoftheinvestee,theCompanyshalladjustandrecognizethenetprofitoftheinvesteebasedonthefairvalueoftheidentifiableassetsoftheinvesteeatthetimeofobtainingtheinvestment.TheunrealizedinternaltransactiongainsandlossesbetweentheCompanyandtheassociatesandjointventuresshallbeoffsetagainsttheportionattributabletotheCompanyinaccordancewiththeproportiontobeenjoyed,onthebasisofwhichtheinvestmentgainsandlossesarerecognized.
WhentheCompanyrecognizesthelossesincurredbytheinvesteethatitshouldbear,itshalldealwithitinthefollowingorder:Firstly,offsetthecarryingamountofthelong-termequityinvestment.Secondly,ifthecarryingamountofthelong-termequityinvestmentisnotenoughtobeoffset,theinvestmentlosswillcontinuetoberecognizedtotheextentofcarryingamountof
Page
otherlong-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)Fairvaluemeasurementorequitymethodaccountingtocostmethodaccounting
IftheequityinvestmentoriginallyheldbytheCompany,thatdoesnothavecontrol,jointcontrolorsignificantinfluenceontheinvesteeandwhichisaccountedforinaccordancewiththefinancialinstrumentrecognitionandmeasurementcriteria,orthelong-termequityinvestmentoriginallyheldinassociatesorjointventure,canexercisecontrolovertheinvesteenotundercommoncontrolduetoadditionalinvestmentorotherwise,inthepreparationofindividualfinancialstatements,thesumofthecarryingamountoftheequityinvestmentoriginallyheldplusthenewinvestmentcostshallberegardedastheinitialinvestmentcostafterbeingaccountedforunderthecostmethod.
Theothercomprehensiveincomerecognizedbytheequitymethodinrespectoftheequityinvestmentoriginallyheldbeforethepurchasedateisaccountedforonthesamebasisastheinvesteedirectlydisposesoftherelevantassetsorliabilitieswhentheinvestmentisdisposedof.
Page
Iftheequityinvestmentheldbeforethepurchasedateisaccountedforinaccordancewiththerelevantprovisionsofthe“AccountingStandardsforBusinessEnterprisesNo.22–RecognitionandMeasurementofFinancialInstruments”,thecumulativefairvaluechangesoriginallyincludedinothercomprehensiveincomearetransferredtocurrentprofitorlosswhenthecostmethodisadopted.
3)Equitymethodaccountingtofairvaluemeasurement
IftheCompanylosesjointcontrolorsignificantinfluenceontheinvesteeduetothedisposalofpartoftheequityinvestmentorotherwise,theremainingequityafterdisposalshallbeaccountedforaccordingtothe“AccountingStandardsforBusinessEnterprisesNo.22–RecognitionandMeasurementofFinancialInstruments”.Thedifferencebetweenthefairvalueandthecarryingamountonthedateoflosingjointcontrolorsignificantimpactisrecognizedinprofitorloss.
Theothercomprehensiveincomerecognizedinrespectoftheoriginalequityinvestmentusingtheequitymethodisaccountedforonthesamebasisastheinvesteedirectlydisposesoftherelevantasset
4)Costmethodtoequitymethod
WheretheCompanylosescontrolovertheinvesteeduetothedisposalofpartoftheequityinvestment,etc.,inthepreparationofindividualfinancialstatements,iftheremainingequityafterdisposalcanexercisejointcontrolorsignificantinfluenceontheinvestee,theequitymethodisadoptedforaccounting,andtheremainingequityisdeemedtobeadjustedundertheequitymethodwhenitisacquired.
5)Costmethodtofairvaluemeasurement
WheretheCompanylosescontrolovertheinvesteeduetothedisposalofpartoftheequityinvestment,etc.,inthepreparationofindividualfinancialstatements,iftheremainingequityafterdisposalcannotjointlycontrolorexertsignificantinfluenceontheinvestee,therelevantprovisionsofthe“AccountingStandardsforBusinessEnterprisesNo.22–RecognitionandMeasurementofFinancialInstruments”areadopted.Thedifferencebetweenthefairvalueandthecarryingamountonthedateoflossofcontrolisrecognizedinprofitorlossforthecurrentperiod.
(4)Disposaloflong-termequityinvestment
Forthedisposaloflong-termequityinvestment,thedifferencebetweenthecarryingamountandtheactualpurchasepriceshallbeincludedinthecurrentprofitorloss.Forthelong-termequityinvestmentaccountedforusingtheequitymethod,whentheinvestmentisdisposedof,thepartthatisoriginallyincludedintheothercomprehensiveincomeisaccountedforinthesameproportionbasedonthesamebasisastheinvesteedirectlydisposesoftherelevantassetsorliabilities.
Iftheterms,conditionsandeconomicimpactofeachtransactionondisposaloftheequity
Page
investmentinasubsidiarysatisfyoneormoreofthefollowingcases,themultipletransactionsaretreatedasapackagetransaction:
1)Thetransactionsaremadesimultaneouslyorwithconsiderationofeachother’sinfluence;
2)Thetransactionsasawholecanachieveacompletebusinessoutcome;
3)Theoccurrenceofatransactiondependsontheoccurrenceofatleastoneothertransaction;
4)Atransactionisuneconomicalone,butitiseconomicwhenconsideredtogetherwithothertransactions
Wherethelossofcontrolovertheoriginalsubsidiaryduetodisposalofpartoftheequityinvestmentorotherwisewhichisnotapackagetransaction,theindividualfinancialstatementsandconsolidatedfinancialstatementsshallbeclassifiedforrelevantaccountingtreatment:
a)Intheindividualfinancialstatements,thedifferencebetweenthecarryingamountofthedisposedequityandtheactualpurchasepriceisincludedinthecurrentprofitorloss.Iftheremainingequityafterdisposalcanexertjointcontrolorsignificantinfluenceontheinvestee,itshallbeaccountedforundertheequitymethod,andtheresidualequityshallbedeemedtobeadjustedbyequitymethodwhenitisacquired;iftheremainingequityafterdisposalcannotexertjointcontrolorsignificantinfluenceovertheinvestee,itshallbeaccountedforbytherelevantprovisionsofthe“AccountingStandardsforBusinessEnterprisesNo.22–RecognitionandMeasurementofFinancialInstruments”,andthedifferencebetweenthefairvalueandthecarryingamountonthedateoflossofcontrolisincludedinthecurrentprofitorloss.
b)Intheconsolidatedfinancialstatements,foreachtransactionbeforethelossofcontroloverthesubsidiary,capitalreserve(sharepremium)isadjustedforthedifferencebetweenthedisposalpriceandtheshareofthenetassetscorrespondingtothedisposedlong-termequityinvestmentthatthesubsidiaryhascontinuouslycalculatedfromthedateofpurchaseorthemergerdate;ifthecapitalreserveisinsufficienttooffset,theretainedearningswillbeadjusted;whenthecontrolofthesubsidiaryislost,theremainingequityshallbere-measuredaccordingtoitsfairvalueonthedateoflossofcontrol.Thesumoftheconsiderationforthedisposaloftheequityandthefairvalueoftheremainingequity,lesstheshareofthenetassetsthatthattheoriginalsubsidiaryhascontinuouslycalculatedfromthedateofpurchasecalculatedbasedontheoriginalshareholding,isincludedintheinvestmentincomefortheperiodoflossofcontrol,whilereducinggoodwill.Othercomprehensiveincomerelatedtotheoriginalsubsidiary’sequityinvestmentwillbeconvertedintocurrentinvestmentincomewhencontrolislost.
Ifeachtransactionondisposaloftheequityinvestmentinasubsidiaryuntilthelossofcontrolisapackagetransaction,eachtransactionisaccountedforasatransactiontodisposeoftheequityinvestmentinthesubsidiarywithlossofcontrol,whichisdistinguishedbetweenindividualfinancialstatementsandconsolidatedfinancialstatements:
Page
a)Intheindividualfinancialstatements,thedifferencebetweeneachdisposalpriceandthecarryingamountofthelong-termequityinvestmentcorrespondingtothedisposedequitybeforethelossofcontrolisrecognizedasothercomprehensiveincome,andwhenthecontrolislost,itistransferredtoprofitorlossfortheperiodofthelossofcontrol.b)Intheconsolidatedfinancialstatements,thedifferencebetweeneachdisposalpriceandthedisposalinvestmentthathastheshareofthenetassetsofthesubsidiarybeforethelossofcontrolisrecognizedasothercomprehensiveincome,andtransferredtoprofitorlossfortheperiodofthelossofcontrol.
(5)Judgingcriteriaforjointcontrolandsignificantinfluence
IftheCompanycollectivelycontrolsanarrangementwithotherpartiesinaccordancewiththerelevantagreement,andtheactivitydecisionthathasasignificantimpactonthereturnofthearrangementneedstobeunanimouslyagreeduponbythepartiessharingthecontrol,itisconsideredthattheCompanyandotherpartiesjointlycontrolanarrangement,whichisajointarrangement.
IfthejointarrangementisreachedthroughaseparateentityanditdeterminesthattheCompanyhasrightstothenetassetsoftheseparateentityinaccordancewiththerelevantagreement,theseparateentityisregardedasajointventureandisaccountedforusingtheequitymethod.IfitisjudgedaccordingtotherelevantagreementthattheCompanydoesnothaverightstothenetassetsoftheseparateentity,theseparateentityactsasajointoperation,andtheCompanyrecognizestheitemsrelatedtotheshareoftheinterestsofthejointoperationandconductsaccountingtreatmentinaccordancewiththerelevantASBEs.
Significantinfluencereferstotheinvestor’spowertoparticipateinthedecision-makingofthefinancialandoperatingpoliciesoftheinvestee,butitcannotcontrolorjointlycontroltheformulationofthesepolicieswithotherparties.TheCompanyhasasignificantinfluenceontheinvesteeunderoneormoreofthefollowingsituationsandtakingintoaccountallfactsandcircumstances:(1)itisrepresentedontheboardofdirectorsorsimilarauthoritiesoftheinvestee;
(2)itinvolvesintheformulationoffinancialandoperatingpolicyoftheinvestee;(3)ithasimportanttransactionswiththeinvestee;(4)itdispatchesmanagementpersonneltotheinvestee;
(5)itprovideskeytechnicalinformationtotheinvestee.
19.InvestmentProperty
Investmentpropertyreferstopropertyheldforthepurposeofearningrentorcapitalappreciation,orboth,includingleasedlanduserights,landuserightsheldandpreparedfortransferafterappreciation,andleasedbuildings.Besides,foremptyconstructionsthattheCompanyheldforrentlatelybutwiththewrittenresolutionfromtheboardstatedthatitwillbeusedasoperatingleaseandthatintentionwillnotbechangedinshort-term,itcanbetreatedasinvestmentproperty.
Page
TheCompany’sinvestmentpropertyisrecordedatitscost,andthecostofpurchasedinvestmentpropertyincludesthepurchaseprice,relatedtaxesandotherexpensesdirectlyattributabletotheasset;thecostofself-builtinvestmentpropertyiscomposedofthenecessaryexpensesincurredbeforetheassetisreadyforexpecteduse.TheCompanyadoptsthecostmodelforsubsequentmeasurementofinvestmentproperty,anddepreciatesoramortizesbuildingsandlanduserightsaccordingtotheirestimatedservicelifeandnetresidualvalue.Expectedusefullife,residualvalueandannualdepreciationrateareasfollows:
| Category | Estimatedusefullife(years) | Residualvaluerate% | Depreciationrate% |
| Property | 20-35 | 5.00 | 2.71-4.85 |
Whentheuseofinvestmentpropertyischangedtoself-use,theCompanyconvertstheinvestmentpropertyintofixedassetsorintangibleassetsfromthedateofchange.Whentheuseofself-usepropertychangestorentalearningorcapitalappreciation,theCompanyconvertsfixedassetsorintangibleassetsintoinvestmentpropertyfromthedateofchange.Whenaconversionoccurs,thecarryingamountbeforeconversionisusedastheconvertedvalue
Theinvestmentpropertyisderecognizedwhentheinvestmentpropertyisdisposedof,orpermanentlywithdrawnfromuseandisnotexpectedtoobtaineconomicbenefitsfromitsdisposal.Theamountofdisposalincomefromthesale,transfer,retirementordamageoftheinvestmentpropertyafterdeductingitscarryingamountandrelatedtaxesandexpensesisrecognizedinprofitorlossforthecurrentperiod.
20.Fixedassets
(1)Recognitionconditionsoffixedassets
Fixedassetsrefertotangibleassetsheldforthepurposeofproducinggoods,providinglabourservices,rentingoroperatingmanagement,andhavingausefullifeofmorethanonefiscalyear.Fixedassetsarerecognizedwhentheymeetallofthefollowingconditions:
1)theeconomicbenefitsassociatedwiththefixedassetsarelikelytoflowintotheenterprise;
2)thecostofthefixedassetscanbereliablymeasured.
(2)Initialmeasurementoffixedassets
ThefixedassetsoftheCompanyareinitiallymeasuredatcost.
1)Thecostofoutsourcingfixedassetsincludesthepurchaseprice,importdutiesandotherrelatedtaxesandfees,aswellasotherexpensesthatcanbedirectlyattributedtotheassetsbeforetheyreachtheirintendedusablestate.
2)Thecostofself-builtfixedassetsisdeterminedbythenecessaryexpendituresincurredbeforetheassetsreachtheirexpectedusablestate.
Page
3)Forfixedassetsinvestedbyinvestors,thevalueagreedintheinvestmentcontractoragreementisregardedasthebookvalue,butthevalueagreedinthecontractoragreementisnotaccountedforatfairvalue.
4)Ifthepaymentforthepurchaseoffixedassetsisdelayedbeyondthenormalcreditconditions,andisofafinancingnatureinessence,thecostoffixedassetsisdeterminedonthebasisofthepresentvalueofthepurchaseprice.Thedifferencebetweentheactualpaymentandthepresentvalueofthepurchasepriceisrecordedinthecurrentprofitorlossduringthecreditperiod,exceptwhereitshouldbecapitalized.
(3)Subsequentmeasurementanddisposaloffixedassets
1)Depreciationoffixedassets
Depreciationoffixedassetsisaccruedovertheestimatedusefullifebasedonitsrecordedvaluelesstheestimatednetresidualvalue.Thefixedassetsthathavebeenprovidedforimpairmentlossesaredepreciatedinthefutureperiodbasedonthecarryingamountafterdeductingtheimpairmentprovisionandtheremainingusefullife.
TheCompanydeterminestheservicelifeandestimatednetresidualvalueoffixedassetsbasedonthenatureanduseoffixedassets.Attheendoftheyear,theservicelife,theestimatednetresidualvalueandthedepreciationmethodofthefixedassetsarereviewed.Ifthereisadifferencefromtheoriginalestimate,correspondingadjustmentswillbemade.
Thedepreciationmethod,depreciationperiodandannualdepreciationrateofvariousfixedassetsareasfollows.
| Class | Methodofdepreciation | Estimatedusefullife(years) | Residualvaluerate% | Depreciationrate% |
| Propertyandplant | Straight-line | 20-35 | 5.00 | 2.71-4.85 |
| Machineryandequipment | Straight-line | 10 | 5.00-10.00 | 9.00-9.50 |
| Electronicequipment | Straight-line | 5 | 5.00 | 19.00 |
| Motorvehicles | Straight-line | 5 | 5.00 | 19.00 |
| Others | Straight-line | 5 | 5.00 | 19.00 |
2)Subsequentexpendituresonfixedassets
Subsequentexpendituresrelatedtofixedassetsthatmeettheconditionsforrecognitionoffixedassetsareincludedinthecostoffixedassets;thosethatdonotmeettheconditionsforrecognitionoffixedassetsareincludedinthecurrentprofitorlosswhentheyoccur.
3)Disposaloffixedassets
Whenafixedassetisdisposedofornoeconomicbenefitisexpectedtoresultfromitsuseordisposal,thefixedassetisderecognized.Theamountofdisposalincomefromsale,transfer,retirementordamageofthefixedassetafterdeductingitsbookvalueandrelatedtaxesisincludedintothecurrentprofitorloss.
Page
21.ConstructioninProgress
(1)InitialmeasurementofconstructioninprogressTheself-builtconstructioninprogressoftheCompanyismeasuredattheactualcost,whichisdeterminedbythenecessaryexpensesincurredbeforetheconstructionoftheassetreachestheintendedusablecondition,includingthecostofengineeringmaterials,labourcostsandrelevanttaxespayable,capitalizedborrowingcostsandindirectcoststhatshouldbeapportioned.TheCompany’sconstructioninprogressisclassifiedintoprojectswheninaccounting
(2)CriteriaforandtimepointofconstructioninprogresstoconvertintofixedassetThetotalexpenditureincurredbeforetheconstructioninprogressprojectisconstructedtoreachtheintendedusableconditionshallberecordedasthebookvalueofthefixedassets.Fortheconstructioninprogressbuiltwhichhasreachedtheintendedusablecondition,buthasnotyetcompletedthefinalaccounts,sincethedateofreachingexpectedusecondition,accordingtotheprojectbudget,costoractualprojectcosts,itshallbeconvertedintofixedassetsattheestimatedvalue,andfixedassetsshallbedepreciatedinaccordancewiththedepreciationpolicyoftheCompanyforfixedassets.Afterthecompletionofthefinalaccounts,theoriginalestimatedvalueshallbeadjustedaccordingtotheactualcost,buttheoriginaldepreciationamountshallnotbeadjusted.
22.BorrowingCosts
(1)RecognitionprincipleforcapitalizationofborrowingcostsIftheborrowingcostsoftheCompanycanbedirectlyattributabletotheacquisitionandconstructionorproductionofassetseligibleforcapitalization,itshallstartcapitalizationandbeincludedinthecostofrelevantassetsinthecaseofeligibleforcapitalization;otherborrowingcostsshallberecognizedasexpensesatthetimeofoccurrenceandshallbeincludedinthecurrentprofitorloss.
Assetsthatareeligibleforcapitalizationareassetsthatrequirealongperiodoftimetopurchaseorproduceactivitiestoachievefixedassets,investmentpropertyandinventorythatareavailableforintendeduseorsale.Borrowingcostsbegintocapitalizewhenallofthefollowingconditionsaremet:
1)Assetsexpenditurehasoccurred,includingexpenditureincurredintheformofcashpayment,transferofnon-cashassetsorassumingofinterest-bearingdebtfortheacquisitionandconstructionorproductionofassetseligibleforcapitalization;
2)Borrowingcostshavealreadyoccurred;
3)Thepurchaseandconstructionorproductionactivitiesnecessaryfortheassetstoreachtheintendeduseorsaleablestatushavestarted.
(2)Capitalizationperiodofborrowingcosts
Theperiodofcapitalizationreferstotheperiodfromthepointoftimewhentheborrowing
Page
costsarecapitalizedtothepointoftimewherethecapitalizationisstopped,excludingtheperiodduringwhichtheborrowingcostsaresuspendedfromcapitalization.Theborrowingcostsshallceasetobecapitalizedwhentheassetsacquiredorproducedthatmeettheconditionsforcapitalizationarereadyforintendeduseorsale.Whenapartoftheassetspurchasedorproducedthatmeetthecapitalizationconditionsarecompletedandcanbeusedalone,suchpartoftheassetsshallstopcapitalizationofborrowingcosts.
Whereeachpartoftheassetspurchasedorproducediscompletedseparately,butmustwaituntilthewholeiscompletedorcanbesoldexternally,thecapitalizationoftheborrowingcostsshallbestoppedwhentheassetsarecompletedasawhole.
(3)Suspensionofcapitalizationperiod
Iftheassetsthatmeetthecapitalizationconditionsareinterruptedabnormallyduringtheconstructionorproductionprocessandtheinterruptiontimelastsformorethan3months,thecapitalizationofborrowingcostsshallbesuspended;theborrowingcostsshallcontinuetobecapitalizediftheacquisitionorproductionofassetseligibleforcapitalizationisnecessarytomeettherequiredusablestatusortheavailabilityofsales.Theborrowingcostsincurredduringtheinterruptionarerecognizedasprofitorlossforthecurrentperiodandtheborrowingcostscontinuetobecapitalizeduntiltheacquisitionorproductionofassetsisresumed.
(4)Calculationforcapitalizationamountofborrowingcosts
Interestchargesonspecialborrowings(excludinginterestincomeonunusedborrowingsdepositedinthebank,orinvestmentincomeontemporaryinvestment)andtheirancillaryexpensesshallbecapitalizedbeforetheassetspurchasedorproducedthatmeetthecapitalizationconditionsarereadyforintendeduseorsale.
Theamountofcapitalizedinterestongeneralborrowingsiscalculatedbytheweightedaverageoftheexcessportionoftheaccumulativeassetexpendituresoverthespecialborrowingsmultipliedbythecapitalizationrateofgeneralborrowings.Thecapitalizationrateisdeterminedbasedontheweightedaverageinterestrateofgeneralborrowings.
Wherethereisadiscountorpremiumintheborrowings,theinterestamountshallbeadjustedinaccordancewiththeeffectiveinterestratemethodtodeterminethediscountorpremiumamountthatshallbeamortizedduringeachaccountingperiod.
23.Right-of-useAssets
TheCompanyinitiallymeasurestheright-to-useassetsatcost,whichincludes:
(1)initialmeasurementamountofleaseliabilities;
(2)leasepaymentsmadebeforeoratthebeginningoftheleaseterm,anddeductionoftherelevantamountofrentalincentivesifany;
(3)initialdirectexpensesincurredbytheCompany;
Page
(4)expectedcoststobeincurredbytheCompanyfordismantlingandremovingleasedassets,restoringthesiteofleasedassetsorrestoringleasedassetstothestateagreedintheleaseterms(excludingcostsincurredfortheproductionofinventory)Afterthebeginningoftheleaseterm,theCompanyadoptsthecostmodelforsubsequentmeasurementoftheright-of-useassets
Ifitisreasonablycertaintoobtaintheownershipoftheleasedassetsattheexpirationoftheleaseterm,theCompanyshalldepreciatetheleasedassetswithintheremainingusefullifeoftheleasedassets.Ifitisnotreasonablycertaintoobtaintheownershipoftheleasedassetsattheexpirationoftheleaseterm,theCompanyshalldepreciatetheleasedassetswithintheshorteroftheleasetermandtheremainingusefullifeoftheleasedassets.Fortheright-of-useassetswithimpairmentprovision,depreciationshallbecalculatedbasedonthebookvalueafterdeductionofimpairmentprovisioninaccordingwiththeaboveprinciplesinfutureperiods.
24.IntangibleAssetsandDevelopmentExpenditure
Intangibleassetsrefertotheidentifiablenon-monetaryassetsownedorcontrolledbytheCompanywhichhavenophysicalform,includinglanduserights,softwareandtrademarkuserights.
(1)Initialmeasurementofintangibleassets
Thecostofexternallypurchasedintangibleassetsincludesthepurchaseprice,relevanttaxationandotherexpensesdirectlyattributabletobringingtheassetstoexpectedusage.Ifpaymentforthepurchasepriceofintangibleassetsisdelayedbeyondnormalcreditconditionsandisinfactfinancinginnature,thecostoftheintangibleassetsisdeterminedbasedonthepresentvalueofthepurchaseprice.
Forintangibleassetobtainedthroughdebtrestructuringforoffsettingthedebtofthedebtor,itsinitialmeasurementcostincludesthefairvalueofthewaivedcreditor’srightsandtaxesandothercostsdirectlyattributabletobringingtheassettoexpectedusage.Thedifferencebetweenthefairvalueofthewaivedcreditor’srightsandthecarryingamountshallberecognizedinprofitorlossfortheperiod.
Thebookvalueofintangibleassetreceivedinexchangefornon-monetaryassetisbasedonthefairvalueoftheassetsurrenderedandrelevanttaxespayable,providedthattheexchangeofnonmonetaryassethasacommercialsubstanceandthefairvalueofboththeassetreceivedandtheassetsurrenderedcanbereliablymeasured,exceptthereisdefiniteevidencethatthefairvalueoftheassetreceivedismorereliable;forexchangeofnon-monetaryassetthatcannotsatisfytheaboveconditions,thecostoftheintangibleassetreceivedisbasedonthecarryingamountoftheassetsurrenderedandrelevanttaxespayable,andnoprofitorlossisrecognized.
Forintangibleassetobtainedthroughbusinessabsorptionorcombinationundercommoncontrol,itsbookvalueisdeterminedbythecarryingamountofthecombinedparty;forintangible
Page
assetobtainedthroughbusinessabsorptionormergernotundercommoncontrol,itsbookvalueisdeterminedbythefairvalueoftheintangibleasset.Thecostofaninternallydevelopedintangibleassetincludesthematerialsconsumedindevelopingtheintangibleasset,labourcosts,registrationfees,amortizationofotherpatentedrightsandlicensedrightsusedduringthedevelopmentprocess,interestexpensesmeetingcapitalizationconditions,andotherdirectcostsforbringingtheintangibleassettoexpectedusage.
(2)SubsequentmeasurementofintangibleassetsTheCompanydeterminestheusefullifeofintangibleassetsonacquisition,whichareclassifiedasintangibleassetswithlimitedusefullifeandindefiniteusefullife.
1)IntangibleassetswithalimitedusefullifeIntangibleassetswithalimitedusefullifearedepreciatedusingstraightlinemethodoverthetermduringwhichtheybringeconomicbenefitstotheCompany.Theestimatedlifeandbasisfortheintangibleassetswithalimitedusefullifeareasfollows:
| Item | Estimatedusefullife | Amortizationmethod |
| Landuseright | 50 | Straight-line |
| Softwaresystems | 5 | Straight-line |
| Righttousethetrademark | 5-10 | Straight-line |
Theusefullifeanddepreciationmethodofintangibleassetswithalimitedusefullifearereassessedattheendofeachperiod.Ifthereisadifferencefromtheoriginalestimate,correspondingadjustmentswillbemade.
Uponre-assessment,therewasnodifferenceintheusefullifeanddepreciationmethodofintangibleassetsfromthepreviousestimatesattheendoftheperiod.
(3)SpecificbasisfordeterminingtheresearchstageanddevelopmentstageofinternalresearchanddevelopmentprojectsoftheCompany
Researchstage:astageofscheduledinnovativeinvestigationsandresearchactivitiesfortheacquisitionandunderstandingofnewscientificortechnicalknowledge.
Developmentstage:beforethecommercialproductionoruse,theresearchresultsorotherknowledgewillbeappliedtoaplanordesigntoproduceneworsubstantialimprovementsinmaterials,devices,productsandotheractivities.
Theexpenditureoftheresearchstageoftheinternalresearchanddevelopmentprojectisincludedinthecurrentprofitorlossatthetimeofoccurrence
(4)Specificstandardforcapitalizationofexpenditureinthedevelopmentstage
Theexpenditureofaninternalresearchanddevelopmentprojectinthedevelopmentstageisrecognizedasanintangibleassetwhenmeetingallofthefollowingconditions:
1)Itistechnicallyfeasibletocompletetheintangibleassetsothatitcanbeusedorsold;
2)Withanintentiontocompletetheintangibleassetandtouseorsellit;
Page
3)Thewaytheintangibleassetgenerateseconomicbenefitscanprovetheexistenceofamarketfortheproductsproducedusingtheintangibleassetoramarketfortheintangibleassetitself,andiftheintangibleassetwillbeusedinternally,itsusefulnesscanbeproven;
4)Havingsufficienttechnical,financialresourcesandotherresourcesupporttocompletethedevelopmentoftheintangibleasset,andhavingtheabilitytouseorselltheintangibleasset;
5)Expenditureattributabletothedevelopmentstageoftheintangibleassetcanbereliablymeasured.
Expendituresincurredinthedevelopmentstagethatdonotmeettheaboveconditionsshallbeincludedinthecurrentprofitorlossatthetimeofoccurrence.Thedevelopmentexpenditureswhichhavebeenincludedintheprofitorlossinthepreviousperiodswillnotberecognizedasanassetinthefutureperiod.Thecapitalizedexpendituresinthedevelopmentphaseareshowninthebalancesheetasdevelopmentexpendituresandareconvertedintointangibleassetsfromthedateoftheproject’sintendeduse.
25.ImpairmentonLong-termAssets
Onthebalancesheetdate,theCompanydetermineswhethertheremaybeasignofimpairmentonlong-termassets.Ifthereisasignofimpairmentonlong-termassets,therecoverableamountisestimatedonthebasisofasingleasset.Ifitisdifficulttoestimatetherecoverableamountofasingleasset,thendeterminetherecoverableamountoftheassetgrouponthebasisoftheassetgrouptowhichtheassetbelongs.
Theestimatedrecoverableamountofanassetisthehigherofitsfairvaluelessthecostofdisposalandthepresentvalueoftheexpectedfuturecashflowoftheasset.
Themeasurementresultsofrecoverableamountshowthatwhentherecoverableamountofanlong-termassetislowerthanitsbookvalue,thebookvalueofthelong-termassetisreducedtoitsrecoverableamount.Thereducedamountisrecognizedasanimpairmentlossontheassetandincludedinthecurrentprofitorloss,atthesametime,assetimpairmentprovisionwillbemadeaccordingly.Assetimpairmentlossshallnotbereversedduringthesubsequentaccountingperiodoncerecognized.
Aftertheassetimpairmentlossisrecognized,thedepreciationoramortizationexpensesoftheimpairedassetswillbeadjustedaccordinglyinthefutureperiod,sothattheassets’bookvalueafteradjustment(deductingtheestimatednetresidualvalue)willbesystematicallyapportionedovertheremainingusefullifeoftheassets.
Nomatterwhetherthereisanysignofimpairmentornot,theimpairmenttestiscarriedouteveryyearforgoodwillandintangibleassetswithanindefiniteusefullifearisingfromanenterprisemerger.
Intheimpairmenttestofgoodwill,thebookvalueofgoodwillwouldbeapportionedtoassetgrouporportfolioofassetgroupexpectedtobenefitfromthesynergyeffectofanenterprise
Page
merger.Whentakinganimpairmenttestontherelevantassetgrouporportfolioofassetgroupcontaininggoodwill,ifthereisasignofimpairmentontheassetgrouporportfolioofassetgrouprelatedtothegoodwill,theCompanyfirstcalculatestherecoverableamountaftertestingtheassetgrouporportfolioofassetgroupwhichdoesnotcontainthegoodwillforimpairment,andthencomparesitwiththerelatedbookvaluetorecognizethecorrespondingimpairmentloss.Next,theCompanyconductsanimpairmenttestontheassetgrouporportfolioofassetgroupwhichcontainsthegoodwillandcomparesthebookvalueoftherelatedassetgrouporportfolioofassetgroup(bookvalueincludestheshareofgoodwill)withtherecoverableamount.Iftherecoverableamountoftherelatedassetgrouporportfolioofassetgroupislowerthanthebookvalue,theCompanywillrecognizetheimpairmentlossofgoodwill.
26.Long-termDeferredExpenses
(1)AmortizationmethodLong-termdeferredexpensesrefertoexpensesthathavealreadybeenspentbytheCompany,butshallbeapportionedinthecurrentperiodandthefutureperiodsandthebenefitperiodisover1year.Long-termdeferredexpensesareamortizedinbenefitperiod
(2)Amortizationperiod
| Category | Amortizationperiod | Note |
| Counterfabricationexpenses | 2-3 | |
| Decorationexpenses | 3-5 | |
| Others | 2-3 |
27.ContractliabilitiesTheobligationtotransfergoodstoacustomerforwhichconsiderationhasbeenreceivedorreceivableisrecognizedinpartasacontractliability
28.EmployeeRemunerationEmployeeremunerationreferstothevariousformsofremunerationorcompensationgivenbytheCompanytoobtaintheservicesprovidedbytheemployeesortoterminatethelabourrelationship.Employeeremunerationincludesshort-termremuneration,post-employmentbenefits,terminationbenefitsandotherlong-termemployeebenefits.
(1)Short-termremunerationShort-termremunerationreferstotheemployeecompensationotherthanpost-employmentbenefitsandterminationbenefitsrequiredtobefullypaidbytheCompanywithin12monthsaftertheendoftheannualreportingperiodinwhichtheemployeesrenderrelevantservices.Duringtheaccountingperiodinwhichtheemployeesrenderservices,theCompanyrecognizestheshort-termremunerationpayableasliabilitiesandincludesthesameinrelatedassetcostsorexpensesaccordingtotheobjectwhichbenefitsfromtheservicesrenderedbyemployees.
(2)Post-employmentbenefits
Page
Post-employmentbenefitsrefertovariousformsofremunerationandbenefitsotherthanshort-termremunerationandterminationbenefitsprovidedbytheCompanyaftertheretirementofemployeesorterminationoflabourrelationshipwiththeCompanyinexchangefortheservicesrenderedbyemployees.
TheCompany’spost-employmentbenefitsisdefinedcontributionplan.
Definedcontributionplanofthepost-employmentbenefitsmainlyreferstothesocialbasicendowmentinsurance,unemploymentinsurance,etc.organizedandimplementedbylocallabourandsocialsecurityinstitutions;DuringtheaccountingperiodwhenemployeesrenderservicestotheCompany,amountpayablecalculatedbythedefinedcontributionplanisrecognizedasaliabilityandincludedinthecurrentprofitorlossorrelatedassetcosts.
TheCompanywillnolongerhaveanyotherpaymentobligationsaftermakingtheabove-mentionedpaymentsonaregularbasisinaccordancewiththestandardsandannuityplansprescribedbytheState.
(3)Terminationbenefits
TerminationbenefitsrefertothecompensationpaidtoanemployeewhentheCompanyterminatestheemploymentrelationshipwiththeemployeebeforetheexpiryoftheemploymentcontractorprovidescompensationasanoffertoencouragetheemployeetoacceptvoluntaryredundancy.TheCompanyrecognizestheliabilitiesarisingfromthecompensationpaidtoterminatetheemploymentrelationshipwithemployeesandincludesthesameinthecurrentprofitorlossattheearlierdateofthefollowing:1)whentheCompanycannotreversetheterminationbenefitsduetotheplanofcancellingthelabourrelationshiportheterminationbenefitsprovidedbytheadviceofreducingstaff;and2)theCompanyrecognizesthecostorexpenserelativetothepaymentofterminationbenefitsofrestructuringintothecurrentprofitorloss.
TheCompanyprovidesinternalretirementbenefitstoemployeeswhoacceptinternalretirementarrangements.TheinternalretirementbenefitsrefertotheremunerationandthesocialinsurancepremiumspaidtotheemployeeswhohavenotreachedtheretirementagesetbytheState,andvoluntarilywithdrewfromthejobafterapprovaloftheCompany’smanagement.TheCompanypaysinternalretiredbenefitstoaninternalretiredemployeefromthedaywhentheinternalretirementarrangementbeginstilltheemployeereachesthenormalretirementage.Forinternalretirementbenefits,theCompanyconductsaccountingtreatmentincontrasttotheterminationbenefits.Whentherelatedrecognitionconditionsofterminationbenefitsaremet,theCompanywillrecognizetheremunerationandthesocialinsurancepremiumsoftheinternalretiredemployeetobepaidduringtheperiodbetweentheemployee’sterminationofserviceandnormalretirementdateasliabilitiesandincludethesameinthecurrentprofitorlossinonetime.Changesinactuarialassumptionsofinternalretirementbenefitsanddifferencesarisingfromthe
Page
adjustmentofwelfarestandardsareincludedincurrentprofitorlosswhenincurred.
(4)Otherlong-termemployeebenefitsOtherlong-termemployeebenefitsrefertoallemployeebenefitsexceptforshort-termremuneration,post-employmentbenefits,andterminationbenefits.Forotherlong-termemployeebenefitsthatmeettheconditionsofthedefinedcontributionplan,duringtheaccountingperiodinwhichtheemployeesprovideservicesfortheCompany,theamountthatshouldbepaidisrecognizedasaliabilityandisincludedinthecurrentprofitorlossorrelatedassetcosts.Inadditiontotheabovesituations,otherlong-termemployeebenefitsareactuariallycalculatedbytheindependentactuaryusingtheexpectedcumulativewelfareunitmethodonthebalancesheetdate,andthewelfareobligationsarisingfromthedefinedbenefitplansareattributedtotheperiodduringwhichtheemployeesprovideservicesandareincludedinthecurrentprofitorlossorrelatedassetcosts.
29.Projectedliabilities
(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.
Page
IfallorpartoftheexpensesoftheCompanyrequiredtosettleprojectedliabilitiesareexpectedtobecompensatedbyathirdpartyanditisbasicallycertaintoreceivetheamountofcompensation,itisindependentlyrecognizedasanasset.Theamountofcompensationrecognizedwillnotexceedthebookvalueoftheprojectedliabilities.
30.Leaseliabilities
TheCompanyinitiallymeasurestheleaseliabilitiesaccordingtothepresentvalueoftheunpaidleasepaymentsatthebeginningoftheleaseterm.Incalculatingthepresentvalueofleasepayments,theCompanyadoptstheinterestrateimplicitintheleaseasthediscountrate.Ifitisimpossibletodeterminetheinterestrateimplicitinthelease,theincrementalborrowingrateoftheCompanyshallbeusedasthediscountrate.Leasepaymentsinclude:
(1)Fixedpaymentsandsubstantivefixedpaymentsafterdeductingtherelevantamountofleaseincentives;
(2)Variableleasepaymentsdependingonanindexorrate;
(3)WheretheCompanyreasonablydeterminesthattheoptionwillbeexercised,theamountoftheleasepaymentincludestheexercisepriceofpurchaseoption;
(4)WheretheleasetermreflectsthattheCompanywillexercisetheoptiontoterminatethelease,theamountoftheleasepaymentincludestheamounttobepaidfortheexerciseoftheoptiontoterminatethelease;
(5)ExpectedpaymentsbasedontheguaranteedresidualvalueprovidedbytheCompany.
TheCompanycalculatestheinterestchargesoftheleaseliabilitiesforeachperiodoftheleasetermatafixeddiscountrateandincludesthesameintheprofitorlossofthecurrentperiodortherelatedassetcosts.
Variableleasepaymentsnotincludedinthemeasurementofleaseliabilitiesshallbeincludedinthecurrentprofitorlossortherelatedassetcostswhentheyactuallyoccur.
31.Share-basedpayment
(1)Categoryofshare-basedpayment
TheCompany’sshare-basedpaymentsincludeequity-settledshare-basedpaymentsandcashsettledshare-basedpayments.
(2)Recognitionmethodoffairvalueofequityinstrument
ForoptionsandotherequityinstrumentsgrantedbytheCompanywithanactivemarket,thefairvalueisdeterminedattheactivemarketquotations.ForoptionsandotherequityinstrumentsgrantedbytheCompanywithnoactivemarket,optionpricingmodelshallbeusedtoestimatethefairvalueoftheequityinstruments.Factorsasfollowsshallbetakenintoaccountusingoptionpricingmodels:1)theexercisepriceoftheoption,2)thevalidityoftheoption,3)thecurrentpriceofthetargetshare,4)theexpectedvolatilityoftheshareprice,5)predicteddividendoftheshare,
6)risk-freerateoftheoptionwithinthevalidityperiod.
Page
Indeterminingthefairvalueoftheequityinstrumentsatthedateofgrant,theCompanyshallconsidertheimpactofmarketconditionsinthevestingconditionsandnon-vestingconditionsstatedintheshare-basedpaymentagreement.Iftherearenovestingconditionsintheshare-basedpayments,aslongastheemployeesorotherpartiessatisfythenon-marketconditionsinallofthevestingconditions(suchastermofservice),theCompanyshallrecognizetheservicesrenderedasanexpenseaccordingly.
(3)Recognitionbasisforthebestestimateofexercisableequityinstruments
Oneachbalancesheetdatewithinthevestingperiod,theestimatednumberofexercisableequityinstrumentsisamendedbasedonthebestestimatemadebytheCompanyaccordingtothelatestavailablesubsequentinformationastochangesinthenumberofemployeeswithexercisablerights.Asattheexercisedate,thefinalestimatednumberofexercisableequityinstrumentsshouldequaltheactualnumberofexercisableequityinstruments.
(4)Accountingtreatment
Equity-settledshare-basedpaymentsaremeasuredatthefairvalueoftheequityinstrumentsgrantedtoemployees.Forthoseexercisableimmediatelyafterthegrant,theyshallbeincludedintherelevantcostsorexpensesatthefairvalueofequityinstrumentsatthegrantdatewithanincreaseincapitalreserveaccordingly.Forthoseexercisableonlyafterprovisionofservicesorsatisfactionofprescribedperformanceconditionswithinthevestingperiod,oneachbalancesheetdatewithinthevestingperiod,theCompanywillrecognizetheservicesreceivedinthecurrentperiodinrelatedcostsorexpensesandcapitalreservesatthefairvalueofequityinstrumentsonthegrantdatebasedonthebestestimateofthenumberofexercisableequityinstruments.Afterthevestingperiod,relevantcostsorexpensesandtotalowners’equitywhichhavebeenrecognizedwillnotbeadjusted.
Cash-settledshare-basedpaymentsarecalculatedbythefairvalueofliabilitiesassumedinaccordancewiththeCompany’ssharesorotherequityinstruments.Forthoseexercisableimmediatelyafterthegrant,theyshallbeincludedintherelevantcostsorexpensesatthefairvalueoftheliabilitiesassumedbytheCompanyatthegrantdatewithanincreaseinliabilitiesaccordingly.Forcash-settledshare-basedpaymentsexercisableonlyafterprovisionofservicesorsatisfactionofprescribedperformanceconditionswithinthevestingperiod,oneachbalancesheetdatewithinthevestingperiod,theCompanywillrecognizetheservicesreceivedinthecurrentperiodincostsorexpensesandcorrespondingliabilitiesattheamountoffairvalueoftheliabilitiesassumedbytheCompanybasedonthebestestimateofthenumberofexercisableequityinstruments.Ateachbalancesheetdateandthesettlementdatepriortothesettlementofrelevantliabilities,thefairvalueoftheliabilitiesisre-measuredthroughprofitorloss.
Duringthevestingperiod,iftheequityinstrumentsgrantedarecancelled,theCompanywill
Page
treatthecancelledequityinstrumentsgrantedasacceleratedvesting,andtheamountwithintheremainingperiodshouldberecognizedimmediatelyinprofitorlosswhilerecognizingthecapitalreverse.Ifemployeesorotherpartiescanmeetnon-vestingconditionsbutdonotmeetwithinthevestingperiod,theCompanywilltreatitascancelledequityinstrumentsgranted.
32.RevenueTheCompany’srevenuemainlycomefrom:
1)Salesofwatch
2)Precisionmanufacturing
3)Propertyleasing
(1)GeneralprincipalofrevenuerecognitionTheGrouprecognizesrevenuewhenthecontractperformanceobligationshavebeenfulfilledi.e.thecustomerhasgainedcontrolovertherelevantgoodsorservices.
PerformanceobligationsmeanstheCompany’scommitmenttotransferidentifiablegoodsorservicetoclients.
Obtainingcontroloftherelevantgoodsmeansthatitisabletodominatetheuseofthegoodsandderivealmostalleconomicbenefitstherefrom.
TheCompanyassessescontractsatthebeginningdateofacontracttoidentifyeachperformanceobligationscontainedinacontractandtodeterminewhethereachperformanceobligationistobefinishedoveraperiodoftimeoratapointoftime.TheCompanysatisfiesaperformanceobligationovertimeifoneofthefollowingcriteriaismet;orotherwise,aperformanceobligationissatisfiedatacertainpointintime:1)thecustomersimultaneouslyreceivesandconsumesthebenefitsprovidedbytheCompany’sperformanceastheCompanyperforms;2)thecustomercancontrolthegoodsunderconstructionduringtheCompany’sperformance;3)theCompany’sperformancedoesnotcreategoodswithanalternativeusetoitandtheCompanyhasarighttopaymentforperformancecompletedtodatethroughoutthecontractterm.Otherwise,theCompanyrecognizesrevenueatthepointoftime.
Forperformanceobligationsatisfiedovertime,theCompanyrecognizesrevenueovertimebymeasuringtheprogresstowardscompletesatisfactionofthatperformanceobligation.Whentheoutcomeofthatperformanceobligationcannotbemeasuredreasonably,buttheCompanyexpectstorecoverthecostsincurredinsatisfyingtheperformanceobligation,theCompanyrecognizesrevenueonlytotheextentoftheamountofcostsincurreduntilitcanreasonablymeasuretheoutcomeoftheperformanceobligation
(2)Detailedmethodforrevenuerecognition
TheCompanyhasthreemainbusinesssectors:salesofwatch,precisionmanufacturingandpropertyleasing.BasedontheCompany’sbusinessmodeandtermsofsettlement,theCompanysetdetailedmethodofrevenuerecognitionmethodasfollows:
Page
1)SalesofwatchSaleofwatchbelongstofulfillingperformanceobligationsatapointoftime.
①OnlinesalesRevenueshallberecognizedatthepointthatthegoodsaredispatchedandthecustomerconfirmedreceivedthegoods.
②OfflinesalesRevenueshallberecognizedatthepointwhenthegoodsaredeliveredandpaymentbycustomeriscollected.③ConsignmentsaleTheCompanyrecognizesrevenuewhentheCompanyreceivesthedetailofthesaleslistfromdistributorsandconfirmsthatthecontrolovergoodsownershipweretransferredtothepurchaser.
④SaleofconsignedgoodsfromothersUnderSaleofconsignedgoodsfromothers,theGrouprecognizesrevenueinnetamountwhenitdeliveredconsignedsalegoodstocustomerandconfirmsthatcontrolovertheownershipofgoodsweretransferredtothepurchaser.
2)PrecisionmanufacturingPrecisionmanufacturingbusinessbelongstofulfillingperformanceobligationsatapointoftime.RevenuefromdomesticsalesshallberecognizedwhenthegoodsaredeliveredandtheeconomicbenefitassociatedwiththegoodsisprobabletoflowintotheCompany.Revenuefromexportshallberecognizedwhenthefollowingcriteriaissatisfied:TheCompanydeclaredthegoodatcustom;obtainedbilloflading;therightofcollectingpaymentisobtainedanditsprobablethattheeconomicbenefitassociatedwiththegoodsflowsintotheCompany.
3)PropertyleasingRefertoNoteIII36.(4)fordetails.
(3)Revenuetreatmentprinciplesforspecifictransactions
1)ContractswithsalesreturnprovisionsWhenthecustomerobtainscontroloftherelevantgoods,revenueisrecognizedbasedontheamountofconsiderationexpectedtobereceivedduetothetransferofgoodstothecustomers(exclusiveoftheamountexpectedtoberefundedduetothereturnofsales),whileliabilityisrecognizedbasedontheamountexpectedtoberefundedduetothereturnofsales.
Thecarryingamountofgoodsexpectedtobereturnedatsalesofgoods,afterdeductionofcostsexpectedtoincurforrecoveryofsuchgoods(includingimpairmentofvalueofthereturnedgoods),willbeaccountedforundertheitemof“Rightofreturnassets”.
2)Contractswithqualityassuranceprovisions
TheCompanyassesseswhetheraseparateserviceisrenderedinrespectofthequalityassurancebesidesguaranteeingthesalesofgoodstocustomersareinlinewiththedesignated
Page
standards.WhenadditionalserviceisprovidedbytheCompany,itisconsideredasasingleperformanceobligationandunderaccountingtreatmentaccordingtothestandardsonrevenue;otherwise,qualityassuranceobligationswillbeunderaccountingtreatmentaccordingtotheaccountingstandardsoncontingentmatters
33.Contractcosts
(1)ContractperformancecostTheCompanyrecognizesthecostofcontractperformanceasanassetforthecostofperformingthecontractasmeetingallofthefollowingconditions:
1)Thecostisdirectlyrelatedtoacurrentorexpectedcontract,includingdirectlabour,directmaterials,manufacturingexpenses(orsimilarexpenses),costsclearlytobebornebythecustomer,andothercostsincurredsolelyforthecontract;
2)Thiscostincreasestheresourcesthatthecompanywillusetofulfillitsperformanceobligationsinthefuture.
3)Thecostisexpectedtoberecovered
Theassetwillbepresentedunderinventoryorothernon-currentassetsbasedonthelengthofitsamortizationperiod.
(2)Contractobtainmentcost
IftheincrementalcostoftheCompanyisexpectedtoberecovered,thecontractacquisitioncostisrecognizedasanasset.IncrementalcostreferstothecostthattheCompanywillnotoccurwithoutobtainingacontract,suchassalescommission.Fortheamortizationperiodnotexceedingoneyear,itisincludedinthecurrentprofitorlosswhenitoccurs.
(3)Amortizationofcontractcosts
TheCompanyrecognizesthecontractperformancecostandthecontractacquisitioncostonthesamebasisasthecommodityincomerelatedtothecontractcostasset,andamortizesitatthetimewhentheperformanceobligationisperformedorinaccordancewiththeperformanceoftheperformanceobligation,andisincludedinthecurrentprofitorloss.
(4)Contractcostimpairment
Forassetsrelatedtocontractcosts,ifthebookvalueishigherthanthedifferencebetweentheremainingconsiderationexpectedtobereceivedbytheCompanyfortransferofthegoodsrelatedtotheassetsandtheestimatedcostoftransferringtherelevantgoods,theexcessshouldbedepreciatedandconfirmedasanassetimpairmentloss
Ifthefactorscausedimpairmentchangedafterimpairmentprovisionisaccrued,impairmentprovisionshallbereversedandincludedincurrentperiodprofitorlossbutthecarryingamountofassetafterthereversalshallnotexceedthecarryingamountatthereversaldateasiftherewasnoimpair.
34.GovernmentSubsidies
Page
(1)ClassificationGovernmentsubsidiesrefertomonetaryandnon-monetaryassetsreceivedfromthegovernmentwithoutcompensation,howeverexcludingthecapitalinvestedbythegovernmentasacorporateowner.Accordingtothesubsidyobjectsstipulatedinthedocumentsofrelevantgovernment,governmentsubsidiesaredividedintosubsidiesrelatedtoassetsandsubsidiesrelatedtoincome.GovernmentsubsidiesrelatedtoassetsareobtainedbytheCompanyforthepurposesofacquiring,constructingorotherwiseforminglong-termassets.Governmentsubsidiesrelatedtoincomerefertothegovernmentsubsidiesotherthanthoserelatedtoassets
(2)RecognitionofgovernmentsubsidiesWhereevidenceshowsthattheCompanycomplieswithrelevantconditionsofpoliciesforfinancialsupportsandisexpectedtoreceivethefinancialsupportfundsattheendoftheperiod,theamountreceivableisrecognizedasgovernmentsubsidies.Otherwise,thegovernmentsubsidyisrecognizeduponactualreceipt.Governmentsubsidiesintheformofmonetaryassetsarestatedattheamountreceivedorreceivable.Governmentsubsidiesintheformofnon-monetaryassetsaremeasuredatfairvalue;iffairvaluecannotbereliablyobtained,anominalamount(RMB1)isused.Governmentsubsidiesthataremeasuredatnominalamountshallberecognizedinthecurrentprofitorlossdirectly.
(3)AccountingtreatmentTheCompanydetermineswhetheragovernmentsubsidyshallusegrossmethodornetmethodbasedonitseconomicalsubstance.Ingeneral,onlyonemethodisusedforonecategoryorsimilargovernmentsubsidyanditshallbeusedinaconsistentway.Governmentsubsidiesrelatedtoassetsarerecognizedasdeferredincome,andarerecognized,underreasonableandsystematicapproach,inprofitandlossineachperiodovertheusefullifeoftheconstructedorpurchasedassets;Governmentsubsidiesrelatedtoincomeaimingatcompensatingforrelevantexpensesorlossestobeincurredbytheenterpriseinsubsequentperiodsarerecognizedasdeferredincome,andarerecognizedincurrentprofitorlosswhenrelevantexpensesorlossesarerecognized.Governmentsubsidiesaimingatcompensatingforrelevantexpensesorlossesoftheenterprisethatarealreadyincurredarechargedtocurrentprofitorlossoncereceived.
Governmentsubsidiesrelatedtodailyactivitiesofenterprisesareincludedinotherincome;governmentsubsidiesthatarenotrelatedtodailyactivitiesofenterprisesareincludedinnon-operatingincomeandexpense.
Governmentsubsidiesrelatedtothediscountinterestreceivedfrompolicy-relatedpreferentialloansoffsettherelevantborrowingcosts;ifthepolicy-basedpreferentialinterestrateloanprovidedbythelendingbankisobtained,theborrowingamountactuallyreceivedshallbe
Page
takenastherecordingvalueoftheborrowings,andborrowingcostshouldbecalculatedusingthepreferentialinterestrateaccordingtotheloanprincipalandthepolicy.Whenitisrequiredtoreturnrecognizedgovernmentsubsidy,ifsuchsubsidyisusedtowritedownthecarryingvalueofrelevantassetsoninitialrecognition,thecarryingvalueoftherelevantassetsshallbeadjusted;ifthereisbalanceofrelevantdeferredincome,itshallbewrittendowntothebookbalanceofrelevantdeferredincome,andtheexcessisincludedinthecurrentprofitorloss;wherethereisnorelevantdeferredincome,itshallbedirectlyincludedinthecurrentprofitorloss
35.DeferredIncomeTaxAssetsandDeferredIncomeTaxLiabilitiesDeferredincometaxassetsanddeferredincometaxliabilitiesaremeasuredandrecognizedbasedonthedifference(temporarydifference)betweenthetaxablebaseofassetsandliabilitiesandbookvalue.Onbalancesheetdate,thedeferredincometaxassetsanddeferredincometaxliabilitiesaremeasuredattheapplicabletaxrateduringtheperiodwhenitisexpectedtorecoversuchassetsorsettlesuchliabilities.
(1)CriteriaforrecognitionofdeferredincometaxassetsTheCompanyrecognizesdeferredincometaxassetsarisingfromdeductibletemporarydifferencetotheextentitisprobablythatfuturetaxableamountwillbeavailableagainstwhichthedeductibletemporarydifferencecanbeutilized,anddeductiblelossesandtaxescanbecarriedforwardtosubsequentyears.However,thedeferredincometaxassetsarisingfromtheinitialrecognitionofassetsorliabilitiesinatransactionwiththefollowingfeaturesarenotrecognized:1)thetransactionisnotabusinesscombination;2)neithertheaccountingprofitorthetaxableincomeordeductiblelosseswillbeaffectedwhenthetransactionoccurs.Fordeductibletemporarydifferenceinrelationtoinvestmentintheassociates,correspondingdeferredincometaxassetsarerecognizedinthefollowingconditions:thetemporarydifferenceisprobablyreversedinaforeseeablefutureanditislikelythattaxableincomeisobtainedfordeductionofthedeductibletemporarydifferenceinthefuture.
(2)CriteriaforrecognitionofdeferredincometaxliabilitiesTheCompanyrecognizesdeferredincometaxliabilitiesonthetemporarydifferencebetweenthetaxablebutnotyetpaidtaxationinthecurrentandpreviousperiods,excluding:
1)temporarydifferencearisingfromtheinitialrecognitionofgoodwill;
2)atransactionoreventarisingfromnon-businesscombination,andneithertheaccountingprofitorthetaxableincome(ordeductiblelosses)willbeaffectedwhenthetransactionoreventoccurs;
3)fortaxabletemporarydifferenceinrelationtoinvestmentinsubsidiariesorassociates,thetimeforreversalofthetemporarydifferencecanbecontrolledandthetemporarydifferenceisprobablynotreversedinaforeseeablefuture
Page
(3)Whenallofthefollowingconditionsaresatisfied,deferredincometaxassetsanddeferredincometaxliabilitiesshallbepresentedonanetbasis
1)Anenterprisehasthestatutoryrighttosettlethecurrentincometaxassetsandcurrentincometaxliabilitiesattheirnetamounts;
2)Thedeferredincometaxassetsanddeferredincometaxliabilitiesrelatetoincometaxesleviedbythesametaxationauthorityoneitherthesametaxableentityordifferenttaxableentitieswhichintendeithertosettlecurrentincometaxassetsandcurrentincometaxliabilitiesonanetbasis,ortorealizetheassetsandsettletheliabilitiessimultaneously,ineachfutureperiodinwhichsignificantamountsofdeferredtaxassetsorliabilitiesareexpectedtoberecoveredorsettled.
36.Lease
Onthecommencementdateofthecontract,theCompanyevaluateswhetherthecontractisaleaseorcontainsalease.Ifonepartytoacontractgivesuptherighttocontroltheuseofoneormoreidentifiableassetsforaperiodoftimeinexchangeforconsideration,thecontractisaleaseorcontainsalease.
(1)Splittingaleasecontract
Whenthecontractcontainsanumberofseparateleases,theCompanywillsplitthecontractintoseparateleasesforaccountingindividually.
Whenthecontractcontainsbothleasingandnon-leasingparts,theCompanywillsplittheleasingandnon-leasingparts.Theleasingpartshallbeaccountedforinaccordancewiththeleasestandards,andthenon-leasingpartshallbeaccountedforinaccordancewithotherapplicableaccountingstandardsforbusinessenterprises.
(2)Combinationofleasecontracts
Whentwoormorelease-containingcontractsconcludedbytheCompanywiththesametraderoritsrelatedpartiesatthesametimeoratasimilartimemeetoneofthefollowingconditions,theCompanyshallmergethemintoonecontractforaccounting:
1)Suchtwoormorecontractsareconcludedforgeneralcommercialpurposesandconstituteapackageoftransactions.Ifthesearenotconsideredasawhole,theseoverallcommercialpurposescannotberecognized.
2)Theamountofconsiderationforacontractinsuchtwoormorecontractsdependsonthepricingorperformanceofothercontracts.
3)Theright-of-useassetstransferredbysuchtwoormorecontractstogetherconstituteaseparatelease.
(3)AccountingtreatmentfortheCompanyasalessee
Onthecommencementdateofleaseterm,theCompanyrecognizesright-of-useassetsandleaseliabilitiesforleases,inadditiontoshort-termleasesandlow-valueassetleaseswith
Page
simplifiedtreatment.
1)Short-termleaseandlowvalueleaseShort-termleasereferstoaleasethatdoesnotincludepurchaseoptionsandhasaleasetermnotexceeding12months.Low-valueassetleasereferstotheleasewithlowervaluewhenasingleleasedassetisanewasset.TheCompanydoesnotrecognizeright-of-useassetsandleaseliabilitiesforshort-termleaseandlowvaluelease.Thepaymentofsuchleasesshallbechargedtoprofitorlossusingstraight-linemethodorothersystematicmethod.
2)RefertoNoteIII.23andNoteIII.30foraccountingpoliciesforright-of-useassetsandleaseliabilities.
(4)AccountingtreatmentfortheCompanyasalessor
1)Classificationofleases
TheCompanydividesleasesintofinancialleasesandoperatingleasesonthestartdateofthelease.Financialleasereferstoaleasethatessentiallytransfersalmostalloftherisksandrewardsrelatedtotheownershipofleasedassets.Itsownershipmayormaynotbetransferredeventually.Operatingleasesrefertoleasesotherthanfinancialleases.
Ifaleasehasoneormoreofthefollowingcharacteristics,theCompanyusuallyclassifiesitasafinanciallease:
①Attheexpiryoftheleaseterm,theownershipoftheleasedassetsistransferredtothelessee.
②Thelesseehastheoptiontopurchasetheleasedassets,andthepurchasepricesetbythelesseeislowenoughcomparedwiththeexpectedfairvalueoftheleasedassetswhenexercisingtheoption.Therefore,itcanbereasonablydeterminedontheleasestartdatethatthelesseewillexercisetheoption.
③Althoughtheownershipoftheassetsisnottransferred,theleasetermaccountsforthemajorityofthelifeoftheleasedassets.
④Onthecommencementdateofthelease,thepresentvalueoftheleasereceiptsisalmostequaltothefairvalueoftheleasedassets.
⑤Thenatureofleasedassetsisspecial.Ifthereisnomajortransformation,onlythelesseecanusethem.
Ifoneormoreofthefollowingconditionsexistinalease,itmayalsobeclassifiedasafinanciallease:
①Ifthelesseestopsthelease,thelesseeshallbearthelossescausedbytheterminationoftheleasetothelessor.
Page
②Theprofitsorlossescausedbythefluctuationofthefairvalueofthebalanceofassetsbelongtothelessee.
③Thelesseecancontinuetoleasefarbelowthemarketlevelforthenextperiod.
2)Accountingtreatmentforfinancialleases
Onthecommencementdateofleaseterm,theCompanyrecognizesthefinancialleasereceivableonthefinancialleasesandderecognizesthefinancialleaseassets.
Whentheinitialmeasurementofthefinancialleasereceivableismade,thebookvalueofthefinancialleasereceivableisthesumoftheunsecuredbalanceandthepresentvalueofleasereceiptsthathavenotyetbeenreceivedatthebeginningoftheleasetermdiscountedattheinterestrateimplicitinthelease.Theleasereceiptsinclude:
①Fixedpaymentsandsubstantivefixedpaymentsafterdeductingtherelevantamountofleaseincentives;
②Variableleasepaymentsdependingonanindexorrate;
③Inthecaseofreasonablydeterminingthatthelesseewillexercisethepurchaseoption,theleasereceiptsincludetheexercisepriceofpurchaseoption;
④Iftheleasetermreflectsthatthelesseewillexercisetheoptiontoterminatethelease,theleasereceiptsincludetheamounttobepaidbythelesseeinexercisingtheoptiontoterminatethelease;
⑤Guaranteeresidualvalueprovidedtothelessorbythelessee,thepartyconcernedwiththelesseeandanindependentthirdpartywithfinancialcapacitytofulfilltheguaranteeobligation.
TheCompanycalculatesandrecognizestheinterestincomeforeachperiodoftheleasetermbasedonthefixedinterestrateimplicitinthelease,andthevariableleasepaymentswhichareobtainedandnotincludedinthenetrentalinvestmentamountareincludedintheprofitorlossoftheperiodwhentheyactuallyoccur.
3)Accountingtreatmentforoperatingleases
TheCompanyadoptsthestraightlinemethodorothersystematicandreasonablemethodtorecognizetheleasereceiptsfromoperatingleasesasrentalincomeduringeachperiodoftheleaseterm.Capitalizationoftheinitialdirectexpensesincurredinconnectionwithoperatingleasesshallbeapportionedonthesamebasisastherecognitionofrentalincomeduringtheleaseterm,andshallberecordedintheprofitorlossofthecurrentperiod.Variableleasepaymentsobtainedinconnectionwithoperatingleasesthatarenotincorporatedintheleasereceiptsshallbeincorporatedintheprofitorlossoftheperiodwhentheyactuallyoccur.
37.Terminationofbusiness
TheCompanyrecognizescomponentsasterminationofbusinesscomponentsifoneofthe
Page
followingconditionismetandthatthecomponenthasalreadybeendisposedorclassifiedasheld-for-saleassetsandidentifiable.
(1)Thecomponentrepresentsastandalongmajorbusinessorastandalongmajorareainconductingbusiness.
(2)Thecomponentispartofplanconnectingtodisposalofastandalongmajorbusinessormajorareaofconductingbusiness.
(3)Thecomponentisasubsidiarythatobtainedspecificallyforresale.
Operatingprofitorlosssuchastheimpairmentlossandtheamountofreversalshallbepresentedinincomestatementasprofitorlossfromterminatedbusiness.
38.Re-purchaseofshares
Beforewritten-offortransfer,thesharesthattheCompanyre-purchasedaredealtastreasuryshares.Allexpensesincurredforthere-purchasearechargedinthecostoftreasuryshares.Considerationandtransactionexpensespaidduringthesharere-purchaseshalldecreaseshareholder’sequity.Nogainorlossesshallberecognizedduringre-purchase,transferorwritten-offoftheCompany’sshares.
Ifthetreasurysharesistransferred,thedifferencebetweenamountactuallyreceivedandtheshare’scarryingamountshallbechargedtocapitalreserve,ifthecapitalreserveisnotsufficienttooffset,surplusreserveandretainedearingshallbeoffset.Ifthetreasuryshareistowritten-off,thesharecapitalshallbedecreasedbasedonthefacevalueofsharesandthedifferencebetweenthecarryingamountanditsfacevalueshalloffsetthecapitalreserve.Ifthecapitalreserveisnotsufficienttooffset,deductingsurplusreserveandretainedearnings.
39.Safetyproductionfee
ThesafetyproductionfeeisaccruedbytheCompanyinaccordancewithnationalregulationsandisincludedinthecostofrelatedproductsorcurrentprofitorloss,andisalsorecordedinthe"specificreserve"item.Whenusingthesafetyproductionfee,ifitisanexpenseexpenditure,itshallbedirectlyoffsetagainstthespecialreserve.Ifthefixedassetsareformed,theexpensesincurredthroughthecollectionof"constructioninprogress"willberecognizedasfixedassetswhenthesafetyprojectiscompletedandreachtheintendedusablestate;atthesametime,thecostofformingfixedassetswillbeoffsetagainstthespecialreserve,andrecognizetheaccumulateddepreciationofthesameamount.Thefixedassetswillnotbedepreciatedinthesubsequentperiod.
40.Significantchangesinaccountingpoliciesandestimates
(1)Changesinaccountingpolicies
Therewerenosignificantchangesinaccountingpoliciesduringtheyear.
(2)Significantchangesinaccountingestimates
Page
Therewerenosignificantchangesinaccountingestimatesduringtheyear.IV.Taxes
1.Maintypesoftaxesandcorrespondingtaxrates
| Taxtype | Basis | Taxrate | note |
| VAT | Domesticsales,providingmanufacturingandrepairingservices | 13% | |
| Propertyleasing | 9% | ||
| Othertaxableservices | 6% | ||
| Simplifiedmethod | 5% | ||
| Consumptiontax | Luxurywatches | 20% | |
| Urbanmaintenanceandconstructiontax | Turnovertaxpayable | 7%、5% | |
| Corporateincometax | Taxableincome | Seebelowtable | |
| Propertytax | 70%or80%oftheoriginalcostofpropertyorrentalincome | 1.2%、12% |
Corporateincometaxofdifferententities:
| Nameofentities | CITrate |
| ShenzhenHARMONYWorldWatchCenterCo.,Ltd.(①) | 25% |
| FIYTASalesCo.,Ltd.(①) | 25% |
| ShenzhenFIYTAPrecisionTechnologyCo.,Ltd.(②) | 15% |
| ShenzhenFIYTATechnologyDevelopmentCo.,Ltd.(②) | 15% |
| HARMONYWorldWatchCenter(Hainan)Co.,Ltd.(⑤) | 20% |
| ShenzhenXunhangPrecisionTechnologyCo.,Ltd. | 25% |
| EmileChoureitTiming(Shenzhen)Ltd. | 25% |
| LiaoningHengdaruiCommercial&TradeCo.,Ltd. | 25% |
| EMPORAL(Shenzhen)Co.,Ltd. | 25% |
| ShenzhenHarmonyE-commerceCo.,Ltd.(⑤) | 20% |
| FIYTA(HongKong)Ltd.(③) | 16.5% |
| MontresChourietSA(④) | 30% |
Note①:Accordingtotheregulationsstatedin“InterimAdministrationMethodforLevyofCorporateIncomeTaxtoEnterprisethatOperatesCross-regionally”,theheadofficeoftheCompanyanditsbranchoffices,theheadofficeofHARMONYCompanyanditsbranchoffices,andtheheadofficeofSalesCompanyanditsbranchofficesadopttaxsubmissionmethodof“unifiedcalculation,managingbyclasses,pre-paidinitsregisteredplace,settlementintotal,and
Page
adjustmentbyfinanceauthorities”.Branchofficesmentionedaboveshare50%oftheenterpriseincometaxandprepaylocally;and50%willbeprepaidbytheheadofficesmentionedabove.Note②:TheCompanyenjoyedfor“ReductionandExemptioninCorporateIncomeTaxRateforHighandNewTechnologyEnterprisesthatRequireKeySupportfromtheState”.
Note③:ThesecompaniesareregisteredinHongKongandtheincometaxrateofHongKongapplicableis16.50%thisyear.
Note④:Thecomprehensivetaxrateof30%isapplicableforSwissCompanyasitregisteredinSwitzerland.
Note⑤:Thesecompaniesaresmallandlow-profitenterprises,whichenjoy20%taxrate.
2.Preferentialtreatmentandcorrespondingapproval
Accordingto“ProclamationofMinistryofFinanceandStateAdministrationofTaxationinPreferentialTaxRatetoSmallandLowProfitEnterprisesandSole-proprietors”(Caishui(2023)No.6),smalllow-profitenterpriseswillbeincludedintaxableincomeat25%andtobetaxedatarateof20%.
Accordingto“NoticeofMinistryofFinanceandStateAdministrationofTaxationinExtendingExpirationPeriodofUtilizingLossesforHigh-TechEnterprisesandScientificOrientedMediumandSmallEnterprises”(CaiShui[2018]No.76),startingfromJanuary1,2018.，unutilizedlossesincurredinprior5yearsbeforeobtainingthestatusofHighandNewTechEnterprisecanbecarriedforwardandutilizedinfutureyears.Thelongestperiodwasextendedfrom5yearsto10years.
AccordingtotheAnnouncementoftheMinistryofFinanceandtheStateAdministrationofTaxationonFurtherImprovingthePolicyofPre-taxDeductionofResearchandDevelopmentExpenses(CaiShui[2023]No.7),theresearchanddevelopmentexpensesactuallyincurredbyenterprisesincarryingoutresearchanddevelopmentactivities,whichhavenotbeenformedintointangibleassetsandrecognizedasprofitandlossforthecurrentperiod,shallbedeductedonthebasisofactualdeductioninaccordancewiththeregulations,andthendeductedinaccordancewith100%oftheactualamountincurredbeforetaxstartingfrom1January2023;andiftheyareformedintoIftheintangibleassetsareformed,startingfromJanuary1,2023,theintangibleassetswillbeamortizedat200%ofthecostoftheintangibleassetsbeforetax.
Atwo-tierprofitstaxsystemwillbeimplementedinHongKongfrom2019,providingthattheprofitstaxrateforHongKongcompanieswillbereducedto8.25%forthefirstHK2,000,000.00,withprofitsthereaftercontinuingtobetaxedat16.5%.
V.Notestomainitemsoftheconsolidatedfinancialstatements
(Unlessotherwiseindicated,thecurrencyunitisRenminbiYuan,theendoftheperiodreferstoDecember31,2023,thebeginningoftheperiodreferstoJanuary1,2023,andtheendofthelastperiodreferstoDecember31,2022)
Note1.Monetaryfunds
Page
| Item | Closingbalance | Openingbalance |
| Cashonhand | 178,996.87 | 173,368.68 |
| Cashatbank | 35,443,378.12 | 41,106,861.46 |
| Othermonetaryfunds | 1,262,979.96 | 1,140,201.67 |
| Depositinfinancecompany | 467,743,798.76 | 271,327,031.83 |
| Total | 504,629,153.71 | 313,747,463.64 |
| Including:Totaloverseasdeposits | 1,202,601.86 | 716,733.44 |
DepositinfinancecompanymainlydepositedwithAVICFinanceCo.,Ltd.AsofDecember31,2023,TheCompanyhasnoamountspledged,frozen,oratpotentialriskofrecovery.Cashwithrestrictedusageisasfollows
| Item | Closingbalance | Openingbalance |
| Overseasdepositwithrestrictionsremittingback | 1,202,601.86 | 716,733.44 |
Note2.Billreceivable1．Presentedbycategory
| Item | Closingbalance | Openingbalance |
| Bankacceptancebills | 10,363,449.00 | 10,690,221.03 |
| Commercialacceptancebills | 7,905,523.37 | 21,524,691.07 |
| Total | 18,268,972.37 | 32,214,912.10 |
2．PresentedbyECLtypes
| Type | Closingbalance | ||||
| Carryingamount | Provision | Bookvalue | |||
| Amount | Percentage(%) | Amount | Percentage(%) | ||
| Notesreceivablethatprovidedexpectedcreditlossesonsinglebasis | |||||
| Notesreceivablethatprovidedexpectedcreditlossesonsinglebasis | 18,685,052.55 | 100.00 | 416,080.18 | 2.23 | 18,268,972.37 |
| Including:Commercialacceptancebills | 8,321,603.55 | 44.54 | 416,080.18 | 5.00 | 7,905,523.37 |
| Risk-freeBankacceptancebills | 10,363,449.00 | 55.46 | 10,363,449.00 | ||
| Total | 18,685,052.55 | 100.00 | 416,080.18 | 2.23 | 18,268,972.37 |
Continued：
| Type | Openingbalance | ||
| Carryingamount | Provision | Bookvalue | |
Page
| Amount | Percentage(%) | Amount | Percentage(%) | ||
| Notesreceivablethatprovidedexpectedcreditlossesonsinglebasis | |||||
| Notesreceivablethatprovidedexpectedcreditlossesonsinglebasis | 33,347,790.58 | 100.00 | 1,132,878.48 | 3.40 | 32,214,912.10 |
| Including:Commercialacceptancebills | 22,657,569.55 | 67.94 | 1,132,878.48 | 5.00 | 21,524,691.07 |
| Risk-freeBankacceptancebills | 10,690,221.03 | 32.06 | 10,690,221.03 | ||
| Total | 33,347,790.58 | 100.00 | 1,132,878.48 | 3.40 | 32,214,912.10 |
3．Notesreceivablewithexpectedcreditlossprovidedbasedoncreditrisk
characteristicportfolio
| Portfolio | Closingbalance | ||
| Carryingamount | Provision | Percentage(%) | |
| Bankacceptancebills | 8,321,603.55 | 416,080.18 | 5.00 |
| Commercialacceptancebills | 10,363,449.00 | ||
| Total | 18,685,052.55 | 416,080.18 | |
4．Baddebtmovementsincurrentperiod
| Types | Openingbalance | Movements | Closingbalance | |||
| Accrual | Receivedorreversal | Written-off | Otherchanges | |||
| Notesreceivablethatprovidedexpectedcreditlossesonsinglebasis | ||||||
| Notesreceivablethatprovidedexpectedcreditlossesonsinglebasis | 1,132,878.48 | 716,798.30 | 416,080.18 | |||
| Including:Commercialacceptancebills | 1,132,878.48 | 716,798.30 | 416,080.18 | |||
| Risk-freeBankacceptancebills | ||||||
| Total | 1,132,878.48 | 716,798.30 | 416,080.18 | |||
5．Billshavebeenendorsedbutnotyetdueattheendoftheperiod.
| Item | Amountde-recognized | Amountnotde-recognized |
| Bankacceptancebills | 47,646,674.86 |
Note3.Accountsreceivable
Page
1．Presentationbyaging
| Aging | Closingbalance | Openingbalance |
| Within1year | 333,204,160.07 | 311,934,503.90 |
| 1-2years | 2,123,874.00 | 14,972,671.61 |
| 2-3years | 4,200,458.08 | 2,781,542.85 |
| Over3years | 18,005,255.95 | 16,064,539.96 |
| Subtotal | 357,533,748.10 | 345,753,258.32 |
| Less:provisionforbaddebt | 34,390,986.46 | 40,462,298.64 |
| Total | 323,142,761.64 | 305,290,959.68 |
2．Presentationbymethodofprovidingbaddebt
| Category | Closingbalance | ||||
| Carryingamount | Baddebtprovision | Bookvalue | |||
| Amount | Percentage(%) | Amount | ECLrate(%) | ||
| Accountsreceivablethatprovidedexpectedcreditlossesonsinglebasis | 24,708,541.73 | 6.91 | 23,148,792.25 | 93.69 | 1,559,749.48 |
| Accountsreceivablethatprovidedexpectedcreditlossesonportfoliobasis | 332,825,206.37 | 93.09 | 11,242,194.21 | 3.38 | 321,583,012.16 |
| Including:Receivablefromothercustomers | 332,825,206.37 | 93.09 | 11,242,194.21 | 3.38 | 321,583,012.16 |
| Total | 357,533,748.10 | 100.00 | 34,390,986.46 | 323,142,761.64 | |
Continued：
| Category | Openingbalance | ||||
| Carryingamount | Baddebtprovision | Bookvalue | |||
| Amount | Percentage(%) | Amount | ECLrate(%) | ||
| Accountsreceivablethatprovidedexpectedcreditlossesonsinglebasis | 34,982,967.68 | 10.12 | 29,705,797.13 | 84.92 | 5,277,170.55 |
| Accountsreceivablethatprovidedexpectedcreditlossesonportfoliobasis` | 310,770,290.64 | 89.88 | 10,756,501.51 | 3.46 | 300,013,789.13 |
| Including:Receivablefromothercustomers | 310,770,290.64 | 89.88 | 10,756,501.51 | 3.46 | 300,013,789.13 |
| Total | 345,753,258.32 | 100.00 | 40,462,298.64 | 11.70 | 305,290,959.68 |
3．Accountsreceivablethatprovidedexpectedcreditlossesonsinglebasisincludedintheclosingbalance
| Name | Closingbalance | |||
| Carryingamount | Baddebtprovision | ECLrate(%) | Reasons | |
| Receivablefromothercustomers | 24,708,541.73 | 23,148,792.25 | 93.69 | Existenceofdisputes,customer |
Page
| Name | Closingbalance | |||
| Carryingamount | Baddebtprovision | ECLrate(%) | Reasons | |
| mismanagement,etc. | ||||
4．Intheportfolio,accountsreceivablewithexpectedcreditlossprovidedbasedoncreditriskcharacteristicportfolio
Portfolioofreceivablefromothercustomers
| Aging | Closingbalance | ||
| Carryingamount | Baddebtprovision | ECLrate(%) | |
| Within1year | 330,569,799.62 | 9,694,581.78 | 2.93 |
| 1-2years | 786,438.13 | 78,643.81 | 10.00 |
| 2-3years | |||
| Over3years | 1,468,968.62 | 1,468,968.62 | 100.00 |
| Total | 332,825,206.37 | 11,242,194.21 | |
5．Movementsofprovisionduringtheperiod
| Types | Openingbalance | Movementsduringtheperiod | Closingbalance | |||
| Accrual | Recoveredorreversed | Written-off | Othermovements | |||
| Accountsreceivablethatprovidedexpectedcreditlossesonsinglebasis | 29,705,797.13 | 1,013,478.97 | 7,508,493.54 | 85,000.00 | -23,009.69 | 23,148,792.25 |
| Accountsreceivablethatprovidedexpectedcreditlossesonportfoliobasis` | 10,756,501.51 | 1,052,151.99 | 751,246.27 | -184,786.98 | 11,242,194.21 | |
| Including:Receivablefromothercustomers | 10,756,501.51 | 1,052,151.99 | 751,246.27 | -184,786.98 | 11,242,194.21 | |
| Total | 40,462,298.64 | 2,065,630.96 | 8,259,739.81 | 85,000.00 | -207,796.67 | 34,390,986.46 |
Including：mainrecoveryofbaddebtprovisionincurrentperiod:
| Name | Amount | Wayofrecovery | Note |
| FuzhouCangshanSuninge-buyPlazaCo.,Ltd. | 4,547,371.89 | Banktransfer | |
| ShanghaiPudongSuninge-buyBusinessManagementCo.,Ltd. | 791,000.00 | Banktransfer | |
| FuzhouSuninge-buyPlazaCo.,Ltd. | 706,157.30 | Banktransfer |
6．Accountsreceivableactuallywrittenoffduringtheperiod
| Item | Amountwrittenoff |
| Accountsreceivableactuallywrittenoff | 85,000.00 |
Page
Including：mainaccountsreceivablewrite-offs:
| Name | Nature | Amount | Reasonsforwrite-offs | Write-offproceduresperformed | Whetherarisingfromconnectedtransactions |
| Xi’anTangchengLimited | Paymentforgoods | 85,000.00 | Toooldtotakeback | Generalmanager'soffice | Clogged |
| Total | 85,000.00 |
7．Top5receivableaccounts
| Name | Closingbalance | Proportionintotalclosingbalanceofaccountsreceivable(%) | Baddebtprovision |
| Top5receivablesaccountsintotal | 76,589,281.00 | 21.42 | 3,829,464.05 |
Note4.Prepayments1．Presentationofprepaymentsbyaging
| Aging | Closingbalance | Openingbalance | ||
| Amount | Percentage(%) | Amount | Percentage(%) | |
| Withinoneyear | 6,564,760.64 | 99.90 | 8,039,794.97 | 100.00 |
| 1-2years | 6,479.34 | 0.10 | ||
| 2-3years | ||||
| Total | 6,571,239.98 | 100.00 | 8,039,794.97 | 100.00 |
2．Top5prepayments
| Name | Closingbalance | Proportionintotalclosingbalanceofprepayments(%) |
| Top5prepaymentsintotal | 2,884,693.00 | 43.90 |
Note5.Otherreceivable1．Presentationofotherreceivablesbyaging
| Aging | Closingbalance | Openingbalance |
| Withinoneyear | 22,481,619.93 | 59,711,314.91 |
| 1-2years | 38,313,327.26 | 216,120.00 |
| 2-3years | 119,250.00 | 649,029.90 |
| Over3years | 1,159,704.90 | 606,105.00 |
| Subtotal | 62,073,902.09 | 61,182,569.81 |
| Less:baddebtprovision | 4,348,110.09 | 4,264,550.33 |
Page
| Aging | Closingbalance | Openingbalance |
| Total | 57,725,792.00 | 56,918,019.48 |
2．Presentedbynature
| Nature | Closingbalance | Openingbalance |
| Securitydeposit | 51,775,226.86 | 49,430,408.24 |
| Pettycash | 1,549,821.50 | 2,841,915.70 |
| Others | 8,748,853.73 | 8,910,245.87 |
| Subtotal | 62,073,902.09 | 61,182,569.81 |
| Less:baddebtprovision | 4,348,110.09 | 4,264,550.33 |
| Total | 57,725,792.00 | 56,918,019.48 |
3．Presentedaccordingtothreestagesoffinancialassetsimpairment
| Item | Closingbalance | Openingbalance | ||||
| Carryingamount | Baddebtprovision | Bookvalue | Carryingamount | Baddebtprovision | Bookvalue | |
| Firststage | 60,655,587.19 | 2,980,723.19 | 57,674,864.00 | 59,703,389.91 | 2,850,206.43 | 56,853,183.48 |
| Secondstage | ||||||
| Thirdstage | 1,418,314.90 | 1,367,386.90 | 50,928.00 | 1,479,179.90 | 1,414,343.90 | 64,836.00 |
| Total | 62,073,902.09 | 4,348,110.09 | 57,725,792.00 | 61,182,569.81 | 4,264,550.33 | 56,918,019.48 |
4．Presentedbybaddebtprovisionmethod
| category | Closingbalance | ||||
| Carryingamount | Baddebtprovision | Bookvalue | |||
| Amount | Percentage(%) | Amount | ECLrate(%) | ||
| Otherreceivablesthatprovidedexpectedcreditlossesonsinglebasis | 1,418,314.90 | 2.28 | 1,367,386.90 | 96.41 | 50,928.00 |
| Otherreceivablesthatprovidedexpectedcreditlossesonportfoliobasis | 60,655,587.19 | 97.72 | 2,980,723.19 | 4.91 | 57,674,864.00 |
| Including:Securitydepositportfolio | 51,304,601.86 | 82.65 | 2,603,277.66 | 5.07 | 48,701,324.20 |
| Pettycashportfolio | 1,549,821.50 | 2.50 | 1,549,821.50 | ||
| Socialsecuritypaymenton-behalfportfolio | 284,862.55 | 0.46 | 284,862.55 | ||
| Portfolioofothers | 7,516,301.28 | 12.11 | 377,445.53 | 5.02 | 7,138,855.75 |
| Total | 62,073,902.09 | 100.00 | 4,348,110.09 | 57,725,792.00 | |
Continued
| Category | Openingbalance |
Page
| Carryingamount | Baddebtprovision | Bookvalue | |||
| Amount | Percentage(%) | Amount | ECLrate(%) | ||
| Otherreceivablesthatprovidedexpectedcreditlossesonsinglebasis | 1,479,179.90 | 2.42 | 1,414,343.90 | 95.62 | 64,836.00 |
| Otherreceivablesthatprovidedexpectedcreditlossesonportfoliobasis | 59,703,389.91 | 97.58 | 2,850,206.43 | 4.77 | 56,853,183.48 |
| Including:Securitydepositportfolio | 48,600,258.24 | 79.43 | 2,476,810.04 | 5.10 | 46,123,448.20 |
| Pettycashportfolio | 2,841,915.70 | 4.64 | 2,841,915.70 | ||
| Socialsecuritypaymenton-behalfportfolio | 279,769.98 | 0.46 | 279,769.98 | ||
| Portfolioofothers | 7,981,445.99 | 13.05 | 373,396.39 | 4.68 | 7,608,049.60 |
| Total | 61,182,569.81 | 100.00 | 4,264,550.33 | 6.97 | 56,918,019.48 |
5．Otherreceivablesthatprovidedexpectedcreditlossesonsinglebasisincludedinthe
closingbalance
| Name | Closingbalance | |||
| Carryingamount | Baddebtprovision | ECLrate(%) | Reason | |
| Receivablefromothers | 1,418,314.90 | 1,367,386.90 | 96.41 | Commercialdisputes |
6．Intheportfolio,otherreceivableswithexpectedcreditlossprovidedbasedoncreditriskcharacteristicportfolio
（1）Securitydepositportfolio
| Aging | Closingbalance | ||
| Carryingamount | Baddebtprovision | ECLrate(%) | |
| Within1year | 28,136,399.98 | 1,406,820.01 | 5.00 |
| 1-2years | 23,028,151.88 | 1,151,407.65 | 5.00 |
| 2-3years | 100,000.00 | 5,000.00 | 5.00 |
| Over3years | 40,050.00 | 40,050.00 | 100.00 |
| Total | 51,304,601.86 | 2,603,277.66 | |
（2）Pettycashportfolio
| Aging | Closingbalance | ||
| Carryingamount | Baddebtprovision | ECLrate(%) | |
| Within1year | 1,511,048.50 | ||
| 1-2years | 19,523.00 | ||
| 2-3years | 19,250.00 | ||
| Total | 1,549,821.50 | ||
Page
（3）Socialsecuritypaymenton-behalfportfolio
| Aging | Closingbalance | ||
| Carryingamount | Baddebtprovision | ECLrate(%) | |
| Within1year | 284,862.55 | ||
（4）Portfolioofothers
| Aging | Closingbalance | ||
| Carryingamount | Baddebtprovision | ECLrate(%) | |
| Within1year | 7,516,301.28 | 377,445.53 | 5.02 |
7．Provisionforbaddebtsofotherreceivables
| Baddebtprovision | Firststage | Secondstage | Thirdstage | Total |
| Expectedcreditlossesoverthenext12months | Lifetimeexpectedcreditlosses(nocreditimpairmentoccurred) | Lifetimeexpectedcreditlosses(creditimpairmentoccurred) | ||
| Openingbalance | 2,850,206.43 | 1,414,343.90 | 4,264,550.33 | |
| Openingbalancemovementsincurrentperiod | ||||
| —Transferintothesecondstage | ||||
| —Transferintothethirdstage | ||||
| —Reversebacktothesecondstage | ||||
| —Reversebacktothefirststage | ||||
| Accrualduringtheperiod | 188,362.28 | 15,525.00 | 203,887.28 | |
| Reversedduringtheperiod | -58,073.95 | -62,482.00 | -120,555.95 | |
| Recoveredduringtheperiod | ||||
| Written-offduringtheperiod | ||||
| Othermovements | 228.43 | 228.43 | ||
| Closingbalance | 2,980,723.19 | 1,367,386.90 | 4,348,110.09 |
8．Nootherreceivableswerewritten-offduringtheperiod.9．Top5otherreceivableaccounts
| Name | Closingbalance | Proportiontoclosingbalanceofotherreceivables(%) | Closingbalanceofbaddebtsprovision |
| Top5otherreceivablesintotal | 7,763,649.48 | 12.51 | 388,182.48 |
Note6.Inventory
Page
1．Classification
| Item | Closingbalance | Openingbalance | ||||
| Carryingamount | Provision | Bookvalue | Carryingamount | Provision | Bookvalue | |
| Rawmaterial | 167,281,491.84 | 5,290,855.71 | 161,990,636.13 | 162,338,704.65 | 17,241,512.65 | 145,097,192.00 |
| WIP | 12,060,525.88 | 12,060,525.88 | 7,204,699.11 | 7,204,699.11 | ||
| Storedgoods | 1,993,236,975.36 | 66,621,962.09 | 1,926,615,013.27 | 2,085,640,712.37 | 96,622,229.81 | 1,989,018,482.56 |
| Total | 2,172,578,993.08 | 71,912,817.80 | 2,100,666,175.28 | 2,255,184,116.13 | 113,863,742.46 | 2,141,320,373.67 |
2．Provisionforinventory
| Item | Openingbalance | Increaseincurrentperiod | Decreaseincurrentperiod | Closingbalance | |||
| Accrual | Other | Reversed | Realized | Others | |||
| Rawmaterial | 17,241,512.65 | 1,767,804.67 | 198,541.68 | 13,917,003.29 | 5,290,855.71 | ||
| Storedgoods | 96,622,229.81 | 11,782,189.77 | 16,398.16 | 14,121,974.81 | 27,676,880.84 | 66,621,962.09 | |
| Total | 113,863,742.46 | 13,549,994.44 | 214,939.84 | 14,121,974.81 | 41,593,884.13 | 71,912,817.80 | |
Notestoprovisionforinventory
| Item | EvidenceofdetermineNRVandfuturesellingcost | Reasonforreversalorrealized |
| Rawmaterial | Estimatedsellingpricelessestimatedcosttocompleteandsellinganddistributionexpensesandassociatedtaxes | FactorsthatcausedimpairmenthasbeendisappearedandtheNAVishigherthanitscarryingamount |
| Storedgoods | Estimatedsellingpricelessestimatedsellinganddistributingexpensesandassociatedtaxes | Inventorythatalreadyprovidedforwassoldorusedincurrentperiod. |
3．Theprovisionisaccruedbyportfolioofassets
| Portfolio | Closingbalance | ||||
| Carryingamount | Provisionforinventory | Bookvalue | Criteriaforaccruedbenefits | ||
| Amount | Percentage(%) | ||||
| Inventoryageingportfolio | 42,498,540.45 | 42,498,540.45 | Newproductsofownbrandslaunchedintheyeararenotsubjecttowrite-downs. | ||
| Total | 42,498,540.45 | 42,498,540.45 | |||
Continued：
| Portfolio | Openingbalance |
Page
| Carryingamount | Provisionforinventory | Bookvalue | Criteriaforaccruedbenefits | ||
| Amount | Percentage(%) | ||||
| Inventoryageingportfolio | 40,147,783.30 | 40,147,783.30 | Newproductsofownbrandslaunchedintheyeararenotsubjecttowrite-downs. | ||
| Total | 40,147,783.30 | 40,147,783.30 | |||
Note7.Othercurrentassets
| Item | Closingbalance | Openingbalance |
| InputVAT | 21,032,239.30 | 12,967,188.47 |
| InputVATnotyetcertified | 31,717,607.91 | 39,454,283.19 |
| Prepaidcorporateincometax | 1,364,632.40 | 3,419,026.38 |
| Others | 18,134,912.20 | 10,499,007.28 |
| Total | 72,249,391.81 | 66,339,505.32 |
Note8.Long-termequityinvestment
| Investee | Openingbalance | Movementsduringtheperiod | |||
| Addition/newinvestment | Withdrawn | Investmentgainsandlossesrecognizedbyequitymethod | Adjustmentofothercomprehensiveincome | ||
| Associate | |||||
| ShanghaiWatchCo.,Ltd.(ShanghaiWatch) | 58,182,086.90 | -5,819,479.60 | |||
Continued
| Investee | Movementsduringtheperiod | Closingbalance | Closingbalanceofimpairmentprovision | |||
| Changesinotherequity | Cashdividenddeclared | Impairmentprovision | Others | |||
| Associate | ||||||
| ShanghaiWatch | -500,000.00 | 51,862,607.30 | ||||
Note9.Otherequityinstrumentinvestments
| Item | Closingbalance | Openingbalance |
| Xi’anTangchengLimited | 85,000.00 |
Note10.Investmentproperty
1.Detailsofinvestmentproperty
| Item | Property |
| I.Originalcost |
Page
| Item | Property |
| 1．Openingbalance | 619,762,618.36 |
| 2．Addition | 572,405.53 |
| Purchase | |
| Transferredfromfixedassets | 572,405.53 |
| Otherreasons | |
| 3．Decrease | |
| Disposal | |
| Otherreasons | |
| 4．Closingbalance | 620,335,023.89 |
| II.Accumulateddepreciation | |
| 1．Openingbalance | 244,783,123.65 |
| 2．Increasedincurrentperiod | 15,296,068.10 |
| Accrual | 15,044,992.22 |
| Transferredfromfixedassets | 251,075.88 |
| Otherreasons | |
| 3．Decreasedincurrentperiod | |
| Disposal | |
| Otherreasons | |
| 4．Closingbalance | 260,079,191.75 |
| III.Impairmentprovision | |
| 1．Openingbalance | |
| 2．Increasedincurrentperiod | |
| Accrual | |
| Transferredfromfixedassets | |
| Otherreasons | |
| 3．Decreasedincurrentperiod | |
| Disposal | |
| Otherreasons | |
| 4．Closingbalance | |
| IV.Bookvalue | |
| 1．Carryingamountatendoftheperiod | 360,255,832.14 |
| 2．Carryingamountatopeningoftheperiod | 374,979,494.71 |
2.NotestoinvestmentpropertyDuringthereportingperiod,certainself-usepropertyoftheCompanywerechangedtoleaseoutandtheyweretransferredfromfixedassetstoinvestmentpropertiesmeasuredatcostmodel.
Page
Note11.Fixedassets
1.Statusoffixedassets
| Item | Propertyandbuildings | Machinery | Transportationvehicles | Electronicdevices | Otherequipment | Total |
| I.Originalcost | ||||||
| 1.Openingbalance | 436,320,947.20 | 117,552,809.38 | 14,472,510.38 | 47,600,350.65 | 45,458,802.97 | 661,405,420.58 |
| 2.Increasedincurrentperiod | 6,274,155.66 | 13,247,259.25 | 22,133.50 | 5,638,594.91 | 1,095,999.30 | 26,278,142.62 |
| Re-classification | ||||||
| Purchased | 914,818.16 | 9,069,828.71 | 22,133.50 | 5,638,411.80 | 1,095,999.30 | 16,741,191.47 |
| Translationdifference | 5,359,337.50 | 4,177,430.54 | 183.11 | 9,536,951.15 | ||
| Otherincrease | ||||||
| 3.Decreaseincurrentperiod | 1,005,470.23 | 132,279.42 | 1,217,550.05 | 2,581,726.49 | 2,460,547.92 | 7,397,574.11 |
| Disposalorretired | 433,064.70 | 132,279.42 | 1,217,550.05 | 2,260,776.40 | 1,552,373.54 | 5,596,044.11 |
| Transferredtoinvestmentproperty | 572,405.53 | 572,405.53 | ||||
| Translationdifference | 309,957.34 | 908,174.38 | 1,218,131.72 | |||
| Otherdecrease | 10,992.75 | 10,992.75 | ||||
| 4.Closingbalance | 441,589,632.63 | 130,667,789.21 | 13,277,093.83 | 50,657,219.07 | 44,094,254.35 | 680,285,989.09 |
| II.Accumulateddepreciation | ||||||
| 1.Openingbalance | 135,388,740.98 | 71,466,324.74 | 12,901,120.89 | 37,167,150.60 | 39,853,318.20 | 296,776,655.41 |
| 2.Increasedincurrentperiod | 17,371,592.78 | 11,708,223.48 | 334,169.25 | 2,754,128.08 | 1,490,096.27 | 33,658,209.86 |
| Re-classification | ||||||
| Accrual | 13,829,319.29 | 8,286,484.22 | 334,169.25 | 2,673,316.21 | 1,490,096.27 | 26,613,385.24 |
| Translationdifference | 3,542,273.49 | 3,421,739.26 | 80,811.87 | 7,044,824.62 | ||
| Otherincrease | ||||||
| 3.Decreaseincurrentperiod | 553,306.35 | 40,954.90 | 1,156,620.74 | 1,964,736.59 | 2,218,612.28 | 5,934,230.86 |
| Disposalorretired | 302,230.47 | 40,954.90 | 1,156,620.74 | 1,964,736.59 | 1,281,465.83 | 4,746,008.53 |
| Transferredtoinvestmentproperty | 251,075.88 | 251,075.88 | ||||
| Translationdifference | 937,146.45 | 937,146.45 | ||||
| Otherdecrease | ||||||
| 4.Closingbalance | 152,207,027.41 | 83,133,593.32 | 12,078,669.40 | 37,956,542.09 | 39,124,802.19 | 324,500,634.41 |
| III.Impairmentprovision | ||||||
| 1.Openingbalance |
Page
| Item | Propertyandbuildings | Machinery | Transportationvehicles | Electronicdevices | Otherequipment | Total |
| 2.Increaseincurrentperiod | ||||||
| Re-classification | ||||||
| Accrual | ||||||
| Translationdifference | ||||||
| Otherincrease | ||||||
| 3.Decreaseincurrentperiod | ||||||
| Disposalorretired | ||||||
| Transferredintoinvestmentproperty | ||||||
| Translationdifference | ||||||
| Otherdecrease | ||||||
| 4.Closingbalance | ||||||
| IV.Bookvalue | ||||||
| 1.Carryingamountatendofperiod | 289,382,605.22 | 47,534,195.89 | 1,198,424.43 | 12,700,676.98 | 4,969,452.16 | 355,785,354.68 |
| 2.Carryingamountatbeginningofperiod | 300,932,206.22 | 46,086,484.64 | 1,571,389.49 | 10,433,200.05 | 5,605,484.77 | 364,628,765.17 |
2.Fixedassetsthatdonothavecertificateforpropertyright
| Item | Bookvalue | Reasonfornothavingcertificateforpropertyrights |
| Property | 190,716.25 | Issuesrelatingtopropertyright |
Note12.Right-of-useassets
| Item | Property |
| I.Originalcost | |
| 1．Openingbalance | 362,417,078.85 |
| 2．Increaseincurrentperiod | 103,612,246.80 |
| Re-classification | |
| Lease | 100,802,964.10 |
| Translationdifference | 3,116.50 |
| Otherincrease | 2,806,166.20 |
| 3．Decreaseincurrentperiod | 312,819,427.84 |
| Maturityofleaseterm | 304,816,556.54 |
| Translationdifference |
Page
| Item | Property |
| Otherdecrease | 8,002,871.30 |
| 4．Closingbalance | 153,209,897.81 |
| II.Accumulateddepreciation | |
| 1．Openingbalance | 252,086,566.82 |
| 2．Increaseintheperiod | 103,960,161.59 |
| Reclassification | |
| Accrual | 103,958,386.94 |
| Translationdifference | 1,774.65 |
| Otherincrease | |
| 3．Decreaseintheperiod | 312,289,312.24 |
| Maturityofleaseterm | 304,816,556.54 |
| Translationdifference | |
| Otherdecrease | 7,472,755.70 |
| 4．Closingbalance | 43,757,416.17 |
| III.Impairmentprovision | |
| 1．Openingbalance | |
| 2．Increaseintheperiod | |
| Reclassification | |
| Accrual | |
| Translationdifference | |
| Otherincrease | |
| 3．Decreaseintheperiod | |
| Maturityofleaseterm | |
| Translationdifference | |
| Otherdecrease | |
| 4．Closingbalance | |
| IV.Bookvalue | |
| 1．Carryingamountatendofperiod | 109,452,481.64 |
| 2．Carryingamountatbeginningofperiod | 110,330,512.03 |
Note13.Intangibleasset1．Status
| Item | Land-useright | Softwaresystem | Righttousetrademarks | Total |
| I.Originalcost | ||||
| 1．Openingbalance | 34,933,822.40 | 33,197,692.51 | 16,518,590.29 | 84,650,105.20 |
| 2．Increaseintheperiod | 2,072,450.42 | 80,894.93 | 2,153,345.35 |
Page
| Item | Land-useright | Softwaresystem | Righttousetrademarks | Total |
| Purchase | 2,072,450.42 | 80,894.93 | 2,153,345.35 | |
| InternalR&D | ||||
| Othersource | ||||
| 3．Decreaseintheperiod | 27,470.38 | 27,470.38 | ||
| Disposal | 27,470.38 | 27,470.38 | ||
| Otherreasons | ||||
| 4．Closingbalance | 34,933,822.40 | 35,242,672.55 | 16,599,485.22 | 86,775,980.17 |
| II.Accumulatedamortization | ||||
| 1．Openingbalance | 16,515,922.01 | 25,903,908.15 | 9,030,056.41 | 51,449,886.57 |
| 2．Increaseintheperiod | 733,553.29 | 1,717,415.91 | 1,238,214.01 | 3,689,183.21 |
| Accrual | 733,553.29 | 1,717,415.91 | 1,238,214.01 | 3,689,183.21 |
| Otherreasons | ||||
| 3．Decreaseintheperiod | 27,470.38 | 27,470.38 | ||
| Disposal | 27,470.38 | 27,470.38 | ||
| Otherreasons | ||||
| 4．Closingbalance | 17,249,475.30 | 27,593,853.68 | 10,268,270.42 | 55,111,599.40 |
| III.Impairmentprovision | ||||
| 1．Openingbalance | ||||
| 2．Increaseintheperiod | ||||
| Accrual | ||||
| Otherreasons | ||||
| 3．Decreaseintheperiod | ||||
| Transfer | ||||
| Otherreasons | ||||
| Othertransfer | ||||
| 4．Closingbalance | ||||
| IV.Bookvalue | ||||
| 1．Bookvalueatendoftheperiod | 17,684,347.10 | 7,648,818.87 | 6,331,214.80 | 31,664,380.77 |
| 2．Bookvalueatbeginningoftheperiod | 18,417,900.39 | 7,293,784.36 | 7,488,533.88 | 33,200,218.63 |
Note14.Long-termdeferredexpenses
| Item | Openingbalance | Increase | Amortized | Otherdecrease | Closingbalance |
| Counterfabricationexpenses | 22,247,070.17 | 22,066,842.07 | 23,175,000.62 | 2,130,567.78 | 19,008,343.84 |
Page
| Item | Openingbalance | Increase | Amortized | Otherdecrease | Closingbalance |
| Renovationexpenses | 116,030,323.61 | 39,047,795.69 | 58,272,039.86 | 509,069.24 | 96,297,010.20 |
| Others | 6,211,058.40 | 7,760,754.71 | 6,952,812.02 | 7,019,001.09 | |
| Total | 144,488,452.18 | 68,875,392.47 | 88,399,852.50 | 2,639,637.02 | 122,324,355.13 |
Note15.Deferredtaxassetsanddeferredtaxliabilities
1．Detailofdeferredtaxassetsbeforeoffsetting
| Item | Closingbalance | Openingbalance | ||
| Deductibletemporarydifference | Deferredtaxassets | Deductibletemporarydifference | Deferredtaxassets | |
| Impairmentprovision | 107,672,653.16 | 24,371,732.35 | 143,503,292.94 | 30,225,885.07 |
| Unrealizedprofitforrelatedpartytransactions | 83,620,908.60 | 20,855,280.62 | 75,781,866.09 | 18,681,772.44 |
| Deductiblelosses | 126,562,143.51 | 31,197,892.87 | 157,860,317.75 | 37,779,977.71 |
| Restrictedshares | 6,263,007.85 | 1,449,733.06 | 23,141,270.85 | 5,411,762.47 |
| Advertisementexpensesthatallowedtodeductinfutureyears | 515,068.99 | 128,767.25 | ||
| Leaseliabilities | 109,682,960.95 | 27,420,740.27 | 113,136,916.00 | 28,284,229.00 |
| Others | 5,168,527.80 | 1,292,131.95 | 7,295,926.80 | 1,823,981.80 |
| Total | 438,970,201.87 | 106,587,511.12 | 521,234,659.42 | 122,336,375.74 |
2．Detailofdeferredtaxliabilitiesbeforeoffsetting
| Item | Closingbalance | Openingbalance | ||
| taxabletemporarydifference | Deferredtaxliabilities | Taxabletemporarydifference | Deferredtaxliabilities | |
| One-offdeductionoffixedassetbeforeCorporateincometax | 28,437,227.07 | 4,265,584.06 | 29,872,344.91 | 4,480,851.74 |
| Right-of-useasset | 109,212,305.15 | 27,303,076.29 | 110,279,028.02 | 27,569,757.01 |
| Total | 137,649,532.22 | 31,568,660.35 | 140,151,372.93 | 32,050,608.75 |
3．Net-offofdeferredtaxassetorliabilities
| Item | Amountoff-setatcurrentperiod | Closingbalanceofdeferredtaxassetorliabilityafteroff-set | Amountoff-setatpriorperiod | Openingbalanceofdeferredtaxassetorliabilityafteroff-set |
| deferredtaxasset | 26,359,739.66 | 80,227,771.46 | 26,551,763.80 | 95,784,611.94 |
| deferredtaxliabilities | 26,359,739.66 | 5,208,920.69 | 26,551,763.80 | 5,498,844.95 |
4．Detailsofdeductibletemporarydifferenceanddeductiblelossesthatdoesnotrecognize
asdeferredincometaxasset
| Item | Closingbalance | Openingbalance |
| Impairmentprovision | 3,395,341.37 | 16,220,176.97 |
| Deductiblelosses | 52,523,345.89 | 50,761,915.00 |
Page
| Item | Closingbalance | Openingbalance |
| Total | 55,918,687.26 | 66,982,091.97 |
DeductiblelossesofMontresChourietSA,whicharesub-subsidiaryoftheCompany,isnotrecognizedasdeferredincometaxassetasit’suncertainthatthecompaniescangetsufficienttaxableincomeinfuture.FIYTA（HongKong）Ltd,asubsidiaryoftheCompany,doesnotneedtorecognizethedeferredincometaxassetsforimpairmentprovisionaccordingtothelocaltaxpolicy.
5．Deductiblelossesthatarenotrecognizedasdeferredtaxassetwilldueinthefollowingyears：
| Year | Closingbalance | Openingbalance | Note |
| 2023 | 8,456,818.95 | ||
| 2024 | 23,049,503.37 | 18,449,678.50 | |
| 2025 | 29,473,842.52 | 23,855,417.55 | |
| Total | 52,523,345.89 | 50,761,915.00 |
Note16.Othernon-currentassets
| Item | Closingbalance | Openingbalance | ||||
| Carryingamount | Provision | Bookvalue | Carryingamount | Provision | Bookvalue | |
| Prepaymentforconstructionandequipment | 9,434,627.17 | 9,434,627.17 | 11,593,741.57 | 11,593,741.57 | ||
| Total | 9,434,627.17 | 9,434,627.17 | 11,593,741.57 | 11,593,741.57 | ||
Note17.Short-termloan
| Item | Closingbalance | Openingbalance |
| Creditloans | 250,000,000.00 | 290,000,000.00 |
| Accruedinterestpayable | 187,763.87 | 237,111.11 |
| Total | 250,187,763.87 | 290,237,111.11 |
Note18.Notespayable
| Types | Closingbalance | Openingbalance |
| Commercialbillspayable | 2,000,600.00 |
Note19.Accountpayables
| Item | Closingbalance | Openingbalance |
| Tradepayables | 148,281,377.41 | 149,811,781.06 |
| Payablesformaterialpurchased | 23,371,455.42 | 19,729,474.20 |
| Payablesforproject | 2,173,074.88 | 1,048,201.41 |
| Total | 173,825,907.71 | 170,589,456.67 |
Page
Note20.Advancesfromcustomer
| Item | Closingbalance | Openingbalance |
| Rentalreceivedinadvance | 10,267,758.31 | 16,960,128.83 |
| Total | 10,267,758.31 | 16,960,128.83 |
Note21.Contractliabilities
| Item | Closingbalance | Openingbalance |
| Advancesforgoodsreceived | 12,286,243.62 | 16,844,437.47 |
| Total | 12,286,243.62 | 16,844,437.47 |
Note22.Employeeremunerationpayable1．Status
| Item | Openingbalance | Increase | Decrease | Closingbalance |
| Short-termemployeebenefits | 122,389,603.47 | 573,249,889.40 | 581,435,441.84 | 114,204,051.03 |
| Post-employmentbenefits-definedcontributionplans | 9,282,692.00 | 45,699,776.34 | 49,401,016.98 | 5,581,451.36 |
| Terminationbenefits | 4,915,643.91 | 3,561,468.21 | 8,177,803.91 | 299,308.21 |
| Total | 136,587,939.38 | 622,511,133.95 | 639,014,262.73 | 120,084,810.60 |
2．Short-termemployeebenefits
| Item | Openingbalance | Increase | Decrease | Closingbalance |
| Salaries,bonus,allowances | 121,169,046.53 | 514,306,267.70 | 522,193,272.18 | 113,282,042.05 |
| Staffwelfare | 10,643.28 | 9,991,313.96 | 9,839,862.22 | 162,095.02 |
| Socialinsurances | 404,028.29 | 22,623,655.78 | 23,027,605.75 | 78.32 |
| Including:1.Medicalinsurance | 404,028.29 | 20,961,272.11 | 21,365,300.40 | |
| 2.Supplementarymedicalinsurance | ||||
| 3.Work-relatedinjuryinsurance | 894,581.96 | 894,503.64 | 78.32 | |
| 4.Maternityinsurance | 767,801.71 | 767,801.71 | ||
| HousingFund | 169,121.00 | 19,257,855.90 | 19,413,425.90 | 13,551.00 |
| Laborunionfeesandeducationfee | 636,764.37 | 7,070,796.06 | 6,961,275.79 | 746,284.64 |
| Total | 122,389,603.47 | 573,249,889.40 | 581,435,441.84 | 114,204,051.03 |
3．Definedcontributionplans
| Item | Openingbalance | Increase | Decrease | Closingbalance |
| Basicpensioninsurance | 290,781.95 | 40,649,553.03 | 40,732,129.01 | 208,205.97 |
| Unemploymentinsurance | 581.68 | 1,203,467.38 | 1,203,669.18 | 379.88 |
| Annuity | 8,991,328.37 | 3,846,755.93 | 7,465,218.79 | 5,372,865.51 |
| Total | 9,282,692.00 | 45,699,776.34 | 49,401,016.98 | 5,581,451.36 |
Page
Note23.Taxespayable
| Item | Closingbalance | Openingbalance |
| VAT | 38,997,243.97 | 39,086,878.23 |
| Corporateincometax | 21,276,050.77 | 16,751,872.66 |
| Individualincometax | 1,101,633.76 | 1,070,872.15 |
| Urbanmaintenanceandconstructiontax | 1,047,680.77 | 1,353,097.21 |
| Educationalsurcharges | 748,598.11 | 966,809.02 |
| Others | 1,016,953.93 | 1,540,639.03 |
| Total | 64,188,161.31 | 60,770,168.30 |
Note24.Otherpayables
| Item | Closingbalance | Openingbalance |
| Dividendspayable | 2,058,352.24 | 6,324,013.97 |
| Otherpayables | 119,879,448.83 | 158,736,108.61 |
| Total | 121,937,801.07 | 165,060,122.58 |
Note:Otherpayablesinabovetablereferstootherpayablesexcludinginterestpayableanddividendspayable.
1.Dividendspayable
| Item | Closingbalance | Openingbalance | Reasonsfornotbeingpaid |
| Dividendsforordinaryshares | 2,058,352.24 | 6,324,013.97 | unlock |
| Total | 2,058,352.24 | 6,324,013.97 |
2.Otherpayables
(1)Otherpayablesbynature
| Nature | Closingbalance | Openingbalance |
| Securitydeposit | 34,075,198.63 | 38,319,837.05 |
| Shopactivityfund | 17,335,559.49 | 16,105,216.84 |
| Decorationexpenses | 10,214,019.04 | 12,827,532.03 |
| Repurchaseliabilityforrestrictedshares | 14,304,862.81 | 50,759,806.16 |
| Other | 43,949,808.86 | 40,723,716.53 |
| Total | 119,879,448.83 | 158,736,108.61 |
(2)Materialotherreceivableswithagingover1year
| Name | Closingbalance | Reasonsfornotbeingpaid |
| CompanyA | 4,614,077.01 | Undue |
Page
| Name | Closingbalance | Reasonsfornotbeingpaid |
| CompanyB | 2,032,676.76 | Undue |
| CompanyC | 2,020,950.20 | Undue |
| CompanyD | 1,807,296.80 | Undue |
| CompanyE | 1,442,275.27 | Undue |
| CompanyF | 1,060,132.00 | Undue |
| Total | 12,977,408.04 |
Note25.Non-currentliabilitiesduewithinoneyear
| Item | Closingbalance | Openingbalance |
| Leaseliabilitiesdueinoneyear | 66,399,004.20 | 71,546,316.16 |
| Total | 66,399,004.20 | 71,546,316.16 |
Note26.Othercurrentliabilities
| Item | Closingbalance | Openingbalance |
| OutputVATnotyetrealized | 1,589,635.30 | 1,686,806.01 |
| Total | 1,589,635.30 | 1,686,806.01 |
Note27.Leaseliabilities
| Item | Closingbalance | Openingbalance |
| BuildingsandStructures | 113,786,386.87 | 113,365,689.55 |
| Less:unrecognisedfinancecosts | 3,861,030.15 | 176,811.81 |
| Subtotalpresentvalueofleasereceipts | 109,925,356.72 | 113,188,877.74 |
| Less:leaseliabilitiesdueinoneyear | 66,399,004.20 | 71,546,316.16 |
| Total | 43,526,352.52 | 41,642,561.58 |
InterestexpensesforleaseliabilitiesrecognizedincurrentperiodwasRMB4,583,361.68.Note28.Deferredincome
| Item | Openingbalance | Increase | Decrease | Closingbalance | Reason |
| Assetrelatedgovernmentsubsidy | 1,295,926.80 | 343,141.11 | 952,785.69 | ||
| Revenuerelatedgovernmentsubsidy | |||||
| Total | 1,295,926.80 | 343,141.11 | 952,785.69 |
DeferredincomerelatedtogovernmentsubsidyTheCompany'sgovernmentsubsidyaredetailedinNoteVIIIGovernmentsubsidy.1forliabilityitemsinvolvinggovernmentgrants.
Page
Note29.Sharecapital
| Item | Openingbalance | Movements:increase(+),decrease(－) | Closingbalance | ||||
| Newlyissued | Bonusshare | Capitalizationofcapitalreserves | Others | Subtotal | |||
| Totalshares | 417,627,960.00 | -2,407,990.00 | -2,407,990.00 | 415,219,970.00 | |||
| Total | 417,627,960.00 | -2,407,990.00 | -2,407,990.00 | 415,219,970.00 | |||
Notestomovements：
1.Pursuanttothe"ProposalontheRepurchaseandCancellationofCertainRestrictedSharesunderthe2018A-shareRestrictedShareIncentivePlan(PhaseII)"consideredandapprovedbytheBoardofDirectorsandthegeneralmeetingoftheCompany,206,860A-sharerestrictedsharesheldbysevendepartingformerincentiverecipients,whichhadbeengrantedbutnotyetreleasedfromrestrictiononsale,wererepurchasedandcancelled.
2.Pursuanttothe''ProposalontheFailuretoAchievetheConditionsforReleaseofRestrictedSharesduringtheSecondReleasePeriodofthe2018A-shareRestrictedShareIncentivePlan(PhaseII)andtheRepurchaseandCancellationofCertainRestrictedShares''consideredandapprovedbytheBoardofDirectorsandtheGeneralMeetingofShareholdersoftheCompany,2,201,130restrictedsharesofA-sharesheldby120incentiverecipientsforwhomtheconditionsforreleaseofrestrictedshareshavenotbeenfulfilledaretoberepurchasedandcancelled.
Note30.Capitalreserve
| Item | Item | Openingbalance | Increase | Decrease |
| Sharepremium | 969,665,728.36 | 12,799,265.10 | 14,207,807.55 | 968,257,185.91 |
| Othercapitalreserve | 37,420,915.12 | 3,184,288.69 | 18,703,356.55 | 21,901,847.26 |
| Total | 1,007,086,643.48 | 15,983,553.79 | 32,911,164.10 | 990,159,033.17 |
Notestocapitalreserve:
1.Pursuanttothe''Resolutiononthefulfillmentoftheconditionsforthereleaseofrestrictedsharesduringthefirstreleaseperiodofthe2018A-shareRestrictedStockIncentivePlan(PhaseII)''andthe''Resolutiononthefulfillmentoftheconditionsforthereleaseofrestrictedsharesduringthethirdreleaseperiodofthe2018A-shareRestrictedStockIncentivePlan(PhaseI)''consideredandapprovedbytheBoardofDirectorsandtheGeneralMeetingofShareholdersoftheCompany,intheyearof2023,RMB3,436,710,000A-sharerestrictedshareswhichmettheconditionsforreleasefromrestrictedsalewerereleasedfromrestrictedsale,andthecapitalsurplusofRMB12,799,265.10correspondingtotherestrictedsharesoftheaboveincentiverecipientswastransferredfrom"Othercapitalsurplus"to"Sharepremium".
Page
2.AsdescribedinNoteV.29,theCompanyrepurchasedrestrictedshares,andtheequitypremiumwasreducedbyRMB14,195,451.00accordingly.
3.Pursuanttothe"ProgramontheRepurchaseofCertainDomesticallyListedForeignShares(BShares)"consideredandapprovedattheEleventhMeetingoftheTenthSessionoftheBoardofDirectorsandtheGeneralMeetingofShareholdersoftheCompany,in2023,thetransactioncostsincurredbytheCompanyfortherepurchaseoftheCompany'ssharesthroughtherepurchaseofthespecialsecuritiesaccountamountedtoRMB12,356.55,whichwasoffsetagainsttheequitypremiumofRMB12,356.55.
4.PursuanttotheProposalontheGrantofRestrictedSharestotheIncentiveRecipientsundertheCompany's2018A-ShareRestrictedStockIncentivePlan(PhaseII),whichwasconsideredandapprovedbytheBoardofDirectorsandtheGeneralMeetingofShareholdersoftheCompany.In2023,theservicesobtainedbytheCompanyfromtheaboveincentiverecipientswereincludedintherelevantcostsorexpensesandincreasedtheothercapitalsurplusbyRMB1,825,092.95accordingly.
5.Pursuanttothe''ProposalontheFailuretoAchievetheConditionsforReleaseofRestrictedSharesduringtheSecondReleasePeriodofthe2018A-ShareRestrictedStockIncentivePlan(PhaseII)andtheRepurchaseandCancellationofCertainRestrictedShares''consideredandapprovedbytheBoardofDirectorsandtheGeneralMeetingofShareholdersoftheCompany,intheyear2023,2,201,130A-sharerestrictedsharesheldby120incentiverecipientsforwhomtheconditionsforreleaseofrestrictedshareshavenotbeenreachedwererepurchasedandcancelled.EliminatetheservicesoftheaboveincentiverecipientschargedtotherelevantcostsorexpensesandreducetheothercapitalsurplusbyRMB5,904,091.45accordingly.
6.TheamountofincometaxeffectofthedifferencebetweentheamountdeductedbeforeincometaxforthecurrentyearandtheamountofrelatedcostsandexpensesrecognizedduringthewaitingperiodresultingfromthedifferencebetweenthefairpriceatthetimeofunlockingofrestrictedsharesandthegrantpriceatthetimeofgrantwasadjustedtoothercapitalsurplusbyRMB1,359,195.74accordingly.
Note31.Treasuryshares
| Item | Openingbalance | Increase | Decrease | Closingbalance |
| Sharerepurchase | 64,340,669.42 | 64,340,669.42 | ||
| Sharebasedpayment | 50,759,806.16 | 36,454,943.35 | 14,304,862.81 | |
| Total | 50,759,806.16 | 64,340,669.42 | 36,454,943.35 | 78,645,532.23 |
Notestotreasuryshares:
1.In2023,theCompanyrepurchasedanaggregateof9,355,763BsharesoftheCompanythroughtheShenzhenStockExchangebywayofcentralizedbidding,andpaidarepurchaseamountofHK70,401,771.17(excludingtransactioncosts),equivalenttoRMB64,340,669.42,
Page
thusincreasing"Reductionofregisteredcapitalrepurchase"byRMB64,340,669.42.
2.AsdescribedinNoteV.29.2,theCompanyrepurchasedandcanceledtheA-sharerestrictedsharesforwhichtheconditionsforreleasefromrestrictiononsalehadnotbeenmet,therebyreducingthe"Restrictedshare-basedpayments"byRMB15,187,797.00.
3.AsdescribedinNoteV.29.1,theCompanyrepurchasedandcanceledtheA-sharerestrictedsharesthathadbeengrantedbutnotyetreleasedfromrestriction,therebyreducing"Restrictedshare-basedpayments"byRMB1,415,644.00;andreduced"Restrictedshare-basedpayments"byRMB588,620.00inrespectofthecorrespondingcashdividends.
4.AsdescribedinNoteV.30.1,forthosesharesthatmeettheunlockingconditionsforrestrictedsharesanddonotneedtoberepurchased,thecorrespondingrepurchaseobligationswerederecognized,thusreducing"Restrictedshare-basedpayments"byRMB19,262,882.35.
Page
Note32.OtherComprehensiveincome
| Item | Openingbalance | Amountincurrentperiod | Closingbalance | ||||||||
| Pre-taxamount | Less:recordedinOCIinpriorperiodandtransferredtoprofitorlossincurrentperiod | Less:recordedinOCIinpriorperiodandtransferredtofinancialassetsatamortizedcost | Less:reserveofhedgingtransferredtorelatedassetsorliabilities | Less:CIT | Attributetoparentcompanyaftertax | Attributetonon-controllingshareholdersaftertax | Less:movementsofdefiedbenefitplan | Less:recordedinOCIinpriorperiodandtransferredtoretainedearningsincurrentperiod | |||
| I.Othercomprehensiveincomeitemswhichwillnotbereclassifiedsubsequentlytoprofitorloss | |||||||||||
| II.Othercomprehensiveincomeitemswhichmaybereclassifiedsubsequentlytoprofitorloss | 5,739,589.89 | 13,585,746.04 | 13,585,746.04 | 19,325,335.93 | |||||||
| Including:translationdifference | 5,739,589.89 | 13,585,746.04 | 13,585,746.04 | 19,325,335.93 | |||||||
| Total | 5,739,589.89 | 13,585,746.04 | 13,585,746.04 | 19,325,335.93 | |||||||
Page
Note33.Specificreserve
| Item | Openingbalance | Increase | Decrease | Closingbalance |
| Safetyproductionfee | 2,012,064.91 | 1,537,825.22 | 326,732.07 | 3,223,158.06 |
| Total | 2,012,064.91 | 1,537,825.22 | 326,732.07 | 3,223,158.06 |
Note34.Surplusreserve
| Item | Openingbalance | Increase | Decrease | Closingbalance |
| Statutorysurplusreserve | 213,025,507.50 | 213,025,507.50 | ||
| Discretionarysurplusreserve | 61,984,894.00 | 61,984,894.00 | ||
| Total | 275,010,401.50 | 275,010,401.50 |
Notestosurplusreserve:
Note:AccordingtotheCompanyLawandArticlesofAssociation,theCompanydrawsstatutorysurplusreserveat10%ofnetprofit.Ifthestatutorysurplusreserveisover50%oftheCompany’sregisteredcapital,drawingofstatutorysurplusreservewillbestopped.TheCompanycandrawdiscretionarysurplusreserveafterdrawingstatutorysurplusreserve.Ifapproved,discretionarysurplusreservecanbeusedtomakeupforlossesinpreviousyearsorincreasesharecapital.
Note35.Undistributedprofit
| Item | Currentperiod | Priorperiod |
| Undistributedprofitattheendofprioryearbeforeadjustments | 1,479,706,638.53 | 1,338,444,326.09 |
| Adjustmentstoundistributedprofitatthebeginningofyear(“+”forincreaseand“-“fordecrease) | ||
| Undistributedprofitatthebeginningofyearafteradjustment | 1,479,706,638.53 | 1,338,444,326.09 |
| Plus:Netprofitattributabletotheowneroftheparentcompanyfortheyear | 333,178,102.37 | 266,681,451.84 |
| Less:statutorysurplusreservedrawn | ||
| Dividendspayabletoordinaryshares | 103,371,355.14 | 125,419,139.40 |
| Undistributedprofitattheendofyear | 1,709,513,385.76 | 1,479,706,638.53 |
Note36.Operatingincomeandoperatingcost
1．Operatingincomeandoperatingcost
| Item | Amountincurrentperiod | Amountinpriorperiod | ||
| Revenue | Cost | Revenue | Cost | |
| Mainbusiness | 4,553,706,250.49 | 2,904,751,241.51 | 4,336,586,473.74 | 2,738,100,529.23 |
| Otherbusiness | 15,983,752.50 | 712,233.30 | 17,510,406.62 | 872,261.88 |
Page
| Item | Amountincurrentperiod | Amountinpriorperiod | ||
| Total | 4,569,690,002.99 | 2,905,463,474.81 | 4,354,096,880.36 | 2,738,972,791.11 |
2．Revenuegeneratedbycontract
| Typesofcontract | Amountincurrentperiod | Amountinpriorperiod |
| I.Typesofgoods | ||
| Watchbusiness | 4,270,245,173.86 | 4,044,205,847.75 |
| Precisionmanufacturing | 133,103,042.03 | 163,114,009.23 |
| Otherbusiness | 15,916,680.92 | 17,510,406.62 |
| II.Categorizedbasedontimingofgoodstransfer | ||
| Atapointoftime | 4,410,670,831.14 | 4,212,548,175.21 |
| Duringaperiodoftime | 8,594,065.67 | 12,282,088.39 |
Note:revenuegeneratedbycontractdoesnotincludeleaseincomeofRMB150,425,106.18whichisregulatedunder“CASNo.21–Lease”.
Note37.Taxandsurcharges
| Item | Amountincurrentperiod | Amountinpriorperiod |
| Consumptiontax | 12,205,585.22 | 10,509,059.81 |
| Urbanmaintenanceandconstructiontax | 5,188,370.21 | 4,483,205.18 |
| Educationalsurcharge | 3,452,657.63 | 2,988,250.62 |
| Propertytax | 7,512,564.92 | 5,824,577.36 |
| Stampduty | 3,040,109.98 | 3,814,124.17 |
| Others | 4,794,558.14 | 3,180,982.59 |
| Total | 36,193,846.10 | 30,800,199.73 |
Note38.Sellinganddistributionexpenses
| Item | Amountincurrentperiod | Amountinpriorperiod |
| Salary | 364,493,305.57 | 390,723,066.47 |
| Departmentstoreexpenseandrental | 159,738,493.87 | 154,977,256.13 |
| Marketpromotionexpenses | 146,787,677.11 | 114,559,488.13 |
| Depreciationandamortization | 187,456,893.25 | 210,324,656.21 |
| Packagingexpenses | 10,367,129.63 | 8,210,424.75 |
| Utilitiesandpropertymanagementexpenses | 22,673,870.27 | 22,115,070.79 |
| Shippingfees | 5,921,929.02 | 5,928,120.89 |
| Officeexpenses | 6,285,406.47 | 5,617,713.76 |
Page
| Item | Amountincurrentperiod | Amountinpriorperiod |
| Travelexpenses | 8,415,884.60 | 4,533,814.79 |
| Entertainmentexpenses | 4,581,476.42 | 3,081,324.66 |
| Others | 7,287,113.11 | 11,761,893.82 |
| Total | 924,009,179.32 | 931,832,830.40 |
Note39.Administrativeexpenses
| Item | Amountincurrentperiod | Amountinpriorperiod |
| Salary | 159,074,391.51 | 169,831,180.19 |
| Depreciationandamortization | 23,462,090.05 | 23,584,581.61 |
| Travelexpenses | 4,773,457.90 | 1,651,207.39 |
| Officeexpenses | 3,174,249.82 | 3,967,189.58 |
| Agentsfees | 1,917,258.68 | 1,764,355.96 |
| Rentalandutilities | 1,359,636.27 | 941,300.03 |
| Entertainmentexpenses | 1,368,967.18 | 764,414.05 |
| Vehicleandtransportationexpenses | 1,884,805.22 | 1,528,304.66 |
| Telecommunicationexpenses | 368,370.99 | 825,712.63 |
| Others | 7,976,049.62 | 14,156,262.42 |
| Total | 205,359,277.24 | 219,014,508.52 |
Note40.R&Dexpenses
| Item | Amountincurrentperiod | Amountinpriorperiod |
| Salary | 43,658,293.35 | 47,534,889.46 |
| Sampleandmaterialexpenses | 2,219,443.20 | 1,964,204.63 |
| Moldingexpenses | 2,263.43 | 853,056.11 |
| Depreciationandamortization | 4,300,190.56 | 4,852,325.18 |
| Technicalcooperationfee | 2,758,347.16 | 217,203.80 |
| Others | 4,863,706.38 | 5,666,906.43 |
| Total | 57,802,244.08 | 61,088,585.61 |
Note41.Financialexpenses
| Item | Amountincurrentperiod | Amountinpriorperiod |
| Interestexpenses | 12,824,222.06 | 16,846,749.14 |
| Less:Interestincome | 5,722,586.39 | 3,923,999.48 |
| Exchangegainorlosses | 1,879,443.15 | -3,053,760.78 |
| Bankcharges | 12,488,693.95 | 11,319,753.23 |
| Total | 21,469,772.77 | 21,188,742.11 |
Note42.Otherincome
Page
1．Details
| Sourcesofotherincome | Amountincurrentperiod | Amountinpriorperiod |
| Governmentsubsidy | 9,105,016.49 | 18,648,210.06 |
| CommissiononIITpayment | 494,598.35 | |
| VATpluscredit | 1,835,758.94 | |
| Total | 11,435,373.78 | 18,648,210.06 |
2．GovernmentsubsidyincludedinotherincomeTheCompany'sgovernmentsubsidyaredetailedinNoteVIIIGovernmentsubsidy.2forgovernmentsubsidyrecognizedinprofitorloss.
Note43.Investmentgain
| Item | Amountincurrentperiod | Amountinpriorperiod |
| Gainfromlong-termequityinvestmentsaccountedforusingequitymethod | -5,819,479.60 | 3,026,481.59 |
| Total | -5,819,479.60 | 3,026,481.59 |
Note44.Creditimpairmentloss
| Item | Amountincurrentperiod | Amountinpriorperiod |
| Baddebtloss | 6,827,575.82 | 4,845,379.45 |
| Total | 6,827,575.82 | 4,845,379.45 |
Note45.Assetimpairmentloss
| Item | Amountincurrentperiod | Amountinpriorperiod |
| Inventorydeclineinvalue | 571,980.37 | -37,625,482.96 |
| Total | 571,980.37 | -37,625,482.96 |
Note46.Gainsfromassetsdisposal
| Item | Amountincurrentperiod | Amountinpriorperiod |
| Gains(losses)fromassetsdisposal | 527,753.57 | -203,932.45 |
| Gains(losses)fromright-of-useassetsdisposal | 158,115.00 | 295,857.51 |
| Total | 685,868.57 | 91,925.06 |
Note47.Non-operatingincome
| Item | Amountincurrentperiod | Amountinpriorperiod | Amountincludedinnon-recurringgainsorlossesincurrentperiod |
| Payablescannotbepaid | 1,346,926.73 | 305,066.79 | 1,346,926.73 |
| Compensation | 2,215,389.10 | 860,904.01 | 2,215,389.10 |
| Revenuesfromrights-basedcompensation | 938,486.50 | 938,486.50 |
Page
| Others | 269,704.47 | 121,231.28 | 269,704.47 |
| Total | 4,770,506.80 | 1,287,202.08 | 4,770,506.80 |
Note48.Non-operatingexpense
| Item | Amountincurrentperiod | Amountinpriorperiod | Amountincludedinnon-recurringgainsorlossesincurrentperiod |
| Donation | 311,464.98 | 78,860.00 | 311,464.98 |
| Fineandpenaltyforlatepayment | 6,014.28 | 403,084.07 | 6,014.28 |
| Paymentforbreachofagreement | 37,725.30 | 1,412,548.66 | 37,725.30 |
| Others | 504,565.54 | 456,773.58 | 504,565.54 |
| Total | 859,770.10 | 2,351,266.31 | 859,770.10 |
Note49.CITexpenses1．Details
| Item | Amountincurrentperiod | Amountinpriorperiod |
| Currenttaxexpensefortheyearbasedontaxlawandregulations | 88,559,245.72 | 86,356,685.06 |
| Changesindeferredtaxassets/liabilities | 15,266,916.22 | -13,916,465.05 |
| Total | 103,826,161.94 | 72,440,220.01 |
2．Reconciliationbetweenincometaxexpensesandaccountingprofitisasfollows:
| Item | Amountincurrentperiod |
| Profitsbeforetax | 437,004,264.31 |
| Incometaxcalculatedbasedonstatutorytaxrate | 109,251,066.08 |
| Effectofdifferenttaxratesappliedbysubsidiaries | -10,206,789.27 |
| Adjustmenttoincometaxofpreviousyears | 6,187,582.94 |
| Effectofnon-taxableincome | 1,454,869.90 |
| Effectofnon-deductiblecosts,expensesandlosses | 781,125.37 |
| Effectofusingthedeductibletemporarydifferencesordeductiblelossesforwhichnodeferredtaxassetwasrecognizedinpriorperiod | -337,571.86 |
| Effectofdeductibletemporarydifferencesordeductiblelossesforwhichnodeferredtaxassetwasrecognizedthisyear | |
| Effectofresearchanddevelopmentexpensessuperdeduction | -4,769,518.22 |
| Others | 1,465,397.00 |
| Incometaxexpenses | 103,826,161.94 |
Note50.Notestocashflowstatement
1.Cashreceivedfromotheroperatingactivities
| Item | Amountincurrentperiod | Amountinpriorperiod |
| Securitydeposit | 7,550,296.24 | 15,956,047.24 |
Page
| Item | Amountincurrentperiod | Amountinpriorperiod |
| Governmentsubsidy | 8,796,670.12 | 18,151,302.96 |
| Promotionexpenses | 12,561,700.18 | 12,201,925.26 |
| Interestincome | 5,722,586.39 | 3,923,999.48 |
| Returnofpettycash | 7,787,782.02 | 8,030,966.63 |
| Others | 25,760,176.26 | 21,392,611.71 |
| Total | 68,179,211.21 | 79,656,853.28 |
2.Cashpaidforotheroperatingactivities
| Item | Amountincurrentperiod | Amountinpriorperiod |
| Securitydeposit | 11,191,285.76 | 24,008,323.15 |
| Pettycashadvancedtoemployee | 22,048,433.11 | 11,049,894.11 |
| Currentperiodexpenses | 293,728,229.26 | 288,360,173.00 |
| Others | 60,670,140.56 | 617,269.28 |
| Total | 387,638,088.69 | 324,035,659.54 |
3.Cashpaidforotherfinancingactivities
| Item | Amountincurrentperiod | Amountinpriorperiod |
| Leasepayment | 114,908,744.94 | 124,087,402.37 |
| Cashpaidforre-purchaseofshares | 83,148,230.83 | 53,390,338.09 |
| Total | 198,056,975.77 | 177,477,740.46 |
Note51.Supplementinformationtocashflowstatement
1.Supplementtocashflowstatement
| Item | Amountincurrentperiod | Amountinpriorperiod |
| 1.Reconciliationofnetprofit/losstocashflowsfromoperatingactivities： | ||
| Netprofit | 333,178,102.37 | 266,681,451.84 |
| Add:Creditimpairmentloss | -6,827,575.82 | -4,845,379.45 |
| Impairmentforassets | -571,980.37 | 37,625,482.96 |
| Depreciationoffixedassets、oilandgasassetsandproductivebiologicalassets | 41,658,377.46 | 40,524,642.37 |
| Depreciationofright-of-useassets | 103,958,386.94 | 110,464,700.15 |
| Intangibleassetamortization | 3,689,183.21 | 5,009,348.81 |
| Amortizationoflong-termdeferredexpenses | 91,039,489.52 | 110,435,014.09 |
| Lossondisposaloffixedassets,intangibleassets,andotherlong-termassets(“-“forgain) | -685,868.57 | -91,925.06 |
| Lossonscrapoffixedassets(“-“forgain) | ||
| Lossonchangesoffairvalue(“-“forgain) |
Page
| Item | Amountincurrentperiod | Amountinpriorperiod |
| Financialexpenses(“-“forincome) | 10,346,099.61 | 16,846,749.14 |
| Investmentloss(“-“forgain) | 5,819,479.60 | -3,026,481.59 |
| Decreaseindeferredtaxassets(“-“forincrease) | 15,556,840.48 | -14,551,337.29 |
| Increaseindeferredtaxliabilities(“-“fordecrease) | -289,924.26 | 262,330.92 |
| Decreaseininventories(“-“forincrease) | 82,605,123.05 | -92,627,165.17 |
| Decreaseinoperatingreceivables(“-“forincrease) | 34,507,754.85 | 121,164,749.65 |
| Increaseinoperatingpayables(“-“fordecrease) | -77,781,831.49 | -117,643,404.85 |
| Others | -3,800,168.60 | |
| Netcashflowsfromoperatingactivities | 632,401,487.98 | 476,228,776.52 |
| 2.Significantinvestmentorfinancingactivitiesnotinvolvingcash: | ||
| Debtsconvertedtocapital | ||
| Convertibledebtsmaturewithinoneyear | ||
| Addedright-of-useassetsinthecurrentperiod | ||
| 3．Netchangesincashandcashequivalents: | ||
| Cashatendofyear | 504,629,153.71 | 313,738,389.64 |
| Less:cashatbeginningofyear | 313,738,389.64 | 210,254,737.14 |
| Plus:cashequivalentsatendofyear | ||
| Less:cashequivalentsatbeginningofyear | ||
| Netincreaseincashandcashequivalents | 190,890,764.07 | 103,483,652.50 |
2.TotalcashoutflowsrelatedtoleaseTotalcashoutflowsrelatedtoleaseamountedtoRMB114,908,744.94.（Priorperiod：
RMB124,087,402.37）
3.Cashandcashequivalents
| Item | Closingbalance | Openingbalance |
| I.Cash | 504,629,153.71 | 313,738,389.64 |
| Incl.Cashonhand | 178,996.87 | 173,368.68 |
| Bankdepositavailableforimmediatepayment | 503,187,176.88 | 312,433,893.29 |
| Othermonetaryfundsavailableforimmediatepayment | 1,262,979.96 | 1,131,127.67 |
| II.Cashequivalents | ||
| IncludingBondinvestmentdueinthreemonths | ||
| III.Cashandcashequivalentsattheendofyear | 504,629,153.71 | 313,738,389.64 |
| IncludingRestrictedcashandcashequivalentsforthe | 1,202,601.86 | 716,733.44 |
Page
| Item | Closingbalance | Openingbalance |
| Companyanditssubsidiaries |
4.Restrictedusebutstillpresentedascashandcashequivalents
| Item | Amountfortheperiod | rationale |
| Cashatbank | 1,202,601.86 | FundsintheaccountsoftheCompany'ssubsidiary,FIYTA（HongKong）Ltd,anditsgrandson,MontresChourietSA,whicharekeptoutsidethecountryandaresubjecttorestrictionsonrepatriationoffunds,butdonotaffecttheirdailyuse. |
Note52.Monetaryitemsdenominatedinforeigncurrency
1．Monetaryitemsdenominatedinforeigncurrency
| Item | Balancedenominatedinforeigncurrencyasat31Dec2023 | Exchangerate | BalancetranslatedinRMBasat31Dec2023 |
| Monetaryfund | 4,912,660.52 | ||
| USD | 197,793.98 | 7.0827 | 1,400,915.42 |
| EUR | 109,603.02 | 7.8592 | 861,392.06 |
| HKD | 1,594,744.82 | 0.9062 | 1,445,189.46 |
| CHF | 143,158.27 | 8.4184 | 1,205,163.58 |
| Accountsreceivable | 7,180,426.44 | ||
| USD | 496,860.67 | 7.0827 | 3,519,115.06 |
| HKD | 3,737,843.78 | 0.9062 | 3,387,308.79 |
| EUR | 4,824.46 | 7.8592 | 37,916.39 |
| CHF | 28,044.07 | 8.4184 | 236,086.20 |
| Otherreceivables | 243,119.93 | ||
| HKD | 119,645.92 | 0.9062 | 108,425.53 |
| CHF | 16,000.00 | 8.4184 | 134,694.40 |
| Accountspayable | 8,936,497.51 | ||
| HKD | 552,191.52 | 0.9062 | 500,407.00 |
| CHF | 1,002,101.41 | 8.4184 | 8,436,090.51 |
| Otherpayables | 810,006.84 | ||
| HKD | 585,023.91 | 0.9062 | 530,160.37 |
| CHF | 33,242.24 | 8.4184 | 279,846.47 |
2．Overseasoperationalentity
Formainbusinesslocationandrecordingcurrencyofimportantoverseasoperatingentities,refertoNoteIII.5.
Page
Note53.TenancyTheCompanyasalessor:
TheCompany'sright-of-useassets,leaseliabilitiesandtotalcashoutflowsrelatedtoleasesaredetailedinNote12,Note27andNote51.TheCompany,asalessee,isrecognizedinprofitorlossasfollows:
| Item | Amountincurrentperiod | Amountinpriorperiod |
| Interestonleaseliabilities | 4,583,361.68 | 8,442,125.35 |
| Short-termrentalcosts | 784,401.29 | 407,454.71 |
| Leasecostsforlow-valueassets | ||
| Variableleasepaymentsnotincludedinthemeasurementoftheleaseliability | 85,741,239.56 | 85,618,040.29 |
| Incomefromsubleaseofright-to-useassets | ||
| Saleandleasebacktransactions |
AdditionalinformationontheCompanyaslesseeissetforthbelow:
1.Leaseactivities
AllleaseoftheCompanyispropertylease,includingshort-termleaseandotherleasedthatrecognizedright-of-useassetandleaseliabilities.
2.Short-termlease
Short-termleasesaretreatedusingsimplifiedmethod.Short-termleasesincludeleasetermthatisshorterthan12monthandnorenewoptionsattached,andleasesthatwillbematuredin12monthafterfirstadoptionofCAS21–Lease.Short-termleaseexpenseschargedtoprofitorlosswasRMB784,401.29.
3.Futurepotentialcashoutflowsthatdoesnotincludedinleaseliabilities
(1)Variableleasepayment
Thelesseeleasedalotofretailshopswhichcontainsvariableleasepaymenttermsinconnectionwithsales.
ManyoftheCompany’spropertyleasecontainvariableleasepaymenttermsinconnectionwithsales.Inmostcircumstances,theCompanyusesthesetermstomatchesleasepaymenttoshopsthatcangeneratemorecashflowsleasepayment.Forstandaloneshops,variablecanreach100%ofallleasepaymentatmostandthatthescopeofpercentageofsalesusedisquitelarge.Insomecircumstances,variablepaymenttermsincludeannualbottompaymentandupperlimit.
In2023,thevariableleasepaymentincludedinthecurrentprofitandlossisRMB85,741,239.56.
(2)Optiontorenew
Page
ManyleasecontractsenteredbytheCompanyhasoptiontorenew.TheCompanyhasalreadyestimatedtheoptiontorenewreasonablywhendeterminingleasetermsinmeasuringleaseliabilities.
(1)Optiontodiscontinuelease
SomeoftheleasecontractenteredbytheCompanyhasoptiontodiscontinue.TheCompanyhasalreadyestimatedtheoptiontodiscontinuereasonablywhendeterminingleasetermsinmeasuringleaseliabilities.
(2)Residualvalueguarantee
TheCompany’sleasedoesnotinvolveresidualvalueguarantee.
(3)Leasethatthelesseehasalreadymadecommitmentbutnotyetstarted
TheCompanydoesnothaveleasethathasalreadymadecommitmentbutnotyetstarted.
Disclosureasalessor:
1.Informationrelatingtooperatingleases
Gainsrelatedtooperatingleasesareshownbelow:
| Item | Rentalincome | Including:notrecognizedinleasereceiptsIncomerelatingtovariableleasepayments |
| Property | 150,425,106.18 | |
| Total | 150,425,106.18 |
2.Riskmanagementstrategyofretainingrightsoverleaseassets
Toreducerisksoflease,theCompanynormallyaskslesseetopayrentalinadvanceandcollects1-3monthsrentalasdeposit.
VI.Researchanddevelopmentexpenditures
1.Presentationbynatureofcosts
| Item | Amountincurrentperiod | Amountinpriorperiod |
| Salary | 43,658,293.35 | 47,534,889.46 |
| Sampleandmaterialexpenses | 2,219,443.20 | 1,964,204.63 |
| Moldingexpenses | 2,263.43 | 853,056.11 |
| Depreciationandamortization | 4,300,190.56 | 4,852,325.18 |
| Technicalcooperationfee | 2,758,347.16 | 217,203.80 |
| Others | 4,863,706.38 | 5,666,906.43 |
| Total | 57,802,244.08 | 61,088,585.61 |
Page
2.DevelopmentexpenditureonR&DprojectseligibleforcapitalizationNil.VII.Interestsinotherentities
1.Equityinsubsidiary
(1)Compositionofenterprisegroup
| Name | Placeofoperation | Placeofregistration | Natureofbusiness | Shareholdingratio(%) | Waysacquired | |
| Direct | Indirect | |||||
| ShenzhenHarmonyWorldWatchCenterCo.,Ltd. | Shenzhen | Shenzhen | Commerce | 100.00 | incorporatedorinvestment | |
| FIYTASalesCo.,Ltd. | Shenzhen | Shenzhen | Commerce | 100.00 | incorporatedorinvestment | |
| ShenzhenFIYTAPrecisionTechnologyCo.,Ltd. | Shenzhen | Shenzhen | Manufacturing | 99.00 | 1.00 | incorporatedorinvestment |
| ShenzhenFIYTATechnologyDevelopmentCo.,Ltd. | Shenzhen | Shenzhen | Manufacturing | 100.00 | incorporatedorinvestment | |
| HarmonyWorldWatchCenter(Hainan)Co.,Ltd. | Sanya | Sanya | Commerce | 100.00 | incorporatedorinvestment | |
| ShenzhenXunhangPrecisionTechnologyCo.,Ltd. | Shenzhen | Shenzhen | Manufacturing | 100.00 | incorporatedorinvestment | |
| EmileChoureitTiming(Shenzhen)Ltd. | Shenzhen | Shenzhen | Commerce | 100.00 | incorporatedorinvestment | |
| LiaoningHengdaruiCommercial&TradeCo.,Ltd. | Shenyang | Shenyang | Commerce | 100.00 | Businesscombinationundercommoncontrol | |
| TEMPORAL(Shenzhen)Co.,Ltd. | Shenzhen | Shenzhen | Commerce | 100.00 | incorporatedorinvestment | |
| ShenzhenHarmonyE-commerceCo.,Ltd. | Shenzhen | Shenzhen | Commerce | 100.00 | incorporatedorinvestment | |
| FIYTA(HongKong)Ltd. | HongKong | HongKong | Commerce | 100.00 | incorporatedorinvestment | |
| MontresChourietSA | Swiss | Swiss | Manufacturing | 100.00 | Businesscombinationnotundercommoncontrol | |
2.Equityinjointarrangementorassociates
(1)Significantassociates
| Name | Placeofoperation | Placeofregistration | Natureofbusiness | Shareholdingratio(%) | Accountingtreatment | |
| Direct | Indirect | |||||
| ShanghaiWatchCo.,Ltd. | Shanghai | Shanghai | Commercial | 25% | Equitymethod | |
(2)Principalfinancialinformationofsignificantassociatecompany
Page
| Item | Closingbalance/Amountincurrentperiod | Openingbalance/Amountinpriorperiod |
| Currentassets | 165,796,119.65 | 175,890,077.66 |
| Non-currentassets | 16,753,785.07 | 21,637,323.67 |
| Totalassets | 182,549,904.72 | 197,527,401.33 |
| Currentliabilities | 60,781,571.60 | 44,595,566.75 |
| Non-currentliabilities | 5,885,583.05 | |
| Totalliabilities | 60,781,571.60 | 50,481,149.80 |
| Non-controllinginterest | ||
| Equityattributabletoparentcompany | 121,768,333.12 | 147,046,251.53 |
| Portionofnetassetcalculatedbasedonshareholding | 30,442,083.28 | 36,761,562.88 |
| Adjustmentmatters | 21,420,524.02 | 21,420,524.02 |
| -Goodwill | 21,420,524.02 | 21,420,524.02 |
| -Unrealizedprofitorlossesfrominternaltransaction | ||
| -Others | ||
| Carryingvalueofinvestmenttoassociates | 51,862,607.30 | 58,182,086.90 |
| Fairvalueofequityinvestmentthathaspublicquotation | ||
| Operatingincome | 110,947,629.04 | 141,379,376.32 |
| Netprofit | -23,277,918.41 | 12,105,926.36 |
| Netprofitfromdiscontinuedoperation | ||
| Othercomprehensiveincome | ||
| Totalcomprehensiveincome | -23,277,918.41 | 12,105,926.36 |
| Dividendsreceivedfromassociatedcompanyduringtheyear | 500,000.00 |
VIII.Governmentsubsidy1．Liabilityitemsinvolvinggovernmentgrants
| Item | Openingbalance | Addition | Includeinnon-operatingincomeincurrentperiod | Includeinothergainsincurrentperiod | Offsettingexpenseorcost | Closingbalance | Relatedtoasset/income |
| SpecialfundforShenzhenindustrialdesignindustrydevelopment | 314,539.36 | 4,882.52 | 309,656.84 | Assetrelated | |||
| FundingprojectforconstructionofNationalEnterpriseTechnologyCenter | 338,833.33 | 293,147.06 | 45,686.27 | Assetrelated |
Page
| ProvincialSpecializedFundforIndustrialandInformation | 642,554.11 | 45,111.53 | 597,442.58 | Assetrelated | ||
| Total | 1,295,926.80 | 343,141.11 | 952,785.69 |
2．Governmentsubsidyrecognizedinprofitorloss
| Item | Amountincurrentperiod | Amountinpriorperiod | Assetorincomerelated |
| Subsidytopromoteconsumption | 7,920,500.00 | Incomerelated | |
| TradeandDistributionIndustryFundingProjects | 2,579,700.00 | Incomerelated | |
| QualityandBrandingPromotionMultiplicationSubsidy | 1,180,000.00 | Incomerelated | |
| ReliefPolicySubsidy | 1,058,150.00 | Incomerelated | |
| ShenzhenSpecialFundforTechnologyResearch | 1,000,000.00 | 1,000,000.00 | Incomerelated |
| Trainingsubsidy | 4,900.00 | 953,220.00 | Incomerelated |
| Subsidyforstabilizingjobposition | 824,116.60 | 819,833.38 | Incomerelated |
| SubsidytoFosterHighandNewTechnologyEnterprise | 220,000.00 | 700,000.00 | Incomerelated |
| CommissiononIITpayment | 730,811.84 | Incomerelated | |
| Othersubsidies | 104,887.83 | 624,893.74 | Incomerelated |
| ShenzhenStandardSpecialFund | 660,468.00 | 550,694.00 | Incomerelated |
| ShenzhenE-commerceInnovationandDevelopmentSupportProgramSubsidy | 330,000.00 | Incomerelated | |
| Professional,Specialize,UniqueandNew"SMEDevelopmentSubsidy | 200,000.00 | Incomerelated | |
| StatecertifiedR&Dcenter | 293,147.06 | 293,147.06 | Assetrelated |
| Provincialindustryandinformationspecialsubsidy | 45,111.53 | 128,176.25 | Assetrelated |
| SpecialfundforShenzhenindustrialdesigning | 4,882.52 | 75,583.79 | Assetrelated |
| 2019HeadquartersEconomicContributionAward | -496,500.00 | Incomerelated | |
| 2022SecondHalfofNanshanDistrictIndustryandInformationTechnologyBureauBusinessStableGrowthSpecialFundingProjectGrant | 1,251,400.00 | Incomerelated | |
| IndustrialInsuranceFund | 17,566.00 | Incomerelated | |
| 2023TechnologyInnovationProjectSupportProgramandManufacturingIndividualChampionIncentive | 1,000,000.00 | Incomerelated | |
| Subsidytoassisthighqualitydevelopmentoffashionindustry | 900,188.00 | Incomerelated | |
| SpecialFundsforCivil-MilitaryIntegrationandFundsfortheFifthProjectGrantScheme | 200,000.00 | Incomerelated | |
| SpecializedEconomicDevelopmentFundingGrants | 100,000.00 | Incomerelated | |
| High-techEnterpriseRecognitionRewardSubsidy | 100,000.00 | Incomerelated |
Page
| SubsidiesforProductionExpansionandEfficiencyIncentivesintheThirdQuarterofBureauofIndustryandInformationTechnology | 70,000.00 | Incomerelated | |
| Epidemicsubsidies | 12,000.00 | Incomerelated | |
| Employmentsubsidies | 5,382.00 | Incomerelated | |
| Incentivesubsidyforemployersofpersonswithdisabilities | 14,920.77 | Incomerelated | |
| SpecializedfundinginthefieldofShenzhenstandards | 130,468.00 | Incomerelated | |
| Ventilatorandkeycomponentsresearchandapplicationproject | 868,178.18 | Incomerelated | |
| VATreliefforkeygroups | 179,400.00 | Incomerelated | |
| Fundingfortechnologicalimprovements | 350,000.00 | Incomerelated | |
| Keyprojectsfortechnologydevelopment | 250,000.00 | Incomerelated | |
| MinistryofIndustryandInformationTechnology-Jointsecurityprojects | 300,000.00 | Incomerelated | |
| IncentivepaymentsfromtheBureauofScience,TechnologyandIndustrytoencouragethestandardizationandupgradingofmicroandsmallenterprisestoabove-scaleenterprises | 200,000.00 | Incomerelated | |
| Governmentsubsidiesfor《E-CommerceMasters》 | -2,000.00 | Incomerelated | |
| Total | 9,105,016.49 | 18,648,210.06 |
3．Subsidyreturned
| Item | Type | Amountincurrentperiod | Amountinpriorperiod | Reasonsforreturn |
| Refundofgovernmentsubsidiesfor《E-CommerceMasters》 | Incomerelated | 2,000.00 | Notqualified | |
| Total | 2,000.00 |
IX.RiskdisclosurerelatedtofinancialinstrumentThemajorfinancialinstrumentsoftheCompanyprimarilyincludecashatbankandonhand,equityinvestments,borrowings,accountsreceivable,accountspayablesandbondpayables.TheCompanyisexposedtorisksfromvariousfinancialinstrumentsinday-to-dayoperation,mainlyincludingcreditrisk,liquidityriskandmarketrisk.TherisksinconnectionwithsuchfinancialinstrumentsandtheriskmanagementpoliciesadoptedbytheCompanytomitigatesuchrisksaresummarizedasfollows:
TheboardofdirectorsisresponsibleforplanningandestablishingtheriskmanagementstructurefortheCompany,developingriskmanagementpoliciesandtherelatedguidelinesacrosstheCompany,andsupervisingtheperformanceofriskmanagementmeasures.TheCompanyhasdevelopedriskmanagementpoliciestoidentifyandanalyserisksexposedbytheCompany.These
Page
riskmanagementpolicieshaveclearregulationsoverspecificrisks,coveringvariousaspectsofmarketrisk,creditriskandliquidityriskmanagement.TheCompanywillevaluatethemarketenvironmentandchangesoftheCompany’soperatingactivitiesonaregularbasistodecidewhethertoupdatetheriskmanagementpoliciesandsystems.RiskmanagementoftheCompanyiscarriedoutbytheRiskManagementCommitteebasedonthepoliciesasapprovedbytheboardofdirectors.RiskManagementCommitteeidentifies,evaluatesandmitigatesrelatedrisksbyworkingcloselywithotherbusinessdivisionsoftheCompany.InternalAuditDepartmentoftheCompanywillreviewtheriskmanagementcontrolandprocessregularly,andsubmitthereviewresultstoAuditCommitteeoftheCompany.TheCompanyspreadstherisksoffinancialinstrumentsthroughappropriatediversifiedinvestmentandbusinessportfolio,andmitigatestheriskoffocusingonanysingleindustry,specificregionsorcounterpartiesbywayofformulatingthecorrespondingpoliciesforriskmanagement.
1.CreditriskCreditriskreferstotheriskoffinanciallossestotheCompanyasaresultofthefailureofperformanceofcontractualobligationsbythecounterparties.Themanagementhasdevelopedpropercreditpoliciesandcontinuouslymonitorscreditriskexposures.
TheCompanyhasadoptedthepolicyoftransactingwithcreditworthycounterpartiesonly.Inaddition,theCompanyevaluatesthecreditqualificationofcustomersandsetsupcorrespondingcredittermbasedonthefinancialstatusofcustomers,thepossibilityofobtainingguaranteesfromthirdparties,creditrecordsandotherfactorssuchascurrentmarketconditions.TheCompanymonitorsthebalancesandrecoveryofbillsandaccountsreceivable,andcontractassetsonacontinualbasis.Asforbadcreditcustomers,theCompanywillusethewrittenreminders,shortenthecredittermorcancelthecredittermtoensurethattheCompanyisfreefrommaterialcreditlosses.Inaddition,theCompanyreviewstherecoveryoffinancialassetsoneachbalancesheetdatetoensureadequateexpectedcreditlossprovisionismadeforrelevantfinancialassets.
TheCompany’sotherfinancialassetsincludecurrencyfundsandotherreceivables.Thecreditriskrelatingtothesefinancialassetsarisesfromthedefaultofcounterparties,butthemaximumexposuretocreditriskisthecarryingamountofeachfinancialassetinthebalancesheet.TheCompanydoesnotprovideanyotherguaranteethatmayexposetheCompanytocreditrisk.
ThemonetaryfundsheldbytheCompanyaremainlydepositedwithfinancialinstitutionssuchasstate-ownedbanksandotherlargeandmedium-sizedcommercialbanks.Themanagementbelievesthatthesecommercialbankshaveahigherreputationandassets,sothereisnomajorcreditriskandtheCompanywouldnothaveanysignificantlossescausedbythedefaultbytheseinstitutions.TheCompany’spolicyistocontroltheamountdepositedwiththesefamousfinancialinstitutionsbasedontheirmarketreputation,operatingsizeandfinancialbackground,tolimitthe
Page
creditriskamountofanysinglefinancialinstitution.Asapartofitscreditriskassetmanagement,theCompanyassessesthecreditlossofreceivablesusingaging.TheCompany’sreceivableandotherreceivablesinvolvelargeamountofcustomers.Aginginformationcanreflecttheabilitytorepayandriskofbaddebtofthesecustomers.TheCompanydeterminedexpectedlossratebycalculatinghistoricalbaddebtrateforreceivableswithdifferentagingbasedonhistoricaldataandalsotakingforecastoffutureeconomicconditionintoconsiderationsuchasGDPgrowthrate,statecurrencypolicyetc...Forlong-termreceivables,theCompanyassessesexpectedcreditlossreasonablybyconsideringsettlementperiod,contractedpaymentterms,debtor’sfinancialsituationandtheeconomicsituationofthedebtor’sindustry.
Asat31December2023,thecarryingamountofrelatedassetsandcorrespondingECLisasfollows:
| Aging | Carryingamount | Provision |
| Billreceivable | 18,685,052.55 | 416,080.18 |
| Accountsreceivable | 357,533,748.10 | 34,390,986.46 |
| Otherreceivable | 62,073,902.09 | 4,348,110.09 |
| Total | 438,292,702.74 | 39,155,176.73 |
AstheCompany’scustomerbaseislarge,nomaterialcreditconcentrationrisk.
Asat31December2023,thebalanceoftop5receivableaccountsaccountedfor21.42%oftotalaccountsreceivables(2022:32.76%).
2.Liquidityrisk
Liquidityriskreferstotheriskofshortoffundswhenthecompanyperformsitsobligationofcashpaymentorsettlementbyotherfinancialassets.TheCompany’ssubordinatemembercompaniesareresponsiblefortheirrespectivecashflowprojections.Basedontheresultsthereof,thesubordinatefinancialmanagementdepartmentcontinuallymonitorsitsshort-termandlong-termcapitalneedsatthecompanyleveltoensureadequatecashreserves;inthemeantime,continuallymonitorsthecompliancewithloanagreementsandsecuresundertakingsforsufficientreservefundsfrommajorfinancialinstitutions,toaddressitsshort-termandlong-termcapitalneeds.Besides,theCompanymainlysignsfinancingagreementswithbanksthathavebusinesstransactionstoprovidesupporttofulfillcommercialbillobligation.Asat31December2023,theCompanyhasfinancingfacilitiesfromseveralbanksamountingtoRMB2,375.95million.Amongst,RMB375.95millionhasalreadybeenused.
Asat31December2023,thediscountedcontractualcashflowsforfinancialliabilitiesandoff-balancesheetguaranteethatpresentedinmaturityareasfollows:
| Item | Closingbalanceintenthousandsyuan | ||||
| Within1year | 1-2years | 2-3years | Over3years | Total | |
Page
| Item | Closingbalanceintenthousandsyuan | ||||
| Within1year | 1-2years | 2-3years | Over3years | Total | |
| Shorttermloan | 25,018.78 | ||||
| Billspayable | |||||
| Accountspayable | 17,382.59 | ||||
| Otherpayables | 12,193.78 | ||||
| Total | 54,595.15 | ||||
3.Marketrisk
(1)ExchangerateriskExceptthattheCompany’ssubsidiaryinHongKongusesHKDassettlementcurrencyandsub-subsidiaryinSwissusedCHFassettlementcurrency,theprincipalplacesofoperationsoftheCompanyarelocatedinChinaandthemajorbusinessesaresettledinRMB.However,theCompany’srecognizedforeigncurrencyassetsandliabilitiesaswellastheforeigncurrencytransactionsinthefuture(thefunctionalcurrenciesofforeignassetsandliabilitiesaswellasthetransactionsaremainlyHKDandCHF)remainexposedtoexchangeraterisk
Asat31December2023,theRMBequivalentoffinancialassetsandfinancialliabilitiesdenominatedinforeigncurrenciesareasfollows:
| Item | Closingbalance | ||||
| HKD | USD | EUR | CHF | Total | |
| Financialassetdenominatedinforeigncurrency: | 0.9062 | 7.0827 | 7.8592 | 8.4184 | |
| Monetaryfund | 1,445,189.46 | 1,400,915.42 | 861,392.06 | 1,205,163.58 | 4,912,660.52 |
| Accountsreceivable | 3,387,308.79 | 3,519,115.06 | 37,916.39 | 236,086.20 | 7,180,426.44 |
| Otherreceivables | 108,425.53 | 134,694.40 | 243,119.93 | ||
| Subtotal | 4,940,923.78 | 4,920,030.48 | 899,308.45 | 1,575,944.18 | 12,336,206.89 |
| Financialliabilitiesdenominatedinforeigncurrency: | |||||
| Accountspayables | 500,407.00 | 8,436,090.51 | 8,936,497.51 | ||
| Otherpayables | 530,160.37 | 279,846.47 | 810,006.84 | ||
| Total | 1,030,567.37 | 8,715,936.98 | 9,746,504.35 | ||
Sensitivityanalysis
Asat31December2023,forfinancialassetsandfinancialliabilitiesthatdenominatedinforeigncurrency,ifRenminbiappreciateordepreciateof5%toforeigncurrencyandotherfactorsremain
Page
unchanged,thenetprofitwilldecreaseorincreaseaboutRMB0.130million(31Dec2022:RMB1.419million).
(2)InterestrateriskTheinterestrateriskoftheCompanymainlyassociateswithbankborrowings,bondspayable,etc.FloatingratefinancialliabilitiesexposetheCompanytocash-flowinterestraterisk,whilefixedratefinancialliabilitiesexposetheCompanytofair-valueinterestraterisk.TheCompanydeterminesthecomparativeproportionoffixedratecontractsandfloatingratecontractsbasedonthethenmarketconditions.
TheinterestrateriskoftheCompanymainlyassociateswithbankborrowings,bondspayable,etc.FloatingratefinancialliabilitiesexposetheCompanytocash-flowinterestraterisk,whilefixedratefinancialliabilitiesexposetheCompanytofair-valueinterestraterisk.TheCompanydeterminesthecomparativeproportionoffixedratecontractsandfloatingratecontractsbasedonthelatestmarketconditions.
Sensitivityanalysis:
Asat31December2023,itisestimatedthatageneralincreaseordecrease50basispointsintheborrowingswithfloatinginterestrates,withallothervariablesheldconstant,theCompany’snetprofitandshareholder’sequityfortheyearwilldecreaseorincreasebyapproximatelyRMB307,300.00(2022:RMB1,200,000.00).
Theabovesensitivityanalysisassumesthatinterestratechangedonthebalancesheetdateandapplicabletoallloanswithfloatinginterestrateterms.
X.Fairvalue
1.Financialinstrumentsmeasuredatfairvalue
Asat31December2023,theCompanydoesnothavefinancialinstrumentsmeasuredatfairvalue.
2.Statusoffinancialassetsandfinancialliabilitiesnotmeasuredatfairvalue
Financialassetsandfinancialliabilitiesnotmeasuredatfairvalueinclude:accountsreceivable,short-termloans,accountspayable,long-termloansduewithinoneyear,andequityinstrumentinvestmentthatdoesnothavepublicquotationinanactivemarketanditsfairvaluecannotbemeasuredreliably.
Thedifferencebetweenfairvalueandcarryingamountoftheabovefinancialassetsandliabilitiesthatnotmeasuredatfairvalueisinsignificant.
XI.Relatedpartyandrelatedtransaction
1.TheparentcompanyoftheCompany
Page
| Name | Registrationplace | Typeofbusiness | Registeredcapital(intenthousandRMB) | ShareholdingratioofparentcompanytotheCompany% | RatioofvoterightofparentcompanytotheCompany% |
| CATICShenzhen | Shenzhen | Commercial | 116,616.20 | 39.25 | 39.25 |
(4)Notestotheparentcompany
CATICShenzhenisasubsidiarythat100.00%held,indirectly,byAVICInternational,andAVIC
directlyholds100.00%oftheequityofAVICInternational.
(5)TheultimatecontrollingpartyoftheCompanyisAVIC.
2.RefertoNoteVI.1forinformationabouttheCompany’ssubsidiaries
3.RefertoNoteVI.2forinformationabouttheCompany’smaterialassociates
4.Otherrelatedparties
| Nameofotherrelatedparties | Relationship |
| ShenzhenCATICPropertyManagementLimited(CATICPropertyManagement) | Associatecompanyofthecontrollingshareholder |
| RainbowDigitalScienceCo.,Ltd.anditsassociatedcompanies(RainbowCompany | Controlledbythesameparty |
| ShennanCircuitsCo.,Ltd.anditsassociatedcompanies(ShennanCircuits) | Controlledbythesameparty |
| AVICHuadongPhotoelectricCo.,Ltd.(AVICHuadongPhotoelectric) | Controlledbythesameparty |
| AVICXi’anFlightAutomaticControlResearchInstitute(AVICXi’anFlightInstitute) | Controlledbythesameparty |
| ShenzhenGrandSkylightHotelManagementCo.,Ltd(GrandSkylightHotelManagementCompany) | Controlledbythesameparty |
| AVICSecuritiesCo.,Ltd.(AVICSecuritiesCompany) | Controlledbythesameparty |
| AVICTrainingCenter | Controlledbythesameparty |
| AVICFinanceCo.,Ltd.(AVICFinanceCompany) | Controlledbythesameparty |
| GongqingchengCATICCultureInvestmentCo.,Ltd(GongqingchengCATICCultureInvestmentCompany) | Controlledbythesameparty |
| AvicJonhonOptronicTechnologyCo.,Ltd.(AVICJonhon) | Controlledbythesameparty |
| AVICInternationalHoldings(Zhuhai)Co.,Ltd.(AVICZhuhai) | Controlledbythesameparty |
| GuizhouHUAYANGElectronicsCo.,Ltd. | Controlledbythesameparty |
| ZhuhaiPilotCompositeMaterialTechnologyCo.,Ltd. | Controlledbythesameparty |
| GuangdongInternationalMansionIndustrialCo.,Ltd.(GuangdongInternationalMansion) | Controlledbythesameparty |
| ShenzhenZhonghangTechnologyChecking&MeasuringInstitute(ShenzhenZHTCMI) | Controlledbythesameparty |
| ShenyangXinghuaAviationElectricCo.,Ltd.（ShenyangXinghua） | Controlledbythesameparty |
| ShenzhenAVICChangtaiInvestmentDevelopmentCo.,Ltd.（AvicChangtai） | Controlledbythesameparty |
| AVICChinaAviationFuturesCo.,Ltd.（AVICFutures） | Controlledbythesameparty |
| AnhuiAVICDisplayTechnologyCo.,Ltd（AnhuiAVIC） | Controlledbythesameparty |
| ShenzhenLingzhiDigitalTechnologyCo.,Ltd.（ShenzhenLingzhiDigital | Controlledbythesameparty |
Page
| Nameofotherrelatedparties | Relationship |
| Technology） | |
| ShenzhenAero-FastenersMFGCo.,Ltd.（ShenzhenAero-Fasteners） | Controlledbythesameparty |
| Castic-SMPMachineryCorp.,Ltd.（Castic-SMPMachinery） | Controlledbythesameparty |
| Companydirectors,managers,CFO,andsecretaryoftheboard | Keymanagementmember |
5.Relatedpartytransactions
(1)Relatedtransactionbetweensubsidiariesandbetweenparentcompanyandsubsidiarieswhichareinthescopeofconsolidationhavealreadybeenoffset.
(2)Purchasegoodandreceivingservice
| Relatedparties | Relatedtransactioncontent | Amountincurrentperiod | Amountinpriorperiod |
| CATICPropertyManagement | Propertymanagement | 11,593,446.00 | 11,834,156.05 |
| RainbowCompany | Departmentstoreexpenses/Commoditypurchase | 13,276,756.38 | 4,184,883.88 |
| AVICJonhon | Purchaseofgoods | 242,771.36 | 238,755.07 |
| GongqingchengCATICCultureInvestmentCompany | Departmentalstoreexpense | 28,667.09 | 25,733.73 |
| GrandSkylightHotelManagementCompany | Purchaseofgoods | 3,855.65 | |
| GuangdongInternationalMansion | Propertymanagement | 18,157.71 | |
| ShenzhenZHTCM | Acceptlabour | 6,590.00 | |
| AVICXi’anFlightAutomaticControlResearchInstitute(AVICXi’anFlightInstitute) | Acceptlabour | 179,245.28 | |
| Total | 25,141,640.83 | 16,491,377.37 |
Notes:Allamountlistedaboveexcludetax
(3)Saleofgoodsandprovidingservices
| Relatedparty | Natureoftransaction | Amountincurrentperiod | Amountinpriorperiod |
| GongqingchengCATICCultureInvestmentCompany | Saleofproduct | 293,786.47 | 310,404.70 |
| ShennanCircuit | Saleofmaterialandprovidingservice | 460.80 | 335,070.20 |
| AVICTrainingCenter | Others | 2,725.66 | 2,453.10 |
| RainbowCompany | Productandservice | 58,044,173.59 | 53,197,052.19 |
| AVICInternational | Saleofproduct | 7,710.59 | |
| AVICJonhon | Saleofproduct | 500,559.59 | 1,252,054.56 |
| AVICZhuhai | Saleofproduct | 8,800.00 | |
| CATICPropertyManagement | ShareofUtilitiesandmanagementfee | 3,363,663.82 | 3,298,502.35 |
| GuizhouHUAYANGElectronics | Saleofproduct | 18,814.16 | 87,263.71 |
Page
| Co.,Ltd. | |||
| AVICHuadongPHOTOELECTRIC | Saleofproduct | 21,238.94 | |
| ZhuhaiPilotCompositeMaterialTechnologyCo.,Ltd. | Saleofproduct | 865,256.63 | 1,805,929.20 |
| ShenzhenAero-Fasteners | Saleofproduct | 227,747.79 | |
| Castic-SMPMachinery | Saleofproduct | 3,960.18 | |
| ShenyangXinghua | Saleofproduct | 464,331.51 | |
| AnhuiAVIC | Saleofproduct | 75,504.42 | |
| Total | 63,868,695.21 | 60,318,768.95 |
Notes:Allamountlistedaboveexcludetax
(4)Relatedpartylease
1)TheCompanyaslessor
| Lessee | Typeofleasedassets | Recognizedrentalincomeincurrentyear | Recognizedrentalincomeinprioryear |
| CATICPropertyManagement | Property | 1,811,657.16 | 4,947,314.30 |
| AVICSecuritiesCompany | Property | 1,411,885.68 | 1,411,885.68 |
| RainbowCompany | Property | 606,792.94 | 437,897.82 |
| Total | 3,830,335.78 | 6,797,097.80 |
2)TheCompanyaslessee
| Lessor | Type | Variableleasepaymentsthatarenotincludedinleaseliabilities | Rentalpayment | Interestpaymentofleaseliabilities | Additionofright-of-useasset | ||||
| Currentperiod | Priorperiod | Currentperiod | Priorperiod | Currentperiod | Priorperiod | Currentperiod | Priorperiod | ||
| GuangdongInternationalMansionIndustrialCo.,Ltd. | Property | 40,527.84 | 3,572.58 | 51,030.81 | |||||
| CATICPropertyManagement | Property | 59,899.04 | 60,513.53 | 501,788.87 | 811,476.76 | 6,776.94 | 29,337.67 | 489,781.90 | 138,708.90 |
| RainbowCompany | Property | 323,382.81 | 417,268.91 | 9,642.03 | 14,378.80 | 247,505.55 | |||
| Total | 59,899.04 | 60,513.53 | 825,171.68 | 1,269,273.51 | 16,418.97 | 47,289.05 | 489,781.90 | 437,245.26 | |
(5)RelatedpartyfundlendingandborrowingNil.
(6)Remunerationtokeymanagement
| Item | Amountincurrentperiod | Amountinpriorperiod |
| Remunerationtokeymanagement | 14,232,500.00 | 15,148,600.00 |
| Total | 14,232,500.00 | 15,148,600.00 |
(7)OtherrelatedtransactionsTheyear-endbalanceoftheCompany’scashthatisdepositedwithAVICFinanceCompanyisRMB467,743,798.76.InterestsreceivedfromthedepositduringtheyearwereRMB342,896.12.
Page
(8)Receivablesfromandpayablestorelatedparties
1)Receivablesfromrelatedparties
| Item | Relatedparty | Closingbalance | Openingbalance | ||
| Carryingamount | Baddebtprovision | Carryingamount | Baddebtprovision | ||
| Monetaryfund | |||||
| AVICFinanceCompany | 467,743,798.76 | 271,327,031.83 | |||
| Accountsreceivable | |||||
| GongqingchengCATICCultureInvestmentCompany | 22,684.75 | 832.29 | 27,297.28 | 1,364.88 | |
| ShennanCircuit | 7,255.14 | 544.14 | |||
| RainbowCompany | 5,973,322.25 | 248,095.43 | 3,808,470.31 | 219,873.20 | |
| AVICJonhon | 202,712.86 | 12,162.77 | 649,797.16 | 48,734.79 | |
| CATICPropertyManagement | 183,123.05 | 9,156.15 | 101,672.00 | 5,083.60 | |
| GuizhouHUAYANGElectronicsCo.,Ltd. | 21,260.00 | 1,275.60 | 59,528.00 | 4,464.60 | |
| ZhuhaiPilotCompositeMaterialTechnologyCo.,Ltd. | 1,412,045.00 | 105,903.38 | |||
| AVICTrainingCenter | 2,772.00 | 207.90 | |||
| ShenyangXinghua | 292,370.58 | 17,542.23 | |||
| AnhuiAVIC | 15,800.00 | 790.00 | |||
| Billreceivable | |||||
| AVICJonhon | 262,429.22 | ||||
| ZhuhaiPilotCompositeMaterialTechnologyCo.,Ltd. | 892,185.99 | 44,609.30 | |||
| AnhuiAVIC | 192,339.42 | ||||
| Otherreceivables | |||||
| GongqingchengCATICCultureInvestmentCompany | 6,500.00 | 325.00 | 6,500.00 | 325.00 | |
| RainbowCompany | 143,990.00 | 7,199.50 | 123,000.00 | 5,300.00 | |
| AVIC | 834,903.00 | 43,170.15 | 1,055,557.43 | 52,777.87 | |
Page
2）Payablestorelatedparties
| Item | Relatedparty | Closingbalance | Openingbalance |
| Accountspayable | |||
| CATICPropertyManagement | 32,992.35 | 32,992.35 | |
| AVICJonhon | 391.96 | 19,411.27 | |
| Otherpayables: | |||
| RainbowCompany | 1,935,611.93 | 108,186.52 | |
| CATICPropertyManagement | 1,023,487.21 | 2,590,116.05 | |
| AVICSecuritiesCompany | 247,080.00 | 247,080.00 | |
| AvicChangtai | 4,064.81 | ||
| Advancereceived | |||
| RainbowCompany | 162,324.03 | ||
| AVICSecuritiesCompany | 123,540.00 | ||
| AVICFutures | 9,435.48 |
XII.Share-basedpayments
1.Generalinformationaboutshare-basedpayments
(1)Equityinstrument
| Categoryofgrantrecipients | Grantedduringcurrentperiod | Exercisedduringcurrentperiod | Unlockedincurrentperiod | Voidedincurrentperiod | ||||
| Quantity | Amount | Quantity | Amount | Quantity | Amount | Quantity | Amount | |
| Someofthecompany'sdirectors,supervisorsandcorecadres | 3,436,710.00 | 3,436,710.00 | ||||||
| 合计 | 3,436,710.00 | 3,436,710.00 | ||||||
(2)StockoptionsorotherequityinstrumentsissuedandoutstandingattheendoftheperiodNil.
2.Equitysettledshare-basedpayment
| Methodofdeterminingfairvalueofequityinstrumentongrantdate | Closepriceofshareongrantdate |
| Evidencetodeterminethenumberofexercisableequityinstrument | Termofemployeeservice,statusoftargetcompletion,andpersonalperformanceassessment |
Page
| Reasonsforsignificantdifferencebetweencurrentperiodestimationandpriorperiodestimation | Nil |
| Accumulatedamountchargedtocapitalreserveforequitysettledshare-basedpayment | 27,909,283.55 |
| Totalexpensesforequitysettledshare-basedpaymentrecognizedincurrentperiod | -4,078,998.50 |
3.Expensesforshare-basedpaymentrecognizedincurrentperiod
| Categoryofgrantrecipients | Expensesforequitysettledshare-basedpayment | Expensesforcashsettledshare-basedpayment |
| Someofthecompany'sdirectors,supervisorsandcorecadres | -4,078,998.50 |
XIII.Commitmentandcontingencies
1.Significantcommitments
(1)LeasecontractthatalreadysignedorpreparedtofulfilanditsfinancialeffectRefertoNoteV.53fordetails.
2.ContingenciesonbalancesheetdateTheCompanydoesnothavematerialcontingenteventsthatneedtobedisclosedXIV.Postbalancesheetdateevents
1.Profitdistribution
| Profitdistributionsordividendsproposed | CashdividendofRMB4.00(taxinclusive)forevery10sharesheld |
2.Othereventsafterthebalancesheetdate
(1)Financingandguaranteeafterthebalancesheetdate
1)On12March2024,pursuanttoapprovalbythe18
th
meetingofthe10
thBoardofdirectors,theCompanyproposedtoapplyforfinancingfacilityofnomorethanRMB1,200millionbymeansofcredit,pledgeandmortgagein2024.Theresolutionispendingforapprovalbytheshareholder’smeeting.
2)On12March2024,pursuanttoapprovalbythe18
th
meetingofthe10
thBoardofdirectors,theCompanyproposedtoprovideguaranteefortheCompany’swholly-ownedsubsidiarytoborrowfrombanksofnomorethanRMB600millionin2024.ThecreditlineisincludedintheactualusagelimitofRMB1,200millionmentionedabove.Theresolutioniswaitingapprovalfromtheshareholder’smeeting.
Page
(2)OthersAsat14March2024,theCompanydoesnothaveotherpost-balancesheeteventsthatneedtobedisclosed.XV.Othermaterialinformation
1.SegmentsOperatingsegmentsoftheCompanyareidentifiedonthebasisofinternalorganizationstructure,managementrequirementsandinternalreportingsystem.AnoperatingsegmentrepresentsacomponentoftheCompanythatsatisfiedthefollowingcriteriasimultaneously:
(1)Itsbusinessactivitiesareengagedtoearnrevenueandincurexpenses;
(2)ItsoperatingresultsareregularlyreviewedbytheCompany’smanagementtomakedecisionsonresourcesallocationandperformanceassessment;
(3)Itsfinancialconditions,operatingresults,cashflowandrelatedaccountinginformationareavailabletotheCompany.
TheCompanydeterminesthereportingsegmentbasedontheoperatingsegment,andtheoperatingsegmentthatmeetsanyofthefollowingconditionsisdeterminedasthereportingsegment:
(1)Thesegmentincomeoftheoperatingsegmentaccountsfor10.00%ormoreoftotalincomeofallsegments;
(2)Theabsoluteamountofprofits(losses)ofthesegmentaccountfor10.00%ormoreofthehigheroftheabsoluteamountoftotalprofitsoftheprofitingsegmentandtheabsoluteamountoftotallossesoftheunprofitablesegment.
TheCompany’sbusinessissimple.Thebusinessmainlyinvolvesmanufacturingandsalesofwatch.Themanagementconsidersthebusinessasawholeinimplementingmanagementandassessingitsperformance.Asaresult,nosegmentinformationisdisclosedinthisfinancialstatement.
2.Othermaterialevents
Asat31December2023,theCompanydoesnothaveothersignificantmattersthatrequiretodisclose.
XVI.Notestotheparentcompany’sfinancialstatement
Note1.Accountsreceivables
1.Presentedbyaging
| Aging | Closingbalance | Openingbalance |
| Within1year | 1,875,782.07 | 635,132.16 |
| Over1year | 23,346.03 | |
| Subtotal | 1,899,128.10 | 635,132.16 |
Page
| Aging | Closingbalance | Openingbalance |
| Less:baddebtprovision | 76,211.49 | 31,916.13 |
| Total | 1,822,916.61 | 603,216.03 |
2.Presentationbymethodofprovidingbaddebt
| Category | Closingbalance | ||||
| Carryingamount | Baddebtprovision | Bookvalue | |||
| Amount | Percentage(%) | Amount | ECLrate(%) | ||
| Accountsreceivablethatprovidedexpectedcreditlossesonsinglebasis | |||||
| Accountsreceivablethatprovidedexpectedcreditlossesonportfoliobasis` | 1,899,128.10 | 100.00 | 76,211.49 | 4.01 | 1,822,916.61 |
| Including:Receivablefromothercustomers | 1,898,159.02 | 99.95 | 76,211.49 | 4.02 | 1,821,947.53 |
| Including:Relatedpartyinscopeofconsolidation | 969.08 | 0.05 | 969.08 | ||
| Total | 1,899,128.10 | 100.00 | 76,211.49 | 1,822,916.61 | |
Continued
| Category | Openingbalance | ||||
| Carryingamount | Baddebtprovision | Bookvalue | |||
| Amount | Percentage(%) | Amount | ECLrate(%) | ||
| Accountsreceivablethatprovidedexpectedcreditlossesonsinglebasis | |||||
| Accountsreceivablethatprovidedexpectedcreditlossesonportfoliobasis` | 635,132.16 | 100.00 | 31,916.13 | 5.03 | 603,216.03 |
| Including:Receivablefromothercustomers | 635,132.16 | 100.00 | 31,916.13 | 5.03 | 603,216.03 |
| Including:Relatedpartyinscopeofconsolidation | |||||
| Total | 635,132.16 | 100.00 | 31,916.13 | 603,216.03 | |
3.Intheportfolio,accountsreceivablewithexpectedcreditlossprovidedbasedoncreditriskcharacteristicportfolio
(1)Portfolioofreceivablefromothercustomer
| Aging | Closingbalance | ||
| Carryingamount | Baddebtprovision | ECLrate(%) | |
| Within1year | 1,874,812.99 | 73,876.89 | 3.94 |
| 1-2years | 23,346.03 | 2,334.60 | 10.00 |
| Total | 1,898,159.02 | 76,211.49 | 4.02 |
4.Movementsofprovisionduringtheperiod
| Category | Openingbalance | Movementsduringtheperiod | Closingbalance |
Page
| Accrual | Recoveredorreversed | Written-off | Othermovements | |||
| Accountsreceivablethatprovidedexpectedcreditlossesonsinglebasis | 85,000.00 | 85,000.00 | ||||
| Accountsreceivablethatprovidedexpectedcreditlossesonportfoliobasis` | 31,916.13 | 44,295.36 | 76,211.49 | |||
| Including:Receivablefromothercustomers | 31,916.13 | 44,295.36 | 76,211.49 | |||
| Total | 31,916.13 | 129,295.36 | 85,000.00 | 76,211.49 |
5.Noactualwrite-offofaccountsreceivableduringthecurrentperiod.
6.Top5receivableaccounts
| Name | Closingbalance | Proportionintotalclosingbalanceofaccountsreceivable(%) | Baddebtprovision |
| Top5receivablesaccountsintotal | 1,301,233.17 | 68.52 | 66,197.12 |
| Total | 1,301,233.17 | 68.52 | 66,197.12 |
Note2.Otherreceivables1．Presentationofotherreceivablesbyaging
| Aging | Closingbalance | Openingbalance |
| Within1year | 614,472,373.93 | 839,808,164.17 |
| 1-2years | 81,857,231.39 | |
| 2-3years | ||
| Over3years | 40,050.00 | 40,050.00 |
| Subtotal | 696,369,655.32 | 839,848,214.17 |
| Less:baddebtprovision | 41,235.47 | 65,671.10 |
| Total | 696,328,419.85 | 839,782,543.07 |
2．Presentedbynature
| Nature | Closingbalance | Openingbalance |
| Relatedpartyinscopeofconsolidation | 696,041,965.52 | 839,174,096.87 |
| Securitydeposit | 49,581.90 | 537,615.90 |
| Pettycash | 24,542.88 | |
| Others | 278,107.90 | 111,958.52 |
Page
| Nature | Closingbalance | Openingbalance |
| Total | 696,369,655.32 | 839,848,214.17 |
| Less:baddebtprovision | 41,235.47 | 65,671.10 |
| Total | 696,328,419.85 | 839,782,543.07 |
3．Presentedaccordingtothreestagesoffinancialassetsimpairment
| Item | Closingbalance | Openingbalance | ||||
| Carryingamount | Baddebtprovision | Bookvalue | Carryingamount | Baddebtprovision | Bookvalue | |
| Firststage | 696,369,655.32 | 41,235.47 | 696,328,419.85 | 839,848,214.17 | 65,671.10 | 839,782,543.07 |
| Secondstage | ||||||
| Thirdstage | ||||||
| Total | 696,369,655.32 | 41,235.47 | 696,328,419.85 | 839,848,214.17 | 65,671.10 | 839,782,543.07 |
4．Presentedbybaddebtprovisionmethod
| Category | Closingbalance | ||||
| Carryingamount | Baddebtprovision | Bookvalue | |||
| Amount | Percentage(%) | Amount | ECLrate(%) | ||
| Otherreceivablesthatprovidedexpectedcreditlossesonsinglebasis | |||||
| Otherreceivablesthatprovidedexpectedcreditlossesonportfoliobasis | 696,369,655.32 | 100.00 | 41,235.47 | 0.01 | 696,328,419.85 |
| Including:Securitydepositportfolio | 49,581.90 | 0.01 | 40,526.60 | 81.74 | 9,055.30 |
| Pettycashportfolio | |||||
| Socialsecuritypaymenton-behalfportfolio | 263,930.39 | 0.04 | 263,930.39 | ||
| Receivablesfromrelatedpartieswithinscopeofconsolidation | 696,041,965.52 | 99.95 | 696,041,965.52 | ||
| Portfolioofothers | 14,177.51 | 708.87 | 5.00 | 13,468.64 | |
| Total | 696,369,655.32 | 100.00 | 41,235.47 | 696,328,419.85 | |
Continued
| Category | Openingbalance | ||||
| Carryingamount | Baddebtprovision | Bookvalue | |||
| Amount | Percentage(%) | Amount | ECLrate(%) | ||
| Otherreceivablesthatprovidedexpectedcreditlossesonsinglebasis | |||||
| Otherreceivablesthatprovidedexpectedcreditlossesonportfoliobasis | 839,848,214.17 | 100.00 | 65,671.10 | 0.01 | 839,782,543.07 |
| Including:Securitydepositportfolio | 537,615.90 | 0.06 | 64,928.30 | 12.08 | 472,687.60 |
| Pettycashportfolio | 24,542.88 | 0.01 | 24,542.88 | ||
| Socialsecuritypaymenton-behalfportfolio | 97,102.57 | 0.01 | 97,102.57 | ||
Page
| Category | Openingbalance | ||||
| Carryingamount | Baddebtprovision | Bookvalue | |||
| Amount | Percentage(%) | Amount | ECLrate(%) | ||
| Receivablesfromrelatedpartieswithinscopeofconsolidation | 839,174,096.87 | 99.92 | 839,174,096.87 | ||
| Portfolioofothers | 14,855.95 | 0.00 | 742.80 | 5.00 | 14,113.15 |
| Total | 839,848,214.17 | 100.00 | 65,671.10 | 0.01 | 839,782,543.07 |
5．Intheportfolio,otherreceivableswithexpectedcreditlossprovidedbasedoncreditriskcharacteristicportfolio
(1)Securitydepositportfolio
| Aging | Closingbalance | ||
| Carryingamount | Baddebtprovision | ECLrate(%) | |
| Within1year | |||
| 1-2years | 9,531.90 | 476.60 | 5.00 |
| 2-3years | |||
| Over3years | 40,050.00 | 40,050.00 | 100.00 |
| Total | 49,581.90 | 40,526.60 | |
(2)Socialsecuritypaymenton-behalfportfolio
| Aging | Closingbalance | ||
| Carryingamount | Baddebtprovision | ECLrate(%) | |
| Within1year | 263,930.39 | ||
| Total | 263,930.39 | ||
(3)Receivablesfromrelatedpartieswithinscopeofconsolidation
| Aging | Closingbalance | ||
| Carryingamount | Baddebtprovision | ECLrate(%) | |
| Within1year | 696,041,965.52 | ||
| Total | 696,041,965.52 | ||
(4)Portfolioofothers
| Aging | Closingbalance | ||
| Carryingamount | Baddebtprovision | ECLrate(%) | |
| Within1year | 14,177.51 | 708.87 | 5.00 |
| Total | 14,177.51 | 708.87 | 5.00 |
6．Baddebtprovisionstatus
Page
| Baddebtprovision | Firststage | Secondstage | Thirdstage | Total |
| Expectedcreditlossesoverthenext12months | Lifetimeexpectedcreditlosses(nocreditimpairmentoccurred) | Lifetimeexpectedcreditlosses(creditimpairmentoccurred) | ||
| Openingbalance | 65,671.10 | 65,671.10 | ||
| Openingbalancemovementsincurrentperiod | ||||
| —Transferintothesecondstage | ||||
| —Transferintothethirdstage | ||||
| —Reversebacktothesecondstage | ||||
| —Reversebacktothefirststage | ||||
| Accrualduringtheperiod | ||||
| Reversedduringtheperiod | -24,435.63 | -24,435.63 | ||
| Recoveredduringtheperiod | ||||
| Written-offduringtheperiod | ||||
| Othermovements | ||||
| Closingbalance | 41,235.47 | 41,235.47 |
7．Nootherreceivableswerewritten-offduringtheperiod.8．Top5otherreceivableaccounts
| Name | Closingbalance | Proportiontoclosingbalanceofotherreceivables(%) | BaddebtprovisionClosingbalance |
| Top5otherreceivablesintotal | 696,041,965.52 | 99.95 | |
| Total | 696,041,965.52 | 99.95 |
Note3.Long-termequityinvestment
| Nature | Closingbalance | Openingbalance | ||||
| Carryingamount | Provision | Bookvalue | Carryingamount | Provision | Bookvalue | |
| Investmentinsubsidiaries | 1,581,179,108.81 | 1,581,179,108.81 | 1,494,128,399.60 | 1,494,128,399.60 | ||
| Investmentinassociates | 51,862,607.30 | 51,862,607.30 | 58,182,086.90 | 58,182,086.90 | ||
| Total | 1,633,041,716.11 | 1,633,041,716.11 | 1,552,310,486.50 | 1,552,310,486.50 | ||
1．Investmentinsubsidiaries
Page
| Investee | Openingbalance | Addition/newinvestment | Withdrawn | Closingbalance | Provisionaccruedincurrentperiod | Closingbalanceofprovision |
| ShenzhenHarmonyWorldWatchCenterCo., | 610,354,397.34 | 1,058,906.51 | 609,295,490.83 | |||
| ShenzhenHarmonyE-commerceCo.,Ltd. | 11,684,484.39 | 11,684,484.39 | ||||
| ShenzhenFIYTAPrecisionTechnologyCo.,Ltd. | 102,482,069.76 | 80,000,000.00 | 437,608.56 | 182,044,461.20 | ||
| ShenzhenFIYTATechnologyDevelopmentCo.,Ltd. | 51,224,974.98 | 162,083.31 | 51,062,891.67 | |||
| FIYTA(HongKong)Ltd. | 137,737,520.00 | 137,737,520.00 | ||||
| TEMPORAL(Shenzhen)Co.,Ltd. | 5,000,000.00 | 5,000,000.00 | ||||
| FIYTASalesCo.,Ltd. | 458,083,251.89 | 1,090,795.72 | 456,992,456.17 | |||
| LiaoningHengdaruiCommercial&TradeCo.,Ltd. | 36,867,843.96 | 36,867,843.96 | ||||
| EmileChoureitTiming(Shenzhen)Ltd. | 80,693,857.28 | 199,896.69 | 80,493,960.59 | |||
| HARMONYWorldWatchCenter(Hainan)Co.,Ltd. | 10,000,000.00 | 10,000,000.00 | ||||
| Total | 1,494,128,399.60 | 90,000,000.00 | 2,949,290.79 | 1,581,179,108.81 |
2．Investmentinassociates
| Investee | Openingbalance | Movementsincurrentperiod | |||
| Addition/newinvestment | Withdrawn | Investmentgainrecognizedunderequitymethod | AdjustmenttoOCI | ||
| Associates | |||||
| ShanghaiWatch | 58,182,086.90 | -5,819,479.60 | |||
Continued
| Investee | Movementsincurrentperiod | Closingbalance | Closingbalanceofprovision | |||
| Otherequitymovements | Cashdividendsdeclaredordistributionofprofit | Impairmentprovisionaccrual | Others | |||
| Associates | ||||||
| ShanghaiWatch | -500,000.00 | 51,862,607.30 | ||||
Note4.Operatingincomeandoperatingcost
| Item | Amountincurrentperiod | Amountinpriorperiod | ||
| Revenue | Cost | Revenue | Cost | |
| Mainbusiness | 177,350,230.18 | 49,729,440.87 | 148,557,095.50 | 41,765,441.70 |
| Otherbusiness | 3,524,696.56 | 6,727,705.55 | ||
Page
| Item | Amountincurrentperiod | Amountinpriorperiod | ||
| Total | 180,874,926.74 | 49,729,440.87 | 155,284,801.05 | 41,765,441.70 |
Note5.Investmentgain
| Item | Amountincurrentperiod | Amountinpriorperiod |
| Gainfromlong-termequityinvestmentsaccountedforusingequitymethod | -5,819,479.60 | 3,026,481.59 |
| Gainfromlong-termequityinvestmentsaccountedforusingcostmethod | 198,000,000.00 | 240,595,696.70 |
| Total | 192,180,520.40 | 243,622,178.29 |
XVII.Supplementaryinformation
1.Detailsofnon-recurringgainorlossfortheyear
| Item | Amount | Note |
| Disposalgainorlossofnon-currentassets，includingeliminationofprovisionforimpairmentofassets | 685,868.57 | |
| Governmentgrantsincludedincurrentprofitorloss(exceptforthefixedorquantitativegovernmentgrants,enjoyedinaconsecutiveway,whichcloselyrelatedtotheenterprisebusinessesandaccordingtonationpolicies) | 8,665,506.85 | |
| Exceptforeffectivehedgingbusinessrelatedtonormaloperatingbusiness,profitandlossfromchangesinfairvalueincurredinfinancialassetsandfinancialliabilities,andtheinvestmentgainfromdisposaloffinancialassets,financialliabilitiesandavailable-for-salefinancialassets | ||
| Chargesforthepossessionsoffundscollectedfromnon-monetaryenterprises | ||
| Profitandlossfromentrustingotherstoinvestormanageassets | ||
| Assetimpairmentprovisionaccruedduetoforcemajeuresuchasnaturaldisasters | ||
| Impairmentprovisionreversalofaccountsreceivableunderstandaloneimpairmenttest | 7,570,975.54 | |
| Gainfrominvestmentinsubsidiaries,jointventureandcooperativeenterpriseswhencostofinvestmentislessthantheprofitincurredinidentifiablenetassetfairvalueofinvestedunitwheninvestment | ||
| Currentnetprofitandlossofsubsidiariesfrombusinesscombinationundercommoncontrolfromtheopeningperiodtocombinationdate | ||
| Profitandlossofnon-monetaryassetsexchange | ||
| Profitandlossofdebtrestructuring | ||
| Enterpriserestructuringexpenses,suchasexpensesforarrangingemployees,integratingcost | ||
| One-timeeffectoncurrentperiod'sprofitorlossduetoadjustmentsintax,accountingandotherlawsandregulations | ||
| Overriddenapproval,orwithoutofficialapprovaldocument,orincidentaltaxreturnorexemption | ||
| Forcash-settledshare-basedpayments,gainsandlossesarisingfromchangesinthefairvalueofemployeecompensationpayableafterthedateofexerciseofoptions | ||
| Profitandlossincurredinfairvaluechangeofinvestmentpropertysubsequentlymeasuredinfairvaluemode | ||
| Profitandlossoverfairvaluepartaccruedintransactionsofunreasonabletransactionprice | ||
| Profitandlossincurredcontingentmattersunrelatedtonormaloperatingbusiness | ||
| Incomefromtrusteefeeobtainedbytrustingoperation |
Page
| Item | Amount | Note |
| Othernon-operatingincomeandexpensesotherthantheaboveitems | 3,910,736.70 | |
| Profitandlossitemspursuanttothedefinitionofnon-recurringprofitandloss | ||
| Less：Effectofincometaxofnon-recurringprofitorloss | 4,461,193.42 | |
| Effectofnon-recurringprofitorlossesattributabletominorityshareholders(aftertax) | ||
| Total | 16,371,894.24 |
2.ReturnonEquity(ROE)andEarningspershare(EPS)
| Profitofthereportingperiod | WeightedaverageROE% | EPS | |
| BasicEPS | DilutedEPS | ||
| NetprofitattributabletoordinaryshareholdersoftheCompany | 10.28 | 0.8082 | 0.8075 |
| NetprofitattributabletoordinaryshareholdersoftheCompanyafterdeductingnon-recurringprofitorloss | 9.77 | 0.7685 | 0.7678 |
FIYTAPrecisionTechnologyCo.,Ltd.
BoardofDirectors14March2024