FIYTA HOLDINGS LTD.2019 Semi-annual Report
August, 2019
Section 1 Important Notice, Table of Contents and Definition
The Board of Directors, the Supervisory Committee, directors, supervisors and senior executives herebyindividually and collectively accept responsibility for the correctness, accuracy and completeness of thecontents of this report and confirm that there are neither material omissions nor errors which would render anystatement misleading.
Huang Yongfeng, the Company leader, Chen Zhuo, chief financial officer, and Tian Hui, the manager of theaccounting department (treasurer) hereby confirm the authenticity and completeness of the financial reportenclosed in this Annual Report.
All the directors attended the board meeting for reviewing the Annual Report.
Any perspective description, such as the future plan, development strategy, etc. involved in the Annual Reportshall not constitute the Company’s substantial commitment to the investors and the investors should please payattention to their investment risks.
In this report, the Company has described in detail the existing macro-economic risks as well as operation risks.Investors are advised to refer to the contents concerning risk factors possibly to be confronted with and thecountermeasures in the Company's future development prospect in Section 4 Discussion and Analysis of theManagement
The Company intends neither to distribute any cash dividend or bonus shares nor to convert any reserve intoshare capital.
Table of Contents
Section 1 Important Notice, Table of Contents and Definition
Section 2 Company Profile and Financial Highlights
Section 3 Business Summary
Section 4 Discussion and Analysis of the Management
Section 5 Significant Events
Section 6 Change of Shares and Particulars about Shareholders
Section 7 About the Preferred Shares
Section 8 Directors, Supervisors, Senior Executives and Employees
Section 9 Corporate Bonds
Section10 Financial Report
Section11 Documents Available for Inspection
Definitions
| Terms to be defined | Refers to | Definition |
| This Company, the Company or FIYTA | Refers to | FIYTA HOLDINGS LTD. |
| AVIC | Refers to | Aviation Industry Corporation of China, Ltd. |
| AVIC International | Refers to | AVIC International Holding Corporation |
| AVIC International Shenzhen | Refers to | AVIC International Shenzhen Co., Ltd. |
| AVIC IHL | Refers to | AVIC International Holding Limited |
| The Sales Co. | Refers to | FIYTA Sales Co., Ltd. |
| Harmony | Refers to | Shenzhen Harmony World Watches Center Co., Ltd. |
| the Manufacture Co. | Refers to | Shenzhen FIYTA Sophisticated Timepieces Manufacture Co., Ltd. |
| the Technology Co. | Refers to | Shenzhen FIYTA Technology Development Co., Ltd. |
| the Hong Kong Co. | Refers to | FIYTA (Hong Kong) Limited |
| SHIYUEHUI | Refers to | Shiyuehui Boutique (Shenzhen) Co., Ltd. |
| Hengdarui | Refers to | Liaoning Hengdarui Commerce & Trade Co., Ltd. |
| Harbin Co. | Refers to | Harbin Harmony World Watch Distribution Co., Ltd. |
| AVIC SUNDA | Refers to | AVIC SUNDA Co., Ltd. |
| Rainbow Ltd. | Refers to | Rainbow Department Store Co., Ltd. |
| Shennan Circuit | Refers to | Shennan Circuit Co., Ltd. |
| AVIC Property | Refers to | AVIC Property Management Co., Ltd. |
Section 2 Company Profile and Financial Highlights
I. Company Profile
| Short form of the stock: | FIYTA A, FIYTA B | Stock Codes: | 000026 and 200026 |
| Stock Exchange Listed with | Shenzhen Stock Exchange | ||
| Company Name in Chinese | FIYTA HOLDINGS LTD. | ||
| Abbreviation of Registered Company Name in Chinese | 飞亚达公司 | ||
| Company name in English (if any) | FIYTA HOLDINGS LTD. | ||
| Abbreviation of the Company name in English (if any) | FIYTA | ||
| Legal Representative | Huang Yongfeng | ||
II. Liaison Persons and Communication Information
| Secretary of the Board | Securities Affairs Representative | |
| Name | Lu Wanjun | Zhang Yong |
| Liaison Address | 20th Floor, FIYTA Technology Building, Gaoxin S. Road One, Nanshan District, Shenzhen | 20th Floor, FIYTA Technology Building, Gaoxin S. Road One, Nanshan District, Shenzhen |
| Tel. | 0755-86013669 | 0755-86013669 |
| Fax | 0755-83348369 | 0755-83348369 |
| investor@fiyta.com.cn | investor@fiyta.com.cn |
III. Other Information
1. Way of Communication
There is no change in the registered address, office address and post code, company website, email during thereporting period. For the detail, refer to 2018 Annual Report.
2. Information Disclosure and Place where the Regular Reports are Prepared
Newspapers designated for disclosing the information, Internet web site designated by China Securities RegulatoryCommission for publishing the Semi-annual Report, place of the Company’s Semi-annual Report prepared for inquiry, forthe detail, refer to 2018 Annual Report.
IV. Summary of Accounting/Financial DataDoes the Company need to make retroactive adjustment or restatement of the accounting data of the previous yearsNo
| Reporting period | Same period of the previous year | Year-on-year increase/decrease in the reporting period | |
| Revenue in CNY | 1,785,036,020.23. | 1,695,891,432.72. | 5.26% |
| Net profit attributable to the Company’s shareholders, in CNY | 123,495,460.90. | 112,367,921.44. | 9.90% |
| Net profit attributable to the Company’s shareholders less the non-recurring items, in CNY | 113,627,146.69. | 99,759,371.16. | 13.90% |
| Net cash flows arising from operating activities, in CNY | 159,014,650.37. | 224,672,274.09. | -29.22% |
| Basic earning per share (CNY/share) | 0.2788. | 0.2561. | 8.86% |
| Diluted earning per share (CNY/share) | 0.2788. | 0.2561. | 8.86% |
| Return on equity, weighted average | 4.69% | 4.45% | 0.24% |
| End of the reporting period | End of the previous year | Increase/decrease at the end of the year over the end of the previous year | |
| Total assets (in CNY) | 3,660,456,223.27. | 3,599,691,650.26. | 1.69% |
| Net profit attributable to the Company’s shareholders, in CNY | 2,683,297,649.42. | 2,570,134,782.90. | 4.40% |
The cause of the change in the accounting policy and the correction of the accounting errors are based on the Circular onRevising and Issuing the 2018 Versions of General Corporate Financial Statement Templates and the Interpretation of theRelevant Issues in the 2018 Versions of General Corporate Financial Statement Templates promulgated by the Ministry ofFinance: the item of R & D Expenses is to be added to the Statement of Profit, the R & D expenses in the first half of 2018increased by CNY 21,285,926.02 and the administrative expenses decreased by CNY 21,285,926.02.
V. Difference in the Accounting Data based respectively on the Chinese Accounting Standards (CAS) andInternational Accounting Standards (IAS)
1. Differences in the net profit disclosed in the financial report & the net assets attributable to the Company’s shareholdersrespectively according to the IAS and the CAS.Inapplicable
2. Differences in the net profit disclosed in the financial report & the net assets attributable to the Company’s shareholdersaccording to both the IAS and the CASInapplicable
VI. Non-recurring gain/loss items and the amount involved
In CNY
| Items | Amount | Note |
| Gain/loss from disposal of non-current assets, including the part offset from the provision for impairment of assets. | -212,010.13 | It refers to the loss from disposal of fixed assets, such as the obsolete production equipment |
| The government subsidies included in the profits and losses of the current period ( (excluding government grants which are closely related to the Company’s business and conform with the national standard | 13,045,742.36 | For detail, refer to the supplementary description of the government subsidy counted to the current profit |
| amount or quantity) | and loss, Note VII.67. | |
| Other non-operating income and expenses other than the aforesaid items | -230,194.27 | It mainly refers to the security deposit due to the advance withdrawal of the shops in some channels, etc. |
| Less: Amount affected by the income tax | 2,735,223.75 | |
| Total | 9,868,314.21 | -- |
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No. 1 on InformationDisclosure for Companies Offering their Securities to the Public – Non-recurring Gains and Losses and its non-recurringgain/loss items as illustrated in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offeringtheir Securities to the Public – Non-recurring Gains and Losses which have been defined as recurring gains and losses, itis necessary to explain the reason.Inapplicable
Section 3 Business Summary
I. Main business the Company operated in the reporting periodDoes the Company need to comply with the disclosure requirements of special industryNoDuring the reporting period， the Company took “creating quality life” as its mission, focused on watch business, insistedon the brand strategy, adhered to the innovation development, complied with the consumption grading trend, continuouslycarried forward the work of improving the brand with FIYTA brand as the core, seized the opportunity of the growth ofmedium- and high-end brands, continued to propel the work of channel upgrading and service improvement withHARMONY as the core.
During the reporting period, there was no significant change in the Company's main business and business model,industry development status and the status of the Company's industry. For detail, please refer to 2018 Annual Report.
II. Significant Movements in Prime Assets
1. Significant Movements in Prime Assets
Inapplicable
2. Major Overseas Assets
Inapplicable
III. Analysis on Core CompetitivenessDoes the Company need to comply with the disclosure requirements of special industryNoI. Unique Business Layout of “Watch Brand Management + Watch Retail Services” in the IndustryIncorporated in 1987, FIYTA experienced over three decades’ accumulation and innovation breakthrough, constructed thebrand management business with FIYTA Brand as the core and watch retail business with Harmony as the core and thetwo businesses supplemented each other and developed in a coordinated way; both take the leading position in thedomestic market at present. The unique business layout of “Watch Brand Management + Watch Retail Services” haveprovided a guarantee for the Company's sustainable development and “becoming a leading internationalized watch brandenterprise”.
II. Profound Brand Management Experience and Clear Segmented Market PositioningWith reference to the experience of brand management experience of various world watches distributed by HARMONYretail business as well as its own FIYTA Brand molding experience, the Company took a lead in constructing multi-brandtribe with watch brands of FIYTA, EMILE CHOURIET, JONAS&VERUS, Jeep and BEIJING as the key brands, constantlyconstructed brand identities of professional watch manufacture, classic and elegance, young fashion, intelligence andoutdoors, oriental aethetics, etc. These brands have become the leading brands in the segmented market.
III. National Watch Base and First Class Product Design AbilityThe Company is a national technological innovation demonstration enterprise, national industrial design center andnational technology certification center for enterprises, and an organization integrating and implementing the standardsfor informationization and industrialization by the Ministry of Industry and Information Technology. All its subordinativemanufacturers are national hi-tech enterprises; has constructed its professional watch manufacture ability in respect ofdriving unit manufacture, space watch development, high-end watch manufacture techniques, etc. Meanwhile, theCompany has kept a leading position in the industry in terms of product quality and creative design ability.
IV. High Quality Brand, Channel Resources and Nationwide Retail Service NetworkIn watch retail business with HARMONY as the core, the Company has established close cooperative relationship with agreat many world top brands and mainstream brands, including Omega, Breguet, Blancpain, Glashutte Original, JaquetDroz, Longines, Tissot, etc. subordinate to Swatch Group; Rolex and TUDOR subordinate to Rolex; A.LANGE &SOHNE,JAEGER LE-COULTRE,CARTIER,PIAGET, IWC, etc. subordinate to Richemont Group; GIRARD PERREGAUXand ULYSSE NARDIN subordinate to Kering Group; as well as such independent brands as CHOPARD, Bucherer,BREITLING, etc. The Company has also established strategic cooperative relationship with various high grade shoppingmalls, such as MIXC as well as various high grade department stores in China, possesses top quality brands and channelresources in the industry. The Company has established nationwide watch retail service network.
V. Profound Industrial Management Experience and Sustainable Talents ReserveThe Company constantly enhanced construction of the “Brand People” team, continuously improved the profession andcomprehensive qualification of the team, actively created a team atmosphere of progressiveness, struggle, continuousimprovement and devotion to work. The major members of the management and business backbones of the Companyhave been engaged in watch industry for long time and have rich experience in brand management and channel operation,enjoy good professional qualification and have profound understanding of watch industry. In addition, the Company hasestablished long term and stable enterprise-school cooperative relationship with various famous colleges and universitiesin China. The Company is able to continuously and steadily obtain a great number of high quality professionals and infusenew blood for the Company's development. The Company has continued to hold the honorable title of “Yearly BestEmployer”granted by Internal Association of Human Resources and CHINACHR.COM successively for 12 years.
Section 4 Discussion and Analysis of the ManagementI. GeneralIn the first half of 2019, the domestic economy still faced a quite high downward pressure due to the complexity of theexternal political and economic environment and depressed consumption, and the watch industry was also confrontedwith big growth pressure. During the reporting period, facing the severe market pressure, the Company seized theopportunity of consumption upgrading, continued to promote upgrading of brand improvement and better customerservices, further strengthened the refined management and professional operation capabilities; the Company stillachieved steady growth in operating performance, and continuous improvement of the operational efficiency. In the firsthalf of 2019, the Company realized revenue amounting to CNY 1,785.036 million with year-on-year growth of 5.26% andrealized total profit amounting to CNY 164.1106 million with a year-on-year growth of 12.53%.During the reporting period, the Company carried out the following key work.I. Continuing to carry forward “FIYTA” Brand upgrading and operation efficiency improvementDuring the reporting period, the Company took the customers’ demand as the origin and continued to carry forward“FIYTA” Brand upgrading centering on the operation work, including product, channel, marketing, etc. During the first halfof 2019, “FIYTA” Brand continued to enhance the professional watch-making spirit and the independent aesthetic designbrand conception, launched in succession a number of new products, including the Master Series DUNHUANG Themedwristwatches, MACH Series “J-20” jointly limited wristwatch and “Heartstrings” series wristwatches, etc. and achievedbreakthrough in application of new materials, such as Damascus steel, Grade 5 titanium, etc.; continued to reinforceimprovement of whole-channel operation ability, promoted off-line channel structure optimization and identity upgrading;promoted adjustment of e-commerce operation pattern, quickened on-line business development; continued to participatein such important activities of the industry, including Baselworld 2019, Watch & Clock Fair China, China Brand Day, etc.and improved the brand identity and industry influence, additionally appointed “Feng Shaofeng” as brand spokesman andincreased the interaction of the brand, consumers and new media. At the same time, the Company spared no efforts toimprove the efficiency of brand business operations. In the first half of 2019, the Company achieved positive results in itsbrand business in terms of product quality, inventory turnover rate, cost control, channel operation quality, etc.II. Continuing to carry forward retail service network optimization and customer service improvementDuring the reporting period, although the overall watch market was under pressure, yet the medium- and high-end brandwatches with unit price exceeding CNY 10,000 were still favored by more consumers and a high growth rate and afavorable trend were achieved. Harmony World Watches retail services grasped the growth opportunity of mid-to-high-endwatch brands, strengthened resource integration and operation improvement, continued to strengthen cooperation withinternational brands and mid-to-high-end retail channels, promoted brand upgrading and channel upgrading, andcontinuously increased customer unit prices; at the same time, continued to obtain international on-line watch brandauthorization, newly set up Tissot and Mido JD franchise houses, Mido Tmall franchise house, and enriched on-line watchretail service network. During the reporting period, Harmony World Watches Retail Service continued to deepen theimprovement of customer service segmentation, accelerated the promotion of smart retail projects, and continued topromote the business development of technical services.III. Insisting on Innovation Development and Maintaining Quick Development of New BusinessesDuring the reporting period, under the macro background of industrial upgrading and intelligent manufacturing, theCompany continued to promote the rapid growth of precision manufacturing business by vigorously developing marketssuch as laser devices and electronic circuits, relying on national high-tech enterprises and more mature precisionmanufacturing industry bases. In the first half of 2019, revenue from precision manufacturing business increased by 41%year-on-year. At the same time, the Company continued to accelerate the layout of smart wear business. In the first half of2019, the Company continued to integrate resources for its "Jeep" brand smart watches, deepened technical cooperation,
and quickly deployed serialized iterative products, and continued to maintain a good sales situation for its smart watches.IV. Implementing the “Repurchase” Program and Improving the Value for the ShareholdersDuring the reporting period, the Company continued to increase its interaction with the capital market in multipledimensions, convey the intrinsic value of the Company, promoted the annual distribution of equity, and continued to keephigh rate of distribution to investors. The accumulative cash dividend distributed took 151.39% of the annual average netprofit in the past three years. At the same time, in order to boost confidence in the capital market and realizedmaximization of the value for shareholders, based on the confidence in the Company's future development prospects andrecognition of the Company's value, the Company initiated the repurchase of some domestically listed foreign shares (Bshares) in April 2019. In the first half of 2019, the Company successfully carried out the “repurchase” program and appliedapproximately HK$16 million to repurchase 2.7 million shares of B shares through centralized bidding.
II. Analysis on the Main BusinessRefer to “I. General” of “Discussion and Analysis of Business Conditions”Movements of the Key Financial Items are summarized as follows:
In CNY
| Reporting period | Same period of the previous year | Year-on-year increase/decrease | Cause of the movement | |
| Operating revenue | 1,785,036,020.23. | 1,695,891,432.72. | 5.26% | Inapplicable |
| Operating cost | 1,051,504,075.22. | 976,325,736.35. | 7.70% | Inapplicable |
| Sales costs | 415,776,028.95. | 422,113,041.69. | -1.50% | Inapplicable |
| Administrative expenses | 116,352,835.42. | 104,242,391.69. | 11.62% | Inapplicable |
| Financial expenses | 16,238,965.89. | 18,147,791.49. | -10.52% | Inapplicable |
| Income tax expenses | 40,615,187.57. | 33,463,799.72. | 21.37% | Inapplicable |
| R&D input | 19,526,410.93. | 21,285,926.02. | -8.27% | Inapplicable |
| Net cash flows arising from operating activities | 159,014,650.37. | 224,672,274.09. | -29.22% | Inapplicable |
| Net cash flow arising from investment activities | -89,214,047.63. | -52,512,866.91. | -69.89% | It was mainly the big year-on-year increase of the amount of investment in fixed assets of which the main fixed asset was the project of FIYTA Watch Building. |
| Net cash flow arising from fund-raising activities | -8,308,417.60. | -78,421,466.76. | 89.41% | It was mainly affected by the size of the interest-bearing liabilities. |
| Net increase of cash and cash equivalents | 61,693,492.45. | 93,856,380.26. | -34.27% | In addition to the influence of the movements of net cash flow from investment and fund-raising activities, |
Significant change in profit composition or profit sources during the reporting period.InapplicableComposition of the principal business
In CNY
the year-on-year drop of netcash flow from operationalactivities was mainly to bigincrease of payment forpurchase of goods in thecurrent year and at thesame time the year-on-yeardecrease of the taxpayment.
| Operating revenue | Operating cost | Gross profit rate | Year-on-year increase/decrease of operating revenue over the previous year | Year-on-year increase/decrease of operating costs over the previous year | Year-on-year increase/decrease of gross profit rate over the previous year | |
| Based on sectors | ||||||
| Watches | 1,677,850,539.71. | 1,012,115,145.40. | 39.68% | 4.56% | 7.24% | -3.67% |
| Sophisticated manufacture | 30,391,092.59. | 22,479,136.85. | 26.03% | 41.00% | 25.16% | 56.15% |
| Leases | 67,373,825.03. | 14,594,714.60. | 78.34% | 17.09% | 27.02% | -2.12% |
| Others | 9,420,562.90. | 2,315,078.37. | 75.43% | -21.85% | -24.97% | 1.37% |
| Based on products | ||||||
| Watch retail and services | 1,148,901,685.86. | 856,306,726.29. | 25.47% | 12.43% | 11.58% | 2.28% |
| Watch brand business | 528,948,853.85. | 155,808,419.11. | 70.54% | -9.26% | -11.66% | 1.15% |
| Sophisticated manufacture | 30,391,092.59. | 22,479,136.85. | 26.03% | 41.00% | 25.16% | 56.15% |
| Leases | 67,373,825.03. | 14,594,714.60. | 78.34% | 17.09% | 27.02% | -2.12% |
| Others | 9,420,562.90. | 2,315,078.37. | 75.43% | -21.85% | -24.97% | 1.37% |
| Based on regions | ||||||
| South China | 816,517,312.49. | 469,110,834.06. | 42.55% | 7.43% | 14.90% | -8.07% |
| Northwest China | 307,450,222.84. | 182,162,158.51. | 40.75% | -0.53% | -3.40% | 4.52% |
| Northeast China | 115,213,698.49. | 65,074,970.17. | 43.52% | -5.71% | -5.07% | -0.87% |
| East China | 241,568,771.25. | 136,301,563.48. | 43.58% | 14.55% | 13.60% | 1.09% |
| Northeast China | 130,823,214.98. | 91,567,691.46. | 30.01% | -7.04% | -5.34% | -4.01% |
| Southwest China | 173,462,800.18. | 107,286,857.54. | 38.15% | 13.41% | 13.90% | -0.70% |
III. Analysis on Non-Principal BusinessesInapplicable
IV. Assets and Liabilities
1. Significant Changes in Assets Composition
In CNY
| End of the reporting period | End of the same period of the previous year | Proportion increased/decreased | Note to significant changes | |||
| Amount | Proportion in total assets | Amount | Proportion in total assets | |||
| Monetary fund | 226,521,552.42. | 6.19% | 281,009,271.58. | 7.74% | -1.55% | Inapplicable |
| Accounts receivable | 448,122,115.59. | 12.24% | 378,420,568.27. | 10.43% | 1.81% | Inapplicable |
| Inventories | 1,727,402,092.53. | 47.19% | 1,735,371,328.09. | 47.82% | -0.63% | Inapplicable |
| Investment-oriented real estate | 370,467,221.69. | 10.12% | 348,258,775.18. | 9.60% | 0.52% | Inapplicable |
| Long-term equity investment | 46,412,373.21. | 1.27% | 43,972,531.47. | 1.21% | 0.06% | Inapplicable |
| Fixed assets | 414,522,443.81. | 11.32% | 463,913,136.18. | 12.78% | -1.46% | Inapplicable |
| Construction-in-progress | 12,886,665.68. | 0.35% | 12,515,382.25. | 0.34% | 0.01% | Inapplicable |
| Short term loans | 550,078,332.26. | 15.03% | 479,917,100.00. | 13.22% | 1.81% | Inapplicable |
| Long-term borrowings | 4,409,875.00. | 0.12% | 62,153,235.50. | 1.71% | -1.59% | Inapplicable |
2. Assets and liabilities measured based on fair value
Inapplicable
3. Restriction on rights in the assets ended the reporting period
A property owned by Switzerland based Montres Chouriet SA with net value of CNY 14,609,376.25 was used as acollateral for the overseas long term loan amounting to CNY 4,762,665.
V. Analysis on Investment Situation
1. General
Inapplicable
2. Significant Equity Investment Acquired in the Reporting Period
Inapplicable
3. Significant non-equity investment in process in the reporting period
In CNY
| Project name | Way of investment | Is it an investment in fixed assets? | Industry involved by the investment project | Amount invested during the reporting period | Accumulative amount actually invested by the end of the reporting period | Capital source | Project progress | Predicted earning | Earnings accumulatively realized by the end of the reporting period | Cause of the failure in arriving at the planned progress and predicted earnings | Date of disclosure (if any) | Disclosure index (if any) |
| FIYTA Watch Building supporting works | Self-built | Yes | Manufacture | 845,539.68. | 12,886,665.68. | Self-raised fund | 100.00% | 0.00. | 0.00. | Inapplicable | March 10, 2017 | http://www.cninfo.com.cn/ |
| Total | -- | -- | -- | 845,539.68. | 12,886,665.68. | -- | -- | 0.00. | 0.00. | -- | -- | -- |
Note: The 13th session of the Eighth Board of Directors reviewed and approved the proposal for increase of theinvestment in the construction project of FIYTA Watch R&D and Manufacture Center by CNY 34.0509 million. For thedetail, refer to Announcement of the Resolution of the 13th Session of the Eighth Board of Directors 2017-003. Ended thereporting period, the accumulative amount of investment in the project was CNY 12.8867 million.
4. Financial assets investment
(1) Portfolio investment
Inapplicable
(2) Investment in derivatives
Inapplicable
VI. Sales of Significant Assets and Equity
1. Sales of Significant Assets
Inapplicable
2. Sales of Significant Equity
Inapplicable
VII. Analysis on Principal Subsidiaries and Mutual Shareholding CompaniesParticulars about the principal subsidiaries and mutual shareholding companies which may affect the Company’s net profitby over 10%.
In CNY
| Company names | Company types | Main businesses | Registered capital | Total assets | Net assets | Operating revenue | Operation profit | Net profit |
| Harmony | Subsidiary | Purchase & sale and repairing service of watches and components | 600,000,000.00. | 1,515,431,759.32. | 827,413,622.38. | 1,133,190,847.40. | 76,045,481.67. | 56,365,795.02. |
| The Sales Co. | Subsidiary | Design, R & D and sales of watches and components & parts | 450,000,000.00. | 723,240,434.21. | 428,379,872.88. | 472,115,784.65. | 35,508,212.17. | 26,507,755.00. |
| the Manufacture Co. | Subsidiary | Manufacture and production of watches and components | 10,000,000.00. | 199,980,604.47. | 130,364,497.84. | 153,878,112.47. | 4,134,787.54. | 3,546,602.25. |
| the Technology Co. | Subsidiary | Production and machining of sophisticated components and parts | 10,000,000.00. | 94,563,187.08. | 71,220,817.63. | 60,984,287.88. | 5,068,978.93. | 4,366,586.65. |
| the Hong Kong Co. | Subsidiary | Trading of watches and accessories and investment | 137,737,520.00. | 245,689,063.38. | 167,165,669.55. | 51,523,590.87. | -719,413.83. | -1,675,458.41. |
| SHIYUEHUI | Subsidiary | Design, R & D and sales of watches and components & parts | 5,000,000.00. | 23,786,257.00. | -5,545,352.53. | 6,577,281.80. | -1,251,382.15. | -1,753,254.01. |
| Hengdarui | Subsidiary | Purchase & sale of watches and components & parts | 51,000,000.00. | 141,084,798.58. | 40,686,466.62. | 4,469,139.71. | 832,719.83. | 623,468.85. |
| Harbin Co. | Subsidiary | Purchase & sale of watches and components & parts | 500,000.00. | 372,386.95. | 2,542,158.28. | 4,004,580.34. | -1,073,617.93. | -1,090,253.15. |
| Emile Chouriet (Shenzhen) Limited | Subsidiary | Design, R & D and sales of watches and components & parts | 41,355,200.00. | 118,143,314.55. | 59,961,106.60. | 38,513,285.69. | -3,855,800.00. | -2,904,931.00. |
| Shanghai Watch Industry Co., Ltd. | Mutual shareholding company | Production and sales of watches and components & parts | 15,350,000.00. | 124,205,651.35. | 111,158,121.40. | 57,039,155.07. | 8,098,631.62. | 6,125,240.23. |
Acquisition and disposal of subsidiaries in the reporting periodInapplicable
Note to the principal mutual shareholding companiesInapplicable
VIII. Structurized Entities Controlled by the CompanyInapplicable
IX. Prediction of the Performances from January to September, 2019Inapplicable
X. Risks Possibly to be Confronted with
1.Risk from the fluctuation of the macro-economy and the countermeasures
As a timepiece product with aesthetic, fashion characteristics and cultural connotations, watches are high-end qualityconsumer products, are quite significantly affected by the fluctuation of the macro economy. At present, the domesticmacroeconomic instability factors are increasing, and the Company's performance may possibly fluctuate. The Companyshall continue to strengthen the unique business layout of the industry - “watch brand management + watch retail service”,actively foster the development of new growth momentum while continuing to enhance business management capability,and strive to achieve steady growth in business performance.
2. Risk from the intensified industry competition and the countermeasures
Thanks to the increase in disposable income of domestic residents, high-quality consumer demand continues to heat up,and the watch industry has received more attention as a typical representative of high-quality consumer goods. At thisstage, more domestic and foreign brands are entering the Chinese watch consumption market. At the same time, smartwatches that stack technologies such as Internet of Things, artificial intelligence, and communication are also active. Thecompetition in the watch industry is intensifying, and the original competitive landscape faces more challenges. TheCompany shall continue to promote multi-brand community construction and omni-channel network construction, aimingat the individual needs of different consumer groups, deepen the development opportunity of market segments, andaccelerate development of the new business of smart wears.
3. Risk from the brand building the countermeasures
Brand-building is a continuous and systematic project that needs to be adhered to and continuously invested. Due tofluctuation in business performance, intensified market competition and increased personalized consumer demand, theCompany shall be confronted with more challenges in brand-building with FIYTA as the core. The Company shall take thecustomers’ requirements as the guide, adhere to the brand spirit, integrate innovative elements, and continue to invest inproducts, channels, marketing and brand team , and strive to build various brands with FIYTA as the core into make themost popular segments of the brands with “FIYTA” as the core into main brands most welcome by the consumers in thesegmented field.
Section 5 Significant EventsI. General Meeting and Extraordinary General Meetings
1. General Meetings
| Sessions | Meeting type | Proportion of attendance of the investors | Meeting date | Date of disclosure | Disclosure index |
| 2019 1st Extraordinary General Meeting | Extraordinary General Meeting | 40.01% | January 11, 2019 | January 12, 2019 | http://www.cninfo.com.cn/ |
| 2019 2nd Extraordinary General Meeting | Extraordinary General Meeting | 37.40% | April 23, 2019 | April 24, 2019 | http://www.cninfo.com.cn/ |
| 2018 Annual general meeting | Annual general meeting | 38.22% | June 19, 2019 | June 20, 2019 | http://www.cninfo.com.cn/ |
2. Extraordinary general meeting requested for holding by the preferred shareholders with the voting power recovered.Inapplicable
II. Profit Distribution and Conversion of Capital Reserve into Share Capital in the Reporting PeriodInapplicable
III. Commitments finished in implementation by the Company's actual controller, shareholders, related parties,acquirer, the Company, etc. in the reporting period and commitments unfinished in implementation at the end ofthe reporting periodInapplicable
IV. Engagement/Disengagement of CPAsHas the financial resport to the Semi-Annual Report been auditedNo
V. Explanation of the Board of Directors and the Supervisory Committee on the Qualified Auditors' Report for thereporting period issued by the CPAsInapplicable
VI. Explanation of the Board of Directors on the Qualified Auditors' Report for the previous year issued by theCPAsInapplicable
VII. Matters concerning Bankruptcy ReorganizationInapplicable
VIII. LawsuitsInapplicable
IX. Penalty and RectificationInapplicable
X. Integrity of the Company, its Controlling Shareholder and Actual ControllerInapplicable
XI. Implementation of the Company’s Equity Incentive Plan, Employee Stock Ownership Plan or other EmployeeIncentive MeasuresThe 3rd session of the Ninth Board of Directors and 2019 1st Extraordinary General Meeting held respectively onNovember 12, 2018 and January 11, 2019 decided to start 2018 A-Share Restricted Stock Incentive Program (Phase I),which was later on reviewed and approved at the 5th session of the Ninth Board of Directors held on January 11, 2019,and the Company eventually granted 4.224 million restricted A-shares to 128 persons eligible for the incentive. For thedetail, refer to the relevant announcement disclosed in the Securities Times,Hong Kong Commercial Daily andwww.cninfo.com.cn on January 12, 2019. This part of A-share restricted shares was all granted and registered for listingby January 30, 2019.
XII. Significant Related Transactions
1. Related Transactions Related with Day-to-Day Operations
Inapplicable
2. Related transactions concerning acquisition and sales of assets or equity
Inapplicable
3. Related transactions concerning joint investment in foreign countries
Inapplicable
4. Current Associated Rights of Credit and Liabilities
Does there exist non-operating current associated rights of credit and liabilitiesNo
5. Other Significant Related Transactions
The 6th session of the Ninth Board of Directors held on March 13, 2019 and 2018 Annual General Meeting held on June19, 2019 approved the Proposal on Prediction of Regular Related Transactions in 2019. For the detail, refer to theAnnouncement on the Resolution of the 6th Session of the Ninth Board of Directors No. 2019-012, the Announcement onthe Resolution of 2018 Annual General Meeting No. 2019-036 and the Announcement on the Prediction of the RegularRelated Transactions in 2019 No. 2019-014. During the reporting period, the cumulative transaction amount of theCompany's related transactions related to its daily operations was within the expected range of the year.
Inquiry on the website for disclosing the provisional report concerning significant related transactions
| Description of the provisional announcements | Date of disclosure | Disclosure website |
| Announcement on the Resolution of the 6th Session of the Ninth Board of Directors, 2019-012 | March 15, 2019 | www.cninfo.com.cn |
| Announcement of the Prediction of the Regular Related Transactions in 2019, 2019-012 | March 15, 2019 | www.cninfo.com.cn |
| Announcement on the Resolution of 2018 Annual General Meeting, 2019-036 | June 20, 2019 | www.cninfo.com.cn |
XIII. The Company's Funds Occupied by its Controlling Shareholder or/and Related Parties for Non-operatingPurposeInapplicable
XIV. Important Contracts and Implementation
1. Custody, Contacting and Leases
(1) Custody
Inapplicable
(2) Contracting
Inapplicable
(3) Leases
Inapplicable
2. Significant Guarantees
(1) Guarantees
In CNY 10,000
| Outward guarantees Offered by the Company and its Subsidiaries (excluding guarantee to the subsidiaries) | ||||||||
| Names of Guarantees | Date of the announcement on the guarantee line | Guarantee line | Date of occurrence (date of agreement execution) | Actual amount of guarantee | Type of guarantee | Guarantee period | Implementation status | Guarantee to related party? |
| Inapplicable | ||||||||
| Total amount of outward guarantee approved in the report period (A1) | 0. | Total amount of outward guarantee actually incurred in the report period (A2) | 0. | |||||
| Total amount of outward guarantee already approved at the end of the report period (A3) | 0. | Total ending balance of outward guarantee at the end of the report period (A4) | 0. | |||||
| Guarantee to the subsidiaries | ||||||||
| Names of Guarantees | Date of the | Guarantee line | Date of occurrence | Actual amount of | Type of guarantee | Guarantee period | Implementati | Guarantee to |
| announcement on the guarantee line | (date of agreement execution) | guarantee | on status | related party? | |||||
| Harmony | March 10, 2018 | 20,000. | December 30, 2018 | 8,000. | Guarantee with joint responsibility | 1 year | No | No | |
| the Hong Kong Co. | March 10, 2018 | 3,513. | September 10, 2018 | 353. | Guarantee with joint responsibility | 1 year | No | No | |
| the Hong Kong Co. | March 10, 2018 | 0. | October 15, 2018 | 353. | Guarantee with joint responsibility | 1 year | No | No | |
| the Hong Kong Co. | March 10, 2018 | 0. | November 13, 2018 | 282. | Guarantee with joint responsibility | 1 year | No | No | |
| the Hong Kong Co. | March 15, 2019 | 0. | April 20, 2019 | 2,020. | Guarantee with joint responsibility | 1 year | No | No | |
| Total guarantee quota to the subsidiaries approved in the reporting period (B1) | 0. | Total amount of guarantee to the subsidiaries actually incurred in the reporting period (B2) | 2,020. | ||||||
| Total guarantee quota to the subsidiaries approved at the end of the reporting period (B3) | 23,513. | Total balance of actual guarantee to the subsidiaries at the end of the reporting period (B4) | 11,008. | ||||||
| Guarantee among the subsidiaries | |||||||||
| Names of Guarantees | Date of the announcement on the guarantee line | Guarantee line | Date of occurrence (date of agreement execution) | Actual amount of guarantee | Type of guarantee | Guarantee period | Implementation status | Guarantee to related party? | |
| Inapplicable | |||||||||
| Total guarantee quota to the subsidiaries approved in the reporting period (C1) | 0. | Total amount of guarantee to the subsidiaries actually incurred in the reporting period (C2) | 0. | ||||||
| Total guarantee quota to the subsidiaries approved at the end of the reporting period (C3) | 0. | Total balance of actual guarantee to the subsidiaries at the end of the reporting period (C4) | 0. | ||||||
| Total amount of guarantees (i.e. Total of the previous three major items) | |||||||||
| Total guarantee quota to the subsidiaries approved in the reporting period (A1) | 0. | Total amount of outward guarantee actually incurred in the report period (A2) | 2,020. | ||||||
| Total amount of guarantees already approved at the end of the report period (A3) | 23,513. | Total ending balance of guarantees at the end of the report period (A4) | 11,008. | ||||||
| Proportion of the actual guarantees in the Company’s net assets (namely A4+B4 + C4) | 4.10% | ||||||||
| in which | |
| Amount of guarantees offered to the shareholders, actual controller and its related parties (D) | 0. |
| Amount of guarantee for liabilities directly or indirectly offered to the guarantees with the asset-liability ratio exceeding 70% (E) | 0. |
| Guarantee with total amount exceeding 50% of the net assets (F) | 0. |
| Total amount of the aforesaid three guarantees (D+E+F) | 0. |
| Note to the undue guarantee which may bring about joint responsibility for discharging (if any) | Inapplicable |
| Note to the outward guarantee against the established procedures (if any) | Inapplicable |
Description of the guarantee with complex methodInapplicable
(2) Outward guarantee against regulations
Inapplicable
3. Other Important Contracts
Inapplicable
XV. Social Responsibilities
1. Significant Issues concerning Environmental Protection
Does the Company or any of its subsidiaries belong to a key pollutant discharging unit as announced to the public by theenvironmental protection authority?Yes
| Name of the Company or its Subsidiary | Description of the major pollutants or specific pollutant | Way of discharging | Number of discharging outlets | Distribution of the discharging outlets | Discharging concentration | Pollutant Discharge Standards in Force | Total discharge volume | Total discharge volume verified | Over-discharging |
| Shanghai Watch Industry Co., Ltd. | Nickel and chromium effluent | Intermittent and interruption | 1. | At the port of effluent treatment equipment | Nickel ﹤0.01, chromium ﹤0.01 | Nickel:0.1; chromium:0.3 | 2640 tons/year | 3960 tons/year | None |
Construction and operation of the pollution prevention and control facilitiesShanghai Watch Co., Ltd. reconstructed the clean production facility in 2016 and added 2 sets of equipment in 2018 forthe purpose of ensuring discharging of nickel and chromium effluent to comply with the Emission Standard of Pollutantsfor Electroplating during 2018. Up to now, the facility has been operating normally and its emission has never exceededthe limit as specified by the standard. The Company's online monitoring terminal has been docked with the governmentmonitoring platform for timely testing. It complies with the standard in terms of emission factors.
Environmental impact assessment on construction projects and other environmental protection administrativelicensingIn 2018 Yangpu District Environmental Protection Bureau of Shanghai organized and held the Clean Production Auditingand Assessment Seminar of Shanghai Watch Co., Ltd. where the company's clean production work was assessed,audited and approved. Shanghai Watch Co., Ltd. has passed the emission certification conducted by YangpuEnvironmental Protection Bureau, Shanghai with the emission certification notice number: YANG HUAN JIAN HUAN JIANFEI HE ZI [2007] No. 05363. In accordance with the provisions of Shanghai Environmental Protection Bureau, theCompany applied for the pollutant discharging licence before the end of 2019. At present, the Company is making therelevant preparation work for application for the pollutant discharging licence.
Contingency Plan for Emergent Environmental IncidentsShanghai Watch Co., Ltd. prepared the Emergency Response Plan against Emergent Environmental Incidents andregularly organizes training and exercise every year. The aforesaid plan has been approved and filed for record byYangpu District Environmental Protection Bureau of Shanghai and has been published on the Environmental InformationDisclosure Platform of Enterprises and Institutions of Shanghai.
Environment Self-Monitoring ProgramYangpu District Environmental Protection Bureau of Shanghai conducts supervision once every quarter. The companyentrusts Shanghai Light Industry Environment Protection and Pressure Vessel Monitoring General Station, a competentindependent agent, to conduct the monitoring every year. The company is itself equipped with monitoring instruments andconducts self-monitoring at least 4 times every month.
Other environment information necessary to be disclosedThe company has disclosed the concerned information on the Environmental Information Disclosure Platform ofEnterprises and Institutions of Shanghai according to the requirements of the local environmental protection authorities.Website name: http://xxgk.eic.sh.cn.
Other information in connection with the environmental protectionNone
2. Implementation of the social responsibility of precise poverty relief
During the reporting period of half a year, the Company had neither precise poverty relief work nor follow-up precisepoverty relief plan to be carried out.
XVI. Notes to Other Significant Events
1. Amendment of the Articles of Association
The 6th Session of the Ninth Board of Directors held on March 13, 2019 , the 9th Session of the Ninth Board of Directorsheld on June 6, 2019 and 2018 Annual General Meeting held on June 19, 2019 reviewed and approved the Proposal onAmendment of the Articles of Association. For the detail, refer to the Announcement on the Resolution of the 6th Sessionof the Ninth Board of Directors,2019-012, the 9th Session of the Ninth Board of Directors,2019-032 and theAnnouncement on the Resolution of 2018 Annual General Meeting No. 2019-036 and the Proposal on Amendment of the
Articles of Association disclosed on the Securities Times, Hong Kong Commercial Daily and www.cninfo.com.cn.
2. Matters concerning Repurchase of the Company’s Partial Domestically Listed Foreign Shares (B Shares)The 7th session of the Ninth Board of Directors held on April 4, 2019 and 2019 2nd Extraordinary General Meeting held onApril 23, 2019, reviewed and approved the “Proposal for the Repurchase of Partial Domestically Listed Foreign Shares inthe Company (B-shares), and subsequently the Company disclosed the repurchase report and published a series ofannouncements on the progress in accordance with relevant regulations. For detail of the above, please refer to therelevant announcements disclosed by the Company in the Securities Times, Hong Kong Commercial Daily andwww.cninfo.com.cn.
3. Election for the Staff Representative Supervisor
2019 1st Staff Representative Congress held on April 12, 2019 reviewed and approved the Proposal on Election of theStaff Representative Supervisor of the Ninth Supervisory Committee; Mr. Fang Jiasheng was elected the staffrepresentative supervisor the Ninth Supervisory Committee. For the detail, refer to the Announcement on the Resolutionof the Staff Representative Congress No. 2019-021 disclosed on the Securities Times, Hong Kong Commercial Daily andwww.cninfo.com.cn.
XVII. Significant Events of the Company's SubsidiariesInapplicable
Section 6 Change of Shares and Particulars about Shareholders
I. Change of Shares
1. Change of Shares
In shares
| Before the change | Increase / Decrease (+/ -) | After the change | |||||||
| Quantity | Proportion | New issuing | Bonus shares | Shares converted from reserve | Others | Sub-total | Quantity | Proportion | |
| I. Restricted shares | 380,513. | 0.09% | 4,224,000. | 4,224,000. | 4,604,513. | 1.04% | |||
| 1. Shares held by the state | 0. | 0.00% | 0. | 0. | 0. | 0.00% | |||
| 2. State corporate shares | 0. | 0.00% | 0. | 0. | 0. | 0.00% | |||
| 3. Other domestic shares | 380,513. | 0.09% | 4,224,000. | 4,224,000. | 4,604,513. | 1.04% | |||
| Including: Domestic corporate shares | 0. | 0.00% | 0. | 0. | 0. | 0.00% | |||
| Shares held by domestic natural persons | 380,513. | 0.09% | 4,224,000. | 4,224,000. | 4,604,513. | 1.04% | |||
| 4、Foreign invested shares | 0. | 0.00% | 0. | 0. | 0. | 0.00% | |||
| Including: Foreign corporate shares | 0. | 0.00% | 0. | 0. | 0. | 0.00% | |||
| Shares held by foreign natural persons | 0. | 0.00% | 0. | 0. | 0. | 0.00% | |||
| II. Unrestricted shares | 438,364,368. | 99.91% | 0. | 0. | 438,364,368. | 98.96% | |||
| 1. CNY ordinary shares | 356,716,368. | 81.30% | 0. | 0. | 356,716,368. | 80.53% | |||
| 2. Foreign invested shares listed in Mainland China | 81,648,000. | 18.61% | 0. | 0. | 81,648,000. | 18.43% | |||
| 3. Foreign invested shares listed abroad | 0. | 0.00% | 0. | 0. | 0. | 0.00% | |||
| 4. Others | 0. | 0.00% | 0. | 0. | 0. | 0.00% | |||
| III. Total shares | 438,744,881. | 100.00% | 4,224,000. | 4,224,000. | 442,968,881. | 100.00% | |||
Cause of the change of sharesDuring the reporting period, the Company finished awarding the A-share restrictive stock as specified in its stock incentiveprogram (Phase I) and registering the same for listing. Upon completion of the share awarding, the Company's totalcapital stock increased to 442,968,881 shares.
Approval of Change of the SharesThe 3rd session of the Ninth Board of Directors and 2019 1st Extraordinary General Meeting held respectively onNovember 12, 2018 and January 11, 2019 decided to start 2018 A-Share Restrictive Stock Incentive Program (Phase I).
The 5th session of the Ninth Board of Directors held on January 11, 2019 decided to award 4.224 million A-sharerestricted shares to 128 persons eligible for the incentive.
Transfer of the Shares ChangedThe persons eligible for the incentive in the Company's 2018 A-Share Restrictive Stock Incentive Program (Phase I) havehandled the procedures for registration with China Securities Depository and Clearing Corporation Limited (CSDC)Shenzhen Office.The 6th session of the Ninth Board of Directors held on March 13, 2019 reviewed and approved the Proposal forAmendment of the Articles of Association, according to which the Company’s registered capital has been changed fromCNY438,744,881 into CNY 442,968,881.
Progress of implementation of the stock repurchaseThe 7th session of the Ninth Board of Directors held on April 4, 2019 and 2019 2nd Extraordinary General Meeting held onApril 23, 2019, reviewed and approved the “Proposal for the Repurchase of Partial Domestically Listed Foreign Shares inthe Company (B-shares), and subsequently the Company disclosed the repurchase report and published a series ofannouncements on the progress in accordance with relevant regulations. For detail of the above, please refer to therelevant announcements disclosed by the Company in the Securities Times, Hong Kong Commercial Daily andwww.cninfo.com.cn.As of the end of the reporting period, the Company repurchased 2,700,000 shares in the Company by way of centralizedbidding, accounting for 0.61% of the Company's total capital stock; the highest transaction price of the repurchasedshares was HK$6.06 per share, and the lowest transaction price was HK$5.85/shares, the total amount paid has beenHK$16,228,291.65 (excluding transaction fees such as stamp duty, commission, etc.) The Company’s repurchase of theshares was in compliance with the relevant laws and regulations and in line with the Company's established repurchaseprogram.
Progress of implementation of reduction of the holding size of the shares repurchased by centralized biddingInapplicable
Influence of the change of the shares upon such financial indicators as the basic EPS and diluted EPS, net asset valueper share attributable to the common stockholders in the past year and the latest period
During the reporting period, the Company finished awarding the 2018 A-share Restrictive Stock Incentive Program (PhaseI); and the earnings per share and return on equity at the end of the reporting period were calculated by weighted average.
| Net return on equity, weighted average (%) | Earnings per share | ||||
| Basic earnings per share (CNY/share) | Diluted earnings per share (CNY/share) | ||||
| The first half year of 2019 | The first half year of 2018 | The first half year of 2019 | The first half year of 2018 | The first half year of 2019 | The first half year of 2018 |
| 4.69% | 4.45% | 0.2788 | 0.2561 | 0.2788 | 0.2561 |
Other information the Company considers necessary or required by the securities regulatory authority to be disclosed.Inapplicable
2. Change of the Restricted Shares
In shares
| Names of the Shareholders | Number of restricted shares at the beginning of the reporting period | Number of restricted shares relieved in the reporting period | Number of restricted shares increased in the reporting period | Number of restricted shares at the end of the reporting period | Cause of restriction | Date of relieving the restriction |
| Huang Yongfeng | 60,000 | 0 | 100,000 | 160,000 | Locked shares for senior executives and restricted shares as the granted locked shares | To be unlocked subject to the conditions of the locked shares for senior executives and the measures for the Company’s equity incentive management |
| Chen Libin | 60,000 | 0 | 100,000 | 160,000 | Locked shares for senior executives and restricted shares as the granted locked shares | To be unlocked subject to the conditions of the locked shares for senior executives and the measures for the Company’s equity incentive management |
| Lu Bingqiang | 72,233 | 0 | 0 | 72,233 | Locked shares for senior executives | To be unlocked subject to the conditions of the locked shares for senior executives |
| Lu Wanjun | 37,500 | 0 | 80,000 | 117,500 | Locked shares for senior executives and restricted shares as the granted locked shares | To be unlocked subject to the conditions of the locked shares for senior executives and the measures for the Company’s equity incentive management |
| Liu Xiaoming | 37,500 | 0 | 80,000 | 117,500 | Locked shares for senior executives and restricted shares as the granted locked shares | To be unlocked subject to the conditions of the locked shares for senior executives and the measures for the Company’s equity incentive management |
| Pan Bo | 37,500 | 0 | 80,000 | 117,500 | Locked shares for senior | To be unlocked subject to |
| executives and restricted shares as the granted locked shares | the conditions of the locked shares for senior executives and the measures for the Company’s equity incentive management | |||||
| Li Ming | 37,530 | 0 | 80,000 | 117,530 | Locked shares for senior executives and restricted shares as the granted locked shares | To be unlocked subject to the conditions of the locked shares for senior executives and the measures for the Company’s equity incentive management |
| Chen Zhuo | 38,250 | 0 | 80,000 | 118,250 | Locked shares for senior executives and restricted shares as the granted locked shares | To be unlocked subject to the conditions of the locked shares for senior executives and the measures for the Company’s equity incentive management |
| Sheng Li | 0 | 0 | 60,000 | 60,000 | Locked shares for senior executives and restricted shares as the granted locked shares | To be unlocked subject to the conditions of the locked shares for senior executives and the measures for the Company’s equity incentive management |
| Bao Xianyong | 0 | 0 | 60,000 | 60,000 | Locked shares for senior executives and restricted shares as the granted locked shares | To be unlocked subject to the conditions of the locked shares for senior executives and the measures for the Company’s equity incentive management |
| Other persons eligible for the incentive of A-share restrictive stock (119 persons) | 0 | 0 | 3,504,000 | 3,504,000 | Locked shares for senior executives and restricted shares as the granted locked shares | To be unlocked subject to the conditions of the locked shares for senior executives and the measures for the Company’s equity incentive management |
| Total | 380,513 | 0 | 4,224,000 | 4,604,513 | -- | -- |
II. Issuing and Listing
| Description of the stock and its derivative securities | Issuing date | Issuing price (or interest rate) | Issuing quantity | Date of listing | Quantity approved for listing for trading | Expiry date of trading | Disclosure index | Date of disclosure |
| Stock category | ||||||||
| A-share ordinary shares | January 11, 2019 | 4.40. | 4,224,000. | January 30, 2019 | - | - | www.cninfo.com.cn | January 29, 2019 |
Description of securities issuing during the reporting periodThe 3rd session of the Ninth Board of Directors held on November 12, 2018 and 2019 1st Extraordinary General Meetingheld on January 11, 2019 decided to start 2018 A-Share Restrictive Stock Incentive Program (Phase I), which was later onreviewed and approved at the 5th session of the Ninth Board of Directors held on January 11, 2019, and the Companyeventually granted 4.224 million restrictive A-shares to 128 persons eligible for the incentive。 The granting date of thispart of the restrictive stock was January 30, 2019; on January 30, 3019, the granting was completed and the stock wasregistered for listing. For the detail, refer to the Announcement on the Completion of Granting the Restrictive A-Sharesaccording to the Incensive Program (Phase I) No. 2019-009 disclosed in the Securities Times, Hong Kong CommercialDaily and www.cninfo.com.
III. Number of Shareholders and Shareholding
In shares
| Total common shareholders at the end of the reporting period | 33,105. | Total preference shareholders with the voting power recovered at the end of the reporting period (if any) (Refer to Note 8) | 0. | |||||||
| Shares held by the common shareholders holding over 5% shares or the top 10 common shareholders | ||||||||||
| Names of the Shareholders | Nature of the shareholder | Shareholding proportion | Number of common shares held at the end of the reporting period | Increase/decrease in the reporting period | Number of the restricted common shares held | Number of the unrestricted common shares held | Pledging or freezing | |||
| Status of the shares | Quantity | |||||||||
| AVIC International Holding Limited | State corporate | 36.79% | 162,977,327. | 0. | 0. | 162,977,327. | ||||
| #Yang Zugui | Domestic natural persons | 3.32% | 14,709,417. | 1,600,500. | 0. | 14,709,417. | ||||
| National Social Security Fund 114 Portfolio | State-owned legal person | 1.92% | 8,483,232. | -1,174,512. | 0. | 8,483,232. | ||||
| BANK OF | Domestic | 0.62% | 2,741,301. | 209,100. | 0. | 2,741,301. | ||||
| COMMUNICATIONS CO.,LTD - CHANGXIN QUANTIFIED PIONEER EQUITY FUND | non-state-owned corporate | ||||||||
| Shenzhen Heli Fengyuan Commerce & Trade Co., Ltd. | Domestic non-state-owned corporate | 0.61% | 2,704,000. | 0. | 0. | 2,704,000. | |||
| Xizang Investment Co., Ltd. | State-owned legal person | 0.51% | 2,271,251. | -2,705,300. | 0. | 2,271,251. | |||
| Li Changqiang | Domestic natural persons | 0.32% | 1,398,000. | 1,398,000. | 0. | 1,398,000. | |||
| # Chen Chu | Domestic natural persons | 0.31% | 1,365,219. | 867,924. | 0. | 1,365,219. | |||
| Zeng Yanhong | Domestic natural persons | 0.30% | 1,350,000. | 250,000. | 0. | 1,350,000. | |||
| Vanguard Investment Australia Ltd. - Vanguard Emerging Market Stock Index Fund (Stock Exchange) | Domestic non-state-owned corporate | 0.27% | 1,190,485. | 0. | 0. | 1,190,485. | |||
| About the fact that a strategic investor or ordinary corporate became one of the top ten common shareholders due to placement of new shares (if any) (Refer to Note 3) | Inapplicable | ||||||||
| Explanation on associated relationship or consistent action of the above shareholders | Inapplicable | ||||||||
| Shares held by top 10 shareholders of unrestricted shares | |||||||||
| Names of the Shareholders | Quantity of unrestricted shares held at the end of the reporting period | Share type | |||||||
| Share type | Quantity | ||||||||
| AVIC International Holding Limited | 162,977,327. | CNY ordinary shares | 162,977,327. | ||||||
| #Yang Zugui | 14,709,417. | CNY ordinary shares | 14,709,417. | ||||||
| National Social Security Fund 114 Portfolio | 8,483,232. | CNY ordinary shares | 8,483,232. | ||||||
| BANK OF COMMUNICATIONS CO.,LTD - CHANGXIN QUANTIFIED PIONEER EQUITY FUND | 2,741,301. | CNY ordinary shares | 2,741,301. | ||||||
| Shenzhen Heli Fengyuan Commerce & Trade | 2,704,000. | CNY ordinary shares | 2,704,000. | ||||||
| Co., Ltd. | |||
| Xizang Investment Co., Ltd. | 2,271,251. | CNY ordinary shares | 2,271,251. |
| Li Changqiang | 1,398,000. | CNY ordinary shares | 1,398,000. |
| # Chen Chu | 1,365,219. | CNY ordinary shares | 1,365,219. |
| Zeng Yanhong | 1,350,000. | CNY ordinary shares | 1,350,000. |
| Vanguard Investment Australia Ltd. - Vanguard Emerging Market Stock Index Fund (Stock Exchange) | 1,190,485. | CNY ordinary shares | 1,190,485. |
| Note to the associated relationship or consistent action among the top 10 shareholders of non-restricted common shares and that between the top 10 shareholders of non-restricted common shares and top 10 common shareholders. | Inapplicable | ||
| Note to the top 10 common shareholders involved in margin financing & securities lending (if any) (Refer to Note 4) | Inapplicable | ||
Did the top ten common shareholders or top ten shareholders of unrestricted common shares conduct contractualrepurchase during the reporting period?No
IV. Change of the Controlling Shareholder or Actual ControllerInapplicable
Section 7 About the Preferred SharesInapplicable
Section 8 Directors, Supervisors, Senior Executives and EmployeesI. Change in Shares Held by Directors, Supervisors and Senior Executives
| Name | Title | Office Status | Number of shares held at the beginning of the reporting period (shares) | Shareholding increased in the reporting period (shares) | Shareholding decreased in the reporting period (shares) | Number of shares held at end of the reporting period (shares) | Number of restricted shares granted at the beginning of the reporting period (shares) | Number of restricted shares granted during the reporting period (shares) | Number of restricted shares granted at the end of the reporting period (shares) |
| Huang Yongfeng | Chairman | In office | 80,000. | 0. | 0. | 80,000. | 0. | 100,000. | 100,000. |
| Wang Mingchuan | Director | In office | 0. | 0. | 0. | 0. | 0. | 0. | 0. |
| Fu Debin | Director | In office | 0. | 0. | 0. | 0. | 0. | 0. | 0. |
| Xiao Zhanglin | Director | In office | 0. | 0. | 0. | 0. | 0. | 0. | 0. |
| Wang Bo | Director | In office | 0. | 0. | 0. | 0. | 0. | 0. | 0. |
| Chen Libin | Director & GM | In office | 80,000. | 0. | 0. | 80,000. | 0. | 100,000. | 100,000. |
| Wang Jianxin | Independent director | In office | 0. | 0. | 0. | 0. | 0. | 0. | 0. |
| Zhong Hongming | Independent director | In office | 0. | 0. | 0. | 0. | 0. | 0. | 0. |
| Tang Xiaofei | Independent director | In office | 0. | 0. | 0. | 0. | 0. | 0. | 0. |
| Wang Baoying | Chairman of the Supervisory Committee | In office | 0. | 0. | 0. | 0. | 0. | 0. | 0. |
| Sheng Qing | Supervisor | In office | 0. | 0. | 0. | 0. | 0. | 0. | 0. |
| Fang Jiasheng | Supervisor | In office | 0. | 0. | 0. | 0. | 0. | 0. | 0. |
| Lu Bingqiang | Deputy GM | In office | 96,311. | 0. | 0. | 96,311. | 0. | 0. | 0. |
| Lu Wanjun | Deputy GM and Secretary of the Board | In office | 50,000. | 0. | 0. | 50,000. | 0. | 80,000. | 80,000. |
| Liu Xiaoming | Deputy GM | In office | 50,000. | 0. | 0. | 50,000. | 0. | 80,000. | 80,000. |
| Pan Bo | Deputy GM | In office | 50,000. | 0. | 0. | 50,000. | 0. | 80,000. | 80,000. |
| Li Ming | Deputy GM | In office | 50,040. | 0. | 0. | 50,040. | 0. | 80,000. | 80,000. |
| Chen Zhuo | Chief Accountant | In office | 51,000. | 0. | 0. | 51,000. | 0. | 80,000. | 80,000. |
| Zou Zhixiang | Supervisor | Retired | 0. | 0. | 0. | 0. | 0. | 0. | 0. |
| Total | -- | -- | 507,351. | 0. | 0. | 507,351. | 0. | 600,000. | 600,000. |
II. Personnel Change in Directors, Supervisors and Senior Executives
| Name | Office Taken | Type | Date: | Cause |
| Fang Jiasheng | Supervisor | Elected | April 12, 2019 | Elected a staff representative supervisor at 2019 1st Staff Representative Congress. |
| Zou Zhixiang | Supervisor | Retired | April 10, 2019 | Decided to resign the office of staff representative supervisor of the Ninth Supervisory Committee due to personal reason. |
Section 9 Corporate Bonds
Did there exist any company bonds which were issued to the public and listed with the stock exchange for trading and wasdue by the date when the Semi-annual Report was approved for issuing or failed to be fully cashed by the end of thereporting period?No
Section 10 Financial ReportI. Auditors’ ReportHas the semi-annual report been auditedNo
II. Financial StatementsThe currency applied in the financial notes and statements is Renminbi (CNY)
1. Consolidated Balance Sheet
Prepared by FIYTA HOLDINGS LTD.
In CNY
| Items | June 30, 2019 | December 31, 2018 |
| Current assets: | ||
| Monetary capital | 226,521,552.42 | 164,828,059.97 |
| Settlement reserve | ||
| Inter-bank lending | ||
| Transactional financial assets |
| Derivative financial assets | ||
| Notes receivable | 9,940,991.52 | 7,051,846.85 |
| Accounts receivable | 448,122,115.59 | 370,545,656.61 |
| Financing with accounts receivable | ||
| Advance payment | 25,833,366.51 | 13,666,816.33 |
| Receivable premium | ||
| Reinsurance accounts receivable | ||
| Reserve for reinsurance contract receivable | ||
| Other receivables | 62,591,073.25 | 45,870,582.26 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Redemptory monetary capital for sale | ||
| Inventories | 1,727,402,092.53 | 1,782,306,301.70 |
| Contract assets |
| Held-for-sale assets | ||
| Non-current assets due within a year | ||
| Other current assets | 46,066,469.94 | 73,703,312.24 |
| Total current assets | 2,546,477,661.76 | 2,457,972,575.96 |
| Non-current assets: | ||
| Loan issuing and advance in cash | ||
| Equity investment | ||
| Available-for-sale financial assets | 85,000.00 | |
| Other equity investment | ||
| Held-to-due investments | ||
| Long term accounts receivable | ||
| Long-term equity investment | 46,412,373.21 | 44,881,063.15 |
| Investment in other equity instruments | 85,000.00 | |
| Other non-current financial assets | ||
| Investment-oriented real estate | 370,467,221.69 | 377,319,433.03 |
| Fixed assets | 414,522,443.81 | 425,649,562.85 |
| Construction-in-progress | 12,886,665.68 | 12,041,126.00 |
| Productive biological asset | ||
| Oil and gas assets | ||
| Use right assets | ||
| Intangible assets | 41,477,871.11 | 43,545,477.61 |
| Development expenses | ||
| Goodwill | ||
| Long-term expenses to be apportioned | 137,535,709.85 | 128,572,545.15 |
| Deferred income tax asset | 83,293,488.15 | 100,675,706.09 |
| Other non-current assets | 7,297,788.01 | 8,949,160.42 |
| Total non-current assets | 1,113,978,561.51 | 1,141,719,074.30 |
| Total assets | 3,660,456,223.27 | 3,599,691,650.26 |
| Current liabilities: | ||
| Short term borrowings | 550,078,332.26 | 547,118,452.97 |
| Borrowings from central bank | ||
| Loans from other banks | ||
| Transactional financial liabilities | ||
| Financial liabilities which are measured at their fair values and the variation of which |
| is counted to the current profit and loss | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 227,682,547.55 | 259,913,612.34 |
| Advance Receipts | 18,022,460.66 | 16,459,445.00 |
| Money from sale of the repurchased financial assets | ||
| Deposits taking and interbank placement | ||
| Acting trading securities | ||
| Income from securities underwriting on commission | ||
| Payroll payable to the employees | 48,582,058.35 | 69,779,037.83 |
| Taxes payable | 32,037,984.80 | 55,923,171.92 |
| Other payables | 92,313,874.56 | 71,819,930.30 |
| Including: interest payable | 740,561.84 | 772,351.26 |
| Dividends payable | ||
| Service charge and commission payable | ||
| Payable reinsurance | ||
| Contract liabilities | ||
| Held-for-sale liabilities | ||
| Non-current liabilities due within a year | 352,790.00 | 347,470.00 |
| Other current liabilities | ||
| Total current liabilities | 969,070,048.18 | 1,021,361,120.36 |
| Non-current liabilities: | ||
| Reserve for insurance contract | ||
| Long-term borrowings | 4,409,875.00 | 4,517,110.00 |
| Bonds payable | ||
| Including: preferred shares | ||
| Perpetual bond | ||
| Lease liabilities | ||
| Long-term accounts payable | ||
| Long term payroll payable to the employees |
| Estimated liabilities | ||
| Deferred income | 3,672,855.36 | 3,672,855.36 |
| Deferred income tax liability | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 8,082,730.36 | 8,189,965.36 |
| Total liabilities | 977,152,778.54 | 1,029,551,085.72 |
| Owner’s equity: | ||
| Capital stock | 442,968,881.00 | 438,744,881.00 |
| Other equity instruments | ||
| Including: preferred shares | ||
| Perpetual bond | ||
| Capital Reserve | 1,079,051,841.53 | 1,062,455,644.22 |
| Less: shares in stock | 32,902,198.89 | |
| Other comprehensive income | -3,692,732.58 | -5,442,139.78 |
| Special reserve | ||
| Surplus Reserve | 223,015,793.80 | 223,015,793.80 |
| Reserve against general risks | ||
| Retained earnings | 974,856,064.56 | 851,360,603.66 |
| Total owners’ equity attributable to the parent company | 2,683,297,649.42 | 2,570,134,782.90 |
| Minority shareholders’ equity | 5,795.31 | 5,781.64 |
| Total owner’s equity | 2,683,303,444.73 | 2,570,140,564.54 |
| Total liabilities and owners’ equity | 3,660,456,223.27 | 3,599,691,650.26 |
Legal representative: Huang Yongfeng Chief Financial Officer: Chen ZhuoPerson in charge of the Accounting Department: Tian Hui
2. Balance Sheet (Parent Company)
In CNY
| Items | June 30, 2019 | December 31, 2018 |
| Current assets: | ||
| Monetary capital | 184,867,858.11 | 137,175,466.27 |
| Transactional financial assets | ||
| Financial assets which are measured at their fair values and the variation of which |
| is counted to the profit and loss of the current period | ||
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 2,232,719.12 | 737,636.38 |
| Financing with accounts receivable | ||
| Advance payment | ||
| Other receivables | 802,334,152.26 | 870,739,378.37 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Inventories | ||
| Contract assets | ||
| Held-for-sale assets | ||
| Non-current assets due within a year | ||
| Other current assets | 11,816,267.04 | 10,081,272.94 |
| Total current assets | 1,001,250,996.53 | 1,018,733,753.96 |
| Non-current assets: | ||
| Equity investment | ||
| Available-for-sale financial assets | 85,000.00 | |
| Other equity investment | ||
| Held-to-due investments | ||
| Long term accounts receivable | ||
| Long-term equity investment | 1,377,660,964.14 | 1,376,129,654.08 |
| Investment in other equity instruments | 85,000.00 | |
| Other non-current financial assets | ||
| Investment-oriented real estate | 291,562,362.07 | 297,042,937.87 |
| Fixed assets | 290,346,866.97 | 297,517,472.81 |
| Construction-in-progress | 12,886,665.68 | 12,041,126.00 |
| Productive biological asset | ||
| Oil and gas assets | ||
| Use right assets | ||
| Intangible assets | 33,070,715.48 | 35,337,052.82 |
| Development expenses | ||
| Goodwill | ||
| Long-term expenses to be apportioned | 9,247,782.11 | 4,500,638.97 |
| Deferred income tax asset | 969,058.32 | 952,857.33 |
| Other non-current assets | 2,486,782.05 | 4,493,971.35 |
| Total non-current assets | 2,018,316,196.82 | 2,028,100,711.23 |
| Total assets | 3,019,567,193.35 | 3,046,834,465.19 |
| Current liabilities: | ||
| Short term borrowings | 520,000,000.00 | 505,000,000.00 |
| Transactional financial liabilities | ||
| Financial liabilities which are measured at their fair values and the variation of which is counted to the current profit and loss | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 26,696,117.76 | 52,324,191.98 |
| Advance Receipts | 3,252,081.05 | 1,636,520.02 |
| Contract liabilities | ||
| Payroll payable to the employees | 9,867,650.25 | 11,589,634.34 |
| Taxes payable | 3,611,483.28 | 943,919.26 |
| Other payables | 45,726,573.85 | 57,997,397.28 |
| Including: interest payable | 579,338.91 | 685,419.80 |
| Dividends payable | ||
| Held-for-sale liabilities | ||
| Non-current liabilities due within a year | ||
| Other current liabilities | ||
| Total current liabilities | 609,153,906.19 | 629,491,662.88 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: preferred shares | ||
| Perpetual bond | ||
| Lease liabilities | ||
| Long-term accounts payable | ||
| Long term payroll payable to the employees | ||
| Estimated liabilities | ||
| Deferred income | 3,672,855.36 | 3,672,855.36 |
| Deferred income tax liability | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 3,672,855.36 | 3,672,855.36 |
| Total liabilities | 612,826,761.55 | 633,164,518.24 |
| Owner’s equity: | ||
| Capital stock | 442,968,881.00 | 438,744,881.00 |
| Other equity instruments | ||
| Including: preferred shares | ||
| Perpetual bond | ||
| Capital Reserve | 1,084,707,382.63 | 1,068,111,185.32 |
| Less: shares in stock | 32,902,198.89 | |
| Other comprehensive income | ||
| Special reserve | ||
| Surplus Reserve | 223,015,793.80 | 223,015,793.80 |
| Retained earnings | 688,950,573.26 | 683,798,086.83 |
| Total owner’s equity | 2,406,740,431.80 | 2,413,669,946.95 |
| Total liabilities and owners’ equity | 3,019,567,193.35 | 3,046,834,465.19 |
Legal representative: Huang Yongfeng Chief Financial Officer: Chen ZhuoPerson in charge of the Accounting Department: Tian Hui
3. Consolidated Profit Statement
In CNY
| Items | The first half year of 2019 | The first half year of 2018 |
| I. Turnover | 1,785,036,020.23 | 1,695,891,432.72 |
| Including: operating income | 1,785,036,020.23 | 1,695,891,432.72 |
| Interest income | ||
| Earned insurance premium | ||
| Service charge and commission income | ||
| II. Total operating costs | 1,634,493,191.74 | 1,559,905,673.67 |
| Including: Operating costs | 1,051,504,075.22 | 976,325,736.35 |
| Interest payment | ||
| Service charge and commission payment | ||
| Surrender Value |
| Compensation expenses, net | ||
| Provision of reserve for insurance contract, net | ||
| Payment of policy dividend | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 15,094,875.33 | 17,790,786.43 |
| Sales costs | 415,776,028.95 | 422,113,041.69 |
| Administrative expenses | 116,352,835.42 | 104,242,391.69 |
| R & D expenditures | 19,526,410.93 | 21,285,926.02 |
| Financial expenses | 16,238,965.89 | 18,147,791.49 |
| Where: Interest cost | 12,023,843.93 | 14,273,043.13 |
| Interest income | -908,850.92 | -1,079,587.08 |
| Plus: Other income | 13,045,742.36 | 6,497,018.80 |
| Investment income (loss is stated with “-”) | 1,531,310.06 | 93,013.38 |
| Including: return on investment in associate and joint venture | 1,531,310.06 | 93,013.38 |
| Gain from the derecognition of the financial assets measured at amortised cost (loss is stated with “-”) | ||
| Exchange income (loss stated with “-“) | ||
| Net exposure hedge income (loss stated with “-“) | ||
| Income from change of fair value (loss is stated with “-”) | ||
| Loss from impairment of credit (loss is stated with “-”) | -3,081,768.89 | 5,178,800.41 |
| Loss from impairment of assets (loss is stated with “-”) | 2,514,740.86 | -1,765,800.30 |
| Income from disposal of assets (loss is stated with “-“) | -212,010.13 | -54,407.16 |
| III. Operating Profit (loss is stated with “-“) | 164,340,842.75 | 145,934,384.18 |
| Plus: Non-operating income | 294,311.70 | 363,859.51 |
| Less: Non-operating expenses | 524,505.98 | 466,522.53 |
| IV. Total profit (total loss is stated with “-”) | 164,110,648.47 | 145,831,721.16 |
| Less: Income tax expense | 40,615,187.57 | 33,463,799.72 |
| V. Net Profit (net loss is stated with “-“) | 123,495,460.90 | 112,367,921.44 |
| (I) Classification based on operation sustainability | ||
| 1. Net Profit from sustainable operation (net loss is stated with “-”) | 123,495,460.90 | 112,367,921.44 |
| 2. Net Profit from termination of operation (net loss is stated with “-”) |
| (II) Classification by ownership | ||
| 1. Net profit attributable to the parent company’s owner | 123,495,460.90 | 112,367,921.44 |
| 2. Minority shareholders’ gain/loss | ||
| VI. Net of other comprehensive income after tax | 1,749,420.87 | -1,392,954.99 |
| Net of other comprehensive income after tax attributable to the parent company’s owner | 1,749,407.20 | -1,392,919.75 |
| (I) Other comprehensive income which cannot be re-classified into gain and loss | ||
| 1. Movement of the net liabilities and net assets re-measured for setting the beneficial plan | ||
| 2. Other comprehensive income which cannot be converted into gain and loss based on the equity method | ||
| 3. Movement of the fair value of the investment in other equity instruments | ||
| 4. Movement of the fair value of the Company’s own credit risk | ||
| 5. Others | ||
| (II) Other comprehensive income which shall be re-classified into gain and loss | 1,749,407.20 | -1,392,919.75 |
| 1. Other comprehensive income which can be converted into gain and loss based on the equity method | ||
| 2. Movement of the fair value of the investment in other debt instruments | ||
| 3. Gain/loss from change in the fair value of the financial assets available for sale | ||
| 4. Amount of the reclassified financial assets counted to the other comprehensive income | ||
| 5. Gain/loss from which the held-to-maturity investment is re-classified as available-for-sale financial assets | ||
| 6. Provision for impairment of the credit of the other debt investment | ||
| 7. Reserve for cash flow hedge | ||
| 8. Conversion difference in foreign currency statements | 1,749,407.20 | -1,392,919.75 |
| 9. Others | ||
| Net amount of other comprehensive income after tax attributable to minority shareholders | 13.67 | -35.24 |
| VII. Total comprehensive income | 125,244,881.77 | 110,974,966.45 |
| Total comprehensive income attributable to the parent company’s owner | 125,244,868.10 | 110,975,001.69 |
| Total comprehensive income attributable to minority shareholders | 13.67 | -35.24 |
| VIII. Earnings per share: | ||
| (I) Basic earnings per share | 0.2788 | 0.2561 |
| (II) Diluted earnings per share | 0.2788 | 0.2561 |
Legal representative: Huang Yongfeng Chief Financial Officer: Chen ZhuoPerson in charge of the Accounting Department: Tian Hui
4. Statement of Profit, Parent Company
In CNY
| Items | The first half year of 2019 | The first half year of 2018 |
| I. Operating revenue | 64,124,939.95 | 56,119,634.18 |
| Less: Operating cost | 11,807,925.90 | 9,578,544.70 |
| Taxes and surcharges | 2,257,018.92 | 2,206,362.07 |
| Sales costs | 582,036.03 | |
| Administrative expenses | 39,783,149.16 | 31,314,977.66 |
| R & D expenditures | 9,146,589.64 | 10,322,178.15 |
| Financial expenses | 3,247,689.32 | 3,554,000.36 |
| Where: Interest cost | 4,007,526.54 | 4,234,698.63 |
| Interest income | -776,046.44 | -710,762.21 |
| Plus: Other income | 7,743,695.89 | 1,598,000.00 |
| Investment income (loss is stated with “-”) | 1,531,310.06 | 93,013.38 |
| Including: return on investment in associate and joint venture | 1,531,310.06 | 93,013.38 |
| Gain from the derecognition of the financial assets measured at amortised cost (loss is stated with “-”) | ||
| Net exposure hedge income (loss stated with “-“) | ||
| Income from change of fair value (loss is stated with “-”) | ||
| Loss from impairment of credit (loss is stated with “-”) | 64,803.91 | |
| Loss from impairment of assets (loss is stated with “-”) | ||
| Income from disposal of assets (loss is stated with “-“) | -2,074.20 | -13,917.68 |
| II. Operating Profit (loss is stated with “-“) | 6,508,658.82 | 820,666.94 |
| Plus: Non-operating income | 18,000.00 | 9,480.00 |
| Less: Non-operating expenses | 200,000.00 | 446,782.07 |
| III. Total profit (total loss is stated with “-“) | 6,326,658.82 | 383,364.87 |
| Less: Income tax expense | 1,174,172.39 | -169,477.50 |
| IV. Net Profit (net loss is stated with “-“) | 5,152,486.43 | 552,842.37 |
| (I) Net Profit from sustainable operation (net loss is stated with “-”) | 5,152,486.43 | 552,842.37 |
| (II) Net Profit from termination of operation (net loss is stated with “-”) | ||
| V. Net of other comprehensive income after tax | ||
| (I) Other comprehensive income which cannot be re-classified into gain and loss | ||
| 1. Movement of the net liabilities and net assets re-measured for setting the beneficial plan | ||
| 2. Other comprehensive income which cannot be converted into gain and loss based on the equity method | ||
| 3. Movement of the fair value of the investment in other equity instruments | ||
| 4. Movement of the fair value of the Company’s own credit risk | ||
| 5. Others | ||
| (II) Other comprehensive income which shall be re-classified into gain and loss | ||
| 1. Other comprehensive income which can be converted into gain and loss based on the equity method | ||
| 2. Movement of the fair value of the investment in other debt instruments | ||
| 3. Gain/loss from change in the fair value of the financial assets available for sale | ||
| 4. Amount of the reclassified financial assets counted to the other comprehensive income | ||
| 5. Gain/loss from which the held-to-maturity investment is re-classified as available-for-sale financial assets | ||
| 6. Provision for impairment of the credit of the other debt investment | ||
| 7. Reserve for cash flow hedge | ||
| 8. Conversion difference in foreign currency statements |
| 9. Others | ||
| VI. Total comprehensive income | 5,152,486.43 | 552,842.37 |
| VII. Earnings per share: | ||
| (I) Basic earnings per share | 0.0116 | 0.0013 |
| (II) Diluted earnings per share | 0.0116 | 0.0013 |
Legal representative: Huang Yongfeng Chief Financial Officer: Chen ZhuoPerson in charge of the Accounting Department: Tian Hui
5. Consolidated Cash Flow Statement
In CNY
| Items | The first half year of 2019 | The first half year of 2018 |
| I. Cash flows arising from operating activities: | ||
| Cash received from sales of goods and supply of labor service | 1,913,555,960.34 | 1,905,278,291.59 |
| Net increase of customers’ deposit and due from banks | ||
| Net increase of borrowings from the central bank | ||
| Net increase of borrowings from other financial institutions | ||
| Cash received from the premium of the original insurance contract | ||
| Net cash received from the reinsurance business | ||
| Net increase of the reserve from policy holders and investment | ||
| Cash received from interest, service charge and commission | ||
| Net increase of loan from other banks | ||
| Net increase of fund from repurchase business | ||
| Net cash received from securities trading on commission | ||
| Rebated taxes received | 3,160,067.59 | 185,691.63 |
| Other operation activity related cash receipts | 40,976,127.91 | 25,022,648.38 |
| Subtotal of cash flow in from operating activity | 1,957,692,155.84 | 1,930,486,631.60 |
| Cash paid for purchase of goods and reception of labor services | 1,116,738,134.87 | 1,010,882,821.40 |
| Net increase of loans and advances to customers | ||
| Net increase of due from central bank and due from other banks | ||
| Cash from payment for settlement of the original insurance contract | ||
| Net increase of the financial assets held for trading purpose | ||
| Net increase of the lending capital | ||
| Cash paid for interest, service charge and commission | ||
| Cash for payment of policy dividend | ||
| Cash paid to and for staff | 314,068,308.62 | 308,576,830.37 |
| Taxes paid | 130,569,918.63 | 169,009,260.06 |
| Other business activity related cash payments | 237,301,143.35 | 217,345,445.68 |
| Subtotal of cash flow out from operating activity | 1,798,677,505.47 | 1,705,814,357.51 |
| Net cash flows arising from operating activities | 159,014,650.37 | 224,672,274.09 |
| II. Cash flow arising from investment activities: | ||
| Cash received from recovery of investment | ||
| Cash received from investment income | ||
| Net cash from disposal of fixed assets,intangible assets and recovery of other long term assets | 84,258.51 | 6,872.90 |
| Net cash received from disposal of subsidiaries and other operating units | ||
| Other investment related cash receipts | ||
| Subtotal of cash flow in from investment activity | 84,258.51 | 6,872.90 |
| Cash paid for purchase/construction of fixed assets, Intangible assets and other long term assets | 89,298,306.14 | 52,519,739.81 |
| Cash paid for investment | ||
| Net increase of the pledged loan | ||
| Net cash paid for acquisition of subsidiaries and other operation units | ||
| Other investment related cash payments | ||
| Subtotal of cash flow out from investment activity | 89,298,306.14 | 52,519,739.81 |
| Net cash flow arising from investment activities: | -89,214,047.63 | -52,512,866.91 |
| III. Cash flow arising from fund-raising activities: | ||
| Cash received from absorbing investment | 18,585,600.00 | |
| Incl.: Cash received from the subsidiaries’ absorption |
| of minority shareholders’ investment | ||
| Cash received from loans | 330,176,520.00 | 384,997,200.00 |
| Cash received from bond issuing | ||
| Other fund-raising related cash receipts | ||
| Subtotal of cash flow in from fund raising activity | 348,762,120.00 | 384,997,200.00 |
| Cash paid for debt repayment | 327,486,253.30 | 448,409,609.38 |
| Cash paid for dividend/profit distribution or repayment of interest | 12,018,884.30 | 15,009,057.38 |
| Including: Dividend and profit paid by the subsidiaries to minority shareholders | ||
| Cash paid for other financing activities | 17,565,400.00 | |
| Sub-total cash flow paid for financing activities | 357,070,537.60 | 463,418,666.76 |
| Net cash flow arising from fund-raising activities | -8,308,417.60 | -78,421,466.76 |
| IV. Change of exchange rate influencing the cash and cash equivalent | 201,307.31 | 118,439.84 |
| V. Net increase of cash and cash equivalents | 61,693,492.45 | 93,856,380.26 |
| Plus: Opening balance of cash and cash equivalents | 162,623,059.97 | 184,947,891.32 |
| VI. Ending balance of cash and cash equivalents | 224,316,552.42 | 278,804,271.58 |
Legal representative: Huang Yongfeng Chief Financial Officer: Chen ZhuoPerson in charge of the Accounting Department: Tian Hui
6. Cash Flow Statement, Parent Company
In CNY
| Items | The first half year of 2019 | The first half year of 2018 |
| I. Cash flows arising from operating activities: | ||
| Cash received from sales of goods and supply of labor service | 66,872,263.13 | 56,758,456.16 |
| Rebated taxes received | ||
| Other operation activity related cash receipts | 1,733,050,857.61 | 1,204,947,705.78 |
| Subtotal of cash flow in from operating activity | 1,799,923,120.74 | 1,261,706,161.94 |
| Cash paid for purchase of goods and reception of labor services | ||
| Cash paid to and for staff | 42,848,757.99 | 33,422,054.30 |
| Taxes paid | 5,460,385.81 | 4,702,936.63 |
| Other business activity related cash payments | 1,676,610,396.74 | 1,045,289,650.60 |
| Subtotal of cash flow out from operating activity | 1,724,919,540.54 | 1,083,414,641.53 |
| Net cash flows arising from operating activities | 75,003,580.20 | 178,291,520.41 |
| II. Cash flow arising from investment activities: | ||
| Cash received from recovery of investment | ||
| Cash received from investment income | ||
| Net cash from disposal of fixed assets,intangible assets and recovery of other long term assets | 23,000.00 | |
| Net cash received from disposal of subsidiaries and other operating units | ||
| Other investment related cash receipts | ||
| Subtotal of cash flow in from investment activity | 23,000.00 | |
| Cash paid for purchase/construction of fixed assets, Intangible assets and other long term assets | 31,845,425.44 | 9,442,405.28 |
| Cash paid for investment | ||
| Net cash paid for acquisition of subsidiaries and other operation units | ||
| Other investment related cash payments | ||
| Subtotal of cash flow out from investment activity | 31,845,425.44 | 9,442,405.28 |
| Net cash flow arising from investment activities: | -31,822,425.44 | -9,442,405.28 |
| III. Cash flow arising from fund-raising activities: | ||
| Cash received from absorbing investment | 18,585,600.00 | |
| Cash received from loans | 310,000,000.00 | 360,000,000.00 |
| Cash received from bond issuing | ||
| Other fund-raising related cash receipts | ||
| Subtotal of cash flow in from fund raising activity | 328,585,600.00 | 360,000,000.00 |
| Cash paid for debt repayment | 295,000,000.00 | 392,500,000.00 |
| Cash paid for dividend/profit distribution or repayment of interest | 11,510,341.40 | 14,108,861.83 |
| Cash paid for other financing activities | 17,565,400.00 | |
| Sub-total cash flow paid for financing activities | 324,075,741.40 | 406,608,861.83 |
| Net cash flow arising from fund-raising activities | 4,509,858.60 | -46,608,861.83 |
| IV. Change of exchange rate influencing the cash and cash equivalent | 1,378.48 | -5,683.55 |
| V. Net increase of cash and cash equivalents | 47,692,391.84 | 122,234,569.75 |
| Plus: Opening balance of cash and cash equivalents | 134,970,466.27 | 128,958,944.43 |
| VI. Ending balance of cash and cash equivalents | 182,662,858.11 | 251,193,514.18 |
Legal representative: Huang Yongfeng Chief Financial Officer: Chen ZhuoPerson in charge of the Accounting Department: Tian Hui
7. Consolidated Statement of Changes in Owner’s Equity
Amount in the reporting period
In CNY
| Items | The first half year of 2019 | ||||||||||||||
| Owners’ equity attributable to the parent company | Minority shareholders’ equity | Total owner’s equity | |||||||||||||
| Capital stock | Other equity instruments | Capital Reserve | Less: shares in stock | Other comprehensive income | Special reserve | Surplus Reserve | Provision for general risks | Retained earnings | Others | Sub-total | |||||
| Preferred shares | Perpetual bond | Others | |||||||||||||
| I. Ending balance of the previous year | 438,744,881.00 | 1,062,455,644.22 | -5,442,139.78 | 223,015,793.80 | 851,360,603.66 | 2,570,134,782.90 | 5,781.64 | 2,570,140,564.54 | |||||||
| Plus: Change in accounting policy | |||||||||||||||
| Correction of previous errors | |||||||||||||||
| Consolidation of enterprises under the same control | |||||||||||||||
| Others | |||||||||||||||
| II. Opening balance of the reporting year | 438,744,881.00 | 1,062,455,644.22 | -5,442,139.78 | 223,015,793.80 | 851,360,603.66 | 2,570,134,782.90 | 5,781.64 | 2,570,140,564.54 | |||||||
| III. Decrease/increase of the report year (decrease is stated with “-“) | 4,224,000.00 | 16,596,197.31 | 32,902,198.89 | 1,749,407.20 | 123,495,460.90 | 113,162,866.52 | 13.67 | 113,162,880.19 | |||||||
| (I) Total comprehensive income | 1,749,407.20 | 123,495,460.90 | 125,244,868.10 | 13.67 | 125,244,881.77 | ||||||||||
| (II) Owners’ input and decrease of capital | 4,224,000.00 | 16,596,197.31 | 32,902,198.89 | -12,082,001.58 | -12,082,001.58 | ||||||||||
| 1. Common shares | 4,224,0 | 16,596,1 | 18,585,6 | 2,234,59 | 2,234,59 | ||||||||||
| contributed by the owner | 00.00 | 97.31 | 00.00 | 7.31 | 7.31 | ||||||||||
| 2. Capital contributed by other equity instruments holders | |||||||||||||||
| 3. Amount of payment for shares counted to owners’ equity | |||||||||||||||
| 4. Others | 14,316,598.89 | -14,316,598.89 | -14,316,598.89 | ||||||||||||
| (III) Profit Distribution | |||||||||||||||
| 1. Provision of surplus reserve | |||||||||||||||
| 2. Provision for general risks | |||||||||||||||
| 3. Distributions to the owners (or shareholders) | |||||||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal carry-over of owners’ equity | |||||||||||||||
| 1. Conversion of capital reserve into capital (or capital stock) | |||||||||||||||
| 2. Conversion of surplus reserve into capital (or capital stock) | |||||||||||||||
| 3. Loss made up for with surplus reserve | |||||||||||||||
| 4. Setting of the amount involved in the movement of the beneficial plan carried over to the retained earnings | |||||||||||||||
| 5. Other comprehensive |
| income carried-over to the retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Provision in the reporting period | |||||||||||||||
| 2. Applied in the reporting period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Ending balance of the reporting period | 442,968,881.00 | 1,079,051,841.53 | 32,902,198.89 | -3,692,732.58 | 223,015,793.80 | 974,856,064.56 | 2,683,297,649.42 | 5,795.31 | 2,683,303,444.73 |
Amount in the previous period
In CNY
| Items | The first half year of 2018 | ||||||||||||||
| Owners’ equity attributable to the parent company | Minority shareholders’ equity | Total owner’s equity | |||||||||||||
| Capital stock | Other equity instruments | Capital Reserve | Less: shares in stock | Other comprehensive income | Special reserve | Surplus Reserve | Provision for general risks | Retained earnings | Others | Sub-total | |||||
| Preferred shares | Perpetual bond | Others | |||||||||||||
| I. Ending balance of the previous year | 438,744,881.00 | 1,062,455,644.22 | -11,523,442.39 | 206,805,713.35 | 771,484,565.02 | 2,467,967,361.20 | 5,515.78 | 2,467,972,876.98 | |||||||
| Plus: Change in accounting policy | |||||||||||||||
| Correction of previous errors | |||||||||||||||
| Consolidation of enterprises under the same control | |||||||||||||||
| Others | |||||||||||||||
| II. Opening balance of the reporting year | 438,744,881.00 | 1,062,455,644.22 | -11,523,442.39 | 206,805,713.35 | 771,484,565.02 | 2,467,967,361.20 | 5,515.78 | 2,467,972,876.98 | |||||||
| III. Decrease/increase | -1,392,919.75 | 112,367,921.44 | 110,975,001.69 | -35.24 | 110,974,966.45 | ||||||||||
| of the report year (decrease is stated with “-“) | |||||||||||||||
| (I) Total comprehensive income | -1,392,919.75 | 112,367,921.44 | 110,975,001.69 | -35.24 | 110,974,966.45 | ||||||||||
| (II) Owners’ input and decrease of capital | |||||||||||||||
| 1. Common shares contributed by the owner | |||||||||||||||
| 2. Capital contributed by other equity instruments holders | |||||||||||||||
| 3. Amount of payment for shares counted to owners’ equity | |||||||||||||||
| 4. Others | |||||||||||||||
| (III) Profit Distribution | |||||||||||||||
| 1. Provision of surplus reserve | |||||||||||||||
| 2. Provision for general risks | |||||||||||||||
| 3. Distributions to the owners (or shareholders) | |||||||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal carry-over of owners’ equity | |||||||||||||||
| 1. Conversion of capital reserve into capital (or capital stock) | |||||||||||||||
| 2. Conversion of surplus reserve into capital (or capital |
| stock) | |||||||||||||||
| 3. Loss made up for with surplus reserve | |||||||||||||||
| 4. Setting of the amount involved in the movement of the beneficial plan carried over to the retained earnings | |||||||||||||||
| 5. Other comprehensive income carried-over to the retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Provision in the reporting period | |||||||||||||||
| 2. Applied in the reporting period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Ending balance of the reporting period | 438,744,881.00 | 1,062,455,644.22 | -12,916,362.14 | 206,805,713.35 | 883,852,486.46 | 2,578,942,362.89 | 5,480.54 | 2,578,947,843.43 |
Legal representative: Huang Yongfeng Chief Financial Officer: Chen ZhuoPerson in charge of the Accounting Department: Tian Hui
8. Consolidated Statement of Changes in Owner’s Equity, Parent Company
Amount in the reporting period
In CNY
| Items | The first half year of 2019 | |||||||||||
| Capital stock | Other equity instruments | Capital Reserve | Less: shares in stock | Other comprehensive income | Special reserve | Surplus Reserve | Retained earnings | Others | Total owners’ equity | |||
| Preferred shares | Perpetual bond | Others | ||||||||||
| I. Ending balance of the previous year | 438,744,881.00 | 1,068,111,185.32 | 223,015,793.80 | 683,798,086.83 | 2,413,669,946.95 | |||||||
| Plus: Change in | ||||||||||||
| accounting policy | ||||||||||||
| Correction of previous errors | ||||||||||||
| Others | ||||||||||||
| II. Opening balance of the reporting year | 438,744,881.00 | 1,068,111,185.32 | 223,015,793.80 | 683,798,086.83 | 2,413,669,946.95 | |||||||
| III. Decrease/increase of the report year (decrease is stated with “-“) | 4,224,000.00 | 16,596,197.31 | 32,902,198.89 | 5,152,486.43 | -6,929,515.15 | |||||||
| (I) Total comprehensive income | 5,152,486.43 | 5,152,486.43 | ||||||||||
| (II) Owners’ input and decrease of capital | 4,224,000.00 | 16,596,197.31 | 32,902,198.89 | -12,082,001.58 | ||||||||
| 1. Common shares contributed by the owner | 4,224,000.00 | 16,596,197.31 | 18,585,600.00 | 2,234,597.31 | ||||||||
| 2. Capital contributed by other equity instruments holders | ||||||||||||
| 3. Amount of payment for shares counted to owners’ equity | ||||||||||||
| 4. Others | 14,316,598.89 | -14,316,598.89 | ||||||||||
| (III) Profit Distribution | ||||||||||||
| 1. Provision of surplus reserve | ||||||||||||
| 2. Distributions to the owners (or shareholders) | ||||||||||||
| 3. Others | ||||||||||||
| (IV) Internal carry-over of owners’ equity | ||||||||||||
| 1. Conversion of capital reserve into capital (or capital stock) |
| 2. Conversion of surplus reserve into capital (or capital stock) | ||||||||||||
| 3. Loss made up for with surplus reserve | ||||||||||||
| 4. Setting of the amount involved in the movement of the beneficial plan carried over to the retained earnings | ||||||||||||
| 5. Other comprehensive income carried-over to the retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Provision in the reporting period | ||||||||||||
| 2. Applied in the reporting period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Ending balance of the reporting period | 442,968,881.00 | 1,084,707,382.63 | 32,902,198.89 | 223,015,793.80 | 688,950,573.26 | 2,406,740,431.80 |
Amount in the previous period
In CNY
| Items | The first half year of 2018 | |||||||||||
| Capital stock | Other equity instruments | Capital Reserve | Less: shares in stock | Other comprehensive income | Special reserve | Surplus Reserve | Retained earnings | Others | Total owners’ equity | |||
| Preferred shares | Perpetual bond | Others | ||||||||||
| I. Ending balance of the previous year | 438,744,881.00 | 1,068,111,185.32 | 206,805,713.35 | 625,656,338.99 | 2,339,318,118.66 | |||||||
| Plus: Change in accounting policy | ||||||||||||
| Correction of previous errors | ||||||||||||
| Others | ||||||||||||
| II. Opening balance of the reporting year | 438,744,881.00 | 1,068,111,185.32 | 206,805,713.35 | 625,656,338.99 | 2,339,318,118.66 | |||||||
| III. Decrease/increase of the report year (decrease is stated with “-“) | 552,842.37 | 552,842.37 | ||||||||||
| (I) Total comprehensive income | 552,842.37 | 552,842.37 | ||||||||||
| (II) Owners’ input and decrease of capital | ||||||||||||
| 1. Common shares contributed by the owner | ||||||||||||
| 2. Capital contributed by other equity instruments holders | ||||||||||||
| 3. Amount of payment for shares counted to owners’ equity | ||||||||||||
| 4. Others | ||||||||||||
| (III) Profit Distribution | ||||||||||||
| 1. Provision of surplus reserve | ||||||||||||
| 2. Distributions to the owners (or shareholders) | ||||||||||||
| 3. Others | ||||||||||||
| (IV) Internal carry-over of owners’ equity | ||||||||||||
| 1. Conversion of capital reserve into capital (or capital stock) | ||||||||||||
| 2. Conversion of surplus reserve into capital (or capital |
| stock) | ||||||||||||
| 3. Loss made up for with surplus reserve | ||||||||||||
| 4. Setting of the amount involved in the movement of the beneficial plan carried over to the retained earnings | ||||||||||||
| 5. Other comprehensive income carried-over to the retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Provision in the reporting period | ||||||||||||
| 2. Applied in the reporting period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Ending balance of the reporting period | 438,744,881.00 | 1,068,111,185.32 | 206,805,713.35 | 626,209,181.36 | 2,339,870,961.03 |
Legal representative: Huang Yongfeng Chief Financial Officer: Chen ZhuoPerson in charge of the Accounting Department: Tian HuiIII. Company ProfileFiyta Holdings Ltd. (hereinafter referred to as the Company) was reorganized, incorporated and renamed from ShenzhenFiyta Timer Industry Company on December 25 1992 with approval by the General Office of Shenzhen Municipal People’sGovernment with Document SHEN FU BAN FU [1992] No. 1259 and with China National Aero-Technology Import &Export Corporation Shenzhen Industry & Trade Center (which was renamed as AVIC International Shenzhen CompanyLimited) as the sponsor. The Company's head office is located at the 20th Floor, FIYTA Technology Building, Gaoxin S.Road One, Nanshan District, Shenzhen, Guangdong Province.
On March 10, 1993, the Company, with approval by the People’s Bank of China Shenzhen Special Economic ZoneBranch [SHEN REN YIN FU ZI (1993) No. 070], issued publically domestic CNY based common shares (A-shares) andCNY based special shares (B-shares). In accordance with the Approval Document of Shenzhen Municipal SecuritiesRegulatory Office SHEN ZHENG BAN FU [1993] No. 20 and the Approval Document of Shenzhen Stock Exchange SHENZHENG SHI ZI (1993) No. 16, the Company’s A-shares and B-shares were all listed with Shenzhen Stock Exchange for
trading commencing from June 3, 1993.
On January 30, 1997, with approval by Shenzhen Municipal Administration for Industry and Commerce, the Company wasrenamed as Shenzhen Fiyta Holdings Ltd.
On July 4, 1997, according to the equity assignment agreement between China National Aero-Technology CorporationShenzhen (CATIC Shenzhen Corporation) and CATIC Shenzhen Holdings Limited (with original name of ShenzhenCATIC Group Co., Ltd. (hereinafter referred to as CATIC Shenzhen), CATIC Shenzhen Corporation assigned 72.36 millioncorporate shares (taking 52.24% of the Company’s total shares) to CATIC Shenzhen. From then on, the Company’scontrolling shareholder turned to be CATIC Shenzhen from CATIC Shenzhen Corporation.
On October 26, 2007, the Company implemented the equity separation reform, according to which the shareholder of theCompany’s non-negotiable shares would pay shares to the whole shareholders of negotiable shares registered on theequity record day as designated in the equity separation reform plan at the rate of 3.1 shares for every 10 shares held bythem while the Company’s total 249,317,999 shares remained unchanged. So far, after the equity separation reform, theproportion of the Company’s shares held by CATIC Shenzhen reduced from 52.24% to 44.69%.
On February 29, 2008, due to expansion of the Company’s business scope and with approval by Shenzhen MunicipalAdministration for Industry and Commerce, the Company’s enterprise corporate business licence number was changedfrom 4403011001583 into 440301103196089.
In 2010, approved by China Securities Regulatory Commission (CSRC) with the Official Reply on Approval of Non-publicIssuing of Shenzhen Fiyta Holdings Ltd., ZHENG JIAN XU KE [2010] No. 1703 and the Official Reply on the Issue ofNon-Public Issuing of Shenzhen Fiyta Holdings Ltd. by State-owned Assets Supervision and Administration Commissionof the State Council [2010] No. 430, the Company was approved to non-publically issue no more than 50 million commonshares (A-shares). After completion of non-public issuing on December 9, 2010, the Company’s registered capitalincreased to CNY 280,548,479.00 and CATIC Shenzhen holds 41.49% of the Company’s equity based capital.
On March 3, 2011, with approval by Shenzhen Municipal Administration for Industry and Commerce, the Company wasrenamed as Shenzhen Fiyta Holdings Ltd. On April 8, 2011, the Company took the total capital stock of 280,548,479shares as the base, converted its capital reserve into capital stock at the rate of 4 shares for every 10 shares. After theconversion, the Company’s total capital stock became 392,767,870 shares.
On November 11, 2015, approved by China Securities Regulatory Commission (CSRC) with the Official Reply onApproval of Non-public Issuing of Fiyta Holdings Ltd., ZHENG JIAN XU KE [2015] No. 2588 and the Official Reply on theIssue of Non-Public Issuing of Fiyta Holdings Ltd. by State-owned Assets Supervision and Administration Commission ofthe State Council [2015] No. 415, the Company was approved to non-publically issue no more than 46,911,649 commonshares (A-shares). After completion of non-public issuing on December 22, 2015, the Company’s registered capitalincreased to CNY 438,744,881.00 and AVIC IHL holds 37.15% of the Company’s equity based capital.
On December 20, 2018, approved by State-owned Assets Supervision and Administration Commission of the StateCouncil with the Official Reply on Fiyta Holdings Ltd. to Implement the Restrictive Stock Incentive Program (Phase I),GUO ZI KAO FEN [2018] No. 936, the Company awarded A-share restrict stock by less than 4.277 million shares. Aftercompletion of implementation of the A-share Restrictive Stock Incentive Program (Phase I) by January 30, 2019, the
Company’s registered capital increased to CNY 442,968,881 and AVIC IHL holds 36.79% of the Company’s equity basedcapital.
Ended June 30, 2019, the Company accumulatively issued altogether 442,968,881 shares of capital stock. For the detail,refer to Note VII. 53 “Share Capital”.
The Company has established the Shareholders’ General Meeting, the Board of Directors, the Supervisory Committee,the Audit Committee, the Strategy Committee and the Nomination, Remuneration and Assessment Committee as thegovernance organs, etc. The Company has also established a number of functional departments, includingcomprehensive management department, the Party construction work department, department of discipline inspection,supervision and audit, financial department, human resource department, strategy operation department, data &information department, innovation & design center, R & D department, property operation department, etc.
The principal business activities of the Company and its subsidiaries (collectively the Group) are: production and sales ofvarious pointer type mechanical watches, quartz watches and their driving units, spares and parts, various timingapparatus, processing and wholesale of K gold watches and ornament watches; domestic trade, materials supply andsales (excluding the commodities for exclusive operation, exclusive control and monopoly); property management andlease; design service; self-run import & export business (implemented according to the Document SHEN MAO GUANDENG ZHENG ZI No. 2007-072). The Company's legal representative is Huang Yongfeng.
The financial statements were approved and issued through the resolution of the Board of Directors dated August 13,2019.
There were 11 subsidiaries consolidated during the reporting period. For the detail, refer to Note IX. "Equity in OtherEntities". The consolidation scope of the reporting year is the same as that of the previous year. For the detail, refer toNote VIII "Change of the Consolidation Scope".IV. Basis for preparation of the financial statements
1. Preparation Basis
The financial statements are prepared with the going-concern assumption as the base and the transactions and mattersactually occurred in accordance with the Accounting Standards for Business Enterprises - Basic Standards promulgatedby the Ministry of Finance (issued by Order 33 of the Ministry of Finance and revised according to Order 76 of the Ministryof Finance), 42 specific accounting standards promulgated and revised on February 15, 2006 and afterwards, and theirapplication guidelines, interpretations and other relevant requirements (collectively, "Accounting Standards forEnterprises"). Besides, the Company discloses the relevant financial information in accordance with Compilation Rules forInformation Disclosure by Companies Offering Securities to the Public No.15-General Provisions on Financial Reports(2014 Revision)
In accordance with the Enterprise Accounting Standards, the Company follows the accrual basis of accounting. With theexception of some financial instruments, these financial statements are measured based on the historic cost basis. Ifimpaired, the assets shall provide for impairment in accordance with the relevant regulations.
2. Operation on Going Concern Basis
The financial statements of the Company have been prepared on going concern basis.V. Important accounting policies and accounting estimatesPresentation on specific accounting policies and accounting estimates:
The Company and its subsidiaries have made a few of specific accounting policies and accounting estimates aboutcognition of revenue, depreciation of fixed assets, amortization of intangible assets, R & D expenditures and othertransactions and matters in accordance with the actual operation and management characteristics and based on relevantprovisions of accounting standards for business enterprises. For the detail, refer to various descriptions stated in NoteV.39 "Revenue", Note V.24 "Fixed assets", Note V.30(1) "Intangible Assets", Note V.30(2) “R & D expenditure" for details.
1. Statement on complying with the accounting standards for business enterpriseThe Company declares that the financial statements prepared by the Company comply with requirements of theenterprise accounting standards, truly and completely reflect the concerned information, including the Company’s financialposition as at June 30, 2019 and operation achievements, cash flow, etc. from January to June, 2019. In addition, theCompany's financial statements are in conformity with the disclosure requirements of Compilation Rules for InformationDisclosure by Companies Offering Securities to the Public No. 15 - General Provisions for Financing Reporting asamended in 2014 by China Securities Regulatory Commission on relevant financial statements and their notes in allimportant aspects.
2. Fiscal period
The accounting period adopted by the Company is from January 1 to December 31 of the Gregorian calendar.
3. Business Cycle
The Company's operating cycle is 12 months.
4. Recording Currency
Renminbi is the currency for the major economic environment where the Company and its domestic subsidiaries aremanaged, and the Company and its domestic subsidiaries take Renminbi as the standard currency for accounting.
Except Switzerland based Montres Chouriet SA Company (hereinafter referred to as the "Swiss Company"), an overseassubsidiary of FIYTA Hong Kong Co., Ltd. (hereinafter referred to as "FIYTA HK"), has determined Swiss Franc as itsrecording currency for accounting in accordance with the currencies available in its major economic environment where itis operated. The other overseas subsidiaries, including FIYTA HK, Station-68 Limited (hereinafter referred to as“Station-68”), another subsidiary of FIYTA HK, have determined Hong Kong currency as their recording currency foraccounting in accordance with the currencies available in their major economic environment where they are operated.Hong Kong currency will be converted into Renminbi while in preparing its financial statements.
The currency the Company takes in preparation of these financial statements is Renminbi.
5. The accounting treatment on consolidation of the enterprises under the same control and not under the samecontrolMerger of enterprises refers to the transaction or matter that two or more independent enterprises are merged into areporting entity. The merger of enterprises includes merger under the same control and the merger not under the samecontrol.
(1) Merger of enterprises under the same control
The enterprise participating in merger is under the final control of the same party or parties and such control is nottemporary, this is the merger of enterprises under the same control. In the merger of enterprises under the same control,the party that obtains the control right to the other enterprises participating in merger on the date of merger is the mergingparty and the other enterprises participating in the merger are the merged party. The date of merger refers to the datewhen the merging party has actually obtained the control right to the merged party.
The assets and liabilities acquired by the merging party are measured at the book value on the merged party on the dateof merger. If the book value of net assets acquired by the merging party is different with the book value paid for mergerconsideration (or sum of book value of issued shares), the capital reserve (premium on stock capital) shall be adjusted; ifthe capital reserve (premium on stock capital) is not sufficient to be written down, the retained earnings shall be adjusted.
Various direct expenses incurred by the merging party for merger of enterprises are included in the current profits andlosses at the time of occurrence.
(2) Merger of enterprises not under the same control
The enterprises to be merged, if not under the final control by the same party or parties before or after merger, refer to themerger of enterprises not under the same control. For the merger of enterprises not under the same control, the partyacquiring the control right to the other enterprises involved with the merger on the date of purchase is the purchasing partyand the other enterprises involved with the merger are the purchased party. The date of purchase refers to the date whenthe purchasing party actually acquires the control right to the purchased party.
For the merger of enterprises not under the same control, the merger costs contain the assets paid by the purchasingparty on the date of purchase for acquiring the control right to the purchased party, the liabilities incurred or undertakenand the fair value of the issued equity securities are the commission incurred for merger of enterprises and involvedwith audit, legal service, evaluation, consultation and etc., as well as other overhead expenses, are included in the currentprofits and losses at the time of occurrence. The transaction costs of equity securities or debt securities issued as mergerconsideration by the purchasing party are included in the initial confirmation amount of equity securities or debt securities.The contingent consideration involved is included into the merger costs at the fair value on its purchase date. If it isnecessary to adjust the contingent consideration because any new or further evidence for the existing situation on thepurchase date appears within 12 months after the purchase date, the merged goodwill shall be modified accordingly. Themerger costs incurred and the net identifiable assets acquired in the merger by the purchasing party are measured at thefair value on the purchase date. The difference that the merger costs are larger than the fair value of the net identifiableassets of the purchased party on the purchase date as acquired in the merger is confirmed as the goodwill. If the mergercosts are less than the fair value of the net identifiable assets of the purchased party as acquired in the merger, the fair
value of various identifiable assets, liabilities and contingent liabilities of the purchased party and measurement of mergercosts are first checked, and if the merger costs are less than the fair value of net identifiable assets of the purchased partyacquired in the merger, the difference is included in the current profits and losses.
If the deductable temporary difference of the purchased party acquired by the purchasing party is not confirmed for it doesnot conform to the confirmation conditions of deferred tax assets on the date of purchase, but new or further informationobtained within 12 months after the date of purchase shows the existence of relevant situation on the date of purchaseand it is expected that the economic interest arising from deductable temporary difference of the purchased party on thedate of purchase could be realized, the relevant deferred tax assets are confirmed and the goodwill is reducedsynchronously. If the goodwill is not sufficient to be written down, the difference is confirmed as the current profits andlosses; except the above situation, if the deferred tax assets involved with merger of enterprises are confirmed, it isincluded in the current profits and losses.
For the merger of enterprises not under the same control as realized in steps through several transactions, whether theseveral transactions are "package deals" is judged in accordance with the Notice of the Ministry of Finance on Issuing theExplanation No. 5 of Accounting Standards for Business Enterprises (Cai Kuai [2012]19) and the judgment standard on“package deals” in article 51 of Accounting Standards for Business Enterprises No. 33 - Consolidated FinancialStatements (see the Note 5.6(2)). If they are package deals, they are treated with reference to the description of variousparagraphs in front of this part and the Note V.22 “Long-term Equity Investment”; if they are not package deals, individualfinancial statements and consolidated financial statements shall undergo separately relevant accounting treatment:
In individual financial statements, the sum of the book value of the equity investment of the purchased party as held beforethe date of purchase and the newly increased investment costs on the date of purchase is used as the initial investmentcosts of the investment; if the equity of the purchased party as held before the date of purchase is involved with othercomprehensive income, while this investment is being disposed, other comprehensive incomes related to it are madeaccounting treatment on the same basis as the purchased party directly disposing relevant assets or liabilities (namely,except the purchased party measures again the corresponding share in the change caused by the net liabilities or netassets of the set benefit plan according to the equity method, the others are included in the current profits and losses).
In the consolidated financial statements, the equity of the purchased party as held before the date of purchase ismeasured again at the fair value on the date of purchase of such equity, and the difference between the fair value and itsbook value is included in the current profits and losses; if the equity of the purchased party as held before the date ofpurchase is involved with other comprehensive incomes, other comprehensive incomes related to it shall be madeaccounting treatment on the same basis as the purchased party directly disposing relevant assets or liabilities (namely,except the purchased party measures again the corresponding share in the change caused by the net liabilities or netassets of the set benefit plan according to the equity method, the others are included in the current profits and losses).
6. Method of preparing consolidated financial statements
(1) Principle of determining the scope of consolidated financial statements
The consolidation scope of the consolidated financial statements is determined on the basis of control. Control refers to,the Company owns the power to the purchased party, enjoys variable return by participating in the relevant activities of thepurchased party and is able to impact the amount of return by using the power to the purchased party. The scope ofconsolidation includes the Company and all of its subsidiaries. A subsidiary refers to the entity under control of the
Company.
Once the change of relevant facts and situations causes the change of relevant factors involved with the above definitionof control, the Company will make new evaluation.
(2) Method of preparing consolidated financial statements
As of the date when the actual control right to the net assets, production and management decision of subsidiary isacquired, the Company starts to put it into the scope of consolidation; ceases to contain it in the scope of consolidationfrom the date of losing the actual control right. For any subsidiary disposed, its operation result and cash flow beforedisposal date have been properly contained in the consolidated profit statement and consolidated cash flow; anysubsidiary disposed in the current period is not modified the beginning number of the balance sheet. For any subsidiaryincreasing due to merger of enterprises not under the same control, its operation result and cash flow after the date ofpurchase have been properly contained in the consolidated profit statement and consolidated cash flow, and thebeginning number and comparison number of the consolidated financial statements are not modified. For any subsidiaryincreasing due to merger of enterprises under the same control, its operation result and cash flow from the beginning ofthe current consolidation period to the date of consolidation have been properly contained in the consolidated profitstatement and consolidated cash flow, and the comparison numbers of the consolidated financial statement aresynchronously modified.
While preparing the consolidated financial statements, if the accounting policies or accounting period adopted by anysubsidiary and the Company are not consistent, necessary modification shall be made to the subsidiary's financialstatements based on the Company's accounting policies and accounting period. For any subsidiary acquired from mergerof enterprises not under the same control, its financial statements are modified on the basis of the fair value of netidentifiable assets on the date of purchase.
All major current account balances, transactions and unrealized profit in the Company are set off in preparation ofconsolidated financial statements.
In the stockholder's equity and current net profit or loss of a subsidiary, the parts not owned by the Company are solelylisted under the stockholder's equity and net profit in the consolidated financial statements separately as minority equityand minority interest. If the loss of subsidiary shared by minority shareholders exceeds the share enjoyed by minorityshareholders in the shareholders' equity of the subsidiary in the beginning, it still writes down the minority equity. Whenthe loss in a subsidiary shared by minority shareholders exceeded the share in the shareholders’ equity enjoyable by theminority shareholders at the beginning of the reporting period, the minority shareholders’ equity should be written down.
When the control right to the original subsidiary is lost due to disposal of partial equity investment or other reasons, theresidual equity is measured again at its fair value on the date of losing the control right. The sum of the considerationacquired from disposal of equity and the fair value of residual equity is minus the share of net assets of the originalsubsidiary as continually calculated from the date of purchase at the original shareholding ratio, such difference isincluded in the investment income in the current period of losing the control right. Other comprehensive incomes related toequity investment of the original subsidiary shall be made accounting treatment on the same basis as the purchased partydirectly disposing relevant assets or liabilities when the control right is lost (namely, except the original subsidiarymeasures again the change caused by the net liabilities or net assets of the set benefit plan according to the equitymethod, the others are included in the current profits and losses). Thereafter, such part of the residual equity is made
subsequent measurement in accordance with the Accounting Standards for Business Enterprises No. 2 - Long-termEquity Investment or Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of FinancialInstruments and other relevant provisions. See the Note V.22 "Long-term Equity Investment" or the Note V.10 “FinancialInstruments”.
If the Company disposes the investment on the subsidiary's equity in steps through several transactions and until losesthe control right, whether the various transactions disposing the investment on the subsidiary's equity until losing thecontrol right are package deals shall be distinguished. If the terms, conditions and economic impact of varioustransactions disposing the investment on the subsidiary's equity conform to one or more of the following circumstances, itis usually indicated that several transactions shall be made accounting treatment as package deal:① these transactionsare concluded synchronously or in consideration of mutual impact; ② these transactions can wholly reach a completecommercial result; ③ Occurrence of a transaction lies on occurrence of at least another transaction; ④ A transactionmay be uneconomic separately, but it is economical if the transaction is considered with other ones. If they are notpackage deals, each transaction thereof shall undergo accounting treatment in accordance with the principle applicablefor “partially disposing long-term equity investment on subsidiary in the case of not losing control power”(for the detail,refer to Note V.22. (2) and ④,) and “losing control power to the original subsidiary due to disposal of partial equityinvestment or other reasons”(for the detail, refer to the above paragraph) as appropriate. If the various transactionsdisposing the investment on the subsidiary's equity until losing control power are package deals, various transactionsundergo accounting treatment as a transaction of disposing the subsidiary and losing control power; however, beforelosing control power, the difference between every disposal amount and the share of the subsidiary's net assets enjoyedcorresponding to disposal of investment is recognized as other comprehensive income in the consolidated financialstatements, and is included in the current profit and loss corresponding to loss of control power.
7. Classification of joint venture arrangements and accounting treatment method of joint managementJoint venture arrangement refers to an arrangement that two or more participants jointly control. In accordance with therights enjoyed and obligations undertaken in the joint venture arrangement, the Company classifies joint venturearrangements into joint management and joint venture. Joint management refers to the joint venture arrangement that theCompany enjoys the relevant assets of the arrangement and undertakes the relevant liabilities of the arrangement. Jointventure refers to the joint venture arrangement that the Company only enjoys rights to the net assets of the arrangement.
The Company's investment in a joint venture is measured with equity method and is treated in accordance with theaccounting policies as stated in the Note V.22(2) ② "Long-term equity investment measured with equity method".
As a joint venture in the joint management, the Company confirms the assets solely held, liabilities solely undertaken andthe assets jointly held and liabilities jointly undertaken as confirmed according to the Company's share; confirms theincome arising from sale of the joint management's output share enjoyed by the Company; confirms the income arisingfrom sale of output if confirming joint management according to the Company's share; confirms the expenses solelyincurred by the Company, and the expenses incurred if confirming joint management according to the Company's share.
When the Company as a joint venture delivers or sells assets to the joint management (the assets do not constitutebusiness, same as below), or the joint management purchases assets, before such assets are sold to a third party, theCompany only confirms the parts in the profit and loss arising from such transaction and belonging to other participants ofthe joint management. If occurrence of such assets is in conformity with the impairment loss as stated in the Accounting
Standards for Business Enterprises No. 8 - Impairment of Assets, in the event that the Company delivers or sells assets tothe joint management, the Company fully confirms the loss; in the event that the Company purchases assets from the jointmanagement, the Company confirms the loss according to its share undertaken.
8. Standard for confirming cash and cash equivalent
The cash and cash equivalent of the Company include the cash on hand, the deposit that can be used for payment at anytime, and the investment held by the Company, which has short term (generally becomes mature within three months fromthe date of purchase), good liquidity and is easy to be converted into known amount of cash and with low risk in change ofvalue.
9. Foreign currency transactions and translation of foreign currency statements
(1) Translation methods for foreign currency transactions
The foreign currency transactions occurred in the Company, at the time of initial recognition, shall be translated into theamount of bookkeeping base currency at the spot exchange rate (generally refer to the medium price of the foreignexchange quotation as declared by the People's Bank of China) on the date of transaction, but any foreign currencyexchanging business or any transaction related to exchange of foreign currency occurred by the Company shall betranslated into the amount of bookkeeping base currency at the actual exchange rate.
(2) Translation methods for monetary items in foreign currency and nonmonetary items in foreign currencyThe balance of foreign currency monetary items are translated at the spot exchange rate on the balance sheet date andthe exchange differences arising therefrom shall be included in the current profit and loss, except ① those exchangedifferences arising from the special borrowings of foreign currency related to the acquired and constructed assets qualifiedfor capitalization that will be capitalized at the borrowing expenses. ② (only applicable to the existing hedging caculatedaccording to the hedge accounting method) the balance of exchange used in the hedging instrument with effectivehedging of net investment in foreign business (such balance is counted to other comprehensive income until the disposednet investment is recognized as the current gain and loss); and ③ those arising from the other changes in the balanceother than amortized cost of available-for-sale monetary items denominated in foreign currency are recognized in theother comprehensive income.
If preparation of consolidated financial statements is involved with overseas operation and any monetary item in foreigncurrency substantially constitutes net investment to overseas operation, the balance of exchange arising from change ofexchange rate is included in other comprehensive incomes; when overseas operation is disposed, it is transferred into thecurrent profits and losses from disposal.
The foreign currency non-monetary items measured based on the historical cost is still measured by means of the amountof the recording currency translated based on the spot rate incurred on the day when the transaction takes place. Thenon-monetary items in foreign currency measured at fair value are translated at the exchange rate on the date ofrecognizing fair value, and the difference between the amount in bookkeeping base currency and the previous amount inbookkeeping base currency after translated is treated as change of fair value (including change of exchange rate) andincluded in the current profits and losses or recognized as other comprehensive incomes.
(3) Method of Translation for the Statements in Foreign Currency
In preparation of consolidated financial statements concerning overseas business, in case there exist any foreign
currency monetary items which substantially form net investment in overseas business, the exchange differences arisingfrom fluctuation in exchange rates are recognized as other comprehensive income as " tralsation differences in foreigncurrency statements"; and are counted to the current profit and loss when the overseas businesses are disposed.
The financial statements in foreign currency for overseas operation are translated into the statements in Renminbiaccording to the following method: the items of assets and liabilities in the balance sheet are translated at the spotexchange rate on the date of balance sheet; in the items of stockholder's equity, except the item of “retained earnings”,other items are translated at the spot exchange rate at the time of occurrence. The items of incomes and expenses in theprofit statement are translated at the current average exchange rate on the transaction occurring date. The undistributedprofit at the beginning of the year is the undistributed profit at the ending of the previous year after translated; theundistributed profit at the ending of the year is listed according to the calculation of translated profit distributed on variousitems; after translated, the difference between the sum of assets items and liabilities items and the sum of stockholder'sequity items is the translated difference of statements in foreign currency and is recognized as other comprehensiveincomes. If overseas operation is disposed and the control right is lost, the translated difference of foreign currencystatements as listed under the item of stockholder's equity in balance sheet and related to overseas operation istransferred fully or at the ratio of disposing the overseas operation into the current profits and losses from disposal.
The cash flow in foreign currency and cash flow of overseas subsidiaries are translated at the current average exchangerate on the cash flow occurring date. The amount affected by the change of the exchange rate on cash is used as theadjustment item and is separately presented on the cash flow statement. The amount of cash impacted by change ofexchange rate is used as the modification item and solely listed in the cash flow statement.
The number in the beginning of the year and the actual number in the previous year are listed according to the amountafter the financial statements for the previous year are translated.
While disposing all owners' equity of the Company in overseas operation or losing the control right to overseas operationdue to disposal of partial equity investment or other reasons, the foreign current statements attributive to the owners'equity of the parent company, as listed under the item of stockholder's equity in balance sheet and related to overseasoperation, are translated into difference and fully transferred into the current profits and losses from disposal.
When the ratio of holding overseas operation equity caused by disposal of partial equity investment or other reasonsreduces but the control right to overseas operation is not lost, the translated difference of foreign currency statementsrelated to the overseas operation disposing part is attributive to minority equity and not transferred into the current profitsand losses. When the disposal of overseas operation is involved with the partial equity of a joint venture or a cooperativeenterprise, the translated difference of foreign currency statements related to the overseas operation is transferred at theratio of disposing the overseas operation into the current profits and losses from disposal.
10. Financial instruments
(1) Recognition and derecognition of financial instruments
A financial asset or financial liability is recognized when the Company becomes a party to a financial instrument contract.
The financial assets purchased or sold in any conventional manner are recognized and derecognized based on theaccounting of the trading day. The financial assets purchased or sold in any conventional manner refers to reception or
delivery of the financial assets within the time limit as specified in the regulations or conventions. A trading day refers tothe day when the Company commits to buy or sell a financial asset.
A financial asset (or a part of financial assets or a part of a similar financial asset group) is derecognized, namely writtenoff from its account and balance sheet when the following conditions are satisfied:
① the rights to receive cash flows from the financial assets have expired; or
② the Bank has transferred its rights to receive cash flows from the assets; or has retained its rights to receive cash flowsfrom the assets but has assumed an obligation to pay them in full without material delay to a third party under a“pass-through” arrangement; and (a) the Bank has transferred substantially all the risks and rewards of ownership of thefinancial asset; or (b) the Bank has neither transferred nor retained substantially all the risks and rewards of ownership ofthe financial asset, but has transferred control of the asset.
(2) Classification and measurement of financial assets
The financial assets of the Company are classified at the initial recognition according to the business model of theCompany's management of financial assets and the contractual cash flow characteristics of the financial assets: financialassets measured at amortized cost, financial assets measured at fair value and whose movement is counted in the othercomprehensive income and financial assets measured at fair value and whose movement is counted in the current profitand loss. The successive measure of financial assets depends on their classification
The Company classifies financial assets according to the business model of the Company's management of financialassets and the cash flow characteristics of financial assets.
① Financial assets measured based on the amortized cost
Financial assets are classified into financial assets measured at amortized cost if the financial assets meet the followingconditions: the business model for the management of the financial assets takes collection of the contractual cash flowsas the objective; according to the contractual terms of the financial asset， the cash flow created on the specific date isexclusively for payment of the principal and the interest based on the outstanding amount of the principal The effectiveinterest method is applied for this class of financial assets and the successive measurement is conducted according to theamortized cost， and the gains or losses generated from the amortization or impairment are counted to in the current profitand loss.
② Debt instrument investment measured at fair value with the change counted in the other comprehensive incomeA financial asset is classified as a financial asset measured at fair value and whose change is counted to othercomprehensive income it meets the following conditions: the business model for the management of the financial assettakes collection of the contractual cash flows as the objective; according to the contractual terms of the financial asset，the cash flow created on the specific date is exclusively for payment of the principal and the interest based on theoutstanding amount of the principal. For such class of financial asset， the fair value is used for the successivemeasurement。 Its discount or premium is amortized by using the effective interest method and recognized as interestincome or expense。 Except for the impairment loss and the exchange differences of foreign currency monetary financialassets recognized as the current profit or loss, the change in the fair value of such financial assets is recognised in othercomprehensive income until such a financial asset is derecognised and its accumulated profit or loss is transferred to thecurrent profit or loss. The interest income related to such type of financial asset is counted to the current profit and loss.
③ Equity instrument investment measured at fair value with the change counted in the other comprehensive income
The Company irrevocably chooses to designate partial non-tradable equity instrument investments as financial assetmeasured at fair value with its change counted to the other comprehensive income and the relevant dividend incomecounted to the current profit or loss and the change in the fair value recognized as other comprehensive income until thefinancial asset is derecognised and its accumulated profit or loss is transferred to the retained earnings.
④ The financial asset measured at fair values with the change counted to the current profit and lossThe financial assets other than those measured at the amortized cost as well as at fair value with the change counted tothe other comprehensive income are classified as the financial assets measured at fair value with the change counted tothe current profit and loss. At the time of the initial recognition, for the purpose of eliminating or significantly reducingaccounting mismatching, it is possible to designate the financial assets as that measured at fair value with the changecounted to the current profit and loss. For such class of financial asset， the fair value is used for the successivemeasurement and all the change in the fair value is counted to the current profit and loss.
All the affected relevant financial assets are reclassified if and only if the Company changes the business model formanaging financial assets.
For the financial assets measured at fair value with the change counted to the current profits and losses, the relevanttransaction expenses are directly included in the current profit and loss; the relevant transaction expenses for othercategories of financial assets are counted to the amount of the initial recognition.
(3) Classification and measurement of financial liabilities
In the initial recognition, financial liabilities are classified as the financial liabilities measured at the amortized cost and thatmeasured at fair value with the change counted to the current profit and loss.
The financial liabilities that meet one of the following conditions can be designated as the financial liabilities measured atfair value with the change counted to the current profit or loss: ① the designation may eliminate or significantly reducethe accounting mismatching; ② to conduct management and performance assessment for financial liability portfolios orcombination of financial assets and financial liabilities based on fair value according to the Company’s risk managementor investment strategies as stated in the formal written documents, and to report to the key management personnel on thebasis of this; ③ the financial liabilities including the embedded derivatives that need to be split separately.
Classification of the financial liabilities determined by the Company at the time of the initial recognition. For the financialassets measured at fair value with the change counted to the current profits and losses, the relevant transaction expensesare directly included in the current profit and loss; the relevant transaction expenses for other financial liabilities arecounted to the amount of the initial recognition.
The successive measurement of financial liabilities depends on their classification:
① Financial liabilities measured based on the amortized cost
The effective interest method is applied for this category of financial liabilities and the successive measurement isconducted according to the amortized cost.
② The financial liabilities measured at fair values with the change counted to the current profit and lossFinancial liabilities measured at their fair values with the change counted to the current profits and losses includetransactional financial liabilities (including the derivative instruments belonging to financial liabilities) and the financial
liabilities measured at fair value with the change counted to the current profits and losses directly designated at the initialrecognition.
(4) Offsetting of financial instruments
When the following condition is satisfied at the same time, the financial assets and financial liabilities are presented in thebalance sheet with the net amount after offsetting each other: there is a statutory right to offset the confirmed amount, andthe legal right is currently enforceable; it is planned to make settlement with net amount, or the financial asset is realizedand the financial liability is paid off at the same time.
(5) Impairment of financial assets
① The Company recognizes loss provision based on expected credit losses for financial assets measured at amortizedcost, debt instrument investments and financial guarantee contracts measured at fair value with the changes counted tothe other comprehensive income. The Company confirms the expected credit loss by considering reasonable andevidenced information about past events, current conditions, forecasting the future economic conditions, taking the risk ofdefault as the weight, calculating the probability weighted amount of the present value of the difference between the cashflow receivable from the contract and the cash flow expected to be received. On each balance sheet day, the Companymeasures the expected credit losses of financial instruments at different stages. If the credit risk has not increasedsignificantly since the initial recognition, the financial instrument is at the first stage, and the Company measures theprovision for the loss according to the expected credit loss within the next 12 months; if the credit risk has increasedsignificantly since the initial confirmation but impairment of the credit has not yet occurred, the financial instrument is atthe second stage, the Company measures the provision for the loss according to the expected credit loss of the financialinstrument for the entire duration; if the credit impairment has taken place since the initial recognition, the financialinstrument is at the third stage and the Company provides reserve for the expected credit loss of the financial instrumentfor the entire duration.
For financial instruments with lower credit risk on the balance sheet day, the Company assumes that its credit risk has notincreased significantly since the initial recognition, and measures the provision for the loss according to the expectedcredit losses in the next 12 months. For the financial instrument at the first stage or the second stage or with lower creditrisk, the Company calculates the interest income.
Based on the book balance without deduction of the provision for the impairment and the actual interest rate. For thefinancial instrument at the third stage, the Company calculates the interest income according to the book balance less theamortized cost after provision for the impairment and the actual interest rate.
② For receivables, regardless of whether there exists a significant financing component, the Company considers allreasonable and evidence-based information, including forward-looking information, to estimate the expected credit lossesof the aforesaid receivables in a single or combined manner and to adopt the simplified model of the expected creditlosses, always measures provision for loss based on expected credit losses for the entire duration. Provision method is asfollows:
(a) At the end of the reporting period, the Company conducts separate impairment testing on the receivables if there isobjective evidence proving that such receivables have experienced impairment. Loss for impairment is recognized andprovision for bad debt is made based on the difference of the present value of the estimated future cash flows lower thantheir carrying amount.
(b) When the information of the expected credit loss of a single financing asset cannot be assessed with reasonable cost,the Company divides the receivables portfolio according to the credit risk characteristics and calculates the expectedcredit losses on a portfolio basis.
For receivables classified as risk portfolios, the Company calculates the expected credit losses with reference to thehistorical experience of credit loss with consideration of the present situation and the prediction of the future economiccondition by using the impairment provision model. The Company counts the provision for loss made or reversed to thecurrent profit and loss
(6) Transfer of financial assets
If substantially all of risks and remunerations on the ownership of the financial asset have been transferred to thetransferee, the financial asset's recognition is terminated; if substantially all of risks and remunerations on the ownershipof the financial asset are kept, the financial asset's recognition is not terminated.
If the enterprise has neither transferred nor kept substantially all of risks and remunerations on the ownership of thefinancial asset, treatment is made respectively based on the following conditions: in case control over the financial assethas been given up, recognition of that financial asset as well and the assets and liabilities generated are terminated; incase control over the financial asset has not been given up, relevant financial assets are recognized based on the extentcontinually involved with the transferred financial asset, and relevant liabilities are recognized accordingly.
In the transferred financial asset continues to be involved by providing financial guarantee, the asset formed bycontinuous involvement is recognized based on the lower of the book value of the financial asset and the amount of thefinancial guarantee. The amount of the financial guarantee refers to the maximum amount in the consideration receivedand required to be repaid.
11. Notes receivable
Refer to Note 10. Financial Instrument Item (5)
12. Accounts receivable
Refer to Note 10. Financial Instrument Item (5)
13. Financing with accounts receivable
Inapplicable
14. Other receivables
Refer to Note 10. Financial Instrument Item (5)
15. Inventories
Does the Company need to comply with the requirements on information disclosure for special industries?
No
(1) Classification of Inventories
Inventories mainly consist of raw materials, products-in-process, commodity stocks, etc.
(2) Pricing of Inventories Acquired and Delivered
Inventories delivered are priced based on the actual cost. Costs of inventories which consist of purchase cost, Rawmaterials, products-in-process and merchandise inventory are priced respectively according to the weighted average(with brand world watch stocks exclusive), specific identification (for famous brand watch stocks) at the time of delivery.
(3) Determination of the net realizable value of inventories and the method for provision for price falling of inventoriesThe net realizable value of the inventories refers to the amount of the estimated sales price of the inventory less theestimated sales costs to incur at the time of completion, sales expenses and relevant taxes in process of normalproduction and operation. In determining the net realizable value of inventory, with the obtained valid evidence as thebase, the purpose of holding the inventory and the influence from the events after the balance sheet day is taken intoconsideration at the same time..
On the balance sheet day, inventories are measured based on the lower of the cost and the net realizable value. When thenet realizable value is lower than the costs, reserve for price falling of inventories is provided. in which
① For the inventories directly for sale, including the finished products and the materials for sale, in process of normalproduction and operation, the realizable net value is the amount of the estimated sales price of the inventories less theestimated sales costs and the relevant taxes;
② For the material inventories necessary to be processed, the realizable net value is the amount of the estimated salesprice of the finished products produced in process of normal production and operation less the costs predicted to incur atthe time of finishing the work, the estimated sales expenses and the relevant taxes.
The Company provides reserve for price falling of the inventories classified based on the models of self-made watchinventories.
For the famous brand watches in distribution, reserve for price falling of inventories is provided based on the individualitems.
For the raw materials for FIYTA watches, based on the terminal sales status of FIYTA finished watches, reserve for pricefalling of inventories is provided with interchangeability of spares and parts and specialized classification of applications ofmaterials taken into consideration.
After provision for price falling of inventories, in case the influencing element for previous reduction of the inventory valuehas disappeared, causing the realizable net value of the inventory higher than the carrying value, the provision for pricefalling of the inventory originally made can be reversed and the reversed amount is charged to the current gain and loss.
(4) The inventory system for the inventories is the perpetual inventory system
(5) Amortization of low value consumables and packing materials
Low value consumables and packing materials are amortized in lump sum at the time of reception.
16. Contract assets
Inapplicable
17. Contract cost
Inapplicable
18. Classified as assets held for sale
The Company shall classify a non-current asset or disposal group as held for sale if its carrying amount will be recoveredprincipally through a sale transaction (including a non-monetary asset exchange of commercial substance, the samebelow) rather than through continuous use. Non-current assets or disposal group classified as held for sale shall meet thefollowing criteria: disposable immediately under current conditions based on similar transactions for disposals of suchassets or practices for the disposal group; a decision has been made on a plan for disposal and an undertaking topurchase has been obtained, and the disposal is expected to be completed within a year. Where, the disposal grouprefers to a group of assets which are disposed altogether by sale or other way as a whole in a transaction as well as aliability transferred in the transaction with direct connection with these these assets. For an asset group or asset groupportfolio attributable to the disposal group where the goodwill has been apportioned at the time of entity consolidationaccording to the Standards for Enterprise Accounting No. 8 - Impairment of Assets, the disposal group should be includedin the goodwill apportioned to the disposal group.
When the Company initially measures or re-measures the held-for-sale non-current assets and disposal group on thebalance sheet date, if the book value is higher than the fair value less the sales expenses, the book value is reduced tothe net amount of the fair value less the sales expenses, the amount of the write-down is recognized as the assetimpairment loss, which is included in the current profit and loss, and the provision for impairment of assets held for sale ismade. For the disposal group, the loss from impairment of the assets as recognized first offsets the carrying value of thegoodwill in the disposal group and then offsets the carrying value of various non-current assets in the disposal group incompliance with the measurement provisions as specified in the Standard for Enterprise Accounting No. 42 -Held-for-Sale Non-current Assets, Disposal Group and Termination of Operation (hereinafter referred to as the “Standardfor Holding for Sale). In case the net amount of the fair value of the held-for-sale disposal group less the sales expenseincreases after the balance sheet day, the amount previously written down should be recovered and reversed within theamount of loss from the impairment of the assets recognized as the non-current assets according to the provisionsapplicable to the measurement based on the standards for holding-for-sale after being classified as the category ofholding-for-sale and the amount reversed is counted to the current profit and loss;and the book value increases based onthe proportions of the book value of each non-current asset accounted for in the disposal group except for the goodwill;the book value of the goodwill already written down and loss from the impairment of the assets recognized as thenon-current assets according to the provisions applicable to the measurement based on the standards for holding-for-saleafter being classified as the category of holding-for-sale must not be reversed.
No depreciation or amortization is provided for a non-current asset in the non-current assets or disposal groups held forsale. Interest and other expenses attributable to the liabilities of a disposal group held for sale shall continue to be
recognized.
When a non-current asset or disposal group no longer satisfies the conditions for classification of the held-for-sale, theCompany no longer classifies it as held-for-sale category or removes the non-current asset from the held-for-sale disposalgroup, and measures it based on the lower of the two: (1) for the book value before classification as the held-for-sale, theamount after the adjustment for depreciation, amortization or impairment which should be recognized under the conditionin which it is assumed not to be classified as held-for-sale; (2) recoverable amount.
19. Equity investment
Inapplicable
20. Other equity investment
Inapplicable
21. Long term accounts receivable
Inapplicable
22. Long-term equity investments
The long-term equity investment as stated in this part refers to the long term equity investment with control over, jointcontrol over or significant influence upon the investees. The long term equity investment without control over, joint controlover or significant influence upon the investees in the Company are taken as available-for-sale financial assets or thefinancial assets which are measured based on the fair value and their changes are counted to the current profit and loss.For the detail of the accounting policy, refer to Note V. 10 "Financial Instruments".
Joint control refers to the joint control over some arrangement made by the Company according to the relevant agreementand the relevant activities for the arrangement must be jointly decided by all the parties sharing the control power.Significant influence refers to the Company's power of participation in making an investee's financial and operationpolicies but the Company cannot control or jointly control with other parties to make these policies.
(1) Determination of Investment Costs
For the long term equity investment acquired through consolidation of enterprises under the common control, the share ofthe book value of the consolidatee's owner's equity as at the date of consolidation in the eventual controller's financialstatements is taken as the initial investment cost of the long term equity investment. The balance among the initialinvestment cost of the long term equity investment and the cash as paid, non-cash asset as assigned and the book valueof the liabilities as assumed is used for adjustment of the capital reserve; in case the capital reserve is not enough forwriting-down, the retained earnings is adjusted. Where the equity securities are issued as the consolidation consideration,the share of the book value of the shareholders' equity in the ultimate controlling party's consolidated financial statementson the consolidation day is the initial investment cost of the long-term equity investment, and the total carrying amount ofthe issued shares is taken as the share capital, the difference between the initial investment cost of the long-term equityinvestment and the total carrying amount of the shares issued is used to adjust the capital reserve; if the capital reserve isinsufficient to offset, the retained earnings are adjusted. The equity which is acquired in steps through a number of
transactions and eventually forms consolidation of enterprises not under the common control shall be treated dependingon whether it belongs to "one package deal": if it belongs to "one package deal", all the transactions shall be taken as atransaction for acquiring the control power for accounting treatment. If it does not belong to“one package deal”, the shareof the book value of the shareholders’ equity in the consolidatee enjoyable in the eventual controller's consolidatedfinancial statements as at the consolidation day is taken as the initial investment cost of the long term equity investment;the difference between the initial investment cost of the long term equity investment and the sum of the book value of thelong term equity investment before the consolidation plus the book value of the consideration newly paid for furtheracquiring the shares on the consolidation day is used to adjust the capital reserve; if the capital reserve is not enough forwriting down, the retained earnings should be adjusted. For the equity investment held before the date of consolidation orthe other comprehensive income as recognized from the available-for-sale financial assets, no accounting treatment shallbe taken for time being.
For the long term equity investment acquired through consolidation of enterprises not under the common control, theconsolidation cost as at the acquisition date is taken as the initial investment cost of the long term equity investment. Theconsolidation cost is the sum of the assets paid to the buyer, the liabilities incurred or assumed, and the fair value of theequity securities as issued. The equity which is acquired in steps through a number of transactions and eventually formsconsolidation of enterprises not under the common control shall be treated depending on whether it belongs to "onepackage deal": if it belongs to "one package deal", all the transactions shall be taken as a transaction for acquiring thecontrol power for accounting treatment. If it does not belong to "one package deal", the sum of the book value of the equityinvestment in the purchasee originally held plus the newly increased investment cost shall be taken as the initialinvestment cost of the long term equity investment calculated according to the cost method. In case the equity originallyheld is calculated based on the equity method, the relevant other comprehensive income shall not undergo accountingtreatment for time being. If the equity investment originally held is an available-for-sale financial asset, the balancebetween its fair value and the book value and the accumulative movement of the fair value originally counted to othercomprehensive income are transferred to the current profit and loss.Intermediary fees in connection with audit, law service, appraisal and consulting, etc. incurred to the consolidator orpurchaser and other relevant administrative fees shall be counted to the current profit and income at the time ofincurrence.
The equity investment other than the long term equity investment formed from the enterprise consolidation which isinitially measured based on the cost, such costs are recognized in such ways as the fair value of the equity securitiesissued by the Company, the value as specified in the investment contract or agreement, the fair value or the original bookvalue of the assets exchanged out in the non-monetary asset exchange transactions, or the own fair value of the long termequity investment, etc. depending on the ways of acquirement of the long term equity investment. The expenses, taxesand other necessary expenditures directly in connection with the acquirement of the long term equity investment arecounted to the investment costs. For the long term equity investment resulted from the additional investment which maybring out significant influence upon or joint control over the investee but shall not constitute control, the cost of the longterm equity investment is the sum of the fair value of the equity investment originally held as determined according to theAccounting Standards for Enterprises No. 22 - Recognition and Measurement of Financial Instruments plus the cost of thenewly increased investment.
(2)Subsequent measurement and recognition of gains and losses
The long-term equity investment with joint control (excluding the composition of the joint operators) or significant influenceon the investee is accounted by using the equity method. and also for the long term equity investment in which the
Company's financial statements can implement control over the investee by calculation based on the cost method.
① Long term equity investment calculated based on the cost method
In calculation by cost method, the long term equity investment is valuated according to the initial investment cost, and foradditional or recovery of investment, the cost of the long term equity investment is adjusted. Except that the actualpayment or consideration paid at the time of acquiring the investment contains the cash dividend or profit alreadyannounced but not yet distributed, the return on the investment in the reporting period is recognized based on the cashdividend or profit already announced for distribution by the investee.
② Long term equity investment calculated based on the equity method
When the calculation based on the equity method is used, if the initial investment cost of the long term equity investmentis greater than the share of the fair value of net identifiable assets enjoyable in the investee, the initial investment cost ofthe long term equity investment shall not be adjusted; when the initial investment cost is less than the share of the fairvalue of net identifiable assets enjoyable in the investee, the balance is counted to the current profit and loss and at thesame time the cost of the long term equity investment is adjusted.
When the equity method is used for calculation, the net gains and losses realized by the investee and the share of theother comprehensive income enjoyable or sharable shall be respectively used to recognize the return on investment andother comprehensive income and at the same time the book value of the long term equity investment is adjusted;according to the profit announced for distribution by the investee or the part of the cash dividend enjoyable uponcalculation, the book value of the long term equity investment is reduced correspondingly. For other change in the netprofit and loss, other comprehensive income and owner's equity other than the profit distribution, the book value of thelong term equity investment is adjusted and counted to the capital reserve. In determining the net profit and loss in theinvestee enjoyable, with the fair value of various identifiable assets, etc. in the investee when the investment is acquiredas the base, the net profit of the investee is recognized after adjustment. When the accounting policy and fiscal periodadopted by the investee is different from that of the Company, the investee's financial statements are adjusted accordingto the accounting policy and fiscal period adopted by the Company and the return on the investment and othercomprehensive income are recognized on this basis. For the transactions between the Company and its associates orjoint ventures, in case the assets provided or sold do not constitute business, the part calculated based on the proportionof the unrealized internal transaction gains and losses attributable to the Company shall be offset and the gains andlosses on the investment shall be recognized on this basis. However, the loss from no internal transaction between theCompany and an investee shall not be offset if the loss belongs to impairment of the assets assigned. In case the assetsinvested in a joint venture or an associate constitutes business and the investor has acquired the long term equityinvestment therefrom but has not achieved the control power, the fair value of the business provided shall be taken as theinitial investment cost of the newly added long term equity investment, the balance between the initial investment cost andthe book value of the business provided shall all be counted to the current gains and losses. In case assets sold by theCompany to its joint ventures or associates constitute business, the balance between the consideration acquired and thebook value of the business shall all be counted to the current gains and losses. In case the asset provided to the Companyby its joint venture or the associate constitutes business, accounting treatment shall be conducted according to theEnterprise Accounting Standards No. 20 - Enterprise Consolidation and all the amount shall be recognized as thetransaction related gains and losses.
In determining the part of the net loss incurred to the investee to be shared by the Company, the book value of the longterm equity investment and other long term equity which has substantially constituted net investment in the investee shall
be reduced to the limit of zero. In addition, in case the Company is obliged for extra loss in an investee, the predictedliabilities shall be recognized according to the obligation predicted to assume and counted to the current gains and lossesin the investment. In case an investee realizes net profit in subsequent periods, the Company shall recover recognition ofthe part of income enjoyable after the recognized part of the loss shared by the Company has been made up for with thepart of the benefit enjoyable.
For the long-term equity investment in the associated enterprises and joint ventures held by the Company for the first timebefore the implementation of the new accounting standards, if there exists a debit balance of the equity investment relatedto the investment, the amount of the straight-line amortization of the original residual maturity is counted to the currentprofit and loss.
③ Acquisition of minority equity
In preparation of the consolidated financial statements, the balance between the long term equity investment newlyincreased resulted from purchase of minority equity and the share of the net asset continuously calculated commencingfrom the date of purchase (or date of consolidation) enjoyable by the subsidiary shall be used to adjust the capital reserve.In case the capital reserve is not enough for writing-down, the retained earnings shall be adjusted.
④ Disposal of long term equity investment
In a consolidated financial statement, the parent company has partially disposed the long term equity investment in itssubsidiary without losing its control power, the difference between the disposal income of the amount enjoyable in thesubsidiary’s net assets corresponding to the long term equity investment disposed is counted to the owner’s equity. Incase that the parent company has partially disposed the long term equity investment in its subsidiary has caused theparent company to have lost the control power over the subsidiary, it should be treated according to the accounting policyas specified in the “method for preparation of consolidated financial statements” of Note V. 5.(2).
If a long term equity investment is disposed under other situation, for the equity disposed, the difference between its bookvalue and the consideration actually obtained is counted to the current gains and losses.
For the long term equity investment calculated based on the equity method, the other comprehensive income part whichwas originally counted to the owner’s equity undergoes accounting treatment according to the corresponding proportionby using the same base for direct disposal of the relevant assets or liabilities used by the investee. The owner's equityrecognized due to change of the other owners' equity of the investee with the net gains and loss, other comprehensiveincome and profit distribution exclusive is carried over into the current gains and losses based on the proportions.
For the long term equity investment, in case the remaining equity after disposal still needs to be calculated according tothe cost method, the other comprehensive income calculated by the equity method or calculated and recognized based onthe standards for recognition and measurement of financial instruments undergoes the accounting treatment by using thesame base as the investee has adopted for direct disposal of the relevant assets or liabilities and carried over to thecurrent gains and losses according to the proportion; movement of all other owners' equity calculated and determined byusing the equity method with the net gains and losses in the investee's net assets as determined, other comprehensiveincome and profit distribution exclusive is carried over to the current gains and losses according to the proportion.
In case the Company has lost the control over an investee due to disposal of partial equity, in preparation of individualfinancial statements, the remaining equity after disposal can still implement joint control over or significant influence on the
investee; the equity method is applied for calculation instead and the said remaining equity is adjusted as if the equitymethod was used for calculation commencing from the time of its acquisition; in case the remaining equity after theadjustment can no longer implement joint control over or significant influence on the investee, the accounting treatmentshall be conducted according to the provisions concerning recognition and measurement of financial instruments; thebalance between the fair value as at the day of losing the control power and the book value is counted to the current gainsand losses. The other comprehensive income calculated by means of the equity method or calculated and recognizedaccording to the standards for recognition and measurement of financial instruments undergoes accounting treatment onthe same base as the investee has lost control and the investee directly disposes the relevant assets or liabilities. Themovement of the other owner's equity in the investee's net assets calculated and recognized by means of the equitymethod is carried over into the current gains and losses at the time of losing the control over the investee with theexception of the net gains and profit, other comprehensive income and profit distribution. Where, for the remaining equityafter disposal calculated by means of equity method, the other comprehensive income and other owner's equity arecarried over according to the proportion; in case the remaining equity after disposal is recognized and measured based onthe financial instruments, the other comprehensive income and other owner's equity are all carried over.
In case the Company has lost the joint control over or significant influence on the investee due to disposal of partial equity,the remaining equity after disposal is calculated according to the standards for recognition and measurement of financialinstruments while the balance between the fair value and the book value as at the day when the Company lost its jointcontrol or significant influence is counted to the current gains and losses. The other comprehensive income from theoriginal equity investment calculated and recognized by means of the equity method undergoes accounting treatment byusing the same base as the investee directly disposes the relevant assets or liabilities when the calculation based on tehequity method is terminated; the owner's equity recognized due to the movement of other owner's equity with theinvestee's net gains and losses, other comprehensive income and profit distribution exclusive is all transferred into thecurrent return on investment when the equity method is stopped.
The Company disposes the equity investment in a subsidiary in steps through a number of transactions until it has lost thecontrol power. If the aforesaid transaction belongs to a one-package transaction, the transactions shall undergoaccounting treatment as a transaction in which the equity investment in a subsidiary is disposed and the control power islost. The balance between the first disposal consideration prior to loss of the control power the book value of the long termequity investment corresponding to the equity disposed is recognized as other comprehensive income first and then alltransferred into the current gains and losses from loss of the control power.
23. Investment based real estate
Measurement model for investment real estateMeasured based on the cost methodDepreciation or amortization methodInvestment based real estate refers to the real estate held by the Company which creates rental or added value of capitalor both, including housing and building already let out. Including the land use right which has already been let out, the landuse right held and to be assigned after appreciation, building which has been leased out, etc. In addition, if the Board ofDirectors (or similar institution) has a written resolution on the vacant buildings held by the Company for the purpose ofoperating the lease, it is clearly stated that they will be used for operating leases and that the intention to hold is no longerchanged in the short term and they are presented as investment-oriented real estate.
Investment-oriented real estate is initially measured according to the cost Investment based real estate is initially
measured based on the cost. The follow-expenses in connection with the investment based real estate are recorded in theinvestment based real estate costs in case the relevant economic benefit may flow into the Company while the costs canbe reliably measured. Other follow-up expenses are recorded in the current gain and loss at the time of incurrence. Otherfollow-up expenses are recorded in the current gain and loss at the time of incurrence.
The Company adopts the cost model to make follow-up measurement of the investment based real estate and makesdepreciation or amortization according to the policy of coincidence with housing and building or land use right.
About the impairment test method and method for provision for impairment of the investment-oriented real estate. For thedetail, refer to Note V.31 “Impairment of Long Term Assets”.
When the self-use real estate is transferred into the investment based real estate or the investment based real estate istransferred into the self-use real estate, the book value prior to the transfer is taken as the entry value after the transfer.
When the application of the investment based real estate is for self-use, the investment based real estate is transferred tofixed asset or intangible asset commencing from the date of change. When the application of the self-use real estate ischanged into earning rental or increase of capital value, commencing from the date of change, the fixed asset orintangible asset are transferred into investment based real estate. When conversion takes place, for the investment basedreal estate measured by means of the cost module instead, the book value before conversion shall be taken as the entryvalue after the conversion; for the investment based real estate measured by means of fair value instead, the fair value asat the conversion date shall be taken as the entry value after conversion.
When the investment based real estate is disposed or permanently withdrawn from use and it is predicted that it is unableto earn economic benefit, the recognition of the investment based real estate is terminated. The income from disposal ofinvestment based real estate, including sale, assignment, discarding or damage, is charged to the current gain and lossafter deduction of the book value and the relevant taxes.
24. Fixed asset
(1) Recognition of fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of services, for rental to others, or foradministrative purposes and have useful lives more than one accounting year. A fixed asset shall be recognized onlywhen it is probable that economic benefits associated with the asset will flow into the enterprise and the cost of the assetcan be measured reliably. A fixed asset shall be initially measured at actual cost.
(2) Depreciation methods
| Categories | Depreciation methods | Depreciation life | Residual rate | Yearly depreciation |
| Plant & buildings | Average service life method | 20 -35 | 5.00 | 2.70-4.80 |
| Machinery & equipment | Average service life method | 10 | 5.00-10.00 | 9.00-9.50 |
| Electronic equipment | Average service life method | 5 | 5.00 | 19.00 |
| Motor vehicle | Average service life method | 5 | 5.00 | 19.00 |
| Other equipment | Average service life method | 5 | 5.00 | 19.00 |
Other fixed assets mainly including some tools, furniture.
(3) Basis for recognizing the fixed assets under financing lease, Pricing and Depreciation MethodsThe "finance lease" shall refer to a lease that has transferred in substance all the risks and rewards related to theownership of an asset. The ownership of it may or may not eventually be transferred. For the fixed assets rented bymeans of financing lease, depreciation of the rented assets is provided according to the policy identical to the proprietaryassets. If it is reasonable to be certain that the lessee will obtain the ownership of the leased asset when the lease termexpires, the leased asset shall be fully depreciated over its useful life. If it is not reasonable to be certain that the lesseewill obtain the ownership of the leased asset at the expiry of the lease term, the leased asset shall be fully depreciatedover the shorter one of the lease term or its useful life.
25. Construction-in-process
The cost of construction-in-process is determined according to the actual expenditure incurred for the construction,including all necessary construction expenditures incurred during the construction period, borrowing costs that shall becapitalized before the construction reaches the condition for intended use and other relevant expenses.Construction-in-process is transferred to fixed assets when the asset is ready for its intended use.For provision for impairment of construction-in-process and the method for provision for impairment, refer to Note V.31“Impairment of Long Term Assets”.
26. Borrowing Costs
Borrowing costs include interest on borrowings, amortization of depreciation or premium, auxiliary expenses and balanceof exchange resulted from foreign currency loan, etc. he borrowing costs from acquisition or production of the assets orborrowing expenses result therefrom directly attributable to compliance with the condition of capitalization starts to becapitalized when the expense of the asset has incurred, borrowing costs have incurred and the acquisition andconstruction or production activities necessary to let the asset reach the predicted applicable or sellable status; when theassets acquired, constructed or produced in compliance with capitalization have reached the predicted applicable statusor sellable status, the capitalization stops. The other borrowing costs are recognized as expenses in the period ofincurrence.
Interest expenses of special borrowings incurred actually for the current period less interest income from borrowings atbank or investment income from temporary investments is capitalized; capitalization amount is determined asaccumulative asset expenditure of general borrowings over weighted average asset expenditure of special borrowingsmultiples capitalization rate of general borrowings. Capitalization rate is determined as calculating weighted averageinterest rate of general borrowings.
In the capitalization period, exchange differences of special borrowings in foreign currency is totally capitalized; exchangedifferences of general borrowings in foreign currency is recognized in profit or loss for the current period.The assets in compliance with the capitalization conditions refer to such assets as fixed assets, investment based realestate, inventories, etc. which need to undergo long time of acquisition or construction or production activities before theycan reach the predicted applicable or sellable status.
Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or production of a
qualifying asset is interrupted abnormally and when the interruption is for a continuous period of more than 3 months untilthe acquisition or construction or production activities of the assets restart.
27. Biological Assets
Inapplicable
28. Oil and Gas Assets
Inapplicable
29. Use right assets
Inapplicable
30. Intangible assets
(1) Pricing Method, Service Life and Impairment Test
An intangible asset refers to a recognizable non-monetary asset without physical form possessed by or under the controlof the Company.
Intangible assets are initially measured according to cots. The expenditure in connection with intangible assets isrecorded in the costs of the intangible assets in case the relevant economic benefit may flow into the Company while thecosts can be reliably measured. Other expenses are recorded in the current gain and loss at the time of incurrence.The land use right acquired is usually calculated as intangible asset. For the buildings, such as factory building,constructed independently, the expenses in connection with the land use right and the construction cost of such buildingare calculated as intangible asset and fixed assets. For purchased housing and buildings, the relevant costs aredistributed between the land use right and buildings; in case it is difficult to distribution rationally, they shall all be handledas fixed assets.
An intangible asset with limited service life is amortized in average by using the straight-line method over the predictedservice life with its original value less the predicted residual value and the accumulated amount of the reserve forimpairment already provided commencing from the time of availability for use. The intangible asset with unidentifiedservice life would not be amortized.
The method for amortization of intangible assets with limited service life is as follows:
| Categories | Useful Life (Year) | Amortization Method |
| Land use right | 50 | Straight-line method |
| Software system | 5 | Straight-line method |
| Trademark rights | 5-10 | Straight-line method |
At the end of a year, the Company rechecks the service life of the intangible asset and the amortization method. Thechange incurred is treated as change of accounting estimation. In addition, the Company also rechecks the service life ofthe intangible assets with indefinite service life, In case there is evidence showing that the time limit in which such
intangible asset may bring about economic interest to the Company is predictable, the service life has to be estimated andthe amortization is conducted according to the amortization policy of intangible assets with limited service life.
About the impairment test method and method for provision for impairment of the intangible assets. For the detail, refer toNote V.31 “Impairment of Long Term Assets”.
(2) Accounting policy for internal research and development expenditure
Expenditure on an internal research and development project is classified into expenditure on the research phase andexpenditure on the development phase.
Expenditure on the research phase is recognized in profit or loss when incurred.
Expenditure on the development phase is capitalized only when the Company can satisfy all of the following conditions:
① the technical feasibility of completing the intangible asset so that it will be available for use or sale;
② its intention to complete the intangible asset is to use or sell it; how the intangible asset will generate economicbenefits;
③ Way of intangible assets producing economic interest, including those that can demonstrate the existence of a marketfor the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of theintangible asset;
④ The availability of adequate technical, financial and other resources to complete the development and the ability to useor sell the intangible asset;
⑤ Its ability to measure reliably the expenditure attributable to the intangible asset during its development phase.
If it is impossible to distinguish research stage expenses and development stage expenses, the R & D expenses asincurred shall be all charged to the current gains and losses.
31. Impairment of long term assets
For non-current and non-financial assets such as fixed assets, construction-in-process, intangible assets with limitedservice life, investment based real estate measured based on the cost model, the long term equity investment insubsidiaries, joint ventures and associates, etc., the Company make judgment on whether there exists any sign ofimpairment on balance sheet day. In case there exists a sign of impairment, the Company estimates the recoverableamount and makes impairment test. For goodwill and the intangible assets with the service life undetermined and theintangible assets which have not reached applicable status, regardless whether there exists sign of impairment, theCompany makes impairment test every year.
In case impairment test result shows that the recoverable amount of asset is lower than the book value, provision forimpairment is made based on the difference and is regarded in the loss for impairment. The recoverable amount isdetermined based on the higher of the net amount of the fair value of the asset less the expense of disposal and thepresent value of the predicted future cash flow of the asset. The fair value of assets is determined based on the salesagreement price in fair transaction; in case there is no sales agreement but does exist active market of asset, the fairvalue is determined according to the buyer’s offer of the asset; in case there exists neither sales agreement nor activemarket of asset, the fair value of assets is estimated based on the best information obtainable. The disposal expenses
include legal expenses, relevant taxes, handling fee and direct expenses incurred before the asset reaches the sellablestatus in connection with disposal of the assets. For the present value of the predicted future cash flow of assets, withreference to the predicted future cash flow generated in process of sustained use and final disposal, a proper discountrate is chosen to determine the amount after the discount. Provision for impairment of asset is calculated and recognizedbased on the individual asset. In case it is difficult to make estimation of the recoverable amount of individual asset, therecoverable amount of asset group is determined based on the asset group which the asset belongs to. The asset groupis the minimum grouping of assets which can independently produce cash flow in.
For the goodwill separately stated in the financial statements, at the time of impairment testing, the book value of thegoodwill is apportioned to the asset group or combination of asset groups of assets benefited from the synergistic effect ofenterprise consolidation. In case the testing result shows that the recoverable amount of an asset group or combination ofasset groups which contain apportioned goodwill is lower than their book value, the corresponding impairment loss isrecognized. The amount of the impairment loss first offsets and is apportioned to the book value of the goodwill of theasset group or combination of asset groups, and then offset the book value of other assets according to the proportions ofother various assets in the book value with the exception of goodwill in the asset group or combination of asset groups.The impairment loss of the aforesaid assets, once recognized, shall not be reversed as the recovered part in subsequentperiods.
32. Long term expenses to be apportioned
Long term expenses to be apportioned refer to various expenses which have already incurred but should be borne in thereporting period and subsequent periods with the apportioning term exceeding one year. The Company's long termexpenses to be apportioned include the special counter fabrication cost, repairing fee, etc. Long term expenses to beapportioned are amortized according to the straight-line method in the predicted beneficial period.
33. Contract liabilities
Inapplicable
34. Employees’ Wages and Salaries
(1) Accounting treatment of short term salaries
Short term salaries mainly include wages, bonus, allowances and subsidy, welfare expenses to employees, medicalinsurance premium, birth insurance premium, work related injury insurance premium, housing fund, labor union dues andemployees' personnel education fund, non-monetary welfare, etc. The Company recognizes the short term salaries toincur during the fiscal periods when employees offer services to the Company as liabilities and count the same to thecurrent gains and losses or the relevant cost of assets. Of them, non-monetary welfare is measured based on the fairvalue.
(2) Post-employment benefits
The post-employment benefits mainly include the basic endowment insurance, unemployment insurance, annuity, etc.Post-employment benefit program includes defined contribution plan. In case the defined contribution plan is used, thecorresponding contributable amount is counted to the corresponding asset cost or the current gains and losses at the timeof incurrence.
(3) Dismissal welfare
In case the labor relationship with an employment is terminated prior to the expiry of an employee's labor contract, or incase the Company proposes a compensation plan for encouraging employees to volunteerly accept lay-off, the liability ofremuneration to employees arising from post-service benefit is recognized in the current gains and losses at the earlierof the following conditions: when the Company cannot unilaterally withdraw the offer of post-service benefit provided forthe purpose of the plan of termination of the labor relationship or proposal of lay-off, and when the Company recognizesany related restructuring costs or expenses in connection with the payment of the post-service benefit. However, if thetermination benefits are predicted to be unable to be fully paid within 12 months after termination of the annual reportingperiod, it shall be handled according to the other long term payroll to employees.
(4) Other long term employees' welfare
The internal retirement program for employees is handled based on the same principle as that for the aforesaid Dismissalwelfare. The Company plans to count the salaries paid to the internally retired employees and their social insurancepremium paid by the Company from the date when the concerned employees stops offering services to the Company tothe time of their official retirement to the current gains and losses (post-service benefit ) when they comply with theconditions for recognizing the predicted liabilities.
Other long term employees' welfare provided by the Company to its employees shall undergo the accounting treatmentaccording to the defined contribution plan as long as it complies with the defined contribution plan. With the exception ofthis, it shall undergo accounting treatment according to the defined beneficial plan.
35. Lease liabilities
Inapplicable
36. Predicted liabilities
Predicted liabilities are recognized when an obligation in connection with contingencies complies with the followingconditions: (1) The obligation is a present obligation of the Company; (2) It is probable that an outflow of economicbenefits will be required to settle the obligation; (3) The amount of the obligation can be measured reliably.
On the balance sheet day, with consideration of such factors as contingency related risk, uncertainty and the time value ofmoney, etc., the predicted liabilities are measured according to the best estimated amount necessary to be paid inimplementation of the relevant current obligation.
If the expenses for clearing of predictive liability is fully or partially compensated by a third party, and the compensatedamount can be definitely received, it is recognized separated as asset. The compensated amount shall not be greaterthan the carrying amount of the predictive liability.
(1) Loss contract
A loss contract is a contract in which the cost unavoidably exceeds the expected economic interest in implementing thecontract obligations. If the contract to be executed becomes a loss contract, and the obligation arising from the losscontract satisfies the conditions for the confirmation of the above-mentioned estimated liabilities, the part of the contract’sestimated loss that exceeds the recognized impairment loss (if any) of the contracted asset is recognized as the estimated
liability.
(2) Obligation of reorganization
For a reorganization plan that is detailed, formal, and has been announced to the public, the estimated liabilities aredetermined based on the direct expenses related to the reorganization, subject to the recognition conditions of theaforementioned estimated liabilities.
37. Share-based payment
(1) Accounting treatment method for the share-based payment
Share-based payment is a transaction that grants an equity instrument or assumes a liability determined on the basis ofan equity instrument in order to obtain services from employees or other parties. Share-based payments are divided intoequity-settled share-based payment and cash-settled share-based payment.
① An equity-settled share-based payment
Share-based payment settled with equity in exchange for services provided by employees is measured with the fair valueof the employee's equity instruments at the grant date. This amount of the fair value, if the right cannot be exercised untilthe vesting period comes to an end or until the prescribed performance conditions are met, with the best estimate of thequantity of the exercisable equity instrument as the base within the vesting period, is counted to the relevant cost orexpense calculated based on the straight-line method/when the right is exercisable immediately after granting, it iscounted to the relevant cost or expenses on the date of the grant and the capital reserve increases correspondingly.
On each balance sheet day during the vesting period, the Company may make best estimate based on the subsequentinformation, such as the movement of the number of employees eligible for exercising the wrights as latest obtained andthe number of the equity instrument of the predicted exercisable is corrected. The influence of the aforesaid estimate iscounted to the current relevant cost or expense and the capital reserve is adjusted correspondingly.
Share-based payment in exchange for services from other parties: if the fair value of the services from other parties canbe reliably measured, the share-based payment is measured according to the fair value of the services from other partiesas at the date of the acquisition. If the fair value of the services from other parties cannot be reliably measured while thefair value of the equity instrument can be reliably measured, the share-based payment is measured according to the fairvalue of the equity instrument as at the date of the acquisition of the service and counted to the relevant cost or expenseand the shareholder's equity increases correspondingly.
② Cash-settled share-based payment
The cash-settled share-based payment is measured at the fair value of the liabilities assumed by the Companydetermined and based on shares and other equity instruments. If the right is exercisable immediately after the grant, thecash-settled share-based payment is counted in the relevant costs or expenses on the date of the grant date, and theliabilities increase accordingly; if the services within the waiting period must be completed or the required performanceconditions are met, the fair value of the liabilities assumed by the Company is based on the best estimate of the vestingrights on each balance sheet day of the waiting period. The services obtained in the current period are included in the costor expense, and the liabilities increase accordingly.
The fair value of the liabilities is re-measured and the movement is counted in the current profits and losses on eachbalance sheet day and settlement day before the settlement of related liabilities.
(2) Relevant accounting treatment for amendment or termination of the share-based payment planWhen the Company amends the share-based payment plan, if the amendment increases the fair value of the equityinstruments granted, the increase of the services obtained is recognized accordingly based on the increase of the fairvalue of the equity instruments. Increase of the fair value of the equity instrument refers to the difference between the fairvalue of the equity instrument on the amendment day before and after the amendment. If the modification reduces thetotal fair value of the share-based payment or adopts any other method unfavorable to the employees, the serviceobtained will continue to undergo accounting treatment, unless the Company cancels part or all of the granted equityinstruments.
If the Company cancels the granted equity instrument during the vesting period, the Company shall treat it as acceleratedvesting, the amount which should be recognized during the remaining vesting period is counted to the current profit andloss immediately and at the same time the capital reserve is recognized. If an employee or other party can choose to meetthe non-vesting conditions but fails to meet the vesting period, the Company treats it as a cancellation of the grantedequity instrument.
(3) Accounting treating involving the share-based payment transaction of the Company, the Company’sshareholders or actual controllerIn respect of the share-based payment transaction between the Company and the Company's shareholders or its actualcontroller, of the settlement enterprise and the enterprise receiving services, one is in the Company, and the other isoutside the Company, and the accounting is carried out in the Company's consolidated financial statements according tothe following provisions:
① In case the settlement enterprise conducts the settlement with its own equity instrument, the share-based paymenttransaction shall be treated as equity-settled share-based payment; otherwise, it shall be treated as a cash-settledshare-based payment.
In case the settlement enterprise is the investor of the enterprise receiving services, the fair value of the equity instrumentas at the granting date or the fair value of the liabilities necessary to be assumed is recognized as the long term equityinvestment in the enterprise receiving the services; at the same time the capital reserve (other capital reserve) or liabilitiesis recognized.
① In case the enterprise receiving services has no obligation of settlement or what it grants its employees is its ownequity instrument, the share-based payment transaction shall be treated as equity-settled share-based payment; in casethe enterprise receiving services have the settlement obligation and what it grants its employees equity instrument of notits own, such share-based payment transaction shall be treated as a cash-settled share-based payment.
In case the share-based payment transaction takes place among the enterprises within the Company while the enterprisereceiving the service and the settlement enterprise are not the same enterprise, the respective confirmation andmeasurement of the share-based payment transaction in the individual financial statements of the enterprise receiving theservices and the settlement enterprise are treated with reference to the above principles.
38. Other financial instruments, such as preferred shares, perpetual liabilities, etc.Inapplicable
39. Revenue
Does the Company need to comply with the requirements on information disclosure for special industries?No
Has the new standard for income been implementedNo
(1) General Principle
① Sale of goods
Revenue from the sale of goods is recognized only when all of the following conditions are satisfied: the Company hastransferred to the buyer the significant risks and rewards of ownership of the goods, the Company retains neithercontinuing managerial involvement nor effective control over the goods sold, and related income has been achieved orevidences of receivable have been obtained, and the associated costs can be measured reliably.
②Providing of services
Where the outcome of a transaction involving the provision of services can be estimated reliably, at the end of the period,revenue associated with the transaction is recognized using the percentage of completion method. The stage ofcompletion of a transaction involving the providing of services is determined according to the proportion of the servicesperformed to the total services to be performed.Reliable measurement of the result of the labor service transaction provided refers to that it can satisfy at the same time:
①. The amount of revenue can be measured reliably; ②. The associated economic benefits are likely to flow into theenterprise; ③. The stage of completion of the transaction can be measured reliably; ④. The costs incurred and to beincurred in the transaction can be measured reliably.
If the outcome of a transaction involving the providing of services can’t be estimated reliably, the revenue of providing ofservices is recognized at the service cost that incurred and is estimated to obtain compensation and the service costincurred is recognized in profit or loss for the current period. If the service cost incurred is estimated to obtaincompensation, revenue isn’t recognized.
When a contract or agreement signed between the Company and other enterprise covers sales of goods and supply oflabor service, in case the part of sales of goods and the part of providing labor service are distinguishable and can bemeasured separately, the part of sales of goods and the part of providing labor service should be treated separately; incase the part of sales of goods and the part of providing labor service cannot be distinguished or cannot be separatelymeasured despite that they are distinguishable, all the contract shall be treated as sales of goods.
③ Royalty revenue
Revenue is recognized on accrual basis according to the relevant contract or agreement.
④ Interest income
The interest income shall be calculated based on the tenure of the Company’s monetary funds used by others and theactual interest rates used.
40. Government subsidies
Government subsidy refers to the monetary asset and non-monetary asset obtained free by the Company from thegovernment, excluding the capital invested by the government in the corresponding owner's equity enjoyable by thegovernment as the investor. Government subsidy consists of asset-related government subsidy and income-relatedgovernment subsidy. The government subsidy related to assets refers to government subsidy obtained by the Companyfor the purpose of purchasing or constructing or otherwise forming long-term assets in other way; the remaininggovernment subsidy refers to the government subsidy related to the income. If the government documents do not clearlydefine the object of subsidy, the subsidy shall be divided into the government subsidy related to income and thegovernment subsidy related to assets in the following ways: (1) If the government document specifies the specific projectfor which the subsidy is targeted, the budget of the project will be divided into the relative proportion of the expenditureamount of the assets and the expenses included in the expenses, and the division ratio shall be reviewed on each balancesheet date and changed when necessary; (2) If the government documents use only for general statement, and notspecify a specific project, it will be as income-related government grants. If a government grant is in form of monetaryasset, it is measured at the amount received or receivable. If a government grant is in the form of non-monetary asset, ismeasured at fair value; if the fair value cannot be measured reliably, it is measured at a nominal amount. The governmentsubsidy measured at a nominal amount is directly counted to the current profit and loss.
The Company usually confirms and measures government grants according to the actual amount received. If there isevidence at the end of the period that the Company can meet the relevant conditions stipulated by the financial supportpolicy and is expected to receive financial support funds, the government subsidy will be recognized according to thereceivable amount. The government grants measured according to the receivable amount shall meet the followingconditions at the same time: (1) The amount of the grants receivable has been authorized by the government departmentto issue the documents or can be reasonably measured according to the relevant provisions of the formally promulgatedfinancial capital management measures; (2) It is based on the financial
support items formally promulgated by the local finance department and proactively disclosed in accordance with theprovisions of the "Regulations Governing the Disclosure of Government Information" and the fiscal fund managementmeasures, and the management measures should be generalized (any eligible enterprises can apply), rather thanspecifically for a specific company; (3) the relevant grant approval has been clearly committed to the deadline fordisbursement, and the disbursement of funds has corresponding budget as a guarantee, so that it can reasonably ensurethat it can be received within the prescribed time limit; (4) Other relevant conditions (if any) that should be satisfiedaccording to the Company and the specific circumstances of the grants.
A government grant related to asset is recognized as deferred income, and evenly amortized and charged to profit or lossover its useful life. If a government grant related to income is used to compensate related expenses and losses insubsequent periods, it is recognized as deferred income and charged to current profit or loss when recognize the relevantcost and expense or loss; if it is used to compensate related expenses and losses that are already incurred, it is chargedto current profit or loss directly.
Government grants including assets-related parts and income-related parts at the same time should be treated separately.If it is difficult to distinguish them, they will be classified as income-related government grants completely.
The government subsidy related to the daily activities of the Company are included in other income; the governmentsubsidy not related to the daily activities of the Company are included in the non-operating income and expenditure.If a government grant already recognized needs to be repaid, the carrying amount of related deferred income, if any, is tobe reduced. Any excess are charged to current profit or loss. If there is no deferred income, the repayment is charged tocurrent profit or loss directly.
41. Deferred income tax asset/deferred income tax liability
(1) Income tax in the reporting period
At the balance sheet date, the current income tax liabilities (or asset) formed in the reporting period and previous periodsare measured based on the income tax amount predicted payable (or returnable) as calculated according to the tax law.The taxable income amount based on which the current income tax expense is calculated is worked out after thecorresponding adjustment of the pretax accounting profit during the reporting period according to the relevant provisionsof the tax law.
(2) Deferred income tax asset and deferred income tax liability
The balance between the book value of some assets and liability items and their tax base and the provisional differencearising from the balance between the book value of the items which have not been taken as asset and liability but may bedetermined as tax base according to the tax law are recognized as deferred income tax asset and deferred income taxliability by means of the debt method based on balance sheet.
The taxable provisional difference which is connected with the initial recognition of goodwill and the initial recognition ofthe asset or liability arising from the transaction which is neither enterprise consolidation nor influences the accountingprofit and taxable income amount (or may be used to offset loss) at the time of incurrence are not recognized as relevantdeferred income tax liability. In addition, as to the taxable provisional difference in connection with investment in thesubsidiaries, associates and joint ventures, if the Company can control the time of reversal of the provisional differencewhile such provisional difference may be possibly unable to be reversed in the foreseeable future and the relevantdeferred income tax liability shall not be recognized either. With the exception of the aforesaid situation, the Companyrecognizes the deferred income tax liability arising from other taxable provisional difference.
The offsetable provisional difference which is connected with the initial recognition of the asset or liability (or may be usedto offset loss) arising from the transaction which is neither enterprise consolidation nor influences the accounting profit andtaxable income amount is not recognized as the relevant deferred income tax asset. In addition the offsetable provisionaldifference in connection with investment in the subsidiaries, associates and joint ventures, in case such provisionaldifference may be possibly unable to be reversed in the foreseeable future, or it is not highly possible to obtain taxableincome amount which can be used to offset the offsetable provincial difference in future, shall not be recognized as therelevant deferred income tax asset. With the exception of the aforesaid situation, the Company recognizes the deferredincome tax asset arising from the other offsetable provisional difference only with the taxable income amount which maypossibly be obtainable for offsetting the offsetable provisional difference.
For the offsetable loss and tax payment write-down which may be carried over to the future years, only the future taxableincome amount which may be obtainable and used to offset the offsetable loss and write down the tax payment may berecognized as the corresponding deferred income tax asset.
At the balance sheet date, deferred tax assets and deferred tax liabilities are measured at the tax rates that are expectedto apply to the period when the asset is realized or the liability is settled according to the tax law.
At the balance sheet date, the Company reviews the carrying amount of a deferred tax asset. If it is probable that sufficienttaxable profits will not be available in future to allow the benefit of the deferred tax asset to be utilized, the carrying amountof the deferred tax asset is reduced. Any such reduction in amount is reversed when it becomes probable that sufficienttaxable profits will be available.
(3) Income tax expense
Income tax expense includes the current income tax and deferred income tax.
Except that the current income tax and deferred income tax in connection with other comprehensive income or thetransactions and matters which are directly stated in the shareholders' equity are counted to the other comprehensiveincome or shareholder's equity and the deferred income tax arising from enterprise consolidation is used to adjusted thebook value of goodwill, all the other current income tax and deferred income tax expenses or income are counted to thecurrent gains and losses.
(4) Income Tax Offsetting
In case the Company has legal right to make netting and is desirous to make netting or obtain assets and settle liabilitiesat the same time, the Company may present the net amount after offsetting the current income tax liabilities with thecurrent income tax assets.
In case the Company has legal right to settle the current income tax asset and current income tax liability in net while thedeferred income tax asset and the deferred income tax liability are related to the income tax which is collected by thesame tax collection and administration authority from the same tax payer or related to the different tax payer, but duringthe period in future when each significant deferred income tax asset and liability are reversed, the Company present thedeferred income tax asset and deferred income tax liability in net after offsetting when it involves the tax payer's desire tosettle the current income tax asset and liability or obtaining asset and satisfying liability in net.
42. Lease
(1) Accounting process for operating lease
The "finance lease" shall refer to a lease that has transferred in substance all the risks and rewards related to theownership of an asset. The ownership of it may or may not eventually be transferred. Other lease except the financinglease is operational lease
① The Company records the operational lease business as the tenant
Rental payment of operational lease is recorded in the relevant asset cost or current gain and loss based on the straight
line method over various fiscal periods within the lease term. The initial direct expense is recorded in the current gain andloss. Contingent rental is recorded in the current gain and loss when it actually incurs.
② The Company records the operational lease business as the lessor
The rental income of the operational lease is recorded in the current gain and loss according to the straight line method indifferent periods within the lease term. The initial direct expense with bigger amount is capitalized at the time of incurrenceand is recorded in the current gain and loss periodically according to the same base in recognizing the rental incomeduring the lease term; other initial direct expense with smaller amount is recorded in the current gain and loss at the timeof incurrence. Contingent rental is recorded in the current gain and loss when it actually incurs.
(2) Accounting treatment method for finance lease
① As lessor
At the beginning date of lease period, the Company will recognize the lower of the fair value of the lease asset at thebeginning of the lease and the present value of the minimum amount of rent payment as the entry value of rent asset;takes the minimum rent payment as the entry value of long term account payable and its balance as the unrecognizedfinancial charges. In addition, when the lease negotiation takes place in the same process of conclusion of lease contract,the initial direct expenses attributable to lease item are also counted to the value of rent asset. The balance of theminimum rent payment amount less the unrecognized financial charges is respectively stated on the long term liabilitiesand the long term liabilities due within a year.
Unrecognized financial charges are recognized in the current financing expenses by using the actual interest rate methodwithin the lease term. Contingent rental is recorded in the current gain and loss when it actually incurs.
② As lessee
As at the beginning date of lease period, the Company takes the sum of the minimum amount of the rent collected at thebeginning of the lease and the initial direct expense as the entry value of the finance lease receivable and at the sametime records the unsecured residual value; the recognizes the balance of the sum of the minimum rent collection amount,initial direct expenses and unsecured residual value and the sum of its present value as the unrealized financing income.The balance between the receivable rent from finance lease less the unrealized revenue of financing is respectivelypresented in the long term claim and the long term claim due within a year.
The unrecognized financial charges are calculated by means of the actual interest rate method within the lease term andrecognized as the current financial expenses. Contingent rental is recorded in the current gain and loss when it actuallyincurs.
43. Other important accounting policy and accounting estimate
Operation terminationOperation termination refers to the components which can satisfy one of the following conditions, can be separatelydistinguished and have been disposed or classified as the category of held-for-sale by the Company: ① this componentrepresents an independent major business or an independent major operation region; ② this component is a part of arelated plan for an independent principal business or an independent principal operation region; ③ this component is asubsidiary acquired exclusively for resale.
About the accounting treatment method for operation termination, refer to the relevant description of Note V.18“Held-for-sale assets and disposal group”
44. Changes in significant accounting policies and accounting estimates
(1) Change in significant accounting policies
| Contents and cause of the change in the accounting policy | Examination and approval procedures | Time of starting the application | Remarks |
| On March 31, 2017, the Ministry of Finance revised the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments, the Accounting Standards for Business Enterprises No. 23 - Transfer of Financial Assets and the Accounting Standards for Business Enterprises No. 24 - Hedging Accounting CAI KUAI (2017) No. 7, 8 and 9 respectively; on May 2, 2017, the Ministry of Finance revised the the Accounting Standards for Business Enterprises No. 37 - Presentation of Financial Instruments. In process of preparing the financial statements of the first half of 2019, the Company implemented the relevant accounting standards and made treatment according to the relevant connecting provisions. | The change in the relevant accounting policy was approved at the 8th session of the Ninth Board of Directors of the Company on April 19, 2019. | January 1, 2019 | For the detail, refer to Explanation I |
| On April 30, 2019, the Ministry of Finance revised the Circular on Issuing the Amended General Corporate Financial Statement Templates for the Year 2019 CAI KUAI (2019) No. 6, according to which the items of Accounts Receivable and Notes Receivable are split into “Accounts Receivable” and “Notes Receivable”; “Accounts Payable and Notes Payable” are split into “Accounts Payable” and “Notes Payable”; the presentation details of the items of “Interest Income”, “Other Income”, “Income from Disposal of Assets”, “Non-operating Income” and “Non-operating Expenses” under the items of “Other Receivables”, “Non-current Assets due in a Year”, “Other Payables”, | The change in the relevant accounting policy was approved at the 10th session of the Ninth Board of Directors of the Company on April 13, 2019. | April 30, 2019 | For the detail, refer to Explanation II |
Explanation I: Influence from the implementation of the new standards for financial instrumentsThe main impacts of the change in the accounting policies arising from the above new standards for financial instrumenton the financial statements of January 1, 2019 are as follows:
Consolidated Financial Statements:
“Deferred Income”, “R & D Expenses,” and“Financial Expenses” have been specifiedor revised. For the enterprises that haveimplemented the new standards forfinancial instruments, the item“Receivables Financing” is added to reflectthe notes receivable and accountsreceivable that are measured at fair valueunder the new standards for financialinstruments and whose changes areincluded in other comprehensive income.The newly added “the Income fromDerecognition of Financial AssetsMeasured at the Amortized Cost” is used toreflect the profit or loss arising from thederecognition of financial assets measuredat amortized cost. For the change of theaforesaid presented items, the Companyadopts the retrospective adjustmentmethod to make accounting changes, andretrospectively adjusts the data incomparable accounting periods.
| Book value as presented according to the original standards (December 31, 2018) | Reclassified | Book value as presented according to the new standards (January 1, 2019) | |
| Available-for-sale financial assets | 85,000.00 | -85,000.00 | |
| Investment in other equity instruments | 85,000.00 | 85,000.00 |
Financial Statements, Parent Company
| Book value as presented according to the original standards (December 31, 2018) | Reclassified | Book value as presented according to the new standards (January 1, 2019) | |
| Available-for-sale financial assets | 85,000.00 | -85,000.00 | |
| Investment in other equity instruments | 85,000.00 | 85,000.00 |
Explanation II: In accordance with the Circular on Revising and Issuing the 2019 Versions of General Corporate
Financial Statement Templates (CAI KUAI [2019] No. 6], the accounting policy for these financial statement templated hasbeen updated. In addition to the change of the items involved in the aforesaid standard, other statement items and thecorresponding amount affected are as follows:
| Description of the statement items affected | Amount affected |
| Administrative expenses in the half year of 2018 (consolidated financial statements) | Reduced by CNY 21,285,926.02 |
| R & D expenses in the half year of 2018 (consolidated financial statements) | Increased by CNY 21,285,926.02 |
| Administrative expenses in the half year of 2018 (the parent company's financial statements) | Reduced by CNY 10,322,178.15 |
| R & D expenses in the half year of 2018 (the parent company's financial statements) | Increased by CNY 10,322,178.15 |
| Notes receivable and accounts receivable as at December 31, 2018 (consolidated financial statements) | Reduced by CNY 377,597,503.46 |
| Notes receivable as at December 31, 2018 (consolidated financial statements) | Increased by CNY 7,051,846.85 |
| Accounts receivable and accounts receivable as at December 31, 2018 (consolidated financial statements) | Increased by CNY 370,545,656.61 |
| Notes payable and accounts payable as at December 31, 2018 (consolidated financial statements) | Reduced by CNY 259,913,612.34 |
| Accounts payable as at December 31, 2018 (consolidated financial statements) | Increased by CNY 259,913,612.34 |
| Notes receivable and accounts receivable as at December 31, 2018 (the parent company's financial statements) | Reduced by CNY 737,636.38 |
| Accounts receivable as at December 31, 2018 (the parent company's financial statements) | Increased by CNY 737,636.38 |
| Notes payable and accounts payable as at December 31, 2018 (the Company's financial statements) | Reduced by CNY 52,324,191.98 |
| Notes payable as at December 31, 2018 (the Company's financial statements) | Increased by CNY 52,324,191.98 |
Note: Explanation on the names and amount of the statement items significantly affected.
(2) Change in significant accounting estimates
Inapplicable
(3) Adjustment of the relevant financial statements at the current year beginning according to the new standardsfor financial instruments, the new standards for revenues and the new standards for lease initially implementedConsolidated Balance Sheet
In CNY
| Items | December 31, 2018 | January 01, 2019 | Amount involved in the adjustment |
| Current assets: |
| Monetary capital | 164,828,059.97 | 164,828,059.97 | |
| Settlement reserve | |||
| Inter-bank lending | |||
| Transactional financial assets | |||
| The financial assets measured at fair values with the change counted to the current profit and loss | |||
| Derivative financial assets | |||
| Notes receivable | 7,051,846.85 | 7,051,846.85 | |
| Accounts receivable | 370,545,656.61 | 370,545,656.61 | |
| Financing with accounts receivable | |||
| Advance payment | 13,666,816.33 | 13,666,816.33 | |
| Receivable premium | |||
| Reinsurance accounts receivable | |||
| Reserve for reinsurance contract receivable | |||
| Other receivables | 45,870,582.26 | 45,870,582.26 | |
| Including: Interest receivable | |||
| Dividends receivable | |||
| Redemptory monetary capital for sale | |||
| Inventories | 1,782,306,301.70 | 1,782,306,301.70 | |
| Contract assets | |||
| Held-for-sale assets | |||
| Non-current assets due within a year | |||
| Other current assets | 73,703,312.24 | 73,703,312.24 | |
| Total current assets | 2,457,972,575.96 | 2,457,972,575.96 | |
| Non-current assets: | |||
| Loan issuing and advance in cash | |||
| Equity investment | |||
| Available-for-sale financial assets | 85,000.00 | -85,000.00 | |
| Other equity investment | |||
| Held-to-due investments |
| Long term accounts receivable | |||
| Long-term equity investment | 44,881,063.15 | 44,881,063.15 | |
| Investment in other equity instruments | 85,000.00 | 85,000.00 | |
| Other non-current financial assets | |||
| Investment-oriented real estate | 377,319,433.03 | 377,319,433.03 | |
| Fixed assets | 425,649,562.85 | 425,649,562.85 | |
| Construction-in-progress | 12,041,126.00 | 12,041,126.00 | |
| Productive biological asset | |||
| Oil and gas assets | |||
| Use right assets | |||
| Intangible assets | 43,545,477.61 | 43,545,477.61 | |
| Development expenses | |||
| Goodwill | |||
| Long-term expenses to be apportioned | 128,572,545.15 | 128,572,545.15 | |
| Deferred income tax asset | 100,675,706.09 | 100,675,706.09 | |
| Other non-current assets | 8,949,160.42 | 8,949,160.42 | |
| Total non-current assets | 1,141,719,074.30 | 1,141,719,074.30 | |
| Total assets | 3,599,691,650.26 | 3,599,691,650.26 | |
| Current liabilities: | |||
| Short term borrowings | 547,118,452.97 | 547,118,452.97 | |
| Borrowings from central bank | |||
| Loans from other banks | |||
| Transactional financial liabilities | |||
| The financial liabilities measured at fair values with the change counted to the current profit and loss | |||
| Derivative financial liabilities | |||
| Notes payable | |||
| Accounts payable | 259,913,612.34 | 259,913,612.34 | |
| Advance receipts | 16,459,445.00 | 16,459,445.00 | |
| Money from sale of the repurchased financial assets | |||
| Deposits taking and interbank placement |
| Acting trading securities | |||
| Income from securities underwriting on commission | |||
| Payroll payable to the employees | 69,779,037.83 | 69,779,037.83 | |
| Taxes payable | 55,923,171.92 | 55,923,171.92 | |
| Other payables | 71,819,930.30 | 71,819,930.30 | |
| Including: interest payable | 772,351.26 | 772,351.26 | |
| Dividends payable | |||
| Service charge and commission payable | |||
| Payable reinsurance | |||
| Contract liabilities | |||
| Held-for-sale liabilities | |||
| Non-current liabilities due within a year | 347,470.00 | 347,470.00 | |
| Other current liabilities | |||
| Total current liabilities | 1,021,361,120.36 | 1,021,361,120.36 | |
| Non-current liabilities: | |||
| Reserve for insurance contract | |||
| Long-term borrowings | 4,517,110.00 | 4,517,110.00 | |
| Bonds payable | |||
| Including: preferred shares | |||
| Perpetual bond | |||
| Lease liabilities | |||
| Long-term accounts payable | |||
| Long term payroll payable to the employees | |||
| Estimated liabilities | |||
| Deferred income | 3,672,855.36 | 3,672,855.36 | |
| Deferred income tax liability | |||
| Other non-current liabilities | |||
| Total non-current liabilities | 8,189,965.36 | 8,189,965.36 | |
| Total liabilities | 1,029,551,085.72 | 1,029,551,085.72 | |
| Owner’s equity: | |||
| Capital stock | 438,744,881.00 | 438,744,881.00 |
| Other equity instruments | |||
| Including: preferred shares | |||
| Perpetual bond | |||
| Capital Reserve | 1,062,455,644.22 | 1,062,455,644.22 | |
| Less: shares in stock | |||
| Other comprehensive income | -5,442,139.78 | -5,442,139.78 | |
| Special reserve | |||
| Surplus Reserve | 223,015,793.80 | 223,015,793.80 | |
| Reserve against general risks | |||
| Retained earnings | 851,360,603.66 | 851,360,603.66 | |
| Total owners’ equity attributable to the parent company | 2,570,134,782.90 | 2,570,134,782.90 | |
| Minority shareholders’ equity | 5,781.64 | 5,781.64 | |
| Total owner’s equity | 2,570,140,564.54 | 2,570,140,564.54 | |
| Total liabilities and owners’ equity | 3,599,691,650.26 | 3,599,691,650.26 |
Note to the AdjustmentIn March 2017, the Ministry of Finance promulgated the Circular on Printing and Issuing the Revised “AccountingStandards for Enterprises No.22–Recognition and Measurement of Financial Instruments”, the Circular on Printing andIssuing the Revised “Accounting Standards for Enterprises No.23–Transfer of Financial Assets”, the Circular on Printingand Issuing the Revised “Accounting Standards for Enterprises No.24–Hedging”; on May 2, 2017, the Ministry of Financepromulgated the Circular on Printing and Issuing the Revised “Accounting Standards for Enterprises No. 37–Presentationof Financial Instruments” and on June 15, 2018, Notice by the Ministry of Finance of Revising and Issuing the Format of2018 Consolidated Financial Statements asked the listed companies of A-shares to implement the updated standards forfinancial instruments series and the new format of presentation commencing from January 1, 2019. In accordance withthe requirements of the updated standards for new financial instrument series, the Company adjusted the“available-for-sale financial assets” to “investment in other equity instruments” based on the business model of theCompany's management of financial assets and the contractual cash flow characteristics of financial assets.
Balance Sheet, Parent Company
In CNY
| Items | Monday, December 31, 2018 | January 01, 2019 | Amount involved in the adjustment |
| Current assets: | |||
| Monetary capital | 137,175,466.27 | 137,175,466.27 | |
| Transactional financial assets | |||
| The financial assets measured at fair values with the change counted to the current profit and loss |
| Derivative financial assets | |||
| Notes receivable | |||
| Accounts receivable | 737,636.38 | 737,636.38 | |
| Financing with accounts receivable | |||
| Advance payment | |||
| Other receivables | 870,739,378.37 | 870,739,378.37 | |
| Including: Interest receivable | |||
| Dividends receivable | |||
| Inventories | |||
| Contract assets | |||
| Held-for-sale assets | |||
| Non-current assets due within a year | |||
| Other current assets | 10,081,272.94 | 10,081,272.94 | |
| Total current assets | 1,018,733,753.96 | 1,018,733,753.96 | |
| Non-current assets: | |||
| Equity investment | |||
| Available-for-sale financial assets | 85,000.00 | -85,000.00 | |
| Other equity investment | |||
| Held-to-due investments | |||
| Long term accounts receivable | |||
| Long-term equity investment | 1,376,129,654.08 | 1,376,129,654.08 | |
| Investment in other equity instruments | 85,000.00 | 85,000.00 | |
| Other non-current financial assets | |||
| Investment-oriented real estate | 297,042,937.87 | 297,042,937.87 | |
| Fixed assets | 297,517,472.81 | 297,517,472.81 | |
| Construction-in-progress | 12,041,126.00 | 12,041,126.00 | |
| Productive biological asset | |||
| Oil and gas assets | |||
| Use right assets | |||
| Intangible assets | 35,337,052.82 | 35,337,052.82 | |
| Development expenses | |||
| Goodwill |
| Long-term expenses to be apportioned | 4,500,638.97 | 4,500,638.97 | |
| Deferred income tax asset | 952,857.33 | 952,857.33 | |
| Other non-current assets | 4,493,971.35 | 4,493,971.35 | |
| Total non-current assets | 2,028,100,711.23 | 2,028,100,711.23 | |
| Total assets | 3,046,834,465.19 | 3,046,834,465.19 | |
| Current liabilities: | |||
| Short term borrowings | 505,000,000.00 | 505,000,000.00 | |
| Transactional financial liabilities | |||
| The financial liabilities measured at fair values with the change counted to the current profit and loss | |||
| Derivative financial liabilities | |||
| Notes payable | |||
| Accounts payable | 52,324,191.98 | 52,324,191.98 | |
| Advance receipts | 1,636,520.02 | 1,636,520.02 | |
| Contract liabilities | |||
| Payroll payable to the employees | 11,589,634.34 | 11,589,634.34 | |
| Taxes payable | 943,919.26 | 943,919.26 | |
| Other payables | 57,997,397.28 | 57,997,397.28 | |
| Including: interest payable | 685,419.80 | 685,419.80 | |
| Dividends payable | |||
| Held-for-sale liabilities | |||
| Non-current liabilities due within a year | |||
| Other current liabilities | |||
| Total current liabilities | 629,491,662.88 | 629,491,662.88 | |
| Non-current liabilities: | |||
| Long-term borrowings | |||
| Bonds payable | |||
| Including: preferred shares | |||
| Perpetual bond | |||
| Lease liabilities | |||
| Long-term accounts payable | |||
| Long term payroll payable to the |
| employees | |||
| Estimated liabilities | |||
| Deferred income | 3,672,855.36 | 3,672,855.36 | |
| Deferred income tax liability | |||
| Other non-current liabilities | |||
| Total non-current liabilities | 3,672,855.36 | 3,672,855.36 | |
| Total liabilities | 633,164,518.24 | 633,164,518.24 | |
| Owner’s equity: | |||
| Capital stock | 438,744,881.00 | 438,744,881.00 | |
| Other equity instruments | |||
| Including: preferred shares | |||
| Perpetual bond | |||
| Capital Reserve | 1,068,111,185.32 | 1,068,111,185.32 | |
| Less: shares in stock | |||
| Other comprehensive income | |||
| Special reserve | |||
| Surplus Reserve | 223,015,793.80 | 223,015,793.80 | |
| Retained earnings | 683,798,086.83 | 683,798,086.83 | |
| Total owner’s equity | 2,413,669,946.95 | 2,413,669,946.95 | |
| Total liabilities and owners’ equity | 3,046,834,465.19 | 3,046,834,465.19 |
Note to the AdjustmentIn March 2017, the Ministry of Finance promulgated the Circular on Printing and Issuing the Revised “AccountingStandards for Enterprises No.22–Recognition and Measurement of Financial Instruments”, the Circular on Printing andIssuing th Revised “Accounting Standards for Enterprises No.23–Transfer of Financial Assets”, the Circular on Printingand Issuing the Revised “Accounting Standards for Enterprises No.24–Hedging”; on May 2, 2017, the Ministry of Financepromulgated the Circular on Printing and Issuing the Revised “Accounting Standards for Enterprises No. 37–Presentationof Financial Instruments” and on June 15, 2018, Notice by the Ministry of Finance of Revising and Issuing the Format of2018 Consolidated Financial Statements asked the listed companies of A-shares to implement the updated standards forfinancial instruments series and the new format of presentation commencing from January 1, 2019. In accordance withthe requirements of the updated standards for new financial instrument series, the Company adjusted the“available-for-sale financial assets” to “investment in other equity instruments” based on the business model of theCompany's management of financial assets and the contractual cash flow characteristics of financial assets.
(4) Note to the retroactive adjustment of the previous comparative data according to the new standards fromfinancial instruments and the new standards for lease initially implemented
| Items to be adjusted | Amount involved in the adjustment |
| Add the item of credit impairment loss to the income statement, and reclassify part of the impairment loss of assets related to receivables to the credit | During the reporting period, the credit impairment loss amounted to CNY -3,081,768.89, the asset impairment loss of the previous period was adjusted |
| impairment loss | down by CNY -5,178,800.41 and credit impairment loss was adjusted up by CNY 5,178,800.41. |
Note: When the Company makes retrospective adjustment of the amount involved in the first implementation of the newaccounting standards and adjusts the comparison data of the previous period, it was necessary to disclose the name andadjustment amount of the financial statement items involved in the adjustment.
45. Others
Inapplicable
VI. Taxation
1. Types of major taxes and tax rates
| Type of taxes | Tax basis | Tax rates |
| Value-added tax | For taxable income, the output VAT is calculated based on the rate of 13% and the VAT is calculated and paid based on the difference after deduction of the input VAT offsetable in the very period. | 13% |
| Consumption tax | For the high-grade watch at the price higher than CNY 10,000 (with CNY 10,000 inclusive) imported or produced, the consumption tax is calculated and payable. | 20% |
| Urban maintenance and construction tax | The urban maintenance and construction tax is based on 7% of the turnover tax actually paid | 7% |
| Corporation income tax | Taxable income amount | 15%-30% |
| Real estate tax | 1.2% of 70% of the cost of the property or 12% of the rental income | 1.2% and 12% |
In case there exist taxpayers subject to different corporate income tax rates, disclose the information.
| Taxpayers | Income tax rates |
| The Company (Notes① and ②) | 25% |
| Harmony (Notes①) | 25% |
| the Manufacture Co. (Notes② and ③) | 15% |
| FIYTA Hong Kong (Note ④) | 16.5% |
| Station-68 (Note ④) | 16.5% |
| the Technology Co. (Notes② and ③) | 15% |
| SHIYUEHUI (Note ⑤) | 25% |
| Harbin Co. (Note ⑤) | 25% |
| Emile Chouriet (Shenzhen) Limited (Note ⑤) | 25% |
| The Sales Co. (Notes① and ⑤) | 25% |
| Hengdarui (Note ⑤) | 25% |
| Switzerland Company (Note ⑥) | 30% |
2. Tax Preferences
(1) Enterprise Income Tax
Note ①: According to the regulations stated in GuoShuiFa (2008) No. 28, “Interim Administration Method for Levy ofCorporate Income Tax to Enterprise that Operates Cross-regionally”, the head office of the Company and its branchoffices, the head office of HARMONY Company and its branch offices adopt tax submission method of “unified calculation,managing by classes, pre-paid in its registered place, settlement in total, and adjustment by finance authorities” startingfrom 1 January 2008. 50% is shared and prepaid by branches and 50% is prepaid by the headquarters.
Note ②: According to the Notice of Improving R & D Expense Pre-tax Weighted Deduction Policy (CAI SHUI (2015) No.119 promulgated by the Science and Technology Department of State Administration of Taxation, the R & D expensesarising from development of new technology, new products and new process in the Company, the Manufacture Companyand the Technology Company may enjoy 50% weighted deduction as the R & D expenses based on the specifieddeduction according to fact as long as they have not formed intangible assets and counted to the current gains and loss;
Note ③: The company enjoys the “income tax rate exclusion of high-tech enterprises enjoying the key support from thestate”;
Note ④: These companies are registered in Hong Kong and the income tax rate of Hong Kong applicable is 16.50% thisyear;
Note ⑤: According to the People's Republic of China Enterprise Income Tax Law, the income tax rate is 25% forresidential enterprises since 1 January 2008;
Note ⑥: The tax rate of 30% is applicable for Swiss companies as it was registered in Switzerland.
(2) Property tax
According to Article 2 of the Circular on Transmission of the Provisions on the Policy in Connection with the Property Taxand Urban Land Use Tax Promulgated by the State Administration of Taxation (SHEN DI SHUI FA [2003] No. 676: for thenew properties newly constructed or purchased by taxpayers, the property tax may be exempted for three yearscommencing from the next month after completion of the construction or purchase. Our FIYTA Watch Building located atGuangming New Zone of Shenzhen enjoys exemption from the property tax for three years commencing from the nextmonth of completion of the construction.
3. Others
Inapplicable
VII. Notes to items of consolidated financial statements
1. Monetary capital
In CNY
| Items | Ending balance | Opening balance |
| Cash in stock | 225,027.58 | 420,783.85 |
| Bank deposit | 223,207,376.62 | 160,135,454.62 |
| Other Monetary Funds | 3,089,148.22 | 4,271,821.50 |
| Total | 226,521,552.42 | 164,828,059.97 |
| Including: total amount deposited overseas | 8,012,479.02 | 9,192,653.31 |
Other notesOf other monetary fund, CNY 1,575,000.00 (December 31, 2018: CNY 1,575,000.00) was the margin deposits depositedby the Company for application to banks for unconditional and irrevocable letter of guarantee, of which CNY 630,000.00was judicially frozen due to litigation matters.
2. Transactional financial assets
Inapplicable
3. Derivative financial assets
Inapplicable
4. Notes receivable
(1) Presentation of classification of notes receivable
In CNY
| Items | Ending balance | Opening balance |
| Bank acceptance | 2,105,700.57 | 0.00 |
| Trade acceptance | 7,835,290.95 | 7,051,846.85 |
| Total | 9,940,991.52 | 7,051,846.85 |
(2) Bad debt provision accrual, received or reversed in the reporting period
Inapplicable
(3) Notes receivable already pledged by the Company at the end of the reporting periodInapplicable
(4) Endorsed or discounted notes receivable at the end of the reproting period, but not yet due onthe balance sheet dateInapplicable
(5) Notes transferred to receivables due to issuer’s default at the end of the reporting period
Inapplicable
(6) Notes receivable actually written off in current period
Inapplicable
5. Accounts receivable
(1) Accounts receivables disclosed by types
In CNY
| Categories | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | |||||
| Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
| Accounts receivable for which bad debt reserve has been provided based on individual items | 1,799,519.78 | 0.39% | 1,799,519.78 | 100.00% | 0.00 | 1,799,519.78 | 0.47% | 1,799,519.78 | 100.00% | 0.00 |
| in which | ||||||||||
| Accounts receivable with significant single amount and provision of bad debt reserve on individual basis | 1,702,371.94 | 0.37% | 1,702,371.94 | 100.00% | 0.00 | 1,702,371.94 | 0.44% | 1,702,371.94 | 100.00% | 0.00 |
| Accounts receivable with insignificant single amount and provision of bad debt reserve on individual basis | 97,147.84 | 0.02% | 97,147.84 | 100.00% | 0.00 | 97,147.84 | 0.03% | 97,147.84 | 100.00% | 0.00 |
| Accounts receivable for which bad debt reserve has been provided based on portfolios | 461,793,096.56 | 99.61% | 13,670,980.97 | 2.96% | 448,122,115.59 | 381,434,944.02 | 99.53% | 10,889,287.41 | 2.85% | 370,545,656.61 |
| in which | ||||||||||
| Group of aging | 251,194,196. | 54.18% | 13,670,980.9 | 5.44% | 237,523,215. | 189,655,491. | 49.49% | 10,889,287.4 | 5.74% | 178,766,203.67 |
| 43 | 7 | 46 | 08 | 1 | ||||||
| Specific fund portfolio | 210,598,900.13 | 45.43% | 0.00 | 0.00 | 210,598,900.13 | 191,779,452.94 | 50.04% | 0.00 | 0.00 | 191,779,452.94 |
| Total | 463,592,616.34 | 100.00% | 15,470,500.75 | 3.34% | 448,122,115.59 | 383,234,463.80 | 100.00% | 12,688,807.19 | 3.31% | 370,545,656.61 |
Provision for bad debt based on individual items: Accounts receivable with significant single amount and provision of baddebt reserve on separate basis
In CNY
| Name | Ending balance | |||
| Book balance | Bad debt reserve | Provision proportion | Provision reason | |
| Xi'an Century Ginwa Qujiang Shopping Center Co., Ltd. | 1,702,371.94 | 1,702,371.94 | 100.00% | Due poor operation of the shopping mall, it is less likely to recover payment for goods |
| Total | 1,702,371.94 | 1,702,371.94 | -- | -- |
Provision for bad debt based on individual items: Accounts receivable with insignificant single amount but provision of baddebt reserve on separate basis
In CNY
| Name | Ending balance | |||
| Book balance | Bad debt reserve | Provision proportion | Provision reason | |
| Shenzhen Number One Shop Co., Ltd. | 97,147.84 | 97,147.84 | 100.00% | Unrecoverable |
| Total | 97,147.84 | 97,147.84 | -- | -- |
Provision for bad debt based on portfolio: Specific fund portfolio
In CNY
| Name | Ending balance | ||
| Book balance | Bad debt reserve | Provision proportion | |
| Specific fund portfolio | 210,598,900.13 | 0.00 | 0.00 |
| Total | 210,598,900.13 | 0.00 | -- |
Note to the basis for determining the combination:
Based on historical experience, the Company’s receivables due from petty cash paid to employees, receivables due fromsubsidiaries of the Company and accounts receivable for the sales between the last settlement date of the samedepartment store and the balance sheet date are with high recoverability and low possibility of incurring bad debt, as aresult, no bad debt provisions are provided for such receivables.
For the provision for bad debts of accounts receivable made according to the general model of the expected credit losses,please refer to the relevant information about the disclosure of provision for bad debt in the way of disclosing otherreceivables:
| Bad debt reserve | The 1st stage | The 2nd stage | The 3rd stage | Total |
| Predicted credit loss in the future 12 months | Predicted credit loss in the whole duration (no credit impairment taken place) | Predicted credit loss in the whole duration (credit impairment already taken place) | ||
| Balance as at January 1, 2019 | 12,688,807.19 | 12,688,807.19 | ||
| Balance as at January 1, 2019 during the reporting period | —— | —— | —— | —— |
| -- transferred to the 2nd stage |
| -- transferred to the 3rd stage | ||||
| -- reversed to the 2nd stage |
| -- reversed to the 1st stage | ||||
| Provision in the reporting period | 2,819,885.29 | 2,819,885.29 | ||
| Reversal in the reporting period | 38,191.73 | 38,191.73 |
| Charged-off in the reporting period | ||||
| Written-off in the reporting period | ||||
| Other changes |
| Balance as at June 30, 2019 | 15,470,500.75 | 15,470,500.75 |
Disclosed based on aging
In CNY
| Aging | Ending balance |
| Within 1 year (with 1 year inclusive) | 244,101,929.86 |
| 1 to 2 years | 4,476,538.60 |
| 2 to 3 years | 1,322,754.44 |
| Over 3 years | 1,292,973.53 |
| Total | 251,194,196.43 |
(2) Provision, recovery or reversal of reserve for bad debts during the reporting periodProvision for bad debt during the reporting period
In CNY
| Categories | Opening balance | Amount of movement during the reporting period | Ending balance | ||
| Provision | Amount recovered or reversed | Written-off | |||
| Accounts receivable with significant single amount and provision of bad debt reserve on separate basis | 1,702,371.94 | 0.00 | 0.00 | 0.00 | 1,702,371.94 |
| Accounts receivable with insignificant amount and provision of bad debt reserve on separate basis | 97,147.84 | 0.00 | 0.00 | 0.00 | 97,147.84 |
| Group of aging | 10,889,287.41 | 2,819,885.29 | 38,191.73 | 0.00 | 13,670,980.97 |
| Total | 12,688,807.19 | 2,819,885.29 | 38,191.73 | 0.00 | 15,470,500.75 |
(3) Accounts receivable actually written off in current period
Inapplicable
(4) Accounts receivable due from the top five debtors are as follows:
Total accounts receivable due from the top five debtors of the Company in the current period is CNY51,743,736.88,accounting for 11.16% of the total accounts receivable as at the end of the current period and the total provision for badand doubtful debts made as at the end of the current period is CNY2,587,186.85.
(5) Accounts receivable terminated for recognition due to transfer of financial assetsInapplicable
(6) Amount of assets, liabilities formed by transfer of accounts receivable and continuing to be involvedInapplicable
6. Financing with accounts receivable
Inapplicable
7. Advance payments
(1) Advance payments are presented based on ages
In CNY
| Aging | Ending balance | Opening balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 21,301,410.87 | 82.46% | 12,886,273.93 | 94.29% |
| 1 to 2 years | 2,868,479.09 | 11.10% | 0.00 | 0.00 |
| 2 to 3 years | 1,014,446.65 | 3.93% | 780,542.40 | 5.71% |
| Over 3 years | 649,029.90 | 2.51% | 0.00 | 0.00 |
| Total | 25,833,366.51 | -- | 13,666,816.33 | -- |
(2) Advance payment to the top five payees of the ending balance collected based on the payees of the advance paymentInapplicable
8. Other receivables
In CNY
| Items | Ending balance | Opening balance |
| Other receivables | 62,591,073.25 | 45,870,582.26 |
| Total | 62,591,073.25 | 45,870,582.26 |
(1) Interest receivable
Inapplicable
(2) Dividends receivable
Inapplicable
(3) Other receivables
1) Classification of other receivables based on nature of payment
In CNY
| Nature of Payment | Ending book balance | Opening book balance |
| Reserve for employees | 5,096,955.76 | 2,478,447.48 |
| Collateral and Deposit | 42,447,660.48 | 38,091,767.87 |
| Commodity promotion | 1,959,416.00 | 7,827,524.03 |
| Guarantee for property suit | 8,958,057.64 | 0.00 |
| Repurchase payment from securities brokers | 3,327,401.11 | 0.00 |
| Others | 11,236,826.69 | 7,510,384.99 |
| Total | 73,026,317.68 | 55,908,124.37 |
2) Provision for bad debts
| Bad debt reserve | The 1st stage | The 2nd stage | The 3rd stage | Total |
| Predicted credit loss in the future 12 months | Predicted credit loss in the whole duration (no credit impairment taken place) | Predicted credit loss in the whole duration (credit impairment already taken place) | ||
| Balance as at January 1, 2019 | 10,037,542.11 | 10,037,542.11 | ||
| Balance as at January 1, 2019 during the reporting period | —— | —— | —— | —— |
| -- transferred to the 2nd stage |
| -- transferred to the 3rd stage | ||||
| -- reversed to the 2nd stage | ||||
| -- reversed to the 1st stage | ||||
| Provision in the reporting period | 453,051.98 | 453,051.98 | ||
| Reversal in the reporting period | 55,349.66 | 55,349.66 | ||
| Charged-off in the reporting period | ||||
| Written-off in the reporting period | ||||
| Other changes | ||||
| Balance as at Sunday, June 30, 2019 | 10,435,244.43 | 10,435,244.43 |
Disclosed based on aging
In CNY
| Aging | Ending balance |
| Within 1 year (with 1 year inclusive) | 58,700,727.02 |
| 1 to 2 years | 6,429,749.30 |
| 2 to 3 years | 6,489,591.36 |
| Over 3 years | 1,406,250.00 |
| Total | 73,026,317.68 |
3) Provision, recovery or reversal of reserve for bad debts during the reporting periodProvision for bad debt during the reporting period
In CNY
| Categories | Opening balance | Amount of movement during the reporting period | Ending balance | |
| Provision | Amount recovered or reversed | |||
| Other receivables with significant single amount and provision of bad debt reserve on individual basis | 7,093,237.65 | 96,353.71 | 0.00 | 7,189,591.36 |
| Other receivables with insignificant single amount but provision of bad debt reserve on individual basis | 565,400.00 | 0.00 | 0.00 | 565,400.00 |
| Group of aging | 2,378,904.46 | 356,698.27 | 55,349.66 | 2,680,253.07 |
| Total | 10,037,542.11 | 453,051.98 | 55,349.66 | 10,435,244.43 |
4) Accounts receivable actually written off in the reporting period
Inapplicable
5) Other receivables owed by the top five debtors based on the ending balance
In CNY
| Company name | Nature of Payment | Ending balance | Aging | Proportion in total ending balance of other receivables | Ending balance of the provision for bad debts |
| Beat Blattman Marketing | Payment for goods | 4,103,512.16 | Over 3 years | 5.62% | 4,103,512.16 |
| China Resources (Shenzhen) Co., Ltd | Deposit in security | 3,059,224.00 | Within 1 year | 4.19% | 152,961.20 |
| Liberty Time Center GmbH | Payment for goods | 2,286,079.20 | Over 3 years | 3.13% | 2,286,079.20 |
| CHINA RESOURCES SUN HUNG KAI PROPERTIES (HANGZHOU) LIMITED | Deposit in security | 1,672,563.00 | Within 1 year | 2.29% | 83,628.15 |
| Shenzhen Yitian Holiday Plaza Co,. Ltd. | Deposit in security | 1,145,523.00 | Within 1 year | 1.57% | 57,276.15 |
| Total | -- | 12,266,901.36 | -- | 16.80% | 6,683,456.86 |
6) Accounts receivable involving government subsidy
Inapplicable
7) Other receivables with recognition terminated due to transfer of financial assetsInapplicable
8) Amount of assets and liabilities formed through transfer of other receivables and continuing to be involvedInapplicable
9. Inventories
Has the new standard for income been implementedNo
(1) Classification of inventories
In CNY
| Items | Ending balance | Opening balance | ||||
| Book balance | Provision for price falling | Book value | Book balance | Provision for price falling | Book value | |
| Raw materials | 167,245,372.54 | 28,350,027.04 | 138,895,345.50 | 183,679,226.95 | 28,296,729.51 | 155,382,497.44 |
| Products in process | 10,557,912.97 | 0.00 | 10,557,912.97 | 10,787,777.81 | 0.00 | 10,787,777.81 |
| Commodities in stock | 1,634,849,921.44 | 56,901,087.38 | 1,577,948,834.06 | 1,675,548,898.56 | 59,412,872.11 | 1,616,136,026.45 |
| Total | 1,812,653,206.95 | 85,251,114.42 | 1,727,402,092.53 | 1,870,015,903.32 | 87,709,601.62 | 1,782,306,301.70 |
Does the Company need to comply with the requirements on disclosure according to the Guidance of Shenzhen StockExchange on Disclosure of Information of the Industry Engaged in No. 4 - Listed Companies Engaged in Seed Industry,Cultivation?No
(2) Reserve for Price Falling of Inventories
In CNY
| Items | Opening balance | Increase in the reporting period | Decrease in the reporting period | Ending balance | ||
| Provision | Others | Reversal or Offset | Others | |||
| Raw materials | 28,296,729.51 | 0.00 | 53,297.53 | 0.00 | 0.00 | 28,350,027.04 |
| Commodities in stock | 59,412,872.11 | 0.00 | 2,956.13 | 2,514,740.86 | 0.00 | 56,901,087.38 |
| Total | 87,709,601.62 | 0.00 | 56,253.66 | 2,514,740.86 | 0.00 | 85,251,114.42 |
(3) Note to the amount of capitalized borrowing costs involved in the ending balance of inventoriesInapplicable
(4) Assets already completed but not yet settled formed in the construction contract at the end of the reportingperiodInapplicable
10. Contract assets
Inapplicable
11. Classified as assets held for sale
Inapplicable
12. Non-current assets due within a year
Inapplicable
13. Other current assets
Has the new standard for income been implementedNo
In CNY
| Items | Ending balance | Opening balance |
| Input VAT to be offset | 33,834,787.17 | 52,444,448.67 |
| Income tax paid in advance | 543,648.10 | 7,846,471.11 |
| Others | 11,688,034.67 | 13,412,392.46 |
| Total | 46,066,469.94 | 73,703,312.24 |
14. Equity investment
Inapplicable
15. Other equity investment
Inapplicable
16. Long term accounts receivable
(1) About long term accounts receivable
Inapplicable
(2) Long term account receivable with recognition terminated due to transfer of financial assetsInapplicable
(3) Amount of assets and liabilities formed through transfer of long term account receivable and continuing to beinvolvedInapplicable
17. Long-term equity investments
In CNY
| Investees | Opening balance | Increase/ Decrease (+ / -) in the reporting period | Ending balance | Ending balance of the provision for impairment | |||||||
| Additional investment | Decrease of investment | Income from equity investment recognized under equity method | Other comprehensive income adjustment | Other equity movement | Announced for distributing cash dividend or profit | Provision for impairment | Others | ||||
| I. Joint Venture | |||||||||||
| II. Associates | |||||||||||
| Shanghai Watch Industry Co., Ltd. (Shanghai Watch) | 44,881,063.15 | 0.00 | 0.00 | 1,531,310.06 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 46,412,373.21 | 0.00 |
| Sub-total | 44,881,063.15 | 0.00 | 0.00 | 1,531,310.06 | 0.00 | 0.00 | 0.0 | 0.00 | 0.00 | 46,412,373.21 | 0.00 |
| Total | 44,881,063.15 | 0.00 | 0.00 | 1,531,310.06 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 46,412,373.21 | 0.00 |
18. Investment in other equity instruments
Inapplicable
19. Other non-current financial assets
Inapplicable
20. Investment based real estate
(1) Investment property measured based on the cost method
In CNY
| Items | Plant and buildings | Land use right | Construction-in-process | Total |
| I. Original book value | 546,695,433.81 | 0.00 | 0.00 | 546,695,433.81 |
| 1. Opening balance | 546,695,433.81 | 0.00 | 0.00 | 546,695,433.81 |
| 2. Increase in the reporting period | ||||
| (1) Purchased | ||||
| (2) Inventories\fixed assets/construction- in – process transferred in | ||||
| (3) Increase of enterprise consolidation | ||||
| 3. Amount decreased in the reporting period | ||||
| (1) Disposal | ||||
| (2) Other transfer out | ||||
| 4. Ending balance | 546,695,433.81 | 0.00 | 0.00 | 546,695,433.81 |
| II. Accumulative depreciation and accumulative amortization | ||||
| 1. Opening balance | 169,376,000.78 | 0.00 | 0.00 | 169,376,000.78 |
| 2. Increase in the reporting period | 6,852,211.34 | 0.00 | 0.00 | 6,852,211.34 |
| (1) Provision or amortization | 6,852,211.34 | 0.00 | 0.00 | 6,852,211.34 |
| 3. Amount decreased in the reporting period | ||||
| (1) Disposal | ||||
| (2) Other transfer out | ||||
| 4. Ending balance | 176,228,212.12 | 0.00 | 0.00 | 176,228,212.12 |
| III. Provision for impairment | ||||
| 1. Opening balance | ||||
| 2. Increase in the reporting period | ||||
| (1) Provision | ||||
| 3. Amount decreased in the reporting period | ||||
| (1) Disposal | ||||
| (2) Other transfer out | ||||
| 4. Ending balance | ||||
| IV. Book value | ||||
| 1.Book value at the end of the reporting period | 370,467,221.69 | 0.00 | 0.00 | 370,467,221.69 |
| 2.Book value at the beginning of the reporting period | 377,319,433.03 | 0.00 | 0.00 | 377,319,433.03 |
(2) Investment property measured based on fair value
Inapplicable
(3) Investment property that does not have certificate for property right
Inapplicable
21. Fixed asset
In CNY
| Items | Ending balance | Opening balance |
| Fixed assets | 414,522,443.81 | 425,649,562.85 |
| Total | 414,522,443.81 | 425,649,562.85 |
(1) About fixed assets
In CNY
| Items | Plant & buildings | Machinery & equipment | Motor vehicle | Electronic equipment | Other equipment | Total |
| I. Original book value | ||||||
| 1. Opening balance | 458,621,315.96 | 80,799,655.00 | 15,572,717.72 | 44,137,536.41 | 58,422,164.62 | 657,553,389.71 |
| 2. Increase in the reporting period | 652,992.91 | 2,232,519.28 | 0.00 | 397,625.55 | 1,186,820.07 | 4,469,957.81 |
| (1) Purchase | 652,992.91 | 2,232,519.28 | 0.00 | 397,625.55 | 1,186,820.07 | 4,469,957.81 |
| (2) Construction-in-process transferred in | ||||||
| (3) Increase of enterprise consolidation | ||||||
| 3. Amount decreased in the reporting period | 68,681.52 | 959,530.62 | 706,638.00 | 734,427.91 | 1,293,798.83 | 3,763,076.88 |
| (1) Disposal or scrapping | 68,681.52 | 959,530.62 | 706,638.00 | 734,427.91 | 1,293,798.83 | 3,763,076.88 |
| 4. Ending balance | 459,205,627.35 | 82,072,643.66 | 14,866,079.72 | 43,800,734.05 | 58,315,185.86 | 658,260,270.64 |
| II. Accumulative depreciation | ||||||
| 1. Opening balance | 97,899,718.69 | 43,012,974.47 | 13,664,912.06 | 28,707,685.36 | 48,618,536.28 | 231,903,826.86 |
| 2. Increase in the reporting period | 7,193,596.75 | 3,569,439.07 | 356,775.98 | 2,382,887.27 | 1,515,801.29 | 15,018,500.36 |
| (1) Provision | 7,193,596.75 | 3,569,439.07 | 356,775.98 | 2,382,887.27 | 1,515,801.29 | 15,018,500.36 |
| 3. Amount decreased in the reporting period | 14,817.35 | 670,153.70 | 671,306.10 | 642,750.80 | 1,185,472.44 | 3,184,500.39 |
| (1) Disposal or scrapping | 14,817.35 | 670,153.70 | 671,306.10 | 642,750.80 | 1,185,472.44 | 3,184,500.39 |
| 4. Ending balance | 105,078,498.09 | 45,912,259.84 | 13,350,381.94 | 30,447,821.83 | 48,948,865.13 | 243,737,826.83 |
| III. Provision for impairment | ||||||
| 1. Opening balance | ||||||
| 2. Increase in the reporting period | ||||||
| (1) Provision | ||||||
| 3. Amount decreased in the reporting period | ||||||
| (1) Disposal or |
| scrapping | ||||||
| 4. Ending balance | ||||||
| IV. Book value | ||||||
| 1.Book value at the end of the reporting period | 354,127,129.26 | 36,160,383.82 | 1,515,697.78 | 13,352,912.22 | 9,366,320.73 | 414,522,443.81 |
| 2.Book value at the beginning of the reporting period | 360,721,597.27 | 37,786,680.53 | 1,907,805.66 | 15,429,851.05 | 9,803,628.34 | 425,649,562.85 |
(2) About temporarily idle fixed assets
Inapplicable
(3) Fixed assets rented through finance lease
Inapplicable
(4) Fixed assets leased through operating lease
Inapplicable
(5) Fixed assets that do not have certificate for property right
In CNY
| Items | Book value | The reason why the property ownership certificate has not been granted |
| Office occupancy of Harbin Office | 263,188.43 | There existed problem in ownership |
| Property belonging to Zhengzhou Office | 5,986,023.77 | In process of handling the procedures |
(6) Disposal of fixed assets
Inapplicable
22. Construction-in-process
In CNY
| Items | Ending balance | Opening balance |
| Construction-in-progress | 12,886,665.68 | 12,041,126.00 |
| Total | 12,886,665.68 | 12,041,126.00 |
(1)About construction in progress
In CNY
| Items | Ending balance | Opening balance |
| Book balance | Impairment reserve | Book value | Book balance | Impairment reserve | Book value | |
| FIYTA Watch Building supporting works | 12,886,665.68 | 0.00 | 12,886,665.68 | 12,041,126.00 | 0.00 | 12,041,126.00 |
| Total | 12,886,665.68 | 0.00 | 12,886,665.68 | 12,041,126.00 | 0.00 | 12,041,126.00 |
(2) Movements of important construction-in-progress projects in the reporting period
In CNY
| Project name | Budget | Opening balance | Increase in the reporting period | Transferred into the fixed assets in the current period | Other decreases in the reporting year | Ending balance | Proportion of the accumulative engineering input in the budget | Project progress | Accumulative amount involved in interest capitalization | Including: amount of the capitalized interest in the reporting period | Interest capitalization rate in the reporting period | Capital source |
| FIYTA Watch Building supporting works | 34,050,900.00 | 12,041,126.00 | 845,539.68 | 0.00 | 0.00 | 12,886,665.68 | 37.85% | 100% | 0.00 | 0.00 | 0.00 | Self-raised fund |
| Total | 34,050,900.00 | 12,041,126.00 | 845,539.68 | 0.00 | 0.00 | 12,886,665.68 | -- | -- | 0.00 | 0.00 | 0.00 | -- |
(3) Provision for impairment of construction in progress in the current period
Inapplicable
(4) Engineering materials
Inapplicable
23. Productive biological asset
(1) Productive biological asset by using the cost measurement model
Inapplicable
(2) Productive biological asset by using the fair value measurement model
Inapplicable
24. Oil and Gas Assets
Inapplicable
25. Use right assets
Inapplicable
26. Intangible assets
(1) About the intangible assets
In CNY
| Items | Land use right | Patent Right | Non-patent technology | Software system | Trademark rights | Total |
| I. Original book value | ||||||
| 1. Opening balance | 34,933,822.40 | 0.00 | 0.00 | 23,887,215.08 | 10,093,308.61 | 68,914,346.09 |
| 2. Increase in the reporting period | 0.00 | 0.00 | 93,469.34 | 871,572.00 | 965,041.34 | |
| (1) Purchase | 0.00 | 0.00 | 93,469.34 | 871,572.00 | 965,041.34 | |
| (2) Internal R & D | ||||||
| (3) Increase of enterprise consolidation | ||||||
| 3. Amount decreased in the reporting period | ||||||
| (1) Disposal | ||||||
| 4. Ending balance | ||||||
| II. Accumulative amortization | ||||||
| 1. Opening balance | 13,581,708.89 | 0.00 | 0.00 | 8,076,111.69 | 3,711,047.90 | 25,368,868.48 |
| 2. Increase in the reporting period | 366,776.65 | 0.00 | 0.00 | 2,206,057.05 | 459,814.14 | 3,032,647.84 |
| (1) Provision | 366,776.65 | 0.00 | 0.00 | 2,206,057.05 | 459,814.14 | 3,032,647.84 |
| 3. Amount decreased in the reporting period | ||||||
| (1) Disposal | ||||||
| 4. Ending balance | 13,948,485.54 | 0.00 | 0.00 | 10,282,168.74 | 4,170,862.04 | 28,401,516.32 |
| III. Provision for impairment | ||||||
| 1. Opening balance |
| 2. Increase in the reporting period | ||||||
| (1) Provision | ||||||
| 3. Amount decreased in the reporting period | ||||||
| (1) Disposal | ||||||
| 4. Ending balance | ||||||
| IV. Book value | ||||||
| 1.Book value at the end of the reporting period | 20,985,336.86 | 0.00 | 0.00 | 13,698,515.68 | 6,794,018.57 | 41,477,871.11 |
| 2.Book value at the beginning of the reporting period | 21,352,113.51 | 0.00 | 0.00 | 15,811,103.39 | 6,382,260.71 | 43,545,477.61 |
(2) About the land use right that does not have certificate of title
Inapplicable
27. Development expenditure
Inapplicable
28. Goodwill
(1) Original book value of the goodwill
Inapplicable
(2) Provision for impairment of the goodwill
Inapplicable
29. Long term expenses to be apportioned
In CNY
| Items | Opening balance | Increase in the reporting period | Amount amortized in the reporting period | Other decrease | Ending balance |
| Charge of fabrication of special counters | 49,305,000.10 | 14,718,343.28 | 20,893,290.14 | 0.00 | 43,130,053.24 |
| Refurbishment expenses | 74,651,287.13 | 21,714,834.94 | 14,319,441.48 | 0.00 | 82,046,680.59 |
| Market promotion | 0.00 | 9,245,282.81 | 2,083,333.34 | 0.00 | 7,161,949.47 |
| Others | 4,616,257.92 | 1,740,660.12 | 1,159,891.49 | 0.00 | 5,197,026.55 |
| Total | 128,572,545.15 | 47,419,121.15 | 38,455,956.45 | 0.00 | 137,535,709.85 |
30. Deferred income tax asset/deferred income tax liability
(1) Deferred income tax asset without offsetting
In CNY
| Items | Ending balance | Opening balance | ||
| Offsetable provisional difference | Deferred income tax asset | Offsetable provisional difference | Deferred income tax asset | |
| Asset impairment reserve | 64,862,735.35 | 17,749,843.25 | 79,775,704.17 | 17,676,690.28 |
| Unrealized profit from the intracompany transactions | 294,735,562.07 | 59,547,817.25 | 272,840,911.63 | 67,717,517.83 |
| Offsetable loss | 23,096,749.97 | 5,077,613.81 | 61,529,125.81 | 14,363,284.14 |
| Deferred income | 3,672,855.36 | 918,213.84 | 3,672,855.36 | 918,213.84 |
| Total | 386,367,902.75 | 83,293,488.15 | 417,818,596.97 | 100,675,706.09 |
(2) Deferred income tax liabilities without offsetting
Inapplicable
(3) Deferred income tax asset or liabilities stated with net amount after offsetting
In CNY
| Items | Amount mutually offset between the deferred income tax assets and liabilities at the end of the reporting period | Ending balance of the deferred income tax asset or liabilities after offsetting | Amount mutually offset between the deferred income tax assets and liabilities at the beginning of the reporting period | Opening balance of the deferred income tax asset or liabilities after offsetting |
| Deferred income tax asset | 0.00 | 83,293,488.15 | 0.00 | 100,675,706.09 |
(4) Statement of deferred income tax asset not recognized
In CNY
| Items | Ending balance | Opening balance |
| Offsetable provisional difference | 0.00 | 0.00 |
| Offsetable loss | 69,044,760.33 | 65,181,936.05 |
| Provision for impairment of assets | 30,788,147.42 | 30,660,246.75 |
| Total | 99,832,907.75 | 95,842,182.80 |
Note: The Swiss Co., one of the Company’s sub-subsidiaries, has not recognized the deferred income tax income as it isindefinite whether it can obtain enough amount of taxable income in future.
Offsetable loss of the income tax assets: FIYTA Hong Kong, one of the Company's subsidiaries, is not necessary torecognize the deferred income tax asset for provision for impairment of assetsaccording to the local tax policy
(5) Unrecognized deferred income tax asset available for offsetting loss is going to expire in the following yearsInapplicable
31. Other non-current assets
Has the new standard for income been implementedNo
In CNY
| Items | Ending balance | Opening balance |
| Advance payment for engineering works and equipment | 7,297,788.01 | 8,949,160.42 |
| Total | 7,297,788.01 | 8,949,160.42 |
32. Short term loans
(1) Classification of short-term loans
In CNY
| Items | Ending balance | Opening balance |
| Secured loan | 30,078,332.26 | 187,118,452.97 |
| Credit loan | 520,000,000.00 | 360,000,000.00 |
| Total | 550,078,332.26 | 547,118,452.97 |
(2)Short-term loans overdue but still remaining outstanding
Inapplicable
33. Transactional financial liabilities
Inapplicable
34. Derivative financial liabilities
Inapplicable
35. Notes payable
Inapplicable
36. Accounts payable
(1) Statement of accounts payable
In CNY
| Items | Ending balance | Opening balance |
| Payment for goods | 146,930,733.24 | 188,957,240.00 |
| Payment for materials | 54,055,696.55 | 18,632,180.36 |
| Engineering fees | 26,696,117.76 | 52,324,191.98 |
| Total | 227,682,547.55 | 259,913,612.34 |
(2) Significant accounts payable with age exceeding 1 year
Inapplicable
37. Advance Receipts
(1) Statement of advances from customers
In CNY
| Items | Ending balance | Opening balance |
| Payment for goods | 14,770,379.61 | 14,822,924.98 |
| Rent | 3,252,081.05 | 1,636,520.02 |
| Total | 18,022,460.66 | 16,459,445.00 |
(2) Significant advances from customers with age exceeding 1 year
Inapplicable
38. Contract liabilities
Inapplicable
39. Employee remuneration payable
(1) Statement of employee remuneration payable
In CNY
| Items | Opening balance | Increase in the reporting period | Decrease in the reporting period | Ending balance |
| I. Short term remuneration | 63,805,316.88 | 272,491,338.67 | 292,637,143.21 | 43,659,512.34 |
| II. Post-employment benefit program - defined contribution plan. | 5,973,720.95 | 22,090,963.73 | 23,142,138.67 | 4,922,546.01 |
| Total | 69,779,037.83 | 294,582,302.40 | 315,779,281.88 | 48,582,058.35 |
(2) Presentation of short term remuneration
In CNY
| Items | Opening balance | Increase in the reporting period | Decrease in the reporting period | Ending balance |
| 1. Salaries, bonus, allowances and subsidies | 63,307,013.46 | 242,746,533.20 | 262,946,115.16 | 43,107,431.50 |
| 2. Staff’s welfare | 0.00 | 5,795,147.74 | 5,795,147.74 | 0.00 |
| 3. Social security premium | 0.00 | 9,967,657.28 | 9,916,381.28 | 51,276.00 |
| Including: medical insurance premium | 0.00 | 8,869,151.88 | 8,827,318.88 | 41,833.00 |
| Work injury insurance | 0.00 | 357,040.05 | 350,766.05 | 6,274.00 |
| Maternity Insurance | 0.00 | 741,465.35 | 738,296.35 | 3,169.00 |
| 4. Public reserve for housing | 0.00 | 8,518,713.97 | 8,518,713.97 | 0.00 |
| 5. Trade union fund and staff education fund | 498,303.42 | 3,849,765.11 | 3,847,263.69 | 500,804.84 |
| 6. Short-term paid leave | 0.00 | 1,613,521.37 | 1,613,521.37 | 0.00 |
| Total | 63,805,316.88 | 272,491,338.67 | 292,637,143.21 | 43,659,512.34 |
(3) Presentation of the defined contribution plan
In CNY
| Items | Opening balance | Increase in the reporting period | Decrease in the reporting period | Ending balance |
| 1. Basic endowment insurance premium | 473,251.38 | 20,675,747.29 | 21,030,867.66 | 118,131.01 |
| 2. Unemployment insurance premium | 0.00 | 552,469.46 | 548,054.46 | 4,415.00 |
| 3. Contribution to the enterprise annuity scheme | 5,500,469.57 | 862,746.98 | 1,563,216.55 | 4,800,000.00 |
| Total | 5,973,720.95 | 22,090,963.73 | 23,142,138.67 | 4,922,546.01 |
40. Taxes payable
In CNY
| Items | Ending balance | Opening balance |
| Value-added tax | 12,738,306.56 | 32,344,121.18 |
| Consumption tax | -153,015.94 | 0.00 |
| Enterprise Income Tax | 15,900,477.46 | 21,599,264.54 |
| Individual income tax | 1,812,507.91 | 998,190.73 |
| Urban maintenance and construction tax | 366,990.40 | 321,914.01 |
| Real estate tax | 1,370,185.18 | 248,795.56 |
| Education Surcharge | 262,286.98 | 229,955.09 |
| Others | -259,753.75 | 180,930.81 |
| Total | 32,037,984.80 | 55,923,171.92 |
41. Other payables
In CNY
| Items | Ending balance | Opening balance |
| Interest payable | 740,561.84 | 772,351.26 |
| Other payables | 91,573,312.72 | 71,047,579.04 |
| Total | 92,313,874.56 | 71,819,930.30 |
(1) Interest payable
In CNY
| Items | Ending balance | Opening balance |
| Interest payable for short term loan | 740,561.84 | 772,351.26 |
| Total | 740,561.84 | 772,351.26 |
(2) Dividend payable
Inapplicable
(3) Other payables
1) Other payments stated based on nature of fund
In CNY
| Items | Ending balance | Opening balance |
| Collateral and Deposit | 33,429,349.06 | 22,954,307.95 |
| Fund for shop-front activities | 1,939,718.66 | 17,461,589.65 |
| Personal account payable | 20,580,376.18 | 3,058,122.71 |
| Refurbishment | 5,100,755.67 | 6,096,460.99 |
| Down payment | 387,531.46 | 612,659.73 |
| Others | 30,135,581.69 | 20,864,438.01 |
| Total | 91,573,312.72 | 71,047,579.04 |
2) Other payables in significant amount and with aging over 1 year
In CNY
| Items | Ending balance | Cause of failure in repayment or carry-over |
| Shenzhen Tencent Computer System Co., Ltd . | 4,693,429.16 | Deposit for property lease |
| Shenzhen Qianhai Zubao Network Technology Co., Ltd. | 1,877,815.24 | Deposit for property lease |
| SHENZHEN COMEN MEDICAL INSTRUMENTS CO., LTD. | 1,059,236.96 | Deposit for property lease |
| Shenzhen Zhongshen Commercial Property Service Co., Ltd. | 903,166.80 | Deposit for property lease |
| Oracle Research & Development Center(Shenzhen) Co.,Ltd | 804,000.00 | Deposit for property lease |
| Total | 9,337,648.16 | -- |
42. Held-for-sale liabilities
Inapplicable
43. Non-current liabilities due within a year
In CNY
| Items | Ending balance | Opening balance |
| Long-term liabilities due within a year | 352,790.00 | 347,470.00 |
| Total | 352,790.00 | 347,470.00 |
44. Other current liabilities
Inapplicable
45. Long-term Loan
(1) Classification of Long-term Borrowings
In CNY
| Items | Ending balance | Opening balance |
| Mortgage loan | 4,409,875.00 | 4,517,110.00 |
| Total | 4,409,875.00 | 4,517,110.00 |
Notes to classification of long term borrowings:
(1) The Company has no overdue and outstanding long term borrowing.
(2) The Company has no secured borrowings in the balance of the long term borrowings during the reporting periodOther notes, including the interest rate interval:
The interest rate of long term borrowings is 3.00%.
46. Bonds Payable
(1) Bonds payable
Inapplicable
(2) Increase/Decrease of bonds payable (excluding other financial instruments classified asfinancial liabilities, such as preferred shares, perpetual bonds, etc.)Inapplicable
(3) Note to the conditions and time of share conversion of convertible company bondsInapplicable
(4) Note to other financial instruments classified as financial liabilities
Inapplicable
47. Lease liabilities
Inapplicable
48. Long term accounts payable
Inapplicable
(1) Long term accounts payable stated based on the nature
Inapplicable
(2) Special accounts payable
Inapplicable
49. Long term payroll payable
(1) Statement of long term payroll payable
Inapplicable
(2) Change of defined benefit plans
Inapplicable
50. Predicted liabilities
Inapplicable
51. Deferred income
In CNY
| Items | Opening balance | Increase in the reporting period | Decrease in the reporting period | Ending balance | Cause of formation |
| Government subsidies | 3,672,855.36 | 0.00 | 0.00 | 3,672,855.36 | Income to be recognized |
| Total | 3,672,855.36 | 0.00 | 0.00 | 3,672,855.36 | -- |
Items involving government subsidies:
In CNY
| Liabilities | Opening balance | Amount of newly added subsidy in the reporting period | Amount counted to the non-operating income in the reporting period | Amount counted to the other income in the reporting period | Amount offsetting costs and expenses in the reporting period | Other changes | Ending balance | Related with assets/related with income |
| Special purpose fund of Shenzhen industrial design development (Note (1)) | 933,011.22 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 933,011.22 | Related with assets |
| Funding project for construction of enterprise technology center designated by the state (Note (2)) | 1,511,421.57 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1,511,421.57 | Related with assets |
| Special purpose | 1,162,384.83 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1,162,384.83 | Related with |
| fund for 2017 Industry and Informationization at Provincial Level (Note (3)) | income | |||||||
| Special fund for upgrading standard and quality of consumer goods | 66,037.74 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 66,037.74 | Related with assets |
Other notes:
Note (1): It is the special fund for development of industrial design in Shenzhen obtained according to the OperationInstructions on Certification and Financial Support Program for Industrial Design Centers in Shenzhen (TrialImplementation) SHEN JING MAO IT Zi [2013] No. 227 jointly promulgated by Economy, Trade and InformationCommission of Shenzhen Municipality and Finance Commission of Shenzhen Municipality;
Note (2) : It is the fund from the financial support for construction of enterprise technology centers in Shenzhen obtainedaccording to the Circular of Development and Reform Commission of Shenzhen Municipality on Issuing the First Batch ofSupporting Program of Financial Support Fund for Construction of Enterprise Technology Centers in Shenzhen in 2015(SHEN JING MAO XINXI YU [2015] No. 129 on October 28, 2015;
Note (3): The special purpose fund obtained according to the Circular of the Economic and Information Commission ofGuangdong Province on Doing a Good Job in Submission to the Special Project Library of Production and Services atProvincial Level in 2017 (YUE JING XIN SHENG CHAN HAN (2016) No. 53) jointly promulgated by the Economic &Information Commission of Guangdong Province and the Finance Department of Guangdong Province.
52. Other non-current liabilities
Inapplicable
53. Capital stock
In CNY
| Opening balance | Increase / Decrease (+/ -) | Ending balance | |||||
| New issuing | Bonus shares | Shares converted from reserve | Others | Sub-total | |||
| Total Shares | 438,744,881.00 | 4,224,000.00 | 0.00 | 0.00 | 0.00 | 4,224,000.00 | 442,968,881.00 |
Other notes:
Approved by the 3rd session of the Ninth Board of Directors held on November 12, 2018 and 2019 1st ExtraordinaryGeneral Meeting held on January 11, 2019, the Company decided to grant 4.224 million restrictive A-shares to 128
persons eligible for the incentive at the price of CNY 4.40 per share. This part of A-share restrictive stock was all grantedand registered for listing by the end of the reporting period. The total consideration of the shares granted to the personseligible for the incentive received by the Company amounted to CNY 18,585,600.00, including the increased capital stockamounted to CNY 4,224,000.00.
54. Other equity instruments
(1) Basic information on the outstanding other financial instruments, including preferred shares,perpetual bonds, etc. at the end of the reporting periodInapplicable
(2)Movement of the outstanding other financial instruments, including preferred shares,perpetual bonds, etc. at the end of the reporting periodInapplicable
55. Capital reserve
In CNY
| Items | Opening balance | Increase in the reporting period | Decrease in the reporting period | Ending balance |
| Capital premium (capital stock premium) | 1,047,963,195.57 | 14,361,600.00 | 0.00 | 1,062,324,795.57 |
| Other capital reserve | 14,492,448.65 | 2,234,597.31 | 0.00 | 16,727,045.96 |
| Total | 1,062,455,644.22 | 16,596,197.31 | 0.00 | 1,079,051,841.53 |
Other notes, including the note to its increase/decrease and the cause(s) of its movement in the reporting period:
Approved by the 3rd session of the Ninth Board of Directors held on November 12, 2018 and 2019 1st ExtraordinaryGeneral Meeting held on January 11, 2019, the Company decided to grant 4.224 million restrictive A-shares to 128persons eligible for the incentive at the price of CNY 4.40 per share. This part of A-share restrictive stock was all grantedand registered for listing by the end of the reporting period. The total consideration of the shares granted to the personseligible for the incentive received by the Company amounted to CNY 18,585,600.00, including the increased capital stockamounted to CNY 4,224,000.00; the increased capital reserve (capital stock premium) amounted to CNY 14,361,600.00.
The increase of other capital reserve was the amount of the expenses recognized in the reporting period.
56. Treasury shares
In CNY
| Items | Opening balance | Increase in the reporting | Decrease in the reporting | Ending balance |
| period | period | |||
| Shares in stock | 0.00 | 32,902,198.89 | 0.00 | 32,902,198.89 |
| Total | 0.00 | 32,902,198.89 | 0.00 | 32,902,198.89 |
Other notes, including the note to its increase/decrease and the cause(s) of its movement in the reporting period:
The increase of the shares in stock during the reporting period consisted of two parts. One part was the considerationfrom the subscription of the employees’ restrictive shares received totaling CNY 18,585,600.00 and the other part was theamount from the repurchase of B-shares totaling CNY 14,316,598.89.
57. Other comprehensive income
In CNY
| Items | Opening balance | Amount incurred in the reporting period | Ending balance | |||||
| Amount incurred before income tax in the reporting period | Less: the amount counted to the profit and loss during the reporting period which had been counted to the other comprehensive income in the previous period. | Less: the amount counted to the retained earnings during the reporting period which had been counted to the other comprehensive income in the previous period. | Less: Income tax expense | Attributable to the parent company after tax | Attributable to minority shareholders after tax | |||
| I. Other comprehensive income which cannot be re-classified into profit and loss | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| II. Other comprehensive income which shall be re-classified into profit and loss | -5,442,139.78 | 1,749,407.20 | 0.00 | 0.00 | 0.00 | 1,749,407.20 | 13.67 | -3,692,732.58 |
| Conversion difference in foreign currency statements | -5,442,139.78 | 1,749,407.20 | 0.00 | 0.00 | 0.00 | 1,749,407.20 | 13.67 | -3,692,732.58 |
| Total other comprehensive income | -5,442,139.78 | 1,749,407.20 | 0.00 | 0.00 | 0.00 | 1,749,407.20 | 13.67 | -3,692,732.58 |
58. Special reserve
Inapplicable
59. Surplus Reserve
In CNY
| Items | Opening balance | Increase in the reporting period | Decrease in the reporting period | Ending balance |
| Statutory surplus reserve | 161,030,899.80 | 0.00 | 0.00 | 161,030,899.80 |
| Discretionary surplus reserve | 61,984,894.00 | 0.00 | 0.00 | 61,984,894.00 |
| Total | 223,015,793.80 | 0.00 | 0.00 | 223,015,793.80 |
60. Retained earnings
In CNY
| Items | Reporting period | Previous period |
| Before adjustment: Retained earnings at the end of the previous period | 851,360,603.66 | 771,484,565.02 |
| After adjustment: Retained earnings at the beginning of the reporting period | 0.00 | 771,484,565.02 |
| Plus: Net profit attributable to the parent company’s owner in the report period | 123,495,460.90 | 183,835,095.29 |
| Less: Provision of statutory surplus public reserve | 0.00 | 16,210,080.45 |
| Dividends of common shares payable | 0.00 | 87,748,976.20 |
| Retained earnings at the end of the reporting period | 974,856,064.56 | 851,360,603.66 |
61. Operation Income and Costs
In CNY
| Items | Amount incurred in the reporting period | Amount incurred in the previous period | ||
| Income | Costs | Income | Costs | |
| Principal business | 1,775,615,457.33 | 1,049,188,996.85 | 1,683,836,915.14 | 973,240,076.81 |
| Other businesses | 9,420,562.90 | 2,315,078.37 | 12,054,517.58 | 3,085,659.54 |
| Total | 1,785,036,020.23 | 1,051,504,075.22 | 1,695,891,432.72 | 976,325,736.35 |
Has the new standard for income been implementedNo
62. Business Taxes and Surcharges
In CNY
| Items | Amount incurred in the reporting period | Amount incurred in the previous period |
| Consumption tax | 184,399.06 | 35,185.87 |
| Urban maintenance and construction tax | 6,395,004.36 | 8,003,388.87 |
| Education Surcharge | 4,548,531.69 | 5,707,461.48 |
| Real estate tax | 1,886,754.77 | 1,987,807.87 |
| Land use tax | 211,126.82 | 189,899.66 |
| Tax on using vehicle and boat | 1,035.00 | 375.00 |
| Stamp duty | 1,102,915.98 | 990,689.30 |
| Others | 765,107.65 | 875,978.38 |
| Total | 15,094,875.33 | 17,790,786.43 |
63. Sales expenses
In CNY
| Items | Amount incurred in the reporting period | Amount incurred in the previous period |
| Salaries & bonus | 145,512,139.90 | 139,546,287.86 |
| Employees’ welfare | 3,159,080.44 | 3,138,963.39 |
| Public reserve for housing | 5,750,656.98 | 5,500,716.30 |
| Social security premium | 22,997,809.84 | 20,980,632.82 |
| Shopping mall and rental fees | 83,986,057.93 | 64,037,045.34 |
| Advertising, exhibition and market promotion fee | 72,972,500.97 | 97,597,459.44 |
| Depreciation and amortization | 43,315,834.35 | 39,426,656.57 |
| Packing expenses | 5,502,133.20 | 8,692,707.95 |
| Water & power supply and property management fee | 9,561,119.07 | 6,745,296.70 |
| Freight | 6,971,013.87 | 5,646,078.77 |
| Office expenses | 2,779,674.92 | 4,263,061.96 |
| Business travel expenses | 4,887,148.59 | 5,097,034.58 |
| Others | 8,380,858.89 | 21,441,100.01 |
| Total | 415,776,028.95 | 422,113,041.69 |
64. Administrative expenses
In CNY
| Items | Amount incurred in the reporting period | Amount incurred in the previous period |
| Salaries & bonus | 67,718,045.37 | 63,138,017.67 |
| Social security premium | 5,755,767.56 | 5,047,581.22 |
| Depreciation and amortization | 14,295,251.10 | 12,160,071.63 |
| Enterprise annuity | 1,125,994.66 | 625,494.72 |
| Labor union dues | 2,630,194.16 | 2,603,067.32 |
| Training fee | 518,230.67 | 1,199,149.56 |
| Business travel expenses | 3,353,907.41 | 3,182,680.24 |
| Office expenses | 1,688,108.77 | 1,870,367.44 |
| Public reserve for housing | 2,077,719.29 | 2,048,849.77 |
| Service fee to intermediary agencies | 1,625,961.96 | 1,792,807.55 |
| Employees’ welfare | 1,790,667.18 | 1,385,238.49 |
| Others | 13,772,987.29 | 9,189,066.08 |
| Total | 116,352,835.42 | 104,242,391.69 |
65. R & D expenditures
In CNY
| Items | Amount incurred in the reporting period | Amount incurred in the previous period |
| Salaries & bonus | 10,860,114.59 | 10,517,474.56 |
| Employees’ welfare | 205,127.58 | 307,905.39 |
| Social security premium | 924,124.54 | 992,592.32 |
| Public reserve for housing | 304,138.80 | 336,550.86 |
| Cost of materials | 63,256.68 | 2,478,026.50 |
| Payment for samples | 868,357.42 | 1,146,145.67 |
| Processing charges | - | 15,226.36 |
| Depreciation and amortization | 2,627,949.69 | 2,356,002.47 |
| Technical cooperation fee | 560,030.37 | 604,801.61 |
| Others | 3,113,311.26 | 2,531,200.28 |
| Total | 19,526,410.93 | 21,285,926.02 |
66. Financial expenses
In CNY
| Items | Amount incurred in the reporting period | Amount incurred in the previous period |
| Interest payment | 12,023,843.93 | 14,273,043.13 |
| Less: capitalized interest | 0.00 | 0.00 |
| Less: Interest income | 908,850.92 | 1,079,587.08 |
| Exchange gain & loss | -134,740.68 | 33,652.69 |
| Financial service charges and miscellaneous | 5,258,713.56 | 4,920,682.75 |
| Total | 16,238,965.89 | 18,147,791.49 |
67. Other income
In CNY
| Source of arising of other income | Amount incurred in the reporting period | Amount incurred in the previous period |
| Government subsidies | 13,045,742.36 | 6,497,018.80 |
| Total | 13,045,742.36 | 6,497,018.80 |
68. Return on investment
In CNY
| Items | Amount incurred in the reporting period | Amount incurred in the previous period |
| Income from long term equity investment based on equity method | 1,531,310.06 | 93,013.38 |
| Total | 1,531,310.06 | 93,013.38 |
69. Net exposure hedge income
Inapplicable
70. Income from change of the fair value
Inapplicable
71. Loss from impairment of credit
| Items | Amount incurred in the reporting period | Amount incurred in the previous period |
| Provision for bad debt of other receivables | -301,318.07 | -253,014.23 |
| Loss from bad debt of accounts receivable | -2,780,450.82 | 5,431,814.64 |
| Total | -3,081,768.89 | 5,178,800.41 |
72. Loss from impairment of assets
Has the new standard for income been implementedNo
In CNY
| Items | Amount incurred in the reporting period | Amount incurred in the previous period |
| I. Loss from impairment of assets | ||
| II. Loss from price falling of inventories | 2,514,740.86 | -1,765,800.30 |
| Total | 2,514,740.8 | -1,765,800.30 |
73. Income from disposal of assets
In CNY
| Source of income from disposal of assets | Amount incurred in the reporting period | Amount incurred in the previous period |
| Profit from disposal of assets | 1,720.00 | 3,490.00 |
| Loss from disposal of assets | -213,730.13 | -57,897.16 |
74. Non-operating expenses
In CNY
| Items | Amount incurred in the reporting period | Amount incurred in the previous period | Amount counted to the current non-operating gain and loss |
| Disposal of account payable impossible to be paid | 212,175.93 | 52,506.24 | 212,175.93 |
| Others | 82,135.77 | 311,353.27 | 82,135.77 |
| Total | 294,311.70 | 363,859.51 | 294,311.70 |
75. Non-operating expenditure
In CNY
| Items | Amount incurred in the reporting period | Amount incurred in the previous period | Amount counted to the current non-operating gain and loss |
| Outward donation | 200,000.00 | 380,000.00 | 200,000.00 |
| Others | 324,505.98 | 86,522.53 | 324,505.98 |
| Total | 524,505.98 | 466,522.53 | 524,505.98 |
76. Income tax expense
(1) Statement of income tax expense
In CNY
| Items | Amount incurred in the reporting period | Amount incurred in the previous period |
| Income tax expense in the reporting period | 22,066,289.48 | 34,026,742.02 |
| Deferred income tax expense | 18,548,898.09 | -562,942.30 |
| Total | 40,615,187.57 | 33,463,799.72 |
(2) Process of adjustment of accounting profit and income tax expense
In CNY
| Items | Amount incurred in the reporting period |
| Total profit | 164,110,648.47 |
| Income tax expense calculated based on the statutory/ applicable tax rate | 41,027,662.12 |
| Influence of different tax rates applicable to subsidiaries | -3,658,836.86 |
| Influence of adjustment of the income tax in the previous period | 414,337.14 |
| Influence of the non-offsetable costs, expenses and loss | 1,425,382.35 |
| Influence from the offsetable provisional difference or offsetable loss of the unrecognized deferred income tax asset at the end of the reporting period | 1,797,934.13 |
| Profit and loss of the joint ventures and associated calculated based on the equity method | -382,827.52 |
| Others | -8,463.80 |
| Income tax expenses | 40,615,187.57 |
77. Other comprehensive income
For the detail, refer to Note 57.
78. Cash Flow Statement Items
(1) Other operation activities related cash receipts
In CNY
| Items | Amount incurred in the reporting period | Amount incurred in the previous period |
| Commodity promotion fee | 7,326,827.42 | 6,072,093.46 |
| Government subsidies | 13,045,742.36 | 6,497,018.80 |
| Cash deposit | 6,493,217.88 | 4,350,761.76 |
| Interest income | 908,850.92 | 1,079,587.08 |
| Reserve | 687,618.62 | 1,406,129.93 |
| Others | 12,513,870.71 | 5,617,057.35 |
| Total | 40,976,127.91 | 25,022,648.38 |
(2) Other cash paid in connection with operation activities
In CNY
| Items | Amount incurred in the reporting period | Amount incurred in the previous period |
| Market promotion | 55,480,743.21 | 66,401,628.85 |
| Rent | 54,742,365.90 | 39,732,881.18 |
| Shopping mall fees | 30,786,192.52 | 26,461,676.31 |
| Advertisement fee | 11,083,207.52 | 11,176,335.56 |
| Packing expenses | 5,703,500.29 | 8,883,462.57 |
| Business travel expenses | 8,284,981.38 | 8,333,226.89 |
| Water and electricity fees | 6,714,986.63 | 7,029,160.13 |
| R & D expenses | 4,322,224.36 | 6,759,781.73 |
| Office expenses | 5,207,489.18 | 6,534,273.39 |
| Freight | 7,747,014.23 | 6,018,407.34 |
| Exhibition fee | 6,546,230.71 | 5,974,002.19 |
| Property management fee | 7,982,065.97 | 4,228,170.40 |
| Business entertainment | 2,683,582.53 | 2,830,040.57 |
| Service fee to intermediary agencies | 2,043,210.38 | 2,156,715.09 |
| Others | 27,973,348.54 | 14,825,683.48 |
| Total | 237,301,143.35 | 217,345,445.68 |
(3) Other investment activities related cash receipts
Inapplicable
(4) Other investment activities related cash payments
Inapplicable
(5) Other fund-raising activities related cash receipts
Inapplicable
(6) Other fund-raising activities related cash payments
In CNY
| Items | Amount incurred in the reporting period | Amount incurred in the previous period |
| Others | 17,565,400.00 | 0.00 |
| Total | 17,565,400.00 | 0.00 |
Note to the cash paid for other fund raising related activities:
The amount incurred in the reporting period was the payment for repurchase of B-shares.
79. Supplementary information of the cash flow statement
(1) Supplementary information of the cash flow statement
In CNY
| Supplementary information | Amount in the reporting period | Amount in the previous period |
| 1. Net cash flows arising from adjustment of net profit into operating activities: | -- | -- |
| Net profit | 123,495,460.90 | 112,367,921.44 |
| Plus: Provision for impairment of assets | 567,028.03 | -14,525,567.48 |
| Depreciation of fixed assets, depletion of oil and gas asset, depreciation of productive biological asset | 21,385,076.08 | 21,080,763.14 |
| Amortization of intangible assets | 3,291,008.97 | 2,430,354.87 |
| Amortization of the long-term expenses to be apportioned | 46,754,405.36 | 40,947,482.90 |
| Loss (income is stated in “-”) from disposal of fixed assets, intangible assets and other long term assets | 212,010.13 | 54,407.16 |
| Financial expenses (income is stated with “-”) | 12,023,843.93 | 14,273,043.13 |
| Investment loss (income is stated with “-”) | -1,531,310.06 | -93,013.38 |
| Decrease of the deferred income tax asset (increase is stated with “_”) | 17,382,217.94 | -562,942.30 |
| Decrease of inventories (Increase is stated with “-”) | 57,362,696.37 | 94,502,115.24 |
| Decrease of operative items receivable (Increase is stated with “-”) | -112,532,040.70 | -56,854,840.95 |
| Increase of operative items payable (Decrease is stated with “-”) | -9,395,746.59 | 11,052,550.32 |
| Net cash flows arising from operating activities | 159,014,650.37 | 224,672,274.09 |
| 2. Significant investment and fund-raising activities with no cash income and expenses involved: | -- | -- |
| 3. Net change in cash and cash equivalents: | -- | -- |
| Ending cash balance | 224,316,552.42 | 278,804,271.58 |
| Less: Opening balance of cash | 162,623,059.97 | 184,947,891.32 |
| Net increase of cash and cash equivalents | 61,693,492.45 | 93,856,380.26 |
(2) Net cash paid for acquisition of subsidiary in the reporting period
Inapplicable
(3) Net cash received from disposal of subsidiary in the reporting periodInapplicable
(4) Composition of cash and cash equivalents
In CNY
| Items | Ending balance | Opening balance |
| I. Cash | 224,316,552.42 | 162,623,059.97 |
| Including: Cash in stock | 225,027.58 | 420,783.85 |
| Bank deposit available for payment at any time | 223,207,376.62 | 160,135,454.62 |
| Other monetary fund used for payment at any time | 884,148.22 | 2,066,821.50 |
| II. Cash equivalents | 224,316,552.42 | 162,623,059.97 |
| III. Ending balance of cash and cash equivalents | 224,316,552.42 | 162,623,059.97 |
| Including: cash and cash equivalents restricted for use from the parent company or other subsidiaries of the Group | 2,205,000.00 | 2,205,000.00 |
80. Notes to items of statement of change in owner’s equity
Inapplicable
81. Assets restricted in ownership or use right
In CNY
| Items | Book value at the end of the reporting period | Cause of restriction |
| Monetary fund | 2,205,000.00 | L/G cash deposit: CNY 1,575,000.00; judicially frozen fund: CNY 630,000.00. |
| Fixed assets | 14,609,376.25 | Security guarantee |
| Other receivables | 8,958,057.64 | Guarantee for property suit |
| Total | 25,772,433.89 | -- |
82. Foreign currency monetary items
(1) Foreign currency monetary items
| Items | Ending balance of foreign currency | Conversion rate | Ending balance of Renminbi converted |
| Monetary capital | -- | -- | 19,563,618.98 |
| Including: USD | 1,544,000.97 | 6.87470 | 10,614,543.46 |
| Euro | 5,335.38 | 7.81700 | 41,706.67 |
| HKD | 8,474,774.02 | 0.87966 | 7,454,919.72 |
| CHF | 206,348.97 | 7.03880 | 1,452,449.13 |
| Accounts receivable | -- | -- | 19,722,262.85 |
| Including: USD | 1,666,823.49 | 6.87470 | 11,458,911.45 |
| Euro | 38,235.40 | 7.81700 | 298,886.12 |
| HKD | 8,181,240.80 | 0.87966 | 7,196,710.28 |
| CHF | 109,074.70 | 7.03880 | 767,755.00 |
| Long-term Loan | -- | -- | 4,409,875.00 |
| Including: USD | 0.00 | 0.00 | 0.00 |
| Euro | 0.00 | 0.00 | 0.00 |
| HKD | 0.00 | 0.00 | 0.00 |
| CHF | 625,000.00 | 7.03880 | 4,409,875.00 |
| Advance payments | 7,691,652.56 | ||
| Including: HKD | 567,280.00 | 0.87966 | 499,013.52 |
| CHF | 742,779.63 | 7.03880 | 5,228,277.26 |
| JP Yen | 30,781,650.00 | 0.06382 | 1,964,361.78 |
| Other receivables | 6,622,119.65 | ||
| Including: HKD | 281,839.74 | 0.87966 | 247,923.15 |
| CHF | 905,580.00 | 7.03880 | 6,374,196.50 |
| Accounts payable | 5,839,977.02 | ||
| Including: USD | 3,144.30 | 6.87470 | 21,616.12 |
| HKD | 6,459,259.72 | 0.87966 | 5,681,952.41 |
| CHF | 19,379.51 | 7.03880 | 136,408.49 |
| Advance receipt | 1,903,605.64 | ||
| Including: USD | 265,931.77 | 6.87470 | 1,828,201.14 |
| HKD | 85,720.05 | 0.87966 | 75,404.50 |
| Other payables | 1,289,717.20 | ||
| Including: USD | 25,326.00 | 6.87470 | 174,108.65 |
| HKD | 498,843.80 | 0.87966 | 438,812.94 |
| CHF | 96,152.13 | 7.03880 | 676,795.61 |
| Short term loans | 30,086,500.00 | ||
| Including: HKD | 23,000,000.00 | 0.87966 | 20,232,180.00 |
| CHF | 1,400,000.00 | 7.03880 | 9,854,320.00 |
| Non-current liabilities due within a year | |||
| Including: CHF | 50,000.00 | 7.03880 | 352,790.00 |
(2) Note to overseas operating entities, including important overseas operating entities, which should bedisclosed about its principal business place, function currency for bookkeeping and basis for the choice. In caseof any change in function currency, the cause should be disclosed.Inapplicable
83. Hedging
Inapplicable
84. Government subsidies
(1) Basic information of government subsidies
In CNY
| Categories | Amount | Items presented | Amount counted to the current profit and loss |
| Allowance for BaselWorld from Shenzhen Watch & Clock Association | 114,333.32 | Other income | 114,333.32 |
| Financial support in 2018 from | 435,000.00 | Other income | 435,000.00 |
| Shenzhen Standardization Special Fund Industrial Standard in 2018 (Note (1)) | |||
| Financial support of Shenzhen Intellectual Property Big Data Testing Platform (Note (2)) | 500,000.00 | Other income | 500,000.00 |
| 2018 R & D Financial Support from Shenzhen Science & Technology Innovation Commission (Note (3)) | 1,191,000.00 | Other income | 1,191,000.00 |
| 2018 Self-innovation Industry Development Financial Support from Shenzhen Science & Technology Innovation Commission | 593,600.00 | Other income | 593,600.00 |
| Supplementary Award of the 20th China Patent Award of Guangdong Intellectual Property | 150,000.00 | Other income | 150,000.00 |
| 2018 Head Office Enterprise Contribution Award from Development and Reform Commission of Shenzhen Municipality (Note (4)) | 4,843,500.00 | Other income | 4,843,500.00 |
| Subsidy of the Talent Qualification Improvement Engineering Project of the Human Resource Bureau of Nanshan District, Shenzhen | 25,000.00 | Other income | 25,000.00 |
| Allowance for the supporting project of commerce & trade circulation innovation development (Note (5)) | 712,664.00 | Other income | 712,664.00 |
| Financial support from the Special Fund of Shenzhen Standards in 2018 | 233,000.00 | Other income | 233,000.00 |
| 2018 R & D financial support from the municipal bureau (Note (6)) | 961,000.00 | Other income | 961,000.00 |
| Bonus of the R & D Financial Support Projects of Guangming District 2018 | 351,000.00 | Other income | 351,000.00 |
| Special fund for the Economic Development of Guangdong District 2019 | 300,000.00 | Other income | 300,000.00 |
| Financial support for the production capacity expansion and efficiency improvement of the key industrial enterprises from the Science and Technology Innovation Commission in 2018 (Note (7)) | 1,000,000.00 | Other income | 1,000,000.00 |
| Special financial support for the standards of the Market and Quality Supervision Commission | 108,000.00 | Other income | 108,000.00 |
| Allowance for the Endowment and Medical Insurance for the Disabled in the Second Half of 2018 from the United Front and Social Construction Bureau of Guangming District | 3,651.47 | Other income | 3,651.47 |
| Birth allowance from the Social Security Bureau of Shenzhen Municipality | 65,323.57 | Other income | 65,323.57 |
| R & D financial support from Guangming District in 2017 | 258,000.00 | Other income | 258,000.00 |
| Domestic market development subsidy of Small and Medium-sized Enterprises Division of Shenzhen Municipality | 14,670.00 | Other income | 14,670.00 |
| Supplementary Award of the 20th China Patent Award of Guangdong Province - Shenzhen Market Supervision | 150,000.00 | Other income | 150,000.00 |
| Financial support from the Finance Bureau of Guangming District on Making Enterprises in Guangming District Bigger and Stronger | 286,000.00 | Other income | 286,000.00 |
| Shenzhen R & D Financial Support in 2018 (expenses in 2017) (Note (8)) | 550,000.00 | Other income | 550,000.00 |
| Allowance for the talents’ quality improvement project | 100,000.00 | Other income | 100,000.00 |
| Bonus for encouraging medium-sized and small enterprises from Ecomomic Promotion Bureau of Nanshan | 100,000.00 | Other income | 100,000.00 |
| District | |||
| Total | 13,045,742.36 | 13,045,742.36 |
Note (1): It refers to the financial support from the government according to the “Measures for Management of theSpecial Fund for Developing Shenzhen Standards in Shenzhen” and the “Operating Instructions on Financial Support withthe Special Fund for Developing Shenzhen Standards in Shenzhen” (SHEN SHI ZHI (2019) No. 17) promulgated byMarket and Quality Supervision Commission of Shenzhen Municipality.
Note (2): It refers to the special fund obtained according to the “Circular on Application for the Financial Support for theIntellectual Property Big Data Monitoring in Shenzhen during 2018 - 2019” promulgated by Market and QualitySupervision Commission of Shenzhen Municipality.
Note (3): It refers to the bonus from of the governmental financial support bonus obtained according to the“Announcement of the First Enterprises to be Financially Supported for the Enterprise R & D Financial Support Program in2018” promulgated by Science & Technology Innovation Commission of Shenzhen Municipality.
Note (4): It refers to the governmental financial support obtained according to the “Measures for Implementation ofEncouraging Development of Head Office Enterprises in Shenzhen” promulgated by Development and ReformCommission of Shenzhen Municipality (SHEN FU GUI (2017) No. 7).
Note (5): It refers to the governmental financial support according to the “Program for Supporting Commerce & TradeCirculation Innovation Development 2019” promulgated by Shenzhen Municipal Commission of Economy andInformatization.
Note (6): It refers to the bonus from of the governmental financial support bonus obtained according to the“Announcement of the First Enterprises to be Financially Supported for the Enterprise R & D Financial Support Program in2018” promulgated by Science & Technology Innovation Commission of Shenzhen Municipality.
Note (7): It refers to the governmental financial support obtained according to the “Circular on Instructions for Applicationfor Projects to be Awarded for Production Capacity Expansion and Efficiency Improvement of the Key IndustrialEnterprises in 2018” promulgated by Shenzhen Municipal Commission of Economy and Informatization.
Note (8): It refers to the bonus from of the governmental financial support bonus obtained according to the“Announcement of the First Enterprises to be Financially Supported for the Enterprise R & D Financial Support Program in2018” promulgated by Science & Technology Innovation Commission of Shenzhen Municipality.
(2) Refunding of the government subsidies
Inapplicable
85. Others
InapplicableVIII. Change in consolidation scope
1. Consolidation of enterprises not under the same control
(1) Consolidation of enterprises not under common control during the reporting periodInapplicable
(2) Consolidation cost and goodwill
Inapplicable
(3) Purchasee's distinguishable assets and liabilities as at the date of purchaseInapplicable
(4) Profit or loss of the equity held before the date of purchase arising from re-measurement based on the fairvalueInapplicable
(5) Note to the consolidation consideration or the fair value of the distinguishable assets and liabilities of thepurchasee which cannot be reasonably identified as at the date of purchase or at the end of the very period ofconsolidationInapplicable
(6) Other notes
Inapplicable
2. Consolidation of enterprises under the same control
(1) Consolidation of enterprises not under common control during the reporting periodInapplicable
(2) Consolidation cost
Inapplicable
(3) Book value of the consolidatee's assets and liabilities as at the date of consolidationInapplicable
3. Counter purchase
Inapplicable
4. Disposal of subsidiaries
Inapplicable
5. Change of consolidation scope due to other reason
Inapplicable
6. Others
InapplicableIX. Equity in other entities
1. Equity in a subsidiary
(1) Composition of an enterprise group
| Subsidiaries | Main business location | Place of registration | Nature of business | Shareholding proportion | Way of acquisition | |
| Direct | Indirect | |||||
| Harmony | Shenzhen | Shenzhen | Commerce | 100.00% | Establishment or investment | |
| the Manufacture Co. | Shenzhen | Shenzhen | Manufacture | 90.00% | 10.00% | Establishment or investment |
| the Hong Kong Co. | Hong Kong | Hong Kong | Commerce | 100.00% | Establishment or investment | |
| Station-68 Co. | Hong Kong | Hong Kong | Commerce | 60.00% | Establishment or investment | |
| Harbin Co. | Harbin | Harbin | Commerce | 100.00% | Establishment or investment | |
| the Technology Co. | Shenzhen | Shenzhen | Manufacture | 100.00% | Establishment or investment | |
| SHIYUEHUI | Shenzhen | Shenzhen | Commerce | 100.00% | Establishment or investment | |
| Emile Chouriet (Shenzhen) Limited | Shenzhen | Shenzhen | Commerce | 100.00% | Establishment or investment | |
| The Sales Co. | Shenzhen | Shenzhen | Commerce | 100.00% | Establishment or investment | |
| Hengdarui | Shenyang | Shenyang | Commerce | 100.00% | Consolidation of enterprises under the same control | |
| Switzerland Company | Switzerland | Switzerland | Commerce | 100.00% | Consolidation of enterprises not under the same control |
(2) Important non-wholly-owned subsidiaries
Inapplicable
(3) Key financial information of important non-wholly-owned subsidiaries
Inapplicable
(4) Significant restriction on use of enterprise group’s assets and paying off the enterprise group’s liabilitiesInapplicable
(5) Financial support or other support provided to the structured entities incorporated in the scope ofconsolidated financial statementsInapplicable
2. Transaction with a subsidiary with the share of the owner’s equity changed but still under control
(1)Note to change in the share of the owner's equity in subsidiaries
Inapplicable
(2) Affect of the transaction on the minority equity and owner's equity attributable to the parent companyInapplicable
3. Equity in joint venture arrangement or associates
(1) Important joint ventures or associates
| Name of joint venture | Main business | Place of registration | Nature of business | Shareholding proportion | Accounting |
| or associate | location | Direct | Indirect | treatment method for investment in joint ventures or associates | ||
| Shanghai Watch Industry Co., Ltd. | Shanghai | Shanghai | Manufacture | 25.00% | Equity method |
(2) Key financial information of important joint ventures
Inapplicable
(3) Key financial information of important associates
In CNY
| Ending balance/amount incurred in the reporting period | Opening balance/amount incurred in the reporting period | |
| Current assets | 108,665,233.95 | 99,901,286.09 |
| Non-current assets | 15,540,417.40 | 15,459,207.08 |
| Total assets | 124,205,651.35 | 115,360,493.17 |
| Current liabilities | 13,047,529.95 | 10,833,917.48 |
| Total liabilities | 13,047,529.95 | 10,833,917.48 |
| Equity attributable to the parent company’s shareholders | 111,158,121.40 | 104,526,575.69 |
| Share of net assets calculated according to the shareholding proportion | 27,789,530.35 | 26,131,643.92 |
| Book value of the equity investment in associates | 46,412,373.21 | 44,881,063.15 |
| Revenue | 57,039,155.07 | 46,323,386.37 |
| Net profit | 6,125,240.23 | 372,053.52 |
| Total comprehensive income | 6,125,240.23 | 372,053.52 |
(4) Financial information summary of unimportant joint ventures and associatesInapplicable
(5) Note to significant restriction on the competence of a joint venture or an associate in transferring funds to theCompanyInapplicable
(6) Excessive loss incurred to a joint venture or an associate
Inapplicable
(7) Unrecognized commitment in connection with investment in a joint ventureInapplicable
(8) Contingent liabilities in connection with investment in joint ventures or associatesInapplicable
4. Important joint operation
Inapplicable
5. Equity in the structurized entities not incorporated in the consolidated financial statementsInapplicable
6. Others
Inapplicable
X. Financial instruments and risk managementThe Company's major financial instruments include monetary funds, notes receivable and accounts receivable, otherreceivables, available-for-sale financial assets, equity investment, notes payable and accounts payable, other payables,borrowings, etc. For details of financial instruments, please refer to the relevant items in Note VI. The risks involved inthese financial instruments and the Company’s risk control policies aiming at reducing these risks are stated as follows.The Company’s management conducts management and monitoring of these risk exposures so as to ensure risks to becontrolled within a specific limitation.
The Company used the sensitivity analysis technique to analyze the possible influence of the reasonable and possiblechange of the risk variables upon the current profit and loss or shareholders’ equity. Since any risk variables seldomhappen individually, relativity between variables will cause significant influences on the ultimate impacted amount of thechange in a risk variable, so the following statement is based on supposition that each variable happens independently.
(I) Risk management goals and policiesThe goal of risk management is to keep proper balance between risk and profit, to reduce negative influence of financialrisk to financial performance of the Company, lower the negative influence of the risks upon the Company's businessperformance to the minimum and maximize the interest of the shareholders and its other equity investors. Based on thisgoal, the basic strategy of risk management for the Company is to ascertain and analyze all the risks that the Groupconfronts, establish appropriate bottom line for risk-taking, and manage the risks accordingly, in the meantime superviseall the risks in a timely and reliable manner, controlling the risks within the limited scope.
1. Market Risks
(1) Foreign exchange risk
Foreign exchange risk refers to the risk arising from the loss on exchange rate changes. The Company is mainly exposed
to foreign exchange risk that relates to Hong
Kong dollars, Swiss Franc. Except a number of the Company's subsidiaries that conduct procurement and sales in HongKong Dollars and Swiss Franc, the principal business activities of the Company’s principal business activities are settledin Renminbi. As at 30 June 2019, except the balance of the aforesaid assets or liabilities which are stated in Hong Kongdollar, Swiss Franc, US dollar, etc., the balance of the financial assets and financial liabilities of the Company are all inRenminbi. Foreign exchange risks arising from the balance of assets and liabilities of such foreign currencies may havean impact on the operating results of the Company.
| Items | Ending balance | Opening balance |
| Monetary fund | 19,563,618.98 | 11,875,297.06 |
| Notes receivable and accounts receivable | 19,722,262.85 | 11,545,880.33 |
| Advance payment for goods | 7,691,652.56 | 4,733,540.86 |
| Other receivables | 6,622,119.65 | 6,589,218.31 |
| Notes payable and accounts payable | 5,839,977.02 | 2,655,278.19 |
| Advance from customers | 1,903,605.64 | 65,276.30 |
| Other payables | 1,289,717.20 | 489,881.07 |
| Short term loans | 30,086,500.00 | 42,118,460.00 |
| Non-current liabilities due within a year | 352,790.00 | 347,470.00 |
| Long-term Loan | 4,409,875.00 | 4,517,110.00 |
The Company paid close attention to the influence from the movement of exchange rate upon the Company. TheCompany has not taken any measures to avoid foreign exchange risks.
Sensitivity analysis on foreign exchange risks:
Assumption for sensitivity analysis on foreign exchange risks: both the net investment hedge of the overseas businessand cash flow hedge are highly effective. On the basis of the aforesaid assumption, while the other variables remainunchanged, the pre-tax influence of the reasonable change of the exchange rate possibly incurred upon the currentincome and loss and shareholders’ equity is as follows:
| Items | Change of the exchange rate | End of the reporting period | End of the same period of the previous year | ||
| Influence upon the profit | Influence upon the shareholders’ equity | Influence upon the profit | Influence upon the shareholders’ equity | ||
| Monetary fund | Appreciation against Renminbi by 5% | 978,180.95 | 978,180.95 | 483,724.43 | 483,724.43 |
| Depreciation against Renminbi by 5% | -978,180.95 | -978,180.95 | -483,724.43 | -483,724.43 | |
| Notes receivable and accounts receivable | Appreciation against Renminbi by 5% | 986,113.14 | 986,113.14 | 846,483.91 | 846,483.91 |
| Depreciation against Renminbi by 5% | -986,113.14 | -986,113.14 | -846,483.91 | -846,483.91 | |
| Advance payment for goods | Appreciation against Renminbi by 5% | 384,582.63 | 384,582.63 | 598,990.31 | 598,990.31 |
| Depreciation against Renminbi by 5% | -384,582.63 | -384,582.63 | -598,990.31 | -598,990.31 |
| Other receivables | Appreciation against Renminbi by 5% | 331,105.98 | 331,105.98 | 312,581.81 | 312,581.81 |
| Depreciation against Renminbi by 5% | -331,105.98 | -331,105.98 | -312,581.81 | -312,581.81 | |
| Notes payable and accounts payable | Appreciation against Renminbi by 5% | 291,998.85 | 291,998.85 | 494,013.75 | 494,013.75 |
| Depreciation against Renminbi by 5% | -291,998.85 | -291,998.85 | -494,013.75 | -494,013.75 | |
| Advance from customers | Appreciation against Renminbi by 5% | 95,180.28 | 95,180.28 | 9,193.71 | 9,193.71 |
| Depreciation against Renminbi by 5% | -95,180.28 | -95,180.28 | -9,193.71 | -9,193.71 |
| Other payables | Appreciation against Renminbi by 5% | 64,485.86 | 64,485.86 | 23,904.05 | 23,904.05 |
| Depreciation against Renminbi by 5% | -64,485.86 | -64,485.86 | -23,904.05 | -23,904.05 | |
| Short term loans | Appreciation against Renminbi by 5% | 1,504,325.00 | 1,504,325.00 | 1,264,650.00 | 1,264,650.00 |
| Depreciation against Renminbi by 5% | -1,504,325.00 | -1,504,325.00 | -1,264,650.00 | -1,264,650.00 |
| Non-current liabilities due within a year | Appreciation against Renminbi by 5% | 17,639.50 | 17,639.50 | - | - |
| Depreciation against Renminbi by 5% | -17,639.50 | -17,639.50 | - | - | |
| Long-term borrowings | Appreciation against Renminbi by 5% | 220,493.75 | 220,493.75 | 240,518.75 | 240,518.75 |
| Depreciation against Renminbi by 5% | -220,493.75 | -220,493.75 | -240,518.75 | -240,518.75 |
(2) Interest rate risk - risk from change of the cash flow
The Company’s risk of movement in the cash flow of financial instrument arising from change of the interest rate is mainlyrelated with the bank loan of the fluctuating interest rate. The Company's policy is to maintain the fluctuating interest rate
of these loans.
Sensitivity analysis on interest rate risks:
Sensitivity analysis on interest rate risks is based on the following assumption:
Influence of the change of market interest rate upon the interest income or expenses of the financial instruments withvariable interest rates;
For the financial instrument with fixed interest rate measured based on the fair value, the change of the interest rate onlyimpact its interest income or expenses;
For the derivative financial instrument designated as arbitrage tool, the change of the market interest rate impacts its fairvalue and all the interest rate hedging is predicted to be highly valid;
The market interest rate as at the balance sheet day uses the discounted cash flow technique to calculate the change ofthe fair value of the financial instrument and other financial assets and liabilities.
On the basis of the aforesaid assumption, while the other variables remain unchanged, the pre-tax influence of thereasonable change of the interest rate possibly incurred upon the current income and loss and shareholders’ equity is asfollows:
As at June 30, 2019, the Company had no borrowings calculated based on the floating interest rate.
(3) Other price risks
The investment classified as the available-for-sale financial asset held by the Company is measured at the cost value asat the balance sheet date. Therefore, there exists no price risk necessary to be disclosed in the Company.
2. Credit risk
As at June 30, 2019, the maximum credit risk exposure possibly arising from the financial loss to the Company was mainlyfrom the loss arising from failure of the other party to the contract in implementing the obligations which caused loss fromgeneration of the Company's financial assets, which specifically included: the carrying amount of the financial assesrecognized in the consolidated balance sheet.
The Company provided no other guarantee which may render the Company bear the credit risk.
For the purpose of lowering the credit risk, the Company may possibly access to the guarantee, credit record and otherelements from the third party based on the debtor's financial status, independent rating and other elements, such asassessment of the debtor’s credit qualification, such as the current market situation and specifying the corresponding debtlimit and credit term. The Company conducts regular supervision over the debtors’ credit records and may take themeasures of written reminders, shortening the credit period or canceling the credit period, etc. against the debtors withpoor credit record so as to ensure the Company’s overall credit risk to be within the controllable scope. In addition, the
Company examines the recovery of the accounts receivable on each balance sheet date so as to ensure to providesufficient bad debt reserve for the accounts impossible to be recovered. Therefore, in the opinion of the Company'smanagement, the credit risk borne by the Company has been greatly reduced.
The Company's working capital is deposited in banks with higher credit ratings, so the credit risk of liquid funds isrelatively low.
In the Company's accounts receivable, the accounts receivable owed by the top five customers took 11.16% of theCompany's total accounts receivable; in the Company's other receivables, the total other receivables owed by the topfive customers took 16.8% of the Company's total other receivables.
3. Liquidity risk
In management of the liquidity risk, the Company kept the cash and cash equivalent as sufficient as the managementconsidered necessary and conducted supervision over the same so as to satisfy the Company's business requirementsand reduced the impact from the fluctuation of cash flow. The Company's management conducted monitoring over theapplication of the bank loans and ensured its compliance with the loan agreements.
The Company took the capital arising from its business and bank loans as the major capital source. As at June 30,2019,the amount of the bank loan not yet used by the Company was CNY 1,527.61 million (December 31,2018: CNY 1,981.03million).
The expiry of the remaining contract obligations for the financial assets and liabilities held by the Company not discountedis analyzed as follows: (in CNY 10,000)
| Items | Within 1 year | 1 to 2 years | 2-3 years | Over 3 years | Total |
| Financial assets: | |||||
| Monetary fund | 22,652.16 | - | - | - | 22,652.16 |
| Notes receivable and accounts receivable | 47173.41 | - | - | - | 47173.41 |
| Where: Notes receivable | 994.10 | - | - | - | 994.10 |
| Accounts receivable | 46,179.31 | - | - | - | 46,179.31 |
| Other receivables | 6,527.13 | - | - | - | 6,527.13 |
| Total financial assets | 76,352.70 | - | - | - | 76,352.70 |
| Financial liabilities: |
| Short term loans | 55,007.83 | - | - | - | 55,007.83 |
| Notes payable and accounts payable | 22,768.25 | - | - | - | 22,768.25 |
| Including: accounts payable | 22,768.25 | - | - | - | 22,768.25 |
| Other payables | 9231.39 | - | - | - | 9231.39 |
| Including: interest payable | 74.06 | - | - | - | 74.06 |
| Other payables | 9,157.33 | - | - | - | 9,157.33 |
| Non-current liabilities due within a year | 35.28 | - | - | - | 35.28 |
| Long-term Loan | - | 440.99 | 440.99 | ||
| Financial guarantee | 11,007.83 | - | - | - | 11,007.83 |
| Total financial liabilities and contingent liabilities | 174,403.28 | - | - | 440.99 | 174,844.27 |
XI. Disclosure of Fair Value
1. Fair value at the end of the reporting period of the assets and liabilities measured based on the fair valueInapplicable
2. Basis for determining the market price of the items measured based on the continuous and non-continuousfirst level fair valueInapplicable
3. Items measured based on the continuous or uncontinuous 2nd level fair value, valuation technique as used,nature of important parameters and quantitative informationInapplicable
4. Items measured based on the continuous or uncontinuous 3rd level fair value, valuation technique as used,nature of important parameters and quantitative informationInapplicable
5. Items measured based on the continuous 3rd level fair value, sensitivity analysis on adjusted information andunobservable parameters between the book value at beginning and end of the periodInapplicable
6. In case items measured based on fair value are converted between different levels incurred in the currentperiod, state the cause of conversion and determine conversion time pointInapplicable
7. Change of valuation technique incurred in the current period and cause of such changeInapplicable
8. Fair value of financial assets and financial liabilities not measured at fair valueInapplicable
9. Others
InapplicableXII. Related parties and transactions
1. Details of the parent company of the Company
| Name of the parent company | Place of registration | Nature of business | Registered capital | Shareholding ratio of the parent company in the Company | Ratio of vote right of the parent company in the Company |
| AVIC International Holding Limited | Shenzhen | Investment in industries, domestic trade, material supply and distribution; import and export. | 1,166,161,996 | 36.79% | 36.79% |
Note to the parent company:
The proportion of the equity held by AVIC International Shenzhen Co., Ltd. in AVIC International Holdings Limited is
33.93%. AVIC International Shenzhen is a wholly owned subsidiary of AVIC International Holdings Limited (AVIC IHL).China Aviation Industry Corporation (AVIC) directly holds 62.52% of the equity of AVIC IHL. Therefore, the Company’seventual controller is AVIC.
Therefore, the eventual controller of the Company is AVIC.
2. Subsidiaries of the Company
Refer to Note IX. 1 for details of subsidiaries of the Company.
3. Joint venture and association of the Company
Refer to NOTE IX.3 for details of the Company's major joint ventures or associates.
4. Other related parties of the Company
| Names of other related parties | Relationship between other related parties and the Company |
| AVIC Property Management Co., Ltd. (AVIC Property) | Controlled by the same party |
| Shenzhen AVIC Building Technology Co., Ltd. (AVIC Building Co.) | Controlled by the same party |
| Rainbow Department Store Co., Ltd. (RAINBOW) | Controlled by the same party |
| Shennan Circuit Co., Ltd. (Shennan Circuit) | Controlled by the same party |
| AVIC SUNDA Co., Ltd. (AVIC SUNDA) | Controlled by the same party |
| AVIC Securities Co., Ltd. (AVIC Securities) | Controlled by the same party |
| Xi’an Skytel Hotel Co., Ltd. (Skytel Hotel) | Controlled by the same party |
| Shenzhen AVIC City Property Development Co., Ltd.(AVIC City Property) | Controlled by the same party |
| Shenzhen AVIC Development Co., Ltd. (AVIC City Development) | Controlled by the same party |
| Shenzhen AVIC Guanlan Real Estate Development Co., Ltd. (AVIC Guanlan Real Estate) | Controlled by the same party |
| Shenzhen AVIC Changtai Investment Development Co., Ltd. (AVIC Changtai) | Controlled by the same party |
| Shenzhen AVIC 9 Square Assets Management Co., Ltd. (9 Square Asset) | Controlled by the same party |
| Shenzhen AVIC City Investment Co., Ltd.(AVIC City Investment) | Controlled by the same party |
| Shenzhen CATIC Group Enterprise Training Center (CATIC Training Center) | Controlled by the same party |
| Ganzhou CATIC 9 Square Commerce Co., Ltd. (Ganzhou 9 Square) | Controlled by the same party |
| AVIC City Property (Kunshan) Co., Ltd. (AVIC City Property (Kunshan) ) | Controlled by the same party |
| Shenzhen AVIC Huacheng Property Development Co., Ltd.(AVIC Huacheng Property) | Controlled by the same party |
| AVIC Finance Co., Ltd. (AVIC Finance ) | Controlled by the same party |
| Shenzhen AVIC Security Service Co., Ltd. (AVIC Security Service) | Controlled by the same party |
| Shenzhen AVIC Property Asset Management Co., Ltd. (AVIC Property Asset Management) | Controlled by the same party |
| Jiujiang 9 Square Commerce Management Co., Ltd. (9 Square Commerce Management) | Controlled by the same party |
| Shenzhen AVIC Grand Skylight Hotel Management Co., Ltd. (Grand Skylight Hotel) | Controlled by the same party |
| Shenzhen AVIC City Parking Lots Management Co., Ltd. (AVIC Parking Lots Management) | Controlled by the same party |
| Shenzhen AVIC Grand Skylight Hotel Management Co., Ltd. (Grand Skylight Hotel) | Controlled by the same party |
| Shenzhen CATIC Technical Testing Office (CATIC Technical Testing) | Controlled by the same party |
| Gongqingcheng CATIC Cultural Investment Co., Ltd. (Gongqingcheng CATIC Cultural Investment) | Controlled by the same party |
| AVIC International Complete Set Equipment Co., Ltd. (AVIC Complete Set Equipment) | Controlled by the same party |
| Shenzhen AVIC Real Estate Development Co., Ltd. (AVIC Real Estate) | Controlled by the same party |
| Jiujiang AVIC City Real Estate Development Co., Ltd. (Jiujiang AVIC Real | Controlled by the same party |
| Estate) | |
| Shenzhen AVIC Property Asset Management Co., Ltd. (AVIC Property Asset Management) | Controlled by the same party |
| Shenzhen AVIC Nanguang Elevator Co., Ltd. (AVIC Nanguang ) | Controlled by the same party |
| Shenzhen AVIC Curtain Wall Engineering Co., Ltd. (AVIC Curtain Wall Engineering ) | Controlled by the same party |
| Huang Yongfeng | A senior executive |
| Wang Mingchuan | A senior executive |
| Fu Debin | A senior executive |
| Xiao Zhanglin | A senior executive |
| Wang Bo | A senior executive |
| Chen Libin | A senior executive |
| Wang Jianxin | A senior executive |
| Zhong Hongming | A senior executive |
| Tang Xiaofei | A senior executive |
| Wang Baoying | A senior executive |
| Sheng Qing | A senior executive |
| Fang Jiasheng | A senior executive |
| Lu Bingqiang | A senior executive |
| Lu Wanjun | A senior executive |
| Liu Xiaoming | A senior executive |
| Pan Bo | A senior executive |
| Li Ming | A senior executive |
| Chen Zhuo | A senior executive |
| Zou Zhixiang | A senior executive |
5. Related transactions
(1) Related transactions of purchase and sale of commodities and supply and acceptance oflabor servicesStatement of purchase of commodities and acceptance of labor services
In CNY
| Related parties | Description of Related Transactions | Amount incurred in the reporting period | Transaction quota as approved | Has it exceeded the transaction quota | Amount incurred in the previous period |
| AVIC Property | Reception of services | 4,665,553.46 | 10,000,000.00 | No | 2,966,178.17 |
| Rainbow Ltd. | Shopping mall fees/purchase of goods | 3,005,499.82 | 8,000,000.00 | No | 2,554,556.27 |
| Shenzhen AVIC Group Enterprise Training Center | Training fee | 0.00 | 500,000.00 | No | 144,548.39 |
Statement of sales of goods/supply of labor services
In CNY
| Related parties | Description of Related Transactions | Amount incurred in the reporting period | Amount incurred in the previous period |
| Rainbow Ltd. | Products and labor services | 35,273,411.88 | 35,060,373.29 |
| Shennan Circuit | Products and labor services | 4,656,548.21 | 3,300,322.92 |
| Ganzhou 9 Square | Products and labor services | 68,392.00 | 701,423.33 |
| Shenzhen Grand Skylight Hotel Management Co., Ltd. | Products and labor services | 0.00 | 5,982.90 |
(2) Related entrusted management/contracted and mandatory management/contracting
Inapplicable
(3) Related lease
The Company as lessor:
In CNY
| Names of lessees | Categories of leasehold properties | Rental income recognized in the current period | Rental income recognized in the previous period |
| AVIC Property | Housing | 9,236,271.13 | 3,786,677.96 |
| Tianyue Hotel | Housing | 2,095,238.09 | 1,746,031.74 |
| 9 Square Assets | Housing | 993,238.13 | 579,564.39 |
| AVIC SUNDA | Housing | 926,577.86 | 898,931.71 |
| CATIC Public Security Service Co. | Housing | 706,043.41 | 0.00 |
| AVIC Securities | Housing | 527,428.55 | 608,571.42 |
| Rainbow Ltd. | Housing | 289,764.58 | 229,327.58 |
| Guanlan Real Estate | Housing | 172,145.99 | 53,919.42 |
| AVIC City Property Co., Ltd. | Housing | 149,630.10 | 187,965.57 |
| AVIC Real Estate Development | Housing | 133,876.07 | 33,406.82 |
| AVIC City Investment | Housing | 133,320.56 | 232,636.75 |
| AVIC Huacheng Property | Housing | 117,566.50 | 143,684.84 |
| AVIC City Development | Housing | 0.00 | 2,428.57 |
The Company as lessee:
In CNY
| Names of lessees | Categories of leasehold properties | Rental fee recognized in the current period | Rental fee recognized in the previous period |
| Ganzhou 9 Square | Housing | 538,609.84 | 544,600.15 |
| Jiujiang AVIC Real Estate | Housing | 191,570.45 | 201,501.48 |
| AVIC City Property (Kunshan) | Housing | 87,666.38 | 110,753.27 |
| AVIC City Property Co., Ltd. | Housing | 203,568.04 | 0.00 |
(4) Related guarantee
The Company as a guarantor
In CNY
| Guarantees | Amount guaranteed | Effective date | Expiring date | Is the guarantee finished |
| the Hong Kong Co. | 30,078,332.26 | July 24, 2018 | May 31, 2020 | No |
| Harmony | 80,000,000.00 | December 30, 2018 | December 29, 2019 | No |
The Company as a guarantee
In CNY
| Guarantors | Amount guaranteed | Effective date | Expiring date | Is the guarantee finished |
| Harmony | 60,000,000.00 | December 04, 2018 | March 08, 2020 | No |
(5) Borrowings and lendings among related parties
In CNY
| Related parties | Borrowing amount | Starting date | Due date | Note |
| Borrowed from | ||||
| AVIC Financial Co. | 100,000,000.00 | April 02, 2019 | April 02, 2020 | |
| AVIC Financial Co. | 50,000,000.00 | March 26, 2019 | March 26, 2020 | |
| Lending | ||||
(6) Assets assignment and liabilities reorganization of related parties
Inapplicable
(7)Remuneration to senior executives
Inapplicable
(8) Other related transactions
Inapplicable
6. Accounts receivable from and payable to related parties
(1) Receivables
In CNY
| Project name | Related parties | Ending balance | Opening balance | ||
| Book balance | Bad debt reserve | Book balance | Bad debt reserve | ||
| Accounts receivable: | |||||
| Rainbow Ltd. | 7,724,759.31 | 386,237.97 | 2,205,867.79 | 115,293.39 | |
| AVIC City Property Co., Ltd. | 46,669.00 | 2,333.45 | 3.00 | 0.15 | |
| Shennan Circuit | 2,972,141.83 | 148,607.09 | 1,659,077.38 | 82,953.87 | |
| Ganzhou 9 Square | 0.00 | 0.00 | 4,000.00 | 200.00 | |
| Gongqingcheng CATIC Cultural Investment | 0.00 | 0.00 | 28,269.36 | 1,413.47 | |
| 9 Square Commerce Management Co., Ltd. | 0.00 | 0.00 | 4,288.00 | 214.40 | |
| AVIC Securities | 0.00 | 0.00 | 101,428.57 | 5,071.43 | |
| 9 Square Assets | 0.00 | 0.00 | 33,331.01 | 1,666.55 | |
| Guanlan Real Estate | 0.00 | 0.00 | 8,315.43 | 415.77 | |
| AVIC SUNDA | 0.00 | 0.00 | 148,915.46 | 7,445.77 | |
| AVIC Property | 0.52 | 0.03 | 0.52 | 0.03 | |
| Total | 10,743,570.66 | 537,178.54 | 4,293,496.52 | 214,674.83 | |
| Notes receivable: | |||||
| Shennan Circuit | 1,357,388.98 | 0.00 | 2,398,579.72 | 0.00 | |
| Total | 1,357,388.98 | 0.00 | 2,398,579.72 | 0.00 | |
| Other receivables: | |||||
| Rainbow Ltd. | 905,787.00 | 45,289.35 | 761,860.00 | 38,093.00 | |
| AVIC Property | 464,011.74 | 23,200.59 | 10,100.00 | 505.00 | |
| Ganzhou 9 Square | 122,666.00 | 6,133.30 | 122,665.60 | 6,133.28 | |
| AVIC City Property (Kunshan) | 50,400.00 | 2,520.00 | 50,400.00 | 2,520.00 | |
| 9 Square Commerce Management Co., Ltd. | 50,000.00 | 2,500.00 | 50,000.00 | 2,500.00 | |
| AVIC City Property Co., Ltd. | 59,923.00 | 2,996.15 | 54,923.00 | 2,746.15 | |
| AVIC IHL | 11,101.80 | 555.09 | 11,101.80 | 555.09 | |
| AVIC Training Center | 16,000.00 | 800.00 | 0.00 | 0.00 | |
| Grand Skylight Hotel | 0.00 | 0.00 | 32,000.00 | 1,600.00 | |
| Gongqingcheng CATIC Cultural Investment | 0.00 | 0.00 | 5,500.00 | 275.00 | |
| Total | - | 1,679,889.54 | 83,994.48 | 1,098,550.40 | 54,927.52 |
(2) Payables
In CNY
| Project name | Related parties | Ending book balance | Opening book balance |
| Accounts payable: | |||
| AVIC Building Co. | 0.00 | 24,000.00 | |
| AVIC Property | 0.00 | 40,821.05 | |
| Total | 0.00 | 64,821.05 | |
| Advance receipts: | |||
| Rainbow Ltd. | 0.00 | 0.00 | |
| AVIC SUNDA | 160,128.00 | 0.00 | |
| CATIC Public Security Service Co. | 122,016.00 | 0.00 | |
| AVIC Property | 1,756.40 | 0.00 | |
| Total | 283,900.40 | 0.00 | |
| Other payables: | |||
| AVIC Property | 960,753.30 | 1,131,164.13 | |
| AVIC SUNDA | 442,407.92 | 442,407.92 | |
| AVIC City Investment | 309,732.00 | 309,732.00 | |
| AVIC Securities | 213,000.00 | 213,000.00 | |
| AVIC Building Co. | 117,888.63 | 116,960.23 | |
| AVIC City Property Co., Ltd. | 99,052.32 | 99,052.32 | |
| AVIC Huacheng Property | 73,819.68 | 73,819.68 | |
| 9 Square Assets | 378,483.84 | 378,483.84 | |
| Rainbow Ltd. | 96,465.30 | 60,000.00 | |
| AVIC Changtai | 0.00 | 4,064.81 | |
| AVIC Real Estate | 51,014.88 | 51,014.88 | |
| Guanlan Real Estate | 25,401.60 | 25,401.60 | |
| CATIC Public Security Service Co. | 10,533.44 | 10,533.44 |
| Ganzhou 9 Square | 4,909.00 | 3,446.22 | |
| Shennan Circuit | 0.00 | 150,000.00 | |
| 9 Square Commerce Management Co., Ltd. | 1,135.00 | 0.00 | |
| Total | 2,784,596.91 | 3,069,081.07 |
7. Related parties’ commitments
Inapplicable
8. Others
Inapplicable
XIII. Stock payment
1. General
In CNY
| Total amount of various equity instruments granted by the Company during the reporting period | 4,224,000.00 |
| Total amount of various equity instruments of the Company exercisable during the reporting period | 0.00 |
| Total amount of various equity instruments of the Company expired during the reporting period | 0.00 |
| The scope of the exercise price of stock options issued at the end of the reporting period and the remaining time of the contract | Inapplicable |
| The scope of the exercise price of other equity instruments issued at the end of the reporting period and the remaining time of the contract | The granting price of the A-share restrictive stock incentive plan in 2018 (Phase I) was CNY4.40 per share. The restricted period is from January 11, 2019 to January 11, 2021 and the unlocking period is from January 11, 2021 to January 11, 2024 (it is necessary to satisfy the vested unlocking conditions). |
Other notes:
Approved by the 3rd session of the Ninth Board of Directors held on November 12, 2018 and 2019 1st ExtraordinaryGeneral Meeting held on January 11, 2019, the Company decided to grant 4.224 million restrictive A-shares to 128persons eligible for the incentive at the price of CNY 4.40 per share. This part of A-share restrictive stock was all grantedand registered for listing by the end of the reporting period. The total consideration of the shares granted to the personseligible for the incentive received by the Company amounted to CNY 18,585,600.00, including the increased capital stockamounted to CNY 4,224,000.00; the increased capital reserve (capital stock premium) amounted to CNY 14,361,600.00.The valid term of the incentive plan is 5 years (60 months), including the 2 years (24 months) of the lock-up period and 3years of unlocking period (36 months).
2. Stock payment for equity settlement
In CNY
| Method for determining the fair value of equity instruments granted | Fair value of the restrictive stock = closing price as at the date of authorization - granting price - costs of the restrictive factors |
| Basis for determining the quantity of exercisable equity instruments | Predicted exercisable quantity of the equity incentive shares as at the balance sheet day |
| Cause of significant difference between the estimation of the reporting period and that of the previous period | Nil |
| Accumulated amount of the equity-settled share-based payment counted to the capital reserve | 16,596,197.31 |
| Total expenses recognized in the equity-settled share-based payment during the reporting period | 2,234,597.31 |
3. Stock payment for cash settlement
Inapplicable
4. Correction and termination of stock payment
Inapplicable
5. Others
Inapplicable
XIV. Commitments and contingencies
1. Important commitments
Important commitments existing as at the balance sheet date
(1) Operating lease commitment
Implementation of irrevocable operating lease contract signed by the Company ended the balance sheet date is asfollows:
| Items | Ending balance | Opening balance |
| Minimum rent payment for irrevocable operational lease: | ||
| 1st year after the balance sheet day | 59,257,332.36 | 54,382,100.37 |
| 2nd year after the balance sheet day | 33,741,124.09 | 28,501,337.58 |
| 3rd year after the balance sheet day | 1,4659709.91 | 12,406,400.37 |
| Subsequent years | 6,968,712.39 | 9,533,027.43 |
| Total | 114,626,878.74 | 104,822,865.75 |
(2) Other commitments
Ended June 30, 2019, there was no other commitments necessary to be disclosed.
2. Contingencies
(1) Significant contingencies existing as at the balance sheet day
Nil
(2) Important contingencies unnecessary to be disclosed but necessary to be explainedThere existed no such contingencies necessary to be disclosed in the Company.
3. Others
Inapplicable
XV. Events after balance sheet daySignificant non-adjustment eventsInapplicable
2. Profit distribution
In CNY
| Profit or dividend to be distributed | 87,748,976.20 |
| Profit or dividend announced to be distributed after review and approval | 87,748,976.20 |
3. Sales return
Inapplicable
4. Note to other matters after the balance sheet date
Inapplicable
XVI. Other significant events
1. Correction of the accounting errors in the previous period
(1) Retroactive restatement
Inapplicable
(2) Prospective application
Inapplicable
2．Liabilities restructuringInapplicable
3. Replacement of assets
(1) Non-monetary assets exchange
Inapplicable
(2) Other assets exchange
Inapplicable
4. Pension plan
Inapplicable
5. Discontinuing operation
Inapplicable
6. Segment information
(1) Basis for determining the reporting segments and accounting policy
Inapplicable
(2) Financial information of the reporting segments
Inapplicable
(3) In case there is no reporting segment or the total assets and liabilities of the reporting segments cannot be disclosed,explain the reasonInapplicable
(4) Other notes
Inapplicable
7. Other significant transactions and matters that may affect investors' decision makingInapplicable
8. Others
Inapplicable
XVII. Notes to the parent company’s financial statements
1. Accounts receivable
(1) Accounts receivables disclosed by types
In CNY
| Categories | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | |||||
| Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
| in which | ||||||||||
| Accounts receivable for which bad debt reserve has been provided based on portfolios | 2,350,230.66 | 100.00% | 117,511.54 | 5.00% | 2,232,719.12 | 776,459.35 | 100.00% | 38,822.97 | 5.00% | 737,636.38 |
| in which | ||||||||||
| Group of aging | 2,350,230.66 | 100.00% | 117,511.54 | 5.00% | 2,232,719.12 | 776,459.35 | 100.00% | 38,822.97 | 5.00% | 737,636.38 |
| Total | 2,350,230.66 | 100.00% | 117,511.54 | 5.00% | 2,232,719.12 | 776,459.35 | 100.00% | 38,822.97 | 5.00% | 737,636.38 |
Individual provision for bad and doubtful debts:
Inapplicable
Total provision for bad and doubtful debts based on portfolio: CNY 117,511.54
In CNY
| Name | Ending balance | ||
| Book balance | Bad debt reserve | Provision proportion | |
| Group of aging | 2,350,230.66 | 117,511.54 | 5.00% |
| Total | 2,350,230.66 | 117,511.54 | -- |
Note to the basis for determining the combination:
In the portfolio, the account receivable for which provision for bad debt is made based on balance percentage:
(2) Provision, recovery or reversal of reserve for bad debts during the reporting periodProvision for bad debt during the reporting period
In CNY
| Categories | Opening balance | Amount of movement during the reporting period | Ending balance | ||
| Provision | Amount recovered or reversed | Written-off | |||
| Group of aging | 38,822.97 | 78,688.57 | 0.00 | 0.00 | 117,511.54 |
| Total | 38,822.97 | 78,688.57 | 0.00 | 0.00 | 117,511.54 |
(3) Accounts receivable actually written off in current period
Inapplicable
(4) Accounts receivable owed by the top five debtors based on the ending balance
| No. | Names of the debtors | Nature of Payment | Amount | Aging | Proportion taken | Bad debt reserve at the end of the reporting period | Are they related parties |
| 1 | Shenzhen Zhongshen Commercial Property Service Co., Ltd. | Rent | 909,993.48 | Within 1 year | 38.72% | 45,499.67 | No |
| 2 | ICBC Shenzhen Branch | Rent | 661,473.12 | Within 1 year | 28.15% | 33,073.66 | No |
| 3 | Shenzhen Goodfamily Sports Equipment Chain Store Co., Ltd. | Rent | 356,020.60 | Within 1 year | 15.15% | 17,801.03 | No |
| 4 | Bravo Tech (Shenzhen) Limited | Rent | 313,391.69 | Within 1 year | 13.33% | 15,669.58 | No |
| 5 | Rainbow Ltd. | Rent | 99,343.20 | Within 1 year | 4.23% | 4,967.16 | Yes |
(5) Account receivable with recognition terminated due to transfer of financial assets
Inapplicable
(6) Amount of assets and liabilities formed through transfer of long term account receivable and continuing to beinvolvedInapplicable
2. Other receivables
In CNY
| Items | Ending balance | Opening balance |
| Other receivables | 802,334,152.26 | 870,739,378.37 |
| Total | 802,334,152.26 | 870,739,378.37 |
(1) Interest receivable
Inapplicable
(2) Dividends receivable
Inapplicable
(3) Other receivables
1) Classification of other receivables based on nature of payment
In CNY
| Nature of Payment | Ending book balance | Opening book balance |
| Dealings among related parties within the consolidation scope | 797,642,912.65 | 869,342,613.30 |
| Reserve | 76,233.69 | 70,000.00 |
| Cash deposit and deposit in security | 257,635.90 | 248,104.00 |
| Others | 4,443,236.36 | 1,178,412.07 |
| Total | 802,420,018.60 | 870,839,129.37 |
2) Provision for bad debts
Disclosed based on aging
In CNY
| Aging | Ending balance |
| Within 1 year (with 1 year inclusive) | 878,515.24 |
| 1 to 2 years | 219,155.80 |
| Over 3 years | 40,050.00 |
| Total | 1,137,721.04 |
3) Provision, recovery or reversal of reserve for bad debts during the reporting periodProvision for bad debt during the reporting period
In CNY
| Categories | Opening balance | Amount of movement during the reporting period | Ending balance | |
| Provision | Amount recovered or reversed | |||
| Group of aging | 99,751.00 | 1,355.09 | 15,239.75 | 85,866.34 |
| Total | 99,751.00 | 1,355.09 | 15,239.75 | 85,866.34 |
4) Accounts receivable actually written off in the reporting period
Inapplicable
5) Other receivables owed by the top five debtors based on the ending balance
In CNY
| Company name | Nature of Payment | Ending balance | Aging | Proportion in total ending balance of other receivables | Ending balance of the provision for bad debts |
| Harmony | Inter-company current account | 464,511,889.07 | Within 1 year | 57.89% | 0.00 |
| The Sales Co. | Inter-company current account | 192,510,054.01 | Within 1 year | 23.99% | 0.00 |
| Hengdarui | Inter-company current account | 98,030,500.00 | Within 1 year | 12.22% | 0.00 |
| SHIYUEHUI | Inter-company current account | 22,846,703.45 | Within 1 year | 2.85% | 0.00 |
| Emile Chouriet (Shenzhen) Limited | Inter-company current account | 19,743,766.12 | Within 1 year | 2.46% | 0.00 |
| Total | -- | 797,642,912.65 | -- | 99.40% | 0.00 |
6) Accounts receivable involving government subsidy
Inapplicable
3. Long-term equity investments
In CNY
| Items | Ending balance | Opening balance | ||||
| Book balance | Impairment reserve | Book value | Book balance | Impairment reserve | Book value | |
| Investment in subsidiaries | 1,331,248,590.93 | 0.00 | 1,331,248,590.93 | 1,331,248,590.93 | 0.00 | 1,331,248,590.93 |
| Investment in associates and joint ventures | 46,412,373.21 | 0.00 | 46,412,373.21 | 44,881,063.15 | 0.00 | 44,881,063.15 |
| Total | 1,377,660,964.14 | 0.00 | 1,377,660,964.14 | 1,376,129,654.08 | 0.00 | 1,376,129,654.08 |
(1) Investment in subsidiaries
In CNY
| Investees | Opening balance | Increase in the reporting period | Decrease in the reporting period | Ending balance | Provision for impairment in the reporting period | Ending balance of the provision for impairment |
| Harmony | 601,307,200.00 | 0.00 | 0.00 | 601,307,200.00 | 0.00 | 0.00 |
| The Sales Co. | 450,000,000.00 | 0.00 | 0.00 | 450,000,000.00 | 0.00 | 0.00 |
| the Manufacture Co. | 9,000,000.00 | 0.00 | 0.00 | 9,000,000.00 | 0.00 | 0.00 |
| the Technology Co. | 10,000,000.00 | 0.00 | 0.00 | 10,000,000.00 | 0.00 | 0.00 |
| FIYTA (Hong Kong) Limited | 137,737,520.00 | 0.00 | 0.00 | 137,737,520.00 | 0.00 | 0.00 |
| SHIYUEHUI | 5,000,000.00 | 0.00 | 0.00 | 5,000,000.00 | 0.00 | 0.00 |
| Harbin Harmony World Watch Co., Ltd. | 2,184,484.39 | 0.00 | 0.00 | 2,184,484.39 | 0.00 | 0.00 |
| Hengdarui | 36,867,843.96 | 0.00 | 0.00 | 36,867,843.96 | 0.00 | 0.00 |
| Emile Chouriet (Shenzhen) Limited | 79,151,542.58 | 0.00 | 0.00 | 79,151,542.58 | 0.00 | 0.00 |
| Total | 1,331,248,590.93 | 0.00 | 0.00 | 1,331,248,590.93 | 0.00 | 0.00 |
(2) Investment in associates and joint ventures
In CNY
| Investees | Opening balance | Increase/ Decrease (+ / -) in the reporting period | Ending balance | Ending balance of the provision for impairment | |||||||
| Additional investment | Decrease of investment | Income from equity investment recognized under equity method | Other comprehensive income adjustment | Other equity movement | Announced for distributing cash dividend or profit | Provision for impairment | Others | ||||
| I. Joint Venture | |||||||||||
| II. Associates | |||||||||||
| Shanghai Watch Industry Co., Ltd. | 44,881,063.15 | 0.00 | 0.00 | 1,531,310.06 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 46,412,373.21 | 0.00 |
| Sub-total | 44,881,063.15 | 0.00 | 0.00 | 1,531,310.06 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 46,412,373.21 | 0.00 |
| Total | 44,881,063.15 | 0.00 | 0.00 | 1,531,310.06 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 46,412,373.21 | 0.00 |
(3) Other notes
Inapplicable
4. Operation Income and Costs
In CNY
| Items | Amount incurred in the reporting period | Amount incurred in the previous period | ||
| Income | Costs | Income | Costs | |
| Principal business | 64,124,939.95 | 11,807,925.90 | 56,119,634.18 | 9,578,544.70 |
| Other businesses | 0.00 | 0.00 | 0.00 | 0.00 |
| Total | 64,124,939.95 | 11,807,925.90 | 56,119,634.18 | 9,578,544.70 |
Has the new standard for income been implementedNo
5. Return on investment
In CNY
| Items | Amount incurred in the reporting period | Amount incurred in the previous period |
| Income from long term equity investment based on equity method | 1,531,310.06 | 93,013.38 |
| Total | 1,531,310.06 | 93,013.38 |
6. Others
Inapplicable
XVIII. Supplementary information
1. Statement of non-recurring gains and losses in the reporting period
In CNY
| Items | Amount | Note |
| 1. Gain/Loss from disposal of non-current assets | -212,010.13 | It refers to the loss from disposal of fixed assets, such as the obsolete production equipment |
| The government subsidies included in the profits and losses of the current period ( (excluding government grants | 13,045,742.36 | For detail, refer to the supplementary description of the government subsidy counted |
| which are closely related to the Company’s business and conform with the national standard amount or quantity) | to the current profit and loss, Note VII.67. | |
| Other non-operating income and expenses other than the aforesaid items | -230,194.27 | It mainly refers to the security deposit due to the advance withdrawal of the shops in some channels, etc. |
| Less: Amount affected by the income tax | 2,735,223.75 | |
| Total | 9,868,314.21 | -- |
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No. 1 on InformationDisclosure for Companies Offering their Securities to the Public – Non-recurring Gains and Losses and its non-recurringgain/loss items as illustrated in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offeringtheir Securities to the Public – Non-recurring Gains and Losses which have been defined as recurring gains and losses, itis necessary to explain the reason.Inapplicable
2. ROE and EPS
| Profit in the reporting period | Return on equity, weighted average | Earnings per share | |
| Basic earnings per share (CNY/share) | Diluted earnings per share (CNY/share) | ||
| Net profit attributable to the Company’s shareholders of ordinary shares | 4.69% | 0.2788 | 0.2788 |
| Net profit attributable to the Company’s shareholders of ordinary shares less non-recurring gains and loss | 4.32% | 0.2565 | 0.2565 |
3. Discrepancy in accounting data between IAS and CAS
(1) Discrepancy in net profit and net assets as disclosed in the financial report respectively according to IAS andCASInapplicable
(2) Discrepancy in net profit and net assets as disclosed in the financial report respectively according to theaccounting standards outside Mainland China and CASInapplicable
(3) Note to the discrepancy in accounting data under the accounting standards outside Mainland China. In casethe discrepancy in data which have been audited by an overseas auditing agent has been adjusted, pleasespecify the name of the overseas auditing agent.Inapplicable
4. Others
Inapplicable
Section11 Documents Available for Inspection
I. Financial statements signed by and under the seal of the legal representative, the chief financialofficer and the person in charge of the accounting office.
II. Originals of all documents and manuscripts of announcements of the Company disclosed inSecurities Times and Hong Kong Commercial Daily as designated by China Securities RegulatoryCommission.
FIYTA HOLDINGS LTD.Board of DirectorsAugust 15, 2019