FIYTA Precision Technology Co., Ltd.
2024 Semi-annual
Financial Report
I. Audit Report
Whether the semi-annual report has been auditedNo
2. Financial statements
The unit of the financial statements in the notes is RMB
1. Consolidated balance sheet
Prepared by: FIYTA Precision Technology Co., Ltd.
June 30, 2024
Unit: RMB
| Item | Ending Balance | Opening balance |
| Current assets: | ||
| Cash and bank balances | 404,356,009.13 | 504,629,153.71 |
| Deposit reservation for balance | ||
| Lending funds | ||
| Trading financial assets | ||
| Derivative financial assets | ||
| Notes receivable | 16,338,392.31 | 18,268,972.37 |
| Accounts receivable | 355,483,465.81 | 323,142,761.64 |
| Receivables financing | ||
| Prepayment | 6,569,774.50 | 6,571,239.98 |
| Premiums receivable | ||
| Cession premiums receivable | ||
| Provision of cession receivable | ||
| Other receivables | 59,436,540.53 | 57,725,792.00 |
| Including: Interest receivable | ||
| Dividend receivable | ||
| Redemptory monetary capital for sale | ||
| Inventories | 2,128,331,242.49 | 2,100,666,175.28 |
| Including: Data resources | ||
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 89,039,020.97 | 72,249,391.81 |
| Total current assets | 3,059,554,445.74 | 3,083,253,486.79 |
| Non-current assets: | ||
| Loans and advances offered | ||
| Debt investment |
| Other debt investment | ||
| Long-term receivables | ||
| Long-term equity investments | 51,952,479.36 | 51,862,607.30 |
| Other equity instrument investments | ||
| Other non-current financial assets | ||
| Investment properties | 352,408,837.92 | 360,255,832.14 |
| Fixed assets | 345,651,268.72 | 355,785,354.68 |
| Construction in progress | ||
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 109,386,646.99 | 109,452,481.64 |
| Intangible assets | 30,848,580.73 | 31,664,380.77 |
| Including: Data resources | ||
| Development expenditures | ||
| Including: Data resources | ||
| Goodwill | ||
| Long-term prepaid expenses | 120,110,202.46 | 122,324,355.13 |
| Deferred income tax assets | 75,893,868.97 | 80,227,771.46 |
| Other non-current assets | 2,185,332.57 | 9,434,627.17 |
| Total non-current assets | 1,088,437,217.72 | 1,121,007,410.29 |
| Total assets | 4,147,991,663.46 | 4,204,260,897.08 |
| Current liabilities: | ||
| Short-term loans | 320,207,333.32 | 250,187,763.87 |
| Borrowing from the central bank | ||
| Borrowed funds | ||
| Trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 131,372,308.62 | 173,825,907.71 |
| Advances from customer | 8,242,987.93 | 10,267,758.31 |
| Contract liabilities | 18,804,742.85 | 12,286,243.62 |
| Financial assets sold for repurchase | ||
| Deposits from customers and interbank | ||
| Receivings from vicariously traded securities | ||
| Funds received as stock underwrite | ||
| Employee benefits payable | 73,285,559.36 | 120,084,810.60 |
| Taxes payable | 52,552,871.74 | 64,188,161.31 |
| Other payables | 110,793,067.03 | 121,937,801.07 |
| Including: Interest payable |
| Dividend payable | 2,907,796.73 | 2,058,352.24 |
| Service charges and commissions payable | ||
| Cession premiums payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 69,943,530.95 | 66,399,004.20 |
| Other current liabilities | 2,078,002.76 | 1,589,635.30 |
| Total current liabilities | 787,280,404.56 | 820,767,085.99 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term loans | ||
| Bonds payable | ||
| Including: preferred stock | ||
| Perpetual bonds | ||
| Lease liabilities | 38,967,635.39 | 43,526,352.52 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Estimated liabilities | ||
| Deferred income | 952,785.69 | 952,785.69 |
| Deferred tax liability | 5,462,841.29 | 5,208,920.69 |
| Other non-current liabilities | ||
| Total non-current liabilities | 45,383,262.37 | 49,688,058.90 |
| Total liabilities | 832,663,666.93 | 870,455,144.89 |
| Owner's equity: | ||
| Share capital | 405,864,207.00 | 415,219,970.00 |
| Other equity instruments | ||
| Including: preferred stock | ||
| Perpetual bonds | ||
| Capital reserve | 936,080,193.96 | 990,159,033.17 |
| Less: treasury stock | 13,445,814.81 | 78,645,532.23 |
| Other comprehensive income | 13,747,808.17 | 19,325,335.93 |
| Special reserve | 3,765,015.42 | 3,223,158.06 |
| Surplus reserves | 275,010,401.50 | 275,010,401.50 |
| General risk provisions | ||
| Undistributed profits | 1,694,306,185.29 | 1,709,513,385.76 |
| Total equity attributable to the owner of the parent company | 3,315,327,996.53 | 3,333,805,752.19 |
| Minority interests | ||
| Total owner's equity | 3,315,327,996.53 | 3,333,805,752.19 |
| Total liabilities and owner's equity | 4,147,991,663.46 | 4,204,260,897.08 |
Legal Representative: Zhang Xuhua CFO: Song Yaoming Financial Manager: Tian Hui
2. Balance Sheet of parent company
Unit: RMB
| Item | Ending Balance | Opening balance |
| Current assets: | ||
| Cash and bank balances | 309,352,375.23 | 308,230,255.35 |
| Trading financial assets | ||
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 11,175,784.69 | 1,822,916.61 |
| Receivables financing | ||
| Prepayment | ||
| Other receivables | 646,226,304.77 | 696,328,419.85 |
| Including: Interest receivable | ||
| Dividend receivable | ||
| Inventories | 44,792.57 | |
| Including: Data resources | ||
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 13,231,838.08 | 15,886,769.82 |
| Total current assets | 980,031,095.34 | 1,022,268,361.63 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term receivables | ||
| Long-term equity investments | 1,633,784,801.52 | 1,633,041,716.11 |
| Other equity instrument investments | ||
| Other non-current financial assets | ||
| Investment properties | 287,220,334.04 | 293,695,692.68 |
| Fixed assets | 202,865,789.95 | 207,209,890.94 |
| Construction in progress | ||
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | ||
| Intangible assets | 22,875,581.52 | 23,460,211.70 |
| Including: Data resources | ||
| Development expenditures | ||
| Including: Data resources | ||
| Goodwill | ||
| Long-term prepaid expenses | 3,934,381.48 | 4,795,846.73 |
| Deferred income tax assets | 834,088.92 | 640,783.05 |
| Other non-current assets | 1,106,563.00 | 710,807.49 |
| Total non-current assets | 2,152,621,540.43 | 2,163,554,948.70 |
| Total assets | 3,132,652,635.77 | 3,185,823,310.33 |
| Current liabilities: | ||
| Short-term loans | 320,207,333.32 | 250,187,763.87 |
| Trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 3,325,588.05 | 2,285,657.88 |
| Advances from customer | 8,242,987.93 | 10,267,758.31 |
| Contract liabilities | ||
| Employee benefits payable | 17,686,842.19 | 25,886,702.67 |
| Taxes payable | 3,322,230.50 | 3,322,241.54 |
| Other payables | 257,308,884.44 | 224,668,548.77 |
| Including: Interest payable | ||
| Dividend payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | ||
| Other current liabilities | ||
| Total current liabilities | 610,093,866.43 | 516,618,673.04 |
| Non-current liabilities: | ||
| Long-term loans | ||
| Bonds payable | ||
| Including: preferred stock | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Estimated liabilities | ||
| Deferred income | 952,785.69 | 952,785.69 |
| Deferred tax liability | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 952,785.69 | 952,785.69 |
| Total liabilities | 611,046,652.12 | 517,571,458.73 |
| Owner's equity: | ||
| Share capital | 405,864,207.00 | 415,219,970.00 |
| Other equity instruments | ||
| Including: preferred stock | ||
| Perpetual bonds | ||
| Capital reserve | 938,958,689.77 | 993,037,528.98 |
| Less: treasury stock | 13,445,814.81 | 78,645,532.23 |
| Other comprehensive income | ||
| Special reserve | ||
| Surplus reserves | 275,010,401.50 | 275,010,401.50 |
| Undistributed profits | 915,218,500.19 | 1,063,629,483.35 |
| Total owner's equity | 2,521,605,983.65 | 2,668,251,851.60 |
| Total liabilities and owner's equity | 3,132,652,635.77 | 3,185,823,310.33 |
Legal Representative: Zhang Xuhua CFO: Song Yaoming Financial Manager: Tian Hui
3. Consolidated income statement
Unit: RMB
| Item | Semi-annual 2024 | Semi-annual 2023 |
| I. Total operating income | 2,076,397,911.32 | 2,364,505,262.56 |
| Including: Operating revenue | 2,076,397,911.32 | 2,364,505,262.56 |
| Interest income | ||
| Premiums earned | ||
| Income from service charges and commissions | ||
| II. Total operating cost | 1,892,890,643.96 | 2,129,534,984.07 |
| Including: Operating costs | 1,304,482,455.55 | 1,512,527,481.83 |
| Interest expense | ||
| Expenditures of service charges and commissions | ||
| Surrender value | ||
| Net payments for insurance claims | ||
| Withdrawal of net provision for insurance contracts | ||
| Expenditure of policy dividend | ||
| Reinsurance costs | ||
| Taxes and surcharges | 12,260,457.55 | 15,762,456.07 |
| Selling and Distribution Expenses | 449,785,002.40 | 456,273,629.20 |
| General and Administrative Expenses | 89,213,932.54 | 104,621,729.61 |
| R&D Expenditures | 27,525,998.33 | 28,161,470.54 |
| Financial expenses | 9,622,797.59 | 12,188,216.82 |
| Including: interest expenses | 5,169,603.47 | 6,690,859.35 |
| Interest income | 2,185,535.51 | 2,432,180.03 |
| Plus: other income | 3,103,884.50 | 6,691,609.41 |
| Investment income ("-" for losses) | 313,834.17 | -1,697,481.65 |
| Including: income from investment in associates and joint ventures | 89,872.06 | -1,697,481.65 |
| Gains from derecognition of financial assets measured at amortized cost | ||
| Foreign exchange gains ("-" for losses) |
| Net exposure hedging income ("-" for losses) | ||
| Gains from changes in fair value ("-" for losses) | ||
| Credit impairment losses ("-" for losses) | 2,724,678.43 | 4,333,947.62 |
| Asset impairment losses ("-" for losses) | 28,336.82 | |
| Asset disposal income ("-" for losses) | 2,906,210.67 | -76,689.73 |
| 3. Operating profits ("-" for losses) | 192,584,211.95 | 244,221,664.14 |
| Plus: non-operating revenue | 1,378,138.85 | 596,523.83 |
| Less: non-operating expenses | 278,833.35 | 291,601.18 |
| 4. Total profits ("-" for total losses) | 193,683,517.45 | 244,526,586.79 |
| Less: income tax expenses | 46,545,035.11 | 57,131,519.56 |
| 5. Net profits ("-" for net losses) | 147,138,482.34 | 187,395,067.23 |
| (I) Classified by business continuity | ||
| 1. Net profit from continuing operations ("-" for net losses) | 147,138,482.34 | 187,395,067.23 |
| 2. Net profit from discontinued operations ("-" for net losses) | ||
| (II) Classified by ownership | ||
| 1. Net profit attributable to shareholders of the parent company ("-" for net losses) | 147,138,482.34 | 187,395,067.23 |
| 2. Minority interest income ("-" for net losses) | ||
| VI. Net of tax from other comprehensive income | -5,577,527.76 | 9,405,009.07 |
| Net amount of other comprehensive income after tax attributable to owners of the parent company | -5,577,527.76 | 9,405,009.07 |
| (I) Other comprehensive incomes that cannot be reclassified into profit and loss | ||
| 1. Changes in re-measurement of the defined benefit plan | ||
| 2. Other comprehensive income that cannot be transferred to profit or loss under the equity method | ||
| 3. Changes in fair value of other equity instrument investments | ||
| 4. Changes in fair value of enterprise's own credit risk | ||
| 5. Other | ||
| (II) Other comprehensive income that can be re-classified into profit and loss | -5,577,527.76 | 9,405,009.07 |
| 1. Other comprehensive income that can be carried forward to profit and loss under the equity method |
| 2. Changes in fair value of other debt investments | ||
| 3. The amount of financial assets reclassified and included in other comprehensive income | ||
| 4. Credit impairment reserves of other debt investment | ||
| 5. Cash flow hedge reserve | ||
| 6. Translation difference of foreign currency financial statements | -5,577,527.76 | 9,405,009.07 |
| 7. Other | ||
| Net of tax from other comprehensive income attributable to minority shareholders | ||
| VII. Total comprehensive income | 141,560,954.58 | 196,800,076.30 |
| Total comprehensive income attributable to owners of the parent company | 141,560,954.58 | 196,800,076.30 |
| Total comprehensive income attributable to minority shareholders | ||
| VIII. Earnings per share: | ||
| (I) Basic earnings per share | 0.3568 | 0.4517 |
| (II) Diluted earnings per share | 0.3564 | 0.4517 |
Legal Representative: Zhang Xuhua CFO: Song Yaoming Financial Manager: Tian Hui
4. Profit Statement of Parent Company
Unit: RMB
| Item | Semi-annual 2024 | Semi-annual 2023 |
| I. Operating revenue | 95,651,893.86 | 92,042,875.14 |
| Less: operating cost | 28,763,610.04 | 22,121,058.14 |
| Taxes and surcharges | 3,754,920.70 | 3,858,296.21 |
| Selling and Distribution Expenses | 13,488,147.65 | 510,613.70 |
| General and Administrative Expenses | 27,338,182.18 | 29,511,087.70 |
| R&D Expenditures | 6,949,411.52 | 5,986,203.21 |
| Financial expenses | -888,010.29 | -103,859.98 |
| Including: interest expenses | 305,742.86 | 1,476,552.70 |
| Interest income | 1,605,624.26 | 1,953,770.61 |
| Plus: other income | 194,361.73 | 753,278.99 |
| Investment income ("-" for losses) | 89,872.06 | -1,697,481.65 |
| Including: income from investment in associates and joint ventures | 89,872.06 | -1,697,481.65 |
| Gains from derecognition of financial assets measured at amortized cost ("-" for losses) | ||
| Net exposure hedging income |
| ("-" for losses) | ||
| Gains from changes in fair value ("-" for losses) | ||
| Credit impairment losses ("-" for losses) | -520,369.57 | -362,763.81 |
| Asset impairment losses ("-" for losses) | ||
| Asset disposal income ("-" for losses) | 2,920,369.62 | -37,783.55 |
| 2. Operating profits ("-" for losses) | 18,929,865.90 | 28,814,726.14 |
| Plus: non-operating revenue | 973.45 | 8,037.20 |
| Less: non-operating expenses | 334,515.20 | 837.18 |
| 3. Total profits ("-" for total losses) | 18,596,324.15 | 28,821,926.16 |
| Less: income tax expenses | 4,661,624.51 | 8,154,082.65 |
| 4. Net profits ("-" for net losses) | 13,934,699.64 | 20,667,843.51 |
| (1) Net profit from continuing operations ("-" for net losses) | 13,934,699.64 | 20,667,843.51 |
| (2) Net profit from discontinued operations ("-" for net losses) | ||
| V. Net of tax of other comprehensive income | ||
| (I) Other comprehensive incomes that cannot be reclassified into profit and loss | ||
| 1. Changes in re-measurement of the defined benefit plan | ||
| 2. Other comprehensive income that cannot be transferred to profit or loss under the equity method | ||
| 3. Changes in fair value of other equity instrument investments | ||
| 4. Changes in fair value of enterprise's own credit risk | ||
| 5. Other | ||
| (II) Other comprehensive income that can be re-classified into profit and loss | ||
| 1. Other comprehensive income that can be carried forward to profit and loss under the equity method | ||
| 2. Changes in fair value of other debt investments | ||
| 3. The amount of financial assets reclassified and included in other comprehensive income | ||
| 4. Credit impairment reserves of other debt investment | ||
| 5. Cash flow hedge reserve | ||
| 6. Translation difference of foreign currency financial statements | ||
| 7. Other | ||
| VI. Total comprehensive income | 13,934,699.64 | 20,667,843.51 |
| VII. Earnings per share: | ||
| (I) Basic earnings per share | ||
| (II) Diluted earnings per share |
Legal Representative: Zhang Xuhua CFO: Song Yaoming Financial Manager: Tian Hui
5. Consolidated Cash Flow Statement
Unit: RMB
| Item | Semi-annual 2024 | Semi-annual 2023 |
| I. Cash flows from operating activities: | ||
| Cash received from sale of goods and rendering of services | 2,242,943,860.28 | 2,544,494,031.57 |
| Net increase in deposits from customers and interbank | ||
| Net increase in borrowings from the central bank | ||
| Net increase in funds borrowed from other financial institutions | ||
| Cash received for premiums under the original insurance contract | ||
| Net cash received from reinsurance business | ||
| Net increase in deposits from the insured and investment funds | ||
| Cash received for interest, service charges and commissions | ||
| Net increase in borrowed funds | ||
| Net increase in funds of repurchasing business | ||
| Net cash received from vicariously traded securities | ||
| Refund of taxes and surcharges | 1,361,806.68 | 850,371.86 |
| Cash received from other operating activities | 22,763,002.95 | 37,298,851.19 |
| Sub-total of cash inflow from operating activities | 2,267,068,669.91 | 2,582,643,254.62 |
| Cash paid for purchase of goods and rendering of services | 1,493,308,339.25 | 1,584,272,785.87 |
| Net increase in loans and advances to customers | ||
| Net increase in deposits in the central bank and deposits from interbank | ||
| Cash paid for the compensation under the original insurance contract | ||
| Net increase in lending funds | ||
| Cash paid for interest, service charges and commissions | ||
| Cash paid for policy dividends | ||
| Cash paid to and for employees | 336,053,098.67 | 336,029,420.86 |
| Taxes and fees paid | 115,761,812.75 | 135,231,581.42 |
| Other cash payments relating to operating activities | 185,414,622.72 | 182,449,622.85 |
| Sub-total of cash outflow from operating activities | 2,130,537,873.39 | 2,237,983,411.00 |
| Net Cash Flows from Operating Activities | 136,530,796.52 | 344,659,843.62 |
| II. Cash flows from investing activities: | ||
| Cash received from disinvestment | ||
| Cash received from investment income | 196,270.19 | |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 4,813,262.87 | 3,545.41 |
| Net cash received from disposal of subsidiaries and other business units | ||
| Cash received from other investing activities | 120,049,969.61 | |
| Sub-total of cash inflow from investing activities | 125,059,502.67 | 3,545.41 |
| Cash paid to acquire and construct fixed assets, intangible assets and other long-term assets | 43,613,301.74 | 36,273,631.65 |
| Cash paid for investments | ||
| Net increase in pledged loans | ||
| Net cash paid to acquire subsidiaries and other business units | ||
| Cash paid for other investing activities | 165,092,806.07 | |
| Sub-total of cash outflow from investing activities | 208,706,107.81 | 36,273,631.65 |
| Net cash flows from operating activities | -83,646,605.14 | -36,270,086.24 |
| III. Cash flows from financing activities: | ||
| Cash received from investors | ||
| Including: Cash received from the investment of minority shareholders of the subsidiaries | ||
| Cash received from borrowings | 320,000,000.00 | 250,000,000.00 |
| Cash received from other financing activities | ||
| Sub-total of cash inflow from financing activities | 320,000,000.00 | 250,000,000.00 |
| Cash paid for debt repayments | 250,000,000.00 | 150,000,000.00 |
| Cash paid for distribution of dividends and profits or payment of interest | 164,868,413.68 | 110,259,489.52 |
| Including: Dividends and profits paid by subsidiaries to minority shareholders | ||
| Cash paid for other financing activities | 58,254,091.98 | 92,370,343.32 |
| Sub-total of cash flows from financing activities | 473,122,505.66 | 352,629,832.84 |
| Net cash flows from financing | -153,122,505.66 | -102,629,832.84 |
| activities | ||
| IV. Effect of exchange rate changes on cash and cash equivalents | -34,830.30 | -138,593.06 |
| V. Net increase in cash and cash equivalents | -100,273,144.58 | 205,621,331.48 |
| Add: opening balance of cash and cash equivalents | 504,629,153.71 | 313,747,463.64 |
| VI. Closing balance of cash and cash equivalents | 404,356,009.13 | 519,368,795.12 |
Legal Representative: Zhang Xuhua CFO: Song Yaoming Financial Manager: Tian Hui
6. Cash Flow Statement of Parent Company
Unit: RMB
| Item | Semi-annual 2024 | Semi-annual 2023 |
| I. Cash flows from operating activities: | ||
| Cash received from sale of goods and rendering of services | 92,269,424.38 | 84,192,699.46 |
| Refund of taxes and surcharges | ||
| Cash received from other operating activities | 1,967,128,778.52 | 2,141,372,420.70 |
| Sub-total of cash inflow from operating activities | 2,059,398,202.90 | 2,225,565,120.16 |
| Cash paid for purchase of goods and rendering of services | 9,782,620.00 | |
| Cash paid to and for employees | 44,398,658.47 | 29,190,598.81 |
| Taxes and fees paid | 12,856,580.23 | 5,480,282.08 |
| Other cash payments relating to operating activities | 1,899,095,301.14 | 2,002,201,028.42 |
| Sub-total of cash outflow from operating activities | 1,966,133,159.84 | 2,036,871,909.31 |
| Net Cash Flows from Operating Activities | 93,265,043.06 | 188,693,210.85 |
| II. Cash flows from investing activities: | ||
| Cash received from disinvestment | ||
| Cash received from investment income | ||
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 4,741,325.47 | 200.00 |
| Net cash received from disposal of subsidiaries and other business units | ||
| Cash received from other investing activities | ||
| Sub-total of cash inflow from investing activities | 4,741,325.47 | 200.00 |
| Cash paid to acquire and construct fixed assets, intangible assets and other long-term assets | 1,946,698.06 | 4,515,871.59 |
| Cash paid for investments | ||
| Net cash paid to acquire subsidiaries and other business units | ||
| Cash paid for other investing activities |
| Sub-total of cash outflow from investing activities | 1,946,698.06 | 4,515,871.59 |
| Net cash flows from operating activities | 2,794,627.41 | -4,515,671.59 |
| III. Cash flows from financing activities: | ||
| Cash received from investors | ||
| Cash received from borrowings | 320,000,000.00 | 250,000,000.00 |
| Cash received from other financing activities | ||
| Sub-total of cash inflow from financing activities | 320,000,000.00 | 250,000,000.00 |
| Cash paid for debt repayments | 250,000,000.00 | 150,000,000.00 |
| Cash paid for distribution of dividends and profits or payment of interest | 164,868,413.68 | 110,259,489.52 |
| Cash paid for other financing activities | 79,409.91 | 35,483,644.86 |
| Sub-total of cash flows from financing activities | 414,947,823.59 | 295,743,134.38 |
| Net cash flows from financing activities | -94,947,823.59 | -45,743,134.38 |
| IV. Effect of exchange rate changes on cash and cash equivalents | 10,273.00 | 109,517.02 |
| V. Net increase in cash and cash equivalents | 1,122,119.88 | 138,543,921.90 |
| Add: opening balance of cash and cash equivalents | 308,230,255.35 | 274,691,023.16 |
| VI. Closing balance of cash and cash equivalents | 309,352,375.23 | 413,234,945.06 |
Legal Representative: Zhang Xuhua CFO: Song Yaoming Financial Manager: Tian Hui
7. Consolidated Statement of Changes in Owner’s Equity
Amount in current period
Unit: RMB
| Item | Semi-annual 2024 | ||||||||||||||
| Equity attributable to owners of the parent company | Minority interests | Total owner's equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserves | General risk provisions | Undistributed profits | Other | Sub-total | |||||
| Preferred stock | Perpetual bonds | Other | |||||||||||||
| 1. Balance at the end of the previous year | 415,219,970.00 | 990,159,033.17 | 78,645,532.23 | 19,325,335.93 | 3,223,158.06 | 275,010,401.50 | 1,709,513,385.76 | 3,333,805,752.19 | 3,333,805,752.19 | ||||||
| Add: Change in | |||||||||||||||
| accounting policy | |||||||||||||||
| Correction of previous errors | |||||||||||||||
| Other | |||||||||||||||
| 2. Balance at the beginning of the current year | 415,219,970.00 | 990,159,033.17 | 78,645,532.23 | 19,325,335.93 | 3,223,158.06 | 275,010,401.50 | 1,709,513,385.76 | 3,333,805,752.19 | 3,333,805,752.19 | ||||||
| 3. Changes in increase/decrease in the current period ("-" for decrease) | -9,355,763.00 | -54,078,839.21 | -65,199,717.42 | -5,577,527.76 | 541,857.36 | -15,207,200.47 | -18,477,755.66 | -18,477,755.66 | |||||||
| (I) Total comprehensive income | -5,577,527.76 | 147,138,482.34 | 141,560,954.58 | 141,560,954.58 | |||||||||||
| (II) Contribution and withdrawal of capital by owners | -9,355,763.00 | -54,078,839.21 | -65,199,717.42 | 1,765,115.21 | 1,765,115.21 | ||||||||||
| 1. Common stock contributed by owners | -9,355,763.00 | -54,984,906.42 | -64,340,669.42 | ||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Share-based payment recognized in owners' equity | 906,067.21 | -859,048.00 | 1,765,115.21 | 1,765,115.21 | |||||||||||
| 4. Others | |||||||||||||||
| (III) Profit distribution | -162,345,6 | -162,345,6 | -162,345,6 |
| 82.81 | 82.81 | 82.81 | |||||||||||||
| 1. Withdrawal of surplus reserve | |||||||||||||||
| 2. Withdrawal of general risk reserves | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -162,345,682.81 | -162,345,682.81 | -162,345,682.81 | ||||||||||||
| 4. Others | |||||||||||||||
| (4) Internal carry-forward of owners' equity | |||||||||||||||
| 1. Capital reserve transferred to paid-in capital (or share capital) | |||||||||||||||
| 2. Surplus reserve transferred to paid-in capital (or share capital) | |||||||||||||||
| 3. Surplus reserve offsetting losses | |||||||||||||||
| 4. Changes in defined benefit plans carried forward to retained earnings | |||||||||||||||
| 5. Other comprehensive income transferred to retained |
| earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserves | 541,857.36 | 541,857.36 | 541,857.36 | ||||||||||||
| 1. Withdrawal in the current period | 760,556.40 | 760,556.40 | 760,556.40 | ||||||||||||
| 2. Utilization in the current period | -218,699.04 | -218,699.04 | -218,699.04 | ||||||||||||
| (VI) Others | |||||||||||||||
| 4. Balance at the end of the current period | 405,864,207.00 | 936,080,193.96 | 13,445,814.81 | 13,747,808.17 | 3,765,015.42 | 275,010,401.50 | 1,694,306,185.29 | 3,315,327,996.53 | 3,315,327,996.53 |
Amount Last Year
Unit: RMB
| Item | Semi-annual 2023 | ||||||||||||||
| Equity attributable to owners of the parent company | Minority interests | Total owner's equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserves | General risk provisions | Undistributed profits | Other | Sub-total | |||||
| Preferred stock | Perpetual bonds | Other | |||||||||||||
| 1. Balance at the end of the previous year | 417,627,960.00 | 1,007,086,643.48 | 50,759,806.16 | 5,739,589.89 | 2,012,064.91 | 275,010,401.50 | 1,479,706,638.53 | 3,136,423,492.15 | 3,136,423,492.15 | ||||||
| Add: Change in accounting policy | |||||||||||||||
| Correction of previous errors | |||||||||||||||
| Other | |||||||||||||||
| 2. Balance at the | 417,62 | 1,007, | 50,759 | 5,739, | 2,012, | 275,01 | 1,479, | 3,136, | 3,136, | ||||||
| beginning of the current year | 7,960.00 | 086,643.48 | ,806.16 | 589.89 | 064.91 | 0,401.50 | 706,638.53 | 423,492.15 | 423,492.15 | ||||||
| 3. Changes in increase/decrease in the current period ("-" for decrease) | -3,732,336.52 | -3,630,088.51 | 9,405,009.07 | 735,198.09 | 83,237,295.23 | 93,275,254.38 | 93,275,254.38 | ||||||||
| (I) Total comprehensive income | 9,405,009.07 | 187,395,067.23 | 196,800,076.30 | 196,800,076.30 | |||||||||||
| (II) Contribution and withdrawal of capital by owners | -3,732,336.52 | -3,630,088.51 | -102,248.01 | -102,248.01 | |||||||||||
| 1. Common stock contributed by owners | 17,007,830.70 | -17,007,830.70 | -17,007,830.70 | ||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Share-based payment recognized in owners' equity | -3,729,602.11 | -20,637,919.21 | 16,908,317.10 | 16,908,317.10 | |||||||||||
| 4. Others | -2,734.41 | -2,734.41 | -2,734.41 | ||||||||||||
| (III) Profit distribution | -104,157,772.00 | -104,157,772.00 | -104,157,772.00 | ||||||||||||
| 1. Withdrawal of surplus reserve | |||||||||||||||
| 2. Withdrawal |
| of general risk reserves | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -104,157,772.00 | -104,157,772.00 | -104,157,772.00 | ||||||||||||
| 4. Others | |||||||||||||||
| (4) Internal carry-forward of owners' equity | |||||||||||||||
| 1. Capital reserve transferred to paid-in capital (or share capital) | |||||||||||||||
| 2. Surplus reserve transferred to paid-in capital (or share capital) | |||||||||||||||
| 3. Surplus reserve offsetting losses | |||||||||||||||
| 4. Changes in defined benefit plans carried forward to retained earnings | |||||||||||||||
| 5. Other comprehensive income transferred to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserves | 735,198.09 | 735,198.09 | 735,198.09 | ||||||||||||
| 1. Withdrawal | 816,61 | 816,61 | 816,61 |
| in the current period | 8.92 | 8.92 | 8.92 | ||||||||||||
| 2. Utilization in the current period | -81,420.83 | -81,420.83 | -81,420.83 | ||||||||||||
| (VI) Others | |||||||||||||||
| 4. Balance at the end of the current period | 417,627,960.00 | 1,003,354,306.96 | 47,129,717.65 | 15,144,598.96 | 2,747,263.00 | 275,010,401.50 | 1,562,943,933.76 | 3,229,698,746.53 | 3,229,698,746.53 |
Legal Representative: Zhang Xuhua CFO: Song Yaoming Financial Manager: Tian Hui
8. Variation of equity attributable to owners of the parent company
Amount in current period
Unit: RMB
| Item | Semi-annual 2024 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserves | Undistributed profits | Other | Total owner's equity | |||
| Preferred stock | Perpetual bonds | Other | ||||||||||
| 1. Balance at the end of the previous year | 415,219,970.00 | 993,037,528.98 | 78,645,532.23 | 275,010,401.50 | 1,063,629,483.35 | 2,668,251,851.60 | ||||||
| Add: Change in accounting policy | ||||||||||||
| Correction of previous errors | ||||||||||||
| Other | ||||||||||||
| 2. Balance at the beginning of the current year | 415,219,970.00 | 993,037,528.98 | 78,645,532.23 | 275,010,401.50 | 1,063,629,483.35 | 2,668,251,851.60 | ||||||
| 3. Changes in increase/decrease in the current | -9,355,763.00 | -54,078,839.21 | -65,199,717.42 | -148,410,983.16 | -146,645,867.95 | |||||||
| period ("-" for decrease) | ||||||||||||
| (I) Total comprehensive income | 13,934,699.65 | 13,934,699.65 | ||||||||||
| (II) Contribution and withdrawal of capital by owners | -9,355,763.00 | -54,078,839.21 | -65,199,717.42 | 1,765,115.21 | ||||||||
| 1. Common stock contributed by owners | -9,355,763.00 | -54,984,906.42 | -64,340,669.42 | |||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3. Share-based payment recognized in owners' equity | 906,067.21 | -859,048.00 | 1,765,115.21 | |||||||||
| 4. Others | ||||||||||||
| (III) Profit distribution | -162,345,682.81 | -162,345,682.81 | ||||||||||
| 1. Withdrawal of surplus reserve | ||||||||||||
| 2. Distribution to owners (or shareholders) | -162,345,682.81 | -162,345,682.81 | ||||||||||
| 3. Others | ||||||||||||
| (4) Internal carry-forward of owners' equity | ||||||||||||
| 1. Capital reserve transferred to paid-in capital (or share |
| capital) | ||||||||||||
| 2. Surplus reserve transferred to paid-in capital (or share capital) | ||||||||||||
| 3. Surplus reserve offsetting losses | ||||||||||||
| 4. Changes in defined benefit plans carried forward to retained earnings | ||||||||||||
| 5. Other comprehensive income transferred to retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserves | ||||||||||||
| 1. Withdrawal in the current period | ||||||||||||
| 2. Utilization in the current period | ||||||||||||
| (VI) Others | ||||||||||||
| 4. Balance at the end of the current period | 405,864,207.00 | 938,958,689.77 | 13,445,814.81 | 275,010,401.50 | 915,218,500.19 | 2,521,605,983.65 |
Amount Last Year
Unit: RMB
| Item | Semi-annual 2023 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive incom | Special reserve | Surplus reserves | Undistributed profits | Other | Total owner's equity | |||
| Preferred | Perpetual bond | Other | ||||||||||
| stock | s | e | ||||||||||
| 1. Balance at the end of the previous year | 417,627,960.00 | 1,010,917,776.19 | 50,759,806.16 | 275,010,401.50 | 943,017,166.88 | 2,595,813,498.41 | ||||||
| Add: Change in accounting policy | ||||||||||||
| Correction of previous errors | ||||||||||||
| Other | ||||||||||||
| 2. Balance at the beginning of the current year | 417,627,960.00 | 1,010,917,776.19 | 50,759,806.16 | 275,010,401.50 | 943,017,166.88 | 2,595,813,498.41 | ||||||
| 3. Changes in increase/decrease in the current period ("-" for decrease) | -4,684,973.42 | -3,630,088.51 | -83,489,928.49 | -84,544,813.40 | ||||||||
| (I) Total comprehensive income | 20,667,843.51 | 20,667,843.51 | ||||||||||
| (II) Contribution and withdrawal of capital by owners | -4,684,973.42 | -3,630,088.51 | -1,054,884.91 | |||||||||
| 1. Common stock contributed by owners | 17,007,830.70 | -17,007,830.70 | ||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3. Share-based payment recognized in owners' equity | -4,682,239.01 | -20,637,919.21 | 15,955,680.20 |
| 4. Others | -2,734.41 | -2,734.41 | ||||||||||
| (III) Profit distribution | -104,157,772.00 | -104,157,772.00 | ||||||||||
| 1. Withdrawal of surplus reserve | ||||||||||||
| 2. Distribution to owners (or shareholders) | -104,157,772.00 | -104,157,772.00 | ||||||||||
| 3. Others | ||||||||||||
| (4) Internal carry-forward of owners' equity | ||||||||||||
| 1. Capital reserve transferred to paid-in capital (or share capital) | ||||||||||||
| 2. Surplus reserve transferred to paid-in capital (or share capital) | ||||||||||||
| 3. Surplus reserve offsetting losses | ||||||||||||
| 4. Changes in defined benefit plans carried forward to retained earnings | ||||||||||||
| 5. Other comprehensive income transferred to retained |
| earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserves | ||||||||||||
| 1. Withdrawal in the current period | ||||||||||||
| 2. Utilization in the current period | ||||||||||||
| (VI) Others | ||||||||||||
| 4. Balance at the end of the current period | 417,627,960.00 | 1,006,232,802.77 | 47,129,717.65 | 275,010,401.50 | 859,527,238.39 | 2,511,268,685.01 |
Legal Representative: Zhang Xuhua CFO: Song Yaoming Financial Manager: Tian Hui
3. Company profile
1. Company's registered location, organizational form, and headquarters addressFIYTA Precision Technology Co., Ltd. (hereinafter referred to as the "Company") was restructured andestablished by "Shenzhen FIYTA Timing Industry Company" on December 25, 1992 with the approval of the SFBF[1992] No. 1259 Document of the General Office of the People's Government of Shenzhen Municipality by ShenzhenIndustry and Trade Center of China Aviation Technology Import & Export (later renamed as "China AviationTechnology Shenzhen Co., Ltd.") as the initiator. The company was listed on the Shenzhen Stock Exchange on June 3,1993, and now holds a business license with a unified social credit code of 91440300192189783K.After the distribution of bonus shares, placement of new shares, capital stock conversion and further issue of newshares over the years, as of June 30, 2024, the company has issued a total of 405,864,207 shares in total, with aregistered capital of RMB405,864,207. The registered address is FIYTA Technology Building, Gaoxin South 1st Road,Nanshan District, Shenzhen City, Guangdong Province. The controlling shareholder is AVIC International HoldingsLimited, and the actual controller is Aviation Industry Corporation of China, LTD.
2. Business nature and main operating activities of the company
The business nature and main operating activities of the Company and its subsidiaries include: general businessitems: sales of clocks and watches; Manufacturing of clocks and timekeeping instruments; Sales of clocks, watchesand timekeeping instruments; Jewelry wholesale; Jewelry retail; Manufacturing of wearable smart devices; Sales ofwearable smart devices; leasing of non-residential real estate; professional design services; Sales of householdappliances; Sales of mobile satellite communication terminals. (except for projects subject to approval by laws,business activities independently carried out according to law with business license) Licensed items: propertymanagement; Goods import and export. (Any business which requires to be approved by law can only be carried outafter approval of relevant authorities. Specific business items are subject to the approval documents or licenses issuedby these authorities.)
3. Scope of the consolidated financial statements
There are 12 subsidiaries included in the scope of consolidation in the current period. See Note 10, Equity in otherentities, for details. There is no change in the entities included in the scope of the consolidated financial statements forthe current period compared to the previous period.
4. Approval on the issuance of the financial statements
These financial statements were approved for issuance by the Company's Director on Aug. 19, 2024.
4. Preparation Basis of Financial Statements
1. Basis of preparation
The Company recognized and measured transactions and events that have actually occurred in accordance with theBasic Standard for Enterprise Accounting issued by the Ministry of Finance, specific enterprise accounting standards,application guidelines, interpretations, and other relevant provisions (collectively referred to as 'Enterprise AccountingStandards). On this basis, combined with the provisions of No.15 Rules on Information Disclosure and Compilation ofCompanies Offering Securities to the Public-General Provisions on Financial Reports (revised in 2023) by ChinaSecurities Regulatory Commission, the Company prepared the financial statements.
2. Going concern
The Company evaluated its ability of going concern for 12 months from the end of the reporting period, and found nomatters or circumstances that have serious doubts about the ability of going concern. Therefore, the financialstatements were prepared on the assumption of going concern.
5. Important accounting policies and estimates
Tips on specific accounting policies and accounting estimates:
1. The Company determines specific accounting policies and accounting estimates according to thecharacteristics of production and operation, mainly reflected in the method of expected credit loss of receivables(Notes V.12, Notes V.13, Notes V.15), the valuation method of inventories (Notes V.17), the depreciation of investmentproperties, fixed assets and intangible assets (Notes V.23, Notes V.24, Notes V.29), income (Notes V.37), etc.
2. The Company continuously evaluates the important accounting estimates and key assumptions adopted basedon historical experience and other factors, including reasonable expectations of future events. The following significantaccounting estimates and key assumptions, if subject to substantial changes, may have a significant impact on thecarrying amounts of assets and liabilities in future accounting periods:
(1) Provision for bad debts of accounts receivable and other receivables is made according to the accountingstandards. The provision for impairment of accounts receivable and other receivables should be estimated bydescribing the expected credit losses of accounts receivable and others receivable judged by the management. If anyevents or changes in circumstances indicate that the Company may not be able to recover the relevant balances, it isnecessary to use estimates to accrue provisions for accounts receivable and other receivables. If the expected figureis different from the original estimate, the difference will affect the book value of accounts receivable and otherreceivables, as well as the impairment provision during the change in estimate.
(2) Estimation of inventory impairment. It shall describe that the inventories are measured at the lower of cost andnet realizable value on the balance sheet date, and the calculation of net realizable value requires the use ofassumptions and estimates. If management revises the estimated selling prices and the costs and expenses to be
incurred upon completion, it will affect the estimated net realizable value of inventories. This difference will impact theprovision for inventory write-downs.
(3) Estimation of impairment of long-term assets. It should be described that when the management judgeswhether there is impairment of long-term assets, it mainly evaluates and analyzes from the following aspects: (1)whether the events that affect the impairment of assets have occurred; (2) Whether the present value of the cash flowsexpected to be obtained due to the continuous use or disposal of the assets is lower than the book value of the assets;And (3) whether the important assumptions used in the present value of expected future cash flows are appropriate.If the assumptions used by the company to determine impairment, such as profitability, discount rate, and growthrate assumptions in the present value method of future cash flows, change, this may significantly impact the presentvalue used in impairment testing and result in the impairment of the company's long-term assets.
(4) Depreciation and amortization. The Company's estimates of the estimated useful life and estimated netresidual value of the investment properties, fixed assets and intangible assets are based on the actual useful life andnet residual value of the assets with similar nature and functions in the past. During the use of the assets, theeconomic environment, technological environment and other environments in which the assets are located may have agreater impact on the useful life and estimated net residual value of the assets. If there is any difference between theestimated useful life and net residual value of the assets and the original estimates, the management will makeappropriate adjustments.
(5) Share-based payment. On each balance sheet date within the waiting period, the management makes the bestestimate of the number of equity instruments expected to vest is revised based on subsequent information such aschanges in the number of employees eligible for vesting. If there is any difference between the change in the numberof employees with exercisable rights in the current year and the original estimates, the management will makeappropriate adjustments.
(6) Deferred tax assets Deferred tax assets should be recognized for all unused tax losses to the extent that it isprobable that there will be sufficient taxable profits to offset the losses. This requires the management to use a lot ofjudgment to estimate the time and amount of future taxable profits, combined with tax planning strategies, to determinethe amount of deferred tax assets that should be recognized.
(7) Income tax. It should be described in normal business activities, there are uncertainties in the final taxtreatment of many transactions and matters. Significant judgments need to be made when accruing income tax. Ifthere is a difference between the final recognized outcome for these taxes and the initial received amount, it will havean impact on the above-mentioned taxes in the final recognition period.
1. Statement of Compliance with Accounting Standard for Business Enterprises
The financial statement prepared by the Company meets the requirements of accounting standards forenterprises, and authentically and completely reflects financial status, business performance, cash flow and otherrelative information on the Company during the reporting period.
2. Accounting period
An accounting year is from January 1 to December 31 of the Gregorian calendar.
3. Operating cycle
The operating cycle refers to the period from the acquisition of assets for processing to the realization of cash orcash equivalents. The Company takes 12 months as an operating cycle and takes it as the classification standard forthe liquidity of assets and liabilities.
4. Functional currency
The Company and its domestic subsidiaries use RMB as its functional currency. FIYTA (HONG KONG) LIMITED,an overseas subsidiary of the Company, determines HKD as its functional currency according to the currency in themain economic environment in which it operates. Montres Chouriet SA, a subsidiary of FIYTA (HONG KONG)LIMITED, determines Swiss franc as its functional currency based on the currency in the main economy environmentin which it operates, which is converted into RMB when preparing the financial statements. The currency adopted bythe Company for the preparation of the financial statements is RMB.
5. Determination method and selection basis of materiality criteria
| Item | Materiality criteria |
| Accounts receivable with significant amount reversed from provision for bad debts or recovered in the current period | Single ending balance of more than RMB500,000 |
| Significant other payable with an aging of over one year | Single ending balance of more than RMB1,000,000 |
6. Accounting treatment methods of business merger under the common control and notunder the common control
1. If the terms, conditions and economic impact of each transaction in the process of step-by-stepbusiness combination meet one or more of the following conditions, multiple transactions will be taken as apackage transaction for accounting treatment.
(1) These transactions are concluded at the same time or under the consideration of mutual influence;
(2) These transactions collectively achieve a complete commercial result;
(3) The occurrence of one transaction depends on the occurrence of at least one other transaction;
(4) A transaction is uneconomical on its own, but economical when considered together with other transactions.
2. Business combination under common control
The assets and liabilities acquired by the Company in business combination shall be measured according to thebook value of the assets and liabilities (including the goodwill formed by the acquisition of the merged party by theultimate controller) of the merged party on the combination date in the consolidated financial statements of the ultimatecontroller. For the difference between the book value of the net assets acquired in the merger and the book value ofthe merger consideration paid (or the total par value of the issued shares), the stock premium in the capital reserveshall be adjusted. If the stock premium in the capital reserve is insufficient to cover the difference, the retainedearnings shall be adjusted.
If there is contingent consideration and it is necessary to recognize estimated liabilities or assets, the capitalreserve (capital premium or stock premium) shall be adjusted based on the difference between the amount of theestimated liabilities or assets and the subsequent settlement amount of the contingent consideration. If the capitalreserve is insufficient, the retained earnings shall be adjusted.
For the business combination finally realized through multiple transactions, which belongs to a packagetransaction, the transactions shall be taken as a transaction that obtains control for accounting treatment; If it does notbelong to a package transaction, the capital reserve shall be adjusted based on the difference between the initialinvestment cost of the long-term equity investment and the book value of the long-term equity investment before themerger plus the book value of the newly paid consideration of the shares on the merger date; if the capital reserve isinsufficient to cover the difference, the retained earnings shall be adjusted. For the equity investment held before themerger date, other comprehensive income recognized due to accounting by equity method or accounting by financialinstruments and measurement standards will not subject to accounting treatment temporarily until the investment isdisposed of on the same basis as the related assets or liabilities directly disposed by the investee; Other changes inthe owner's equity in the net assets of the investee, except net profit or loss and other comprehensive income andprofit distribution, which are recognized by the equity method, will not subject to accounting treatment temporarily untilthe investment is transferred to the current profit and loss.
3. Business combination not under common control
Acquisition date refers to the date when the Company actually obtains the control over the acquiree, that is, thedate when the control over the net assets or production and operation decisions of the acquiree is transferred to theCompany. When the following conditions are met at the same time, the Company generally considers that the controlhas been transferred:
①The business combination contract or agreement has been approved by the company's internal authority.
②Where the business combination needs to be examined and approved by the relevant national competentauthorities, the approval has been obtained.
③The necessary formalities for the transfer of property rights have been handled.
④The Company has paid most of the merger price, and has the ability and plan to pay the remaining amount.
⑤The Company has actually controlled the financial and operating policies of the acquiree, and enjoys thecorresponding benefits and bears the corresponding risks.
On the acquisition date, the Company measures the assets paid as the consideration for business combination,and the liabilities incurred or assumed at their fair values. The difference between the fair value and the book value isrecognized in the current profit or loss.
The Company recognizes as goodwill the excess of the merger costs over the fair value of the identifiable netassets acquired in the merger; The excess of the fair value of the identifiable net assets acquired over the cost of theacquisition, after review, should be recognized in the current period's profit or loss.
If the business combination not under common control realized step by step through multiple transactions belongsto a package transaction, the transactions shall be taken as a transaction that obtains control for accounting treatment;If it does not belong to a package transaction, and the equity investments held before the merger date is accounted forby the equity method, the initial investment cost is the sum of the book value of the equity investment in the acquireeheld before the acquisition date and the additional investment cost on the acquisition date; Other comprehensiveincome recognized from equity investments accounted for by the equity method before the acquisition date isaccounted for on the same basis as the direct disposal of related assets or liabilities by the investee. If the equityinvestment held before the merger date is accounted for under the financial instruments recognition and measurementguidelines, the initial investment cost on the merger date is the sum of the fair value of the equity investment on themerger date plus the additional investment cost. The difference between the fair value and the book value of thepreviously held equity, and the cumulative fair value changes previously recognized in other comprehensive income,shall be all transferred to the investment income of the current period on the merger date.
4. Costs of business combination
Intermediary expenses such as audit, legal services, evaluation and consultation and other directly relatedexpenses incurred for business combination are recognized in the current profit and loss upon occurrence.Transaction costs for issuing equity securities due to business combination can be directly deducted from equity.
7. Control criteria and preparation method of consolidated financial statements
1. Control criteria
Control refers to the power the investor has over the investee, enjoying variable returns by participating in relevantactivities of the investee, and having the ability to influence the amount of returns by using its power over the investee.
The Company judges its control over the investee based on a comprehensive consideration of all relevant factsand circumstances. Should changes in relevant facts and circumstances alter the elements involved in the definition ofcontrol, the Company will make re-assessment. Relevant facts and circumstances mainly include:
(1) The establishment purpose of the investee.
(2) The investee's relevant activities and how decisions about those activities are made.
(3) Whether the rights enjoyed by the investor enable it to dominate the related activities of the investee at present.
(4) Whether the investor enjoys variable returns by participating in the related activities of the investee.
(5) Whether the investor has the ability to use the power over the investee to influence its return amount.
(6) The relationship between investors and other parties.
2. Scope of consolidation
The scope of the Company's consolidated financial statements is based on control, and all subsidiaries (includingindividual entities controlled by the Company) are included in the consolidated financial statements.
3. Combination procedures
The Company prepares consolidated financial statements based on the financial statements of itself and itssubsidiaries and other relevant information. In preparing consolidated financial statements, the Company regards thewhole enterprise group as an accounting entity, and reflects the overall financial position, operating results and cashflow of the enterprise group according to the recognition, measurement and presentation requirements of relevantaccounting standards for business enterprises and unified accounting policies.
The accounting policies and accounting periods adopted by all subsidiaries included in the consolidation scope ofconsolidated financial statements are consistent with those of the Company. If the accounting policies and accountingperiods adopted by subsidiaries are inconsistent with those of the Company, necessary adjustments shall be madebased on those of the Company when preparing consolidated financial statements.
When preparing consolidated financial statements, the impact of internal transactions between the Company andits subsidiaries and among the subsidiaries themselves on the consolidated balance sheet, consolidated incomestatement, consolidated statement of cash flows, and consolidated statement of changes in shareholders' equity shallbe offset. If the recognition of the same transaction from the perspective of consolidated financial statements ofenterprise groups is different from that of the Company or its subsidiaries as accounting entities, the transaction shallbe adjusted from the perspective of enterprise groups.
The owner's equity of subsidiaries, the current net profit and loss and the share belonging to minority shareholdersin the current comprehensive income are listed separately under the owner's equity item in the consolidated balancesheet, the net profit item in the consolidated income statement and the total comprehensive income item. If the currentperiod losses shared by the minority shareholders of a subsidiary exceed the portion of owners' equity held by theminority shareholders at the beginning of the period, the excess is offset against the minority shareholders' equity.
For subsidiaries acquired through business combinations under common control, their financial statements shallbe adjusted based on the book value of assets and liabilities (including goodwill formed by the ultimate controller'sacquisition of the subsidiary) as reflected in the financial statements of the ultimate controller.
For subsidiaries acquired through business combinations not under common control, their financial statementsshall be adjusted based on the fair value of identifiable net assets on the acquisition date.
(1) Addition of subsidiaries or businesses
During the reporting period, if subsidiaries or businesses are added due to business combinations under commoncontrol, the opening balances of the consolidated balance sheet shall be adjusted. The incomes, expenses, and profitsfrom the beginning of the period to the end of the reporting period for the subsidiaries or businesses merged shall beincluded in the consolidated income statement. The cash flows of subsidiaries or businesses from the beginning of thecurrent period to the end of the reporting period shall be included into the statement of cash flows, and the relateditems of the comparative statements shall be adjusted as if the reporting entity had existed since the point of control bythe ultimate controller.
If control over an investee under common control is achieved due to additional investments, it is assumed that allparties involved in the consolidation existed in their current state from the time the ultimate controller began to exercisecontrol. The equity investment held before the acquisition of the control right of the merged party, the relevant profitand loss recognized from the date when the original equity is acquired or the merge party and the merged party areunder common control (whichever is later) to the merger date, other comprehensive income and other changes in netassets are used to respectively offset the initial retained income or current profit and loss during the comparativestatement period.
If a subsidiary or business is added through a business combination under different control during the reportingperiod, the opening balances of the consolidated statement of financial position are not adjusted; the incomes,expenses, and profits of the subsidiary or business from the acquisition date to the end of the reporting period shall beincluded in the consolidated income statement; the cash flows of the subsidiary or business from the acquisition dateto the end of the reporting period shall be included in the statement of cash flows.
If the investee not under common control can be controlled due to additional investment, the Company will re-measure the equity of the investee held before the acquisition date according to the fair value of the equity on theacquisition date, and the difference between the fair value and its book value will be included in the current investmentincome. For equity interests in the acquiree held before the acquisition date that involve other comprehensive incomeand changes in other owners' equity under the equity method accounting, excluding net gains or losses, othercomprehensive income, and profit distribution, the related other comprehensive income and changes in other owners'equity are reclassified to investment income of the current period on the acquisition date, except for othercomprehensive income arising from remeasurement of the defined benefit plan net liability or net assets of theinvestee.
(2) Disposal of subsidiaries or businesses
1) General methods
During the reporting period, if the Company disposes of a subsidiary or business, the incomes, expenses, andprofits from the beginning of the period to the date of disposal are included in the consolidated income statement; Thecash flows from the beginning of the period to the date of disposal of the subsidiary or business are included in theconsolidated statement of cash flows.
When losing control over an investee due to the disposal of a partial equity investment or other reasons, theCompany re-measures the remaining equity investment at its fair value on the date of loss of control. The sum of theconsideration obtained from the disposal of the shares and the fair value of the remaining shares, minus the differencebetween the share of the original subsidiary's net assets that shall be continuously calculated from the acquisition dateor the merger date and the sum of goodwill, is included in the investment income in the current period when the controlright is lost. Other comprehensive income related to the equity investment in the original subsidiary, or changes inother owners' equity excluding net loss, other comprehensive income, and profit distribution, are reclassified as current
period investment income upon loss of control, except for other comprehensive income arising from theremeasurement of the net liability or net assets of the defined benefit plan of the investee.
2) Step-by-step disposal of a subsidiary
When disposing of equity investments in a subsidiary in multiple transactions until control is lost, the terms,conditions, and economic effects of each transaction in disposing of the equity investments in the subsidiary typicallyindicate that the multiple transactions shall be accounted for as a package transaction if they meet one or more of thefollowing situations:
A. These transactions are concluded at the same time or under the consideration of mutual influence;
B. These transactions collectively achieve a complete commercial result;
C. The occurrence of one transaction depends on the occurrence of at least one other transaction;
D. A transaction is uneconomical on its own, but economical when considered together with other transactions.
When transaction related to the disposal of equity investments in subsidiaries until control is lost belongs to apackage transaction, the Company accounts for the transactions as a disposal of a subsidiary and loss of control;However, before the loss of control, the difference between each disposal consideration and the corresponding shareof the subsidiary's net assets is recognized as other comprehensive income in the consolidated financial statements,and is reclassified to profit or loss of the period when the control is lost.
If the transaction related to the disposal of equity investments in subsidiaries until control is lost does not belong toa package transaction, they are accounted for according to the policy for partial disposals of equity investments insubsidiaries without losing control; At the time of loss of control, the accounting treatment is performed in the sameway as a general disposal of a subsidiary.
(3) Acquisition of minority interests in subsidiaries
The Company shall adjust the stock premium in the capital reserve in the consolidated balance sheet for thedifference between the newly acquired long-term equity investment due to the acquisition of minority shares and theshare of net assets that shall be continuously calculated by the subsidiaries from the acquisition date (or merger date)according to the new shareholding ratio. If the stock premium in the capital reserve is insufficient, the retained earningsshall be adjusted.
(4) Partial disposal of equity investments in subsidiaries without losing control
In cases of partial disposal of long-term equity investments in subsidiaries without losing control, the differencebetween the disposal consideration and the corresponding share of the subsidiary's net assets continuously calculatedfrom the acquisition date or the merger date is adjusted in the stock premium within the capital reserve in theconsolidated balance sheet. If the share premium in the capital reserve is insufficient, retained earnings shall beadjusted.
8. Classification of joint venture arrangements and accounting treatment of joint operations
1. Classification of joint venture arrangements
According to the structure, legal form, terms agreed in the joint venture arrangement and other relevant facts andcircumstances, the Company divides the joint venture arrangement into joint operation and joint venture.
Joint venture arrangements not reached through a separate entity shall be classified as joint operation; Jointventure arrangements reached through a separate entity are usually divided into joint ventures; However, if there isstrong evidence that any of the following conditions is met and the joint venture arrangement complies with therelevant laws and regulations, it shall be classified as a joint operation:
The legal form of the joint venture arrangement indicates that the joint venture shall respectively enjoy the rightsand assume the obligations for the relevant assets and liabilities in the arrangement.
The contractual terms of the joint venture arrangement stipulate that the joint venture shall respectively enjoy therights and assume the obligations for the relevant assets and liabilities in the arrangement.Other relevant facts and circumstances indicate that the joint venture has rights to the assets and obligations forthe liabilities related to the arrangement, such as when the joint venture enjoys almost all of the output related to thejoint arrangement and the settlement of liabilities depends continuously on the support of the joint venture.
2. Accounting treatment for joint operation
The Company recognizes the following items related to the Company in the share of interests in joint operation,and carries out accounting treatment in accordance with the relevant accounting standards for business enterprises:
Recognize the assets held individually, and the assets held jointly based on their shares;
Recognize the liabilities assumed individually, and the liabilities undertaken jointly based on their shares;
Recognize the income generated from the sale of its share of joint operation output;
Recognize the income generated from the sale of output in the joint operation based on their shares;
Recognize the expenses incurred individually and the expenses incurred in joint operation based on their shares.
The Company recognizes only the portion of gains and losses attributable to other participants in the jointoperation when contributing or selling assets (except for those constituting a business) to the joint operation, until suchassets are sold to a third party. If an impairment loss occurs on assets invested or sold that meets the provisions of"Accounting Standard for Business Enterprises No. 8 – Asset Impairment," the company will fully recognize the loss.
The Company recognizes only the portion of gains and losses attributable to other participants in the jointoperation when acquiring assets (except for those constituting a business) from the joint operation, until such assetsare sold to a third party. If an impairment loss occurs on assets purchased that meets the provisions of "AccountingStandard for Business Enterprises No. 8 – Asset Impairment," the company will fully recognize the loss.
If the Company does not have joint control over the joint operation but enjoys the relevant assets and bears therelevant liabilities of the joint operation, accounting should still be conducted according to the above principles.Otherwise, accounting should be conducted in accordance with the relevant enterprise accounting standards.
9. Recognition criteria for cash and cash equivalents
In preparing the cash flow statement, the Company recognizes its cash on hand and the deposits that can be used forpayment at any time. Investments that meet the four conditions of short-term maturity (generally within three monthsfrom the acquisition date), high liquidity, easy conversion into a known amount of cash, and minimal risk of change invalue, as cash equivalents.
10. Foreign currency transactions and conversion of foreign currency financial statements
1. Foreign currency transactions
Foreign currency transactions are initially recorded at the spot exchange rate of the transaction date when initiallyrecognized.
On the balance sheet date, foreign currency monetary items are converted at the spot exchange rate of thebalance sheet date. The resulting exchange differences, except for those arising from foreign currency borrowingsrelated to the acquisition or construction of assets meeting the capitalization criteria, which are treated in accordancewith the principle of borrowing cost capitalization, are all recognized in the current profit or loss. Foreign currency non-monetary items measured at historical cost are still converted at the spot exchange rate of the transaction date,without changing their recorded amount in the functional currency.
Foreign currency non-monetary items measured at fair value are converted at the spot exchange rate of the fairvalue determination date. The difference between the converted amount in the functional currency and the original
recorded amount in the functional currency is treated as a fair value change (including changes of exchange rate), andis recognized in the current profit or loss or as other comprehensive income.
2. Foreign currency financial statements
Assets and liabilities in the balance sheet are converted at the spot exchange rate of the balance sheet date;Equity items, except for the "undistributed profits" item, are converted at the spot exchange rate at the time ofoccurrence. The income and expense items in the income statement are converted at the current average exchangerate of the transaction date. The exchange differences arising from the conversion of foreign currency financialstatements as described above are recognized in other comprehensive income.
When disposing of a foreign operation, the exchange differences related to that foreign operation and presented inother comprehensive income items in the balance sheet are transferred from other comprehensive income items to thecurrent profit or loss; In the case of disposing of a part of an equity investment or for other reasons that lead to areduction in the ownership interest in a foreign operation without losing control over it, the exchange differencesrelated to the partial disposal of the foreign operation are attributed to minority interests and are not transferred to thecurrent profit or loss. When disposing of a portion of equity in overseas operations that are joint ventures or associates,the foreign currency translation differences related to the overseas operations are transferred to the disposal period'sprofit or loss in proportion to the disposal scale.
11. Financial instruments
The Company recognizes financial assets or financial liabilities when it becomes a party to the financial instrumentcontract.
The effective interest method is the calculation of the amortized cost of financial assets or financial liabilities andthe allocation of interest income or interest expense over the accounting periods.
The effective interest rate is the rate used to discount the estimated future cash flows of financial assets orfinancial liabilities over the expected life to the book value of the financial asset or the amortized cost of the financialliability. In determining the effective interest rate, the expected cash flows are estimated based on all contractual termsof the financial asset or financial liability (such as prepayment, extension, call options, or other similar options), withoutconsidering expected credit losses.
The amortized cost of financial assets or financial liabilities is the initial recognition amount minus principalrepayments, plus or minus the cumulative amortization of the difference between the initial recognition amount and thematurity amount using the effective interest method, less any cumulative impairment loss provision (applicable only tofinancial assets).
1. Classification, recognition, and measurement of financial assets
The Company classifies financial assets into the following three categories based on the business model formanaging the financial assets and the contractual cash flow characteristics of the financial assets:
A. Financial assets measured at amortized cost.
B. Financial assets measured at fair value with changes recognized in other comprehensive income.
C. Financial assets measured at fair value with changes recognized in profit or loss.
Financial assets are initially measured at fair value. However, receivables from the sale of goods or provision ofservices that do not include a significant financing component or consider financing components of not more than oneyear are initially measured at the transaction price.
For financial assets measured at fair value with changes recognized in profit or loss, related transaction costs aredirectly recognized in profit or loss. For other categories of financial assets, related transaction costs are included intheir initial recognition amount.
Subsequent measurement of financial assets depends on their classification. Reclassification of all affectedfinancial assets occurs only when the Company changes its business model for managing financial assets.
1) Financial assets measured at amortized cost
Financial assets whose contractual terms generate cash flows on specified dates that are solely payments ofprincipal and interest on the outstanding principal amount, and are managed with the objective of collecting contractualcash flows, are classified by the Company as financial assets measured at amortized cost. The Company's financialassets classified at amortized cost include cash, notes receivable, accounts receivable, and other receivables.
The Company recognizes interest income on such financial assets using the effective interest method, measuresthem subsequently at amortized cost, and includes any impairment losses or gains or losses on de-recognition ormodification in profit or loss. Except in the following situations, the Company calculates interest income based on theactual interest rate multiplied by the financial asset's book value:
A. For financial assets that have incurred credit impairment upon acquisition or origination, the Companycalculates interest income from the initial recognition based on the amortized cost of the financial asset and theeffective interest rate adjusted for credit.
B. For financial assets that have not incurred credit impairment upon acquisition or origination but subsequentlybecome credit-impaired, the Company calculates interest income in subsequent periods based on the amortized costand the effective interest rate of the financial asset. If the financial instrument is no longer credit-impaired insubsequent periods due to an improvement in credit risk, the Company calculates interest income by multiplying theeffective interest rate by the book value of the financial asset.
2) Financial assets measured at fair value with changes recognized in other comprehensive income
If the contractual terms of financial assets require cash flows on a specified date that are solely payments ofprincipal and interest on the principal amount outstanding, and the business model for managing the financial asset isboth to collect contractual cash flows and to sell the financial asset, then the Company classifies the financial asset asmeasured at fair value with changes recognized in other comprehensive income.
The Company recognizes interest income on such financial assets using the effective interest method. Apart frominterest income, impairment losses, and foreign exchange gains or losses recognized in profit or loss, other fair valuechanges are recognized in other comprehensive income. When the financial asset is de-recognized, the cumulativegains or losses previously recognized in other comprehensive income are reclassified from other comprehensiveincome to profit or loss.
Financial assets measured at fair value with changes recognized in other comprehensive income, such as tradereceivables and accounts receivable, are reported as receivables financing, and other such financial assets arereported as other debt investments. Among them, other debt investments maturing within one year from the balancesheet date are reported as non-current assets due within one year, and other debt investments with original maturitieswithin one year are reported as other current assets.
3) Financial assets designated at fair value with changes recognized in other comprehensive income
At initial recognition, the Company may irrevocably designate non-trading equity instrument investments based ona single financial asset as measured at fair value through other comprehensive income.
The fair value changes of such financial assets are recognized in other comprehensive income, without the needfor impairment provisions. When the financial asset is de-recognized, the accumulated gains or losses previouslyrecognized in other comprehensive income are reclassified to retained earnings. During the period the Company holdsthe equity instrument investment, dividend income is recognized and included in the current profit or loss when theCompany's right to receive dividends is established, the economic benefits related to the dividends are likely to flowinto the Company, and the amount of dividends can be reliably measured. The Company reports such financial assetsunder other equity instrument investments.
An equity instrument investment that meets one of the following conditions is classified as financial assetsmeasured at fair value through profit or loss: The primary purpose of acquiring the financial asset is for sale in the nearterm; At initial recognition, it is part of an identifiable financial asset group under centralized management, and there isobjective evidence indicating the existence of a short-term profit pattern recently; It is a derivative instrument(excluding those meeting the definition of a financial guarantee contract and those designated as effective hedginginstruments).
4) Classified as financial assets measured at fair value through profit or loss
Financial assets that do not meet the conditions for measurement at amortized cost or at fair value through othercomprehensive income, and are not designated as measured at fair value through other comprehensive income, areclassified as measured at fair value through profit or loss.
Such financial assets are subsequently measured at fair value. Gains or losses from changes in fair value as wellas dividends and interest income related to such financial assets are included in the current profit and loss.
The Company shall present such financial assets in the items of transactional financial assets and other non-current financial assets according to their liquidity.
5) Financial assets designated to be measured by fair value through current profit and loss
At initial recognition, in order to eliminate or significantly reduce accounting mismatches, the Company mayirrevocably designate financial assets as financial assets measured at fair value through current profit or loss on thebasis of individual financial asset.
If a hybrid contract contains one or more embedded derivative instruments, and its master contract does notbelong to the above financial assets, the Company can designate it as a whole as a financial instrument measured atfair value through current profit and loss. Except for the following circumstances:
A. The embedded derivative instruments will not have a significant change in the cash flows of the hybrid contract.
B. When determining whether a similar hybrid contract needs to be split for the first time, it can be made clear thatthe embedded derivatives contained therein should not be split with little analysis. For example, the prepayment rightembedded in the loan allows the holder to prepay the loan at an amount close to the amortized cost, and theprepayment right does not need to be split.
Such financial assets are subsequently measured at fair value. Gains or losses from changes in fair value as wellas dividends and interest income related to such financial assets are included in the current profit and loss.
The Company shall present such financial assets in the items of transactional financial assets and other non-current financial assets according to their liquidity.
2. Classification, recognition and measurement of financial liabilities
The Company classifies the financial instrument or its components as financial liabilities or equity instruments atinitial recognition based on the contractual terms of the issued financial instruments and their economic substancerather than merely legal form, in conjunction with the definitions of financial liabilities and equity instruments. Financialliabilities are classified at initial recognition as: financial liabilities measured at fair value through profit or loss, otherfinancial liabilities, and derivatives designated as effective hedging instruments.
Financial liabilities are measured at fair value at initial recognition. For financial liabilities measured at fair valuethrough profit or loss, the relevant transaction costs are directly included in the current profit or loss; For othercategories of financial liabilities, related transaction costs are included in the initially recognized amount.
Subsequent measurement of financial liabilities depends on their classification:
1) Financial liabilities measured at fair value through profit or loss.
This category includes trading financial liabilities (including derivatives that are financial liabilities) and thosedesignated at initial recognition as measured at fair value through profit or loss.
Financial liabilities is considered trading if it is incurred primarily for the purpose of selling or re-acquiring in thenear term; Or if it is part of an identifiable portfolio of financial instruments that the enterprise manages together andthere is evidence of a recent actual pattern of short-term profit-taking. Belongs to derivative instruments, except forthose designated and effective as hedging instruments and derivatives that meet the criteria of financial guaranteecontracts. Trading financial liabilities (including derivatives that are financial liabilities) are measured at fair valuesubsequently, with all fair value changes recognized in the current profit or loss, except for those related to hedgeaccounting.At initial recognition, to provide more relevant accounting information, the Company designates financial liabilitiesthat meet one of the following conditions as financial liabilities measured at fair value through profit or loss, whichcannot be revoked:
A. Capable of eliminating or significantly reducing accounting mismatches.
B. Managed and performance evaluated on a fair value basis for a portfolio of financial liabilities or a combinationof financial assets and financial liabilities, as documented in formal written documents reflecting the Company's riskmanagement or investment strategy, and reported internally to key management personnel on this basis.
The Company subsequently measures such financial liabilities at fair value, with changes in fair value due to theCompany's own credit risk recognized in other comprehensive income, and all other fair value changes recognized inthe current profit or loss. Unless recognizing changes in fair value due to the Company's own credit risk in othercomprehensive income would create or enlarge an accounting mismatch in profit or loss, the Company recognizes allfair value changes (including the effect of changes in its own credit risk) in the current profit or loss.
2) Other financial liabilities
Except for the following items, the Company classifies financial liabilities as those measured at amortized cost,using the effective interest method for subsequent measurement at amortized cost, with gains or losses arising fromde-recognition or amortization recognized in the current profit or loss:
A. Financial liabilities measured at fair value through profit or loss.
B. Financial liabilities caused by the transfer of financial assets that do not meet the conditions for de-recognitionor continue to be involved in the transferred financial assets.
C. Financial guarantee contracts that do not fall under the first two categories mentioned above, and loancommitments that are not under the Category 1) and are provided at an interest rate lower than the market rate.
A financial guarantee contract refers to an agreement that requires the issuer to compensate the contract holderfor a specific amount if a particular debtor fails to repay the debt on the due date according to the original or modifiedterms of the debt instrument. Financial guarantee contracts that are not designated as financial liabilities measured atfair value with changes recognized in profit or loss are measured after initial recognition at the higher of the amount ofthe loss allowance and the balance of the initial recognition amount less the cumulative amortization during theguarantee period.
3. De-recognition of financial assets and financial liabilities
1) Financial assets are de-recognized when it meets one of the following conditions, i.e., it is removed from theaccounts and the balance sheet:
A. The contractual right to receive cash flows from the financial asset has expired.
B. The financial asset has been transferred, and the transfer complies with the provisions for the de-recognition offinancial assets.
2) Conditions for derecognition of financial liabilities
Financial liabilities (or part of it) is de-recognized when the present obligation is terminated.
An agreement is signed between the Company and the lender to replace the original financial liability with a newfinancial liability, and if the terms of the new financial liability are substantially different from the original financial
liability, or if there are substantial modifications to the terms of the original financial liability (or a part of it), then theoriginal financial liability is de-recognized and a new financial liability is recognized. The difference between the bookvalue and the consideration paid (including non-cash assets transferred or liabilities assumed) is recognized in thecurrent profit or loss.When the Company re-acquires part of financial liabilities, the book value of the entire financial liabilities isallocated based on the proportion of the fair value of the part that continues to be recognized and the part that is de-recognized on the re-acquisition date. The difference between the book value allocated to the de-recognized part andthe consideration paid (including non-cash assets transferred or liabilities assumed) should be recognized in thecurrent profit or loss.
4. Recognition basis and measurement method for the transfer of financial assetsWhen transferring financial assets, the Company assesses the extent to which it retains the risks and rewards ofownership of the financial assets and deals with the following situations accordingly:
(1) If almost all the risks and rewards of ownership of the financial asset are transferred, then the financial asset isde-recognized, and the rights and obligations arising from the transfer or retained are separately recognized as assetsor liabilities.
(2) If substantially all the risks and rewards associated with the ownership of financial assets are retained, thefinancial asset continues to be recognized.
(3) If almost all risks and rewards in the ownership of financial assets are neither transferred nor retained (that is,other circumstances except (1) and (2) of this Article), the following circumstances shall be handled according towhether the control over the financial assets is retained:
A. If no control over the financial assets is retained, the financial assets shall be de-recognized, and the rights andobligations arising from or retained in the transfer shall be separately recognized as assets or liabilities.
B. If the control over the financial assets is retained, the relevant financial assets shall continue to be recognizedaccording to the degree of its continuous involvement in the transferred financial assets, and the relevant liabilitiesshall be recognized accordingly. The term "continuous involvement in the transferred financial asset" refers to theextent to which the Company bears the risks or rewards of changes in the value of the transferred financial asset.The principle of substance over form is adopted to determine whether the transfer of financial assets meets the abovede-recognition conditions for financial assets. The Company divides the transfer of financial assets into overall transferand partial transfer of financial assets.
If the entire transfer of financial assets meets the de-recognition conditions, the difference between the amountsof the following two items shall be included in the current profit and loss:
A. The book value of the transferred financial asset on the de-recognition date.
B. The consideration received for transferring financial assets, which is the sum of the amount corresponding tothe part of the cumulative fair value changes originally recognized in other comprehensive income that is de-recognized (involving transferred financial assets measured at fair value with changes recognized in othercomprehensive income).
If financial assets are partially transferred and the transferred part fully meets the de-recognition condition, thebook value of the entire financial asset before the transfer is allocated between the de-recognized part and thecontinuing recognized part (in this case, the retained servicing asset is considered part of the continuing recognizedfinancial asset) based on their relative fair values on the transfer date. The difference between the following twoamounts is recognized in the current profit or loss:
A. The book value of the de-recognized part on the de-recognition date.
B. The sum of the consideration received for the de-recognized part and the amount corresponding to the part ofthe cumulative fair value changes originally recognized in other comprehensive income (involving transferred financialassets measured at fair value with changes recognized in other comprehensive income).
If the transfer of financial assets does not meet the de-recognition condition, the financial asset continues to berecognized, and the consideration received is recognized as financial liabilities.
5. Determination method for the fair value of financial assets and financial liabilities
For financial assets or liabilities with an active market, its fair value is determined by the quoted price in the activemarket, unless there is a restriction on the sale of the financial assets itself. For financial assets with restrictions on thesale of the assets itself, its fair value is determined by deducting the compensation amount required by marketparticipants for bearing the risk of not being able to sell the financial asset in the open market during the specifiedperiod from the quoted price in the active market. Quoted prices in an active market include those that are readily andregularly obtainable from exchanges, dealers, brokers, industry groups, pricing services, or regulatory authorities, andcan represent the actual and frequent market transactions on the basis of fair trade.
The fair value of initially acquired or derived financial assets or incurred financial liabilities is based on thetransaction price in the market.
Financial assets or liabilities without an active market are valued using valuation techniques to determine their fairvalue. In valuation, the Company uses valuation techniques that are applicable under current circumstances andsupported by sufficient available data and other information, selecting input values consistent with the characteristicsof the assets or liabilities considered by market participants in transactions, and prioritizes the use of relevantobservable input values wherever possible. In cases where relevant observable input values are not available or notfeasible to obtain, unobservable input values are used.
6. Impairment of financial instruments
The Company measures impairment and recognizes loss allowances for financial assets measured at amortizedcost, financial assets classified as measured at fair value through other comprehensive income, lease receivables,contract assets, loan commitments that are not measured at fair value through profit or loss, financial liabilities that arenot measured at fair value through profit or loss, and financial guarantee contracts formed by the transfer of financialassets that do not meet the derecognition criteria or continue to be involved in the transferred financial assets, basedon expected credit losses.
Expected credit losses refer to the weighted average value of credit losses of financial instruments weighted bythe risk of default. Credit loss refers to the difference between all contractual cash flows receivable from the contractand all cash flows expected to be received by the Company at the original effective interest rate, that is, the presentvalue of all cash shortages. For financial assets acquired or originated that have experienced credit impairment, theyshall be discounted using the effective interest rate adjusted for credit.
For receivables, contract assets, and lease receivables arising from transactions regulated by the revenuestandards, the company applies a simplified measurement approach, measuring loss allowances at an amount equalto the expected credit losses over the entire lifetime of the assets.
For acquired or originated financial assets that have experienced credit impairment, only the cumulative change inexpected credit losses over the entire life from initial recognition is recognized as a provision for losses at eachbalance sheet date. At each balance sheet date, the change in expected credit losses over the entire life is recognizedas an impairment loss or gain in the current profit or loss. Even if the expected credit losses determined at the balancesheet date for the entire life are less than the amount of expected credit losses reflected by the estimated cash flows atinitial recognition, the favorable change in expected credit losses is recognized as an impairment gain.
Apart from the aforementioned simplified measurement method and acquired or originated financial assets thathave experienced credit impairment, the Company assesses whether the credit risk of the relevant financial
instruments has significantly increased since initial recognition at each balance sheet date, measures its loss provision,and recognizes expected credit losses and their changes according to the following situations:
A. If the credit risk of the financial instrument has not increased significantly since initial recognition and is inphase I, loss allowance is measured in the amount equal to the expected credit losses over the next 12 months, andinterest income is calculated based on the book value and the effective interest rate.
B. If the credit risk of the financial instrument has increased significantly since initial recognition but no creditimpairment has occurred, and is in phase II, loss allowance is measured in the amount equal to the expected creditlosses over the entire lifetime of the financial instrument, and interest income is calculated based on the book valueand the effective interest rate.
C. If the financial instrument has experienced credit impairment since initial recognition and is in phase III, theCompany measures loss allowance in the amount equal to the expected credit losses over the entire lifetime of thefinancial instrument, and interest income is calculated based on the amortized cost and the effective interest rate.
Increases or reversals of credit loss allowance for financial instruments are recognized as impairment losses orgains in the current profit or loss. Except for financial assets classified at fair value through other comprehensiveincome, credit loss allowance reduces the book value of financial assets. For financial assets classified at fair valuethrough other comprehensive income, the Company recognizes credit loss allowance in other comprehensive income,without reducing the book value of the financial asset presented in the balance sheet.
If the Company had previously measured loss allowance for a financial instrument in the amount equal to theexpected credit losses over the entire lifetime of the financial instrument, but as of the current balance sheet date, thefinancial instrument no longer exhibits a significant increase in credit risk since initial recognition, the Companymeasures loss allowance at the current balance sheet date in the amount equal to the expected credit losses over thenext 12 months. The resulting reversal of loss allowance is recognized as an impairment gain in the current profit orloss.
1) Significant increase in credit risk
The Company uses reasonable and supportable forward-looking information available to determine whether thecredit risk of a financial instrument has increased significantly since initial recognition by comparing the risk of defaultat the balance sheet date with the risk of default at the initial recognition date. For financial guarantee contracts, whenapplying the impairment requirements for financial instruments, the Company considers the date on which theCompany becomes the party to the irrevocable commitment as the initial recognition date.
The Company considers the following factors when assessing whether there has been a significant increase incredit risk:
A. Whether there has been a significant change in the debtor's operational results, actual or expected;
B. Whether there has been a significant adverse change in the regulatory, economic, or technologicalenvironment in which the debtor operates;
C. Whether there has been a significant change in the value of collateral securing the debt or in the quality ofguarantees or credit enhancements provided by third parties, which are expected to reduce the debtor's economicincentive to repay on time as per the contract, or affect the probability of default;
D. Whether there has been a significant change in the debtor's expected performance and repayment behavior;
E. Whether there has been a change in the Company's credit management methods for financial instruments, etc.
As of the balance sheet date, if the Company determines that a financial instrument has low credit risk, it isassumed that the credit risk of the financial instrument has not increased significantly since initial recognition. If afinancial instrument has low default risk, the borrower has a strong ability to fulfill its contractual cash flow obligationsin the short term, and even if there are adverse changes in the economic situation and operating environment over a
longer period, it does not necessarily reduce the borrower's ability to fulfill its contractual cash flow obligations, thenthe financial instrument is considered to have low credit risk.
2) Financial assets with credit impairment
When one or more events occur that are expected to have an adverse effect on the future cash flows of financialassets, the financial asset becomes one that has experienced credit impairment. Evidence of credit impairment forfinancial assets includes the following observable information:
A. The issuer or the debtor is experiencing significant financial difficulties;
B. The debtor has breached the contract, such as defaulting on interest or principal payments or being overdue;
C. The creditor, for economic or contractual considerations related to the debtor's financial difficulties, grants
concessions to the debtor that would not be made under any other circumstances;
D. It is likely that the debtor will go bankrupt or undergo other financial restructuring;
E. The disappearance of an active market for the financial assets due to the issuer's or the debtor's financial
difficulties;
F. Acquiring or originating financial assets at a significant discount, which reflects the occurrence of credit losses.
Credit impairment of financial assets may result from the combined effect of multiple events and may notnecessarily be caused by individually identifiable events.
3) Determination of expected credit losses
The Company assesses the expected credit losses of financial instruments based on individual and Combinationevaluations, taking into account reasonable and substantiated information regarding past events, current conditions,and forecasts of future economic conditions.
The Company classifies financial instruments into different combinations based on common credit riskcharacteristics. The common credit risk characteristics adopted by the Company include: type of financial instruments,aging combination, contract settlement cycle, industry of debtors, etc. For details on the individual assessment criteriaand combination credit risk characteristics of the relevant financial instruments, refer to the accounting policies of thefinancial instruments.
The Company determines the expected credit losses of the relevant financial instruments using the followingmethods:
A. For financial assets, the credit loss is the present value of the difference between the contractual cash flowsdue to the Company and the expected cash flows to be collected.
B. For lease receivables, the credit loss is the present value of the difference between the contractual cash flowsdue to the Company and the expected cash flows to be collected.
C. For financial guarantee contracts, the credit loss is the expected payment to be made by the Company tocompensate for the credit loss incurred by the holder of the contract, minus the present value of the differencebetween the amount the Company expects to collect from the holder of the contract, the debtor, or any other party.
D. For financial assets that have incurred credit impairment as of the balance sheet date but are not acquired ororiginated credit-impaired, the credit loss is the difference between the book value of the financial asset and thepresent value of the estimated future cash flows discounted at the original effective interest rate.
The methods used by the Company to measure the expected credit losses of financial instruments reflect factorsincluding: the unbiased probability-weighted average amount determined by evaluating a range of possible outcomes;The time value of money. Information that can be obtained on the balance sheet date without the need forunnecessary additional costs or efforts, which is reasonable and substantiated, relating to past events, currentconditions, and forecasts of future economic circumstances.
4) Write-down of financial assets
When the Company no longer has reasonable expectation that the cash flows from the financial asset contractcan be fully or partially recovered, the book value of the financial asset is directly written down. This write-downconstitutes the de-recognition of the related financial assets.
7. Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are presented separately in the balance sheet without offsetting each other.However, if the following conditions are met, they are presented in the Balance Sheet as a net amount after offsetting:
A. The Company has a legally enforceable right to offset the recognized amounts, and this right is currentlyenforceable;
B. The Company intends to settle on a net basis, or to realize the financial asset and settle the financial liabilitysimultaneously.
12. Notes receivable
The Company's determination method and accounting treatment method of expected credit loss of notesreceivable are detailed in the Notes V.11.
The Company separately determines the credit loss of receivables with sufficient evidence that can assess theexpected credit loss at a reasonable cost at the level of individual instrument.
When there is no sufficient evidence to evaluate the expected credit loss at a reasonable cost at the level ofindividual tools, the Company refers to the historical credit loss experience, combines the current situation and thejudgment of future economic conditions, and divides the notes receivable into several combinations according to thecredit risk characteristics, and calculates the expected credit loss on the basis of the combination. The basis fordetermining the combination is as follows:
| Combination name | Basis for determining the combination | Provision method |
| Risk-free bank acceptance draft combination | The drawer has a high credit rating, and has no bill default in history, so the risk of credit loss is extremely low, and also has a strong ability to fulfill the obligation to pay the cash flow of the contract in a short period of time. | The provision for bad debts is measured with reference to the historical credit loss experience and in combination with the current situation and the expectation of future economic conditions. |
| Commercial acceptance draft combination | Accounts receivable with the same aging have similar credit risk characteristics | Provision is made based on the comparison table of aging and expected credit loss rate over the entire duration |
13. Accounts receivable
The Company's determination method and accounting treatment method of expected credit loss of accountsreceivable are detailed in the Notes V.11.
The Company separately determines the credit loss of accounts receivable with sufficient evidence that theexpected credit loss can be assessed at a reasonable cost at the level of a single instrument.
When there is no sufficient evidence to evaluate the expected credit loss at a reasonable cost at the level ofindividual tools, the Company refers to the historical credit loss experience, combines the current situation and thejudgment of future economic conditions, and divides the accounts receivable into several combinations according tothe credit risk characteristics, and calculates the expected credit loss on the basis of the combination. The basis fordetermining the combination is as follows:
| Combination name | Basis for determining the combination | Provision method |
| Combination of receivables of | Accounts receivable of related parties within the scope of consolidation have similar credit risk characteristics | The provision for bad debts is measured with reference to the |
| related parties within the scope of consolidation | historical credit loss experience and in combination with the current situation and the expectation of future economic conditions. | |
| Combination of other customers' receivables | Accounts receivable with the same aging have similar credit risk characteristics | Provision is made based on the comparison table of aging and expected credit loss rate over the entire duration |
14. Receivables financing
Not applicable
15. Other receivables
Determination method and accounting treatment method of expected credit loss of other receivablesThe Company's determination method and accounting treatment method of expected credit loss of other accountsreceivable are detailed in the Notes V.11.The Company individually determines the credit losses for other receivables that have sufficient evidence toassess expected credit losses at a reasonable cost on an individual instrument level.When sufficient evidence to assess expected credit losses at a reasonable cost is not available on an individualinstrument level, the Company refers to historical credit loss experience, combined with current conditions andjudgments about future economic conditions, and classifies other receivables into several combinations to calculateexpected credit losses on a combination basis. The basis for determining the combination is as follows:
| Combination name | Basis for determining the combination | Provision method |
| Combination of margin and deposit receivables | According to the nature of business, margin and deposits have similar credit risk characteristics | Provision is made based on the comparison table of aging and expected credit loss rate over the entire duration |
| Combination of employee reserve receivable | According to the nature of business, employees' reserve receivables have similar credit risk characteristics | The provision for bad debts is measured with reference to the historical credit loss experience and in combination with the current situation and the expectation of future economic conditions. |
| Combination of social security advances receivable | According to the nature of business, social security advances have similar credit risk characteristics | The provision for bad debts is measured with reference to the historical credit loss experience and in combination with the current situation and the expectation of future economic conditions. |
| Combination of receivables of related parties within the scope of consolidation | Accounts receivable of related parties within the scope of consolidation have similar credit risk characteristics | The provision for bad debts is measured with reference to the historical credit loss experience and in combination with the current situation and the expectation of future economic conditions. |
| Combination of other financings | Accounts receivable with the same aging have similar credit risk characteristics | Provision is made based on the comparison table of aging and expected credit loss rate over the entire duration |
16. Contract assets
The Company recognizes a right to consideration from the transfer of goods to customers as a contract assetwhen that right is conditional on factors other than the passage of time. The Company's unconditional rights toconsideration from customers (i.e., solely time-based) are presented separately as receivables.
The Company's determination method and accounting treatment method of expected credit loss of contractualassets are detailed in the Notes V.11.
17. Inventories
1. Inventory categories, cost valuation methods for outgoing inventory, inventory system, and
amortization methods for low-value consumables and packaging materials
(1) Classification of inventory
Inventory refers to the finished products or goods held for sale, products in production, and materials andmaterials consumed during the production process or service provision that the Company holds in its daily activities. Itmainly includes raw materials, products in process, finished products (stock commodities), etc.
(2) Cost valuation methods for inventory
At acquisition, inventory is initially measured at cost, including purchasing cost, processing cost, and other costs.Raw materials and inventory items are issued using the weighted average method for valuation, except for brandedwatch inventory items, which are valued using the specific identification method.
(3) Inventory system
The inventory system is a perpetual inventory system.
(4) Amortization methods for low-value consumables and packaging materials
Low-value consumables are amortized using the one-time charge-off method;
Packaging materials are amortized using the one-time charge-off method;
2. Criteria and methods for recognizing and provisioning for inventory impairment
At the end of the period, after a comprehensive inventory check, inventory impairment provisions are made oradjusted based on the lower of cost or net realizable value. For finished goods, merchandise inventory, and materialsfor sale that are directly intended for sale in the normal course of business, their net realizable value is determined bythe estimated selling price minus the estimated selling expenses and related taxes. For material inventory that requiresprocessing, in the normal course of business, its net realizable value is determined by the estimated selling price of theproduced finished goods minus the estimated costs to completion, estimated selling expenses, and related taxes. Forinventory held to fulfill sales or service contracts, the net realizable value is calculated based on the contract price. Ifthe quantity of inventory held exceeds the quantity ordered in the sales contract, the net realizable value of the excessinventory is calculated based on the general selling price.
At the end of the period, inventory impairment provisions are made for individual inventory items; However, forinventories that are numerous and have low unit prices, provisions for inventory impairment are made based oninventory categories. Inventory that is related to the product series produced and sold in the same region, with thesame or similar final uses or purposes, and that is difficult to measure separately, shall be combined for the provisionof inventory impairment.
If the factors that led to the inventory write-down have disappeared, the amount of the write-down is reversed andincluded in the current profit and loss within the amount of inventory impairment provision originally recognized.
The provision for inventory depreciation by combination is as follows:
| Category | Determination basis of category | Determination basis of the net realizable value of the category |
| Combination of merchandise inventory years | New products launched by private brands in the current year | No provision for revaluation reserve |
18. Assets held for sale
Not applicable
19. Debt investment
Not applicable
20. Other debt investment
Not applicable
21. Long-term receivables
Not applicable
22. Long-term equity investments
1. Determination of initial investment cost
A. Long-term equity investments formed through business combinations, see the Notes 6 for specific accountingpolicies on business combinations under common control and those not under common control.B. Long-term equity investments acquired through other meansLong-term equity investments acquired by paying cash are measured at the actual acquisition price as the initialinvestment cost. Initial investment cost includes directly related expenses, taxes, and other necessary expendituresincurred in acquiring the long-term equity investment.Long-term equity investments acquired by issuing equity securities are measured at the fair value of the issuedsecurities as the initial investment cost; Transaction costs incurred in issuing or acquiring own equity instruments canbe directly deducted from equity in equity transactions.
Under the premise that a non-monetary asset exchange has commercial substance and the fair value of the assetreceived or surrendered can be reliably measured, the initial investment cost of the long-term equity investmentacquired in a non-monetary asset exchange is based on the fair value of the surrendered asset, unless there isconclusive evidence that the fair value of the received asset is more reliable; For non-monetary asset exchanges thatdo not meet the above premise, the initial investment cost of the long-term equity investment acquired is based on thebook value of the surrendered asset and related taxes and fees payable.
Long-term equity investments obtained through debt restructuring are initially measured at cost based on fairvalue.
2. Subsequent measurement and recognition of profit or loss
A. Cost method
The Company accounts for long-term equity investments over which it has control using the cost method,measured at initial investment cost, with additional investments or withdrawals adjusting the cost of the long-termequity investment.
Apart from cash dividends or profits declared but not yet distributed included in the price or consideration paid atthe time of investment, the Company recognizes cash dividends or profits distributed by the investee as currentinvestment income.
B. Equity method
The Company uses the equity method to account for long-term equity investments in associates and jointventures; For a portion of equity investments in associates held indirectly through venture capital organizations, mutualfunds, trust companies, or similar entities including investment-linked insurance funds, fair value measurement is usedand changes are recognized in profit or loss.
If the initial cost of a long-term equity investment is greater than the fair value share of the identifiable net assetsof the investee at the time of investment, the initial investment cost is not adjusted; If the initial investment cost is lessthan the fair value share of the identifiable net assets of the investee at the time of investment, the difference isrecognized in the current profit or loss.
After acquiring long-term equity investments, the Company recognizes investment income and othercomprehensive income based on its share of net gains or losses and other comprehensive income realized by theinvestee, and adjusts the book value of the long-term equity investment accordingly; it also calculates the share ofprofits or cash dividends declared by the investee and correspondingly reduces the book value of the long-term equityinvestment; For changes in the investee's equity other than net profits or losses, other comprehensive income, andprofit distribution, the book value of long-term equity investment shall be adjusted and included in the owner's equity.
When recognizing the share of the net profit and loss of the investee, the Company adjusts and recognizes thenet profit of the investee based on the fair value of the identifiable assets of the investee at the time of investment.Unrealized profits and losses of internal transactions between the Company and its associated enterprises and jointventures shall be offset by the portion that belongs to the Company according to the due proportion, and theinvestment profits and losses shall be recognized on this basis.
When recognizing its share of losses incurred by the investee, the Company shall handle it in the following order:
first, it offsets the book value of the long-term equity investment. Next, if the book value of the long-term equityinvestment is insufficient to offset the losses, the Company continues to recognize investment losses limited to thebook value of other long-term equity interests that substantially constitute a net investment in the investee, offsettingthe book value of long-term receivables and other items. Finally, after the above actions, if the Company still hasadditional obligations as stipulated by the investment contract or agreement, it recognizes a provision for liabilitiesbased on the expected obligation and includes it in the current investment losses.
If the investee realizes profits in subsequent periods, the Company reverses the process described above afterdeducting the share of unrecognized losses. It reduces the book value of recognized provisions for liabilities, restoresother long-term equity interests and the book value of long-term equity investments that substantially constitute a netinvestment in the investee, and then resumes recognizing investment income.
3. Conversion of accounting methods for long-term equity investments
1) Fair value measurement to equity method accounting
For equity investments in investees over which the Company originally had no control, joint control, or significantinfluence and which were accounted for in accordance with financial instruments recognition and measurementguidelines, if additional investments enable the Company to exert significant influence or joint control withoutconstituting control, the fair value of the original equity investment determined by the Accounting Standards for
Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments plus the cost of the additionalinvestment, shall be the initial investment cost under the equity method.
If the initial investment cost under the equity method is less than the difference between the fair value share of theidentifiable net assets of the investee on the date of the additional investment, calculated based on the newshareholding scale post-investment, the book value of the long-term equity investment is adjusted, and the differenceis recognized in current non-operating income.
2) Fair value measurement or equity method accounting to cost method accounting
For equity investments in investees over which the Company originally had no control, joint control, or significantinfluence and which were accounted for in accordance with financial instruments recognition and measurementguidelines, or for long-term equity investments in associates and joint ventures, if additional investments lead to controlover the investee not under common control, in preparing individual financial statements, the book value of the originalequity investment plus the cost of the additional investment, shall be the initial investment cost under the cost method.
Other comprehensive income recognized from equity investments accounted for by the equity method before theacquisition date is accounted for on the same basis as the direct disposal of related assets or liabilities by the investee.
For equity investments held before the acquisition date that were accounted for in accordance with the AccountingStandards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments, the cumulativefair value changes previously recognized in other comprehensive income shall be reclassified to current profit or lossunder the cost method.
3) Equity method accounting to fair value measurement
If the Company loses joint control or significant influence over the investee due to partial divestment of equityinvestments, the remaining equity investments after the disposal shall be subject to accounting treatment inaccordance with the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement ofFinancial Instruments, and the difference between the fair value and the book value on the date of losing joint controlor significant influence shall be recognized in current profit or loss.
For original equity investments that recognized other comprehensive income under the equity method, othercomprehensive income shall be subject to accounting treatment on the same basis as if the investee had directlydisposed of the related assets or liabilities not under the equity method.
4) Cost method to equity method
If the Company loses the control over the investee due to disposal of part of equity investments or other reasons,in the preparation of individual financial statements, the remaining equity after disposal that can exercise joint controlor significant influence over the investee shall be subject to accounting treatment under the equity method, and theremaining equity shall be deemed to have been adjusted under the equity method since acquisition.
5) Cost method to fair value measurement
If the Company loses the control over the investee due to disposal of part of equity investments and other reasons,in the preparation of individual financial statements, the remaining equity after disposal that cannot exercise jointcontrol or exert significant influence on the investee shall be subject to accounting treatment in accordance with therelevant provisions of the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement ofFinancial Instruments, and the difference between the fair value and the book value on the date when the control islost shall be included in the current profit and loss.
4. Disposal of long-term equity investments
For disposal of long-term equity investment, the difference between the book value and the actual price shall beincluded in the current profit and loss. For long-term equity investments accounted for under the equity method, when
disposing of the investment, the part originally included in other comprehensive income shall be subject to accountingtreatment according to the corresponding scale on the same basis as the investee directly disposes of the relevantassets or liabilities.If the terms, conditions and economic impact of the transactions related to the disposal of the equity investment insubsidiaries meet one or more of the following circumstances, multiple transactions will be taken as a packagetransaction for accounting treatment:
A. These transactions are concluded at the same time or under the consideration of mutual influence;B. These transactions collectively achieve a complete commercial result;C. The occurrence of one transaction depends on the occurrence of at least one other transaction;D. A transaction is uneconomical on its own, but economical when considered together with other transactions.Where the control over the original subsidiaries is lost due to disposal of part of equity investments or otherreasons, and it does not belong to a package transaction, relevant accounting treatment shall be made bydistinguishing individual financial statements from consolidated financial statements:
1) In the individual financial statements, for the disposal of equity, the difference between the book value and theactual acquisition price shall be included in the current profit and loss. If the remaining equity after disposal canexercise joint control or significant influence on the investee, it shall be subject to accounting treatment under theequity method, and the remaining equity shall be adjusted as if it had been accounted for under the equity methodsince acquisition; If the remaining equity after disposal cannot exercise joint control or significant influence on theinvestee, it shall be subject to accounting treatment in accordance with the relevant provisions of the AccountingStandards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments, and thedifference between the fair value and the book value on the date when the control is lost shall be included in thecurrent profit and loss.
2) In the consolidated financial statements, for various transactions before the loss of control over the subsidiaries,the capital reserves (stock premium) are adjusted according to the difference between the disposal price and the shareof net assets of the subsidiaries continuously calculated from the acquisition date or the combination datecorresponding to the disposal of long-term equity investment. If the capital reserves are insufficient, the retainedearnings shall be adjusted; When the control over subsidiaries is lost, the remaining equity shall be re-measured at itsfair value on the date of loss of control. The difference between the sum of the consideration obtained from thedisposal of equity and the fair value of the remaining equity, less the share of the net assets of the original subsidiarycalculated continuously from the acquisition date according to the original shareholding ratio, is included in theinvestment income in the period of losing control, and the goodwill is also written down. Other comprehensive incomerelated to equity investments in the original subsidiary shall be converted into current investment profits at the loss ofcontrol.
If the transactions of disposal of equity investments in subsidiaries until the loss of control belong to a packagetransaction, the transactions shall be accounted for as a transaction of disposal of equity investment in subsidiariesand loss of control, and the relevant accounting treatment shall be carried out by distinguishing individual financialstatements and consolidated financial statements:
1) In individual financial statements, the difference between each disposal price and the book value of long-termequity investment corresponding to the disposed equity before the loss of control is recognized as othercomprehensive income, and transferred to the current profit or loss at the loss of control.
2) In the consolidated financial statements, the difference between each disposal price and the share of netassets of the subsidiary corresponding to each disposal of investment before the loss of control is recognized as othercomprehensive income, which is converted to the current profit or loss at the loss of control.
5. Judgment criteria for common control and significant influence
If the Company collectively controls an arrangement according to the relevant agreement with other participants,and decisions on activities that significantly affect the returns of the arrangement require unanimous consent from theparticipants sharing control, then the Company is considered to jointly control the arrangement with other participants,which constitutes a joint venture.
When a joint venture is established through a separate entity, the Company's rights over the net assets of theseparate entity are determined according to the relevant agreement. The separate entity is then accounted for as ajoint venture using the equity method. If, according to the relevant agreement, the Company is not deemed to haverights over the net assets of the separate entity, the entity is considered as joint operation. The Company recognizesitems related to its share of the joint operation's profits and accounts for them in accordance with the relevantaccounting standards.
Significant influence refers to the power to participate in decision-making over the financial and operating policiesof the investee, without having control or joint control over the formulation of those policies. The Company assesseswhether it has significant influence over the investee by considering all facts and circumstances and through one ormore of the following situations: (1) having representation on the board of directors or similar governing body of theinvestee; (2) participating in the process of setting financial and operating policies of the investee; (3) engaging insignificant transactions with the investee; (4) appointing managerial personnel to the investee; (5) providing essentialtechnical information to the investee.
23. Investment properties
Measurement model of investment propertyMeasured under cost methodDepreciation or amortization method
Investment properties refer to real estate held for earning rental income or capital appreciation, or both, includingleased land use rights, land use rights held for appreciation and subsequent transfer, and leased buildings.Furthermore, for vacant buildings held by the Company for operational leasing, if the Board of Directors issues awritten resolution explicitly stating the intent to use them for operational leasing and that the holding intention will notchange in the short term, they are also reported as investment properties.
The Company's investment properties are recorded at cost as their entry value, which for externally acquiredinvestment properties includes the acquisition price, related taxes and fees, and other expenditures that can be directlyattributed to the asset. The cost of self-constructed investment properties consists of necessary expenditures incurredbefore the asset reaches its intended usable state.
The Company uses the cost model for subsequent measurement of investment properties, providing depreciationor amortization for buildings and land use rights based on their expected service lives and net residual value rates.The expected service lives, net residual value rates, and annual depreciation (amortization) rates of investmentproperties are listed as follows:
| Category | Expected service life (years) | Expected net residual value rate (%) | Annual depreciation (amortization) rate (%) |
| Houses and buildings | 20-35 | 5.00 | 2.71-4.85 |
When the use of investment property is changed to owner-occupied, from the date of change, the Companyreclassifies the investment property as fixed assets or intangible assets. When the use of owner-occupied property ischanged to earn rental income or capital appreciation, from the date of change, the Company reclassifies fixed assetsor intangible assets as investment property. At the time of conversion, the book value before conversion is used as therecorded value after conversion.
When investment property is disposed of, or permanently withdrawn from use and no economic benefits areexpected from its disposal, the recognition of such investment property is ceased. The income from the sale, transfer,scrapping, or destruction of investment property, after deducting its book value and related taxes, is recognized in thecurrent profit or loss.
24. Fixed assets
(1) Recognition conditions
Fixed assets refer to tangible assets held for the production of goods, provision of services, leasing, oradministrative purposes, and have a service life exceeding one accounting year. Fixed assets are recognized whenthey meet the following conditions:
1) It is probable that the economic benefits associated with the fixed asset will flow into the enterprise;
2) The cost of the fixed asset can be measured reliably.
(2) Depreciation methods
| Category | Depreciation method | Depreciation period | Residual value rate | Annual depreciation rate |
| Houses and buildings | Straight-line method | 20-35 | 5 | 2.71-4.85 |
| Machinery equipment | Straight-line method | 10 | 5.00-10.00 | 9.50-9.00 |
| Electronic equipment | Straight-line method | 5 | 5 | 19 |
| Transport equipment | Straight-line method | 5 | 5 | 19 |
| Other equipment | Straight-line method | 5 | 5 | 19 |
1. Depreciation of fixed assets
The depreciation of fixed assets is accrued over their expected service lives based on their book-entry valuesminus their expected net residual values. For fixed assets with provision for impairment, the depreciation amount willbe determined in the future according to the book value after deducting the impairment provision and the service life;Fixed assets that have been fully depreciated and are still in use shall not be depreciated.
The Company determines the useful life and estimated net residual value of the fixed assets according to theirnature and usage. At the end of each fiscal year, the Company reviews the useful life, estimated net residual value,and depreciation method of fixed assets, and makes corresponding adjustments if there are differences from theoriginal estimates.
2. Subsequent expenditures on fixed assets
Subsequent expenditures related to fixed assets that meet the recognition criteria for fixed assets are included inthe cost of fixed assets; Those that do not meet the recognition criteria for fixed assets are included in the currentprofits and losses when incurred.
3. Disposal of fixed assets
Fixed assets are derecognized upon disposal or when no future economic benefits are expected from their use ordisposal. The net amount of disposal income from fixed assets through sale, transfer, scrapping, or damage, afterdeducting their book value and related taxes, is recognized in the current profits and losses.
25. Construction in progress
1. Initial measurement of construction in progress
The Company values self-constructed construction in progress at actual cost. Actual costs comprise necessaryexpenditures incurred to bring the asset to the intended usable state, including material costs, labor costs, relatedtaxes, capitalized borrowing costs, and apportioned indirect costs.
2. Standard and timing for transferring of construction in progress to fixed assets
The total expenses incurred before the construction in progress asset is ready for its intended use are recorded asthe entry value of the fixed asset. Construction in progress is transferred to fixed assets at the total expenditureincurred before the asset reaches its intended usable state. If the project is usable but final settlement has not beencompleted, it is transferred based on estimated value and depreciated according to the Company's depreciation policy.Adjustments are made to the estimated value upon final settlement, but previously recognized depreciation is notadjusted.
26. Borrowing costs
1. Recognition principle of capitalization of borrowing costs
Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and constructionor production of assets eligible for capitalization, such costs shall be capitalized; And other borrowing costs shall berecognized as expenses and included in current profits and losses when incurred.
Qualifying capitalized assets are those that require a substantial period to get ready for their intended use or sale,including fixed assets, investment properties, and inventories.
Borrowing costs begin to be capitalized when the following conditions are met:
(1) Expenditures for the asset have been incurred, including cash payments, transfers of non-cash assets, orincurring interest-bearing debt for the acquisition and construction or production of the asset;
(2) Borrowing costs have been incurred;
(3) Acquisition and construction or production activities necessary to bring the asset to its intended use or salehave commenced.
2. Capitalization period of borrowing costs
The capitalization period spans from when borrowing costs begin to be capitalized until they cease, excluding anyperiods when capitalization is suspended.
The borrowing costs shall stop being capitalized when acquired and constructed or produced assets eligible forcapitalization are available for use or sale.
If parts of an asset being acquired and constructed or produced are completed and can be used independently,capitalization of borrowing costs for those parts ceases.
When various parts of an asset are completed separately but the asset can only be used or sold as a whole upontotal completion, capitalization of borrowing costs ceases when the entire asset is finished.
3. Suspension of capitalization period
Where the acquisition and construction or production of assets eligible for capitalization is interrupted abnormallyand the interruption lasts for more than 3 months, the capitalization of borrowing costs shall be suspended; If theinterruption is a necessary procedure for the asset to be ready for use or sale, the capitalization of borrowing costscontinues. Borrowing costs incurred during the interruption are recognized as current profits and losses , until theacquisition and construction or production activities resume and the capitalization of borrowing costs continues.
4. Calculation method of capitalized amount of borrowing costs
Interest expenses on specific borrowings (after deducting interest income earned from unused borrowingsdeposited in the bank or investment returns from temporary investments) and related ancillary costs are capitalizeduntil the qualifying asset is ready for its intended use or sale.
The interest amount of general borrowings to be capitalized is calculated based on the weighted average of theasset expenditures exceeding the specific borrowings, multiplied by the simple average at end of the period, and thecapitalization rate of the general borrowings occupied. The capitalization rate is calculated and determined based onthe weighted average interest rate of general borrowings.
For borrowings issued at a discount or premium, the amount of discount or premium amortized in each accountingperiod is determined using the effective interest method, adjusting the interest amount for each period.
27. Biological assets
Not applicable
28. Oil and gas assets
Not applicable
29. Intangible assets
(1) Service life and its determination basis, estimation, amortization method or reviewprocedure
Intangible assets refer to identifiable non-monetary assets without physical substance that the Company owns orcontrols, including land use rights, software systems and trademark use rights.
1) Initial measurement of intangible assets
The cost of externally acquired intangible assets includes the purchase price, related taxes and fees, and otherexpenses directly attributable to preparing the asset for its intended use. If the payment for intangible assets exceedsnormal credit terms and essentially represents financing, the cost of the intangible assets is determined based on thepresent value of the purchase price.
Intangible assets acquired through debt restructuring to settle debts are measured at their fair value uponrecognition, and any difference between the book value of the restructured debt and the fair value of the intangibleassets is recognized in the current profit or loss.
In a non-monetary asset exchange that has commercial substance and where the fair value of the assets receivedor surrendered can be reliably measured, the cost of the intangible assets acquired is based on the fair value of theassets surrendered, unless there is conclusive evidence that the fair value of the acquired assets is more reliable; Fornon-monetary asset exchanges that do not meet the above conditions, the cost of the intangible assets acquired isbased on the book value of the assets surrendered and the related taxes and fees paid, without recognizing any profitor loss.
Intangible assets acquired through business combination under common control are measured at the book valueof the merged party; For mergers not under common control, intangible assets are recognized at fair value.
Intangible assets developed internally include costs for materials used, labor, registration fees, amortization ofother patents and licenses used during development, interest expenses that meet capitalization criteria, and otherdirect expenses incurred before the intangible assets are ready for their intended use.
2) Subsequent measurement of intangible assets
The Company classifies intangible assets as having either finite or indefinite useful lives upon acquisition.Intangible assets with limited useful lifeIntangible assets with a finite useful life are amortized on a straight-line basis over their beneficial periods. Theestimated useful life and basis for intangible assets with a finite useful life are as follows:
| Item | Estimated service life | Basis |
| Land use rights | 50 | Straight-line method |
| Software system | 5 | Straight-line method |
| Right to use trademark | 5-10 | Straight-line method |
At the end of each period, the useful life and amortization method of intangible assets with a finite useful life arereviewed. If there are differences from the original estimates, adjustments are made accordingly.Upon review, there were no changes in the estimated useful life and amortization method of intangible assets atthe end of the current period.
(2) Collection scope of R&D expenses and related accounting treatment methods
1) Specific standards for classifying the research stage and development stage of the Company's internalresearch and development projects
Research stage: This stage involves original and planned investigation activities undertaken to acquire andunderstand new scientific or technical knowledge.
Development stage: This stage involves applying research findings or other knowledge to a plan or design forproducing new or substantially improved materials, devices, products, etc., before commercial production or use.
Expenditures during the research stage of internal research and development projects are recognized as anexpense in the current profits and losses when incurred.
2). Specific criteria for capitalizing expenditures during the development stage
Expenditures during the development stage of internal research and development projects are recognized asintangible assets when the following conditions are met:
A. Complete such intangible asset to make it usable or salable with technical feasibility;
B. Intention of completing such intangible asset for use or sale;
C. The ways in which intangible assets generate economic benefits include being able to demonstrate thatproducts produced using the intangible assets have a market, or that the intangible assets themselves have a market.If the intangible assets are intended for internal use, their utility must be proven;
D. There is sufficient support from technical, financial resources and other resources, to complete development ofsuch intangible assets, and the ability of using or selling such intangible assets;
E. The expenditures attributable to development stage of such intangible assets shall be measured reliably.
Expenditures in the development stage that do not meet the above conditions shall be included in the currentprofits and losses when incurred. Development expenditures recognized in profits and losses in prior periods shall notbe subsequently reclassified as assets. Capitalized development phase expenditures are presented as developmentexpenditures on the balance sheet and are reclassified as intangible assets from the date the project is ready for itsintended use.
30. Long-term assets impairment
The Company assesses whether there are any indications that long-term assets may be impaired as of thebalance sheet date. If indications of impairment exist in long-term assets, their recoverable amount is estimated basedon individual assets; If it is difficult to estimate the recoverable amount of an individual asset, the recoverable amountof the asset group to which the asset belongs is determined.The estimate of the recoverable amount of an asset is based on the higher of its fair value less costs to sell andthe present value of the expected future cash flows.If the estimated recoverable amount of a long-term asset is lower than its carrying amount, the carrying amount ofthe long-term asset is written down to its recoverable amount. The impairment loss is recognized in current profits andlosses and an impairment provision is made accordingly. Once recognized, impairment losses for assets shall not bereversed in subsequent accounting periods.After the recognition of an impairment loss, the depreciation or amortization expense of the impaired asset isadjusted in future periods to systematically allocate the asset's adjusted carrying amount (less the expected netresidual value) over its remaining useful life.Goodwill arising from business combinations and intangible assets with indefinite useful lives are tested forimpairment annually, regardless of whether there are any indications of impairment.
When testing for impairment of goodwill, the carrying amount of goodwill is allocated to the asset groups orcombinations that are expected to benefit from the synergies of the business combination. When testing forimpairment of asset groups or combinations that include goodwill, if there are indications of impairment for the assetgroups or combinations related to goodwill, the asset groups or combinations that do not include goodwill are testedfor impairment first. The recoverable amount is calculated and compared with the related carrying amount to recognizethe corresponding impairment loss. Then, the asset groups or combinations that include goodwill are tested forimpairment, comparing the carrying amount of these related asset groups or combinations (including the allocatedportion of the carrying amount of goodwill) with their recoverable amount. If the recoverable amount of the relatedasset groups or combinations is lower than their carrying amount, the impairment loss of goodwill is recognized.
31. Long-term deferred expenses
1. Amortization method
Long-term deferred expenses refer to expenses that have been incurred by the Company but are to be borne bythe current and subsequent periods, with an amortization period of more than 1 year. Long-term deferred expensesare amortized on a straight-line basis over the benefit period.
2. Amortization period
| Category | Amortization period |
| Counter production fee | 2-3 |
| Decoration fee | 3-5 |
| Other | 2-3 |
32. Contract liabilities
Contract liabilities are the obligations for which the company has received or is entitled to receive consideration fromcustomers for the transfer of goods.
33. Employee compensation
(1) Accounting treatment methods for short-term compensation
Short-term compensation is employee compensation that is expected to be fully paid within twelve months afterthe end of the annual reporting period in which employees provide related services, excluding post-employment andtermination benefits. During the accounting period when services are provided by employees, the company recognizespayable short-term compensation as liabilities and includes them in the cost of related assets and expenses based onthe beneficiaries of the services provided.
(2) Accounting treatment method for post employment benefits
Post-employment benefits are various forms of remuneration and benefits provided to employees after they retireor terminate their employment with the company, excluding short-term compensation and termination benefits.
The company's post-employment benefit plans are classified into defined contribution plans.
Post-employment defined contribution plans mainly consist of participation in social basic pension insurance,unemployment insurance, etc., organized and implemented by local labor and social security institutions. During theaccounting period in which employees provide services, the company recognizes the contributions payable underdefined contribution plans as a liability and includes them in the current profits and losses or the cost of related assets.
After the Company makes the above payments on a regular basis in accordance with the standards stipulated bythe state and the annuity plan, it will have no other payment obligations.
(3) Accounting treatment method for dismissal benefits
Termination benefits are compensations paid to employees as a result of the company's decision to terminatetheir employment before the contractual retirement date or to encourage voluntary resignation. The liability fortermination benefits is recognized when the company cannot unilaterally withdraw the plan to terminate employment orthe proposal to encourage voluntary resignation, whichever is earlier. The liability is included in the current profits andlosses.
The company provides early retirement benefits to employees who accept internal retirement arrangements. Earlyretirement benefits refer to wages paid to employees who have not reached the statutory retirement age and havevoluntarily left their positions with the approval of the company's management, as well as social insurancecontributions paid on their behalf. From the start date of the internal retirement arrangement until the employeereaches the normal retirement age, the company pays early retirement benefits to the early retired employees. Forearly retirement benefits, the company accounts for them in the same way as severance benefits. When the conditionsfor recognizing severance benefits are met, the wages and social insurance contributions intended to be paid from thedate the employee ceases to provide services until the normal retirement date are recognized as liabilities andcharged to current profits and losses in a lump sum. Differences arising from changes in actuarial assumptions andadjustments to benefit standards for early retirement benefits are recognized in current profits and losses whenoccurred.
(4) Accounting treatment of other long-term employee benefits
Other long-term employee benefits refer to all employee benefits other than short-term salaries, post-employmentbenefits and dismissal benefits.
For other long-term employee benefits meeting the conditions of defined contribution plans, the companyrecognizes the contributions payable as a liability during the accounting period in which employees render servicesand includes them in the current profits and losses or the cost of related assets. For other long-term employee benefitsnot meeting these conditions, an independent actuary uses the projected unit credit method at each balance sheetdate to calculate the benefit obligations attributable to the period in which employees provide services, and these areincluded in the current profits and losses or the cost of related assets.
34. Estimated liabilities
1. Recognition criteria for estimated liabilities
In case that an obligation connected to contingencies meets all of the following conditions, the Companyrecognizes the obligation as a provision:
The obligation is a present obligation of the Company;
The fulfillment of the obligation is likely to result in an outflow of economic benefits;
The amount of the obligation can be measured reliably.
2. Measurement of estimated liabilities
The company measures its provisions based on the best estimate of the expenditures required to settle thepresent obligations.
When determining the best estimate, the company comprehensively considers factors related to contingent itemssuch as risk, uncertainty, and the time value of money. For significant impacts of the time value of money, the bestestimate is determined by discounting the related future cash outflows.
The best estimate is treated as follows:
If the required expenditure falls within a continuous range (or interval) with equal likelihood of various outcomes,the best estimate is determined by the average of the range's upper and lower limits.
If there is no continuous range (or interval) for the required expenditure, or the likelihood of various outcomeswithin the range is not equal, such as in the case of contingent items involving a single project, the best estimate isdetermined by the most likely amount. If the contingent items involve multiple projects, the best estimate is calculatedbased on the various possible outcomes and their associated probabilities.
If the company expects to be reimbursed by a third party for all or part of the expenditure required to settle aprovision, the reimbursement amount is recognized as an asset when it is virtually certain to be received, and therecognized amount does not exceed the carrying amount of the provision.
35. Share-based payment
1. Types of share-based payments
The company's share-based payments are categorized into equity-settled and cash-settled.
2. Determination method for the fair value of equity instruments
For granted options and other equity instruments with an active market, their fair value is determined based onquoted prices in the active market. For granted options and other equity instruments without an active market, their fairvalue is estimated using option pricing models, which consider the following factors: (1) the exercise price of the option;
(2) The option's term; (3) The current price of the underlying stock; (4) The expected volatility of the stock price; (5)The expected dividends of the shares; (6) The risk-free interest rate during the option's term.
When determining the fair value of equity instruments on the grant date, the impact of market and non-vestingconditions as stipulated in the share-based payment agreement is considered. For share-based payments with non-vesting conditions, as long as the employee or other party meets all non-market conditions among the vestingconditions (such as service period), the cost corresponding to the services received is recognized.
3. Basis for the best estimate of vesting equity instruments
On each balance sheet date within the waiting period, the best estimate of the number of equity instrumentsexpected to vest is revised based on subsequent information such as changes in the number of employees eligible forvesting. On the vesting date, the final expected number of equity instruments to vest matches the actual numbervested.
4. Accounting treatment
For equity-settled share-based payments, they are measured at the fair value of the equity instruments granted toemployees. If immediately exercisable upon grant, they are recognized in related costs or expenses at the grant date'sfair value, with a corresponding increase in capital reserve. If exercisable only after completing the service or achievingperformance conditions within the vesting period, each balance sheet date during the vesting period will reflect thebest estimate of the number of vestable equity instruments. The fair value on the grant date is used to allocate theservice costs obtained in the current period into related costs or expenses and capital reserve. Post-vesting date, noadjustments are made to the recognized costs or expenses and total equity.
For cash-settled share-based payments, they are measured at the fair value of the liabilities calculated based onthe Company's shares or other equity instruments. If immediately exercisable upon grant, they are recognized inrelated costs or expenses at the fair value of the liabilities assumed at the grant date, with a corresponding increase inliabilities. If exercisable only after completing the service or achieving performance conditions within the vesting period,each balance sheet date during the vesting period will reflect the best estimate of the exercisable situation. The fairvalue of the liabilities assumed is used to allocate the service costs obtained in the current period into costs orexpenses and corresponding liabilities. On each balance sheet date and settlement date before the settlement ofrelevant liabilities, the fair value of liabilities shall be re-measured, and the changes shall be included in the currentprofits and losses.If the granted equity instruments are cancelled within the vesting period, the Company treats the cancellation asaccelerated vesting, recognizing the remaining amount to be recognized in the vesting period immediately in currentprofits and losses, and simultaneously increasing capital reserves. If employees or other parties have the option tomeet non-vesting conditions but fail to meet them within the vesting period, the Company treats it as a cancellation ofthe granted equity instruments.
36. Other financial instruments like preferred shares and perpetual bondsNot applicable
37. Revenue
Disclosure of accounting policies adopted for recognition and measurement of revenue by business type
The Company's revenue mainly comes from the following business types:
(1) Watch sales business
(2) Precision manufacturing business
(3) Property leasing business
1. General principles of revenue recognition
Revenue is recognized at the transaction price allocated to the performance obligation when the Company fulfillsits performance obligations under a contract by transferring control of goods or services to the customer.Performance obligation refers to the commitment in the contract that the Company can transfer to the customerthe goods or services that can be clearly distinguished.Control over the relevant goods is transferred when the customer can direct the use of and obtain substantially allthe remaining benefits from the goods or services.
On the contract commencement date, the Company assesses the contract to identify each distinct performanceobligation and determines whether each obligation is satisfied over time or at a point in time. If one of the followingconditions is met, it is considered that the performance obligation is fulfilled over a period of time, and the Companyrecognizes revenue based on the progress of performance over time: (1) The customer simultaneously receives andconsumes the economic benefits as the company performs; (2) The customer controls the goods in progress as thecompany performs; (3) The goods produced by the company's performance have no alternative use, and the companyhas the right to payment for the performance completed to date throughout the contract period. Otherwise, theCompany recognizes revenue at the point in time when the customer obtains control of the relevant goods or services.
For performance obligations fulfilled over a period of time, the Company determines the appropriate progress ofperformance based on the nature of goods and services using the input method. The output method determines theprogress of performance based on the value of goods transferred to the customer (the input method determines theprogress of performance based on the company's inputs to fulfill the performance obligation). Where the progress ofperformance cannot be reasonably determined, if the costs incurred by the Company are expected to be compensated,revenue shall be recognized according to the amount of costs incurred until the progress of performance can bereasonably determined.
2. Specific methods of revenue recognition
The company has three main business segments: watch sales, precision manufacturing, and property leasing.According to the Company's own business model and settlement method, the specific methods for recognizing salesrevenue of various businesses are disclosed as follows:
(1) Watch sales business
The Company's watch sales business is a performance obligation performed at a certain point in time.
①Online sales
Revenue is recognized when the products are delivered, signed for by the customer, and payment has beenreceived by the platform.
②Offline sales
Revenue is recognized when the product is delivered to the customer and accepted by the customer, the pricehas been received or the right to receive the payment has been obtained, and the relevant economic benefits are likelyto flow in.
③Commissioned sales
Under the commissioned sales model, the Company recognizes revenue when it receives the sales list from thecommissioned seller and confirms that the control over the goods has been transferred to the purchaser.
④Consignment-in
Under the consignment-in model, when the Company delivers the external consignment products to the customerand confirms that the control of the goods has been transferred to the buyer, the revenue is recognized by net method.
(2) Precision manufacturing business
The Company's precision manufacturing and sales business fulfills the performance obligations at a point in time.Domestic sales revenue is recognized when the company delivers the product to the contractually agreed deliverylocation, the products are accepted by the customer, payment has been received or the right to receive payment hasbeen obtained, and the related economic benefits are likely to flow in. Export sales revenue is recognized when thecompany has declared the products for export according to the contract, obtained the Bill of Lading, received thepayment or obtained the right to receive payment, and the related economic benefits are likely to flow in.
(3) Property leasing business
For details of specific accounting policies, please refer to Note V.41 Accounting treatment of the Company as alessor.
3. Revenue treatment principles for specific transactions
(1) Contracts with sales return clauses
Revenue is recognized at the amount expected to be entitled from the transfer of goods to the customer when thecustomer obtains control of the relevant goods (i.e., excluding the amount expected to be refunded due to salesreturns). A liability is recognized for the amount expected to be refunded due to sales returns.
The carrying amount of goods expected to be returned, less the estimated costs to recover such goods (includingany impairment of the returned goods), is accounted for under the item "refund assets."
(2) Contracts with quality assurance clauses
Evaluate whether the quality assurance provides a separate service in addition to assuring the customer that thegoods sold meet the established standards. If the Company provides additional services, it shall be treated as a singleperformance obligation and subject to accounting treatment in accordance with the provisions of the revenuestandards; Otherwise, the quality assurance responsibility shall be subject to accounting treatment in accordance withthe provisions of the accounting standards for contingencies.
Different revenue recognition and measurement methods involved in different business models adopted by the sametype of businessNot applicable
38. Contract costs
1. Contract performance costs
The costs incurred by the company for the performance of a contract, which do not fall within the scope of otheraccounting standards outside of revenue standards and meet the following conditions, are recognized as an asset:
(1) The costs are directly related to a current or expected contract, including direct labor, direct materials,manufacturing overhead (or similar costs), costs explicitly borne by the customer, and other costs incurred solely dueto the contract;
(2) The costs that increase the resources of the enterprise for future performance obligations;
(3) The costs that are expected to be recoverable.
These assets are classified as inventory or other non-current assets based on whether their amortization periodexceeds a normal operating cycle from the time of initial recognition.
2. Contract acquisition costs
The incremental costs incurred by the company to obtain a contract that are expected to be recoverable arerecognized as an asset. Incremental costs refer to costs that would not have been incurred if the contract had not beenobtained, such as sales commissions. For amortization periods not exceeding one year, these costs are recognized inthe current profits and losses upon occurrence.
3. Amortization of contract costs
Assets related to contract costs are amortized on the same basis as the revenue recognition for the associatedgoods or services. They are amortized at the point in time or according to the progress of the performance obligations,and recognized in the current profits and losses.
4. Impairment of Contract Costs
For assets related to contract costs, if the carrying amount exceeds the difference between the expectedconsideration receivable from transferring the goods related to the asset and the estimated costs to transfer thosegoods, an impairment provision should be recognized for the excess and recorded as an asset impairment loss.
After the impairment loss is provided for, if there is a change in the factors that caused the impairment in previousperiods, resulting in the above difference exceeding the carrying amount of the asset, the previously providedimpairment loss is reversed and recognized in the current profits and losses. However, the carrying amount of theasset after reversal should not exceed the carrying amount on the reversal date assuming no impairment loss hadbeen provided.
39. Government subsidies
1. Type
Government grants are monetary and non-monetary assets obtained by the company from the governmentwithout compensation. Based on the beneficiary specified in the relevant government documents, government grantsare classified into asset-related and income-related government grants.
Government subsidies related to assets refer to government subsidies obtained by the Company for the purchase,construction, or other forms of long-term assets of government subsidies. Government subsidies related to incomerefer to government subsidies other than government subsidies related to assets.
2. Recognition of government subsidies
Government grants are recognized at the receivable amount at the end of the period if there is evidence that thecompany meets the relevant conditions of the financial support policy and expects to receive the financial supportfunds. Otherwise, government grants are recognized when actually received.
Government grants in the form of monetary assets are measured at the amount received or receivable. Non-monetary government grants are measured at fair value; If fair value cannot be reliably determined, they are measuredat the nominal amount (RMB1). Government grants measured at a nominal amount are directly included in the currentprofits and losses.
3. Accounting treatment method
Based on the economic substance of the transactions, the Company determines whether to use the gross methodor net method for accounting treatment of a certain type of government grant transaction. Usually, the Company usesonly one method for similar or related government grant transactions and consistently applies that method to thetransactions.
For asset-related government grants, the grants are either deducted from the carrying amount of the related assetor recognized as deferred income. Asset-related government grants recognized as deferred income are systematicallyrecognized in profits and losses over the useful life of the constructed or purchased asset using a reasonable andsystematic method.
For income-related government grants, those used to compensate for related expenses or losses incurred by thecompany in subsequent periods are recognized as deferred income and included in profit or loss or deducted fromrelated costs in the period when the related expenses or losses are recognized; Those used to compensate for related
expenses or losses already incurred by the company are directly included in profit or loss or deducted from relatedcosts when received.Government grants related to the entity's routine activities are recognized as other income or deducted fromrelated cost expenses; Government grants not related to the entity's routine activities are recognized as non-operatingincome and expenses.
Government grants received for interest subsidies on policy-based preferential loans are used to offset relatedborrowing costs; For policy-based preferential interest rate loans provided by lending banks, the actual loan amountreceived is taken as the borrowing's book value, and the relevant borrowing costs are calculated based on the loanprincipal and the policy-based preferential interest rate.
When previously recognized government grants need to be returned, if they were initially deducted from thecarrying amount of related assets, the asset carrying amount shall be adjusted; If there is a balance of related deferredincome, the balance of deferred income is reduced, and the excess is included in the current profits and losses; Ifthere is no related deferred income, the amount is directly included in the current profits and losses.
40. Deferred tax assets and deferred tax liabilities
Deferred tax assets and liabilities are recognized based on the differences between the tax bases of assets andliabilities and their carrying amounts (temporary differences). On the balance sheet date, the deferred income taxassets and deferred income tax liabilities shall be measured according to the tax rate applicable to the period duringwhich the assets are expected to be recovered or the liabilities are expected to be paid off.
1. Recognition basis of deferred tax assets
Deferred tax assets arising from deductible temporary differences that are recognized to the extent that taxableincome will be probable to be available against the deductible temporary difference, deductible losses and tax creditsthat can be carried forward to subsequent periods. However, the deferred tax assets arising from the initial recognitionof assets or liabilities in a transaction with the following characteristics at the same time shall not be recognized: (1)The transaction is not a business combination; (2) The transaction affects neither the accounting profit nor the taxableincome or deductible loss.
For deductible temporary differences related to investments in associates, the corresponding deferred tax assetsare recognized when all the following conditions are met: the temporary difference may be reversed in the foreseeablefuture, and taxable income will be available against which the deductible temporary differences can be used.
2. Recognition basis of deferred income tax liabilities
The company recognizes the taxable temporary differences payable but not paid in the current period and priorperiods as deferred income tax liabilities. But excluding:
(1) Temporary differences arising from the initial recognition of goodwill;
(2) Transactions or events that are not formed by business combination, and the occurrence of such transactionsor events affects neither the accounting profit nor the temporary differences formed by the taxable income (ordeductible losses);
(3) For taxable temporary differences related to investments in subsidiaries and associates, the time of theirreversal can be controlled and they are not likely to be reversed in the foreseeable future.
3. Deferred tax assets and liabilities are presented as a net amount when the following conditions are metsimultaneously:
(1) The enterprise has the legal right to offset current tax assets against current tax liabilities on a net basis;
(2) The deferred tax assets and liabilities are related to income taxes levied by the same taxation authority on thesame taxable entity or different taxable entities, and for each significant period in which the deferred tax assets andliabilities reverse, the involved taxable entities intend to settle current tax assets and liabilities on a net basis or realizethe assets and settle the liabilities simultaneously.
41. Leasing
(1) Accounting treatment method of leasing as a lessee
At the commencement date of the lease, except for short-term leases and leases of low-value assets subject tosimplified treatment, the company recognizes right-of-use assets and lease liabilities.
Short-term leases and leases of low-value assets
Short-term leases are those without a purchase option and with a lease term of not more than 12 months. Leasesof low-value assets refer to leases where the leased asset, if new, is of low value.
The company does not recognize right-of-use assets and lease liabilities for short-term leases and leases of low-value assets; instead, related lease payments are recognized on a straight-line method or other systematic andreasonable methods over the lease term as part of the cost of the related assets or as current period profit or loss.
(2) Accounting treatment method of leasing as a lessor
(1) Classification of leases
The company classifies leases as finance leases or operating leases on the commencement date of the lease.Finance lease refers to a lease that substantially transfers all risks and rewards related to ownership of the leasedasset, where ownership may or may not ultimately be transferred. Operating lease refers to all other leases that arenot finance leases.
A lease is typically classified as a finance lease by our company if one or more of the following conditions exist:
1) Ownership of the leased asset is transferred to the lessee at the end of the lease term;
2) The lessee has the option to purchase the leased asset at a price sufficiently lower than its fair value at thetime the option is expected to be exercised, making it reasonably certain that the lessee will exercise the option at thelease commencement date;
3) Although ownership is not transferred, the lease term covers a major part of the useful life of the asset;
4) At the inception of the lease, the present value of the lease receipts is nearly the fair value of the leased asset;
5) The leased asset is of such a specialized nature that only the lessee can use it without major modifications.
A lease may also be classified as a finance lease by our company if it exhibits one or more of the followingindicators:
1) If the lessee cancels the lease, the lessee bears the losses associated with the cancellation for the lessor;
2) Gains or losses arising from fluctuations in the fair value of the residual value of assets are attributed to thelessee.
3) The lessee has the ability to continue leasing at a rent significantly below market level for the next period.
(2) Accounting treatment for finance leases
On the lease commencement date, the Company recognizes the finance lease receivables for the finance leaseand terminates the recognition of the finance lease assets.
At the initial recognition of finance lease receivables, the unguaranteed residual value and the present value oflease receipts not received on the commencement date of lease term, discounted at the interest rate implicit in thelease, are summed to determine the entry value of the finance lease receivables. Lease receipts include:
1) Fixed payments and substantially fixed payments after deducting lease incentives;
2) Variable lease payments that depend on an index or rate;
3) In cases where it is reasonably certain that the lessee will exercise the purchase option, lease receipts includethe exercise price of the purchase option;
4) If the lease term reflects that the lessee is expected to exercise the termination option, lease receipts includethe amount payable by the lessee upon exercising the termination option;
5) Guaranteed residual value provided to the lessor by the lessee, parties related to the lessee, and independentthird parties with the financial capacity to fulfill the guarantee obligations.
The company calculates and recognizes interest income for each period within the lease term based on a fixedimplicit lease rate. Variable lease payments not included in the net investment in the lease are recognized in thecurrent period's profit or loss when they occur.
(3) Accounting treatment for operating leases
The company recognizes lease receipts from operating leases as rental income over the lease term using thestraight-line method or another systematic and rational method; Initial direct costs associated with operating leases arecapitalized and amortized over the lease term on the same basis as rental income recognition and are included in thecurrent period's profit or loss; Variable lease payments related to operating leases that are not included in leasereceipts are recognized in the current period's profit or loss when they occur.
42. Other significant accounting policies and accounting estimates
Not applicable
43. Changes in significant accounting policies and estimates
(1) Changes in significant accounting policies
Not applicable
(2) Changes in significant accounting estimates
Not applicable
(3) Adjustment of items related to the financial statements at the beginning of the year when the newaccounting standards are implemented for the first time since 2024Not applicable
44. Others
Not applicableVI. Taxes
1. Main taxes and tax rates
| Tax Type | Tax Basis | Tax rates |
| VAT | Domestic sales and provision of processing, repairs and replacement services | 13% |
| Real estate leasing services | 9% | |
| Other taxable sales of services | 6% | |
| Simple tax method | 5% | |
| Consumption tax | High-end watches | 20% |
| Urban maintenance and construction tax | Paid-in turnover tax | 7%、5% |
| Enterprise income tax | Taxable income | See the table below for details |
| Property tax | Tax basis: 70% or 80% of the original value of the house property | 1.2%、12% |
Disclosure of information about taxpayers with different enterprise income tax rates
| Name of taxpayer | Income tax rate |
| Shenzhen Harmony World Watch Centre Co., Ltd. (①) | 25% |
| FIYTA Sales Co., Ltd. (①) | 25% |
| Shenzhen FIYTA Precision Technology Co., Ltd. (②) | 15% |
| Shenzhen FIYTA STD Co., Ltd. (②) | 15% |
| Shenzhen Harmony World Watch Centre Co., Ltd. (⑤) | 20% |
| Shenzhen Xunhang Precision Technology Co., Ltd. | 25% |
| Emile Chouriet Horologe (Shenzhen) Co., Ltd. | 25% |
| Liaoning Hengdarui Commerce and Trade Co., Ltd. | 25% |
| Temporal (Shenzhen) Co., Ltd. | 25% |
| Shenzhen Harmony E-commerce Co., Ltd. (⑤) | 20% |
| FIYTA (HONG KONG) LIMITED (③) | 16.5% |
| Montres Chouriet SA（④） | 30% |
Note ①: According to the relevant provisions of the "Interim Measures for the Administration of Enterprise IncomeTax Collection for Enterprises with Trans-regional Operations and Consolidated Tax Payments" issued by the StateAdministration of Taxation, the headquarters and its subordinate branches of such companies implement aconsolidated tax payment method for enterprise income tax. This method involves "unified calculation, hierarchicalmanagement, local prepayment, consolidated settlement, and fiscal transfer of accounts." 50% of the prepayment isshared among branches, and 50% is shared by the head office;Note ②: These companies enjoy the "tax rate reduction and exemption for high-tech enterprises that need keysupport from the state";Note ③: the Company's registered location is Hong Kong, and the local profits tax in Hong Kong is applicable, andthe applicable tax rate for this year is 16.50%;
Note ④: the Company is registered in Switzerland. According to the applicable tax rate in registration location, thecomprehensive tax rate for this year is 30%;
Notes ⑤: these companies are small low-profit enterprises and are subject to enterprise income tax at a rate of20%.
2. Tax preference
According to the "Announcement on Preferential Income Tax Policies for Small and Micro Enterprises andIndividual Businesses" (CS [2023] No. 6) issued by the Ministry of Finance and the State Administration of Taxation,small and micro-profit enterprises include only 25% of their taxable income and pay enterprise income tax at a rate of20%. According to the "Notice on Extending the Loss Carry Forward Period for High-Tech Enterprises andTechnology-Based Small and Medium-Sized Enterprises" (CS [2018] No. 76) issued by the Ministry of Finance and the
State Administration of Taxation, starting from January 1, 2018, losses incurred in the five fiscal years prior toobtaining high-tech enterprise qualification that have not yet been offset are allowed to be carried forward tosubsequent years for offsetting, with the maximum carry forward period extended from 5 years to 10 years.According to the "Announcement on Further Improving the Policy of Pre-tax Additional Deduction of R&DExpenses" (CS [2023] No. 7) issued by the Ministry of Finance and the State Administration of Taxation, starting fromJanuary 1, 2023, enterprises' actual R&D expenses incurred in conducting R&D activities, which are not converted intointangible assets and are included in the current profit and loss, can be additionally deducted at 100% of the actualamount incurred on top of the actual deduction as per regulations. Where intangible assets are formed, they shall beamortized before tax at 200% of the cost of intangible assets as of January 1, 2023.Since 2019, Hong Kong implemented a two-tiered profits tax regime, whereby the profits tax rate for the firstHKD2,000,000 of profits earned by Hong Kong companies is reduced to 8.25%, and the remaining profits are taxed atthe standard rate of 16.5%.
3. Others
Not applicable
7. Notes to items in the consolidated financial statements
1. Monetary funds
Unit: RMB
| Item | Ending Balance | Opening balance |
| Cash on hand | 107,494.56 | 178,996.87 |
| Cash in bank | 21,352,343.64 | 35,443,378.12 |
| Other monetary funds | 2,109,236.20 | 1,262,979.96 |
| Deposit in finance companies | 380,786,934.73 | 467,743,798.76 |
| Total | 404,356,009.13 | 504,629,153.71 |
| Including: total amount deposited abroad | 1,951,883.15 | 1,202,601.86 |
Other notesThe deposits in finance companies were mainly the deposits in AVIC Finance Co., Ltd.As of June 30, 2024, the Company had no pledged or frozen funds. Details of the Company's funds placedoverseas with restrictions on fund repatriation are as follows:
| Item | Ending Balance | Opening balance |
| Funds placed overseas with restrictions on fund repatriation | 1,951,883.15 | 1,202,601.86 |
2. Trading financial assets
Not applicable
3. Derivative financial assets
Not applicable
4. Notes receivable
(1) Classified presentation of notes receivable
Unit: RMB
| Item | Ending Balance | Opening balance |
| Bank acceptance note | 7,483,190.50 | 10,363,449.00 |
| Commercial acceptance note | 8,855,201.81 | 7,905,523.37 |
| Total | 16,338,392.31 | 18,268,972.37 |
(2). Disclosure under the methods of provision for bad debts by category
Unit: RMB
| Category | Ending Balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Scale | Amount | Drawing percentages | Amount | Scale | Amount | Drawing percentages | |||
| In which: | ||||||||||
| Notes receivable with provision for bad debts by combination | 16,654,813.30 | 100.00% | 316,420.99 | 1.90% | 16,338,392.31 | 18,685,052.55 | 100.00% | 416,080.18 | 2.23% | 18,268,972.37 |
| In which: | ||||||||||
| Commercial acceptance draft combination | 9,171,622.80 | 55.07% | 316,420.99 | 3.45% | 8,855,201.81 | 8,321,603.55 | 44.54% | 416,080.18 | 5.00% | 7,905,523.37 |
| Risk-free bank acceptance draft combination | 7,483,190.50 | 44.93% | 0.00% | 7,483,190.50 | 10,363,449.00 | 55.46% | 0.00% | 10,363,449.00 | ||
| Total | 16,654,813.30 | 100.00% | 316,420.99 | 1.90% | 16,338,392.31 | 18,685,052.55 | 100.00% | 416,080.18 | 2.23% | 18,268,972.37 |
Name of provision with provision for bad debts by combination: commercial acceptance bill combination
Unit: RMB
| Name | Ending Balance | ||
| Book balance | Bad debt provision | Drawing percentages | |
| Commercial acceptance draft combination | 9,171,622.80 | 316,420.99 | 3.45% |
| Total | 9,171,622.80 | 316,420.99 | |
Description of the basis for determining the combination:
Accounts receivable with the same aging have similar credit risk characteristics.Catalog name with provision for bad debts by combination: non-risk bank acceptance bill combination
Unit: RMB
| Name | Ending Balance | ||
| Book balance | Bad debt provision | Drawing percentages | |
| Risk-free bank acceptance draft combination | 7,483,190.50 | 0.00% | |
| Total | 7,483,190.50 | ||
Description of the basis for determining the combination:
The drawer has a high credit rating, and has no bill default in history, so the risk of credit loss is extremely low, andalso has a strong ability to fulfill the obligation to pay the cash flow of the contract in a short period of time.If the provision for bad debts of notes receivable is made according to the general expected credit loss model:
Not applicable
(3) Status of bad debt provision, recovery, or reversal for the period
Provision for bad debts in the current period:
Unit: RMB
| Category | Opening balance | Amount of change for the period | Ending Balance | |||
| Provision | Recovered or transferred | Write-off | Other | |||
| Notes receivable with provision for bad debts by individual | ||||||
| Notes receivable with provision for bad debts by combination | ||||||
| Including: commercial acceptance bill combination | 416,080.18 | 99,659.19 | 316,420.99 | |||
| Risk-free bank acceptance draft combination | ||||||
| Total | 416,080.18 | 99,659.19 | 316,420.99 |
Where accounts receivable with significant from provision for bad debts or recovered in the current periodNot applicable
(4) Notes receivable pledged by the Company at the end of the periodNot applicable
(5) Receivables notes or discounted at period-end not yet due on the Company's balancesheet date
Unit: RMB
| Item | Termination confirmation amount at period-end | Unconfirmed amount at period-end |
| Bank acceptance note | 24,056,305.26 | 0.00 |
| Total | 24,056,305.26 | 0.00 |
(6). Situation of notes receivable actually written off in the current periodNot applicable
5. Accounts receivable
1. Disclosure by aging
Unit: RMB
| Aging | Book balance at period end | Beginning book balance |
| Within 1 year (including 1 year) | 363,748,311.83 | 333,204,160.07 |
| 1-2 years | 3,035,192.98 | 2,123,874.00 |
| 2-3 years | 1,519,611.03 | 4,200,458.08 |
| More than 3 years | 19,089,043.69 | 18,005,255.95 |
| 3-4 years | 19,089,043.69 | 18,005,255.95 |
| Total | 387,392,159.53 | 357,533,748.10 |
(2). Disclosure under the methods of provision for bad debts by category
Unit: RMB
| Category | Ending Balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Scale | Amount | Drawing percentages | Amount | Scale | Amount | Drawing percentages | |||
| Accounts receivable with provisio | 20,141,411.68 | 5.20% | 19,908,405.24 | 98.84% | 233,006.44 | 24,708,541.73 | 6.91% | 23,148,792.25 | 93.69% | 1,559,749.48 |
| n for bad debts by individual | ||||||||||
| In which: | ||||||||||
| Accounts receivable with provision for bad debts by combination | 367,250,747.85 | 94.80% | 12,000,288.48 | 3.27% | 355,250,459.37 | 332,825,206.37 | 93.09% | 11,242,194.21 | 3.38% | 321,583,012.16 |
| In which: | ||||||||||
| Combination of other customers' receivables | 367,250,747.85 | 94.80% | 12,000,288.48 | 3.27% | 355,250,459.37 | 332,825,206.37 | 93.09% | 11,242,194.21 | 3.38% | 321,583,012.16 |
| Total | 387,392,159.53 | 100.00% | 31,908,693.72 | 8.24% | 355,483,465.81 | 357,533,748.10 | 100.00% | 34,390,986.46 | 9.62% | 323,142,761.64 |
Category name of provision for bad debts by individual: accounts receivable from other customers
Unit: RMB
| Name | Opening balance | Ending Balance | ||||
| Book balance | Bad debt provision | Book balance | Bad debt provision | Drawing percentages | Provision Reason | |
| Receivables from other customers | 24,708,541.73 | 23,148,792.25 | 20,141,411.68 | 19,908,405.24 | 98.84% | Less likely to be withdrawn |
| Total | 24,708,541.73 | 23,148,792.25 | 20,141,411.68 | 19,908,405.24 | ||
Category name of provision for bad debts by combination: accounts receivable from other customers
Unit: RMB
| Name | Ending Balance | ||
| Book balance | Bad debt provision | Drawing percentages | |
| Receivables from other customers | 367,250,747.85 | 12,000,288.48 | 3.27% |
| Total | 367,250,747.85 | 12,000,288.48 | |
Description of the basis for determining the combination:
Accounts receivable with the same combination have similar credit risk characteristics.If the provision for bad debts of accounts receivable is made according to the general expected credit loss model:
Not applicable
(3) Status of bad debt provision, recovery, or reversal for the periodProvision for bad debts in the current period:
Unit: RMB
| Category | Opening balance | Amount of change for the period | Ending Balance | |||
| Provision | Recovered or transferred | Write-off | Other | |||
| Accounts receivable with provision for expected credit losses by individual | 23,148,792.25 | 3,253,930.73 | -13,543.72 | 19,908,405.24 | ||
| Accounts receivable with provision for expected credit losses by combination | 11,242,194.21 | 822,060.56 | 54,756.65 | 9,209.64 | 12,000,288.48 | |
| Total | 34,390,986.46 | 822,060.56 | 3,308,687.38 | -4,334.08 | 31,908,693.72 | |
Where accounts receivable with significant from provision for bad debts or recovered in the current period
Unit: RMB
| Company name | Recovered or reversed amount | Reason for reversal | Recovery method | Determine the basis and rationality of the original provision for bad debts |
| Shijiazhuang Yuhua Suning.com Commercial Management Co., Ltd. | 358,855.97 | Payment has been received normally | Bank collection | Provision based on the estimated recoverable amount |
| Nanjing Jianye Suning Yigou Plaza Commercial Management Co., Ltd. | 776,062.11 | Payment has been received normally | Bank collection | Provision based on the estimated recoverable amount |
| Baotou Galaxy Suning Yigou Plaza Co., Ltd. | 504,733.73 | Payment has been received normally | Bank collection | Provision based on the estimated recoverable amount |
| Yinchuan Suning.com Plaza Co., Ltd. | 636,843.63 | Payment has been received normally | Bank collection | Provision based on the estimated recoverable amount |
| Shanghai Pudong Suning.com Commercial Management Co., Ltd. | 818,227.34 | Payment has been received normally | Bank collection | Provision based on the estimated recoverable amount |
| Total | 3,094,722.78 |
(4). Situation of accounts receivable actually written off in the current periodNot applicable
(5) Accounts receivable and contractual assets collected from the debtors which rank the firstfive at the end of period
Unit: RMB
| Company name | Accounts receivable balance at the end of period | Ending balance of contractual assets | Ending balance of accounts receivable and contractual assets | Proportion in the total ending balance of accounts receivable and contractual assets | Ending balance of provision for bad debts of accounts receivable and provision for impairment of contractual assets |
| Summary of accounts receivable which ranks the first five at the end of period | 81,395,716.91 | 387,392,159.53 | 21.01% | 3,973,834.24 | |
| Total | 81,395,716.91 | 387,392,159.53 | 21.01% | 3,973,834.24 |
6. Contract assets
Not applicable
7. Receivables financing
Not applicable
8. Other receivables
Unit: RMB
| Item | Ending Balance | Opening balance |
| Other receivables | 59,436,540.53 | 57,725,792.00 |
| Total | 59,436,540.53 | 57,725,792.00 |
(1) Interest receivable
1) Classification of interest receivable
Not applicable
2) Important overdue interest
Not applicable
3). Disclosure under the methods of provision for bad debts by categoryNot applicable
4). Status of bad debt provision, recovery, or reversal for the period
Not applicable
5) Situation of interest receivable actually written off in the current periodNot applicable
(2) Dividends receivable
1) Classification of dividends receivable
Not applicable
2) Important dividends receivable with aging over 1 year
Not applicable
3). Disclosure under the methods of provision for bad debts by category
Not applicable
4). Status of bad debt provision, recovery, or reversal for the periodNot applicable
5) Situation of dividends receivable actually written off in the current period
Not applicable
(3) Other receivables
1) Classification of other receivables by nature
Unit: RMB
| Payment nature | Book balance at period end | Beginning book balance |
| Margin and deposits | 53,774,307.13 | 51,775,226.86 |
| Employee reserve | 3,740,041.27 | 1,549,821.50 |
| Other | 6,132,069.36 | 8,748,853.73 |
| Total | 63,646,417.76 | 62,073,902.09 |
2) Disclosure by aging
Unit: RMB
| Aging | Book balance at period end | Beginning book balance |
| Within 1 year (including 1 year) | 33,867,092.11 | 22,481,619.93 |
| 1-2 years | 24,429,192.98 | 38,313,327.26 |
| 2-3 years | 4,155,060.57 | 119,250.00 |
| More than 3 years | 1,195,072.10 | 1,159,704.90 |
| 3-4 years | 1,195,072.10 | 1,159,704.90 |
| Total | 63,646,417.76 | 62,073,902.09 |
3). Disclosure under the methods of provision for bad debts by category
Unit: RMB
| Category | Ending Balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Scale | Amount | Drawing percentages | Amount | Scale | Amount | Drawing percentages | |||
| Provision for bad debts on an individual basis | 1,393,147.78 | 2.19% | 1,363,219.78 | 97.85% | 29,928.00 | 1,418,314.90 | 2.28% | 1,367,386.90 | 96.41% | 50,928.00 |
| In which: | ||||||||||
| Provision for bad debts on a combination basis | 62,253,269.98 | 97.81% | 2,846,657.45 | 4.57% | 59,406,612.53 | 60,655,587.19 | 97.72% | 2,980,723.19 | 4.91% | 57,674,864.00 |
| In which: | ||||||||||
| Combination of margin and deposit receivable | 53,259,849.25 | 83.68% | 2,633,875.69 | 4.95% | 50,625,973.56 | 51,304,601.86 | 82.65% | 2,603,277.66 | 5.07% | 48,701,324.20 |
| Combination of employee reserve receivable | 3,740,041.27 | 5.88% | 0.00% | 3,740,041.27 | 1,549,821.50 | 2.50% | 0.00% | 1,549,821.50 | ||
| Combination of social security advances receivable | 508,259.76 | 0.80% | 0.00% | 508,259.76 | 284,862.55 | 0.46% | 0.00% | 284,862.55 | ||
| Combination of other financings | 4,745,119.70 | 7.46% | 212,781.76 | 4.48% | 4,532,337.94 | 7,516,301.28 | 12.11% | 377,445.53 | 5.02% | 7,138,855.75 |
| Total | 63,646,417.76 | 100.00% | 4,209,877.23 | 6.61% | 59,436,540.53 | 62,073,902.09 | 100.00% | 4,348,110.09 | 7.00% | 57,725,792.00 |
Number of categories with provision for bad debts by individual: 1Category name of provision for bad debts by individual: other accounts receivable
Unit: RMB
| Name | Opening balance | Ending Balance | ||||
| Book balance | Bad debt provision | Book balance | Bad debt provision | Drawing percentages | Provision Reason | |
| Other receivables | 1,418,314.90 | 1,367,386.90 | 1,393,147.78 | 1,363,219.78 | 97.85% | There is a dispute |
| Total | 1,418,314.90 | 1,367,386.90 | 1,393,147.78 | 1,363,219.78 | ||
Number of categories with provision for bad debts by combination: 4Category name of provision for bad debts by combination: combination of margin and deposit receivable
Unit: RMB
| Name | Ending Balance | ||
| Book balance | Bad debt provision | Drawing percentages | |
| Combination of margin and deposit receivable | 53,259,849.25 | 2,633,875.69 | 4.95% |
| Total | 53,259,849.25 | 2,633,875.69 | |
Description of the basis for determining the combination: payments of the same nature have similar credit riskcharacteristics.
Category name of provision for bad debts by combination: combination of employee reserve receivable
Unit: RMB
| Name | Ending Balance | ||
| Book balance | Bad debt provision | Drawing percentages | |
| Combination of employee reserve receivable | 3,740,041.27 | 0.00% | |
| Total | 3,740,041.27 | ||
Description of the basis for determining the combination: payments of the same nature have similar credit riskcharacteristics.
Category name of provision for bad debts by combination: combination of social security receivable on behalf of thepayer
Unit: RMB
| Name | Ending Balance |
| Book balance | Bad debt provision | Drawing percentages | |
| Combination of social security advances receivable | 508,259.76 | 0.00% | |
| Total | 508,259.76 |
Description of the basis for determining the combination: payments of the same nature have similar credit riskcharacteristics.
Category name of provision for bad debts by combination: other accounts receivable
Unit: RMB
| Name | Ending Balance | ||
| Book balance | Bad debt provision | Drawing percentages | |
| Combination of other financings | 4,745,119.70 | 212,781.76 | 4.48% |
| Total | 4,745,119.70 | 212,781.76 | |
Description of the basis for determining the combination: payments of the same nature have similar credit riskcharacteristics.
Provision for bad debts made according to the general expected credit loss model:
Unit: RMB
| Bad debt provision | Stage I | Stage II | Stage III | Total |
| Expected credit loss in the next 12 months | Expected credit loss throughout the duration (no credit impairment) | Expected credit loss throughout the duration (credit impairment has occurred) | ||
| Balance as of Jan. 1, 2024 | 2,980,723.19 | 1,367,386.90 | 4,348,110.09 | |
| Balance on Jan. 1, 2024 in the current period | ||||
| - Transfer to phase II | ||||
| - Transfer to phase III | ||||
| - Reversal to phase II | ||||
| - Reversal to phase I | ||||
| Provision in the current period | 40,599.80 | 40,599.80 | ||
| Reversal in the current period | -129,992.21 | -49,000.00 | -178,992.21 | |
| Write-off in the current period | ||||
| Write-off in the current period | ||||
| Other changes | 159.55 | 159.55 |
| Balance as of June 30, 2024 | 2,891,490.33 | 1,318,386.90 | 4,209,877.23 |
The basis for the division of each stage and the ratio of provisions for bad debtsThe phase I is the bad debt provision for other receivables within one year. The phase II is the bad debt provision foraccounts receivable over one year that have not been individually assessed. The phase III is the bad debt provision forindividually assessed accounts receivable.Changes in book balance with significant amount of loss provision in the current periodNot applicable
4). Status of bad debt provision, recovery, or reversal for the periodProvision for bad debts in the current period:
Unit: RMB
| Category | Opening balance | Amount of change for the period | Ending Balance | |||
| Provision | Recovered or transferred | Write-off or impairment | Other | |||
| Bad debt provision | 4,348,110.09 | 40,599.80 | -178,992.21 | 159.55 | 4,209,877.23 | |
| Total | 4,348,110.09 | 40,599.80 | -178,992.21 | 159.55 | 4,209,877.23 | |
Where the bad-debt provision amount recovered or reversed this period is important:
Not applicable
5) Situation of other accounts receivable actually written off in the current periodNot applicable
6). Other receivables collected from the debtors which rank the first five at the end of period
Unit: RMB
| Company name | Payment nature | Ending Balance | Aging | Proportion in the total ending balance of other receivables | End-of-period balance of provision for bad debt |
| Summary of other accounts receivable which rank the first five at the end of period | Deposits and margin | 8,634,010.68 | Within 1 year, 1-2 years | 13.57% | 431,700.53 |
| Total | 8,634,010.68 | 13.57% | 431,700.53 |
7) Presented in other receivables due to centralized management of funds
Not applicable
9. Prepayments
(1) Prepayments are presented by aging
Unit: RMB
| Aging | Ending Balance | Opening balance | ||
| Amount | Scale | Amount | Scale | |
| Within 1 year | 6,569,774.50 | 100.00% | 6,564,760.64 | 99.90% |
| 1-2 years | 0.00% | 6,479.34 | 0.10% | |
| Total | 6,569,774.50 | 6,571,239.98 | ||
Reasons for not timely settlement of prepayments with aging over 1 year and significant amount:
Not applicable
(2). Top five of advances to suppliers in terms of the ending balance presented by advancereceivers
| Company name | Ending Balance | Percentage of total advances (%) |
| Summary of prepayments collected from the debtors which rank the first five at the end of period | 4,185,055.26 | 63.70% |
10. Inventories
Whether the Company needs to comply with the disclosure requirements of the real estate industryNo
(1) Classification of inventory
Unit: RMB
| Item | Ending Balance | Opening balance | ||||
| Book balance | Provision for impairment of inventory or contract performance costs | Book value | Book balance | Provision for impairment of inventory or contract performance costs | Book value | |
| Raw material | 161,344,020.85 | 5,401,893.56 | 155,942,127.29 | 167,281,491.84 | 5,290,855.71 | 161,990,636.13 |
| Unfinished products | 10,779,027.93 | 10,779,027.93 | 12,060,525.88 | 12,060,525.88 | ||
| Merchandise inventory | 2,026,413,760.86 | 64,803,673.59 | 1,961,610,087.27 | 1,993,236,975.36 | 66,621,962.09 | 1,926,615,013.27 |
| Total | 2,198,536,809.64 | 70,205,567.15 | 2,128,331,242.49 | 2,172,578,993.08 | 71,912,817.80 | 2,100,666,175.28 |
(2) Data resources recognized as inventory
Not applicable
(3) Provision for impairment of inventory or contract performance costs
Unit: RMB
| Item | Opening balance | Increase for the current period | Decrease amount in the current period | Ending Balance | ||
| Provision | Other | Reversal or write-off | Other | |||
| Raw material | 5,290,855.71 | 253,915.61 | 142,877.76 | 5,401,893.56 | ||
| Merchandise inventory | 66,621,962.09 | 126,606.77 | 7,749.55 | 1,952,644.82 | 64,803,673.59 | |
| Total | 71,912,817.80 | 380,522.38 | 7,749.55 | 2,095,522.58 | 70,205,567.15 | |
Notes to provision for inventory write-down
| Item | Specific basis for determining the net realizable value/residual consideration and the cost to be incurred | Reversal or write-off in the current period Reasons to provision for inventory write-down |
| Raw material | Estimated selling prices of manufactured products minus estimated costs to completion, estimated selling expenses and related taxes and surcharges | The factors affecting the previous write-down of inventory value have disappeared, resulting in the net realizable value of inventory higher than its book value |
| Merchandise inventory | Estimated selling price minus estimated sales expenses and related taxes | The inventory with provision for inventory depreciation at the beginning of the period has been consumed/sold in the current period |
The provision for inventory depreciation by combinationNot applicableProvision criteria for provision of inventory depreciation reserve by combinationNot applicable
(4) Notes to the ending balance of inventories including the capitalization amount ofborrowing costs
Not applicable
(5) Notes to the amortization amount of contract performance costs in the current period
Not applicable
11. Assets held for sale
Not applicable
12. Non-current assets due within one year
Not applicable
(1) Debt investments due within one year
Not applicable
(2) Other debt investments due within one year
Not applicable
13. Other current assets
Unit: RMB
| Item | Ending Balance | Opening balance |
| Amount of value-added tax deduction | 14,705,036.13 | 21,032,239.30 |
| Input tax to be recognized | 13,980,706.95 | 31,717,607.91 |
| Prepaid income tax | 384,254.22 | 1,364,632.40 |
| Other taxes prepaid | 491,655.06 | |
| Fixed deposits | 45,001,594.79 | |
| Other | 14,475,773.82 | 18,134,912.20 |
| Total | 89,039,020.97 | 72,249,391.81 |
14. Debt investments
(1) Debt investments situation
Not applicable
(2) Important debt investments at the end of the period
Not applicable
(3) Provision for impairment
Not applicable
(4). Situation of debt investments actually written off in the current period
Not applicable
15. Other debt investments
(1) Other debt investments situation
Not applicable
(2) Other important debt investments at the end of the period
Not applicable
(3) Provision for impairment
Not applicable
(4). Situation of other debt investments actually written off in the current periodNot applicable
16. Investment in other equity instruments
Not applicable
17. Long-term receivables
(1) Long-term receivables
Not applicable
(2). Disclosure under the methods of provision for bad debts by categoryNot applicable
(3) Status of bad debt provision, recovery, or reversal for the periodNot applicable
(4). Situation of accounts receivable actually written off in the current periodNot applicable
18. Long-term equity investments
Unit: RMB
| The investee | Beginning balance (book value) | Beginning balance of provision for impairment | Increase or decrease in the current period | Ending balance (book value) | End-of-period balance of provision for impairment | |||||||
| Additional investment | Reduction of investment | Investment income or loss recognized under equity method | Other comprehensive income adjustments | Other changes in equity | Cash dividends or profits declared to be distributed | Provision for impairment accrued | Other | |||||
| 1. Joint ventures | ||||||||||||
| 2. Associated enterprise | ||||||||||||
| Shang | 51,86 | 89,87 | 51,95 | |||||||||
| hai Watch Industry Co., Ltd. | 2,607.30 | 2.06 | 2,479.36 | |||||||||
| Sub-total | 51,862,607.30 | 89,872.06 | 51,952,479.36 | |||||||||
| Total | 51,862,607.30 | 89,872.06 | 51,952,479.36 |
The recoverable amount is determined by the net amount of the fair value less the disposal expensesNot applicableThe recoverable amount is determined at the present value of the expected future cash flowsNot applicableReasons for the difference between the aforementioned information and the information used in the impairment test ofprevious years or external informationNot applicableReasons for the difference between the information used in the company's impairment test in previous years and theactual situation in the current yearNot applicableOther notesNot applicable
19. Other non-current financial assets
Not applicable
20. Investment properties
(1) Investment property measured at cost
Unit: RMB
| Item | Houses and structures | Land use rights | Construction in progress | Total |
| I. Original book value | ||||
| 1. Beginning balance | 620,335,023.89 | 620,335,023.89 | ||
| 2. Increase for the current period | ||||
| (1) Outsourcing | ||||
| (2) Transfers from inventories\fixed assets\construction in progress | ||||
| (3) Increase from business |
| combinations | ||||
| 3. Decrease for the current period | ||||
| (1) Disposal | ||||
| (2) Other transfers out | ||||
| 4. Ending balance | 620,335,023.89 | 620,335,023.89 | ||
| II. Accumulated depreciation and amortization | ||||
| 1. Beginning balance | 260,079,191.75 | 260,079,191.75 | ||
| 2. Increase for the current period | 7,846,994.22 | 7,846,994.22 | ||
| (1) Provision or amortization | 7,846,994.22 | 7,846,994.22 | ||
| (2) Transfer from fixed assets | ||||
| 3. Decrease for the current period | ||||
| (1) Disposal | ||||
| (2) Other transfers out | ||||
| 4. Ending balance | 267,926,185.97 | 267,926,185.97 | ||
| III. Impairment provision | ||||
| 1. Beginning balance | ||||
| 2. Increase for the current period | ||||
| (1) Provision | ||||
| 3. Decrease for the current period | ||||
| (1) Disposal | ||||
| (2) Other transfers out | ||||
| 4. Ending balance | ||||
| IV. Book value | ||||
| 1. Ending book value | 352,408,837.92 | 352,408,837.92 | ||
| 2. Beginning book value | 360,255,832.14 | 360,255,832.14 |
The recoverable amount is determined by the net amount of the fair value less the disposal expensesNot applicableThe recoverable amount is determined at the present value of the expected future cash flows
Not applicableReasons for the difference between the aforementioned information and the information used in the impairment test ofprevious years or external informationNot applicableReasons for the difference between the information used in the company's impairment test in previous years and theactual situation in the current yearNot applicableOther notes:
Not applicable
(2) Investment property measured at fair value
Not applicable
(3) Convert to investment property and measure at fair value
Not applicable
(4) Investment property without certificate of title
Not applicable
21. Fixed assets
Unit: RMB
| Item | Ending Balance | Opening balance |
| Fixed assets | 345,651,268.72 | 355,785,354.68 |
| Liquidation of fixed assets | 0.00 | 0.00 |
| Total | 345,651,268.72 | 355,785,354.68 |
(1). Status of fixed assets
Unit: RMB
| Item | Houses and buildings | Machinery equipment | Transport equipment | Electronic equipment | Other equipment | Total |
| 1. Original book value: | ||||||
| 1. Beginning balance | 441,589,632.63 | 130,667,789.21 | 13,277,093.83 | 50,657,219.07 | 44,094,254.35 | 680,285,989.09 |
| 2. Increase for the current period | 20,027.36 | 2,328,766.75 | 1,473,437.61 | 663,176.09 | 4,485,407.81 | |
| (1) Acquisitions | 2,320,494.70 | 1,473,351.07 | 663,176.09 | 4,457,021.86 | ||
| (2) Transfer from construction in progress |
| (3) Increase from business combinations | ||||||
| (4). Exchange differences arising from foreign currency transactions | 20,027.36 | 8,272.05 | 86.54 | 28,385.95 | ||
| 3. Decrease for the current period | 3,199,869.02 | 1,423,289.61 | 1,026,085.81 | 680,665.17 | 453,955.74 | 6,783,865.35 |
| (1) Disposal or scrapping | 570,550.00 | 128,105.05 | 1,026,085.81 | 631,965.29 | 335,369.81 | 2,692,075.96 |
| (2). Exchange differences arising from foreign currency transactions | 2,629,319.02 | 1,295,184.56 | 48,699.88 | 118,585.93 | 4,091,789.39 | |
| 4. Ending balance | 438,409,790.97 | 131,573,266.35 | 12,251,008.02 | 51,449,991.51 | 44,303,474.70 | 677,987,531.55 |
| II. Accumulated depreciation | ||||||
| 1. Beginning balance | 152,207,027.41 | 83,133,593.32 | 12,078,669.40 | 37,956,542.09 | 39,124,802.19 | 324,500,634.41 |
| 2. Increase for the current period | 6,534,045.86 | 4,469,874.54 | 167,437.90 | 1,580,401.82 | 674,908.55 | 13,426,668.67 |
| (1) Provision | 6,517,095.45 | 4,462,019.71 | 167,437.90 | 1,580,319.60 | 674,908.55 | 13,401,781.21 |
| (2). Exchange differences arising from foreign currency transactions | 16,950.41 | 7,854.83 | 82.22 | 24,887.46 | ||
| 3. Decrease for the current period | 2,238,221.77 | 1,295,744.31 | 974,781.52 | 597,648.74 | 484,643.91 | 5,591,040.25 |
| (1) Disposal or scrapping | 395,811.20 | 113,925.59 | 974,781.52 | 554,287.43 | 366,283.77 | 2,405,089.51 |
| (2). Exchange differences arising from foreign currency transactions | 1,842,410.57 | 1,181,818.72 | 43,361.31 | 118,360.14 | 3,185,950.74 | |
| 4. Ending balance | 156,502,851.50 | 86,307,723.55 | 11,271,325.78 | 38,939,295.17 | 39,315,066.83 | 332,336,262.83 |
| III. Impairment provision | ||||||
| 1. Beginning |
| balance | ||||||
| 2. Increase for the current period | ||||||
| (1) Provision | ||||||
| 3. Decrease for the current period | ||||||
| (1) Disposal or scrapping | ||||||
| 4. Ending balance | ||||||
| IV. Book value | ||||||
| 1. Ending book value | 281,906,939.47 | 45,265,542.80 | 979,682.24 | 12,510,696.34 | 4,988,407.87 | 345,651,268.72 |
| 2. Beginning book value | 289,382,605.22 | 47,534,195.89 | 1,198,424.43 | 12,700,676.98 | 4,969,452.16 | 355,785,354.68 |
(2) Temporarily idle fixed assets
Not applicable
(3) Fixed assets leased out through operating leases
Not applicable
(4) Fixed assets without certificates of title
Unit: RMB
| Item | Book value | Reasons for not completing the certificate of title |
| Houses and buildings | 182,663.79 | Defects in property rights |
(5) Impairment test of fixed assets
Not applicable
(6) Liquidation of fixed assets
Not applicable
22. Construction in progress
Not applicable
(1) Status of construction in progress
Not applicable
(2) Changes in important construction in progress in the current periodNot applicable
(3) Status of impairment of construction in progress in the current period
Not applicable
(4) Status of impairment test of construction in progress
Not applicable
(5) Project materials
Not applicable
23. Productive biological assets
(1) Productive biological assets measured at cost
Not applicable
(2) Impairment test of productive biological assets measured at costNot applicable
(3) Productive biological assets measured at fair value
Not applicable
24. Oil and gas assets
Not applicable
25. Right-of-use assets
(1) Right-of-use assets situation
Unit: RMB
| Item | Houses and buildings | Total |
| I. Original book value | ||
| 1. Beginning balance | 153,209,897.81 | 153,209,897.81 |
| 2. Increase for the current period | 54,191,179.24 | 54,191,179.24 |
| (1) Lease | 54,188,231.32 | 54,188,231.32 |
| (2). Exchange differences arising from foreign currency transactions | 2,947.92 | 2,947.92 |
| 3. Decrease for the current period | 79,521,232.18 | 79,521,232.18 |
| (1) Disposal | 1,437,591.74 | 1,437,591.74 |
| (2) The lease expires | 78,083,640.44 | 78,083,640.44 |
| 4. Ending balance | 127,879,844.87 | 127,879,844.87 |
| II. Accumulated depreciation | ||
| 1. Beginning balance | 43,757,416.17 | 43,757,416.17 |
| 2. Increase for the current period | 52,810,274.43 | 52,810,274.43 |
| (1) Provision | 52,808,948.49 | 52,808,948.49 |
| (2). Exchange differences arising from foreign currency transactions | 1,325.94 | 1,325.94 |
| 3. Decrease for the current period | 78,074,492.72 | 78,074,492.72 |
| (1) Disposal | 928,227.37 | 928,227.37 |
| (2) The lease expires | 77,146,265.35 | 77,146,265.35 |
| 4. Ending balance | 18,493,197.88 | 18,493,197.88 |
| III. Impairment provision | ||
| 1. Beginning balance | ||
| 2. Increase for the current period | ||
| (1) Provision | ||
| 3. Decrease for the current period | ||
| (1) Disposal | ||
| 4. Ending balance | ||
| IV. Book value | ||
| 1. Ending book value | 109,386,646.99 | 109,386,646.99 |
| 2. Beginning book value | 109,452,481.64 | 109,452,481.64 |
(2) Impairment test of right-of-use assets
Not applicable
26. Intangible assets
(1) Intangible assets
Unit: RMB
| Item | Land use rights | Patent right | Non-Patent Technology] | Software system | Right to use trademark | Total |
| I. Original book value | ||||||
| 1. Beginning balance | 34,933,822.40 | 35,242,672.55 | 16,599,485.22 | 86,775,980.17 | ||
| 2. Increase for the current period | 1,006,663.53 | 5,867.94 | 1,012,531.47 | |||
| (1) Acquisitions | 1,006,663.53 | 5,867.94 | 1,012,531.47 | |||
| (2) Internal |
| research and development | ||||||
| (3) Increase from business combinations | ||||||
| 3. Decrease for the current period | 7,357.60 | 0.43 | 7,358.03 | |||
| (1) Disposal | 7,357.60 | 0.43 | 7,358.03 | |||
| 4. Ending balance | 34,933,822.40 | 36,241,978.48 | 16,605,352.73 | 87,781,153.61 | ||
| II. Accumulated amortization | ||||||
| 1. Beginning balance | 17,249,475.30 | 27,593,853.68 | 10,268,270.42 | 55,111,599.40 | ||
| 2. Increase for the current period | 366,776.65 | 1,427,172.01 | 27,392.70 | 1,821,341.36 | ||
| (1) Provision | 366,776.65 | 1,427,172.01 | 27,392.70 | 1,821,341.36 | ||
| 3. Decrease for the current period | 367.88 | 367.88 | ||||
| (1) Disposal | 367.88 | 367.88 | ||||
| 4. Ending balance | 17,616,251.95 | 29,020,657.81 | 10,295,663.12 | 56,932,572.88 | ||
| III. Impairment provision | ||||||
| 1. Beginning balance | ||||||
| 2. Increase for the current period | ||||||
| (1) Provision | ||||||
| 3. Decrease for the current period | ||||||
| (1) Disposal | ||||||
| 4. Ending balance | ||||||
| IV. Book value | ||||||
| 1. Ending book value | 17,317,570.45 | 7,221,320.67 | 6,309,689.61 | 30,848,580.73 | ||
| 2. Beginning book value | 17,684,347.10 | 7,648,818.87 | 6,331,214.80 | 31,664,380.77 |
The proportion of intangible assets formed by the Company's internal research and development at the end of thecurrent period to the balance of intangible assets is 0.00%
(2) Data resources recognized as intangible assets
Not applicable
(3) Land use right without certificate of title
Not applicable
(4) Impairment test of intangible assets
Not applicable
27. Goodwill
(1) Original book value of goodwill
Not applicable
(2) Provision for impairment of goodwill
Not applicable
(3) Information on the asset group or combination of asset groups where the goodwill islocatedNot applicable
(4) Specific determination method of recoverable amount
Not applicable
(5) Completion of performance commitments and corresponding impairment of goodwillNot applicable
28. Long-term deferred expenses
Unit: RMB
| Item | Opening balance | Increase for the current period | Amortization amount for the current period | Other decreases | Ending Balance |
| Counter production fee | 19,008,343.84 | 8,377,686.40 | 9,745,039.42 | 1,078,053.51 | 16,562,937.31 |
| Decoration fee | 96,297,010.20 | 27,813,498.18 | 24,501,735.62 | 177,816.39 | 99,430,956.37 |
| Other | 7,019,001.09 | 441,460.90 | 3,258,250.73 | 85,902.48 | 4,116,308.78 |
| Total | 122,324,355.13 | 36,632,645.48 | 37,505,025.77 | 1,341,772.38 | 120,110,202.46 |
29. Deferred tax assets/deferred tax liabilities
(1) Deferred income tax assets without offset
Unit: RMB
| Item | Ending Balance | Opening balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Provision for impairment of assets | 103,493,511.38 | 23,491,810.64 | 107,672,653.16 | 24,371,732.35 |
| Unrealized profits from internal transactions | 61,698,023.06 | 15,215,058.31 | 83,620,908.60 | 20,855,280.62 |
| Deductible losses | 132,264,495.42 | 31,790,112.52 | 126,562,143.51 | 31,197,892.87 |
| Equity incentive | 8,686,896.23 | 2,038,524.01 | 6,263,007.85 | 1,449,733.06 |
| Publicity expenses that can be carried forward to subsequent years | 4,438,509.76 | 1,109,627.44 | ||
| Lease liabilities | 162,217,563.49 | 40,554,390.88 | 109,682,960.95 | 27,420,740.27 |
| Other | 5,150,706.68 | 1,287,676.67 | 5,168,527.80 | 1,292,131.95 |
| Total | 477,949,706.02 | 115,487,200.47 | 438,970,201.87 | 106,587,511.12 |
(2) Deferred income tax liabilities without offset
Unit: RMB
| Item | Ending Balance | Opening balance | ||
| Taxable temporary differences | Deferred tax liability | Taxable temporary differences | Deferred tax liability | |
| One-time pre-tax deduction of fixed assets | 29,215,672.67 | 4,382,350.90 | 28,437,227.07 | 4,265,584.06 |
| Right-of-use assets | 162,695,287.60 | 40,673,821.90 | 109,212,305.15 | 27,303,076.29 |
| Total | 191,910,960.27 | 45,056,172.80 | 137,649,532.22 | 31,568,660.35 |
(3) Deferred tax assets or liabilities presented by net amount after offset
Unit: RMB
| Item | Amount of deferred tax assets and liabilities offset at the end of the period | Ending balance of deferred tax assets or liabilities after offset | Amount of deferred tax assets and liabilities offset at the beginning of the period | Balance of deferred tax assets or liabilities after offset at the beginning of the period |
| Deferred income tax assets | 39,593,331.51 | 75,893,868.97 | 26,359,739.66 | 80,227,771.46 |
| Deferred tax liability | 39,593,331.51 | 5,462,841.29 | 26,359,739.66 | 5,208,920.69 |
(4) Details of unrecognized deferred tax assets
Unit: RMB
| Item | Ending Balance | Opening balance |
| Provision for impairment of assets | 3,444,117.03 | 3,395,341.37 |
| Deductible losses | 52,393,966.99 | 52,523,345.89 |
| Total | 55,838,084.02 | 55,918,687.26 |
(5) The deductible losses of the unrecognized deferred tax assets will become due in thefollowing years:
Unit: RMB
| Year | Ending amount | Beginning amount | Remarks |
| 2024 | 21,759,088.21 | 23,049,503.37 | |
| 2025 | 27,823,763.89 | 29,473,842.52 | |
| 2026 | |||
| 2027 | |||
| 2028 | |||
| 2029 | |||
| 2030 | |||
| 2031 | 2,811,114.89 | ||
| Total | 52,393,966.99 | 52,523,345.89 |
30. Other non-current assets
Unit: RMB
| Item | Ending Balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Prepayment for long-term assets | 2,185,332.57 | 2,185,332.57 | 9,434,627.17 | 9,434,627.17 | ||
| Total | 2,185,332.57 | 2,185,332.57 | 9,434,627.17 | 9,434,627.17 | ||
31. Assets with restricted ownership or usage rights
Not applicable
32. Short-term loans
(1) Classification of short-term debts
Unit: RMB
| Item | Ending Balance | Opening balance |
| Credit loans | 320,000,000.00 | 250,000,000.00 |
| Unexpired interest payable | 207,333.32 | 187,763.87 |
| Total | 320,207,333.32 | 250,187,763.87 |
(2) Overdue and outstanding short-term debts
Not applicable
33. Trading financial liabilities
Not applicable
34. Derivative financial liabilities
Not applicable
35. Notes payable
Not applicable
36. Accounts payable
(1) Presentation of accounts payable
Unit: RMB
| Item | Ending Balance | Opening balance |
| Payable for goods | 109,737,172.05 | 148,281,377.41 |
| Materials payable | 20,600,336.04 | 23,371,455.42 |
| Construction payables | 1,034,800.53 | 2,173,074.88 |
| Total | 131,372,308.62 | 173,825,907.71 |
(2). Significant payable aging over 1 year or overdue
Not applicable
37. Other payables
Unit: RMB
| Item | Ending Balance | Opening balance |
| Dividend payable | 2,907,796.73 | 2,058,352.24 |
| Other payables | 107,885,270.30 | 119,879,448.83 |
| Total | 110,793,067.03 | 121,937,801.07 |
(1) Interest payable
Not applicable
(2) Dividends payable
Unit: RMB
| Item | Ending Balance | Opening balance |
| Common stock dividends | 2,907,796.73 | 2,058,352.24 |
| Total | 2,907,796.73 | 2,058,352.24 |
(3) Other payables
1). Other payable listed by nature
Unit: RMB
| Item | Ending Balance | Opening balance |
| Deposits and margin | 33,574,986.55 | 34,075,198.63 |
| Expenses for store activities | 21,585,739.68 | 17,335,559.49 |
| Decoration fee | 4,893,296.60 | 10,214,019.04 |
| Restricted stock repurchase obligations | 13,379,181.81 | 14,304,862.81 |
| Other | 34,452,065.66 | 43,949,808.86 |
| Total | 107,885,270.30 | 119,879,448.83 |
2) Other significant payable with aging over 1 year or overdue
Unit: RMB
| Item | Ending Balance | Reasons for non-repayment or non-transfer |
| Property lease deposit | 14,498,179.29 | Settlement period not reached |
| Total | 14,498,179.29 |
38. Advance receipts
(1) Presentation of advances received
Unit: RMB
| Item | Ending Balance | Opening balance |
| Advance rent | 8,242,987.93 | 10,267,758.31 |
| Total | 8,242,987.93 | 10,267,758.31 |
(2) Significant advance receivable with aging over 1 year or overdueNot applicable
39. Contract liabilities
Unit: RMB
| Item | Ending Balance | Opening balance |
| Payment for goods | 18,804,742.85 | 12,286,243.62 |
| Total | 18,804,742.85 | 12,286,243.62 |
Significant contractual liabilities with aging over 1 yearNot applicableSignificant changes in book value during the reporting period, amounts and reasonsNot applicable
40. Employee compensation
(1). Employee compensation breakdown
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending Balance |
| I. Short-term compensations | 114,204,051.03 | 262,318,167.18 | 309,320,717.16 | 67,201,501.05 |
| II. Post-employment benefits - defined contribution plans | 5,581,451.36 | 23,863,509.40 | 23,378,302.45 | 6,066,658.31 |
| III. Termination benefits | 299,308.21 | 3,044,542.52 | 3,326,450.73 | 17,400.00 |
| Total | 120,084,810.60 | 289,226,219.10 | 336,025,470.34 | 73,285,559.36 |
(2). Short-term compensation breakdown
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending Balance |
| 1. Wages, bonus, allowance and subsidy | 113,282,042.05 | 227,106,252.78 | 274,396,607.52 | 65,991,687.31 |
| 2. Staff welfare | 162,095.02 | 10,037,372.97 | 9,883,253.98 | 316,214.01 |
| 3. Social insurance premium | 78.32 | 11,937,649.21 | 11,921,628.76 | 16,098.76 |
| Including: medical insurance premium | 10,978,630.58 | 10,962,684.19 | 15,946.38 | |
| Work-related injury insurance premium | 78.32 | 489,199.84 | 489,125.78 | 152.38 |
| Birth insurance premium | 469,818.79 | 469,818.79 | ||
| Housing provident funds | 13,551.00 | 9,652,267.10 | 9,488,972.22 | 176,845.89 |
| 5. Labor Union fee and staff education expenses | 746,284.64 | 3,584,625.12 | 3,630,254.68 | 700,655.08 |
| Total | 114,204,051.03 | 262,318,167.18 | 309,320,717.16 | 67,201,501.05 |
(3). Defined contribution plan breakdown
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending Balance |
| 1. Basic endowment insurance | 208,205.97 | 20,260,935.24 | 20,251,259.03 | 217,882.18 |
| 2. Unemployment | 379.88 | 877,646.96 | 877,338.68 | 688.16 |
| insurance premium | ||||
| 3. Enterprise annuity payment | 5,372,865.51 | 2,724,927.20 | 2,249,704.74 | 5,848,087.97 |
| Total | 5,581,451.36 | 23,863,509.40 | 23,378,302.45 | 6,066,658.31 |
41. Taxes payable
Unit: RMB
| Item | Ending Balance | Opening balance |
| VAT | 23,145,061.97 | 38,997,243.97 |
| Enterprise income tax | 24,686,272.16 | 21,276,050.77 |
| Individual income tax | 1,023,995.40 | 1,101,633.76 |
| Urban maintenance and construction tax | 184,082.84 | 1,047,680.77 |
| Education surcharges | 132,497.14 | 748,598.11 |
| Other | 3,380,962.23 | 1,016,953.93 |
| Total | 52,552,871.74 | 64,188,161.31 |
42. Liabilities held for sale
Not applicable
43. Non-current liabilities due within one year
Unit: RMB
| Item | Ending Balance | Opening balance |
| Lease liabilities due within one year | 69,943,530.95 | 66,399,004.20 |
| Total | 69,943,530.95 | 66,399,004.20 |
44. Other current liabilities
Unit: RMB
| Item | Ending Balance | Opening balance |
| Output tax amount to be transferred | 2,078,002.76 | 1,589,635.30 |
| Total | 2,078,002.76 | 1,589,635.30 |
45. Long-term loans
(1) Classification of long-term loans
Not applicable
46. Bonds payable
(1) Bonds payable
Not applicable
(2) Increase/decrease in bonds payable (excluding preferred stock, perpetual bonds and otherfinancial instruments divided into financial liabilities)Not applicable
(3) Notes to convertible corporate bonds
Not applicable
(4) Description of other financial instruments divided into financial liabilities
Not applicable
47. Lease liabilities
Unit: RMB
| Item | Ending Balance | Opening balance |
| Houses and buildings | 111,899,576.39 | 113,786,386.87 |
| Unrecognized financing charges | -2,988,410.05 | -3,861,030.15 |
| Lease liabilities due within one year | -69,943,530.95 | -66,399,004.20 |
| Total | 38,967,635.39 | 43,526,352.52 |
48. Long-term payable
Not applicable
(1) Long-term payable listed by nature
Not applicable
(2) Special payable
Not applicable
49. Long-term employee compensation payable
(1) Table of long-term employee compensation payable
Not applicable
(2) Changes in defined benefit plans
Not applicable
50. Estimated liabilities
Not applicable
51. Deferred income
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending Balance | Reasons for formation |
| Government subsidies | 952,785.69 | 952,785.69 | |||
| Total | 952,785.69 | 952,785.69 |
Other notes:
Deferred income related to government subsidiesFor details of the Company's government subsidies, please refer to Note XI.2 Liabilities related to governmentsubsidies.
52. Other non-current liabilities
Not applicable
53. Capital stock
Unit: RMB
| Opening balance | Increase/decrease in this change (+, -) | Ending Balance | |||||
| IPO | Rights issue | Capital conversion of provident funds | Other | Sub-total | |||
| Total number of shares | 415,219,970.00 | -9,355,763.00 | -9,355,763.00 | 405,864,207.00 | |||
Other notes:
According to the Plan on the Repurchase of Partial Domestic Listed Foreign-Invested Shares (B Shares)deliberated and adopted at the 11th meeting of the 10th Board of Directors held on March 16, 2023 and the 2022Annual General Meeting of Shareholders held on April 26, 2023, the Company is agreed to use its own funds torepurchase part of domestic listed foreign-invested shares (B Shares) through centralized bidding transactions. Thecancellation of 9,355,763 B shares repurchased by the company has been completed at the China SecuritiesDepository and Clearing Corporation Limited (CSDC) Shenzhen Branch on May 10, 2024.
54. Other equity instruments
(1) Basic information of preferred stock, perpetual bonds and other financial instruments issued at the end ofthe periodNot applicable
(2) Table of changes in preferred stock, perpetual bonds and other financial instruments issued at the end ofthe periodNot applicable
55. Capital reserve
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending Balance |
| Capital premium (equity premium) | 968,257,185.91 | 54,984,906.42 | 913,272,279.49 | |
| Other capital reserves | 21,901,847.26 | 906,067.21 | 22,807,914.47 | |
| Total | 990,159,033.17 | 906,067.21 | 54,984,906.42 | 936,080,193.96 |
Other notes, including the changes in the current period and the reasons for the changes:
1. According to the Proposal on Granting Restricted Stocks to the Incentive Objects of the Company's 2018 A-Shares Restricted Stock Incentive Plan (Phase II) deliberated and approved by the Board of Directors and the GeneralMeeting of Shareholders of the Company, in 1H24, the services obtained by the Company from the above incentiveobjects were included in the relevant costs or expenses and the "other capital reserves" was increased byRMB906,067.21 accordingly.
2. As stated in Note VII.53, the Company reduced the capital reserve by RMB54,984,906.42 for the repurchaseand cancellation of B shares.
56. Treasury stock
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending Balance |
| Reduction of registered capital for repurchase | 64,340,669.42 | 64,340,669.42 | ||
| Restricted share-based payment | 14,304,862.81 | 859,048.00 | 13,445,814.81 | |
| Total | 78,645,532.23 | 65,199,717.42 | 13,445,814.81 |
Other notes, including the changes in the current period and the reasons for the changes:
1. As stated in Note VII.53, the Company reduced the treasury stock by RMB64,340,669.42 for the repurchaseand cancellation of B shares.
2. In 1H24, the treasury stock was reduced by RMB859,048.00 for the cash dividends corresponding to theremaining restricted stocks.
57. Other comprehensive income
Unit: RMB
| Item | Opening balance | Amount for the current period | Ending Balance | |||||
| Amount before income tax for the | Less: Amounts previously included | Less: Amounts previously included | Less: income tax expenses | Net income attributable to | Net income attributable to | |||
| current period | in other comprehensive income reclassified to profit or loss in the current period | in other comprehensive income for retained earnings in the current period | parent company | minority shareholders | ||||
| I. Other comprehensive income that cannot be transferred to profit or loss | ||||||||
| Including: changes in re-measurement of the defined benefit plan | ||||||||
| Other comprehensive income that cannot be transferred to profit or loss under the equity method | ||||||||
| Changes in fair value of other equity instrument investments | ||||||||
| Changes in fair value of the company's credit risk |
| II. Other comprehensive income that will be reclassified into profit or loss | 19,325,335.93 | -5,577,527.76 | -5,577,527.76 | 13,747,808.17 | ||||
| Including: other comprehensive income that can be carried forward to profit and loss under the equity method | ||||||||
| Changes in fair value of other debt investments | ||||||||
| Amount of financial assets reclassified into other comprehensive incomes | ||||||||
| Provision for credit impairment of other debt investments | ||||||||
| Cash flow hedge reserves | ||||||||
| Translation difference of foreign currency financial | 19,325,335.93 | -5,577,527.76 | -5,577,527.76 | 13,747,808.17 |
| statements | ||||||||
| Total other comprehensive income | 19,325,335.93 | -5,577,527.76 | -5,577,527.76 | 13,747,808.17 |
58. Special reserves
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending Balance |
| Work safety charges | 3,223,158.06 | 760,556.40 | 218,699.04 | 3,765,015.42 |
| Total | 3,223,158.06 | 760,556.40 | 218,699.04 | 3,765,015.42 |
59. Surplus reserve
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending Balance |
| Legal surplus reserve | 213,025,507.50 | 213,025,507.50 | ||
| Discretionary surplus reserves | 61,984,894.00 | 61,984,894.00 | ||
| Total | 275,010,401.50 | 275,010,401.50 |
Description of surplus reserves, including the changes in the current period and the reasons for the changes:
According to the provisions of the Company Law and the Articles of Association, the Company withdraws statutorysurplus reserves at 10% of the net profit. If the cumulative amount of statutory surplus reserves reaches more than 50%of the registered capital of the Company, no further allocation is required.After withdrawing the statutory surplus provident funds, the Company may withdraw any surplus provident funds.Upon approval, the any surplus provident funds can be used to make up for the losses of previous years or increasethe share capital.
60. Undistributed profits
Unit: RMB
| Item | Increase for the current | Previous period |
| Undistributed profit at the end of the previous period before adjustment | 1,709,513,385.76 | 1,479,706,638.53 |
| Total adjusted undistributed profit at the beginning of the period (increase +, decrease -) | 0.00 | 0.00 |
| Undistributed profit at the beginning of the period after adjustment | 1,709,513,385.76 | 1,479,706,638.53 |
| Add: Net profit attributable to owners of the parent company for the current period | 147,138,482.34 | 333,178,102.37 |
| Less: withdrawal of legal surplus reserves | 0.00 | 0.00 |
| Common stock dividends payable | 162,345,682.81 | 103,371,355.14 |
| Undistributed profit at the end of the period | 1,694,306,185.29 | 1,709,513,385.76 |
Details of undistributed profit at the beginning of the period after adjustment
1) Due to the retrospective adjustment of the Accounting Standards for Business Enterprises and its relevant newprovisions, the retained profit at the beginning of the period was affected by RMB0.00.
2) Due to the change in accounting policies, the retained profit at the beginning of the period was affected byRMB0.00.
3) Due to the correction of major accounting errors, the retained profit at the beginning of the period was affectedby RMB0.00.
4) Due to the change in the scope of consolidation caused by the same control, the retained profit at the beginningof the period was affected by RMB0.00.
5) The total impact of other adjustments on the retained profit at the beginning of the period was RMB0.00.
61. Operating income and operating costs
Unit: RMB
| Item | Amount for the current period | Amount for the previous period | ||
| Revenue | Cost | Revenue | Cost | |
| Main business | 2,070,514,213.15 | 1,304,312,255.31 | 2,356,716,526.00 | 1,512,310,635.56 |
| Other businesses | 5,883,698.17 | 170,200.24 | 7,788,736.56 | 216,846.27 |
| Total | 2,076,397,911.32 | 1,304,482,455.55 | 2,364,505,262.56 | 1,512,527,481.83 |
Breakdown of operating income and operating cost:
Unit: RMB
| Classification of contracts | Divisional 1 | Total | ||
| Operating revenue | Operating cost | Operating revenue | Operating cost | |
| Business type | ||||
| In which: | ||||
| Watch brand business | 384,620,560.57 | 121,046,208.60 | 384,620,560.57 | 121,046,208.60 |
| Watch retail service business | 1,526,078,368.10 | 1,087,364,062.78 | 1,526,078,368.10 | 1,087,364,062.78 |
| Precision technology business | 88,908,749.85 | 77,451,749.76 | 88,908,749.85 | 77,451,749.76 |
| Leasing business | 70,906,534.63 | 18,450,234.17 | 70,906,534.63 | 18,450,234.17 |
| Other | 5,883,698.17 | 170,200.24 | 5,883,698.17 | 170,200.24 |
| Classified by business area | ||||
| In which: | ||||
| South China | 985,168,650.24 | 623,886,476.28 | 985,168,650.24 | 623,886,476.28 |
| Northwest China | 299,728,304.42 | 183,377,627.30 | 299,728,304.42 | 183,377,627.30 |
| North China | 67,039,768.59 | 36,074,332.54 | 67,039,768.59 | 36,074,332.54 |
| East China | 258,928,020.96 | 163,307,282.94 | 258,928,020.96 | 163,307,282.94 |
| Northeast China | 175,024,033.83 | 115,936,550.01 | 175,024,033.83 | 115,936,550.01 |
| Southwest China | 290,509,133.28 | 181,900,186.48 | 290,509,133.28 | 181,900,186.48 |
Information related to performance obligations:
See Note V.37 for details.Information related to the transaction price allocated to the remaining performance obligations:
At the end of the reporting period, the revenue corresponding to the performance obligations that have beensigned but not performed or not completed is RMB0.00.Information about variable consideration in the contract:
Not applicableChanges in major contracts or adjustments to major transaction prices:
Not applicable
62. Taxes and surcharges
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Consumption tax | 913,936.41 | 1,764,057.54 |
| Urban maintenance and construction tax | 3,480,924.40 | 4,791,269.83 |
| Education surcharges | 2,468,662.07 | 3,381,982.77 |
| Property tax | 3,689,322.24 | 3,557,771.54 |
| Land use tax | 203,766.80 | 186,994.62 |
| Vehicle and vessel usage tax | 1,020.00 | 2,880.00 |
| Stamp duty | 1,095,430.07 | 1,492,951.96 |
| Other | 407,395.56 | 584,547.81 |
| Total | 12,260,457.55 | 15,762,456.07 |
63. Administrative expenses
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Employee remuneration | 66,869,323.72 | 83,415,424.92 |
| Depreciation and amortization | 10,112,949.88 | 11,499,296.13 |
| Travel expense | 1,603,647.72 | 2,036,742.28 |
| Office allowance | 1,670,705.64 | 1,561,690.78 |
| Fees for hiring intermediary agencies | 1,961,271.79 | 1,750,354.69 |
| Water and electricity, property and rental fees | 1,784,853.95 | 1,735,898.86 |
| Business entertainment expenses | 456,485.67 | 567,726.27 |
| Automobile and transportation expenses | 598,205.06 | 919,436.00 |
| Communication charges | 173,259.63 | 195,521.76 |
| Other | 3,983,229.48 | 939,637.92 |
| Total | 89,213,932.54 | 104,621,729.61 |
64. Selling expenses
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Employee remuneration | 181,510,506.64 | 184,843,963.06 |
| Shopping malls and rental expenses | 72,573,677.88 | 82,289,084.29 |
| Advertising, exhibition and marketing expenses | 73,779,075.70 | 66,569,380.88 |
| Depreciation and amortization | 91,305,090.93 | 91,843,176.93 |
| Packing expenses | 4,665,459.60 | 4,588,450.00 |
| Water and electricity and property management fees | 11,430,327.96 | 11,172,272.71 |
| Transport cost | 2,742,617.08 | 2,972,928.76 |
| Office allowance | 2,697,327.59 | 2,929,620.97 |
| Travel expense | 3,648,244.84 | 3,826,254.03 |
| Business entertainment expenses | 2,008,292.89 | 1,947,349.51 |
| Other | 3,424,381.29 | 3,291,148.06 |
| Total | 449,785,002.40 | 456,273,629.20 |
65. Research and development expenses
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Employee remuneration | 19,756,648.13 | 22,913,768.63 |
| Sample and material costs | 1,285,353.22 | 663,576.68 |
| Mold fees | 318,637.69 | -4,970.13 |
| Depreciation and amortization | 2,382,614.08 | 2,243,045.93 |
| Technical cooperation fee | 1,469,929.58 | 444,619.97 |
| Other | 2,312,815.63 | 1,901,429.46 |
| Total | 27,525,998.33 | 28,161,470.54 |
66. Financial expenses
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Interest expense | 5,169,603.47 | 6,690,859.35 |
| Less: interest income | 2,185,535.51 | 2,432,180.03 |
| Exchange gains and losses | 944,148.29 | 1,335,231.32 |
| Handling fees and others | 5,694,581.34 | 6,594,306.18 |
| Total | 9,622,797.59 | 12,188,216.82 |
67. Other income
Unit: RMB
| Sources of other income | Amount for the current period | Amount for the previous period |
| Government subsidies | 1,414,439.38 | 6,691,609.41 |
| Personal income tax service fee refund | 511,868.05 | |
| Additional deduction of VAT | 1,177,577.07 |
68. Net exposure hedging income
Not applicable
69. Gains from changes in fair value
Not applicable
70. Investment income
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Long-term equity investment income accounted for using the equity method | 89,872.06 | -1,697,481.65 |
| Interest income from fixed deposits | 223,962.11 | |
| Total | 313,834.17 | -1,697,481.65 |
71. Credit impairment losses
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Losses from bad debts in notes receivable | 99,659.19 | 621,723.41 |
| Losses from bad debt in accounts receivable | 2,486,626.83 | 3,558,352.90 |
| Losses from bad debt in accounts receivable | 138,392.41 | 153,871.31 |
| Total | 2,724,678.43 | 4,333,947.62 |
72. Asset impairment losses
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| 1. Inventory depreciation loss and contract performance cost impairment loss | 28,336.82 | |
| 2. Losses from impairment of long-term equity investments | ||
| 3. Losses from impairment of investment properties | ||
| 4. Losses from impairment of fixed assets | ||
| 5. Losses from impairment of project materials | ||
| 6. Losses from impairment of construction in progress | ||
| 7. Losses from impairment of productive biological assets | ||
| 8. Losses from impairment of oil and gas assets | ||
| 9. Losses from impairment of |
| intangible assets | ||
| 10. Losses from impairment of goodwill | ||
| 11. Losses from impairment of contract assets | ||
| 12. Others | ||
| Total | 28,336.82 |
73. Income from asset disposals
Unit: RMB
| Source of income from assets disposal | Amount for the current period | Amount for the previous period |
| Gains or losses from disposal of fixed assets | 2,871,991.80 | -89,254.33 |
| Gains or losses on disposal of right-of-use assets | 34,218.87 | 12,564.60 |
| Total | 2,906,210.67 | -76,689.73 |
74. Non-operating income
Unit: RMB
| Item | Amount for the current period | Amount for the previous period | Amount included in the current non-recurring profit and loss |
| Income from liquidated damages | 685,500.07 | 286,740.28 | 685,500.07 |
| Payable not required to be paid | 250,659.03 | 226,699.03 | 250,659.03 |
| Income from rights protection and compensation | 397,868.50 | 397,868.50 | |
| Other | 44,111.25 | 83,084.52 | 44,111.25 |
| Total | 1,378,138.85 | 596,523.83 | 1,378,138.85 |
75. Non-operating expenditure
Unit: RMB
| Item | Amount for the current period | Amount for the previous period | Amount included in the current non-recurring profit and loss |
| Losses from non-monetary asset exchange | |||
| External donation | 243,626.35 | 243,626.35 | |
| Fines and overdue fines | 1,348.47 | 208,833.38 | 1,348.47 |
| Liquidated damages | 4,075.11 | 54,416.71 | 4,075.11 |
| Other | 29,783.42 | 28,351.09 | 29,783.42 |
| Total | 278,833.35 | 291,601.18 | 278,833.35 |
76. Income tax expense
(1) Table of income tax expense
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Current income tax expenses | 41,957,212.02 | 52,147,601.16 |
| Deferred income tax expense | 4,587,823.09 | 4,983,918.40 |
| Total | 46,545,035.11 | 57,131,519.56 |
(2) Accounting profit and income tax expense adjustment process
Unit: RMB
| Item | Amount for the current period |
| Gross profit | 193,683,517.45 |
| Income tax expenses calculated at statutory/applicable tax rate | 48,420,879.36 |
| Effect of different tax rates applicable to subsidiaries | -1,174,196.24 |
| Effect of adjusting income tax in prior periods | 526,448.25 |
| Effect of non-taxable income | -22,468.02 |
| Effect of non-deductible costs, expenses and losses | 1,066,134.58 |
| Tax payment effect of markup deduction of research and development expenses ("-") | -2,271,762.82 |
| Income tax expense | 46,545,035.11 |
77. Other comprehensive income
See Note VII.57 for details.
78. Cash flow statement items
(1) Cash related to operating activities
Cash received from other operating activities
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Deposits and margin | 3,891,700.17 | 4,310,663.92 |
| Government subsidies | 1,685,999.41 | 6,623,312.69 |
| Commodity promotion expenses | 3,815,826.53 | 6,824,544.07 |
| Interest income | 2,197,067.47 | 2,432,180.03 |
| Petty cash | 1,656,985.54 | 3,098,754.09 |
| Other | 9,515,423.83 | 14,009,396.39 |
| Total | 22,763,002.95 | 37,298,851.19 |
Notes of cash received from other operating activitiesNot applicableOther cash payments relating to operating activities
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Deposits and margin | 4,378,182.27 | 8,763,786.62 |
| Petty cash | 3,510,492.16 | 6,711,750.04 |
| Period expense | 171,248,817.83 | 162,631,345.85 |
| Other | 6,277,130.46 | 4,342,740.34 |
| Total | 185,414,622.72 | 182,449,622.85 |
Notes of cash paid for other operating activitiesNot applicable
(2) Cash related to investing activities
Cash received from other investing activities
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Recovery of fixed deposits | 120,049,969.61 | |
| Total | 120,049,969.61 |
Cash received from significant investing activitiesNot applicableCash paid for other investing activities
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Purchase of fixed deposit products | 165,092,806.07 | |
| Total | 165,092,806.07 |
Cash paid for important investing activitiesNot applicable
(3) Cash related to financing activities
Cash received from other financing activitiesNot applicableCash paid for other financing activities
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Lease cash outflow | 58,174,682.07 | 56,886,698.46 |
| Payment for share repurchase | 79,409.91 | 35,483,644.86 |
| Total | 58,254,091.98 | 92,370,343.32 |
Notes of cash paid for other financing activities:
Not applicableChanges in liabilities arising from financing activities:
Not applicable
(4) Notes to net presentation of cash flows
Not applicable
(5) Major activities and financial impacts that do not involve current cash receipts andpayments but affect the financial position of the enterprise or may affect the cash flows of theenterprise in the futureNot applicable
79. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
Unit: RMB
| Additional information | Amount in current period | Amount of previous period |
| 1. Reconciliation of net profit to cash flows from operating activities | ||
| Net profit | 147,138,482.34 | 187,395,067.23 |
| Plus: provision for asset impairment | -2,753,015.25 | -4,333,947.62 |
| Depreciation of fixed assets, consumption of oil and gas assets and productive biological assets | 21,248,775.43 | 20,546,291.19 |
| Depreciation of right-of-use asset | 52,808,948.49 | 50,579,624.79 |
| Amortization of intangible assets | 1,821,341.36 | 1,853,819.12 |
| Long-term unamortized expenses | 37,505,025.77 | 46,620,603.57 |
| Losses from disposal of fixed assets, intangible assets and other long-term assets (income to be listed with "-") | -2,906,210.67 | 76,689.73 |
| Losses from discarding of fixed assets (income to be listed with "-") | ||
| Losses from fair value changes (income to be listed with "-") | ||
| Financial expenses (income to be listed with "-") | 6,113,751.76 | 8,026,090.67 |
| Investment loss (income to be listed with "-") | -313,834.17 | 1,697,481.65 |
| Decrease in deferred income tax assets (increase to be listed with "-") | 4,333,902.49 | 3,681,918.71 |
| Increase in deferred income tax liabilities (decrease to be listed with "-") | 253,920.60 | -57,196.06 |
| Decrease in inventory (increase to be listed with "-") | -25,957,816.56 | 56,107,015.08 |
| Decrease in operating receivables (increase to be listed with | -29,498,881.56 | -73,392,204.29 |
| "-") | ||
| Increase in operating payables (decrease to be listed with "-") | -73,263,593.51 | 45,858,589.85 |
| Other | ||
| Net Cash Flows from Operating Activities | 136,530,796.52 | 344,659,843.62 |
| II. Significant investing and financing activities not related to cash deposit and withdrawal | ||
| Conversion of debt into capital | ||
| Convertible corporate bonds due within one year | ||
| Fixed assets under financing lease | ||
| 3. Net change in cash and cash equivalents | ||
| Ending balance of cash | 404,356,009.13 | 519,368,795.12 |
| Less: Beginning balance of cash | 504,629,153.71 | 313,747,463.64 |
| Add: Ending balance of cash equivalents | ||
| Less: Beginning balance of cash equivalents | ||
| Net increase in cash and cash equivalents | -100,273,144.58 | 205,621,331.48 |
(2) Net cash paid for acquisition of subsidiaries in the current period
Not applicable
(3) Net cash received from disposal of subsidiaries in the current periodNot applicable
(4). Composition of cash and cash equivalents
Unit: RMB
| Item | Ending Balance | Opening balance |
| I. Cash | 404,356,009.13 | 504,629,153.71 |
| Including: Petty cash | 107,494.56 | 178,996.87 |
| Bank deposits available for immediate payment | 402,139,278.38 | 503,187,176.88 |
| Other monetary funds available for immediate payment | 2,109,236.20 | 1,262,979.96 |
| II. Cash equivalents | ||
| Including: bond investment due within three months | ||
| III. Closing balance of cash and cash equivalents | 404,356,009.13 | 504,629,153.71 |
| Including: cash and cash equivalents restricted for use by the parent company or subsidiaries within the group | 1,951,883.15 | 1,202,601.86 |
(5) The situation where the scope of use is limited but still belongs to the presentation of cashand cash equivalents
Unit: RMB
| Item | Amount in current period | Amount of previous period | Reasons for remaining cash and cash equivalents |
| Cash in bank | 1,951,883.15 | 1,202,601.86 | The remittance of funds deposited in overseas accounts of the company's overseas subsidiaries is restricted, which does not affect the daily use. |
| Total | 1,951,883.15 | 1,202,601.86 |
(6) Cash not belonging to cash and cash equivalents
Not applicable
(7) Description of other major activities
Not applicable
80. Notes to items of the statement of changes in Owners' equity
Not applicable
81. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
| Item | Foreign currency ending balance | Conversion exchange rate | Balance converted into RMB at the end of the period |
| Cash and bank balances | 6,824,404.89 | ||
| Including: USD | 273,845.27 | 7.1268 | 1,951,640.49 |
| EUR | 181,785.03 | 7.6617 | 1,392,782.33 |
| HKD | 1,671,648.98 | 0.9127 | 1,525,680.59 |
| CHF | 245,913.79 | 7.9471 | 1,954,301.48 |
| Accounts receivable | 6,181,874.23 | ||
| Including: USD | 406,931.54 | 7.1268 | 2,900,119.70 |
| EUR | 7.6617 | ||
| HKD | 3,390,101.20 | 0.9127 | 3,094,077.56 |
| CHF | 23,615.78 | 7.9471 | 187,676.97 |
| Other receivables | 789,748.94 | ||
| Including: HKD | 769,061.82 | 0.9127 | 701,907.34 |
| CHF | 11,053.29 | 7.9471 | 87,841.60 |
| Accounts payable | 813,157.24 | ||
| Including: USD | 1,019.00 | 7.1268 | 7,262.21 |
| HKD | 754,624.08 | 0.9127 | 688,730.30 |
| CHF | 14,743.08 | 7.9471 | 117,164.73 |
| Other payables | 627,505.26 | ||
| Including: USD | 9,339.10 | 7.1268 | 66,557.92 |
| HKD | 252,649.49 | 0.9127 | 230,588.13 |
| CHF | 41,569.78 | 7.9471 | 330,359.20 |
| Long-term loans | |||
| Including: USD | |||
| EUR | |||
| HKD |
(2) Description of overseas operating entities, including for important overseas operatingentities, the main overseas business place, functional currency and selection basis shall bedisclosed, and the reasons for changes in functional currency shall also be disclosed.Not applicable
82. Leasing
(1) The Company as the lessee
See Note 25, Note 47 and Note 79 for the Company's right-of-use assets, lease liabilities and total cash outflowrelated to leases. The Company, as the lessee, is included in the profit and loss as follows:
| Item | Amount for the current period | Amount for the previous period |
| Interest on lease liabilities | 2,155,222.71 | 2,222,605.26 |
| Short-term leases expenses | 76,946.63 | 496,529.80 |
| Low-value asset leases expenses | ||
| Variable lease payments not included in the measurement of lease liabilities | 38,721,311.76 | 45,887,165.30 |
| Revenue from subleasing right-of-use assets | ||
| Sale and leaseback transactions |
The Company, as the lessee, other information as follows:
Leasing activities
The Company's leases are all houses and buildings, including short-term leases simplified and treated, and leasesother than short-term leases recognized as the right-of-use assets and lease liabilities.
Variable lease payments not included in the measurement of lease liabilities
1) Variable lease payments
The lessee has a large number of real estate leases for retail stores, and many leases contain variable paymentterms linked to store sales.
Many of our real estate leases contain variable lease payment terms linked to the sales volume of the leasedstores. Where possible, the Company uses these terms to match lease payments with stores that generate more cashflows. For individual stores, up to 100% of the lease payment can be based on variable payment terms, and the salesscale used is relatively large. In some cases, variable payment terms also include the bottom line and upper limit ofannual payment
In 1H24, the variable lease payments included in the current profit and loss were RMB38,721,311.76.
2) Renewal option
Many of the lease contracts signed by the Company contain renewal options, and the Company has reasonablyestimated the exercise of the renewal options when measuring the lease liabilities to determine the lease term.
3) Termination of lease option
Some of the lease contracts signed by the Company contain the option to terminate the lease. and the Companyhas reasonably estimated the exercise of the termination of lease options when measuring the lease liabilities todetermine the lease term.
4) Residual value guarantee
There is no residual value guarantee for the Company's leases.
5) Lease committed by the lessee but not yet started
There is no lease committed by the lessee but not yet started
Simplified treatment of short-term leases or leasing fees for low-value assetsThe Company's short-term leases, which are simplified in processing, include leases with a term of no more than 12months and without purchase options, as well as leases completed within 12 months after the initial implementation of"Accounting Standard for Business Enterprises No. 21 - Leases." In 1H24, the short-term rental expenses included inthe current profit and loss were RMB76,946.63.
Circumstances involving sale and leaseback transactionsNot applicable
(2) The Company as the lessor
Operating lease as a lessor
Unit: RMB
| Item | Leasing income | Including: income related to variable lease payments not included in the lease receipts |
| Lease of houses and buildings | 70,906,534.63 | 0.00 |
| Total | 70,906,534.63 | 0.00 |
Financing lease as a lessorNot applicableUndiscounted lease receipts for each of the next five yearsNot applicableReconciliation table of undiscounted lease receipts and net lease investmentNot applicable
(3) Recognize profit or loss on finance lease sales as a manufacturer or distributorNot applicable
83. Data resources
Not applicable
84. Others
8. R&D expenditure
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Employee remuneration | 19,756,648.13 | 22,913,768.63 |
| Sample and material costs | 1,285,353.22 | 663,576.68 |
| Mold fees | 318,637.69 | -4,970.13 |
| Depreciation and amortization | 2,382,614.08 | 2,243,045.93 |
| Technical cooperation fee | 1,469,929.58 | 444,619.97 |
| Other | 2,312,815.63 | 1,901,429.46 |
| Total | 27,525,998.33 | 28,161,470.54 |
| Including: Expensed R&D expenditures | 27,525,998.33 | 28,161,470.54 |
| Capitalized R&D expenditures | 0.00 | 0.00 |
1. R&D projects eligible for capitalization
Not applicable
2. Important outsourcing projects under research
Not applicable
9. Changes in the scope of consolidation
1. Business combination not under common control
(1) Business combination not under common control occurred in the current periodNot applicable
(2) Combination costs and goodwill
Not applicable
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
Not applicable
(4) Gains or losses arising from the re-measurement of equity held before the acquisition date at fair valueWhether there is a transaction that achieves the business combination step by step through multiple transactions andobtains the control during the reporting periodNo
(5) Relevant explanations for the inability to reasonably determine the acquisition consideration or the fairvalue of identifiable assets and liabilities of the acquiree at the acquisition date or the end of the reportingperiod of combination.Not applicable
(6) Other notes
Not applicable
2. Business combination under common control
(1) Business combination under common control occurred in the current periodNot applicable
(2) Combination cost
Not applicable
(3) Book value of the combined party's assets and liabilities on the combination dateNot applicable
3. Reverse acquisition
Not applicable
4. Disposal of subsidiaries
Whether there is any transaction or event that results in the loss of control over the subsidiaries in the current periodNoWhether there is a situation where the investment in subsidiaries is disposed of through multiple transactions and thecontrol is lost in the current periodNo
5. Changes in the scope of consolidation for other reasons
Not applicable
6. Others
Not applicable
10. Equity interests in other entities
1. Equity in subsidiaries
(1) Composition of the enterprise group
Unit: RMB
| Name of subsidiaries | Registered Capital | Main business premise | Registration place | Nature of business | Percentage of shares | Method of acquisition | |
| Direct | Indirect | ||||||
| Shenzhen Harmony World Watch Centre Co., Ltd. | 600,000,000.00 | Shenzhen | Shenzhen | Commerce | 100.00% | Establishment or investment | |
| FIYTA Sales Co., Ltd. | 450,000,000.00 | Shenzhen | Shenzhen | Commerce | 100.00% | Establishment or investment | |
| Shenzhen FIYTA Precision Technology Co., Ltd. | 180,000,000.00 | Shenzhen | Shenzhen | Manufacturing | 99.00% | 1.00% | Establishment or investment |
| Shenzhen FIYTA STD Co., Ltd. | 50,000,000.00 | Shenzhen | Shenzhen | Manufacturing | 100.00% | Establishment or investment | |
| Shenzhen Harmony World Watch Centre Co., Ltd. | 10,000,000.00 | Sanya | Sanya | Commerce | 100.00% | Establishment or investment | |
| Shenzhen Xunhang Precision Technology Co., Ltd. | 10,000,000.00 | Shenzhen | Shenzhen | Manufacturing | 100.00% | Establishment or investment | |
| Emile Chouriet Horologe (Shenzhen) Co., Ltd. | 41,355,200.00 | Shenzhen | Shenzhen | Commerce | 100.00% | Establishment or investment | |
| Liaoning Hengdarui Commerce and Trade Co., Ltd. | 51,000,000.00 | Shenyang | Shenyang | Commerce | 100.00% | Business combination under common control | |
| Temporal (Shenzhen) Co., Ltd. | 5,000,000.00 | Shenzhen | Shenzhen | Commerce | 100.00% | Establishment or investment | |
| Shenzhen Harmony E-commerce Co., Ltd. | 10,000,000.00 | Shenzhen | Shenzhen | Commerce | 100.00% | Establishment or investment | |
| FIYTA (HONG KONG) LIMITED | 137,737,520.00 | Hong Kong | Hong Kong | Commerce | 100.00% | Establishment or investment | |
| Montres Chouriet SA | 97,958,426.10 | Switzerland | Switzerland | Manufacturing | 100.00% | Business combination not under common control | |
Description of the shareholding ratio in the subsidiary that is different from the voting rights ratio:
Not applicable
Basis for holding half or less of the voting rights but still controlling the investee, and holding more than half of thevoting rights but not controlling the investee:
Not applicableFor important structured entities included in the scope of consolidation, basis for control:
Not applicableBasis for determining whether the company is an agent or a principal:
Not applicable
(2) Significant non-wholly-owned subsidiaries
Not applicable
(3) Main financial information of significant non-wholly-owned subsidiaries
Not applicable
(4) Major restrictions on the use of the assets of the enterprise group and the settlement of the debts of theenterprise groupNot applicable
(5) Financial support or other support provided to structured entities included in the scope of consolidatedfinancial statementsNot applicable
2. Transactions of changes in the share of Owners' equity in subsidiaries and still control thesubsidiaries
(1) Description of changes in the share of Owners' equity in subsidiaries
Not applicable
(2) Impact of the transaction on minority equity and equity attributable to shareholdersNot applicable
3. Equity in joint venture arrangements or associates
(1) Important joint ventures or associated enterprises
| Name of joint venture or associated enterprise | Main business premise | Registration place | Nature of business | Percentage of shares | Accounting treatment of investments in joint ventures or associated enterprise | |
| Direct | Indirect | |||||
| Shanghai Watch Industry Co., Ltd. | Shanghai | Shanghai | Commerce | 25.00% | Equity method |
Description of the different shareholding scales of joint ventures or associated enterprises from the voting scale:
Not applicableBasis for holding less than 20% of voting rights but having significant influence, or holding 20% or more of voting rightsbut not having significant influence:
Not applicable
(2) Main financial information of important joint ventures
Not applicable
(3) Main financial information of important associated enterprise
Unit: RMB
| Ending balance/amount incurred in the current period | Beginning balance/amount incurred in the previous period | |
| Current assets | 185,298,448.35 | 165,796,119.65 |
| Non-current assets | 13,596,917.44 | 16,753,785.07 |
| Total assets | 198,895,365.79 | 182,549,904.72 |
| Current liabilities | 76,767,544.41 | 60,781,571.60 |
| Non-current liabilities | ||
| Total liabilities | 76,767,544.41 | 60,781,571.60 |
| Minority interests | ||
| Equity attributable to shareholders of the parent company | 122,127,821.38 | 121,768,333.12 |
| Share of net assets calculated by shareholding scale | 30,531,955.34 | 30,442,083.28 |
| Adjustment matters | 21,420,524.02 | 21,420,524.02 |
| - Goodwill | 21,420,524.02 | 21,420,524.02 |
| - Unrealized profits from internal transactions | ||
| - Others | ||
| Book value of equity investment in associated enterprise | 51,952,479.36 | 51,862,607.30 |
| Fair value of equity investments in associated enterprises at publicly quoted prices | ||
| Operating revenue | 58,283,918.10 | 63,610,760.47 |
| Net profit | 359,488.26 | -6,789,926.61 |
| Net profits from discontinued operations | ||
| Other comprehensive income | ||
| Total comprehensive income | 359,488.26 | -6,789,926.61 |
| Dividends received from associated |
enterprise in the current year
(4) Summary financial information of insignificant joint ventures and associated enterpriseNot applicable
(5) Explanation on significant restrictions on the ability of joint ventures or associatedenterprises to transfer funds to the CompanyNot applicable
(6) Excess losses incurred by joint ventures or associated enterpriseNot applicable
(7) Unrecognized commitments related to investment in joint venturesNot applicable
(8) Contingent liabilities related to investments in joint ventures or associated enterpriseNot applicable
4. Important joint operation
Not applicable
5. Equity in structured entities not included in the scope of consolidated financial statementsNot applicable
6. Others
Not applicable
11. Government subsidies
1. Government subsidies recognized as receivable at the end of the reporting periodNot applicable
2. Liability items involving government subsidies
Unit: RMB
| Accounting item | Opening balance | Amount of new subsidies in | Amount included in non- | Amount transferred to other | Other changes in the current | Ending Balance | Related to assets/income |
| the current period | operating income in the current period | income in the current period | period | ||||
| Deferred income | 952,785.69 | 952,785.69 | Related to assets |
3. Government subsidies included in the current period's profit and loss
Unit: RMB
| Accounting item | Amount for the current period | Amount for the previous period |
| Other income | 1,414,439.38 | 6,691,609.41 |
12. Risks related to financial instruments
1. Various risks arising from financial instruments
The Company's main financial instruments include cash, equity investment, borrowings, accounts receivable, accountspayable, etc. In daily activities, it faces the risks of various financial instruments, mainly including credit risk, liquidityrisk and market risk. The risks associated with these financial instruments and the risk management policies adoptedby the Company to mitigate these risks are as follows:
The Board of Directors is responsible for planning and establishing the risk management framework of the Company,formulating the risk management policies and relevant guidelines of the Company, and supervising the implementationof risk management measures. The Company has formulated risk management policies to identify and analyze therisks faced by the Company. These risk management policies clearly stipulate specific risks and cover many aspectssuch as market risk, credit risk and liquidity risk management. The Company regularly assesses the changes in themarket environment and the Company's operating activities to decide whether to update the risk management policiesand systems. The Company's risk management is carried out by the Risk Management Committee in accordance withthe policies approved by the Board of Directors. The Risk Management Committee identifies, evaluates and mitigatesrelevant risks through close cooperation with other business departments of the Company. The internal AuditDepartment of the Company conducts regular audits on risk management controls and procedures, and reports theaudit results to the Audit Committee of the Company. The Company diversifies the risks of financial instrumentsthrough appropriate diversified investments and business combinations, and reduces the risks of concentration in asingle industry, a specific region or a specific counter party by formulating corresponding risk management policies.
1. Credit risk
Credit risk refers to the risk of financial loss to the company resulting from a counter party's failure to fulfill contractualobligations. Management has established appropriate credit policies and continuously monitors the exposure to creditrisk.The Company has adopted a policy of only dealing with creditworthy counter parties. In addition, the Companyassesses customers' creditworthiness based on their financial condition, the possibility of obtaining guarantees fromthird parties, credit history, and other factors such as current market conditions, and sets corresponding credit terms.The Company continuously monitors the balances and recovery of notes receivable and accounts receivable. Forcustomers with poor credit history, the company uses measures such as written reminders, shortening credit terms, orcanceling credit terms to ensure that the company does not face significant credit losses. In addition, the Companyreviews the recovery of financial assets on each date of Balance Sheet to ensure that the relevant financial assetshave been fully provisioned for expected credit losses.
The Company's other financial assets include cash, accounts receivable, and other receivables. The credit risk ofthese financial assets arises from counter party default, with the maximum credit risk exposure being the carryingamount of each financial asset as stated on the balance sheet. The Company has not provided any other guaranteesthat may expose the Company to credit risks.The Company's cash is primarily deposited with state-controlled banks and other large and medium-sized commercialbanks. Management believes that these commercial banks have high creditworthiness and sound financial conditions,posing no significant credit risk, and are not expected to incur any substantial losses due to counter party default. TheCompany's policy is to control the amount of deposits held with various reputable financial institutions based on theirmarket reputation, operating scale, and financial background, in order to limit the credit risk exposure to any singlefinancial institution.As part of the management of the Company's credit risk assets, the Company uses aging to assess the impairmentloss of accounts receivable and other receivables. The Company's accounts receivable and other receivables involvea large number of customers. The aging information can reflect these customers' ability to pay accounts receivableand other receivables, as well as the risk of bad debts. The Company calculates the historical actual bad debt rate fordifferent aging periods based on historical data and adjusts it considering forward-looking information, such asforecasts of current and future economic conditions, including national GDP growth and national monetary policy, toderive the expected loss rate. For long-term receivables, the Company makes a reasonable assessment of theexpected credit loss after comprehensively considering the settlement period, the payment period agreed in thecontract, the debtor's financial situation and the economic dynamics of the debtor's industry, and considering theabove-mentioned forward-looking information.As of June 30, 2024, the book balance and expected credit loss of related assets are as follows:
| Item | Book balance | Impairment provision |
| Notes receivable | 16,654,813.30 | 316,420.99 |
| Accounts receivable | 387,392,159.53 | 31,908,693.72 |
| Other receivables | 63,646,417.76 | 4,209,877.23 |
| Total | 467,693,390.59 | 36,434,991.94 |
Due to the Company having a wide range of customers, there is no significant concentration of credit risk.As of June 30, 2024, the accounts receivable of the Company's top five customers accounted for 21.01% (in 2023:
21.42%) of the Company's total accounts receivable.
2. Liquidity risk
Liquidity risk refers to the risk of shortage of funds when the Company fulfills its obligations to settle by delivering cashor other financial assets. The member companies subordinate to the Company are responsible for their own cash flowforecasts. The company continuously monitors the short-term and long-term funding needs at the corporate levelbased on the cash flow forecasts of its member enterprises to ensure adequate cash reserves. Additionally, itcontinuously monitors compliance with loan agreements and secures commitments from major financial institutions toprovide sufficient standby funds to meet short-term and long-term funding needs. In addition, the Company enteredinto financing line credit agreements with major business banks to provide support for the Company to perform itsobligations related to commercial paper. As of June 30, 2024, the company has bank credit lines provided by anumber of domestic banks, amounting to RMB2,348,784,900, of which: the used credit amount is RMB458,784,900.
As of June 30, 2024, the Company's financial liabilities and off-balance sheet guarantee items are presented interms of undiscounted contractual cash flows according to the remaining term of the contract as follows:
| Item | Ending balance (RMB10,000) | ||||
| Within 1 year | 1-2 years | 2-3 years | More than 3 years | Total | |
| Short-term loans | 32,020.73 | 32,020.73 | |||
| Accounts payable | 13,137.23 | 13,137.23 | |||
| Other payables | 11,079.31 | 11,079.31 | |||
| Total | 56,237.27 | - | - | - | 56,237.27 |
3. Market risk
1) Exchange rate risk
Except that the subsidiary established in Hong Kong holds assets with HKD as the settlement currency and the sub-subsidiary established in Switzerland holds assets with CHF as the settlement currency, other main business activitiesof the Company are mainly settled with RMB. However, the Company's recognized foreign currency assets andliabilities and future foreign currency transactions (foreign currency assets, liabilities and foreign currency transactionsare mainly denominated with HKD and CHF) still have exchange rate risks.As of June 30, 2024, the amounts of foreign currency financial assets and foreign currency financial liabilities heldby the Company converted into RMB are listed as follows:
| Item | Ending Balance | ||||
| HKD items | USD items | Euro items | CHF items | Total | |
Foreign currencyfinancial assets:
| Foreign currency financial assets: |
Cash and bankbalances
| Cash and bank balances | 1,525,680.59 | 1,951,640.49 | 1,392,782.33 | 1,954,301.48 | 6,824,404.89 |
Accounts receivable
| Accounts receivable | 3,094,077.56 | 2,900,119.70 | - | 187,676.97 | 6,181,874.23 |
Other receivables
| Other receivables | 701,907.34 | 87,841.60 | 789,748.94 |
Sub-total
| Sub-total | 5,321,665.49 | 4,851,760.19 | 1,392,782.33 | 2,229,820.05 | 13,796,028.05 |
Foreign currencyfinancial liabilities:
| Foreign currency financial liabilities: |
Accounts payable
| Accounts payable | 688,730.30 | 7,262.21 | 117,164.73 | 813,157.24 |
Other payables
| Other payables | 230,588.13 | 66,557.92 | 330,359.20 | 627,505.26 |
Sub-total
| Sub-total | 919,318.43 | 73,820.13 | - | 447,523.93 | 1,440,662.50 |
Sensitivity analysis:
As of June 30, 2024, for the Company's various foreign currency financial assets and foreign currency financialliabilities, if the RMB appreciates or depreciates by 5% against foreign currencies and other factors remain unchanged,the Company will reduce or increase the net profit by about RMB617,700 (about RMB129,500 in 2023).
2) Interest rate risk
The Company's interest rate risk mainly arises from bank borrowings. Financial liabilities with floating interestrates expose the Company to cash flow interest rate risk, and financial liabilities with fixed interest rate expose theCompany to fair value interest rate risk. The Company determines the relative scale of fixed-rate and floating-ratecontracts according to the market environment at that time.
The Company's Financial Department continuously monitors company's interest rate level. An increase in interestrates will raise the cost of new interest-bearing debt and the interest expenses on the company's existing floating-ratedebt, significantly adversely affecting the company's financial performance. Management will make timely adjustmentsbased on the latest market conditions to mitigate interest rate risk.
Sensitivity analysis:
As of June 30, 2024, if the borrowing interest rate calculated at the floating interest rate increases or decreases by50 basis points, while other factors remain unchanged, the Company's net profit will decrease or increase by aboutRMB800,000 (about RMB307,300 in 2023).
The sensitivity analysis above assumes that interest rate changes have occurred on the date of Balance Sheetand have been applied to all loans obtained by the Company at floating interest rates.
2. Hedging
(1) The company carries out hedging business for risk management
Not applicable
(2) The company carries out eligible hedge business and applies hedge accountingNot applicable
(3) The company carries out hedging business for risk management, and is expected to achieve the riskmanagement objectives but has not applied hedge accountingNot applicable
3. Financial assets
(1) Classification of transfer methods
Unit: RMB
| Transfer methods | Nature of transferred financial assets | Amount of transferred financial assets | Derecognition | Determination basis of derecognition |
| Discount and endorsement | Bank acceptance bill | 24,056,305.26 | Derecognized | Banks with high creditworthiness undertake bills of exchange with minimal credit risk |
| Total | 24,056,305.26 |
(2) Financial assets derecognized due to transfer
Unit: RMB
| Item | Way of transfer of financial assets | Amount of financial assets derecognized | Gains or losses related to derecognition |
| Bank acceptance bill | Discount and endorsement | 24,056,305.26 | 0.00 |
| Total | 24,056,305.26 | 0.00 |
(3) Assets transfer financial assets that continue to be involved
Not applicable
13. Disclosure of fair value
1. Ending fair value of assets and liabilities measured at fair value
Not applicable
2. Basis for determining the market price of items measured at fair value of the first level on acontinuous and non-continuous basisNot applicable
3. Qualitative and quantitative information on valuation techniques and important parametersadopted for continuous and non-continuous Level 2 fair value measurement itemsNot applicable
4. Qualitative and quantitative information on valuation techniques and important parametersadopted for continuous and non-continuous Level 3 fair value measurement itemsNot applicable
5. Sensitivity analysis of adjustment information and non-observable parameters betweenopening and closing book value of continuous third-level fair value measurement itemsNot applicable
6. For items measured at fair value on a going concern, if there is any transfer betweendifferent levels in the current period, the reason for the transfer and the policy for determiningthe transfer timeNot applicable
7. Changes in valuation techniques in the current period and the reasons for the changesNot applicable
8. Fair value of financial assets and financial liabilities not measured at fair valueNot applicable
9. Others
Not applicable
14. Related parties and related transactions
1. Parent company information
| Parent company name | Registration place | Nature of business | Registered Capital | Shareholding scale of the parent company in the Company | Voting rights scale of the parent company in the Company |
| AVIC International Holding Co., Ltd. | Shenzhen | Commercial services | RMB1,166,162,000.00 | 40.16% | 40.16% |
Description of the parent companyAVIC International Holdings Limited is a 100.00% indirectly owned subsidiary of AVIC International HoldingCorporation Aviation Industry Corporation of China, LTD. holds 100.00% equity of AVIC International HoldingCorporationThe ultimate controller of the enterprise is Aviation Industry Corporation of China, LTD.
2. Subsidiaries of the Company
For details of the subsidiaries of the Company, please refer to Note X.1.
3. Joint ventures and associates of the Company
See Note X.3 for details of the important joint ventures or associates of the enterprise.
4. Other related parties
| Names of other related parties | Relationship between other related parties and the enterprise |
| AVIC Property Management Co., Ltd. (AVIC Property) | Associated enterprise of the actual controller |
| Rainbow Digital Commercial Co., Ltd. (Rainbow) | Controlled by the same party |
| Shennan Circuits Co., Ltd. (SCC) | Controlled by the same party |
| AVIC East China Optoelectronics (Shanghai) Co., Ltd. (East China Optoelectronics (Shanghai)) | Controlled by the same party |
| AVIC Xi'an Flight Automatic Control Research Institute (AVIC Xi'an Flight Automatic Control Research Institute) | Controlled by the same party |
| Shenzhen Grand Skylight Hotel Management Co., Ltd. (Grand Skylight Hotel Management) | Controlled by the same party |
| AVIC Securities Co., Ltd. (AVIC Securities Company) | Controlled by the same party |
| Shenzhen AVIC Group Training Center (AVIC Training Center) | Controlled by the same party |
| AVIC Finance Co., Ltd. (AVIC Finance Company) | Controlled by the same party |
| Gongqingcheng AVIC Cultural Investment Co., Ltd.(Gongqingcheng AVIC Cultural Investment) | Controlled by the same party |
| AVIC Jonhon Optronic Technology Co., Ltd. (AVIC JONHON) | Controlled by the same party |
| AVIC International Holdings (Zhuhai) Co., Ltd. (AVIC INTL (Zhuhai)) | Controlled by the same party |
| Guizhou Huayang Electronics Co., Ltd. (Guizhou Huayang Electronics) | Controlled by the same party |
| Zhuhai Pilot Composite Material Technology Co., Ltd. (Zhuhai PilotTechnology) | Controlled by the same party |
| Guangdong International Mansion Industrial Co., Ltd.(Guangdong International Mansion) | Controlled by the same party |
| Shenzhen AVIC Technical Testing Institute Co., Ltd. (Shenzhen AVIC Technical Testing Institute) | Controlled by the same party |
| Shenyang Xinghua AVIC Electrical Appliance Co., Ltd. (Shenyang Xinghua) | Controlled by the same party |
| Shenzhen AVIC Changtai Investment Development Co., Ltd. (AVIC Changtai) | Controlled by the same party |
| AVIC Futures Co., Ltd. (AVIC Futures) | Controlled by the same party |
| Anhui AVIC Display Technology Co., Ltd. (Anhui AVIC) | Controlled by the same party |
| Shenzhen Aero-Fasteners MFG Co., Ltd. (SHBC) | Controlled by the same party |
| Castic-SMP Machinery Corp.Ltd. (CSM) | Controlled by the same party |
| Shijiazhuang Aircraft Industry Co., Ltd. (Shijiazhuang Aircraft Industry) | Controlled by the same party |
| Sichuan Aviation Industry Chuanxi Machinery Co., Ltd. (Sichuan Chuanxi Machinery) | Controlled by the same party |
| AVIC International Holding Corporation (AVIC INTL) | Controlled by the same party |
| Company Director, Manager, Chief Financial Officer and Secretary of the Board of Directors (key management personnel) | Key management personnel |
5. Related party transactions
(1) Related transactions for the purchase and sale of commodities, the provision and receiptof servicesPurchase of goods/receipt of labor services
Unit: RMB
| Related party | Content of related party transaction | Amount for the current period | Approved transaction limit | Whether the transaction limit is exceeded | Amount for the previous period |
| AVIC Property | Water and electricity and property management fees | 5,642,393.30 | 65,000,000.00 | No | 5,600,171.42 |
| Rainbow Digital Commercial Co., Ltd. | Shopping mall expenses/commodity purchase | 9,301,602.91 | No | 1,939,136.26 | |
| China Aviation City Real Estate (Kunshan) Co., Ltd. | Shopping mall expenses | 33,486.54 | No | 32,726.23 | |
| Jiufang Commercial Management Co., Ltd. | Shopping mall expenses | 64,792.60 | No | 45,347.58 | |
| AVIC Nanguang Office | Elevator maintenance premium | 12,286.27 | No | 18,000.00 | |
| AVIC Louyu Office | Fire fighting maintenance fee | 4,740.00 | No | ||
| Gongqingcheng AVIC Cultural Investment Co., Ltd. | Shopping mall expenses | 8,478.92 | No |
Sales of goods/rendering of services
Unit: RMB
| Related party | Content of related party transaction | Amount for the current period | Amount for the previous period |
| Rainbow Digital Commercial Co., Ltd. | Products and services | 24,031,549.70 | 30,348,264.13 |
| SCC | Sales of materials and rendering of services | 460.80 | |
| Gongqingcheng AVIC Cultural Investment Co., Ltd. | Product sales | 175,983.10 | 154,635.87 |
| AVIC JONHON | Product sales | 1,865.30 | 406,907.87 |
| AVIC INTL | Product sales | 2,824.77 | |
| East China Optoelectronics (Shanghai) | Product sales | 10,619.47 | |
| Guizhou Huayang Electronics | Product sales | 5,309.73 | |
| Zhuhai PilotTechnology | Product sales | 75,711.51 | |
| Shenyang Xinghua | Product sales | 739,635.19 | 145,831.01 |
| Shijiazhuang Aircraft Industry | Product sales | 234,915.96 | |
| Sichuan Chuanxi Machinery | Product sales | 70,796.46 |
(2) Associated trusteeship/contracting and commissioned management/outsourcing situationNot applicable
(3) Related leasing
As the lessor:
Unit: RMB
| Name of lessee | Type of leased assets | Lease income recognized in the current period | Lease income recognized in the previous period |
| AVIC Property | Premises | 2,477,133.06 | 2,677,492.91 |
| AVIC Securities Company | Premises | 705,942.84 | 705,942.84 |
| Rainbow Digital Commercial Co., Ltd. | Premises | 274,857.12 | 309,104.34 |
| AVIC Futures | Premises | 44,700.47 |
The Company as the lessee:
Unit: RMB
| Name of lessor | Type of leased assets | Simplified processing of rental fees for short-term leases and leases of low-value assets (if applicable) | Variable lease payments not included in the measurement of lease liabilities (if applicable) | Rent paid | Interest expense on assumed lease liabilities | Increase in right-of-use assets | |||||
| Amount for the current period | Amount for the previous period | Amount for the current period | Amount for the previous period | Amount for the current period | Amount for the previous period | Amount for the current period | Amount for the previous period | Amount for the current period | Amount for the previous period | ||
| China Aviation City Real Estate (Kunshan) Co., Ltd. | Premises | 67,714.26 | 71,100.00 | 791.99 | 580.08 | -66,765.72 | -66,767.11 | ||||
| Jiufang Commercial Management Co., Ltd. | Premises | 455.75 | 41,544.03 | 197,522.76 | 136,406.96 | 6,947.61 | 4,179.58 | 145,907.09 | |||
| Rainbo | Premis | 78,102 | 218,27 | 1,463. | 6,473. | - | - | ||||
| w Digital Commercial Co., Ltd. | es | .84 | 1.00 | 37 | 23 | 75,092.94 | 195,898.05 |
(4) Related guarantees
Not applicable
(5) Loans from and to related parties
Not applicable
(6) Assets transfer and debt restructuring of related parties
Not applicable
(7) Remuneration of key management personnel
Not applicable
(8) Other related party transactions
As at the end of the current year, the balance of deposits placed by the Company in AVIC Finance amounted toRMB380,786,934.73, of which the deposit interest received in the current year amounted to RMB210,559.83.
6. Receivables from and payable to related parties
(1) Receivable items
Unit: RMB
| Item | Related party | Ending Balance | Opening balance | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Cash in bank | |||||
| AVIC Finance | 380,786,934.73 | 467,743,798.76 | |||
| Accounts receivable | |||||
| Rainbow Digital Commercial Co., Ltd. | 2,490,562.71 | 115,297.65 | 5,973,322.25 | 248,095.43 | |
| AVIC JONHON | 162,478.08 | 7,311.51 | 202,712.86 | 12,162.77 | |
| Gongqingcheng AVIC Cultural Investment Co., Ltd. | 56,510.95 | 2,825.55 | 22,684.75 | 832.29 | |
| Shenyang Xinghua | 848,596.59 | 38,186.85 | 292,370.58 | 17,542.23 | |
| AVIC Property | 245,170.39 | 12,258.52 | 183,123.05 | 9,156.15 | |
| Guizhou Huayang | 21,260.00 | 1,275.60 | |||
| Electronics | |||||
| Anhui AVIC | 15,800.00 | 790.00 | |||
| AVIC Securities Company | 247,080.00 | 12,354.00 | |||
| Sichuan Chuanxi Machinery | 40,000.00 | 1,800.00 | |||
| Notes receivable | |||||
| Zhuhai PilotTechnology | 892,185.99 | 44,609.30 | |||
| Shenyang Xinghua | 194,183.16 | 192,339.42 | |||
| Other receivables | |||||
| Rainbow Digital Commercial Co., Ltd. | 855,943.00 | 42,797.15 | 834,903.00 | 43,170.15 | |
| Gongqingcheng AVIC Cultural Investment Co., Ltd. | 6,500.00 | 325.00 | 6,500.00 | 325.00 | |
| AVIC Property | 133,990.00 | 6,699.50 | 143,990.00 | 7,199.50 |
(2) Payable items
Unit: RMB
| Item | Related party | Book balance at period end | Beginning book balance |
| Accounts payable | |||
| AVIC Property | 32,992.35 | ||
| AVIC JONHON | 391.96 | ||
| Other payables | |||
| AVIC Property | 1,058,235.04 | 1,023,487.21 | |
| AVIC Securities Company | 247,080.00 | 247,080.00 | |
| AVIC Louyu Office | 14,808.41 | ||
| Rainbow Digital Commercial Co., Ltd. | 96,200.00 | 1,935,611.93 | |
| AVIC Changtai | 4,064.81 | ||
| AVIC Nanguang Office | 23,943.22 | ||
| Prepayments | |||
| AVIC Securities Company | 123,540.00 | ||
| AVIC Futures | 9,435.48 | ||
| AVIC INTL | 7,640.00 |
7. Commitments of related parties
Not applicable
8. Others
Not applicable
15. Share-based payment
1. Overall situation of share-based payment
Unit: RMB
| Category of grant object | Grant in the current period | Exercise in the current period | Unlocked in the current period | Invalid in the current period | ||||
| Quantity | Amount | Quantity | Amount | Quantity | Amount | Quantity | Amount | |
2. Equity-settled share-based payment
Unit: RMB
| Determination method for the fair value of equity instruments on the grant date | Closing price of the company's shares on the date of grant |
| Important parameters for the fair value of equity instruments on the grant date | Employee service period, achievement rate of performance indicator and employee personal performance evaluation results |
| Determination basis for the number of exercisable equity instruments | For equity-settled share-based payments exchanged for employee services that can only be exercised after the completion of the vesting period or upon meeting specified performance conditions, at each balance sheet date during the vesting period, the company should account for the fair value of the equity instruments granted on the grant date, based on the best estimate of the number of equity instruments expected to vest, by including the cost of the services received for the period in the relevant costs or expenses and capital reserves. At the Balance Sheet Date, if subsequent information indicates that the number of equity instruments expected to vest differs from previous estimates, adjustments should be made. The number of equity instruments should be adjusted to the actual number vested on the vesting date. |
| Reasons for significant differences between the estimates in the current period and those in the previous period | None |
| Cumulative amount of equity-settled share-based payment included in capital reserves | 28,815,350.76 |
| Total expenses recognized in the equity-settled share-based payment in the current period | 906,067.21 |
3. Cash-settled share-based payment
Not applicable
4. Share-based payment expenses in the current period
Unit: RMB
| Category of grant object | Equity-settled share-based payment expenses | Cash-settled share-based payment expenses |
| Some Directors, Supervisors, Senior Executives and core backbones of the company | 906,067.21 | |
| Total | 906,067.21 |
5. Modification and termination of share-based payment
Not applicable
6. Others
Not applicable
16. Commitments and contingencies
1. Important commitments
Significant commitments existing on the Balance Sheet Date
1. Signed lease contracts being performed or to be performed and their financial impactSee Note VII. 82 for details
2. Significant contingencies existing on the Balance Sheet Date
There were no significant contingencies required to be disclosed.
2. Contingencies
(1). Significant contingencies existing on the Balance Sheet Date
Not applicable
(2) If the company has no important contingencies required to be disclosed, it shall also beexplainedThere were no significant contingencies required to be disclosed.
3. Others
Segment informationThe Company determines the operating segments based on the internal organizational structure, managementrequirements and internal reporting system. The Company's operating segment refers to the component that meetsthe following conditions at the same time:
(1) The component can generate income and expenses in daily activities;
(2) The management is able to regularly evaluate the operating results of the component in order to determine theallocation of resources to them and evaluate their performance;
(3) The financial position, operating results, cash flows and other relevant accounting information of thecomponent can be obtained.
The Company determines report segments on the basis of operating segments, and the operating segments thatmeet one of the following conditions are recognized as report segments:
(1) The segment revenue of the operating segment accounts for 10% or more of the total revenue of all segments;
(2) The absolute amount of the segment's profit (loss) accounts for 10% or more of the greater of the total profit ofall profitable segments or the total loss of all loss-making segments.
The Company operates a single line of business, primarily the production and sale of watches. Managementviews and manages this business as a whole and evaluates its operating results accordingly. Therefore, this financialstatement does not report segment information.As of June 30, 2024, the Company had no other significant events that should be disclosed.
17. Events after the balance sheet date
1. Important non-adjusting matters
Not applicable
2. Profit distribution
Not applicable
3. Sales returns
Not applicable
4. Notes to other events after the Balance Sheet Date
18. Other significant events
1. Correction of accounting previous errors
(1) Retrospective restatement method
Not applicable
(2) Future applicable law
Not applicable
2. Debt restructuring
Not applicable
3. Assets replacement
(1) Exchange of non-monetary assets
Not applicable
(2) Replacement of other assets
Not applicable
4. Annuity plan
Not applicable
5. Discontinued operation
Not applicable
6. Segment information
(1) Determination basis and accounting policies for report segmentsThe Company determines the operating segments based on the internal organizational structure, managementrequirements and internal reporting system. The Company's operating segment refers to the component that meetsthe following conditions at the same time:
(1) The component can generate income and expenses in daily activities;
(2) The management is able to regularly evaluate the operating results of the component in order to determine theallocation of resources to them and evaluate their performance;
(3) The financial position, operating results, cash flows and other relevant accounting information of thecomponent can be obtained.
The Company determines report segments on the basis of operating segments, and the operating segments thatmeet one of the following conditions are recognized as report segments:
(1) The segment revenue of the operating segment accounts for 10% or more of the total revenue of all segments;
(2) The absolute amount of the segment's profit (loss) accounts for 10% or more of the greater of the total profit ofall profitable segments or the total loss of all loss-making segments.
The Company operates a single line of business, primarily the production and sale of watches. Managementviews and manages this business as a whole and evaluates its operating results accordingly. Therefore, this financialstatement does not report segment information.
(2) Financial information of report segments
Not applicable
(3) If the company has no report segments, or cannot disclose the total assets and totalliabilities of each report segment, it shall explain the reasonsNot applicable
(4) Other notes
Not applicable
7. Other important transactions and events that affect the decision-making of investors
Not applicable
8. Others
Not applicable
19. Notes to the major items of the Parent Company's Financial Statements
1. Accounts receivable
1. Disclosure by aging
Unit: RMB
| Aging | Book balance at period end | Beginning book balance |
| Within 1 year (including 1 year) | 11,424,830.46 | 1,875,782.07 |
| 1-2 years | 341,772.29 | 23,346.03 |
| Total | 11,766,602.75 | 1,899,128.10 |
(2). Disclosure under the methods of provision for bad debts by category
Unit: RMB
| Category | Ending Balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Scale | Amount | Drawing percentages | Amount | Scale | Amount | Drawing percentages | |||
| Accounts receivable with provision for bad debts by individual | ||||||||||
| In which: | ||||||||||
| Accounts receivable with provision for bad debts by combination | 11,766,602.75 | 100.00% | 590,818.06 | 5.02% | 11,175,784.69 | 1,899,128.10 | 100.00% | 76,211.49 | 4.01% | 1,822,916.61 |
| In which: | ||||||||||
| Receivables from other customers | 11,469,482.48 | 97.47% | 590,818.06 | 5.15% | 10,878,664.42 | 1,898,159.02 | 99.95% | 76,211.49 | 4.02% | 1,821,947.53 |
| Combination of related parties within the scope of consolidation | 297,120.27 | 2.53% | 0.00% | 297,120.27 | 969.08 | 0.05% | 0.00% | 969.08 | ||
| Total | 11,766,602.75 | 100.00% | 590,818.06 | 5.02% | 11,175,784.69 | 1,899,128.10 | 100.00% | 76,211.49 | 4.01% | 1,822,916.61 |
Category name of provision for bad debts by combination: accounts receivable from other customers
Unit: RMB
| Name | Ending Balance | ||
| Book balance | Bad debt provision | Drawing percentages | |
| Receivables from other customers | 11,469,482.48 | 590,818.06 | 5.15% |
| Total | 11,469,482.48 | 590,818.06 | |
Description of the basis for determining the combination:
Not applicable
Name of provision for bad debts by combination: combination of related parties within the scope of consolidation
Unit: RMB
| Name | Ending Balance | ||
| Book balance | Bad debt provision | Drawing percentages | |
| Combination of related parties within the scope of consolidation | 297,120.27 | ||
| Total | 297,120.27 | ||
Description of the basis for determining the combination:
Not applicableIf the provision for bad debts of accounts receivable is made according to the general expected credit loss model:
Not applicable
(3) Status of bad debt provision, recovery, or reversal for the periodProvision for bad debts in the current period:
Unit: RMB
| Category | Opening balance | Amount of change for the period | Ending Balance | |||
| Provision | Recovered or | Write-off | Other | |||
| transferred | ||||||
| Accounts receivable with provision for expected credit losses by combination | ||||||
| Including: combination of other customers' receivables | 76,211.49 | 539,312.88 | 24,706.31 | 590,818.06 | ||
| Total | 76,211.49 | 539,312.88 | 24,706.31 | 590,818.06 |
Where accounts receivable with significant from provision for bad debts or recovered in the current periodNot applicable
(4). Situation of accounts receivable actually written off in the current periodNot applicable
(5) Accounts receivable and contractual assets collected from the debtors which rank the firstfive at the end of period
Unit: RMB
| Company name | Accounts receivable balance at the end of period | Ending balance of contractual assets | Ending balance of accounts receivable and contractual assets | Proportion in the total ending balance of accounts receivable and contractual assets | Ending balance of provision for bad debts of accounts receivable and provision for impairment of contractual assets |
| Summary of accounts receivable which ranks the first five at the end of period | 8,284,824.11 | 11,766,602.75 | 70.41% | 414,241.21 | |
| Total | 8,284,824.11 | 11,766,602.75 | 70.41% | 414,241.21 |
2. Other receivables
Unit: RMB
| Item | Ending Balance | Opening balance |
| Other receivables | 646,226,304.77 | 696,328,419.85 |
| Total | 646,226,304.77 | 696,328,419.85 |
(1) Interest receivable
1) Classification of interest receivable
Not applicable
2) Important overdue interest
Not applicable
3). Disclosure under the methods of provision for bad debts by category
Not applicable
4). Status of bad debt provision, recovery, or reversal for the period
Not applicable
5) Situation of interest receivable actually written off in the current period
Not applicable
(2) Dividends receivable
1) Classification of dividends receivable
Not applicable
2) Important dividends receivable with aging over 1 year
Not applicable
3). Disclosure under the methods of provision for bad debts by category
Not applicable
4). Status of bad debt provision, recovery, or reversal for the period
Not applicable
5) Situation of dividends receivable actually written off in the current period
Not applicable
(3) Other receivables
1) Classification of other receivables by nature
Unit: RMB
| Payment nature | Book balance at period end | Beginning book balance |
| Payments of related parties within the scope of consolidation | 645,692,800.05 | 696,041,965.52 |
| Margin and deposits | 129,081.90 | 49,581.90 |
| Other | 451,421.29 | 278,107.90 |
| Total | 646,273,303.24 | 696,369,655.32 |
2) Disclosure by aging
Unit: RMB
| Aging | Book balance at period end | Beginning book balance |
| Within 1 year (including 1 year) | 646,224,474.36 | 614,472,373.93 |
| 1-2 years | 5,615.00 | 81,857,231.39 |
| 2-3 years | 3,163.88 | |
| More than 3 years | 40,050.00 | 40,050.00 |
| 3-4 years | 40,050.00 | 40,050.00 |
| Total | 646,273,303.24 | 696,369,655.32 |
3). Disclosure under the methods of provision for bad debts by category
Unit: RMB
| Category | Ending Balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Scale | Amount | Drawing percentages | Amount | Scale | Amount | Drawing percentages | |||
| Accounts receivable with provision for bad debts by individual | ||||||||||
| In which: | ||||||||||
| Provision for bad debts on a combin | 646,273,303.24 | 100.00% | 46,998.47 | 0.01% | 646,226,304.77 | 696,369,655.32 | 100.00% | 41,235.47 | 0.01% | 696,328,419.85 |
| ation basis | ||||||||||
| In which: | ||||||||||
| Combination of margin and deposit receivable | 129,081.90 | 0.02% | 2,496.87 | 1.93% | 126,585.03 | 49,581.90 | 0.01% | 40,526.60 | 81.74% | 9,055.30 |
| Combination of receivables of related parties within the scope of consolidation | 645,692,800.05 | 99.91% | 0.00% | 645,692,800.05 | 696,041,965.52 | 99.95% | 0.00% | 696,041,965.52 | ||
| Combination of social security advances receivable | 0.00% | 263,930.39 | 0.04% | 0.00% | 263,930.39 | |||||
| Combination of other financings | 451,421.29 | 0.07% | 44,501.60 | 9.86% | 406,919.69 | 14,177.51 | 0.00% | 708.87 | 5.00% | 13,468.64 |
| Total | 646,273,303.24 | 100.00% | 46,998.47 | 0.01% | 646,226,304.77 | 696,369,655.32 | 100.00% | 41,235.47 | 0.01% | 696,328,419.85 |
Number of categories with provision for bad debts by individual: 0Number of categories with provision for bad debts by combination: 3Category name of provision for bad debts by combination: combination of margin and deposit receivable
Unit: RMB
| Name | Ending Balance | ||
| Book balance | Bad debt provision | Drawing percentages | |
| Combination of margin and deposit receivable | 129,081.90 | 2,496.87 | 1.93% |
| Total | 129,081.90 | 2,496.87 | |
Description of the basis for determining the combination: payments of the same nature have similar credit riskcharacteristics.
Name of provision for bad debts by combination: combination of accounts receivable related parties within the scopeof consolidation
Unit: RMB
| Name | Ending Balance |
| Book balance | Bad debt provision | Drawing percentages | |
| Combination of receivables of related parties within the scope of consolidation | 645,692,800.05 | ||
| Total | 645,692,800.05 |
Description of the basis for determining the combination: payments of the same nature have similar credit riskcharacteristics.
Category name of provision for bad debts by combination: other accounts receivable
Unit: RMB
| Name | Ending Balance | ||
| Book balance | Bad debt provision | Drawing percentages | |
| Combination of other financings | 451,421.29 | 44,501.60 | 9.86% |
| Total | 451,421.29 | 44,501.60 | |
Description of the basis for determining the combination: payments of the same nature have similar credit riskcharacteristics.
Provision for bad debts made according to the general expected credit loss model:
Unit: RMB
| Bad debt provision | Stage I | Stage II | Stage III | Total |
| Expected credit loss in the next 12 months | Expected credit loss throughout the duration (no credit impairment) | Expected credit loss throughout the duration (credit impairment has occurred) | ||
| Balance as of Jan. 1, 2024 | 41,235.47 | 41,235.47 | ||
| Balance on Jan. 1, 2024 in the current period | ||||
| --Transfer to phase II | ||||
| - Transfer to phase III | ||||
| - Reversal to phase II | ||||
| - Reversal to phase I | ||||
| Provision in the current period | 5,763.00 | 5,763.00 | ||
| Reversal in the current period | ||||
| Write-off in the current period | ||||
| Write-off in the current period | ||||
| Other changes | ||||
| Balance as of June | 46,998.47 | 46,998.47 |
30, 2024
The basis for the division of each stage and the ratio of provisions for bad debtsThe phase I is the bad debt provision for other receivables within one year. The phase II is the bad debt provision foraccounts receivable over one year that have not been individually assessed. The phase III is the bad debt provision forindividually assessed accounts receivable.Changes in book balance with significant amount of loss provision in the current periodNot applicable
4). Status of bad debt provision, recovery, or reversal for the periodProvision for bad debts in the current period:
Unit: RMB
| Category | Opening balance | Amount of change for the period | Ending Balance | |||
| Provision | Recovered or transferred | Write-off or impairment | Other | |||
| Provision for bad debts on a combination basis | 41,235.47 | 5,763.00 | 46,998.47 | |||
| Total | 41,235.47 | 5,763.00 | 46,998.47 | |||
Where the bad-debt provision amount recovered or reversed this period is important:
Not applicable
5) Situation of other accounts receivable actually written off in the current period
Not applicable
6). Other receivables collected from the debtors which rank the first five at the end of period
Unit: RMB
| Company name | Payment nature | Ending Balance | Aging | Proportion in the total ending balance of other receivables | End-of-period balance of provision for bad debt |
| Summary of other accounts receivable which rank the first five at the end of period | Receivables of related parties within the scope of consolidation | 645,692,800.05 | Within 1 year | 99.91% | 0.00 |
| Total | 645,692,800.05 | 99.91% | 0.00 |
7) Presented in other receivables due to centralized management of fundsNot applicable
3. Long-term equity investments
Unit: RMB
| Item | Ending Balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Investment in subsidiaries | 1,581,832,322.16 | 1,581,832,322.16 | 1,581,179,108.81 | 1,581,179,108.81 | ||
| Investments in associates and joint ventures | 51,952,479.36 | 51,952,479.36 | 51,862,607.30 | 51,862,607.30 | ||
| Total | 1,633,784,801.52 | 1,633,784,801.52 | 1,633,041,716.11 | 1,633,041,716.11 | ||
(1) Investment in subsidiaries
Unit: RMB
| The investee | Beginning balance (book value) | Beginning balance of provision for impairment | Increase or decrease in the current period | Ending balance (book value) | End-of-period balance of provision for impairment | |||
| Additional investment | Reduction of investment | Provision for impairment accrued | Other | |||||
| Shenzhen Harmony World Watch Centre Co., Ltd. | 609,295,490.83 | 283,653.83 | 609,579,144.66 | |||||
| Shenzhen Harmony E-commerce Co., Ltd. | 11,684,484.39 | 11,684,484.39 | ||||||
| Shenzhen FIYTA Precision Technology Co., Ltd. | 182,044,461.20 | 123,186.52 | 182,167,647.72 | |||||
| Shenzhen FIYTA STD Co., Ltd. | 51,062,891.67 | 48,625.00 | 51,111,516.67 | |||||
| FIYTA (HONG KONG) LIMITED | 137,737,520.00 | 137,737,520.00 | ||||||
| Temporal (Shenzhen) Co., Ltd. | 5,000,000.00 | 5,000,000.00 | ||||||
| FIYTA Sales Co., Ltd. | 456,992,456.17 | 137,775.90 | 457,130,232.07 | |||||
| Liaoning Hengdarui Commerce and Trade Co., Ltd. | 36,867,843.96 | 36,867,843.96 | ||||||
| Emile Chouriet Horologe (Shenzhen) Co., Ltd. | 80,493,960.59 | 59,972.10 | 80,553,932.69 | |||||
| Shenzhen Harmony World Watch Centre Co., Ltd. | 10,000,000.00 | 10,000,000.00 | ||||||
| Total | 1,581,179,108.81 | 653,213.35 | 1,581,832,322.16 |
(2). Investments in associates and joint ventures
Unit: RMB
| Investment unit | Beginning balance (book value) | Beginning balance of provision for impairment | Increase or decrease in the current period | Ending balance (book value) | End-of-period balance of provision for impairment | |||||||
| Additional investment | Reduction of investment | Investment income or loss recognized under equity method | Other comprehensive income adjustments | Other changes in equity | Cash dividends or profits declared to be distributed | Provision for impairment accrued | Other | |||||
| 1. Joint ventures | ||||||||||||
| 2. Associated enterprise | ||||||||||||
| Shanghai Watch Industry Co., Ltd. | 51,862,607.30 | 89,872.06 | 51,952,479.36 | |||||||||
| Sub-total | 51,862,607.30 | 89,872.06 | 51,952,479.36 | |||||||||
| Total | 51,862,607.30 | 89,872.06 | 51,952,479.36 | |||||||||
The recoverable amount is determined by the net amount of the fair value less the disposal expenses
Not applicableThe recoverable amount is determined at the present value of the expected future cash flowsNot applicableReasons for the difference between the aforementioned information and the information used in the impairment test ofprevious years or external informationNot applicableReasons for the difference between the information used in the company's impairment test in previous years and theactual situation in the current yearNot applicable
(3) Other notes
Not applicable
4. Operating income and operating costs
Unit: RMB
| Item | Amount for the current period | Amount for the previous period | ||
| Revenue | Cost | Revenue | Cost | |
| Main business | 93,442,375.61 | 28,763,610.04 | 90,155,946.21 | 22,121,058.14 |
| Other businesses | 2,209,518.25 | 1,886,928.93 | ||
| Total | 95,651,893.86 | 28,763,610.04 | 92,042,875.14 | 22,121,058.14 |
5. Investment income
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Long-term equity investment income accounted for using the equity method | 89,872.06 | -1,697,481.65 |
| Total | 89,872.06 | -1,697,481.65 |
6. Others
Not applicable
20. Additional information
1. Breakdown of current non-recurring profit and loss
Unit: RMB
| Item | Amount | Notes |
| Losses from disposal of non-current assets | 2,906,210.67 | |
| Government grants recognized in current profit and loss (excluding | 1,414,439.38 |
| those closely related to the Company's normal operations, in compliance with national policies, entitled in accordance with set standards, and having a sustained impact on the Company's profit and loss) | ||
| Reversal of provision for impairment of receivables subject to individual impairment testing | 3,302,930.73 | |
| Other operating incomes and expenses excluding the above items | 1,099,305.50 | |
| Less: Income tax impact | 2,029,625.75 | |
| Total | 6,693,260.53 | -- |
Specific circumstances of other items that meet the definition of non-recurring gains and losses:
Not applicableExplanation of circumstances where items listed as non-recurring gains and losses in Explanatory Announcement No.1 on Information Disclosure of Companies Issuing Securities Publicly - Non-recurring Gains and Losses are classifiedas recurringNot applicable
2. Return on equity and Earnings per share
| Profit during the reporting period | Weighted average return on equity | Earnings per share | |
| Basic earnings per share (RMB/share) | Diluted earnings per share (RMB/share) | ||
| Net profit attributable to common stock shareholders of the company | 4.36% | 0.3568 | 0.3564 |
| Net profit attributable to common stock shareholders of the company after deducting non-recurring gains and losses | 4.16% | 0.3405 | 0.3401 |
3. Differences in accounting data under domestic and overseas accounting standards
(1). Differences in net profit and net assets in the financial reports disclosed in accordancewith international accounting standards and Chinese accounting standardsNot applicable
(2). Differences in net profit and net assets in the financial reports disclosed in accordancewith overseas accounting standards and Chinese accounting standardsNot applicable
(3) Explanation of the reasons for the differences in accounting data under domestic andoverseas accounting standards. If the data has been audited by an overseas audit institutionfor difference adjustment, the name of the overseas institution shall be indicated
4. Others
Not applicable
FIYTA Precision Technology Co., Ltd.
Board of DirectorsAugust 21, 2024