FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

FIYTA Precision Technology Co. Ltd.2023 Semi-annual Report

August 23 2023

1FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Section 1 Important Notice Table of Contents and Definition

The Board of Directors the Supervisory Committee directors supervisors and senior executives hereby

individually and collectively accept responsibility for the correctness accuracy and completeness of the

contents of this report and confirm that there are neither material omissions nor errors which would render any

statement misleading.Zhang Xuhua the Company leader Song Yaoming chief financial officer and Tian Hui the manager of the

accounting department (treasurer) hereby confirm the authenticity and completeness of the financial report

enclosed in this Semi-annual Report.All the directors attended the Board Meeting for reviewing the Semi-annual Report.Any perspective description such as future plan development strategy etc. involved in the Semi-annual

Report shall not constitute the Company’s substantial commitment to the investors and the investors should

please pay attention to their investment risks.In this report the Company has described in detail the existing macro-economic risks as well as operation

risks. Investors are advised to refer to the contents concerning risks possibly to be confronted with by the

Company and the countermeasures to be taken in Section 3 Discussion and Analysis of the Management

The Company intends neither to distribute any cash dividend or bonus shares nor to convert any reserve into

share capital.

2FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Table of Contents

Section 1 Important Notice Table of Contents and Definition

Section 2 Company Profile and Financial Highlights

Section 3 Discussion and Analysis by the Management

Section 4 Corporate Governance

Section 5 Environment and Social Responsibility

Section 6 Significant Events

Section 7 Change of the Shares and Particulars about Shareholders

Section 8 About the Preferred Shares

Section 9 About Bonds

Section 10 Financial Report

3FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Documents Available for Inspection

I. Financial statements signed by and under the seal of the legal representative the chief financial officer and the

person in charge of the accounting office.II. Originals of all documents and manuscripts of all the Company’s documents disclosed to the public on the media

designated by China Securities Regulatory Commission during the reporting period.III. Full text of 2023 Semi-annual Report carrying the signature of the legal representative.

4FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Definitions

Terms to be defined Refers to Definition

This Company the Company or FIYTA Refers to FIYTA Precision Technology Co. Ltd.AVIC Refers to Aviation Industry Corporation of China Ltd.AVIC International Refers to AVIC International Holding Corporation

AVIC IHL Refers to AVIC International Holding Limited

AVIC Finance Refers to AVIC Finance Co. Ltd.Restricted Stock Incentive Plan Phase I Refers to Restricted A-Share Incentive Plan 2018 (Phase I)

Restricted Stock Incentive Plan Phase II Refers to Restricted A-Share Incentive Plan 2018 (Phase II)

5FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Section 2 Company Profile and Financial Highlights

I. Company Profile

Short form of the stock: FIYTA and FIYTA B Stock Code 000026 and 200026

Short form of the stock before

the change (if any) None

Stock Exchange Listed with Shenzhen Stock Exchange

Company Name in Chinese 飞亚达精密科技股份有限公司

Abbreviation of Registered

Company Name in Chinese 飞亚达公司

Company name in English (if FIYTA Precision Technology Co. Ltd.any)

Abbreviation of the Company

name in English (if any) FIYTA

Legal Representative Zhang Xuhua

II. Liaison Persons and Communication Information

Secretary of the Board Securities Affairs Representative

Names Song Yaoming Xiong Yaojia

Liaison Address 20th Floor FIYTA Technology Building Gaoxin 18th Floor FIYTA Technology Building GaoxinS. Road One Nanshan District Shenzhen S. Road One Nanshan District Shenzhen

Tel. 0755-86013669 0755-86013669

Fax 0755-83348369 0755-83348369

Email investor@fiyta.com.cn investor@fiyta.com.cn

III. Other Information

1. Way of Communication

There is no change in the registered address office address and post code the company website email during the

reporting period. For the detail refer to 2022 Annual Report.

2. Information Disclosure and Place where the Regular Reports are Prepared

There was no change in the website media name the website of the Stock Exchange where the Company disclosed its

Semi-annual Report as well as the place where the Company's Semi-annual Report was prepared and placed during

the reporting period. For the detailed information please refer to our 2022 Annual Report.

3. Other Relevant Information

Is there any change in any other relevant information during the reporting period

Inapplicable

IV. Summary of Accounting/Financial Data

Does the Company need to make retroactive adjustment or restatement of the accounting data of the previous years

No

Reporting period Same period of the

Year-on-year

previous year increase/decrease in thereporting period

Revenue in CNY 2364505262.56 2183570749.11 8.29%

Net profit attributable to the

Company’s shareholders 187395067.23 140692784.29 33.19%

in CNY

Net profit attributable to the

Company’s shareholders 177352543.66 129931756.90 36.50%

less the non-recurring

items in CNY

Net cash flows arising from

operating activities in CNY 344659843.62 278386263.60 23.81%

Basic earning per share 0.4517 0.3351 34.80%

6FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

(CNY/share)

Diluted earning per share 0.4517 0.3351 34.80%

(CNY/share)

Return on equity weighted

average 5.80% 4.62% 1.18%

Increase/decrease at the

End of the reporting period End of the previous year end of the year over the

end of the previous year

Total assets (in CNY) 4251877900.66 4117143911.99 3.27%

Net profit attributable to the

Company’s shareholders 3229698746.53 3136423492.15 2.97%

in CNY

V. Difference in the Accounting Data based respectively on the Chinese Accounting Standards (CAS) and

International Accounting Standards (IAS)

1. Differences in the net profit disclosed in the financial report & the net assets attributable to the Company’s

shareholders respectively according to the IAS and the CAS.Inapplicable

2. Difference of the net profit and net asset in the financial report disclosed respectively according to the IAS

and the CAS.Inapplicable

VI. Non-recurring gain/loss items and the amount involved

In CNY

Items Amount Notes

Gain/loss from disposal of

non-current assets including the part

written-off with the provision for -76689.73

impairment of assets.The government subsidies

included in the profits and losses of

the current period ( (excluding

government grants which are closely 6691609.41

related to the Company’s normal

business and conform with the

national standard amount or quantity)

Reversal of provision for impairment

of accounts receivable that has been 5954740.99

separately tested for impairment

Other non-operating income and

expenses with the aforesaid items 304922.65

exclusive

Less: Amount affected by the income

tax 2832059.75

Total 10042523.57

Details of other gains and losses in compliance with the definition of non-recurring gains and losses.Inapplicable

Explanation of the non-recurring gains and losses listed in the Explanatory Announcement No.1 on Information

Disclosure for Companies Offering Their Securities to the Public as recurring gains and losses

Inapplicable

7FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Section 3 Discussion and Analysis by the Management

I. Main business the Company operated during the reporting period

(I) Main business activities the Company carried out

The Company bases its establishment and development on the aviation precision technology and material technology.The Company has been adhering to the values of “the leading role of brand customer orientation value creationcooperation and responsibility learning and innovation" taking “inheriting of the spirit of aeronautical patriotism andcreating a quality life” as its mission focusing on the watch industry has formed a core business layout with the mutual

promotion of own watch brand and watch retail channels. In addition the Company is actively exploring and cultivating

new businesses such as precision technology and smart wears which are in the stage of continuous development.The Company is deeply involved in the construction of professional watchmaking capabilities and brand operations has

a number of self-owned brands such as "Fiyta" "Emile Chouriet" etc. covering different dimensions of mid-to-high-end

popular professional fashion and cool and so on. Where the Company positioned “FIYTA” the core self-owned brand

as “a high-quality Chinese watch brand characterized by the aerospace watch" adhered to the concept of “Home-made”

as the core and “Trendy” as the form continuously created differentiated characteristics and upgrading to “youthfulnesshigh-end and mainstream”; meanwhile the Company continuously increased investment in technological innovation

fields such as the driving units and aviation technology applications. Relying on the advantages of aviation technology

and aerospace quality the Company continuously provided professional watches for China's aerospace industry

gradually established a leading position in the domestic industry and expanded our brand influence.The Company established “Harmony” World Watch Retail Channel to seize the opportunity in the domestic watch

market and promote the rapid development of its own brand. “Harmony” is committed to “becoming the bestcomprehensive service provider of famous watches” and has long-term and in-depth cooperation with many famous

watch groups and brands; quenched its industry-leading operation management ability and customer service capability

and has become a domestic leading professional high-end chain commercial brand of famous watches.In recent years the Company based on the development principle of “technology being homologous the industry beingsame-rooted and value being co-directional” and relying on the strength of precision technology and industrial

accumulation extended the development of precision technology business and smart wears business which have

already taken shape.(II) Overview of the Principal Sectors the Company Engages in

During the reporting period the external macro environment was complex and severe and the domestic consumer

market faced multiple pressures such as insufficient demands. However boosted by the travel recovery and a series of

consumer promotion policies the overall situation showed a trend of tortuous recovery. The total social expenditure

announced by the National Bureau of Statistics increased by 8.2% year-on-year significantly higher than the

year-on-year growth rate of GDP. The domestic watch consumption market continued to be differentiated and the

consumption of medium and high-end watches continued to grow. Federation of the Swiss Watch Industry announced

that the cumulative amount of exports to Mainland China in the first half year increased by 26% year-on-year (a low

base in the same period last year). Mainland China remained the second largest consumer market of Swiss watches.The duty-free market and Hong Kong market also achieved good growth and the market size continued to expand; The

mid to low-end watch consumer market is under overall pressure with both domestic watches and smart watches

experiencing a decline and brand competition becoming increasingly fierce.II. Analysis on Core Competitiveness

(I) Brand operation and management capabilities of the whole-industry-chain

The Company has a comprehensive industrial chain operation and management capability based on research and

development design manufacturing sales and service focused on resource allocation and strengthened the

differentiated construction of the self-owned core brand of “FIYTA”. During the reporting period the brand influence and

market share of “FIYTA” was gradually rising.(II) Elaborative channel operation and management capabilities

Based on its leading channel operation capabilities the Company promoted the optimization of channel structure and

the integration of online and offline integration. During the reporting period core indicators such as customer

satisfaction potential customers’ transactions regular customers’ repeated purchases and unit output of stores etc.continued to improve further advancing towards high-quality development.(III) Digital capabilities to empower businesses

The Company was based on platforms such as digital retail systems CRM systems SAP systems and cloud stores

gradually deepening the digital applications in research and development design production sales and services;

carried out private domain operations and customer lifecycle management effectively improved the efficiency of online

and offline store operations and products sales. During the reporting period the Company achieved a year-on-year

growth in revenue in its principal businesses.(IV) Capacity of Core Precision Technology

8FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

The Company was based on R&D and production platforms in Shenzhen and Switzerland continuously strengthened

its professional watch making capabilities in the manufacturing of movements and key components aerospace watch

development and high-end watch making techniques. It has achieved commercial listing of the self-made movements

and continued to provide professional chronowatches for China’s aerospace industry.(V) Ability to Build the Team of Professional Talents

Based on the concept of “value creation” the Company continued to invest in the building of a talent team in order to

have a professional and stable core backbone team. There were a number of outstanding industry representatives in

core fields such as design research and development and manufacturing. During the reporting period Liu Zhonghuaone of the Company's senior clock technicians was awarded the honorary titles of the “National May Day LaborMedal” and “National Technical Expert”.III. Analysis on Principal Businesses

General

In the first half of 2023 the international environment remained complex and severe. Thanks to the recovery of travel

and policy guidance the economy showed a positive trend in multiple challenges and the fundamentals of the

consumer industry were improved. The Company attached close attention to and evaluated the changing trends in the

industry firmly adhered to its brand strategy insisted on a “defensive and counterattack” business strategy and focused

on risk prevention and control in key areas such as inventory and accounts receivable. Meanwhile the Company deeply

explored various business counterattacks based on customers’ needs using technological innovation and digitization

as the focus promoted the transformation and upgrading of its principal businesses and promoted comprehensive and

high-quality development. During the reporting period the Company achieved a revenue of CNY 2364.51 million a

year-on-year increase of 8.29%; realized a total profit of CNY 244.53 million a year-on-year increase of 37.12%;

realized a weighted average return on equity of 5.80% a year-on-year increase of 1.18 percentage points.(I)Continuously Promoting Brand Upgrading and Creating Brand Differentiation

During the reporting period “FIYTA” brand based on the positioning of "high-quality Chinese watch brand characterized

by aerospace watches" strengthened internal collaboration concentrated on the core product matrix and resource

investment focused on creating faddish products and successively launched J-20 Harbin Z-20 “Spaceman” flywheelChina-Chic “Blue Dragon and White Tiger" and other aerospace themed watches. The "aerospace" series kept growingrapidly; accurately carried out integrated marketing and effectively enhanced the popularity and dissemination effect of

new products by holding events such as collaboration with the film “the King of the Sky” Chinese Brand Day and

celebrity events; relying on the dissemination of the aviation-featured products and aviation culture the Company

continued to establish the aviation brand image promoted the increase of the average customer price of the brand and

rejuvenated the brand image.(II) Continuously Promoting Channel Structure Optimization and Consolidating Operation and Management

Capability

During the reporting period “FIYTA” Brand upgraded its store image entirely focused on aerospace themed stores and

fashion collection stores continuously optimized its channel structure settled in mainstream shopping centers and

commercial districts in first and second tier cities and opened new aerospace concept stores in Shanghai Zhengzhou

Xi'an Nanjing Guiyang and other places effectively driving the increase in unit store output; actively carried out store

membership salon activities to revitalize customer perception and experience and created a base station for

dissemination of the aviation culture; increased the investment in new media channels such as Tiktok and Xiaohongshu

strengthened the development of new online products the construction of self support live broadcast matrix and

multi-party cooperation and accelerated the breakthrough in online sales. During the “June 18” period GMV grew by

more than 80% hitting a new record.“HARMONY” World Watch Retail continued to explore the integration of online and offline channels with a focus on

high-quality development in offline channels promoted the upgrading and expansion of mid- to high-end channels and

accumulated 17 new and upgraded stores; established a private domain traffic matrix and a new media operation matrix

for online channels linked offline stores nationwide promoted full staff marketing and cultivated KOCs for watch

brands; the omnichannel focused on customer research refined operation and customer services and conducted full

cycle management of customer vitality consumption to enhance customer stickiness.(III) Continuously Increasing Investment in Technological Innovation and Strengthening the Hardcore Strength

of Precision Technology

During the reporting period the Company increased its investment in technological innovation fields such as the

movements and application of aviation technology relying on the R & D platforms in Shenzhen and Switzerland

integrated industry advantageous supply chain resources and continuously promoted the application of the

home-made movements based on the commercial listing of the independently-developed movement.(IV) Continuously Promoting Digital Transformation and Deepening Platform Application

During the reporting period the Company promoted in depth digital full value chain applications based on multiple

platforms such as digital retail system CRM system and cloud stores carried out private domain marketing expanded

membership scale promoted refined membership management improved customer shopping and service experience

9FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

and continued to increase potential customers’ transactions and regular customers’ repeated purchases.(V) Continuously Promoting New Business Exploration and Cultivating New Growth Points

During the reporting period for the precision technology business the Company continued to lay solid foundation in its

technical strength in matching complex and high-precision products with prevision technology promoted its expansion

into fields such as aerospace and medical devices and achieved breakthroughs in some new customers; the Company

continued to improve product software and hardware functions in its smart wearables business optimized channel

structure and promoted the development of its own brand ADASHER.Year-on-year Movements of the Key Financial Items are summarized as follows:

In CNY

The reporting period Same period of the

Year-on-year

previous year increase/decr Cause of the changeease

Operating revenue 2364505262.56. 2183570749.11 8.29% Inapplicable

Operating cost 1512527481.83 1373664560.41 10.11% Inapplicable

Sales costs 456273629.20 477806040.76 -4.51% Inapplicable

Administrative expenses 104621729.61 116715664.69 -10.36% Inapplicable

Financial expenses 12188216.82 11877406.98 2.62% Inapplicable

Mainly due to year-on-year increase

Income tax expenses 57131519.56 37639093.79 51.79% of the total profit in the reporting

period.R&D input 28161470.54 25026713.85 12.53% Inapplicable

Net cash flows arising 344659843.62 278386263.60 23.81% Inapplicable

from operating activities

Mainly due to a year-on-year

Net cash flow arising from -36270086.24 -53842038.20 32.64% decrease in expenses for store

investment activities: updating and improvement during the

reporting period.Mainly due to a year-on-year

Net cash flow arising from -102629832.84 -41711043.76 -146.05% decrease in the net borrowing

financial activities: amount during the reporting period.Net increase of cash and 205621331.48 183619193.41 11.98% Inapplicable

cash equivalents

Significant change in profit composition or profit sources during the reporting period.Inapplicable

Composition of Revenues

In CNY

The reporting period Same period of the previous year

Year-on-year

Amount Proportion in the Proportion in the increase/decreaserevenue Amount revenue

Total operating 2364505262.56 100% 2183570749.11revenue 100%

8.29%

Based on sectors

Watches 2210238499.43 93.48% 2030451582.84 92.99% 8.85%

Precision technology

business 67709263.28 2.86% 84809043.13 3.88% -20.16%

Leases 78768763.29 3.33% 61589877.27 2.82% 27.89%

Others 7788736.56 0.33% 6720245.87 0.31% 15.90%

Based on products

Watch brand business 396794035.90 16.78% 405700843.92 18.58% -2.20%

Watch retail and

services 1813444463.53 76.70% 1624750738.92 74.41% 11.61%

Precision technology

business 67709263.28 2.86% 84809043.13 3.88% -20.16%

Leases 78768763.29 3.33% 61589877.27 2.82% 27.89%

Others 7788736.56 0.33% 6720245.87 0.31% 15.90%

Based on regions

South China 1085243222.03 45.89% 1114400902.31 51.04% -2.62%

Northwest China 364119542.91 15.40% 313541606.46 14.36% 16.13%

North China 127379519.35 5.39% 109155218.86 5.00% 16.70%

East China 293815408.18 12.43% 277109098.62 12.69% 6.03%

Northeast China 183610107.98 7.77% 133516376.90 6.11% 37.52%

10FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Southwest China 310337462.11 13.12% 235847545.96 10.80% 31.58%

Sector(s) Product(s) or Region(s) Taking over 10% of the Operating Revenue or Operating Profit

In CNY

Year-on-year Year-on-year Year-on-year

Gross increase/decreas increase/decreas

increase/decr

Turnover Operating cost profit rate e of operating e of operating

ease of gross

revenue over the costs over the profit rate

previous year previous year over theprevious year

Based on sectors

Watches 2210238499.43 1434919721.95 35.08% 8.85% 11.88% -1.75%

Precision

technology 67709263.28 57850777.60 14.56% -20.16% -18.44% -1.81%

business

Leases 78768763.29 19540136.01 75.19% 27.89% -0.62% 7.12%

Others 7788736.56 216846.27 97.22% 15.90% -55.80% 4.52%

Based on products

Watch brand

business 396794035.90 125298304.94 68.42% -2.20% 2.38% -1.41%

Watch retail and

services 1813444463.53 1309621417.01 27.78% 11.61% 12.88% -0.81%

Precision

technology 67709263.28 57850777.60 14.56% -20.16% -18.44% -1.81%

business

Leases 78768763.29 19540136.01 75.19% 27.89% -0.62% 7.12%

Others 7788736.56 216846.27 97.22% 15.90% -55.80% 4.52%

Based on regions

South China 1085243222.03 684230585.95 36.95% -2.62% -3.81% 0.78%

Northwest China 364119542.91 235459389.03 35.33% 16.13% 20.55% -2.37%

North China 127379519.35 80606032.63 36.72% 16.70% 24.87% -4.14%

East China 293815408.18 192797330.04 34.38% 6.03% 12.57% -3.81%

Northeast China 183610107.98 124031025.13 32.45% 37.52% 41.26% -1.79%

Southwest China 310337462.11 195403119.05 37.04% 31.58% 36.26% -2.16%

While adjustment of the statistical caliber for the principal business data took place in the reporting period the principal

business data with the statistical caliber adjusted at the end of the reporting period in the latest year.Inapplicable

IV. Analysis on Non-Principal Businesses

Inapplicable

V. Analysis on Assets and Liabilities

1. Significant Changes in Assets Composition

In CNY

End of the reporting period End of the previous year Proportio

n Note to

Proportion in Proportion in increase/ significantAmount total assets Amount total assets decrease changes

Monetary fund 519368795.12 12.22% 313747463.64 7.62% 4.60% Inapplicable

Accounts 399576267.99 9.40% 305290959.68 7.42% 1.98% Inapplicable

receivable

Contract assets 0.00% 0.00% 0.00% Inapplicable

Inventories 2085380802.48 49.05% 2141320373.67 52.01% -2.96% Inapplicable

Investment-orient 367140251.89 8.63% 374979494.71 9.11% -0.48% Inapplicable

ed real estate

Long-term equity 56484605.25 1.33% 58182086.90 1.41% -0.08% Inapplicable

investment

Fixed assets 356142836.23 8.38% 364628765.17 8.86% -0.48% Inapplicable

Construction-in-p 0.00% 0.00% 0.00% Inapplicable

rocess

Right-of-use 87234100.50 2.05% 110330512.03 2.68% -0.63% Inapplicable

assets

Short term loans 390273749.99 9.18% 290237111.11 7.05% 2.13% Inapplicable

11FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Contract 19287771.81 0.45% 16844437.47 0.41% 0.04% Inapplicable

liabilities

Long-term 0.00% 0.00% 0.00% Inapplicable

borrowings

Lease liabilities 30745380.62 0.72% 41642561.58 1.01% -0.29% Inapplicable

2. Major Overseas Assets

Inapplicable

3. Assets and liabilities measured based on fair value

Inapplicable

4. Restriction on rights in the assets ended the reporting period

Inapplicable

VI. Analysis of Investment Situation

1. General

Amount of investment in the reporting period Amount of investment in the same period of

(CNY) the previous year (CNY) Amount of variation

0.000.000.00%

2. Significant Equity Investment Acquired in the Reporting Period

Inapplicable

3. Significant non-equity investment in process in the reporting period

Inapplicable

4. Financial assets investment

(1) Investment in securities

Inapplicable

(2) Investment in derivatives

Inapplicable

5. Application of the raised capital

Inapplicable

VII. Sales of Significant Assets and Equity

1. Sales of Significant Assets

Inapplicable

2. Sales of Significant Equity

Inapplicable

12FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

VIII. Analysis on Principal Subsidiaries and Mutual Shareholding Companies

Particulars about the principal subsidiaries and mutual shareholding companies which may affect the Company’s net profit by over 10%

In CNY

Company

Company name Principal business Registered capital Total assets Net assets Operation revenue Operating profit Net profit

type

Purchase & sale

Shenzhen Harmony World and repairing

Subsidiaries 600000000.00 2127022924.71 1252957899.75 1778290441.83 181514300.46 135433561.92

Watches Center Co. Ltd. service of watches

and components

Design R & D and

sales of watches

FIYTA Sales Co. Ltd. Subsidiary 450000000.00 461158135.67 321206303.22 200804707.14 -17831739.54 -13702858.35

and components &

parts

Manufacture and

Shenzhen FIYTA Precision production of

Subsidiary 100000000.00 324593596.44 187350869.67 157045977.88 24490519.06 22908938.45

Technology Co. Ltd. watches and

components

Production and

Shenzhen FIYTA machining of

Technology Development Subsidiary sophisticated 50000000.00 192063976.31 155351494.99 77714105.39 5243937.33 5231903.19

Co. Ltd. components and

parts

Trading of watches

FIYTA (Hong Kong) Limited Subsidiary and accessories 137737520.00 257253056.41 244312184.64 44131741.73 8671263.29 7120581.91

and investment

Design R & D and

Emile Chouriet (Shenzhen) sales of watches

Subsidiary 41355200.00 123960804.81 52972172.61 39206687.06 -1037459.14 -811084.45

Limited and components &

parts

Production and

Mutual

Shanghai Watch Industry sales of watches

shareholding 15350000.00 181492570.35 140256324.92 63610760.47 -7264204.96 -6789926.61

Co. Ltd. and components &

company

parts

13FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Acquisition and disposal of subsidiaries in the reporting period

Inapplicable

Note to the principal mutual shareholding companies

Inapplicable

IX. Structurized Entities Controlled by the Company

Inapplicable

14FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

X. Risks Possibly to be Confronted with

In the first half of 2023 the overall performance of the domestic economy was improving and the consumer market was

gradually recovering showing strong resilience. However it still faced risks and challenges such as continuous

diversification and rationalization of consumer preferences comprehensive opening up of consumer exports rapid

development of offshore duty-free channels and the rapid rise of new media channels in the digital economy.Based on a comprehensive analysis on the above situation the Company adhered to brand strategy solidly promoted

various basic work around the brands products channels marketing and other aspects increased investment in

technological innovation accelerated digital transformation and explored and cultivated new business growth points.For the specific measures refer to the Section of “Analysis on the Principal Businesses”. Up to now the Company has

enhanced the core competitiveness of the Company's principal businesses and as a result its market share has

gradually increased.

15FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Section 4 Corporate Governance

I. General Meeting and Extraordinary General Meetings

1. General Meetings

Proportion of

Sessions Meeting type attendance of the Meeting date Date ofdisclosure Resolutions of the meetingsinvestors

For the detail refer to the

2022 Annual Annual April 27 "Announcement on the Resolutions

General Meeting General 42.07% April 26 2023 2023 of 2022 Annual General MeetingMeeting No. 2023-024" disclosed on

www.cninfo.com.cn

For the detail refer to the

2023 1st Extraordinary June 01 "Announcement on the ResolutionsExtraordinary General 39.13% May 31 2023 2023 of 2023 1st Extraordinary GeneralGeneral Meeting Meeting Meeting No. 2023-031" disclosed

on www.cninfo.com.cn

2. Extraordinary general meeting requested for holding by the preferred shareholders with the voting power

recovered.Inapplicable

II. Personnel Change in Directors Supervisors and Senior Executives

No change has taken place in directors supervisors and senior executives of the Company during the reporting period.For the detail refer to 2022 Annual Report.III. Profit Distribution and Conversion of Capital Reserve into Share Capital in the Reporting Period

Inapplicable

IV. Implementation of the Company’s Equity Incentive Plan Employee Stock Ownership Plan or other

Employee Incentive Measures

1. Equity incentive

(1) Restricted Stock Incentive Plan Phase I

The 3rd session of the Ninth Board of Directors held on November 12 2018 and 2019 1st Extraordinary General

Meeting held on January 11 2019 decided to start 2018 A-Share Restricted Stock Incentive Program (Phase I) which

was later on reviewed and approved at the 5th session of the Ninth Board of Directors held on January 11 2019 and

the Company eventually granted 4.224 million restricted A-shares to 128 persons eligible for the incentive. The grant

price of this part of the restricted stock was CNY 4.40 per share which was granted and registered for listing on January

30 2019. For the detail refer to the relevant announcement disclosed on http://www.cninfo.com.cn. on January 12

2019. The specific implementation during the reporting period is summarized as follows:

Reviewed and approved at the 10th session of the Tenth Board of Directors the Company satisfied the conditions for

the release of the restriction for sales in the third release period of the Company's Restricted Stock Incentive Plan

(Phase I) and the 1.16232 million restricted A-shares involved were listed for trading on January 31 2023. For the detail

refer to the Company's relevant announcement disclosed on http://www.cninfo.com.cn. on January 19 2023.

(2) Restricted Stock Incentive Plan Phase II

The 23rd session of the Ninth Board of Directors held on December 4 2020 and 2021 1st Extraordinary General

Meeting held on January 6 2021 decided to start 2018 A-Share Restricted Stock Incentive Program (Phase II) which

was later on reviewed and approved at the 25th session of the Ninth Board of Directors held on January 15 2021 and

the Company eventually granted 7.66 million restricted A-shares to 135 persons eligible for the incentive. The grant

price of this part of the restricted stock was CNY 7.60 per share which was granted and registered for listing on

January 29 2021. For the detail refer to the relevant announcement disclosed on http://www.cninfo.com.cn. on

January 16 2021. The specific implementation during the reporting period is summarized as follows:

Reviewed and approved at the 10th session of the Tenth Board of Directors the Company satisfied the conditions for

the release of the restriction for sales in the first release period of the Company's Restricted Stock Incentive Plan

(Phase II) and the 2.27439 million restricted A-shares involved were listed for trading on January 31 2023. For the

detail refer to the Company's relevant announcement disclosed on http://www.cninfo.com.cn. on January 19 2023.Reviewed and approved at the 11th session of the Tenth Board of Directors the Company decided to repurchase and

cancel the total of 146740 A-share restricted shares which were already granted to but with the restriction not yet

relieved held by 4 retired incentive recipients. Considering that the Company had not satisfied the Company’s

16FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

performance condition for lifting restrictions during the second period of the restricted stock incentive plan the

Company decided to repurchase and cancel 2201130 A-share restricted shares which had not met the conditions for

lifting the restriction. The aforesaid shares had been all canceled. For the detail refer to the Company's relevant

announcements disclosed on http://www.cninfo.com.cn. on March 18 2023 April 27 2023 and July 8 2023

respectively.Reviewed and approved at the 13th session of the Tenth Board of Directors and 2023 1st Extraordinary General

Meeting the Company decided to repurchase and cancel the 13360 restricted A-shares which were already granted to

but with the restriction not yet lifted held by 1 retired incentive recipient. For the detail refer to the Company's relevant

announcements disclosed in http://www.cninfo.com.cn. on May 16 2023 and June 1 2023 respectively.

2. Implementation of the Employee Stock Ownership Plan

Inapplicable

3. Other employee incentive measures

Inapplicable

17FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Section 5 Environment and Social Responsibility

I. Significant Issues concerning Environmental Protection

Does the Company or any of its subsidiaries belong to a key pollutant discharging unit as announced to the public by

the environmental protection authority?

No

Administrative penalties for environmental issues during the reporting period

Inapplicable

Refer to other environmental information disclosed by key pollutant discharge units.In 2018 Yangpu District Bureau of Ecology and Environment of Shanghai organized a clean production audit and

evaluation meeting on Shanghai Watch Co. Ltd. one of the Company's joint stock companies. The meeting assessed

and approved the Company's clean production work. Shanghai Watch Co. Ltd. passed the pollution discharge

verification organized by Yangpu District Bureau of Ecology and Environment of Shanghai and received the Pollutant

Discharge Permit issued by the said authority at the end of 2019. Since the individual non-heavy pollutant factors

originally approved in the "Pollutant Discharge Permit" did not belong to the discharge scope of Shanghai Watch Co.Ltd. the Company proposed to change the “Pollutant Discharge Permit" which was now been re-examined by theYangpu District Bureau of Ecology and Environment and was issued on October 20 2021.On December 31 2022 Shanghai Watch Co. Ltd. shut down its pollution related business and completed the

cancellation of its "Pollution Discharge License" on April 24 2023. Shanghai Watch Co. Ltd. was changed from a key

pollutants discharge unit into a general management unit.Measures taken to reduce carbon emissions during the reporting period and their effect

Inapplicable

Reason for not disclosing other environmental information

Inapplicable

II. Social Responsibilities

The Company has been actively practicing social responsibility for many years and has disclosed its annual socialresponsibility report successively for 16 years. For the latest information please refer to the “2022 Social ResponsibilityReport” published on www.cninfo.com.cn on March 18 2023.

18FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Section 6 Significant Events

I. Commitments finished in implementation by the Company's actual controller shareholders related parties

acquirer the Company etc. in the reporting period and commitments unfinished in implementation at the end

of the reporting period

Inapplicable

II. Non-operational Occupancy of the Company’s Capital by the Controlling Shareholder and its Related Parties

Inapplicable

III. Outward guarantee against regulations

Inapplicable

IV. Engagement/Disengagement of the CPAs

Has the financial report to the Semi-Annual Report been audited

No

V. Explanation of the Board of Directors and the Supervisory Committee on the Qualified Auditors' Report for

the reporting period issued by the CPAs

Inapplicable

VI. Explanation of the Board of Directors on the Qualified Auditors' Report for the previous year issued by the

CPAs

Inapplicable

VII. Matters concerning Bankruptcy Reorganization

Inapplicable

VIII. Lawsuits

Inapplicable

IX. Penalty and Rectification

Inapplicable

X. Integrity of the Company its Controlling Shareholder and Actual Controller

Inapplicable

XI. Significant Related Transactions

1. Related Transactions Related with Day-to-Day Operations

Inapplicable

2. Related transactions concerning acquisition and sales of assets or equity

Inapplicable

3. Related transactions concerning joint investment in foreign countries

Inapplicable

4. Current associated rights of credit and liabilities

Inapplicable

5. Transactions with the finance company with incidence relation

Deposit business

19FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Amount incurred in the reporting

period

Maximum Opening Total amount Total amount

Related party Incidence deposit limit Deposit

Ending

balance (CNY deposited withdrawnrelation per day (CNY interest range balance (CNY

10000)10000)

during the during the 10000)

reporting reporting

period (in CNY period (in CNY

10000)10000)

Finance

AVIC Finance company withincidence 80000 1.25% 27132.70 202170.79 181249.01 48054.48

relation

Loan business

Amount incurred in the reporting

period

Loan amount Opening Total loan Total Ending

Related party Incidencerelation (in CNY

Loan interest repayments

rate range balance (in during the balance (in10000) CNY 10000) reporting during the CNY 10000)

period (in CNY reporting

10000) period (in CNY10000)

Finance

AVIC Finance company withincidence 80000 2.7% 0 0 0 0

relation

Credit extension and other financial business

Inapplicable

During the reporting period the balance of the daily maximum related deposits and loans between the Company and

AVIC Finance did not exceed the above-mentioned limit as specified in the financial service agreement and there were

no credit grants or other financial services incurred for time being. At the same time the Company issued the "Risk

Assessment Report on the Related Deposits and Loans with AVIC Finance Co. Ltd." for the above matters every six

months.

6. Transactions between the finance company controlled by the Company and the related parties

Inapplicable

7. Other Significant Related Transactions

The 11th Session of the Tenth Board of Directors held on March 16 2023 and 2022 Annual General Meeting held on

April 26 2023 reviewed and approved the Proposal on the Prediction of the Regular Related Transactions of Year 2023.During the reporting period the cumulative transaction amount of the Company's related transactions related to its daily

operations was within the expected range of the year.Inquiry on the website for disclosing the provisional report concerning significant related transactions

Description of the provisional announcements Date of disclosure Disclosure website

Announcement on the Resolution of the 11th Session of the

Tenth Board of Directors 2023-007 March 18 2023 http://www.cninfo.com.cn/

Announcement of the Prediction of the Regular Related

Transactions in 2023 2023-010 March 18 2023 http://www.cninfo.com.cn/

Announcement on the Resolution of 2022 Annual General

Meeting 2023-031 April 27 2023 http://www.cninfo.com.cn/

XII. Important Contracts and Implementation

1. Custody Contacting and Leases

(1) Custody

Inapplicable

(2) Contracting

Inapplicable

(3) Leases

Inapplicable

20FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

2. Significant Guarantees

In CNY 10000

Outward guarantees Offered by the Company and its Subsidiaries (excluding guarantee to the subsidiaries)

Date of

the Actual

Names of announce Guarante

Guarante ment on Guarante

Date of amount Type of Counter Implemen

e line occurrenc of guarante

Collateral guarante Guarante e to

es the e guarante e (if any) e (if any) e period

tation

status related

guarante e party?

e line

Inapplica

ble

Total amount of Total amount of

outward guarantee outward guarantee

approved in the report 0 actually incurred in the 0

period (A1) report period (A2)

Total amount of

outward guarantee Total ending balance of

already approved at 0 outward guarantee at

the end of the report the end of the report

0

period (A3) period (A4)

Guarantee to the subsidiaries

Date of

the Actual

Names of announ Guarante Date of amount Type of Counter Implemen

Guarante

Guarantee cement occurrenc of guarante Collateral guarante Guarante tation e to

s on the e line e guarante e (if any) e (if any) e period status related

guarant e party?

ee line

Shenzhen

Harmony Guarante

World March10 35000 Decembe

e with

Watches r 30 15000 joint 1 year No No

Center Co. 2022 2022 responsib

Ltd. ility

Total guarantee quota Total amount of

to the subsidiaries guarantee to the60000

approved in the subsidiaries actually

0

reporting period (B1) incurred in thereporting period (B2)

Total guarantee quota Total balance of actual

to the subsidiaries guarantee to the

approved at the end of 95000 subsidiaries at the end 15000

the reporting period of the reporting period

(B3) (B4)

Guarantee to the subsidiaries

Date of

the Actual

Names of announce Guarante Date of amount Type of Collateral Counter Implemen

Guarante

Guarante ment on occurrenc of guarante guarante Guarantee line (if any) e period tation

e to

es the e guarante e e (if any) status related

guarante e party?

e line

Inapplica

ble

Total guarantee quota Total amount of

to the subsidiaries guarantee to the

approved in the 0 subsidiaries actually 0

reporting period (C1) incurred in thereporting period (C2)

Total guarantee quota Total balance of actual

to the subsidiaries guarantee to the

approved at the end of 0 subsidiaries at the end 0

the reporting period of the reporting period

(C3) (C4)

Total amount of guarantees (i.e. Total of the previous three major items)

Total guarantee quota Total amount of

to the subsidiaries outward guarantee

approved in the 60000 actually incurred in the 0

reporting period reporting period

(A1+B1+C1) (A2+B2+C2)

Total amount of Total ending balance of

guarantees already 95000 guarantees at the end 15000

approved at the end of of the reporting period

21FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

the reporting period (A4+B4+C4)

(A3+B3+C3)

Proportion of the actual guarantees in the 4.64%

Company’s net assets (namely A4+B4 + C4)

where

Amount of guarantees offered to the shareholders 0

actual controller and its related parties (D)

Amount of guarantee for liabilities directly or

indirectly offered to the guarantees with the 0

asset-liability ratio exceeding 70% (E)

Guarantee with total amount exceeding 50% of 0

the net assets (F)

Total amount of the aforesaid three guarantees 0

(D+E+F)

For the guarantee contract not yet due guarantee

responsibility incurred in the reporting period or Inapplicable

there is evidence showing the description of the

possible related discharge duty (if any)

Note to the outward guarantee against the Inapplicable

established procedures (if any)

Description of the guarantee with complex method

Inapplicable

3. Finance Management on Commission

Inapplicable

4. Other Important Contracts

Inapplicable

XIII. Notes to Other Significant Events

1. About Renewal of the Accounting Firm

After review and approval at the Company's 11th session of the Tenth Board of Directors and 2022 Annual General

Meeting the Company decided to renew Da Hua CPAs LLP as the auditor of Company's 2023 annual financialstatements and internal control for another fiscal year. For the detail please refer to the “Announcement on theRenewal of the CPAs 2023-012” and the “Announcement on the Resolution of 2022 Annual General Meeting 2023-024disclosed by the Company on http://www.cninfo.com.cn/ on March 18 2023 and April 27 2023 respectively.

2. About the Change of the Business Scope and the Amendment of the Articles of Association

After review and approval at the 13th meeting of the 10th Board of Directors and 2023 1st Extraordinary General

Meeting the Company decided to add new business scope adjust the standardized expression of the existing business

scope and revise the corresponding provisions of the Company's Articles of Association based on the changedbusiness scope. For detail please refer to the “Announcement on the Resolution of the 13th Session of the 10th Boardof Directors 2023-025” and the “Announcement on the Change of the Business Scope and the Amendment of theArticles of Association 2023-027” and the “Announcement on the Resolution of 2023 1st Extraordinary General Meeting

2023-031 disclosed by the Company on http://www.cninfo.com.cn/ on May 16 2023 and June 1 2023 respectively.

XIV. Significant Events of the Company's Subsidiaries

Inapplicable

22FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Section 7 Change of the Shares and Particulars about Shareholders

I. Change of the Shares

1. Change of the Shares

In shares

Before the change Increase/decrease (+ -) upon the change After the change

Shares

convert

Quantity Proportio New Bonus edn issuing shares from Others Sub-total Quantity

Proportio

n

reserv

e

I.Restricted 8227310 1.97% 0 0 0 -3089460 -3089460 5137850 1.23%

shares

1. Shares

held by the 0 0.00% 0 0 0 0 0 0 0.00%

state

2. State

corporate 0 0.00% 0 0 0 0 0 0 0.00%

shares

3. Other

domestic 8227310 1.97% 0 0 0 -3089460 -3089460 5137850 1.23%

shares

Including:

Domestic 0 0.00% 0 0 0 0 0 0 0.00%

corporate

shares

Shares

held by

domestic 8227310 1.97% 0 0 0 -3089460 -3089460 5137850 1.23%

natural

persons

4. Foreign

invested 0 0.00% 0 0 0 0 0 0 0.00%

shares

Including:

Foreign 0 0.00% 0 0 0 0 0 0 0.00%

corporate

shares

Shares

held by

foreign 0 0.00% 0 0 0 0 0 0 0.00%

natural

persons

II.Unrestricte 409400650 98.03% 0 0 0 3089460 3089460 412490110 98.77%

d shares

1. CNY

ordinary 359463953 86.07% 0 0 0 3089460 3089460 362553413 86.81%

shares

2. Foreign

invested

shares 49936697 11.96% 0 0 0 0 0 49936697 11.96%

listed in

Mainland

China

3. Foreign

invested

shares 0 0.00% 0 0 0 0 0 0 0.00%

listed

abroad

4. Others 0 0.00% 0 0 0 0 0 0.00%

III. Total 417627960 100.00% 0 0 0 0 0 417627960 100.00%

shares

Cause of the change of shares

1. During the reporting period the release conditions of the third restriction release period for the Company’s restricted

stock incentive plan (Phase I) and the first restriction release period for the Company’s restricted stock incentive plan

(Phase II) were satisfied and the restricted shares corresponding to the release were listed for trading and as a result

3436710 shares of the restricted shares were reduced (converted into circulating shares);

23FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

2. During the reporting period 347250 restricted shares were added due to the adjustment of the transferable quota of

the senior executives;

Due to the above reasons the total number of shares with restricted sales conditions of the Company decreased by

3089460 shares and the total number of shares without restricted sales conditions increased by 3089460 shares

with the total number of shares remaining unchanged

Approval of the Change of the Shares

Reviewed and approved at the 10th session of the Tenth Board of Directors the release conditions of the third

restriction release period for the Company’s restricted stock incentive plan (Phase I) and the first restriction release

period for the Company’s restricted stock incentive plan (Phase II) were satisfied the Board of Directors of the

Company decided to handle the lifting of restrictions on the sale of 3436710 A-share restricted shares in accordance

with relevant regulations in accordance with the authorization of 2019 1st Extraordinary General Meeting in 2019 and

2021 1st Extraordinary General Meeting.

Transfer of the Shares Changed

Inapplicable

Progress of implementation of the stock repurchase

The Company’s 11th Session of the Tenth Board of Directors and 2022 General Meeting reviewed and approved the“Proposal on Repurchase of Partial Domestically Listed Foreign Shares (B- Shares). For the detail please refer to therelevant announcements disclosed on www.cninfo.com. on March 18 2023 and April 27 2023 respectively.Ended the reporting period the Company accumulatively repurchased 2403565 shares through a centralized bidding

method with the special account for the securities repurchased accounting for 0.58% of the Company’s total share

capital. The highest transaction price was HK$ 8.00 per share and the lowest transaction price was HK$7.48/share the

total amount paid was HK$ 18653010.10 (with the transaction cost exclusive).Progress of implementation of reduction of the holding size of the shares repurchased by centralized bidding

Inapplicable

Influence of the change of the shares upon such financial indicators as the basic EPS and diluted EPS net asset value

per share attributable to the common stockholders in the past year and the latest period

Inapplicable

Other information the Company considers necessary or required by the securities regulatory authority to be disclosed.Inapplicable

24FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

2. Change of the Restricted Shares

In shares

Number of

Number of restricted Number of Number of

restricted shares

Names of the shares at the restricted shares restricted shares

at the end of Cause of restriction Date of relieving the restriction

Shareholders beginning of the relieved in the increased in the

the reporting

reporting period reporting period reporting period

period

1. As at January 31 2023 76670 equity incentive restricted

shares were unlocked.Locked and not yet unlocked restricted shares

Li Ming 214250 76670 22500 160080 2. The residual restricted shares shall be unlocked subject to the

held by the senior executives

conditions of the locked shares for senior executives and the

measures for the Company’s equity incentive management

1. As at January 31 2023 76670 equity incentive restricted

shares were unlocked.Locked and not yet unlocked restricted shares

Pan Bo 214220 76670 22500 160050 2. The residual restricted shares shall be unlocked subject to the

held by the senior executives

conditions of the locked shares for senior executives and the

measures for the Company’s equity incentive management

1. As at January 31 2023 76670 equity incentive restricted

shares were unlocked.Locked and not yet unlocked restricted shares

Lu Wanjun 214220 76670 22500 160050 2. The residual restricted shares shall be unlocked subject to the

held by the senior executives

conditions of the locked shares for senior executives and the

measures for the Company’s equity incentive management

1. As at January 31 2023 76670 equity incentive restricted

shares were unlocked.Locked and not yet unlocked restricted shares

Liu Xiaoming 214220 76670 22500 160050 2. The residual restricted shares shall be unlocked subject to the

held by the senior executives

conditions of the locked shares for senior executives and the

measures for the Company’s equity incentive management

1. As at January 31 2023 69990 equity incentive restricted

shares were unlocked.Locked and not yet unlocked restricted shares

Tang Haiyuan 170040 69990 7500 107550 2. The residual restricted shares shall be unlocked subject to the

held by the senior executives

conditions of the locked shares for senior executives and the

measures for the Company’s equity incentive management

1. As at January 31 2023 93340 equity incentive restricted

shares were unlocked; 2. the residual restricted shares shall be

Chen Libin 213400 93340 -59940 60120 Not yet unlocked restricted shares

unlocked subject to the measures for the Company’s equity

incentive management.

25FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

1. As at January 31 2023 60000 equity incentive restricted

shares were unlocked; 2. the residual restricted shares shall be

Bao Xianyong 140040 60000 -39960 40080 Not yet unlocked restricted shares

unlocked subject to the measures for the Company’s equity

incentive management.

1. As at January 31 2023 60000 equity incentive restricted

shares were unlocked; 2. the residual restricted shares shall be

Sun Lei 140040 60000 -39960 40080 Not yet unlocked restricted shares

unlocked subject to the measures for the Company’s equity

incentive management.

1. As at January 31 2023 60000 equity incentive restricted

shares were unlocked; 2. the residual restricted shares shall be

Sheng Li 140040 60000 -39960 40080 Not yet unlocked restricted shares

unlocked subject to the measures for the Company’s equity

incentive management.

1. As at January 31 2023 2786700 equity incentive restricted

shares were unlocked.Locked and not yet unlocked restricted shares 2. The residual restricted shares shall be unlocked subject to the

Other shareholders 6566840 2786700 429570 4209710

held by the retired senior executives conditions of the locked shares for the retired senior executives

and the measures for the Company’s equity incentive

management.Total 8227310 3436710 347250 5137850 -- --

Note: As four of the original incentive recipients in the Restricted Shares Incentive Plan (Phase II) were retired and the conditions for unlocking the restricted shares at the Company’s level for the second phase of the restriction lifting

period had not been satisfied the Company handled the repurchase and cancellation procedures for 2347870 shares of equity incentive restricted shares in accordance with regulations. As of the end of the reporting period therelevant shares had not been cancelled and they were placed in the "Special Account of FIYTA Precision Technology Co. Ltd. for Repurchase of Securities “ and included in the "Other Shareholders". These securities were notseparately presented.

26FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

II. Issuing and Listing

Inapplicable

III. Number of Shareholders and Shareholding

In shares

Total common shareholders at the Total preference shareholders with the voting power29772

end of the reporting period recovered at the end of the reporting period (if any)

0

(Refer to Note 8)

Shares held by the common shareholders holding over 5% shares or the top 10 common shareholders

Pledging

Sharehol Number of marking or

Names of the Nature of the ding common Increase/decre

Number of Number of the

freezing

Shareholders shareholder proportio shares held at ase in the

the restricted unrestricted

common common Status

n the end of the reporting period Quareporting period shares held shares held of the

shares ntity

AVIC

International State

Holding Limited corporate

39.02%16297732700162977327

Domestic

# Wu Jilin natural 4.45% 18599502 653888 0 18599502

person

Domestic

# Xu Guoliang natural 1.79% 7455068 2190300 0 7455068

person

Domestic

Qiu Hong natural 0.59% 2470000 100000 0 2470000

person

China Merchants

Securities (HK) Foreign legalentity 0.43% 1788011 1538988 0 1788011Co. Limited

China

Construction

Bank Co. Ltd. -

China Universal

Asset CSI Guoxin

Central-Soes Others 0.41% 1706200 1706200 0 1706200

Shareholder

Return Index

Exchange Traded

Fund

Industrial and

Commercial Bank

of China LTD -

Rongtong Power Others 0.39% 1639534 1639534 0 1639534

Pioneer Hybrid

Securities

Investment Fund

Industrial and

Commercial Bank

of China Ltd -

Guangfa CSI

Guoxin

Central-Soes Others 0.37% 1548200 1548200 0 1548200

Shareholder

Return Index

Exchange Traded

Fund

Bank of Jiangsu

Co. Ltd. - Bosera

Huirong Returns

1-Year Holding Others 0.36% 1483000 1483000 0 1483000

Hybrid Securities

Investment Fund

Domestic

# Qu Yongjie natural 0.30% 1266800 0 0 1266800

person

About the fact that a strategic

investor or ordinary corporate

became one of the top ten common Inapplicable

shareholders due to placement of

new shares (if any) (Refer to Note

3)

Explanation on associated The Company has no idea on whether the above 10 shareholders are associated or are acting in

relationship or consistent action of concert.

27FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

the above shareholders

Among the above shareholders AVIC International Holding Limited authorized representatives to

Note to the aforesaid shareholders exercise voting rights on their behalf in the Company’s 2022 Annual General Meeting and 2023 1st

involving entrusting/being Extraordinary General Meeting with the number of representative shares being 162977327 shares. For

entrusted with voting power and the result of the voting refer to the relevant announcement published by the Company on

the waiver of voting power http://www.cninfo.com.cn.

1. In the Company's A-shares special repurchase account - “the Special Repurchase Securities Accountof Fiyta Precision Technology Co. Ltd." the number of ordinary shares held at the end of the reporting

There is a special repurchase period being 2347870 shares with the holding proportion of 0.56% was mainly due to that the Company

account among the top 10 was in process of handling the procedures for repurchase and cancellation of some equity incentive

shareholders (if any) (see Note 11) restricted shares;Special note to the designated 2. In the Company's B-shares special repurchase account - “the Special Repurchase Securities Accountrepurchase account in top 10 of Fiyta Precision Technology Co. Ltd." the number of ordinary shares held at the end of the reporting

shareholders (if any) (Refer to Note period being 2403565 shares with the holding proportion of 0.58% was mainly due to that the Company

11) was in process of implementing repurchase of B-shares.

According to regulations the above-mentioned repurchase special accounts were not included in the list

of the top 10 shareholders.Shares held by top 10 shareholders of unrestricted shares

Names of the Shareholders Quantity of unrestricted shares held at the end of the

Share type

reporting period Share type Quantity

AVIC International Holding Limited 162977327 CNY ordinary shares 162977327

# Wu Jilin 18599502 CNY ordinary shares 18599502

# Xu Guoliang 7455068 CNY ordinary shares 7455068

Qiu Hong 2470000 CNY ordinary shares 2470000

China Merchants Securities (HK) Domestically listed

Co. Limited 1788011 foreign investment 1788011shares

China Construction Bank Co. Ltd.- China Universal Asset CSI

Guoxin Central-Soes Shareholder 1706200 CNY ordinary shares 1706200

Return Index Exchange Traded

Fund

Industrial and Commercial Bank of

China LTD - Rongtong Power

Pioneer Hybrid Securities 1639534 CNY ordinary shares 1639534

Investment Fund

Industrial and Commercial Bank of

China Ltd. - Guangfa CSI Guoxin

Central-Soes Shareholder Return 1548200 CNY ordinary shares 1548200

Index Exchange Traded Fund

Bank of Jiangsu Co. Ltd. - Bosera

Huirong Returns 1-Year Holding 1483000 CNY ordinary shares 1483000

Hybrid Securities Investment Fund

# Qu Yongjie 1266800 CNY ordinary shares 1266800

Note to the associated

relationship or consistent action

among the top 10 shareholders of

non-restricted common shares and The Company has no idea on whether the above 10 shareholders are associated or are acting in

that between the top 10 concert.shareholders of non-restricted

common shares and top 10

common shareholders.

1. In addition to the 10593376 shares held through the ordinary securities account Wu Jilin one of the

shareholders of the Company also holds 8006126 shares through the client credit transaction

guarantee securities account of China CICC Wealth Securities Co. Ltd. Therefore Wu Jilin is actually

holding 18599502 shares;

Note to the top 10 common 2. In addition to the 6853168 shares held through the ordinary securities account Xu Guoliang one of

shareholders involved in margin the shareholders of the Company also holds 601900 shares through the client credit transaction

financing & securities lending (if guarantee securities account of Guosen Securities Co. Ltd. Therefore Xu Guoliang is actually holding

any) (Refer to Note 4) 7455068 shares;

3. In addition to the 22800 shares held through the ordinary securities account Qu Yongjie one of the

shareholders of the Company also holds 1244000 shares through the client credit transaction

guarantee securities account of Shanxi Securities Co. Ltd. Therefore Qu Yongjie is actually holding

1266800 shares;

Did the top ten common shareholders or top ten shareholders of unrestricted common shares conduct

contractual repurchase during the reporting period?

No

IV. Change in Shares Held by Directors Supervisors and Senior Executives

Name Title Office Number of Sharehol Shareholdi Number of Number of Number of Number ofStatus shares held ding ng shares restricted restricted restricted

28FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

at the increase decreased held at end shares shares shares

beginning of d in the in the of the granted at granted granted at

the reporting reporting reporting reporting the during the the end of

period period period period beginning reporting the

(shares) (shares) (shares) (shares) of the period reporting

reporting (shares) period

period (shares)

(shares)

Zhang Chairman of the In

Xuhua Board office 0 0 0 0 0 0 0

Xiao Yi Director Inoffice 0 0 0 0 0 0 0

Xiao Director InZhanglin office 0 0 0 0 0 0 0

Li Peiyin Director Inoffice 0 0 0 0 0 0 0

Deng In

Jianghu Director office 0 0 0 0 0 0 0

Pan Bo Managing InDirector office 280000 0 0 230050 176720 0 50100

Wang Independent In

Jianxin Director office 0 0 0 0 0 0 0

Zhong

Hongmin Independent In

g Director office

0000000

Tang Independent In

Xiaofei Director office 0 0 0 0 0 0 0

Zheng Chairman of the

Qiyuan Supervisory

In

office 0 0 0 0 0 0 0Committee

Cao In

Zhen Supervisor office 0 0 0 0 0 0 0

Hu Jing Supervisor Inoffice 9000 0 0 9000 0 0 0

Lu deputy GM and

Wanjun chief law

In

office 280000 0 70000 160050 176720 0 50100adviser

Liu In

Xiaoming Deputy GM office 280000 0 0 230050 176720 0 50100

Li Ming Deputy GM Inoffice 280040 0 70000 160090 176720 0 50100

Chief

Song Accountant

Yaoming Deputy GM and

In 0 0 0 0 0 0 0

the Secretary of office

the Board

Tang Deputy GM InHaiyuan office 210000 0 52500 107550 170040 0 50100

Total -- -- 1339040 0 192500 896790 876920 0 250500

V. Change of the Controlling Shareholder or Actual Controller

Change of the controlling shareholder in the reporting period

Inapplicable

Change of the actual controller in the reporting period

Inapplicable

29FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Section 8 About the Preferred Shares

Inapplicable

30FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Section 9 About Bonds

Inapplicable

31FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Section 10 Financial Report

I. Auditors’ Report

Has the semi-annual report been audited

No

II. Financial Statements

The currency applied in the financial notes and statements is Renminbi (CNY)

1. Consolidated Balance Sheet

Prepared by FIYTA Precision Technology Co. Ltd.June 30 2023

In CNY

Items June 30 2023 January 01 2023

Current assets:

Monetary capital 519368795.12. 313747463.64

Settlement reserve

Inter-bank lending

Transactional financial assets

Derivative financial assets

Notes receivable 14629298.90. 32214912.10

Accounts receivable 399576267.99 305290959.68

Financing with accounts receivable

Advance payment 8005894.20. 8039794.97

Receivable premium

Reinsurance accounts receivable

Reserve for reinsurance contract

receivable

Other receivables 57386850.68. 56918019.48

Including: Interest receivable

Dividends receivable

Redemptory monetary capital for sale

Inventories 2085380802.48 2141320373.67

Contract assets

Held-for-sale assets

Non-current assets due within a year

Other current assets 39308621.80. 66339505.32

Total current assets 3123656531.17. 2923871028.86

Non-current assets:

Loan issuing and advance in cash

Equity investment

Other debt investment

Long term accounts receivable

Long-term equity investments 56484605.25 58182086.90

Investment in other equity instruments 85000.00.Other non-current financial assets

Investment-oriented real estate 367140251.89 374979494.71

Fixed assets 356142836.23 364628765.17

Construction-in-progress

Productive biological asset

Oil and Gas Assets

Use right assets 87234100.50. 110330512.03

Intangible assets 31559015.75. 33200218.63

Development expenses

32FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Goodwill

Long term expenses to be apportioned 124953334.60. 144488452.18

Deferred income tax asset 92102693.23. 95784611.94

Other non-current assets 12604532.04 11593741.57

Total non-current assets 1128221369.49. 1193272883.13

Total assets 4251877900.66. 4117143911.99

Current liabilities:

Short term borrowings 390273749.99. 290237111.11

Borrowings from central bank

Loans from other banks

Transactional financial liabilities

Derivative financial liabilities

Notes payable 2000600.00

Accounts payable 191488208.83. 170589456.67

Advance Receipts 9945161.72 16960128.83

Contract liabilities 19287771.81. 16844437.47

Money from sale of the repurchased

financial assets

Deposits taking and interbank placement

Acting trading securities

Income from securities underwriting on

commission

Payroll payable to the employees 111187240.92 136587939.38

Taxes payable 73848183.25. 60770168.30

Other payables 129167556.82. 165060122.58

Including: interest payable

Dividends payable 2889585.48 6324013.97

Service charge and commission payable

Payable reinsurance

Held-for-sale liabilities

Non-current liabilities due within a year 57351473.17. 71546316.16

Other current liabilities 2146851.31 1686806.01

Total current liabilities 984696197.82. 932283086.51

Non-current liabilities:

Reserve for insurance contract

Long-term borrowings

Bonds payable

Including: preferred shares

Perpetual bond

Lease liabilities 30745380.62. 41642561.58

Long-term accounts payable

Long term payroll payable to employees

Estimated liabilities

Deferred income 1295926.80. 1295926.80

Deferred income tax liability 5441648.89 5498844.95

Other non-current liabilities

Total non-current liabilities 37482956.31. 48437333.33

Total liabilities 1022179154.13. 980720419.84

Owner’s equity:

Capital stock 417627960.00. 417627960.00

Other equity instruments

Including: preferred shares

Perpetual bond

Capital reserve 1003354306.96. 1007086643.48

Less: shares in stock 47129717.65. 50759806.16

Other comprehensive income 15144598.96 5739589.89

Special reserve 2747263.00. 2012064.91

33FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Surplus reserve 275010401.50. 275010401.50

Reserve against general risks

Retained earnings 1562943933.76. 1479706638.53

Total owners’ equity attributable to the parent

company 3229698746.53. 3136423492.15

Minority shareholders’ equity

Total owner’s equity 3229698746.53. 3136423492.15

Total liabilities and owners’ equity 4251877900.66. 4117143911.99

Legal representative: Zhang Xuhua Chief Financial Officer: Song Yaoming

Person in charge of the Accounting Department: Tian Hui

2. Balance Sheet (Parent Company)

In CNY

Items June 30 2023 January 01 2023

Current assets:

Monetary capital 413234945.06. 274691023.16

Transactional financial assets

Derivative financial assets

Notes receivable

Accounts receivable 9527390.87 603216.03

Financing with accounts receivable

Advance payment

Other receivables 667253750.44. 839782543.07

Including: Interest receivable

Dividends receivable

Inventories

Contract assets

Held-for-sale assets

Non-current assets due within a year

Other current assets 12544185.27. 14107604.63

Total current assets 1102560271.64. 1129184386.89

Non-current assets:

Equity investment

Other debt investment

Long term accounts receivable

Long-term equity investments 1546969980.93 1552310486.50

Investment in other equity instruments 85000.00.Other non-current financial assets

Investment-oriented real estate 299208476.85 305676084.09

Fixed assets 205123588.08 209495642.59

Construction-in-progress

Productive biological asset

Oil and Gas Assets

Use right assets

Intangible assets 22808397.38. 23522355.93

Development expenses

Goodwill

Long term expenses to be apportioned 6440459.33. 8240653.62

Deferred income tax asset 712027.80. 1904597.73

Other non-current assets 5530288.43 2051932.75

Total non-current assets 2086793218.80. 2103286753.21

Total assets 3189353490.44. 3232471140.10

Current liabilities:

Short term borrowings 390273749.99. 290237111.11

Transactional financial liabilities

Derivative financial liabilities

34FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Notes payable

Accounts payable 4256200.53. 1048201.41

Advance Receipts 9945161.72 16960128.83

Contract liabilities

Payroll payable to employees 24918704.24 27139007.97

Taxes payable 7843400.85. 778299.01

Other payables 239551661.30. 299198966.56

Including: interest payable

Dividends payable 2889585.48 6324013.97

Held-for-sale liabilities

Non-current liabilities due within a year

Other current liabilities

Total current liabilities 676788878.63. 635361714.89

Non-current liabilities:

Long-term borrowings

Bonds payable

Including: preferred shares

Perpetual bond

Lease liabilities

Long-term accounts payable

Long term payroll payable to employees

Estimated liabilities

Deferred income 1295926.80. 1295926.80

Deferred income tax liability

Other non-current liabilities

Total non-current liabilities 1295926.80. 1295926.80

Total liabilities 678084805.43. 636657641.69

Owner’s equity:

Capital stock 417627960.00. 417627960.00

Other equity instruments

Including: preferred shares

Perpetual bond

Capital reserve 1006232802.77. 1010917776.19

Less: shares in stock 47129717.65. 50759806.16

Other comprehensive income

Special reserve

Surplus Reserve 275010401.50. 275010401.50

Retained earnings 859527238.39. 943017166.88

Total owner’s equity 2511268685.01. 2595813498.41

Total liabilities and owners’ equity 3189353490.44. 3232471140.10

Legal representative: Zhang Xuhua Chief Financial Officer: Song Yaoming

Person in charge of the Accounting Department: Tian Hui

3. Consolidated Profit Statement

In CNY

Items The first half year of 2023 The first half year of 2022

I. Turnover 2364505262.56. 2183570749.11

Including: operating income 2364505262.56. 2183570749.11

Interest income

Earned insurance premium

Service charge and commission

income

II. Total operating costs 2129534984.07 2019291580.02

35FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Including: Operating costs 1512527481.83. 1373664560.41

Interest payment

Service charge and commission

payment

Surrender Value

Compensation expenses net

Provision of reserve for insurance

liabilities net

Payment of policy dividend

Reinsurance expenses

Taxes and surcharges 15762456.07. 14201193.33

Sales costs 456273629.20 477806040.76

Administrative expenses 104621729.61 116715664.69

R & D expenditures 28161470.54 25026713.85

Financial expenses 12188216.82 11877406.98

Where: Interest cost 6690859.35. 9731247.68

Interest income 2432180.03 1981825.39

Plus: Other income 6691609.41. 13369782.95

Investment income (loss is stated with -1697481.65. 2462626.52

“-”)

Including: return on investment in -1697481.65. 2462626.52

associate and joint venture

Gain from the

derecognition of the financial assets

measured at amortised costExchange income (loss stated with “-“)Net exposure hedge income (lossstated with “-“)Income from change of fair value (loss

is stated with “-”)

Loss from impairment of credit (loss is 4333947.62. 1848.85

stated with “-”)

Loss from impairment of assets (loss -348218.69.is stated with “-”)

Income from disposal of assets (loss -76689.73. -816021.16is stated with “-“)III. Operating Profit (loss is stated with “-“) 244221664.14. 178949187.56Plus: Non-operating income 596523.83. 208587.88

Less: Non-operating expenses 291601.18. 825897.36

IV. Total profit (total loss is stated with “-”) 244526586.79. 178331878.08

Less: Income tax expense 57131519.56. 37639093.79V. Net Profit (net loss is stated with “-“) 187395067.23. 140692784.29(I) Classification based on operation

sustainability

1. Net Profit from sustainable operation

(net loss is stated with “-”) 187395067.23. 140692784.29

2. Net Profit from termination of

operation (net loss is stated with “-”)

(II) Classification by ownership

1.Net profit attributable to the parent

company’s shareholder (net loss is stated 187395067.23. 140692784.29

with “-”)

2. Minority shareholders’ gain/loss (net

loss is stated with “-”)

VI. Net of other comprehensive income after

tax 9405009.07. 424855.72

Net of other comprehensive income after

tax attributable to the parent company’s 9405009.07. 424855.72

owner

(I) Other comprehensive income which

cannot be re-classified into gain and loss

1. Remeasurement of the change

amount in the defined benefit plan

2. Other comprehensive income which

cannot be converted into gain and loss based

on the equity method

3. Movement of the fair value of the

investment in other equity instruments

36FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

4. Movement of the fair value of the

Company’s own credit risk

5. Others

(II) Other comprehensive income which

shall be re-classified into gain and loss 9405009.07. 424855.72

1. Other comprehensive income which

can be converted into gain and loss based on

the equity method

2. Movement of the fair value of the

investment in other debt instruments

3. Amount of the reclassified financial

assets counted to the other comprehensive

income

4. Provision for impairment of the

credit of the other creditor's right investment

5. Reserve for cash flow hedge

6. Conversion difference in foreign

currency statements 9405009.07. 424855.72

7. Others

Net amount of other comprehensive

income after tax attributable to minority

shareholders

VII. Total comprehensive income 196800076.30. 141117640.01

Total comprehensive income attributable to

the parent company’s owner 196800076.30. 141117640.01

Total comprehensive income attributable to

minority shareholders

VIII. Earnings per share:

(I) Basic earnings per share 0.4517. 0.3351

(II) Diluted earnings per share 0.4517. 0.3351

Legal representative: Zhang Xuhua Chief Financial Officer: Song Yaoming

Person in charge of the Accounting Department: Tian Hui

4. Statement of Profit Parent Company

In CNY

Items The first half year of 2023 The first half year of 2022

I. Operating revenue 92042875.14. 91642614.69

Less: Operating cost 22121058.14. 19190036.95

Taxes and surcharges 3858296.21. 3830748.17

Sales costs 510613.70 630681.48

Administrative expenses 29511087.70 32867677.72

R & D expenditures 5986203.21 9134485.17

Financial expenses -103859.98 -613920.42

Where: Interest cost 1476552.70. 1770519.63

Interest income 1953770.61 1830268.89

Plus: Other income 753278.99. 587709.30

Investment income (loss is stated with -1697481.65 2462626.52

“-”)

Including: return on investment in -1697481.65 2462626.52

associate and joint venture

Gain from the derecognition

of the financial assets measured at amortised

cost (loss is stated with “-”)

Net exposure hedge income (lossstated with “-“)Income from change of fair value (loss

is stated with “-”)

Loss from impairment of credit (loss is -362763.81 -186946.13

stated with “-”)

Loss from impairment of assets (loss

is stated with “-”)

Income from disposal of assets (loss -37783.55 -13335.34is stated with “-“)II. Operating Profit (loss is stated with “-“) 28814726.14 29452959.97Plus: Non-operating income 8037.20 104980.99

Less: Non-operating expenses 837.18 3084.22

37FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full TextIII. Total profit (total loss is stated with “-“) 28821926.16 29554856.74Less: Income tax expense 8154082.65 6788603.54IV. Net Profit (net loss is stated with “-“) 20667843.51 22766253.20(I) Net Profit from sustainable operation

(net loss is stated with “-”) 20667843.51 22766253.20

(II) Net Profit from termination of operation

(net loss is stated with “-”)

V. Net of other comprehensive income after

tax

(I) Other comprehensive income which

cannot be re-classified into the gain and loss

1. Remeasurement of the change

amount in the defined benefit plan

2. Other comprehensive income which

cannot be converted into gain and loss based

on the equity method

3. Movement of the fair value of the

investment in other equity instruments

4. Movement of the fair value of the

Company’s own credit risk

5. Others

(II) Other comprehensive income which

shall be re-classified into gain and loss

1. Other comprehensive income which

can be converted into gain and loss based on

the equity method

2. Movement of the fair value of the

investment in other debt instruments

3. Amount of the reclassified financial

assets counted to the other comprehensive

income

4. Provision for impairment of the

credit of the other creditor's right investment

5. Reserve for cash flow hedge

6. Conversion difference in foreign

currency statements

7. Others

VI. Total comprehensive income 20667843.51 22766253.20

VII. Earnings per share:

(I)Basic earnings per share

(II)Diluted earnings per share

Legal representative: Zhang Xuhua Chief Financial Officer: Song Yaoming

Person in charge of the Accounting Department: Tian Hui

5. Consolidated Cash Flow Statement

In CNY

Items The first half year of 2023 The first half year of 2022

I. Cash flows arising from operating activities:

Cash received from sales of goods and

supply of services 2544494031.57 2393028123.16

Net increase of customers’ deposit and

due from banks

Net increase of borrowings from the central

bank

Net increase of borrowings from other

financial institutions

Cash received from the premium of the

original insurance contract

Net cash received from the reinsurance

business

Net increase of the reserve from policy

holders and investment

Cash received from interest service

charge and commission

Net increase of loan from other banks

Net increase of fund from repurchase

business

38FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Net cash received from securities trading

on commission

Rebated taxes received 850371.86 4558409.98

Other operation activity related cash

receipts 37298851.19 37580077.51

Subtotal of cash flow in from operating

activity 2582643254.62 2435166610.65

Cash paid for purchase of goods and 1584272785.87 1500723327.63

reception of labor services

Net increase of loans and advances to

customers

Net increase of due from central bank and

due from other banks

Cash from payment for settlement of the

original insurance contract

Net increase of the lending capital

Cash paid for interest service charge and

commission

Cash for payment of policy dividend

Cash paid to and for staff 336029420.86 367134428.28

Taxes paid 135231581.42 133532633.53

Other business activity related cash

payments 182449622.85 155389957.61

Subtotal of cash flow out from operating

activity 2237983411.00 2156780347.05

Net cash flows arising from operating

activities 344659843.62 278386263.60

II. Cash flow arising from investment

activities:

Cash received from recovery of investment

Cash received from investment income

Net cash from disposal of fixed

assetsintangible assets and recovery of 3545.41 119998.33

other long term assets

Net cash received from disposal of

subsidiaries and other operating units

Other investment activity related cash

receipts

Subtotal of cash flow in from investment

activity 3545.41 119998.33

Cash paid for purchase/construction of

fixed assets Intangible assets and other long 36273631.65 53962036.53

term assets

Cash paid for investment

Net increase of the pledged loan

Net cash paid for acquisition of

subsidiaries and other operation units

Other investment activity related cash

payments

Subtotal of cash flow out from investment

activity 36273631.65 53962036.53

Net cash flow arising from investment

activities: -36270086.24 -53842038.20

III. Cash flow arising from fund-raising

activities:

Cash received from absorbing investment

Incl.: Cash received from the subsidiaries’

absorption of minority shareholders’

investment

Cash received from loans 250000000.00 705155704.29

Other financing activity related cash

receipts

Subtotal of cash flow in from fund raising

activity 250000000.00 705155704.29

Cash paid for debt repayment 150000000.00 500174365.00

Cash paid for dividend/profit distribution or 110259489.52 129988270.60

repayment of interest

Including: Dividend and profit paid by the

subsidiaries to minority shareholders

Other financing activity related cash

payments 92370343.32 116704112.45

Sub-total cash flow paid for financing

activities 352629832.84 746866748.05

39FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Net cash flow arising from fund-raising

activities -102629832.84 -41711043.76

IV. Change of exchange rate influencing the

cash and cash equivalent -138593.06 786011.77

V. Net increase of cash and cash equivalents 205621331.48 183619193.41

Plus: Opening balance of cash and cash

equivalents 313747463.64 210254737.14

VI. Ending balance of cash and cash

equivalents 519368795.12 393873930.55

Legal representative: Zhang Xuhua Chief Financial Officer: Song Yaoming

Person in charge of the Accounting Department: Tian Hui

6. Cash Flow Statement Parent Company

In CNY

Items The first half year of 2023 The first half year of 2022

I. Cash flows arising from operating activities

Cash received from sales of goods and

supply of services 84192699.46 83213751.44

Rebated taxes received 7647.56

Other operation activity related cash

receipts 2141372420.70 2152559822.69

Subtotal of cash flow in from operating

activity 2225565120.16 2235781221.69

Cash paid for purchase of goods and

reception of labor services

Cash paid to and for staff 29190598.81 31495381.68

Taxes paid 5480282.08 8848751.02

Other business activity related cash

payments 2002201028.42 2023994609.32

Subtotal of cash flow out from operating

activity 2036871909.31 2064338742.02

Net cash flows arising from operating

activities 188693210.85 171442479.67

II. Cash flow arising from investment

activities:

Cash received from recovery of investment

Cash received from investment income

Net cash from disposal of fixed

assetsintangible assets and recovery of 200.00 3973162.69

other long term assets

Net cash received from disposal of

subsidiaries and other operating units

Other investment activity related cash

receipts

Subtotal of cash flow in from investment

activity 200.00 3973162.69

Cash paid for purchase/construction of

fixed assets Intangible assets and other long 4515871.59 2196743.47

term assets

Cash paid for investment

Net cash paid for acquisition of

subsidiaries and other operation units

Other investment activity related cash

payments

Subtotal of cash flow out from investment

activity 4515871.59 2196743.47

Net cash flow arising from investment

activities: -4515671.59 1776419.22

III. Cash flow arising from fund-raising

activities:

Cash received from absorbing investment

Cash received from loans 250000000.00 690000000.00

Other financing activity related cash

receipts

Subtotal of cash flow in from fund raising

activity 250000000.00 690000000.00

Cash paid for debt repayment 150000000.00 500000000.00

Cash paid for dividend/profit distribution or

repayment of interest 110259489.52 129931071.56

40FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Other financing activity related cash

payments 35483644.86 53318818.77

Sub-total cash flow paid for financing

activities 295743134.38 683249890.33

Net cash flow arising from fund-raising

activities -45743134.38 6750109.67

IV. Change of exchange rate influencing the

cash and cash equivalent 109517.02 323297.27

V. Net increase of cash and cash equivalents 138543921.90 180292305.83

Plus: Opening balance of cash and cash

equivalents 274691023.16 171022392.92

VI. Ending balance of cash and cash

equivalents 413234945.06 351314698.75

Legal representative: Zhang Xuhua Chief Financial Officer: Song Yaoming

Person in charge of the Accounting Department: Tian Hui

7. Consolidated Statement of Changes in Owner’s Equity

Amount in the reporting period

In CNY

The first half year of 2023

Owners’ equity attributable to the parent company

Minor

Other equity instruments Other Provi ity Total

Items

Capit Capit Less: comp Speci Surpl sion Retai share ownePrefe

al Perp al treas rehen al us for ned Other Sub-t holde r’srred

stock etual

Other reser ury sive reser Reser gener earni s otal rs’ equity

share bond s ve stock incom ve ve al ngs equitys e risks

I. Ending 4176

1007

0865075573920122750

147931363136

balance of the 2796 643.4 9806 589. 064. 1040

706423423

638.5492.1492.1

previous year 0.00 8 .16 89 91 1.50 3 5 5

Plus: Change in

accounting

policy

Correction of

previous errors

Consolidation of

enterprises

under the

common control

Others

II. Opening 4176

1007147931363136

2796086

5075573920122750

balance of the 643.4 9806 589. 064. 1040

706423423

0.00 .16 89 91 1.50 638.5 492.1 492.1reporting year 8 3 5 5

III.Decrease/increa -373 -363 9405 8323 9327 9327

se of the report 2336 0088 009.

7351.52.510798.09

729552545254

year (decrease .23 .38 .38is stated with “-“)(I) Total 9405 1873 1968 1968

comprehensive 009. 9506 0007 0007

income 07 7.23 6.30 6.30

(II) Owners’ input -373 -363 -102 -102

and decrease of 2336 0088 248.0 248.0

capital .52 .51 1 1

1. Common 1700 -170 -170

shares 7830 0783 0783

contributed by .70 0.70 0.70

the owner

2. Capital

contributed by

other equity

instruments

holders

3. Amount of -372 -206 1690 1690

payment for 9602 3791 8317 8317

shares counted .11 9.21 .10 .10

to owners’ equity

-273-273-273

4. Others 4.41 4.41 4.41

-104-104-104

(III) Profit 1577 1577 1577

Distribution 72.00 72.00 72.00

1. Provision of

surplus reserve

41FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

2. Provision for

general risks

3. Distributions -104 -104 -104

to the owners (or 1577 1577 1577

shareholders) 72.00 72.00 72.00

4. Others

(IV) Internal

carry-over of

owners’ equity

1. Capitalization

of capital

reserve (or

capital stock)

2. Capitalization

of surplus

reserve (or

capital stock)

3. Loss made up

for with surplus

reserve

4. Setting of the

amount involved

in the movement

of the beneficial

plan carried over

to the retained

earnings

5. Other

comprehensive

income

carried-over to

the retained

earnings

6. Others

(V) Special 7351 7351 7351

reserve 98.09 98.09 98.09

1. Provision in 8166 8166 8166

the reporting 18.92 18.92 18.92

period

2. Applied in the -814 -814 -814

reporting period 20.83 20.83 20.83

(VI) Others

1003156232293229

IV. Ending 4176 354 4712 1514 2747 2750

balance of the 2796 306.9 9717 4598 263. 1040

943698698

0.00 .65 .96 00 1.50 933.7 746.5 746.5reporting period 6 6 3 3

Amount of the previous year

In CNY

The first half year of 2022

Owners’ equity attributable to the parent company

Minor

Other equity instruments Other Provi ity Total

Items

Capit Capit Less: comp Speci Surpl sion Retai share ownePrefe

al Perp al treas rehen al us for ned Other Sub-t holde r’srred

stock etual

Other reser ury sive reser Reser gener earni s otal rs’ equity

share bond s ve stock incom ve ve al ngs equitys e risks

1040

I. Ending 4260 908 6058 -765 1062 2750

133830133013

balance of the 5101 194.1 5678 8346 731. 1040

444232232

5.00 .92 .40 13 1.50 326.0 642.5 642.5previous year 3 9 3 3

Plus: Change in

accounting

policy

Correction of

previous errors

Consolidation of

enterprises

under the

common control

Others

1040133830133013

II. Opening 4260 908 6058 -765 1062 27505101 5678 8346 731. 1040 444 232 232balance of the

5.00 194.1 .92 .40 13 1.50 326.0 642.5 642.5reporting year 3 9 3 3

III.Decrease/increa 5596 4325 1527 -214 -214

se of the report 697. 5975

42484912

49.9255.7246.44

364469536953

year (decrease .89 1.38 1.38is stated with “-“)(I) Total 4248 1406 1411 1411

comprehensive 55.72 9278 1764 1764

income 4.29 0.01 0.01

42FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

(II) Owners’ input 5596 4325 -376 -376

and decrease of 697. 5975 5927 5927

capital 49 .92 8.43 8.43

1. Common 5025 -502 -502

shares 2831 5283 5283

contributed by .88 1.88 1.88

the owner

2. Capital

contributed by

other equity

instruments

holders

3. Amount of 5611 -699 1260 1260

payment for 740. 6855 8596 8596

shares counted 66 .96 .62 .62

to owners’ equity

-150-150-150

4. Others 43.17 43.17 43.17

-125-125-125

(III) Profit 4191 4191 4191

Distribution 39.40 39.40 39.40

1. Provision of

surplus reserve

2. Provision for

general risks

3. Distributions -125 -125 -125

to the owners (or 4191 4191 4191

shareholders) 39.40 39.40 39.40

4. Others

(IV) Internal

carry-over of

owners’ equity

1. Capitalization

of capital

reserve (or

capital stock)

2. Capitalization

of surplus

reserve (or

capital stock)

3. Loss made up

for with surplus

reserve

4. Setting of the

amount involved

in the movement

of the beneficial

plan carried over

to the retained

earnings

5. Other

comprehensive

income

carried-over to

the retained

earnings

6. Others

(V) Special 4912 4912 4912

reserve 46.44 46.44 46.44

1. Provision in 6000 6000 6000

the reporting 00.00 00.00 00.00

period

-108-108-108

2. Applied in the 753.5 753.5 753.5

reporting period 6 6 6

(VI) Others

1046

IV. Ending 4260 504 1038 -723 1553 2750

135329912991

717763763

balance of the 5101 4165 3490 977. 1040

reporting period 5.00

891.6

24.84.68571.50

970.9111.1111.1

855

Legal representative: Zhang Xuhua Chief Financial Officer: Song Yaoming

Person in charge of the Accounting Department: Tian Hui

8. Consolidated Statement of Changes in Owner’s Equity Parent Company

Amount in the reporting period

In CNY

Items The first half year of 2023

43FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Other equity instruments

Less: Other RetaineCapital Preferre Capital compre Special Surplus d

Total

stock d Perpetu Others reserve

treasury

stock hensive reserve Reserve earning

Others owners’

equity

shares al bond income s

I. Ending 417627 10109 50759 275010 943017 25958

balance of the 960.00 17776.19 806.16 401.50 166.88

13498.

previous year 41

Plus: Change in

accounting

policy

Correction of

previous errors

Others

II. Opening 417627 10109 50759 275010 943017 25958

balance of the 960.00 17776. 806.16 401.50 166.88 13498.reporting year 19 41

III.Decrease/increa -46849 -36300 -83489 -84544

se of the report 73.42 88.51 928.49 813.40

year (decreaseis stated with “-“)(I) Total 20667 20667

comprehensive 843.51 843.51

income

(II) Owners’ input -46849 -36300 -10548

and decrease of 73.42 88.51 84.91

capital

1. Common

shares 17007 -17007

contributed by 830.70 830.70

the owner

2. Capital

contributed by

other equity

instruments

holders

3. Amount of

payment for -46822 -20637 15955

shares counted 39.01 919.21 680.20

to owners’ equity

-2734.4-2734.4

4. Others 1 1

-10415-10415

(III) Profit 7772.0 7772.0

Distribution 0 0

1. Provision of

surplus reserve

2. Distributions -10415 -10415

to the owners (or 7772.0 7772.0

shareholders) 0 0

3. Others

(IV) Internal

carry-over of

owners’ equity

1. Capitalization

of capital reserve

(or capital stock)

2. Capitalization

of surplus

reserve (or

capital stock)

3. Loss made up

for with surplus

reserve

4. Setting of the

amount involved

in the movement

of the beneficial

plan carried over

to the retained

earnings

5. Other

comprehensive

income

carried-over to

the retained

earnings

6. Others

(V) Special

reserve

1. Provision in

the reporting

period

44FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

2. Applied in the

reporting period

(VI) Others

IV. Ending 417627 10062 47129 275010 859527 25112

balance of the 960.00 32802. 68685.reporting period 77

717.65401.50238.3901

Amount of the previous year

In CNY

The first half year of 2022

Other equity instruments

Items Capital Less:

Other Retaine Total

Preferre Capital treasury compre Special Surplus dstock d Perpetu Others reserve stock hensive reserve Reserve earning

Others owners’

equity

shares al bond income s

I. Ending 426051 1045449410. 60585 275010 806441

24923

balance of the 015.00 67 678.92 401.50 654.46

66802.

previous year 71

Plus: Change in

accounting

policy

Correction of

previous errors

Others

II. Opening 426051 1045449410. 60585 275010 806441

24923

balance of the 015.00 678.92 401.50 654.46 66802.reporting year 67 71

III.Decrease/increa 48866 43255 -10265 -14102

se of the report 13.66 975.92 2886.2 2248.4

year (decrease 0 6is stated with “-“)(I) Total 22766 22766

comprehensive 253.20 253.20

income

(II) Owners’ input 48866 43255 -38369

and decrease of 13.66 975.92 362.26

capital

1. Common

shares 50252 -50252

contributed by 831.88 831.88

the owner

2. Capital

contributed by

other equity

instruments

holders

3. Amount of

payment for 49016 -69968 11898

shares counted 56.83 55.96 512.79

to owners’ equity

-15043.-15043.

4. Others 17 17

-12541-12541

(III) Profit 9139.4 9139.4

Distribution 0 0

1. Provision of

surplus reserve

2. Distributions -12541 -12541

to the owners (or 9139.4 9139.4

shareholders) 0 0

3. Others

(IV) Internal

carry-over of

owners’ equity

1. Capitalization

of capital reserve

(or capital stock)

2. Capitalization

of surplus

reserve (or

capital stock)

3. Loss made up

for with surplus

reserve

4. Setting of the

amount involved

in the movement

of the beneficial

plan carried over

to the retained

earnings

5. Other

45FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

comprehensive

income

carried-over to

the retained

earnings

6. Others

(V) Special

reserve

1. Provision in

the reporting

period

2. Applied in the

reporting period

(VI) Others

IV. Ending 426051 10503 103841 275010 703788 23513

balance of the 015.00 36024.33 654.84 401.50 768.26

44554.

reporting period 25

Legal representative: Zhang Xuhua Chief Financial Officer: Song Yaoming

Person in charge of the Accounting Department: Tian Hui

III. Company Profile

1.Place of Registration Organization Form and Address of the Head Office

FIYTA Precision Technology Co. Ltd. (the “Company”) was founded under the approval of Shen Fu Ban Fu (1992)

1259 issued by the General Office of Shenzhen Municipal Government through the restructuring of former Shenzhen

FIYTA Time Industrial Company by the promoter of China National Aero-Technology Import and Export Shenzhen

Industry & Trade Center (name changed to “China National Aero-Technology Shenzhen Co. Ltd” lately) on 25

December 1992. On 3 June 1993 the Company was listed on Shenzhen Stock Exchange. The Company holds

business license with the Unified Social Credit Code of 91440300192189783K.After the distribution of bonus shares placement of new shares conversion to share capital additional issuance of new

shares and share repurchase and cancellation over the years as of June 30 2023 the Company has issued a total of

417627960 shares with a registered capital of CNY 417627960. The Company’s registered address is FIYTA

Technology Building Gaoxin S. Road One Nanshan District ShenzhenChina. Head office address: FIYTA

Technology Building Gaoxin S. Road One Nanshan District Shenzhen Guangdong Province; the Parent Company is

AVIC International Holding Limited; the Actual Controller is Aviation Industry Corporation of China Ltd.

2.Business Nature and Principal Business Activities

As of June 30 2023 the principal business activities of the Company and its subsidiaries are: production and sales of

various pointer type mechanical watches quartz watches and their driving units spares and parts various timing

apparatus processing and wholesale of Karat gold ornament watches and smart watches; domestic trade materials

supply and sales (excluding the commodities for exclusive operation exclusive control and monopoly); property

management and lease; design service; self-run import & export business.As of July 5 2023 the business nature and principal business activities of the Company and its subsidiaries have

changed to: sales of watches; manufacturing of watches and timing instruments; sales of watches and timing

instruments; wholesale of jewelry; retail of jewelry; manufacturing of smart wearables; sales of smart wearables;

property management; lease of non residential real estate; professional design services; import and export of goods;

sales of household appliances; sales of satellite mobile communication terminals.

3. Approval for the Financial Statements for Issuing

The financial statements were approved and issued by the Board of Directors dated August 21 2023.There were 12 subsidiaries consolidated in the financial statements during the reporting period. For the detail refer to

Note IX. "Equity in Other Entities".The entities included in the scope of the consolidated financial statements in the reporting period remain unchanged

compared with the previous period. For details please refer to Note VIII “Changes of the consolidation scope”.IV. Basis for preparation of the financial statements

1. Preparation Basis

The Company makes recognitions and measurements according to the actual transactions and events in the light of the

"Accounting Standards for Business Enterprises - Basic Standards" promulgated by the Ministry of Finance and specific

accounting standards guidelines for the application of accounting standards for enterprises interpretations of

46FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

accounting standards for enterprises and other relevant regulations (hereinafter collectively referred to as the

"Accounting Standards for Enterprises"); on this basis prepares the financial statements with consideration of the

relevant provisions of the China Securities Regulatory Commission - " Preparation Rules for Information Disclosure by

Companies Offering Securities to the Public No. 15—General Provisions on Financial Reports (2014 Revision).

2. Operation on Going Concern Basis

The Company has assessed its going-concern ability for 12 months from the end of the reporting period and has not

found any matters or circumstances that may lead to significant doubts about the going-concern ability. As a result the

financial statements of the Company have been prepared on going concern basis.V. Important accounting policies and accounting estimates

Presentation on specific accounting policies and accounting estimates:

1. The Company makes specific accounting policies and estimates according to its nature of business and accounting

policies and estimates mainly include: method of estimated credit loss accrual (Note V. 11 Note V. 12 and Note V. 14)

measurement of inventory (Note V. 15) depreciation of investment property and fixed asset and amortization of

intangible asset (Note V. 23 Note V. 24 and Note V. 30) revenue (Note V. 39) etc.

2. Based on historical experience and other factors including reasonable expectations for future events the Company

continuously evaluates the important estimates and key assumptions used. If material changes to following accounting

estimate and key assumption incurred material impact would happened to the carrying value of the Company’s assets

and liabilities in coming accounting year：

(1) Provision for bad debt of accounts receivable and other receivables It is necessary to describe that the management

estimates impairment loss provision to accounts receivable and other receivables based on the judgments to estimated

credit loss of accounts receivable and other receivables. If any events occurred that indicated the Company may not be

able to recover the balance amount estimation is needed in provision accrual. If the expected number is different with

the estimated figure the difference will affect the carrying value of accounts receivable and other receivables and the

impairment loss expenses in corresponding accounting period.

(2) Impairment of inventory. The Company recognizes provision for obsolete inventories based on the excess

of the cost of inventory over its net realizable value. In determining the net realizable value of inventories the

management uses significant judgments to estimate the selling price cost to finish manufacturing and selling expenses

and associated taxes. If the management revises estimated selling price and cost to finish manufacturing and selling

expenses the NAV estimation would be affected and the difference would have an effect to the inventory provision.

(3) Estimation of long-term asset impairment. When evaluating whether there is impairment to long-term asset the

management mainly considers the following: (1) whether the events affect the asset impairment have already incurred;

(2) whether the discounted cash flow from continue usage of the asset or disposal is lower than its carrying amount; and

(3) whether major assumption used in estimating the future cash flow is appropriate.

Changes to related assumption adopted in determining impairment such as profitability discounting rate and growth

rate may have material impact to the present value used in impairment test and result in impairment to above

mentioned long-term assets.

(4) Depreciation and amortization. The estimated residual value and useful life of investment property fixed asset and

intangible asset that used by the Company are based on historical actual useful life and actual residual value of assets

with similar nature or functions. In the process of using such assets estimated useful life and residual value may vary

depending on the economic environment technological environment and other environment that the assets located. If

there is difference between the expectation and previous estimation proper adjustments will be made by the

management.

(5) Share-based payments The management makes best estimation based on up-to-date number of employees who

have exercisable shares and adjusting the number of exercisable equity instrument on each balance sheet date in the

vesting period. If there is difference between current year exercisable employee and previous estimation proper

adjustments will be made by the management.

(6) Deferred income tax asset. Deferred income tax asset of taxable losses shall be recognized to the extent that there

will have sufficient taxable income to offset. This involves significant judgments to estimate the timing and amount of

future taxable profit and taking into consideration of tax planning so as to determine the amount of deferred tax asset.

(7) Income tax. It should be described that the final tax treatment of many transaction and events are with uncertainty in

the normal course of operation. Significant judgments necessary to be made when calculating the income tax. If there is

47FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

difference between the final discretion and the amount recorded in books the difference will affect the amount of tax in

the period of final discretion.

1. Statement on complying with the accounting standards for business enterprise

The financial statements of the Company have been prepared in accordance with the requirements of Accounting

Standards for Business Enterprises. These financial statements present truly and completely the financial position the

results of operations and the cash flows for reporting period of the Company.

2.Accounting period

The accounting period of the Company is the calendar year i.e. from 1 January to 31 December of each year.

3.Operating cycle

The operating cycle refer to the period from purchasing assets for process to realizing cash or cash equivalent. The

Company’s operating cycle is 12 months which is also used as standard to determine the liquidity of asset and liabilities.

4. Recording Currency

The Company and its domestic subsidiaries use Renminbi (CNY) as the function currency for book keeping. FIYTA

Hong Kong Co. Ltd. one of the Company's overseas subsidiaries one of the subsidiaries of FIYTA HK (hereinafter

referred to as “Station-68”) has determined Hong Kong Dollars as its recording currency for accounting in accordance

with the currencies available in its major economic environment where it is operated. Montres Chouriet SA one of the

subsidiaries of FIYTA Hong Kong determines Swiss Franc as its recording currency for accounting in accordance with

the currencies available in its major economic environment where it is operated and Swiss France is converted into

Renminbi in preparing its financial statements. The currency the Company takes in preparation of these financial

statements is Renminbi.

5. The accounting treatment on consolidation of the enterprises under the same control and not under the

same control

1. If a business combination is achieved through multiple steps of which the terms condition and economical

effect is in line with one or more criteria as followed the multiple transactions shall be dealt with as one-basket

transaction.

(1) the transactions were entered into at the same time or by considering each other’s influence;

(2) a complete business result can only be achieved by combining all these transactions together;

(3) the performing of one transaction is depended on at least one other transaction;

(4) a transaction is not economical if it is considered stand along but it will become economical if it is considered in

combination with other transactions.

2. Business combination involving entities under common control

The assets and liabilities obtained by the Company in a business merger are measured at the carrying amount of the

merged party's assets and liabilities (including goodwill formed by the eventual controller's acquisition of the merged

party) on the merger date in the eventual controller’s consolidated financial statements. The difference between the

carrying amount of the net assets acquired and the consideration paid for the combination (or the total par value of

shares issued) is adjusted against share premium in the capital reserve with any excess adjusted against retained

earnings.If there is contingent consideration and provision or assets are required to be recognized the difference between the

provision or assets and the contingent consideration shall adjust the capital reserve with any excess adjusted against

retained earnings.If business combinations involving entities under common control achieved in stages that involves multiple transactions

belongs to one-basket transaction all transactions shall be dealt with as one transaction. If not the accounting

treatment is as follows: Initial investment cost is the acquirer’s share of the carrying amount of the net assets of the

acquiree in the consolidated financial statements of the ultimate controlling party at the combination date. The

difference between the initial investment cost and the sum of carrying amount of investment prior to combination date

and carrying amount of new considerations paid for the combination at the combination date is adjusted to capital

48FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

reserve (share premium) . If the capital reserve is not sufficient to absorb the difference any excess is adjusted against

retained earnings. the difference between the carrying amount of the net assets acquired and the sum of carrying

amount of investment prior to combination date and carrying amount of new considerations paid for the combination at

the combination date is adjusted to capital reserve (share premium) . If the capital reserve is not sufficient to absorb the

difference any excess is adjusted against retained earnings. The profit or loss other comprehensive income and

changes in other owner’s equity recognized by the acquirer during the period from the later of initial investment date and

the date that the acquirer and acquiree both under common ultimate control to the combination date are offset the

opening retained earnings or profit for loss for the current period in the comparative statements.

3. Business combination involving entities not under common control

The purchase date refers to the date that the Company actually acquired control over the acquire i.e. the date when the

control over the acquiree’s net assets or decision of business operation has been transferred to the Company. If the

Company fulfills the following conditions at the same time it is considered that the control has been transferred:

* the contract or agreement of business combination has been approved by internal power department;

* related matters has been approved by state supervisory authorities if needed;

* procedures of asset transfer has been completed;

* the Company has been made majority of payments and has the ability and plan to make the residual payments;

* the Company is in substances acquired the business and operating policies and enjoyed corresponding interests

and undertaking risks of the acquire.On the purchase date assets transferred liabilities incurred or assumed as the consideration paid shall be measured at

fair value. The difference between the fair value and carrying amount shall be charged to current period profit or loss.Where the combination cost exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net assets the

difference is recognized as goodwill and subsequently measured on the basis of its cost less accumulated impairment

provisions. Where the combination cost is less than the acquirer’s interest in the fair value of the acquiree’s identifiable

net assets the difference is recognized in profit or loss for the current period after reassessment.If business combinations involving entities not under common control achieved in stages that involves multiple

transactions belong to one-basket transaction all the transactions shall be treated as one. Otherwise if the equity

investment held before the combination date is accounted for by the equity method the sum of the book value of the

equity investment of the acquiree held before the acquisition date and the new investment cost on the acquisition date

shall be regarded as the initial investment cost of the investment; Other comprehensive income recognized by the

equity investment held before the acquisition date due to accounting by the equity method shall be accounted for on the

same basis as the investee's direct disposal of the relevant assets or liabilities when the investment is disposed of. If the

equity investment held before the combination date is accounted for by the recognition and measurement standards of

financial instruments the sum of the fair value of the equity investment on the combination date plus the new

investment cost shall be regarded as the initial investment cost on the combination date. The difference between the

fair value and book value of the originally held equity and the accumulated changes in fair value originally included in

other comprehensive income should be fully transferred to the current return on investment on the combination date.

4.Transaction costs for business combination

The overhead for the business combination including the expenses for audit legal services valuation advisory and

other administrative expenses are recorded in profit or loss for the current period when incurred. The transaction costs

of equity or debt securities issued as the considerations of business combination are included in the initial recognition

amount of the equity or debt securities.

6. Method of preparing consolidated financial statements

1. Scope of consolidation

The scope of consolidated financial statements is based on control. All subsidiaries (including standalone entity that

controlled by the Company) are all included in the scope of consolidation.

2.Procedures of consolidation

The consolidated financial statements are prepared by the Company based on the financial statements of the Company

and its subsidiaries and other relevant information. The whole enterprise is considered as one accounting body when

preparing consolidated financial statement and reflect the whole group’s financial position performance and cash flow

according to unified accounting policies based on accounting standards.All subsidiaries that are included in the scope of consolidation adopt same accounting policies and accounting period.If

there are differences the subsidiaries shall adjust its policies and accounting period accordingly.

49FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

When preparing consolidated financial statements the accounting policies and accounting periods of the subsidiaries

should be consistent with those established by the Company and all significant intra-group balances and transactions

are eliminated. If the treatment based on enterprise group angle is different with the angle from subsidiaries’ it shall be

treated based on enterprise group angle.The shares belonging to minority shareholders in the owner's equity current net profit and loss and current

comprehensive income of subsidiaries are separately presented under the owner's equity in the consolidated balance

sheet net profit in the consolidated income statement and total comprehensive income item. If the current loss shared

by the minority shareholders of a subsidiary exceeds the share of the minority shareholders in the initial owner's equity

of the subsidiary the balance formed shall still offset the minority shareholders' equity.For subsidiaries acquired through business combinations under the common control adjustments are made to their

financial statements based on the carrying amount of their assets and liabilities (including goodwill formed by the

eventual controller’s acquisition of the subsidiary) in the eventual controller's financial statements.Where a subsidiary or business has been acquired through a business combination not involving enterprises under

common control in the reporting period the financial statements of subsidiaries shall be adjusted on the basis of fair

value of identifiable net assets on purchase date.

(1) Addition of subsidiaries or business operation

Where a subsidiary or business has been acquired through a business combination involving enterprises under

common control in the reporting period the subsidiary or business is deemed to be included in the consolidated

financial statements from the date they are controlled by the ultimate controlling party. Their operating results and cash

flows are included in the consolidated income statement and consolidated cash flow statement respectively from the

date they are controlled by the ultimate controlling party.If the Company can exert control over the investee under common control because of addition of investment

adjustments shall be made as if all the combining party are at the current condition in the angle of ultimate controlled

party. Equity investment held before acquired control profit or loss other comprehensive income and other net asset

changes that have already recognized between the later of acquiring original equity and the date under common control

and combination date shall offset opening retained earnings or current period profit or loss respectively.In the reporting period if there is subsidiary or business addition involving entities not under common control no

adjustments shall be made to the consolidated balance sheet. The revenue expenses and profit from the purchasing

date to period end shall be included in consolidated income statement. The cash flows from the purchasing date to

period end shall be included in consolidated cash flow statement.If it is possible to exercise control over an investee not under the common control due to additional investment or other

reasons the Company remeasures the equity of the investee held before the purchase date based on its fair value on

the purchase date and the difference between the fair value and its book value is included in the current return on

investment. Changes related to equity method such as other comprehensive income and other equity changes beside

net profit other comprehensive income and profit distribution shall be transferred to current period investment gain.

(2) Disposal of subsidiaries

1) General disposal method

In the reporting period if the Company disposed a subsidiary or business the subsidiary’s revenue expenses profit

and cash flows from the beginning of the period to the disposal date would be included in consolidated financial

statements; the cash flow of the subsidiary or business from the beginning of the period to the date of disposal is

included in the consolidated cash flow statement.When the control right to the investee is lost due to disposal of partial equity investment or other reasons the Company

remeasures residual equity investment after the disposal at its fair value on the date of losing the control right. The

difference between the sum of the consideration acquired from disposal of equity and the fair value of residual equity

minus the portion of net assets of the original subsidiary as continually calculated from the date of purchase or date of

combination at the original shareholding ratio and the goodwill is included in the investment income in the current period

of losing the control right. A gain or loss is recognized in the current period and is calculated by the aggregate of

consideration received in disposal and the fair value of remaining part of the equity investment deducting the share of

net assets in proportion to previous shareholding percentage in the former subsidiary since acquisition date and the

goodwill.

2) Disposal of subsidiary through multiple steps

In the event that the Company losses control over a subsidiary through multiple transactions if one or more conditions

below are fulfilled it shall be treated as one-basket transaction:

A. the transactions were entered into at the same time or by considering each other’s influence;

B. a complete business result can only be achieved by combining all these transactions together;

50FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

C. the performing of one transaction is depended on at least one other transaction;

D. a transaction is not economical if it is considered stand along but it will become economical if it is considered in

combination with other transactions.If the various transactions disposing the investment on the subsidiary's equity until losing control power are package

deals various transactions undergo accounting treatment as a transaction of disposing the subsidiary and losing control

power; however before losing control power the difference between every disposal amount and the share of the

subsidiary's net assets enjoyed corresponding to disposal of investment is recognized as other comprehensive income

in the consolidated financial statements and is included in the current profit and loss corresponding to loss of control

power.If dispose of the equity investment in the subsidiary until the loss of control does not belong to one-basket transaction

before the loss of control the accounting treatment shall be carried out in accordance with the relevant policies for

partial disposal of the equity investment in the subsidiary without losing control; when the control is lost accounting

treatment shall be carried out according to the general treatment method of disposal of subsidiaries.

(3) Purchase of the minority shareholders’ equity of subsidiaries

The difference between the long term equity investment newly acquired resulted from purchase of minority equity and

the share of the net asset continuously calculated commencing from the date of purchase (or date of consolidation)

enjoyable by the subsidiary shall be used to adjust the capital stock premium in the capital reserve. In case the capital

stock premium in the capital reserve is not enough for writing-down the retained earnings shall be adjusted.

(4) Partial disposal of equity investment in subsidiary without loss of control

The difference between the disposal income obtained from the partial disposal of the long-term equity investment in a

subsidiary without loss of control and the corresponding portion of the subsidiary's net assets calculated from the

acquisition date or the combination date corresponding to the disposal of the long-term equity investment is used to

adjust the share premium in the capital reserve in the consolidated balance sheet and adjust the retained earnings if

the capital stock premium in the capital reserve is insufficient to offset.

7. Classification of joint venture arrangements and accounting treatment method of joint management

1. Classification of Joint Venture Arrangement

The Company classifies joint venture arrangements into joint operations and joint ventures based on the structure legal

form terms and conditions in the arrangement and other related facts.Joint operations means joint arrangement that does not realized through independent entity. Joint arrangement that

realized through independent entity is normally recognized as joint venture but it also can be classified as joint

operation if clear evidence showed that one of the following condition is met:

(1) The legal form of an joint arrangement showed that the joint parties enjoyed rights over related assets and

undertake liability respectively.

(2) The contract showed that the joint parties enjoyed rights over related assets and undertake liability respectively.

(3) Other facts and situation indicated that the joint parties enjoyed rights over related assets and undertake liability

respectively. If the joint venture party enjoys substantially all of the output associated with the joint arrangement and

the settlement of the liabilities in the arrangement continues to depend on the joint venture party's support.

2. Accounting treatment to joint operation

The Company confirms the following items related to the Company in the portion of interests in joint operation and

conducts accounting treatment in accordance with the relevant accounting standards for enterprises:

(1) to recognize the assets held separately and recognize the assets held jointly by their shares;

(2) to recognize the liabilities borne individually and the liabilities borne jointly according to their share;

(3) to recognize the income generated from the sale of its share of joint management output;

(4) to recognize the income generated by the joint operation from the sale of output according to its portion;

(5) to recognize the expenses incurred separately and recognize the expenses incurred in joint management according

to their share.Before the Company delivers or sells assets to the joint operation (except the assets constituting business) or the joint

operation sells such assets to a third party the Company only confirms the parts in the profit and loss arising from such

51FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

transaction and belonging to other participants of the joint operation. If occurrence of such assets is in conformity with

the impairment loss as stated in the Accounting Standards for Business Enterprises No. 8 - Impairment of Assets the

Company fully confirms the loss;

Before the Company sells an asset in the joint operation etc. (except the assets constituting business) to a third party

the Company only confirms the part in the profit and loss arising from such transaction and belonging to other

participants of the joint operation. If occurrence of purchase of an asset is in conformity with the impairment loss as

stated in the Accounting Standards for Business Enterprises No. 8 - Impairment of Assets the Company fully

recognizes this part of loss based on the portion the Company should take.The Company does not enjoy joint control to joint operation. If the Company enjoys joint operation’s asset and

undertaking related liabilities the accounting treatment is the same. Otherwise it shall be accounted for based on

accounting standards.

8. Cash and cash equivalents

The term “cash” refers to cash on hand and deposits that are readily available for payment in preparation of the cash

flow statement. The term “cash equivalents” refers to short-term (generally due within 3 months from the purchase date)

and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an

insignificant risk of change in value.

9. Foreign currency transactions and translation of foreign currency statements

1. Foreign Currency Transactions

In the initial recognition of foreign currency transactions the spot exchange rate on the transaction date is used as the

rate to translate the foreign currency amount into Renminbi for bookkeeping.On the date of balance sheet the foreign currency monetary items are translated based on the spot rate as at the date

of balance sheet and the balance of exchange arising therefrom is counted to the current gains and losses except the

balance of exchange arising from the special foreign currency borrowings in connection with the assets satisfying the

capitalization conditions which is treated based on the principle of capitalization of borrowing expenses The foreign

currency non-monetary items measured at historical cost shall still be translated at the spot exchange rate on the date

of transaction without change of the amount of the functional currency for bookkeeping.The non-monetary items in foreign currency measured at fair value are translated at the exchange rate on the date of

recognizing fair value and the difference between the amount in bookkeeping base currency and the previous amount

in bookkeeping base currency after translated is treated as change of fair value (including change of exchange rate)

and included in the current profits and losses or recognized as other comprehensive incomes.

2. Translation of Foreign Currency Financial Statements

The asset and liability items in the balance sheet are translated by means of the spot rate of the balance sheet; all the

other owner's equity type items with the exception of "retained earnings" item are translated by means of the spot rate

of the day when the transaction takes place. The items of incomes and expenses in the profit statement are translated

at the current average exchange rate on the transaction occurring date. The foreign currency financial statement

translation difference arising from the above conversion is counted to the other comprehensive income.In disposal of overseas business the translation difference of the foreign currency financial statements related to the

foreign business listed in other comprehensive income items in the balance sheet is transferred from the other

comprehensive income items to the current profit and loss; in case the proportion of the equity in the overseas business

held by the Company drops due to disposal of partial equity investment or other reason but the control power over the

overseas business has not lost the translation difference of the foreign currency statements in connection with the

disposed part of the overseas business shall be attributable to the minority shareholders’ equity instead of being

transferred into the current profit and loss. When the disposal of overseas operation is involved with the partial equity of

a joint venture or a cooperative enterprise the translated difference of foreign currency statements related to the

overseas operation is transferred at the ratio of disposing the overseas operation into the current profits and losses from

disposal.

10. Financial instruments

A financial asset or financial liability is recognized when the Company becomes a party of financial instrument contract.The effective interest rate method refers to the method for calculating the amortized cost of financial assets or financial

liabilities and apportioning the interest income or interest expense of each period into each accounting period.Effective interest rate refers to such interest rate with which the future cash flow of any financial asset or financial

liability in the expected period of existence is discounted to the current book value of such financial asset or financial

liability. When determining the effective interest rate the future cash flow shall be predicted on the basis of taking into

account all the contractual stipulations (Such as prepayment rollover call option or other similar options) concerning

the financial asset or financial liability but the future credit losses shall not be taken into account.

52FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Amortized cost of financial assets or financial liabilities is the initial recognition amount deduct principal and add or less

accumulated amortization to the difference between initial recognition and the amount at maturity and less accumulated

loss provision (for financial assets only).

1.Classification confirmation and measurement of financial assets

Financial assets are classified into the following three categories depending on the Company’s business mode of

managing financial assets and cash flow characteristics of financial assets:

A. Financial assets measured at amortized cost.B. Financial asset that is measured at fair value and whose change is included in other comprehensive income.C. The financial asset measured at fair values with the change counted to the current profit and loss.Financial assets are measured at their fair value at the time of initial recognition but if the accounts receivable or notes

receivable generated from the sale of commodities or provision of services do not contain significant financing elements

or the financing elements not exceeding one year are not considered the initial measurement shall be made according

to the transaction price.For the financial assets measured at fair value with the change counted to the current profits and losses the relevant

transaction expenses are directly included in the current profit and loss; the relevant transaction expenses for other

categories of financial assets are counted to the amount of the initial recognition.The subsequent measurement of financial assets depends on their classification and all affected relevant financial

assets shall be reclassified if and only if the Company changes its business model for managing financial assets.

1) Classified as financial assets measured based on the amortized cost

According to the contractual terms of the financial asset， the cash flow created on the specific date is exclusively forpayment of the principal and the interest based on the outstanding amount of the principal，while if the business modelof managing the financial asset is to take the collection of contractual cash flow as the goal the Company shall classify

the financial asset as a financial asset measured at amortized cost. Such financial assets include monetary fund notes

receivable accounts receivable and other receivables.The Company recognizes the interest income of such financial assets based on the effective interest rate method

subsequent measurement is carried out at amortized cost and the gain or loss arising from derecognition or

modification when impairment occurs shall be included in the current profit and loss. Except for the following

circumstances the Company calculates and determines interest income based on the book balance of financial assets

multiplied by the actual interest rate:

A. For purchased or originated credit-impaired financial assets the Company calculates and determines the interest

income from the initial recognition based on the amortized cost of the financial assets and the credit-adjusted effective

interest rate.B. For purchased or originated financial assets without credit impairment but become credit-impaired in the subsequent

period the Company calculates and determines the interest income based on the amortized cost and effective interest

rate of the financial asset in the subsequent period. If the financial instrument no longer has credit impairment due to the

improvement of its credit risk in the subsequent period the Company calculates and determines the interest income by

multiplying the actual interest rate by the book balance of the financial asset.

2) Classified as financial asset that is measured at fair value and whose change is included in other comprehensive

income.According to the contractual terms of the financial asset，the cash flow created on the specific date is exclusively forpayment of the principal and the interest based on the outstanding amount of the principal; while if the business model

for managing the financial asset is aimed at both collecting contractual cash flow and selling the financial asset the

Company classifies the financial asset as a financial asset measured at fair value whose change is included in other

comprehensive income.The Company recognizes interest income of such financial assets by the effective interest rate method. Except for

interest income impairment losses and exchange differences which are recognized as profit or loss for the current

period other changes in fair value are included in other comprehensive income. When the recognition of the said

financial assets is terminated the accumulated gains or losses previously included in other comprehensive income are

transferred out from other comprehensive income and included in the current profit and loss.Notes and accounts receivable measured at fair value whose change is included in other comprehensive income are

presented as receivables financing and other such financial assets are presented as other creditor's rights investments

53FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

where other debt investments that mature within one year as of the balance sheet date are reported as non-current

assets that mature within one year and other creditor's rights investments whose original maturity is within one year are

presented as other current assets.

3) Designated as financial asset measured at fair value and whose change is included in other comprehensive income.

At the initial recognition the Company may irrevocably designate non-trading equity instrument investments as financial

assets at fair value through other comprehensive income on the basis of individual financial assets.Changes in fair value of such financial assets are included in other comprehensive income and no provision for

impairment is required. When the recognition of the said financial assets is terminated the accumulated gains or losses

previously included in other comprehensive income are transferred out from other comprehensive income and included

in the retained earnings. During the period when the Company holds the investment in the equity instrument when the

Company's right to receive dividends has been established the economic benefits related to dividends are likely to flow

into the Company and the amount of dividends can be measured reliably dividend income is recognized and included

in the current profit and loss. The Company represents such financial assets under other equity instrument investment

items.An equity instrument investment that satisfies one of the following conditions is a financial asset measured at fair value

and its changes are included in the current profit and loss: the purpose of obtaining the financial asset is mainly for

recent sales; it is part of a centrally managed portfolio of identifiable financial assets and instruments at initial

recognition and there is objective evidence that there is a short-term profit model in the near future; it is a derivative

instrument (with a derivative instrument that meets the definition of a financial guarantee contract and is designated as

an effective hedging instrument exclusive).

4) The financial asset measured at fair value with the change counted to the current profit and loss.

Financial assets that do not meet the criteria for classification as financial assets measured at amortized cost or at fair

value whose change is concluded in other comprehensive income nor designated as financial assets measured at fair

value whose change is included in other comprehensive income are all classified as financial assets measured at fair

value whose change is included in the current profit and loss.The Company makes subsequent measurement of these financial assets at fair value and their profit or loss formed due

to change of fair value and the dividends and interests related to such financial assets are included in the current profits

and losses.The Company present the financial assets as financial asset held for trade other non-current financial assets.

5) The financial asset designated for measurement at fair value with the change counted to the current profit and loss.

At initial recognition in order to eliminate or significantly reduce the accounting mismatch can be eliminated or

significantly reduced the Company may irrevocably designate the financial assets as that measured at fair value with

the change counted to the current profit and loss based on the individual financial assets.If the hybrid contract includes one or more embedded derivatives and the main contract does not belong to the above

financial assets the Company may designate the whole as a financial instrument that is measured at fair value through

profit or loss except in the following cases:

A. Embedded derivatives do not materially change the cash flow of a hybrid contract.B. When it is first determined whether a similar hybrid contract requires a spin-off there is little need for analysis to

make it clear that the embedded derivatives it contains should not be split. If the prepayment right of the embedded loan

allows the holder to repay the loan in advance with an amount close to the amortized cost the prepayment right does

not need to be split.The Company makes subsequent measurement of these financial assets at fair value and their profit or loss formed due

to change of fair value and the dividends and interests related to such financial assets are included in the current profits

and losses.The Company present the financial assets as financial asset held for trade other non-current financial assets.

2. Classification recognition and measurement of financial liabilities

The Company categorizes such financial instruments or their components as financial liabilities or equity instrument at

the initial recognition based on the contract terms for issuing such financial instruments and economical nature they

have reflected rather than solely on its legal form with the combination of the definition of financial liabilities and equity

instrument. In the initial recognition financial liabilities are classified as the financial liabilities that are measured at fair

value and whose change is included in the current profits and losses other financial liabilities and derivative instrument

designated as effective hedging instrument.

54FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Financial liabilities are measured at fair value at the initial recognition time. For financial liabilities that are measured at

fair value and which change is included in the current profits and losses the relevant transaction expenses are directly

included in the current profits and losses; for other financial liabilities relevant transaction expenses are included in the

initially recognized amount.The successive measurement of financial liabilities depends on their classification:

1) The financial liabilities designated for measurement at fair value with the change counted to the current profit and

loss.Such financial liabilities include financial liabilities held for trade (including the derivative instruments belonging to

financial liabilities) and the financial liabilities measured at fair value with the change counted to the current profits and

losses directly designated at the initial recognition.The Company classifies financial liabilities that meet one of the following conditions: the purpose of assuming the

relevant financial liabilities is mainly for recent sale or repurchase; if they belong to part of the portfolio of identifiable

financial instruments under concentrated management and objective evidences showing that the Company has

recently adopted short-term profit making mode; they belong to a derivative instrument except the derivative

instruments designated as and being effective hedging instruments with the derivative instruments in compliance with

financial guarantee contract excluded. Financial liabilities held for trade (including the derivative instruments belonging

to financial liabilities) are measured at fair value subsequently and all fair value changes except for hedging accounting

shall be included in current period profit or loss.At initial recognition in order to provide more relevant accounting information the Company classifies financial liabilities

that meet one of the following conditions as financial liabilities designated at fair value through profit or loss (the

designation cannot be revoked once it is made) :

A. accounting mismatches can be eliminated or significantly reduced.B. according to the corporate risk management or investment strategy specified in the formal written documents the

financial liability portfolio or the financial asset and financial liability portfolio is managed and performance evaluated on

the basis of fair value and reported to key management personnel within the Company on this basis.When the Company initially recognizes a financial liability and designates it at fair value through profit or loss according

to stipulations of standards the changes in the fair value of the financial liability arising from changes in the company’s

own credit risk are included in other comprehensive income and other changes in fair value are recognized in profit or

loss for the period. However if the accounting causes or expands the accounting mismatch in profit or loss the entire

gain or loss of the financial liability (including the affected amount from changes in the company’s own credit risk) is

included in the current profit or loss.

2) Other financial liabilities

Except for the following items the Company classifies financial liabilities as financial liabilities measured at amortized

cost. The effective interest method is adopted for such financial liabilities and the subsequent measurement is carried

out according to the amortized cost and the profit or losses arising from the derecognition or amortization are included

in the current profit and loss:

A. The financial liabilities designated for measurement at fair value with the change counted to the current profit and

loss.B. The transfer of financial assets does not meet the conditions for derecognition or financial liabilities arising from the

continued involvement in the transferred financial assets.C. Financial guarantee contracts that are not in the first two categories of this article and loan commitments granted at

a rate lower than market interest rates and that are not in the first category of this article.A financial guarantee contract refers to a contract that requires the issuer to pay a specific amount to the contract holder

who has suffered losses when a specific debtor fails to repay the debt in accordance with the original or revised terms of

the liability instrument. For financial guarantee contracts that are not designated as financial liabilities measured at fair

value and whose changes are included in the current profit and loss the initial recognition shall be carried out at the

higher of the provision for loss and the balance after deducting the accumulated amortization during the guarantee

period from the initial recognition amount.

3. Derecognition of financial assets and financial liabilities

1) If a financial asset meets one of the following conditions it shall be derecognized:

A. The contractual right to receive the cash flow of the financial asset is terminated.

55FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

B. The contractual right to receive the cash flow of the financial asset is terminated.

2) Conditions for derecognition of financial liabilities

If the current obligation of a financial liability (or a part thereof) has been discharged the financial liability (or such part

of financial liability) is derecognized.When the Company and the lender sign an agreement to replace the original financial liability with a new financial

liability and the new financial liability is substantially different from the original financial liability the original financial

liability is derecognized and a new financial liability is recognized. The difference between the carrying amount and the

consideration paid (including the transferred non-cash assets or liabilities assumed) is recognized in profit or loss.If the Company repurchases part of the financial liabilities the carrying amount of the financial liabilities as a whole is

allocated based on the proportion of the fair value of the continuing recognition portion and the derecognition portion on

the repurchase date. The difference between the carrying amount assigned to the derecognition portion and the

consideration paid (including the transferred non-cash assets or liabilities assumed) shall be included in the current

profit or loss.

4. Recognition basis and measurement method for transfer of financial assets

In the event of transfer of financial assets the Company assesses the extent to which it retains the risks and rewards of

ownership of the financial assets and treats them in the following cases:

(1) If almost all risks and rewards of ownership of financial assets are transferred the financial assets are derecognized

and the rights and obligations arising from or retained in the transfer are separately recognized as assets or liabilities.

(2) If almost all the risks and rewards of ownership of financial assets are retained the financial assets shall continue to

be recognized

(3) If there is neither transfer nor retention of almost all risks and rewards of ownership of financial assets (i.e. other

than (1) and (2) of this article) then depending on whether or not they retain control over financial assets:

A. If the control of the financial asset is not retained the financial asset shall be derecognized and the rights and

obligations arising or retained during 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 be continuously recognized

according to the degree of its continued involvement in the transferred financial assets and the relevant liabilities shall

be recognized accordingly. The degree of continued involvement in the transferred financial assets refers to the degree

to which the Company undertakes the risks or rewards of changes in the value of the transferred financial assets.When judging whether the transfer of financial assets meets the above conditions for derecognition of financial assets

the principle of substance over form is adopted. The Company distinguishes the transfer of financial assets into overall

transfer and partial transfer of financial assets.If the overall transfer of financial assets meets the conditions for termination of recognition the difference between the

following two amounts shall be included in the current profit and loss:

A. The carrying amount of the transferred financial assets on the date of derecognition.B. The sum of the consideration received in respect of the transfer of financial assets and the amount corresponding to

the derecognized portion in the accumulated changes in the fair value originally and directly recognized in other

comprehensive income (the financial assets involved in the transfer are measured at fair value through other

comprehensive income).If the transfer of partial financial assets while the part to be transferred overally satisfy the conditions of derecognition

the entire book value of the transferred financial asset shall between the portion derecognized and the portion not

derecognized (in such a case the retained service assets shall be deemed to be part of the continued recognition of

financial assets) be apportioned according to their respective relative fair value and the difference between the

amounts of the following 2 items shall be included into the profits and losses of the current period :

A. The carrying amount of the portion derecognized on the date of derecognition.B. The sum of the consideration received in respect of the derecognition of the financial assets and the amount

corresponding to the derecognized portion in the accumulated changes in the fair value originally and directly

recognized in other comprehensive income (the financial assets involved in the transfer are measured at fair value

through other comprehensive income).If the transfer of financial assets does not satisfy the conditions for termination of recognition continue to recognize the

financial asset and the received consideration is recognized as a financial liability.

56FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

5. The method of determining the fair value of financial assets and financial liabilities

For the financial assets or financial liabilities existing in the active market the fair value is determined by the quotation

in the active market unless there is a restricted period for the financial asset itself. For a financial asset with restricted

sales of the asset itself it is determined according to the quotation in the active market after deducting the

compensation amount required by market participants for bearing the risk of not being able to sell the financial asset in

the open market within a specified period. The quotation in the active market includes the quotation that is readily and

regularly available from exchanges dealers brokers industry groups pricing agencies or regulators etc. for the

relevant assets or liabilities and are representative of actual and frequently occurring markets on an arm's length basis

trade.For the initially acquired or derived financial assets or assumed financial liabilities the market transaction price is used

as the basis for determining their fair value.For financial assets or financial liabilities not existing in the active market the fair value is determined using valuation

techniques. At the time of valuation the Bank adopts valuation techniques that are applicable under the current

circumstances and have sufficient data and other information to support and the selection is consistent with the

characteristics of the assets or liabilities considered by market participants in the transactions of relevant assets or

liabilities and it takes priority to use the relevant observable input value as far as possible. When the relevant

observable input value cannot be obtained or it is not feasible to obtain the unobservable input value is used.

6. Impairment of financial instruments

Based on the expected credit losses the Company assesses the expected credit losses of the financial assets

measured at amortized cost and financial assets at fair value through other comprehensive income lease receivables

contract assets loan commitment and financial liabilities that are not measured at fair value through profit or loss and

financial guarantee contract etc. and makes impairment accounting and recognizes loss provisions.Expected credit loss refers to the weighted average of the credit losses of financial instruments based on the risk of

default. Credit loss refers to the difference between all contractual cash flows receivable under the contract and all cash

flows expected to be received by the Company discounted at the original effective interest rate that is the present

value of all cash shortages. Where for the purchased or originated credit-impaired financial assets the Company

discounts based on the credit-adjusted effective interest rate according to the credit of the financial assets.For accounts receivable contract assets and lease receivables the Company shall always measure the loss allowance

for them at an amount equal to the lifetime expected credit losses.For financial assets that have been purchased or generated with credit impairment loss provision is recognized only for

the cumulative changes in lifetime expected credit losses after the initial recognition on the balance sheet date. On each

balance sheet date the amount of changes in lifetime expected credit losses is included in profit or loss as an

impairment loss or gain. Even if the lifetime expected credit loss determined on the balance sheet date is less than the

expected credit loss reflected in the estimated cash flow at the initial recognition the positive change in expected credit

loss is also recognized as an impairment gain.Except for the provision for loss of financial instruments in item (3) of this article the Company assesses whether the

credit risk of the relevant financial instruments has increased significantly since the initial recognition on each balance

sheet date and separately measures its loss provision recognizes expected credit loss and its changes based on the

following circumstances：

A. If the credit risk of the financial instruments has increased significantly since the initial recognition the loss provision

is measured at the amount equivalent to the lifetime expected credit loss of the financial instruments regardless of

whether the basis the Company assesses the credit losses is on individual financial instrument or a combination of

financial instruments and the increase or reversal of the loss provision resulting therefrom should be included in the

current profit or loss as an impairment loss or gain

B. If the credit risk of the financial instruments has not increased significantly since the initial recognition the loss

provision is measured at the amount equivalent to the expected credit loss of the financial instruments in the next 12

months regardless of whether the basis the Company assesses the credit loss is on individual financial instrument or

the combination of financial instruments and the increase or reversal of the loss provision resulting therefrom shall be

included in the current profit or loss as an impairment loss or gain.C. For financial instruments in the third stage the Company measures loss provision on the basis of life-time expected

credit loss and calculating interest income according to their book balance minus the impairment provision and the

actual interest rate.Incremental or reversal of credit loss provision shall be included in current profit or loss as impairment loss or gain.Except for financial asset at fair value through other comprehensive income credit loss provision is to offset the

carrying amount of financial assets. For financial assets at fair value through other comprehensive income the credit

57FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

loss provision is recognized in other comprehensive income and will not offset the financial asset’s carrying amount in

balance sheet.In the previous fiscal period the loss provision was measured at an amount equivalent to the expected credit loss

during the entire duration of the financial instrument but on the current balance sheet date the financial instrument is

no longer in a situation where the credit risk has significantly increased since the initial recognition; if on the current

balance sheet date the loss provision of the financial instrument was measured at the amount equivalent to the

expected credit loss in the next 12 months and the resulting loss provision was reversed as the impairment gain and

included in the current profit and loss.

1) Assessment of significant increase of credit risk

By comparing the default risk of financial instruments on balance sheet date with that on initial recognition day the

Company determines the relative change of default risk of financial instruments during the expected life of financial

instruments to evaluate whether the credit risk of financial instruments has increased significantly since the initial

recognition. For financial guarantee contracts when applying the provisions on impairment of financial instruments the

Company takes the date when the Company becomes the party that has made the irrevocable commitment as the initial

recognition date.To determine whether credit risk has increased significantly since the initial recognition factors considered by the

Company includes:

A. Whether there is serious deterioration of the debtor’s operating results that have occurred or are expected to occur;

B. Changes in the existing or anticipated technological market economic or technical environment will have a

significant negative impact on the debtor’s repayment capacity;

C. Whether there have been significant changes in the value of collateral used as collateral for the debt or the quality of

guarantees or credit enhancements provided by third parties that are expected to reduce the debtor's economic

incentive to repay within the contractual terms or affect the probability of default;

D. Whether the expected performance and repayment of debtor changes significantly;

E. Whether the Company changed the way of managing financial assetsetc.On the balance sheet date if the Company assesses that the financial instrument only has lower level of credit risk the

Company assumes that the credit risk associated with the financial instrument does not increased after the initial

recognition. If the default rate of a financial instrument is low and the debtor’s ability to fulfill its cash flow liability is

strong the financial instrument will be regarded with lower credit risk even if there will be adverse changed in economic

and operating environment in long-term which may not necessarily decrease the debtor’s ability of fulfilling its cash flow

liabilities.

2) Financial assets with credit impairment already incurred

When one or more events that have an adverse effect on the expected future cash flow of a financial asset occur the

financial asset becomes a financial asset that has been credit-impaired. Evidence of credit impairment of financial

assets includes the following observable information:

A. The issuer or debtor has experienced major financial difficulty;

B. The debtor has violated the contract such as failure in or late payment of the interest or the principal;

C. The Creditor out of economic or contractual considerations related to the debtor’s financial difficulties gives the

debtor concessions that the Group shall never make under any other circumstances;

D. The debtor is likely to go bankrupt or carry out other financial restructuring;

E. The issuer or debtor’s financial difficulties caused the disappearance of the active market for the financial asset.F. Purchase or originate a financial asset at a substantial discount that reflects the fact that a credit loss has occurred;

Credit-impairment of a financial asset may be caused by the combined action of multiple events not necessarily by an

individually identifiable event.

3) Determining expected credit loss (ECL)

The Company evaluates ECL based on single or portfolio of financial instrument. When evaluating ECL the Company

considers past events current situation and future economic condition.The Company categorizes financial instrument into different portfolios based on common credit risk characteristics.Common credit risk characteristics includes: types of financial instruments aging portfolio settlement period debtor’s

58FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

industries etc. Refer to accounting policies of financial instruments for standard for single evaluation and credit risk

characteristics.The Company uses the following way to determine the ECL of financial instruments:

A. For financial assets credit loss is the present value of difference between all contractual cash flows receivable from

the contract and all cash flows expected to be received by the Company.B. For lease receivable credit loss is the present value of difference between all contractual cash flows receivable from

the contract and all cash flows expected to be received by the Company.C. For financial guarantee contract credit loss is the present value of expected payment amount due to credit losses

happened to the owner of the contract and less any amount that the Company expected to receive from the contract

owner debtor or other parties.D. For financial assets that already impaired on balance sheet date but not impaired when purchasing the credit loss is

the difference of carrying amount and present value of future cash flows discounted at original effective interest rate.Factors that the Company measures ECL of financial instrument includes: assessing a series of possible results and to

determine a weighted average amount without bias; time value of money; information of past event current situation

and future economic condition forecast that can be obtained without paying extra cost or efforts on balance sheet date.

4) Write off

The Company no longer reasonably expects that the contractual cash flow of the financial asset can be recovered

wholly or partially it will directly write down the book balance of the financial asset. This write-down constitutes the

derecognition of related financial assets.

7. Offset of financial assets and financial liabilities

Financial assets and financial liabilities are presented in the balance sheet respectively and are not offset with each

other. However the net value after offset is presented in the balance sheet when the following conditions are satisfied:

A. The Company has the legal right to offset the recognised amount and such right is exercisable;

B. The Company plans to settle by net amount or realize the financial assets and repay the financial liabilities at the

same time.

11. Notes receivable

For the determination method and accounting treatment method of the expected credit loss of the Company's notes

receivable please refer to Note V. 10

If the Company has sufficient evidence to evaluate the ECL of notes receivable on single basis it will be assessed on

single basis.If there is not sufficient evidence to evaluate the ECL on single basis the Company will make judgment based on

historical loss experience current situation and future economic situation and classifying the bill receivable into

different portfolios. The basis for portfolios is determined as follows:

Portfolio

Description The basis for portfolios is determined as follows: Provision method

Risk-free bank Referencing historical impairment

acceptance The issuer has higher level of credit rating and no default in past and has experience and taking into consideration of

portfolio strong ability to fulfill its contractual cash follow obligation current situation and estimation of futureconditions

Business Provision based on the ECL checklist of

acceptance note Notes receivables with same aging have similar credit risk characteristics aging against the loss rate throughout theduration

12. Accounts receivable

For the determination method and accounting treatment method of the expected credit loss of the Company's notes

receivable please refer to Note V. 10

If the Company has sufficient evidence to evaluate the ECL of accounts receivable on single basis it will be assessed

on single basis.If there is not sufficient evidence to evaluate the ECL on single basis the Company will make judgment based on

historical loss experience current situation and future economic situation and classifying the accounts receivable into

different portfolios. The basis for portfolios is determined as follows:

59FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Portfolio Description The basis for portfolios is determined asfollows: Provision method

Receivables for related parties in Account receivables for related parties in Referencing historical impairment experience and

scope of consolidation scope of consolidation have similar credit risk taking into consideration of current situation andcharacteristics estimation of future conditions

Accounts receivables from other Notes receivables with same aging have Provision based on the ECL checklist of aging against

parties similar credit risk characteristics the loss rate throughout the duration

13. Financing with accounts receivable

Inapplicable

14. Other receivables

Method for determination and accounting treatment of the expected credit loss of other receivables

Method for determination and accounting treatment of the expected credit loss of other receivables

For the determination method and accounting treatment method of the expected credit loss of the Company's notes

receivable please refer to Note V. 10

If the Company has sufficient evidence to evaluate the ECL of other receivables on single basis it will be assessed on

single basis.If there is not sufficient evidence to evaluate the ECL on single basis the Company will make judgment based on

historical loss experience current situation and future economic situation and classifying the other receivables into

different portfolios. The basis for portfolios is determined as follows:

Portfolio Description The basis for portfolios is determined asfollows: Provision method

Receivables of down payment The portfolio has similar credit risk

and guarantee characteristics based on the business nature

Provision based on the ECL checklist of aging against the

down payment and guarantee loss rate throughout the duration

Petty cash for employees The portfolio has similar credit risk

Referencing historical impairment experience and taking

characteristics based on the business nature into consideration of current situation and estimation offuture conditions

Social security payment paid The portfolio has similar credit risk Referencing historical impairment experience and taking

on-behalf of employees characteristics based on the business nature into consideration of current situation and estimation offuture conditions

Receivables for related parties in Account receivables for related parties in Referencing historical impairment experience and taking

scope of consolidation scope of consolidation have similar credit risk into consideration of current situation and estimation ofcharacteristics future conditions

Portfolio of other receivables Notes receivables with same aging have Provision based on the ECL checklist of aging against thesimilar credit risk characteristics loss rate throughout the duration

15. Inventories

1. Classification of Inventories

The Company’s inventories refer to the finished products or commodities held for sale products in process and the

materials and supplies consumed in process of production or rendering of services etc. in the Company’s daily

activities which are classified into three categories including raw materials products-in-process and commodity stocks.which are classified into three categories Inventories mainly include raw materials products-in-processfinished

products (commodity stocks) etc.

2. Valuation method of inventories

When inventory is acquired it is initially measured at cost including procurement costs processing costs and other

costs. Raw materials and merchandise inventory are priced respectively according to the weighted average (except

for branded watches) specific identification (for branded watches) at the time of delivery.

3. Basis for determining net realizable value of inventories and method for providing reserve for price falling of

inventories

After the inventory is thoroughly inspected at the end of the period the provision shall be provided or adjusted at the

lower of the cost of the inventory and its net realizable value. The net realizable value of inventory of goods directly

used for sale such as finished goods stocked goods and materials for sale in the normal production and operation

process is determined by the estimated selling price of the inventory minus the estimated selling expenses and related

taxes; net realizable value of inventory of materials that need to be processed is determined based on the estimated

selling price of the finished products produced minus the estimated cost till completion estimated selling expenses and

related taxes and fees in the normal production and operation process; the net realizable value of the inventory held for

the execution of a sales contract or labour contract is calculated on the basis of the contract price. If the quantity of the

inventory held exceeds the quantity ordered by the sales contract the net realizable value of the excess inventory is

calculated based on the general sales price.

60FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

The provision is accrued according to the individual inventory project at the end of the period; but for a large number of

inventories with lower unit price the provision is accrued according to the category of inventory; for those related to the

product series produced and sold in the same region have the same or similar end use or purpose and that are difficult

to measure separately from other projects they are combined for provision for inventory depreciation

If the influencing factors of the write-down of inventory value have disappeared the amount of write down will be

restored and will be reversed within the amount of the provision for decline in value of the inventory that has been

accrued. The amount of the reversal is included in the current profit or loss

4.Inventory count system

The inventory system for the inventories is the perpetual inventory system

5. Amortization methods of low-value consumables and packaging materials

A. Low cost and short lived articles are amortized by once-writing-off method.B. Packaging materials are amortized by once-writing-off method.

16. Contract assets

The Company has the right to receive the consideration for the transfer of goods to the customers. If the right depends

on factors other than the passage of time it is recognized as a contract asset. If the Company has the right (only

depends on passage of time) to receive consideration from client accounts receivable shall be recognized.For the determination method and accounting treatment method of the expected credit loss of the Company's contract

assets please refer to Note V. 10

17. Contract cost

1. Contract performance costs

If the cost incurred to fulfill the contract does not fall within the scope of other accounting standards for enterprises other

than the standards for revenue and meets the following conditions at the same time the Company recognizes it as the

contract performance cost as an asset:

A. The cost is directly related to a current or anticipated contract including direct labor direct materials manufacturing

expenses (or similar expenses) costs clearly borne by the customer and other costs incurred solely due to the

contract;

B. The cost has increased the resource the Company shall use to fulfill its performance obligation in the future.C. The cost is expected to be recoverable.The asset is presented in inventory or other non-current assets based on whether the amortization period at initial

recognition exceeds one normal operating cycle.

2. Contract acquisition cost

If the incremental cost incurred to the Company for obtaining the contract is expected to be recoverable it is recognized

as an asset as the cost of obtaining the contract. The incremental cost refers to the cost that no cost may incur if the

Company does not obtain the contract (such as sales commission etc.) If the amortization period does not exceed one

year it shall be included in the current profit and loss when it incurs.

3. Amortization of contract cost

The above assets related to contract costs are recognized on the same basis as the income from goods or services

related to the asset and are amortized at the time when the performance obligations are performed or in accordance

with the progress of the performance obligations and are included in the current profit and loss.

4. Impairment of contract cost

For the above-mentioned assets related to contract costs if the book value is higher than the difference between the

remaining consideration expected to be obtained by the Company due to the transfer of commodities related to the

assets and the estimated cost to incur for the transfer of the related commodities the excess shall be provided for

impairment and recognized as asset impairment loss.After provision for the impairment ff the factors of impairment in the previous period change afterward so that the

difference of the above two items is higher than the book value of the asset the original provision for asset impairment

should be reversed and included in the current profit and loss but the book value of the asset after the reversal should

not exceed the book value of the asset on the reversal date if no provision for impairment is made.

61FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

18. Held-for-sale assets

Inapplicable

19. Equity investment

Inapplicable

20. Other equity investment

Inapplicable

21. Long term accounts receivable

Inapplicable

22. Long-term equity investments

1. Determination of the initial investment cost

A. For the long-term equity investment formed by business combination the specific accounting policies are detailed in

the accounting treatment of business combination under common control and not under common control as set out in

this Note (6).B. Long-term equity investment obtained by other means

For long-term equity investments obtained by paying cash the actual purchase price paid shall be used as the initial

investment cost. The initial investment cost includes expenses directly related to the acquisition of long-term equity

investments taxes and other necessary expenses.The initial investment cost of the long-term equity investment obtained by issuing equity securities is the fair value of the

issued equity securities; the transaction cost incurred in the issuance or acquisition of its own equity instruments is

deducted from equity if it is directly attributable to equity transactions.Under the premise that the non-monetary asset exchange has the commercial substance and the fair value of the

assets received or surrendered can be reliably measured the initial investment cost of the long-term equity investment

exchanged for non-monetary assets is determined based on the fair value of the assets exchanged and relevant taxes

payable unless there is conclusive evidence that the fair value of the assets transferred is more reliable; for the

exchange of non-monetary asset that does not meet the above premise the initial investment cost of long-term equity

investment is the carrying amount of the assets exchanged and the related taxes and fees payable.The initial investment cost of a long-term equity investment obtained through debt restructuring includes the fair value of

the waived debt taxes that can be directly attributable to the asset and other costs.

2. Subsequent measurement and profit and loss recognition

A. Cost method

The long-term equity investment that the Company can control over the investee is accounted for using the cost method

and the cost of the long-term equity investment is adjusted by adding or recovering the investment according to the

initial investment cost.Except for the actual payment or the cash dividends or profits included in the consideration that have been announced

but not yet paid at the time of acquiring the investment the Company recognizes the current investment income

according to its share of cash dividends or profits declared to be distributed by the investee.B. Equity method

The Company’s long-term equity investments in associates and joint ventures are accounted for using the equity

method and some of the equity investments in associates that are indirectly held by venture capital institutions mutual

funds trust companies or similar entities including investment-linked insurance funds are measured at fair value

through profit or loss.When the initial investment cost of a long-term equity investment is greater than the investment the initial investment

cost of the long-term equity investment shall not be adjusted by the difference between the fair value of the identifiable

net assets of the investee; if the initial investment cost is less than the investment the difference between the fair value

of the identifiable net assets of the investee should be included in the current profit or loss.After the Company has acquired the long term equity investment the net gains and losses realized by the investee

and the share of the other comprehensive income enjoyable or sharable should be respectively used to recognize the

62FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

return on investment and other comprehensive income and at the same time the book value of the long term equity

investment is adjusted; according to the profit announced for distribution by the investee or the part of the cash dividend

enjoyable upon calculation the book value of the long term equity investment is reduced correspondingly. For other

change in the net profit and loss other comprehensive income and owner's equity other than the profit distribution the

book value of the long term equity investment is adjusted and counted to the capital reserve.In determining the net profit and loss in the investee enjoyable with the fair value of various identifiable assets etc. in

the investee when the investment is acquired as the base the net profit of the investee is recognized after adjustment.For the transactions between the Company and its associates or joint ventures the part calculated based on the

proportion of the unrealized internal transaction gains and losses attributable to the Company shall be offset and the

gains and losses on the investment shall be recognized on this basis.When the Company recognizes the losses incurred by the investee that it should bear it shall deal with it in the

following order: Firstly offset the carrying amount of the long-term equity investment. Secondly if the carrying amount

of the long-term equity investment is not enough to be offset the investment loss will continue to be recognized to the

extent of carrying amount of other long-term equity that virtually constitutes a net investment in the investee and the

carrying amount of the long-term receivables is offset. Finally after the above-mentioned treatment if the enterprise still

bears additional obligations in accordance with the investment contract or agreement the projected liabilities are

recognized according to the estimated obligations and included in the current investment losses.If the investee realizes profit in the future period after deducting the unrecognized loss share and the reduction of book

balance of the recognized projected liabilities and recovery of other long-term equity that virtually constitutes a net

investment in the investee and carrying amount of long-term equity investment as opposite to the order above the

Company shall restore the investment income.

3. Conversion of accounting methods for long-term equity investment

1) Fair value measurement to equity method accounting

If the equity investment originally held by the Company that does not have control joint control or significant influence

on the investee which is accounted for according to the recognition and measurement criteria of financial instruments

can exert significant influence on the investee or jointly control but does not constitute control over it due to additional

investment and otherwise its initial investment cost shall be the sum of the fair value of the equity investment originallyheld in accordance with the “Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement ofFinancial Instruments” and new investment cost after being accounted for under the equity method.If the initial investment cost accounted for under the equity method is less than the fair value share of the identifiable net

assets of the investee on the additional investment date determined by the new shareholding ratio after the additional

investment the carrying amount of the long-term equity investment is adjusted and included in the current

non-operating income.

2) Fair value measurement or equity method accounting to cost method accounting

If the equity investment originally held by the Company that does not have control joint control or significant influence

on the investee and which is accounted for in accordance with the financial instrument recognition and measurement

criteria or the long-term equity investment originally held in associates or joint venture can exercise control over the

investee not under common control due to additional investment or otherwise in the preparation of individual financial

statements the sum of the carrying amount of the equity investment originally held plus the new investment cost shall

be regarded as the initial investment cost after being accounted for under the cost method.The other comprehensive income recognized by the equity method in respect of the equity investment originally held

before the purchase date is accounted for on the same basis as the investee directly disposes of the relevant assets or

liabilities when the investment is disposed of.If the equity investment held before the purchase date is accounted for in accordance with the relevant provisions of the

“Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of Financial Instruments” the

cumulative fair value changes originally included in other comprehensive income are transferred to current profit or loss

when the cost method is adopted.

3) Equity method accounting to fair value measurement

If the Company loses joint control or significant influence on the investee due to the disposal of part of the equityinvestment or otherwise the remaining equity after disposal shall be accounted for according to the “AccountingStandards for Business Enterprises No. 22 – Recognition and Measurement of Financial Instruments”. The difference

between the fair value and the carrying amount on the date of losing joint control or significant impact is recognized in

profit or loss.The other comprehensive income recognized in respect of the original equity investment using the equity method is

accounted for on the same basis as the investee directly disposes of the relevant asset.

4) Cost method to equity method

63FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Where the Company loses control over the investee due to the disposal of part of the equity investment etc. in the

preparation of individual financial statements if the remaining equity after disposal can exercise joint control or

significant influence on the investee the equity method is adopted for accounting and the remaining equity is deemed

to be adjusted under the equity method when it is acquired.

5) Cost method to fair value measurement

Where the Company loses control over the investee due to the disposal of part of the equity investment etc. in the

preparation of individual financial statements if the remaining equity after disposal cannot jointly control or exertsignificant influence on the investee the relevant provisions of the “Accounting Standards for Business Enterprises No.

22 – Recognition and Measurement of Financial Instruments” are adopted. The difference between the fair value and

the carrying amount on the date of loss of control is recognized in profit or loss for the current period.

4. Disposal of long-term equity investment

For the disposal of long-term equity investment the difference between the carrying amount and the actual purchase

price shall be included in the current profit or loss. For the long-term equity investment accounted for using the equity

method when the investment is disposed of the part that is originally included in the other comprehensive income is

accounted for in the same proportion based on the same basis as the investee directly disposes of the relevant assets

or liabilities.If the terms conditions and economic impact of each transaction on disposal of the equity investment in a subsidiary

satisfy one or more of the following cases the multiple transactions are treated as a package transaction:

A. the transactions were entered into at the same time or by considering each other’s influence;

B. a complete business result can only be achieved by combining all these transactions together;

C. the performing of one transaction is depended on at least one other transaction;

D. a transaction is not economical if it is considered stand along but it will become economical if it is considered in

combination with other transactions.Where the loss of control over the original subsidiary due to disposal of part of the equity investment or otherwise which

is not a package transaction the individual financial statements and consolidated financial statements shall be

classified for relevant accounting treatment:

1) In individual financial statements the difference between the book value of the disposed equity and the actual

acquisition price is recorded in the current profit and loss. If the remaining equity after disposal can exert joint control or

significant influence on the investee it shall be accounted for under the equity method and the residual equity shall be

deemed to be adjusted by equity method when it is acquired; if the remaining equity after disposal cannot exert jointcontrol or significant influence over the investee it shall be accounted for by the relevant provisions of the “AccountingStandards for Business Enterprises No. 22 – Recognition and Measurement of Financial Instruments” and the

difference between the fair value and the carrying amount on the date of loss of control is included in the current profit

or loss.

2) In the consolidated financial statements for each transaction before the loss of control over the subsidiary capital

reserve (share premium) is adjusted for the difference between the disposal price and the share of the net assets

corresponding to the disposed long-term equity investment that the subsidiary has continuously calculated from the

date of purchase or the merger date; if the capital reserve is insufficient to offset the retained earnings will be adjusted;

when the control of the subsidiary is lost the remaining equity shall be re-measured according to its fair value on the

date of loss of control. The sum of the consideration for the disposal of the equity and the fair value of the remaining

equity less the share of the net assets that that the original subsidiary has continuously calculated from the date of

purchase calculated based on the original shareholding is included in the investment income for the period of loss of

control while reducing goodwill. Other comprehensive income related to the original subsidiary’s equity investment will

be converted into current investment income when control is lost.If each transaction on disposal of the equity investment in a subsidiary until the loss of control is a package transaction

each transaction is accounted for as a transaction to dispose of the equity investment in the subsidiary with loss of

control which is distinguished between individual financial statements and consolidated financial statements:

1) In the individual financial statements the difference between each disposal price and the carrying amount of the

long-term equity investment corresponding to the disposed equity before the loss of control is recognized as other

comprehensive income and when the control is lost it is transferred to profit or loss for the period of the loss of control.

2) In the consolidated financial statements the difference between each disposal price and the disposal investment that

has the share of the net assets of the subsidiary before the loss of control is recognized as other comprehensive

income and transferred to profit or loss for the period of the loss of control.

64FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

5. Judging criteria for joint control and significant influence

If the Company collectively controls an arrangement with other parties in accordance with the relevant agreement and

the activity decision that has a significant impact on the return of the arrangement needs to be unanimously agreed

upon by the parties sharing the control it is considered that the Company and other parties jointly control an

arrangement which is a joint arrangement.If the joint arrangement is reached through a separate entity and it determines that the Company has rights to the net

assets of the separate entity in accordance with the relevant agreement the separate entity is regarded as a joint

venture and is accounted for using the equity method. If it is judged according to the relevant agreement that the

Company does not have rights to the net assets of the separate entity the separate entity acts as a joint operation and

the Company recognizes the items related to the share of the interests of the joint operation and conducts accounting

treatment in accordance with the relevant ASBEs.Significant influence refers to the investor's power of participation in making an investee's financial and operation

policies but the Company cannot control or jointly control with other parties to make these policies. The Company has a

significant influence on the investee under one or more of the following situations and taking into account all facts and

circumstances: (1) it is represented on the board of directors or similar authorities of the investee; (2) it involves in the

formulation of financial and operating policy of the investee; (3) it has important transactions with the investee; (4) it

dispatches management personnel to the investee; (5) it provides key technical information to the investee.

23. Investment Property

Measurement model for investment property

Measured based on the cost method

Depreciation or amortization method

Investment property refers to real estate held to earn rentals or for capital appreciation or both including the land use

right which has already been let out the land use right held and to be assigned after appreciation building which has

been leased out etc. In addition if the Board of Directors has a written resolution on the vacant buildings held by the

Company for the purpose of operating the lease it is clearly stated that they will be used for operating leases and that

the intention to hold is no longer changed in the short term and they are presented as investment property.The Company’s investment property is recorded at its cost and the cost of purchased investment property includes the

purchase price related taxes and other expenses directly attributable to the asset; the cost of self-built investment

property is composed of the necessary expenses incurred before the asset is ready for expected use.The Company adopts the cost model for subsequent measurement of investment property and depreciates or

amortizes buildings and land use rights according to their estimated service life and net residual value. Expected useful

life residual value and annual depreciation rate are as follows:

Categories Expected useful life (years) Expected residual value rate (%) Annual depreciation(amortization) (%)

Housing & buildings 20 -35 5.00 4.80-2.70

When the use of investment property is changed to self-use the Company converts the investment property into fixed

assets or intangible assets from the date of change. When the use of self-use property changes to rental earning or

capital appreciation the Company converts fixed assets or intangible assets into investment property from the date of

change. When a conversion occurs the carrying amount before conversion is used as the converted value.The investment property is derecognized when the investment property is disposed of or permanently withdrawn from

use and is not expected to obtain economic benefits from its disposal. The amount of disposal income from the sale

transfer retirement or damage of the investment property after deducting its carrying amount and related taxes and

expenses is recognized in profit or loss for the current period.

24. Fixed asset

(1)Recognition conditions of fixed assets

Fixed assets are tangible assets that are held for production of goods supply of services for rental to others or for

administrative purposes and have useful lives more than one accounting year. Fixed assets are recognized when the

following conditions are met at the same time:

1) The economic benefit related to the fixed asset is likely to flow into the enterprise;

2) The cost of the fixed asset can be reliably measured.

(2) Depreciation methods

Categories Depreciation methods Depreciation life Residual rate Yearly depreciation rate

65FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Plant & buildings Average service lifemethod 20 -35 5.00 4.80-2.70

Machinery & equipment Straight-line method 10 5.00-10.00 9.50-9.00

Electronic equipment Straight-line method 5 5.00 19.00

Motor vehicle Straight-line method 5 5.00 19.00

Other equipment Straight-line method 5 5.00 19.00

Depreciation of fixed assets is accrued over the estimated useful life based on its recorded value less the estimated net

residual value. The fixed assets that have been provided for impairment losses are depreciated in the future period

based on the carrying amount after deducting the impairment provision and the remaining useful life.The Company determines the service life and estimated net residual value of fixed assets based on the nature and

usage of fixed assets. The Company rechecks the service life predicted net residual value and depreciation method of

the fixed asset at the end of a year. In case there exists any difference with the original estimate the corresponding

adjustment should be made.

(3) Basis for recognizing the fixed assets under financing lease Pricing and Depreciation Methods

Inapplicable

25. Construction-in-progress

1. Construction-in-progress

The self-built construction in progress of the Company is measured at the actual cost which is determined by the

necessary expenses incurred before the construction of the asset reaches the intended usable condition including the

cost of engineering materials labour costs and relevant taxes payable capitalized borrowing costs and indirect costs

that should be apportioned.

2. Criteria for and time point of construction in progress to convert into fixed asset

For a construction-in-progress its entry value shall be the total expenses incurred before the built asset reaches the

expected use condition. Where a construction in progress has reached the expected use condition but the final

accounts of the as-built project have not been settled from the day when the fixed asset reaches the expected use

condition values estimated according to the construction budget and cost or the actual construction cost shall be

assigned to the fixed asset and the fixed asset shall be depreciated under the fixed asset depreciation provisions. The

depreciation amount already provided is not adjusted.

26. Borrowing Costs

1. Recognition principle of capitalization of borrowing costs

If the borrowing costs incurred to the Company can be directly attributable to the acquisition construction or production

of assets that meet the conditions for capitalization they shall be capitalized and included in the cost of the relevant

assets; other borrowing costs shall be recognized as expenses based on the amount incurred when they incur and

included in the current profit and loss.The assets in compliance with the capitalization conditions refer to such assets as fixed assets investment based real

estate inventories etc. which need to undergo long time of acquisition or construction or production activities before

they can reach the predicted applicable or sellable status.As soon as the borrowing costs meet the following conditions capitalization starts:

A. Asset expenditures have already occurred including expenditures in the form of paying cash transferring non-cash

assets or assuming interest-bearing debts for the purchase construction or production of assets that meet the

capitalization conditions;

B. Borrowing costs have incurred;

C. The purchase construction or production activities necessary for the assets to reach the expected usable or

marketable state have already begun.

2. Period of capitalization of borrowing costs

The capitalization period refers to the period from the time when the capitalization of borrowing costs starts to the time

when the capitalization is stopped excluding the period during which the capitalization of borrowing costs is suspended.When the acquisition construction or production of assets that meet the capitalization conditions reaches the intended

usable or saleable state the capitalization of borrowing costs shall cease.When a part of the assets purchased or produced that meet the capitalization conditions are completed and can be

used alone such part of the assets shall stop capitalization of borrowing costs.

66FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Where each part of the assets purchased or produced is completed separately but must wait until the whole is

completed or can be sold externally the capitalization of the borrowing costs shall be stopped when the assets are

completed as a whole.

3.Suspension of capitalization period

If an abnormal interruption occurs during the acquisition construction or production of an asset that meets the

capitalization conditions and the interruption lasts for more than 3 months the capitalization of borrowing costs shall be

suspended; if the interruption is a necessary procedure for the acquired constructed or produced assets eligible for

capitalization to reach the intended use or sale state the borrowing costs may continue to be capitalized. The borrowing

costs incurred during the interruption period are recognized as the current profit and loss and the borrowing costs

continue to be capitalized after the acquisition construction or production activities of the asset are resumed.

4. Calculation method for the capitalized amount of borrowing costs

Interest charges on special borrowings (excluding interest income on unused borrowings deposited in the bank or

investment income on temporary investment) and their ancillary expenses shall be capitalized before the assets

purchased or produced that meet the capitalization conditions are ready for intended use or sale.The amount of capitalized interest on general borrowings is calculated by the weighted average of the excess portion of

the accumulative asset expenditures over the special borrowings multiplied by the capitalization rate of general

borrowings. The capitalization rate is determined based on the weighted average interest rate of general borrowings.The capitalization rate is determined based on the weighted average interest rate of general borrowings.Where there is a discount or premium in the borrowings the interest amount shall be adjusted in accordance with the

effective interest rate method to determine the discount or premium amount that shall be amortized during each

accounting period.

27. Biological Assets

Inapplicable

28. Oil and Gas Assets

Inapplicable

29. Right-of-use Assets

The Company initially measures the right-to-use assets at cost which includes:

1) initial measurement amount of lease liabilities;

2) lease payments made before or at the beginning of the lease term and deduction of the relevant amount of rental

incentives if any;

3) initial direct expenses incurred by the Company;

4) expected costs to be incurred by the Company for dismantling and removing leased assets restoring the site of

leased assets or restoring leased assets to the state agreed in the lease terms (excluding costs incurred for the

production of inventory)

After the starting date of the lease term the Company adopts the cost model for subsequent measurement of the asset

with use right.If it can be reasonably determined to obtain the ownership of the leased asset at the expiration of the lease term the

Company shall accrue depreciation during the remaining useful life of the leased asset. If it is impossible to reasonably

determine that the ownership of the leased asset can be obtained when the lease term expires the Company shall

accrue depreciation during the shorter period of the lease term and the remaining useful life of the leased asset. For the

right-of-use assets with impairment provision depreciation shall be calculated based on the book value after deduction

of impairment provision in according with the above principles in future periods.

30. Intangible assets

(1) Pricing method service life and impairment test

Intangible assets refer to the identifiable non-monetary assets owned or controlled by the Company which have no

physical form including land use rights software and trademark use rights.

67FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

1) Initial measurement of intangible assets

The cost of outsourcing intangible assets includes the purchase price relevant taxes and other expenditures directly

attributable to the asset's intended use. If the payment for the purchase of intangible assets is delayed beyond the

normal credit conditions and is of a financing nature the cost of the intangible assets is determined on the basis of the

present value of the purchase price.For an intangible asset acquired through debt restructuring by the debtor for the purpose of repaying debts the

Company determines its entry value on the basis of the fair value of the intangible assets and includes the difference

between the book value of the restructured debt and the fair value of the fixed assets used to repay the debts in the

current period profit and loss.On the premise that the exchange of non-monetary assets has commercial substance and the fair value of the

exchanged assets or exchanged assets can be reliably measured the intangible assets exchanged in with

non-monetary assets are determined on the basis of the fair value of the exchanged assets unless there is conclusive

evidence showing that the fair value of the assets exchanged in is more reliable; for non-monetary asset exchanges

that do not meet the above premises the book value of the assets exchanged and the relevant taxes and fees payable

shall be used as the cost of the exchange of intangible assets and no profit or loss is recognized.For intangible asset obtained through business absorption or combination under common control its book value is

determined by the carrying amount of the combined party; for intangible asset obtained through business absorption or

merger not under common control its book value is determined by the fair value of the intangible asset.The costs of intangible assets developed internally includes: materials used in the development of the intangible asset

labor costs registration fees amortization of other patents and franchises used in the development process and

interest expenses that meet the capitalization conditions and other direct expenses incurred before the intangible

asset reaches its intended use.

2) Subsequent measurement of intangible assets

The Company determines the useful life of intangible assets on acquisition which are classified as intangible assets

with limited useful life and indefinite useful life.Intangible assets with a limited useful life

Intangible assets with a limited useful life are depreciated using straight line method over the term during which they

bring economic benefits to the Company. The estimated life and basis for the intangible assets with a limited useful life

are as follows:

Items Estimated useful life Basis

Land use right 50 Straight-line method

Software system 5 Straight-line method

Trademark rights 5-10 Straight-line method

The useful life and depreciation method of intangible assets with a limited useful life are reassessed at the end of each

period. If there is a difference from the original estimate corresponding adjustments will be made.Upon re-assessment there was no difference in the useful life and depreciation method of intangible assets from the

previous estimates at the end of the period.

(2) Accounting policy for internal research and development expenditure

1) Specific basis for determining the research stage and development stage of internal research and development

projects of the Company

Research phase: The phase of original planned investigations research activities to acquire and understand new

science or technology knowledge etc.Development phase: It is the phase in which the research result or other knowledge is applied in some plan or design so

that new or substantially improved materials devices products etc. are produced prior to commercial production or

use.The expenditure of the research stage of the internal research and development project is included in the current profit

or loss at the time of occurrence

2) Specific standard for capitalization of expenditure in the development stage

68FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

The expenditure of an internal research and development project in the development stage is recognized as an

intangible asset when meeting all of the following conditions:

A. It is technically feasible to complete the intangible asset so that it can be used or sold;

B. With an intention to complete the intangible asset and to use or sell it;

C. The way the intangible asset generates economic benefits can prove the existence of a market for the products

produced using the intangible asset or a market for the intangible asset itself and if the intangible asset will be used

internally its usefulness can be proven;

D. Having sufficient technical financial resources and other resource support to complete the development of the

intangible asset and having the ability to use or sell the intangible asset;

E. Expenditure attributable to the development stage of the intangible asset can be reliably measured.Expenditures incurred in the development stage that do not meet the above conditions shall be included in the current

profit or loss at the time of occurrence. The development expenditures which have been included in the profit or loss in

the previous periods will not be recognized as an asset in the future period. The capitalized expenditures in the

development phase are shown in the balance sheet as development expenditures and are converted into intangible

assets from the date of the project’s intended use.

31. Impairment of long term assets

On the balance sheet date the Company determines whether there may be a sign of impairment on long-term assets. If

there is a sign of impairment on long-term assets the recoverable amount is estimated on the basis of a single asset. If

it is difficult to estimate the recoverable amount of a single asset then determine the recoverable amount of the asset

group on the basis of the asset group to which the asset belongs.The estimated recoverable amount of an asset is the higher of its fair value less the cost of disposal and the present

value of the expected future cash flow of the asset.The measurement results of recoverable amount show that when the recoverable amount of an long-term asset is lower

than its book value the book value of the long-term asset is reduced to its recoverable amount. The reduced amount is

recognized as an impairment loss on the asset and included in the current profit or loss at the same time asset

impairment provision will be made accordingly. Asset impairment loss shall not be reversed during the subsequent

accounting period once recognized.After the loss of asset impairment has been recognized the depreciation or amortization expenses of the impaired

asset shall be adjusted accordingly in the future periods so as to amortize the post - adjustment carrying value of the

asset systematically (deducting the expected net salvage value) within the residual service life of the asset.For the goodwill formed from consolidation of an enterprise and intangible asset with the undetermined service life

regardless whether there exists any evidence of impairment impairment testing is conducted every year.In the impairment test of goodwill the book value of goodwill would be apportioned to asset group or portfolio of asset

group expected to benefit from the synergy effect of an enterprise merger. When taking an impairment test on the

relevant asset group or portfolio of asset group containing goodwill if there is a sign of impairment on the asset group or

portfolio of asset group related to the goodwill the Company first calculates the recoverable amount after testing the

asset group or portfolio of asset group which does not contain the goodwill for impairment and then compares it with

the related book value to recognize the corresponding impairment loss. Next the Company conducts an impairment

test on the asset group or portfolio of asset group which contains the goodwill and compares the book value of the

related asset group or portfolio of asset group (book value includes the share of goodwill) with the recoverable amount.If the recoverable amount of the related asset group or portfolio of asset group is lower than the book value the

Company will recognize the impairment loss of goodwill.

32. Long term expenses to be apportioned

1. Amortization Method

Long term expenses to be apportioned refer to expenses that have already been spent by the Company but shall be

apportioned in the current period and the future periods and the benefit period is over 1 year. Long term expenses to be

apportioned are amortized in benefit period.

2. Amortization period

Categories Amortization period

Counter fabrication expenses 2-3

Decoration expenses 3-5

69FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Categories Amortization period

Others 2-3

33. Contract liabilities

The obligation to transfer goods to a customer for which consideration has been received or receivable is recognized in

part as a contract liability.

34. Payroll to Employees

(1) Accounting treatment of short term salaries

Short-term remuneration refers to the remuneration of the employees that needs to be fully paid within 12

months after the end of the annual reporting period in which the employees provide related services except for

post-employment benefits and termination benefits. During the accounting period in which employees provide services

the Company recognizes the short-term remuneration payable as a liability and accounts for the relevant asset costs

and expenses based on the beneficiaries of the services provided by the employees.

(2) Post-employment benefits

Post-employment benefits refer to the compensation and benefits provided after employees’ retirement and

termination of employment by the Company in order to obtain services from employees except for the

short-term compensation and employee benefits.The Company’s post-employment benefits is classified as contribution plan.The defined contribution plan of the Company refers to the basic endowment insurance unemployment insurance paid

for the employees according to relevant regulation by local governments. During the accounting period when

employees render services to the Company amount payable calculated by the base and ratio in conformity with local

regulation is recognized as liability and accounted for profit and loss or related cost of assets.After paying the above-mentioned funds regularly in accordance with the standards and annuity plans stipulated by the

state the Company does not have other payment obligations.

(3)Termination benefits

Termination benefits refer to the compensation paid to an employee when the Company terminates the employment

relationship with the employee before the expiry of the employment contract or provides compensation as an offer to

encourage the employee to accept voluntary redundancy. The Company recognizes the liabilities arising from the

compensation paid to terminate the employment relationship with employees and includes the same in the current profit

or loss at the earlier date of the following: when the Company cannot reverse the termination benefits due to the plan of

cancelling the labour relationship or the termination benefits provided by the advice of reducing staff; and the Company

recognizes the cost or expense relative to the payment of termination benefits of restructuring into the current profit or

loss.The Company provides internal retirement benefits to employees who accept internal retirement arrangements. The

internal retirement benefits refer to the remuneration and the social insurance premiums paid to the employees who

have not reached the retirement age set by the State and voluntarily withdrew from the job after approval of the

Company’s management. The Company pays internal retired benefits to an internal retired employee from the day

when the internal retirement arrangement begins till the employee reaches the normal retirement age. For internal

retirement benefits the Company conducts accounting treatment in contrast to the termination benefits. When the

related recognition conditions of termination benefits are met the Company will recognize the remuneration and the

social insurance premiums of the internal retired employee to be paid during the period between the employee’s

termination of service and normal retirement date as liabilities and include the same in the current profit or loss in one

time. Changes in actuarial assumptions of internal retirement benefits and differences arising from the adjustment of

welfare standards are included in current profit or loss when incurred.

(4) Other long term employee benefits

Other long-term employee benefits refer to all employee benefits except for short-term remuneration post-employment

benefits and termination benefits.For other long-term employee benefits that meet the conditions of the defined contribution plan during the accounting

period in which the employees provide services for the Company the amount that should be paid is recognized as a

liability and is included in the current profit or loss or related asset costs. In addition to the above situations other

long-term employee benefits are actuarially calculated by the independent actuary using the expected cumulative

welfare unit method on the balance sheet date and the welfare obligations arising from the defined benefit plans are

70FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

attributed to the period during which the employees provide services and are included in the current profit or loss or

related asset costs.

35. Lease liabilities

The Company initially measures the lease liabilities according to the present value of the unpaid lease payments at the

beginning of the lease term. In calculating the present value of lease payments the Company adopts the interest rate

implicit in the lease as the discount rate. If it is impossible to determine the interest rate implicit in the lease the

incremental borrowing rate of the Company shall be used as the discount rate. Lease payments include:

1) Fixed payments and substantive fixed payments after deducting the relevant amount of lease incentives;

2) Variable lease payments depending on an index or rate;

3) Where the Company reasonably determines that the option will be exercised the amount of the lease payment

includes the exercise price of purchase option;

4)Where the lease term reflects that the Company will exercise the option to terminate the lease the amount of the

lease payment includes the amount to be paid for the exercise of the option to terminate the lease;

5) Expected payments based on the guaranteed residual value provided by the Company.

The Company calculates the interest charges of the lease liabilities for each period of the lease term at a fixed discount

rate and includes the same in the profit or loss of the current period or the related asset costs.Variable lease payments not included in the measurement of lease liabilities shall be included in the current profit or

loss or the related asset costs when they actually occur.

36. Estimated liabilities

1. Basis for recognition of projected liabilities

The Company will recognize projected liabilities if the obligation relating to contingent matters meets all of the following

conditions:

This obligation is a present obligation assumed by the Company;

The fulfillment of this obligation will probably cause the outflow of economic benefits from the Company;

The amount of this obligation can be measured reliably.

2. Measurement method of projected liabilities

The initial measurement of projected liabilities of the Company is based on the best estimate of the expenditure

required for the performance of the related present obligations.When determining the best estimate the Company comprehensively considers the risks uncertainties relating to the

contingent matters and time value of currency. If the time value of currency has a great influence the Company

determines the best estimate by discounting the related future cash outflows.The best estimate is determined in different situations as follow:

If there is a continuous range (or interval) of the required expenditure and the probability of the occurrence of all the

results in the range is the same the best estimate is determined according to the median value of the range which is

the average of the upper and lower limit.Where there is not a continuous range (or interval) of the required expenditure or there is a continuous range but the

probability of the occurrence of all the results in the range is different if the contingencies involve a single project the

best estimate is determined by the amount which is most likely to occur; if the contingencies involve a number of

projects the best estimate is determined based on various possible results and related probability calculation.If all or part of the expenses of the Company required to settle projected liabilities are expected to be compensated by a

third party and it is basically certain to receive the amount of compensation it is independently recognized as an asset.The amount of compensation recognized will not exceed the book value of the projected liabilities.

37. Share-based payments

1. Category of share-based payment

The Company’s share-based payments include equity-settled share-based payments and cash settled share-based

payments.

2. Method for determining the fair value of equity instruments

71FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

For options and other equity instruments granted by the Company with an active market the fair value is determined at

the active market quotations. For options and other equity instruments granted by the Company with no active market

option pricing model shall be used to estimate the fair value of the equity instruments. Factors as follows shall be taken

into account using option pricing models: (1) the exercise price of the option; (2) the validity of the option; (3) the current

price of the target share; (4) the expected volatility of the share price: (5) predicted dividend of the share; (6) risk-free

rate of the option within the validity period.In determining the fair value of the equity instruments at the date of grant the Company shall consider the impact of

market conditions in the vesting conditions and non-vesting conditions stated in the share-based payment agreement. If

there are no vesting conditions in the share-based payments as long as the employees or other parties satisfy the

non-market conditions in all of the vesting conditions (such as term of service) the Company shall recognize the

services rendered as an expense accordingly.

3. Recognition basis for the best estimate of exercisable equity instruments

On each balance sheet date within the vesting period the estimated number of exercisable equity instruments is

amended based on the best estimate made by the Company according to the latest available subsequent information

as to changes in the number of employees with exercisable rights. As at the exercise date the final estimated number

of exercisable equity instruments should equal the actual number of exercisable equity instruments.

4. Accounting treatment

Equity-settled share-based payments are measured at the fair value of the equity instruments granted to employees. If

the right can be exercised immediately after the grant the fair value of the equity instrument shall be included in the

relevant costs or expenses on the date of grant and the capital reserve shall be increased accordingly. If the right is

exercised after the completion of the waiting period services or the achievement of the specified performance

conditions on each balance sheet date during the waiting period based on the best estimate of the number of

exerciseable equity instruments the fair value of the equity instruments is granted on the basis of value including the

services obtained in the current period into related costs or expenses and capital reserves. No adjustment will be made

to the recognized related costs or expenses and the total owner's equity after the vesting date.The cash-settled share-based payment is measured at the fair value of the liabilities assumed by the Company

determined and based on shares and other equity instruments. If the right can be exercised immediately after the grant

the fair value of the liabilities assumed by the Company shall be included in the relevant costs or expenses on the date

of grant and the liabilities shall be increased accordingly. Cash-settled share-based payments that can only be

exercised after the completion of the waiting period services or the specified performance conditions are exercised. At

each balance sheet date during the waiting period the best estimate of the exercise is based on the fair value of the

liabilities assumed by the Company including the services obtained in the current period as costs or expenses and

corresponding liabilities. The fair value of the liabilities is re-measured and the movement is counted in the current

profits and losses on each balance sheet date and settlement day before the settlement of related liabilities.If the Company cancels the granted equity instrument during the vesting period the Company shall treat it as

accelerated vesting the amount which should be recognized during the remaining vesting period is counted to the

current profit and loss immediately and at the same time the capital reserve is recognized. If an employee or other party

can choose to meet the non-vesting conditions but fails to meet the vesting period the Company treats it as a

cancellation of the granted equity instrument.

38. Other financial instruments such as preferred shares perpetual liabilities etc.

Inapplicable

39. Revenue

Accounting policies used in revenue recognition and measurement

The Company’s revenue mainly come from:

1) Sales of watch

2) Precision manufacturing

3) Property leasing

1. General principle of revenue recognition

The Company recognizes revenue when the contract performance obligations have been fulfilled i.e. the customer has

gained control over the relevant goods or services.Performance obligations means the Company’s commitment to transfer identifiable goods or service to clients.Obtaining control of the relevant goods means that it is able to dominate the use of the goods and derive almost all

economic benefits therefrom.

72FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

The Company assesses contracts at the beginning date of a contract to identify each performance obligations

contained in a contract and to determine whether each performance obligation is to be finished over a period of time or

at a point of time. The Company satisfies a performance obligation over time if one of the following criteria is met; or

otherwise a performance obligation is satisfied at a certain point in time: (1) the customer simultaneously receives and

consumes the benefits provided by the Company’s performance as the Company performs; (2) the customer can

control the goods under construction during the Company’s performance; (3) the Company’s performance does not

create goods with an alternative use to it and the Company has a right to payment for performance completed to date

throughout the contract term. Otherwise the Company recognizes revenue at the point of time.For performance obligation satisfied over time the Company recognizes revenue over time by measuring the progress

towards complete satisfaction of that performance obligation. The output method determines the progress of

performance based on the value of the goods transferred to the customers (The input method is to determine the

performance progress based on the Company's input for fulfilling its performance obligations.) When the outcome of

that performance obligation cannot be measured reasonably but the Company expects to recover the costs incurred in

satisfying the performance obligation the Company recognizes revenue only to the extent of the amount of costs

incurred until it can reasonably measure the outcome of the performance obligation.

2. Detailed method of revenue recognition

The Company has three main business sectors: sales of watch precision manufacturing and property leasing. Based

on the Company’s business mode and terms of settlement the Company set detailed method of revenue recognition

method as follows:

1) Sales of watch

Sale of watch belongs to fulfilling performance obligations at a point of time.* Online sales

Revenue shall be recognized at the point that the goods are dispatched and the customer confirmed received the

goods.* Offline sales

Revenue shall be recognized at the point when the goods are delivered and payment by customer is collected.* Consignment sale

The Company recognizes revenue when the Company receives the detail of the sales list from distributors and confirms

that the control over goods ownership were transferred to the purchaser.* Sale of consigned goods from others

Under sale of consigned goods from others the Group recognizes revenue in net amount when it delivered consigned

sale goods to customer and confirms that control over the ownership of goods were transferred to the purchaser.

2) Precision manufacturing

Precision manufacturing business belongs to fulfilling performance obligations at a point of time. Revenue from

domestic sales shall be recognized when the goods are delivered and the economic benefit associated with the goods

is probable to flow into the Company. Revenue from export shall be recognized when the following criteria is satisfied:

The Company declared the good at custom; obtained bill of lading; the right of collecting payment is obtained and its

probable that the economic benefit associated with the goods flows into the Company.

3)Property leasing

Refer to Note V 42 for details: accounting treatment with the Company as the lessor

3. Revenue treatment principles for specific transactions

1) Contracts with sales return provisions

When the customer obtains control of the relevant goods revenue is recognized based on the amount of consideration

expected to be received due to the transfer of goods to the customers (exclusive of the amount expected to be refunded

due to the return of sales) while liability is recognized based on the amount expected to be refunded due to the return

of sales.The carrying amount of goods expected to be returned at sales of goods after deduction of costs expected to incur for

recovery of such goods (including impairment of value of the returned goods) will be accounted for under the item of

“Right of return assets”.

2) Contracts with quality assurance provisions

The Company assesses whether a separate service is rendered in respect of the quality assurance besides

guaranteeing the sales of goods to customers are in line with the designated standards. When additional service is

provided by the Company it is considered as a single performance obligation and under accounting treatment

73FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

according to the standards on revenue; otherwise quality assurance obligations will be under accounting treatment

according to the accounting standards on contingent matters

Differences in accounting policies for revenue recognition caused by the adoption of different business models for

similar businesses

Nil

40. Government subsidies

1. Classification

Government subsidies refer to monetary and non-monetary assets received from the government without

compensation however excluding the capital invested by the government as a corporate owner. According to the

subsidy objects stipulated in the documents of relevant government government subsidies are divided into subsidies

related to assets and subsidies related to income.Government subsidies related to assets are obtained by the Company for the purposes of acquiring constructing or

otherwise forming long-term assets. Government subsidies related to income refer to the government subsidies other

than those related to assets.

2. Recognition of government subsidies

Where evidence shows that the Company complies with relevant conditions of policies for financial supports and is

expected to receive the financial support funds at the end of the period the amount receivable is recognized as

government subsidies. Otherwise the government subsidy is recognized upon actual receipt.Government subsidies in the form of monetary assets are stated at the amount received or receivable. Government

subsidies in the form of non-monetary assets are measured at fair value; if fair value cannot be reliably obtained a

nominal amount (CNY 1) is used. Government subsidies that are measured at nominal amount shall be recognized in

the current profit or loss directly.

3. Accounting treatment

The Company determines whether a government subsidy shall use gross method or net method based on its

economical substance. In general only one method is used for one category or similar government subsidy and it shall

be used in a consistent way.Government subsidies related to assets should be used to offset the book value of related assets or be recognized as

deferred income. under reasonable and systematic approach in profit and loss in each period over the useful life of the

constructed or purchased assets;

Government subsidies related to income aiming at compensating for relevant expenses or losses to be incurred by the

enterprise in subsequent periods are recognized as deferred income and are recognized in current profit or loss when

relevant expenses or losses are recognized. Government subsidies aiming at compensating for relevant expenses or

losses of the enterprise that are already incurred are charged to current profit or loss once received.Government subsidies related to daily activities of enterprises are included in other income; government subsidies that

are not related to daily activities of enterprises are included in non-operating income and expense.Government subsidies related to the discount interest received from policy-related preferential loans offset the relevant

borrowing costs; if the policy-based preferential interest rate loan provided by the lending bank is obtained the

borrowing amount actually received shall be taken as the recording value of the borrowings and borrowing cost should

be calculated using the preferential interest rate according to the loan principal and the policy.When it is required to return recognized government subsidy if such subsidy is used to write down the carrying value of

relevant assets on initial recognition the carrying value of the relevant assets shall be adjusted; if there is balance of

relevant deferred income it shall be written down to the book balance of relevant deferred income and the excess is

included in the current profit or loss; where there is no relevant deferred income it shall be directly included in the

current profit or loss

41. Deferred Income Tax Assets and Deferred Income Tax Liabilities

Deferred income tax assets and deferred income tax liabilities are measured and recognized based on the difference

(temporary difference) between the taxable base of assets and liabilities and book value. On balance sheet date the

deferred income tax assets and deferred income tax liabilities are measured at the applicable tax rate during the period

when it is expected to recover such assets or settle such liabilities.

1. Criteria for recognition of deferred income tax assets

The Company recognizes deferred income tax assets arising from deductible temporary difference to the extent it is

probably that future taxable amount will be available against which the deductible temporary difference can be utilized

and deductible losses and taxes can be carried forward to subsequent years. However the deferred income tax assets

74FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

arising from the initial recognition of assets or liabilities in a transaction with the following features are not recognized: (1)

the transaction is not a business combination; (2) neither the accounting profit or the taxable income or deductible

losses will be affected when the transaction occurs.For deductible temporary difference in relation to investment in the associates corresponding deferred income tax

assets are recognized in the following conditions: the temporary difference is probably reversed in a foreseeable future

and it is likely that taxable income is obtained for deduction of the deductible temporary difference in the future.

2. Criteria for recognition of deferred income tax liabilities

The Company recognizes deferred income tax liabilities on the temporary difference between the taxable but not yet

paid taxation in the current and previous periods excluding:

1) temporary difference arising from the initial recognition of goodwill;

2) a transaction or event arising from non-business combination and neither the accounting profit or the taxable income

(or deductible losses) will be affected when the transaction or event occurs;

3) for taxable temporary difference in relation to investment in subsidiaries or associates the time for reversal of the

temporary difference can be controlled and the temporary difference is probably not reversed in a foreseeable future

3. When all of the following conditions are satisfied deferred income tax assets and deferred income tax

liabilities shall be presented on a net basis

1) An enterprise has the statutory right to settle the current income tax assets and current income tax liabilities at their

net amounts;

2) The deferred income tax assets and deferred income tax liabilities relate to income taxes levied by the same taxation

authority on either the same taxable entity or different taxable entities which intend either to settle current income tax

assets and current income tax liabilities on a net basis or to realize the assets and settle the liabilities simultaneously

in each future period in which significant amounts of deferred tax assets or liabilities are expected to be recovered or

settled.

42. Lease

(1) Accounting process for operating lease

The Company adopts the straight-line method or other systematic and reasonable method in each period of the lease

term and recognizes the lease receipts from operating leases as rental income; the initial direct expenses incurred in

relation to operating leases are capitalized and amortized on the same basis as rental income recognition during the

lease term and included in the current profit and loss in installments; the variable lease payments obtained in relation to

operating leases that are not included in the lease receipts are included in the current profit and loss when actually

incurred.

(2) Accounting treatment method for finance lease

If a lease has one or more of the following characteristics the Company usually classifies it as a financial lease：

1) At the expiry of the lease term the ownership of the leased assets is transferred to the lessee.

2) The lessee has the option to purchase the leased assets and the purchase price set by the lessee is low enough

compared with the expected fair value of the leased assets when exercising the option. Therefore it can be reasonably

determined on the lease start date that the lessee will exercise the option.

3) Although the ownership of the assets is not transferred the lease term accounts for the majority of the life of the

leased assets.

4) On the commencement date of the lease the present value of the lease receipts is almost equal to the fair value of

the leased assets.

5)The nature of leased assets is special. If there is no major transformation only the lessee can use them.

If one or more of the following conditions exist in a lease it may also be classified as a financial lease:

1) If the lessee stops the lease the lessee shall bear the losses caused by the termination of the lease to the lessor.

2)The profits or losses caused by the fluctuation of the fair value of the balance of assets belong to the lessee.

3) The lessee can continue to lease far below the market level for the next period.

75FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

On the commencement date of lease term the Company recognizes the financial lease receivable on the financial

leases and derecognizes the financial lease assets.When the initial measurement of the financial lease receivable is made the book value of the financial lease

receivable is the sum of the unsecured balance and the present value of lease receipts that have not yet been

received at the beginning of the lease term discounted at the interest rate implicit in the lease. The lease

receipts include:

1) Fixed payments and substantive fixed payments after deducting the relevant amount of lease incentives;

2) Variable lease payments depending on an index or rate;

3) In the case of reasonably determining that the lessee will exercise the purchase option the lease receipts include the

exercise price of purchase option;

4) If the lease term reflects that the lessee will exercise the option to terminate the lease the lease receipts include the

amount to be paid by the lessee in exercising the option to terminate the lease;

5) Guarantee residual value provided to the lessor by the lessee the party concerned with the lessee and an

independent third party with financial capacity to fulfill the guarantee obligation.The Company calculates and recognizes the interest income for each period of the lease term based on the fixed

interest rate implicit in the lease and the variable lease payments which are obtained and not included in the net rental

investment amount are included in the profit or loss of the period when they actually occur.

43. Other important accounting policy and accounting estimate

Inapplicable

44. Changes in significant accounting policies and accounting estimates

(1) Change in significant accounting policies

Inapplicable

(2) Change in significant accounting estimates

Inapplicable

(3) The Company started implementing the updated accounting standards commencing from 2023 and

adjusted the relevant items of the financial statements at the beginning of the very year involved in the initial

implementation of the said standards

Inapplicable

45. Others

Inapplicable

VI. Taxation

1. Types of major taxes and tax rates

Type of taxes Taxation basis Tax rates

Domestic sales and provision of processing

repairing and repairing services; property

Value-added tax lease services; other taxable sales service 13% 9% 6% and 5%

activities; simplified method

Consumption tax High-grade watches 20%

Urban maintenance and construction tax Amount of the turnover tax actually paid 7% and 5%

Enterprise income tax Taxable income amount For the detail refer to the following table

In case there exist taxpayers subject to different corporate income tax rates disclose the information.Taxpayers Income tax rates

Shenzhen Harmony World Watches Center Co. Ltd.(* ) 25%

FIYTA Sales Co. Ltd. (* ) 25%

Shenzhen FIYTA Precision Technology Co. Ltd. (* * ) 15%

76FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Shenzhen FIYTA Technology Development Co. Ltd. (* * ) 15%

Harmony World Watches Center (Hainan) Ltd.(* ) 20%

Shenzhen XUNHANG Precision Technology Co. Ltd.(* ) 20%

Emile Chouriet (Shenzhen) Limited 25%

Liaoning Hengdarui Commerce & Trade Co. Ltd. 25%

Shiyuehui Boutique (Shenzhen) Co. Ltd. 25%

Shenzhen Harmony E-Commerce Limited (* ) 20%

FIYTA (Hong Kong) Limited (* ) 16.5%

Montres Chouriet SA (* ) 30%

2. Tax PreferencesNote * : According to the regulations stated in “Interim Administration Method for Levy of Corporate Income Tax toEnterprise that Operates Cross-regionally” the head office of the Company and its branch offices the head office of

HARMONY Company and its branch offices and the head office of Sales Company and its branch offices adopt taxsubmission method of “unified calculation managing by classes pre-paid in its registered place settlement in total andadjustment by finance authorities”. Branch offices mentioned above share 50% of the enterprise income tax and prepay

locally; and 50% will be prepaid by the head offices mentioned above;Note* : According to “Notice of the Ministry of Finance the State Administration of Taxation and Ministry of Science onFurther Perfection of the Pre-tax Super Deduction Ratio of Research and Development Expenses” (Cai Shui (2021) No.

13) if the research and development costs are not capitalized as intangible assets but charged to current profit or loss

all of these entities can enjoy a 100% super deduction on top of the R&D expenses that allowed to deduct before

income tax since 1st January 2021.Note * : The Company enjoyed for “Reduction and Exemption in Corporate Income Tax Rate for High and NewTechnology Enterprises that Require Key Support from the State”;

Note* : These companies are registered in Hong Kong and the income tax rate of Hong Kong applicable is 16.50% this

year.Note * : The comprehensive tax rate of 30% is applicable for Swiss Company as it registered in Switzerland.Note * : These companies are small and low-profit enterprises which enjoy 20% tax rate.Preferential treatment and corresponding approval

According to the Announcement of the Ministry of Finance and the State Administration of Taxation on the Preferential

Income Tax Policies for Micro and Small Enterprises and Individual Industrial and Commercial Households (CAISHUI

(2023) No. 6) and “Proclamation of Ministry of Finance and State Administration of Taxation in ImplementingPreferential Tax Rate to Small and Low Profit Enterprises and Sole-proprietors” (Caishui (2022) No.13) the portion of

annual taxable income of small low-profit enterprise that is below RMB1000000.00 will be included in taxable income

at 25% and to be taxed at a rate of 20%; and for annual taxable income that is greater than RMB1000000.00 but not

exceeding RMB3000000.00 of which 25% will be included in taxable income and to be taxed at 20%.In accordance with Notice of the Ministry of Finance and the State Administration of Taxation on Extending the Loss

Carryover Period for High and New Technology Enterprises and Small and Medium-Sized Technological Enterprises

(CAI SHUI (2018)No.76) commencing from January 1 2018 the unrecovered losses incurred in the 5 fiscal years

before being qualified for becoming a high-tech enterprise are allowed to be carried forward to make up for subsequent

years and the longest carry-forward period has been extended from 5 years to 10 years.According to “Notice of the Ministry of Finance the State Administration of Taxation and Ministry of Science on FurtherPerfection of the Pre-tax Super Deduction Ratio of Research and Development Expenses” (Cai Shui (2023) No. 7) if

the research and development costs are not capitalized as intangible assets but charged to current profit or loss all of

these entities can enjoy a 100% super deduction on top of the R&D expenses that allowed to deduct before income tax

since 1st January 2021; commencing from January 1 2023 the intangible assets formed shall be amortized at 200% of

the cost of intangible assets before tax.

3. Others

Inapplicable

77FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

VII. Notes to items of consolidated financial statements

1. Monetary capital

In CNY

Items Ending balance Opening balance

Cash in stock 63562.14 173368.68

Bank deposit 514412146.09 312433893.29

Other monetary funds 4893086.89 1140201.67

Total 519368795.12 313747463.64

Including: total amount deposited overseas 398877.12 716733.44

The total amount of funds with restrictions on 9074.00

use due to mortgage pledge or freezing

Other notes

As at 30th June 2023 the Company did not have balance of cash or other monetary funds that are restricted because

being pledged as security frozen or have potential risk in recovery.

2. Transactional financial assets

Inapplicable

3. Derivative financial assets

Inapplicable

4. Notes receivable

(1) Presentation of classification of notes receivable

In CNY

Items Ending balance Opening balance

Bank acceptance 4917352.62 10690221.03

Trade acceptance 9711946.28 21524691.07

Total 14629298.90 32214912.10

In CNY

Ending balance Opening balance

Categories Book balance Bad debt reserve Book balance Bad debt reserve

Provision Book value Provision Book valueAmount Proportion Amount proportion Amount Proportion Amount proportion

Including:

Notes

receivable

for which

bad debt 15140453 100.00% 511155.07 3.38% 14629298 33347790reserve .97 .90 .58 100.00%

1132878.

483.40%

32214912.10

has been

provided

based on

portfolios

Including

:

Business

acceptanc 10223101 67.52% 511155.07 5.00% 9711946. 22657569 1132878..35 28 .55 67.94% 48 5.00%

21524691

e note .07

Risk-free

bank 4917352.acceptanc 62 32.48% 0.00%

4917352.1069022132.06%0.00%1069022162.03.03

e portfolio

15140453 100.00% 511155.07 3.38% 14629298 33347790 100.00% 1132878.Total .97 .90 .58 48 3.40%

32214912.10

Provision for bad debts based on portfolio: commercial acceptance portfolio

In CNY

Ending balance

Description

Book balance Bad debt reserve Provision proportion

Business acceptance note 10223101.35 511155.07 5.00%

78FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Total 10223101.35 511155.07

Note to the basis for determining the combination:

The issuer has higher level of credit rating and no default in past and has strong ability to fulfill its contractual cash

follow obligation

Provision for bad debts based on portfolio: risk-free bank acceptance portfolio

In CNY

Ending balance

Description

Book balance Bad debt reserve Provision proportion

Risk-free bank acceptance

portfolio 4917352.62 0.00%

Total 4917352.62

Note to the basis for determining the combination:

The issuer has higher level of credit rating and no default in past and has strong ability to fulfill its contractual cash

follow obligation

If the provision for bad debts of notes receivable is accrued in accordance with the general expected credit loss model

please refer to the disclosure of other receivables to disclose the relevant information of the provision for bad debts:

Inapplicable

(2) Provision recovery or reversal of reserve for bad debts during the reporting period

Provision for bad debt during the reporting period

In CNY

Amount of movement during the reporting period

Categories Opening balance Recovery or Ending balanceProvision reversal Written-off Others

Notes receivable for

which bad debt

reserve has been

provided based on

individual items

Notes receivable for

which bad debt

reserve has been 1132878.48 621723.41 511155.07

provided based on

portfolios

Total 1132878.48 621723.41 511155.07

Where the significant amount of the reserve for bad debt recovered or reversed:

Inapplicable

(3) Notes receivable already pledged by the Company at the end of the reporting period

Inapplicable

(4) Endorsed or discounted notes receivable at the end of the reporting period but not yet due on the balance

sheet date

In CNY

Items Amount involved in the termination of Amount without termination of recognition atrecognition at the end of the reporting period the end of the reporting period

Bank acceptance 3867105.40

Total 3867105.40

(5) Notes transferred to receivables due to issuer’s default at the end of the reporting period

Inapplicable

(6) Notes receivable actually written off in current period

Inapplicable

79FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

5. Accounts receivable

(1) Accounts receivable disclosed by category

In CNY

Ending balance Opening balance

Categories Book balance Bad debt reserve Book balance Bad debt reserve

Book value Book value

Amount Proportion Amount Provision Amount Proportion Amount Provisionproportion proportion

Accounts

receivable

for which

bad debt

reserve 26826283.996.14%

237870823039201.34982967297057975277170.

has been .62

88.67%37.6810.12%.1384.92%55

provided

based on

individual

items

Including

:

Accounts

receivable

for which

bad debt 40978737 93.86% 13250311 3.23% 39653706 31077029 89.88% 10756501reserve 7.88 .26 6.62 0.64 .51 3.46%

30001378

9.13

has been

provided

based on

portfolios

Including

:

Accounts

receivable 40978737

from other 7.88 93.86%

132503113965370631077029.263.23%6.620.6489.88%

107565013.46%30001378.519.13

customers

43661366 100.00% 37037393 8.48% 39957626 34575325 40462298Total 1.87 .88 7.99 8.32 100.00% .64 11.70%

30529095

9.68

Bad debt reserve provided based on individual items: Accounts receivable from other customers

In CNY

Ending balance

Description

Book balance Bad debt reserve Provision proportion Provision reason

Accounts receivable from

other customers 26826283.99 23787082.62 88.67%

Small possibility of

recovery

Total 26826283.99 23787082.62

Bad debt reserve provided based on portfolio: Accounts receivable from other customers

In CNY

Ending balance

Description

Book balance Bad debt reserve Provision proportion

Accounts receivable from other

customers 409787377.88 13250311.26 3.23%

Total 409787377.88 13250311.26

Note to the basis for determining the combination:

Accounts receivable with same aging have similar credit risk characteristics

If the provision for bad debts of accounts receivable is accrued in accordance with the general expected credit loss

model please refer to the disclosure of other receivables to disclose the relevant information of the provision for bad

debts:

Inapplicable

Disclosed based on aging

In CNY

Aging Ending balance

Within 1 year (with 1 year inclusive) 406593079.37

1 to 2 years 4977810.21

2 to 3 years 6691774.94

Over 3 years 18350997.35

3 to 4 years 18350997.35

80FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Total 436613661.87

(2) Provision recovery or reversal of reserve for bad debts during the reporting period

Provision for bad debt during the reporting period

In CNY

Amount of movement during the reporting period

Categories Opening balance Recovery or Ending balanceProvision reversal Written-off Others

Accounts

receivable with

single provision 29705797.13 85000.00 5954740.99 85000.00 36026.48 23787082.62

for expected

credit loss

Accounts

receivable with

provision for 10756501.51 2501374.43 130612.05 123047.37 13250311.26

expected credit

loss by portfolio

Total 40462298.64 2586374.43 6085353.04 85000.00 159073.85 37037393.88

Where the significant amount of the reserve for bad debt recovered or reversed:

In CNY

Organization names Amount recovered or reversed Way of recovery

Fuzhou Cangshan Suning e-buy Plaza Co.Ltd. 3981455.50 Bank transfer

Fuzhou Suning e-buy Plaza Co. Ltd. 706157.30 Bank transfer

Xiangyang Zizhen Suning e-buy Plaza

Business Management Co. Ltd. 517576.18 Bank transfer

Total 5205188.98

(3) Accounts receivable actually written off in the reporting period

In CNY

Items Amount written-off

Xi'an Tangcheng Group Co. Ltd. 85000.00

Where the important accounts receivable written-off:

Inapplicable

(4) Accounts receivable owed by the top five debtors based on the ending balance

In CNY

Organization name Ending balance of the Proportion in total ending Ending balance of the provisionaccounts receivable balance of accounts receivable for bad debts

Summary of the top five accounts

receivable in the ending balance 104324362.77 23.89% 2278271.19

Total 104324362.77 23.89%

(5) Account receivable with recognition terminated due to transfer of financial assets

Inapplicable

(6) Amount of assets and liabilities formed through transfer of accounts receivable and continuing to be

involved

Inapplicable

6. Financing with accounts receivable

Inapplicable

81FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

7. Advance payments

(1) Advance payments are presented based on ages

In CNY

Ending balance Opening balance

Aging

Amount Proportion Amount Proportion

Within 1 year 8005894.20 100.00% 8039794.97 100.00%

Total 8005894.20 8039794.97

Note to the reason why advance payments with an age exceeding 1 year and significant amount are not settled in time:

Inapplicable

(2) Advance payment to the top five payees in the ending balance collected based on the payees of the advance

payment

Organization name Ending balance Proportion in the total advance payments(%)

Summary of the advance payments in the ending

balance to the top 5 payees 4308626.86 53.82%

8. Other receivables

In CNY

Items Ending balance Opening balance

Other receivables 57386850.68 56918019.48

Total 57386850.68 56918019.48

(1) Interest receivable

1) Classification of interest receivable

Inapplicable

2) Significant overdue interest

Inapplicable

3) Provision for bad debts

Inapplicable

(2) Dividends receivable

1) Classification of dividends receivable

Inapplicable

2) Significant dividends receivable with age exceeding 1 year

Inapplicable

3) Provision for bad debts

Inapplicable

(3) Other receivables

1) Classification of other receivables based on nature of payment

In CNY

Nature of the fund Ending book balance Opening book balance

82FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Reserve for employees 5093048.28 2841915.70

Collateral deposit 49899834.88 49430408.24

Others 6505130.45 8910245.87

Total 61498013.61 61182569.81

2) Provision for bad debts

In CNY

Stage 1 Stage 2 Stage 3

Expected credit loss in Expected credit loss in

Provision for bad debt Expected credit loss in the whole duration (no the whole duration (credit Total

future 12 months credit impairment impairment already

incurred) incurred)

Balance as at January 2850206.43 1414343.90 4264550.33

012023

Balance as at January

01 2023 in the reporting

period

Provision in the reporting 32519.05 25.00 32544.05

period

Reversal in the reporting 130851.02 55230.00 186081.02

period

Other changes 149.57 149.57

Balance as at June 30 2752024.03 1359138.90 4111162.93

2023

Provision for loss - Change of the book balance with significant amount during the reporting period

Inapplicable

Disclosed based on aging

In CNY

Aging Ending balance

Within 1 year (with 1 year inclusive) 59512781.85

1 to 2 years 498803.32

2 to 3 years 702029.90

Over 3 years 784398.54

3 to 4 years 784398.54

Total 61498013.61

3) Provision recovery or reversal of reserve for bad debts during the reporting period

Provision for bad debt during the reporting period

In CNY

Amount of movement during the reporting period

Categories Opening balance Ending balance

Provision Recovery orreversal Written-off Others

Provision for bad

debt 4264550.33 32544.05 186081.02 149.57 4111162.93

Total 4264550.33 32544.05 186081.02 149.57 4111162.93

Where a significant amount of the reserve for bad debt recovered or reversed during the reporting period:

Inapplicable

4) Other receivables actually written off in the reporting period

Inapplicable

5) Accounts receivable owed by the top five debtors based on the ending balance

In CNY

Proportion in total Ending balance of

Organization name Nature of Payment Ending balance Aging ending balance of the provision for bad

other receivables debts

Summary of the top

five other receivables Collateral anddeposit 9157527.22 Within 1 year 14.89% 457876.36in the ending balance

83FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Total 9157527.22 14.89% 457876.36

6) Accounts receivable involving government subsidy

Inapplicable

7) Other receivables derecognized due to transfer of financial assets

Inapplicable

8) Amount of assets and liabilities formed through transfer of other receivables and continuing to be involved

Inapplicable

9. Inventories

Does the Company need to comply with the requirements on information disclosure for real estate industry

No

(1) Classification of inventories

In CNY

Ending balance Opening balance

Provision for price Provision for price

falling of inventory or falling of inventory or

Items

Book balance provision for Book value Book balance provision forimpairment of impairment of Book value

contract performance contract performance

costs costs

Raw 161850331.54 17653314.17 144197017.37 162338704.65 17241512.65 145097192.00

materials

Products in 10056978.44 10056978.44 7204699.11 7204699.11

process

Commodities 2027169791.07 96042984.40 1931126806.67 2085640712.37 96622229.81 1989018482.56

in stock

Total 2199077101.05 113696298.57 2085380802.48 2255184116.13 113863742.46 2141320373.67

(2) Provision for price falling of inventory or provision for impairment of contract performance costs

In CNY

Amount increased in the reporting

period Decrease in the reporting period

Items Opening balance Ending balance

Provision Others Reversal orwrite-off Others

Raw materials 17241512.65 411801.52 17653314.17

Commodities in 96622229.81 34011.93 613257.34 96042984.40

stock

Total 113863742.46 445813.45 613257.34 113696298.57

Items Evidence of determine NRV and future selling cost Reversal or write-off during the reporting periodCause of the provision for price falling of inventories

Raw materials Estimated selling price less estimated cost to complete and Factors that caused impairment has been disappearedselling and distribution expenses and associated taxes and the NAV is higher than its carrying amount

Commodities in Estimated selling price less estimated selling and distributing Inventory that already provided for was sold or used in

stock expenses and associated taxes current period

(3) Note to the amount of capitalized borrowing costs involved in the ending balance of inventories

Inapplicable

(4) Description of the current amortization amount of contract performance costs

Inapplicable

84FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

10. Contract assets

Inapplicable

11. Held-for-sale assets

Inapplicable

12. Non-current assets due within a year

Inapplicable

13. Other current assets

In CNY

Items Ending balance Opening balance

excess VAT paid 13493362.67 12967188.47

Input VAT to be certified 13402110.47 39454283.19

Income tax paid in advance 2299239.63 3419026.38

Others 10113909.03 10499007.28

Total 39308621.80 66339505.32

14. Equity investment

Inapplicable

15. Other equity investment

Inapplicable

16. Long term accounts receivable

(1) About long term accounts receivable

Inapplicable

(2) Long term account receivable derecognized due to transfer of financial assets

Inapplicable

(3) Amount of assets and liabilities formed through transfer of long term accounts receivable and continuing to

be involved

Inapplicable

17. Long-term equity investments

In CNY

Increase/ Decrease (+ / -) in the reporting period

Ending

Income

Opening from equity Adjustme Announce Ending

balance

of the

Investees balance Additional

Decreas Other d for Provision balance

(book investme e of

investment nt of other provision

investm recognized comprehe

equity distributin for (book

value) nt under nsive movemen g cash impairme

Others

value) for

ent equity income t dividend nt

impairme

method or profit

nt

I. Joint Venture

II. Associates

Shanghai

Watch 5818208 -1697481. 5648460

Industry 6.90 65 5.25

Co. Ltd.

85FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

5818208-1697481.5648460

Sub-total 6.90 65 5.25

5818208-1697481.5648460

Total 6.90 65 5.25

18. Investment in other equity instruments

In CNY

Items Ending balance Opening balance

Xi'an Tangcheng Group Co. Ltd. 0.00 85000.00

Total 0.00 85000.00

Itemized disclosure of investment in non-transactional equity instruments in the reporting period

Inapplicable

19. Other non-current financial assets

Inapplicable

20. Investment based real estate

(1) Investment property measured based on the cost method

In CNY

Items Housing & buildings Land use right Construction-in-progress Total

I. Original book value

1. Opening balance 619762618.36 619762618.36

2. Amount increased in

the reporting period

(1) Purchased

(2) Inventories\fixed

assets/construction-in–progre

ss transferred in

(3) Increase of

enterprise consolidation

3. Amount decreased in

the reporting period

(1) Disposal

(2) Other transfer

out

4. Ending balance 619762618.36 619762618.36

II. Accumulative depreciation

and accumulative

amortization

1. Opening balance 244783123.65 244783123.65

2. Amount increased in 7839242.82 7839242.82

the reporting period

(1) Provision or 7839242.82 7839242.82

amortization

3. Amount decreased in

the reporting period

(1) Disposal

(2) Other transfer

out

4. Ending balance 252622366.47 252622366.47

III. Provision for impairment

1. Opening balance

2. Amount increased in

the reporting period

(1) Provision

3. Amount decreased in

the reporting period

(1) Disposal

(2) Other transfer

out

4. Ending balance

IV. Book value

1.Book value at the end 367140251.89 367140251.89

of the reporting period

2.Book value at the 374979494.71 374979494.71

86FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

beginning of the reporting

period

(2) Investment property measured based on fair value

Inapplicable

(3) Investment property that does not have certificate for property right

Inapplicable

21. Fixed asset

In CNY

Items Ending balance Opening balance

Fixed asset 356142836.23 364628765.17

Total 356142836.23 364628765.17

(1) About fixed assets

In CNY

Housing & buildings Machinery & Motor vehicle ElectronicItems equipment equipment Others Total

I. Original book

value

1. Opening 436320947.20 117552809.38 14472510.38 47600350.65 45458802.97 661405420.58

balance

2. Amount

increased in the 4073026.96 2546928.33 22133.50 967232.86 565462.83 8174784.48

reporting period

(1)913540.151010713.5222133.50910214.97426929.903283532.04

Purchase

(2)

Construction-in-pro

cess transferred in

(3)

Increase of

business

combination

(4) Translation

difference in foreign

currency 3159486.81 1536214.81 57017.88 138532.93 4891252.43

statements

3. Amount

decreased in the 442670.05 1107530.63 827091.61 2377292.29

reporting period

(1)

Disposal or 442670.05 1107530.63 827091.61 2377292.29

scrapping

4. Ending 440393974.16 120099737.71 14051973.83 47460052.88 45197174.19 667202912.77

balance

II. Accumulative

depreciation

1. Opening 135388740.98 71466324.74 12901120.89 37167150.60 39853318.20 296776655.41

balance

2. Amount

increased in the 8633075.14 5362220.14 166731.15 1291766.11 780574.73 16234367.28

reporting period

(1)6577515.704073216.85166731.151246360.85643223.8212707048.37

Provision

(2) Translation

difference in foreign

currency 2055559.45 1289003.29 45405.26 137350.91 3527318.91

statements

3. Amount

decreased in the 420536.55 916580.94 613828.66 1950946.15

reporting period

(1)

Disposal or 420536.55 916580.94 613828.66 1950946.15

scrapping

4. Ending 144021816.12 76828544.88 12647315.49 37542335.77 40020064.27 311060076.54

balance

III. Provision for

impairment

1. Opening

balance

2. Amount

increased in the

reporting period

87FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

(1)

Provision

3. Amount

decreased in the

reporting period

(1)

Disposal or

scrapping

4. Ending

balance

IV. Book value

1.Book value at

the end of the 296372158.04 43271192.83 1404658.34 9917717.11 5177109.92 356142836.23

reporting period

2.Book value at

the beginning of the 300932206.22 46086484.64 1571389.49 10433200.05 5605484.77 364628765.17

reporting period

(2) About temporarily idle fixed assets

Inapplicable

(3) Fixed assets leased through operating lease

Inapplicable

(4) Fixed assets that do not have certificate for property right

In CNY

Items Book value The reason why the title certificate has notbeen granted

Housing & buildings 30941254.14 Not yet completed

Housing & buildings 198768.71 There existed problem in ownership

(5) Disposal of fixed assets

Inapplicable

22. Construction-in-progress

Inapplicable

(1)About construction-in-progress

Inapplicable

(2) Movements of important construction-in-progress projects in the reporting period

Inapplicable

(3) Provision for impairment of construction in progress in the current period

Inapplicable

(4) Engineering materials

Inapplicable

23. Productive biological asset

(1) Productive biological asset by using the cost measurement model

Inapplicable

88FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

(2) Productive biological asset by using the fair value measurement model

Inapplicable

24. Oil and Gas Assets

Inapplicable

25. Right-of-use Assets

In CNY

Items Housing & buildings Total

I. Original book value

1. Opening balance 362417078.85 362417078.85

2. Amount increased in the reporting 27157628.92 27157628.92

period

(1) Lease 27156080.80 27156080.80

(2) Translation difference in foreign currency

statements 1548.12 1548.12

3. Amount decreased in the reporting 40531858.34 40531858.34

period

(1) Expiry of tenancy 38437066.38 38437066.38

(2) Other decreases 2094791.96 2094791.96

4. Ending balance 349042849.43 349042849.43

II. Accumulative depreciation

1. Opening balance 252086566.82 252086566.82

2. Amount increased in the reporting 50579624.79 50579624.79

period

(1) Provision 50579624.79 50579624.79

3. Amount decreased in the reporting 40857442.68 40857442.68

period

(1) Disposal 1160251.39 1160251.39

(2) Expiry of tenancy 39308277.33 39308277.33

(3) Other decreases 388913.96 388913.96

4. Ending balance 261808748.93 261808748.93

III. Provision for impairment

1. Opening balance

2. Amount increased in the reporting

period

(1) Provision

3. Amount decreased in the reporting

period

(1) Disposal

4. Ending balance

IV. Book value

1.Book value at the end of the reporting 87234100.50 87234100.50

period

2.Book value at the beginning of the 110330512.03 110330512.03

reporting period

26. Intangible assets

(1) About the intangible assets

In CNY

Items Land use right Patent Right Non-patent Software system Trademark rightstechnology Total

I. Original book

value

1. Opening 34933822.40 33197692.51 16518590.29 84650105.20

balance

2. Amount

increased in the 90000.00 122616.24 212616.24

reporting period

(1)90000.00122616.24212616.24

Purchase

(2) Internal

R & D

89FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

(3)

Increase of

business

combination

3. Amount

decreased in the

reporting period

(1)

Disposal

4. Ending 35023822.40 33320308.75 16518590.29 84862721.44

balance

II. Accumulative

amortization

1. Opening 16515922.01 25903908.15 9030056.41 51449886.57

balance

2. Amount

increased in the 366776.65 874444.06 612598.41 1853819.12

reporting period

(1)366776.65874444.06612598.411853819.12

Provision

3. Amount

decreased in the

reporting period

(1)

Disposal

4. Ending 16882698.66 26778352.21 9642654.82 53303705.69

balance

III. Provision for

impairment

1. Opening

balance

2. Amount

increased in the

reporting period

(1)

Provision

3. Amount

decreased in the

reporting period

(1)

Disposal

4. Ending

balance

IV. Book value

1.Book value at

the end of the 18141123.74 6541956.54 6875935.47 31559015.75

reporting period

2.Book value at

the beginning of the 18417900.39 7293784.36 7488533.88 33200218.63

reporting period

At the end of the reporting period the intangible assets formed through the Company's internal research and

development accounted for 0.00% of the balance of intangible assets.

(2) About the land use right that does not have certificate of title

Inapplicable

27. Development expenditure

Inapplicable

28. Goodwill

(1) Original book value of the goodwill

Inapplicable

(2) Provision for impairment of the goodwill

Inapplicable

90FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

29. Long term expenses to be apportioned

In CNY

Items Opening balance Amount increased in Amount amortized inthe reporting period the reporting period Other decrease Ending balance

Charge of fabrication

of special counters 22247070.17 5191622.68 10324598.31 17114094.54

Decoration

expenses 116030323.61 21605559.10 30885043.21 106750839.50

Others 6211058.40 288304.21 5410962.05 1088400.56

Total 144488452.18 27085485.99 46620603.57 124953334.60

30. Deferred tax assets and deferred tax liabilities

(1) Deferred income tax asset without offsetting

In CNY

Ending balance Opening balance

Items Offsetable provisional Deferred income tax Offsetable provisional Deferred income tax

difference asset. difference asset.Asset impairment reserve 128613031.38 28990110.15 143503292.94 30225885.07

Unrealized profit from the

intracompany 62320154.02 15530810.81 75781866.09 18681772.44

transactions

Offsetable loss 173670367.97 42693574.15 157860317.75 37779977.71

Equity incentive 6771029.72 1594027.74 23141270.85 5411762.47

Promotion expenses

available for

carrying-forward to the 515068.99 128767.25

next year

Lease liabilities 98448712.63 24583069.44 113136916.00 28284229.00

Others 7895926.80 1973981.70 7295926.80 1823981.80

Total 477719222.52 115365573.99 521234659.42 122336375.74

(2) Deferred income tax liabilities without offsetting

In CNY

Ending balance Opening balance

Items Provisional difference Deferred income tax Provisional difference of Deferred income tax

of taxes payable liability taxes payable liability

Fixed assets deducted in

once-and-for-all way before 28913730.11 4337059.52 29872344.91 4480851.74

taxation

Right-of-use Assets 97585959.35 24367470.13 110279028.02 27569757.01

Total 126499689.46 28704529.65 140151372.93 32050608.75

(3) Deferred income tax asset or liabilities stated with net amount after offsetting

In CNY

Amount mutually offset

between the deferred Ending balance of the

Amount mutually offset Opening balance of the

Items income tax assets and deferred income tax

between the deferred

income tax assets and deferred income tax

liabilities at the end of the asset or liabilities after liabilities at the beginning asset or liabilities after

reporting period offsetting of the reporting period offsetting

Deferred income tax 23262880.76 92102693.23 26551763.80 95784611.94

asset.Deferred income tax 23262880.76 5441648.89 26551763.80 5498844.95

liability

(4) Statement of deferred income tax asset not recognized

In CNY

Items Ending balance Opening balance

Provision for impairment of assets 17012250.30 16220176.97

Offsetable loss 47715557.14 50761915.00

Total 64727807.44 66982091.97

91FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

(5) Unrecognized deferred income tax asset available for offsetting loss is going to expire in the following

years

In CNY

Year Amount at the end of thereporting period Amount at the year beginning Remarks

20245410461.098456818.95

202518449678.5018449678.50

202623855417.5523855417.55

Total 47715557.14 50761915.00

31. Other non-current assets

In CNY

Ending balance Opening balance

Items

Book balance Provision forimpairment Book value Book balance

Provision for

impairment Book value

Advance payment

for long term assets 12604532.04 12604532.04 11593741.57 11593741.57

Total 12604532.04 12604532.04 11593741.57 11593741.57

32. Short term borrowings

(1) Classification of short-term borrowings

In CNY

Items Ending balance Opening balance

Credit loan 390000000.00 290000000.00

Undue interest payable 273749.99 237111.11

Total 390273749.99 290237111.11

(2)Short-term borrowings overdue but still remaining outstanding

Inapplicable

33. Transactional financial liabilities

Inapplicable

34. Derivative financial liabilities

Inapplicable

35. Notes payable

In CNY

Category Ending balance Opening balance

Commercial acceptance bills 2000600.00

Total 2000600.00

The total amount of due but outstanding notes payable at the end of the reporting period is CNY 0.00.

36. Accounts payable

(1) Presentation of accounts payable

In CNY

Items Ending balance Opening balance

Payment for goods 168155513.01 149811781.06

Payment for materials 22297895.29 19729474.20

Engineering payment payable 1034800.53 1048201.41

Total 191488208.83 170589456.67

92FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

(2) Significant accounts payable with age exceeding 1 year

Inapplicable

37.Advance Receipts

(1) Statement of advances from customers

In CNY

Items Ending balance Opening balance

Rent received in advance 9945161.72 16960128.83

Total 9945161.72 16960128.83

(2) Significant advances from customers with age exceeding 1 year

Inapplicable

38. Contract liabilities

In CNY

Items Ending balance Opening balance

Payment for goods 19287771.81 16844437.47

Total 19287771.81 16844437.47

The amount involved in the significant change of the book value and the cause during the reporting period

Inapplicable

39. Payroll payable to employees

(1) Presentation of payroll payable to the employees

In CNY

Items Opening balance Increase in the reporting Decrease in the reportingperiod period Ending balance

I. Short term 122389603.47 285457917.07 305981244.68 101866275.86

remuneration

II. Post-employment

benefit program - defined 9282692.00 23046218.60 23781610.47 8547300.13

contribution plan.III. Dismissal welfare 4915643.91 2054382.52 6196361.50 773664.93

Total 136587939.38 310558518.19 335959216.65 111187240.92

(2) Presentation of short term remuneration

In CNY

Items Opening balance Increase in the reporting Decrease in the reportingperiod period Ending balance

1. Salaries bonus 121169046.53 255699465.59 275765045.21 101103466.91

allowances and subsidies

2. Staff’s welfare 10643.28 4904729.50 4910920.78 4452.00

3. Social security 404028.29 11030921.06 11404082.79 30866.56

premium

Including: medical 404028.29 10401071.69 10774233.42 30866.56

insurance premium

Work injury 467199.86 467199.86

insurance

Maternity 359188.24 359188.24

Insurance

4. Public reserve for 169121.00 10040520.84 10187999.84 21642.00

housing

5. Trade union fund and 636764.37 3782280.08 3713196.06 705848.39

staff education fund

Total 122389603.47 285457917.07 305981244.68 101866275.86

93FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

(3) Presentation of the defined contribution plan

In CNY

Items Opening balance Increase in the reporting Decrease in the reportingperiod period Ending balance

1. Basic endowment 290781.95 20757450.87 20786597.50 261635.32

insurance premium

2. Unemployment 581.68 550463.15 550581.89 462.94

insurance premium

3. Contribution to the

enterprise annuity 8991328.37 1738304.58 2444431.08 8285201.87

scheme

Total 9282692.00 23046218.60 23781610.47 8547300.13

40. Taxes payable

In CNY

Items Ending balance Opening balance

Value-added tax 38636532.43 39086878.23

Enterprise income tax 29802234.48 16751872.66

Individual income tax 1104976.43 1070872.15

Urban maintenance and construction tax 350547.55 1353097.21

Education Surcharge 169969.72 966809.02

Others 3783922.64 1540639.03

Total 73848183.25 60770168.30

41. Other payables

In CNY

Items Ending balance Opening balance

Dividends payable 2889585.48 6324013.97

Other payables 126277971.34 158736108.61

Total 129167556.82 165060122.58

(1) Interest payable

Inapplicable

(2) Dividend payable

In CNY

Items Ending balance Opening balance

Dividends of common shares 2889585.48 6324013.97

Total 2889585.48 6324013.97

Other notes including that if significant dividends payable have not been paid for more than 1 year it is necessary to

disclose the reasons for non-payment：

Inapplicable

(3) Other payables

1) Other payments stated based on nature of fund

In CNY

Items Ending balance Opening balance

Cash pledge or cash deposit 35883820.09 38319837.05

Fund for shop-front activities 25644797.87 16105216.84

Refurbishment 10668322.92 12827532.03

Obligation of repurchase of restricted shares 13829399.95 50759806.16

Others 40251630.51 40723716.53

Total 126277971.34 158736108.61

94FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

2) Other payables in significant amount and with aging over 1 year

In CNY

Items Ending balance Cause of failure in repayment or carry-over

Deposit for property rent 16810342.85 Settlement not due yet

Total 16810342.85

42. Held-for-sale liabilities

Inapplicable

43. Non-current liabilities due within a year

In CNY

Items Ending balance Opening balance

Long-term rent liabilities due within one year 57351473.17 71546316.16

Total 57351473.17 71546316.16

44. Other current liabilities

In CNY

Items Ending balance Opening balance

Pending output VAT 2146851.31 1686806.01

Total 2146851.31 1686806.01

Increase/decrease of the short term bonds payable:

Inapplicable

45. Long-term Loan

(1) Classification of Long-term Borrowings

Inapplicable

46. Bonds payable

(1) Bonds payable

Inapplicable

(2) Increase/Decrease of bonds payable (excluding other financial instruments classified as financial liabilities

such as preferred shares perpetual bonds etc.)

Inapplicable

(3) Note to the conditions and time of share conversion of convertible company bonds

Inapplicable

(4) Note to other financial instruments classified as financial liabilities

Inapplicable

47. Rent liabilities

In CNY

Items Ending balance Opening balance

Housing & buildings 88096853.79 113188877.74

Less: Long-term rent liabilities due within one

year -57351473.17 -71546316.16

Total 30745380.62 41642561.58

95FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

48. Long term accounts payable

(1) Long term accounts payable stated based on the nature

Inapplicable

(2) Special accounts payable

Inapplicable

49. Long term payroll payable to employees

(1) Statement of long term payroll payable to employees

Inapplicable

(2) Change of defined benefit plans

Inapplicable

50. Estimated liabilities

Inapplicable

51. Deferred income

In CNY

Items Opening balance Increase in the Decrease in thereporting period reporting period Ending balance Cause of formation

Government 1295926.80 1295926.80

subsidies

Total 1295926.80 1295926.80

Items involving government subsidies:

In CNY

Amount of Amount

newly counted to Amount Amount

added the counted to offsetting Related with

Liabilities Opening the other costs and Other Endingbalance subsidy in non-operatinthe g income in income in expenses in changes balance

assets/relate

reporting the reporting the reporting the reporting

d with income

period period period period

Special

purpose fund

of Shenzhen Related with

industrial 314539.36 314539.36 assets

design

development

Funding

project for

construction

of enterprise 338833.33 338833.33 Related withtechnology assets

center

designated

by the state

Special

purpose fund

for the

Industry and Related with

Informationiz 642554.11 642554.11 assets

ation at

Provincial

Level

96FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

52. Other non-current liabilities

Inapplicable

53. Capital stock

In CNY

Increase / Decrease (+/ -)

Opening balance Bonus Shares Ending balanceNew issuing shares converted from Others Sub-totalreserve

Total Shares 417627960.00 417627960.00

54. Other equity instruments

(1) Basic information on the outstanding other financial instruments including preferred shares perpetual

bonds etc. at the end of the reporting period

Inapplicable

(2) Movement of the outstanding financial instruments including preferred shares perpetual bonds etc. at the

end of the reporting period

Inapplicable

55. Capital reserve

In CNY

Items Opening balance Increase in the reporting Decrease in the reportingperiod period Ending balance

Capital premium (capital 969665728.36 12799265.10 2734.41 982462259.05

stock premium)

Other capital reserve 37420915.12 1359195.75 17888062.96 20892047.91

Total 1007086643.48 14158460.85 17890797.37 1003354306.96

Other notes including the note to its increase/decrease and the cause(s) of its movement in the reporting period:

1. According to the "Proposal on Granting Restricted Stocks to the Incentive Recipients of 2018 A-share Restricted

Stock Incentive Plan (Phase II)" and the "Proposal on the Failure in Satisfying the Conditions for Lifting the Restrictions

during the Second Period of the 2018 A-share Restricted Stock Incentive Plan (Phase II) and the Repurchase and

Cancellation of Some Restricted Stocks" passed by the Company's Board of Directors and the General Meeting in the

first half of 2023 the services obtained by the Company from the above-mentioned incentive recipients were included in

relevant costs or expenses and the corresponding reduction in capital reserve amounted to CNY 5088797.86.

2. According to the Plan for Repurchasing some Domestically Listed Foreign Shares (B-shares) of the Company

approved by the Board of Directors and the General Meeting in the first half year of 2023，the Company repurchased its

own shares through a centralized bidding method with the special account for the securities repurchased at expense

equivalent to CNY 2734.41 which has written off capital reserve amounting to CNY 2734.41.

3. Differences caused by fair value different when unlock the restricted shares between CIT deducted amount and cost

or expenses recognized in vesting period increased the capital reserve by CNY 1359195.75. Meanwhile the

reclassification of capital reserves was adjusted for the unlocked part other capital reserves decreased by CNY

12799265.10 and capital premium increased by CNY 12799265.10.

56. Treasury shares

In CNY

Items Opening balance Increase in the reporting Decrease in the reportingperiod period Ending balance

Decrease of the

repurchase of the 17007830.70 17007830.70

registered capital

Payment for restricted

shares 50759806.16 20637919.21 30121886.95

Total 50759806.16 17007830.70 20637919.21 47129717.65

Other notes including the note to its increase/decrease and the cause(s) of its movement in the reporting period:

97FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

1. In the first half year of 2023，the Company repurchased accumulatively 2403565 shares of the Company's B-shares

through a centralized bidding method with Shenzhen Stock Exchange and paid HKD 18653010.10 (with trading cost

exclusive) which was equivalent to CNY 17007830.70. As a result the treasury stock increased by CNY

17007830.70.

2. In the first half year of 2023the cash dividends corresponding to the remaining restricted shares were reduced by

CNY 1138902.50 for treasury shares.

3. According to the Proposal on the Achievement of Lifting Restrictions during the Third Period of the 2018 A-share

Restricted Stock Incentive Plan (Phase I) and the Proposal on the Achievement of Lifting Restrictions during the First

Period of the 2018 A-share Restricted Stock Incentive Plan (Phase II) which were reviewed and approved by the

Company's Board of Directors and the General Meeting the Company satisfied the conditions for lifting the restrictions

for the third restriction lifting period of 2018 A-share Restricted Stock Incentive Plan (Phase I) as well as the conditions

for lifting the restrictions for the first restriction lifting period of 2018 A-share Restricted Stock Incentive Plan (Phase II).Authorized by the General Meeting the Board of Directors of the Company handled the lifting of sales restriction for

incentive recipients that had meet the conditions for lifting sales restriction in accordance with relevant regulations. The

shares that had satisfied the conditions for lifting sales restrictions were listed for trading on January 31 2023 and the

corresponding dividends amounting to CNY 19499016.71 were reduced by treasury shares.

57. Other comprehensive income

In CNY

Amount incurred in the reporting period

Less: the Less: the amount

amount counted counted to the

Amount to the other other

Opening incurred comprehensive comprehensive Less: Attributable to Attributable toItems Endingbalance before profit of the profit of the Income tax the parent minority balanceincome tax in previous period previous period expense company after shareholdersthe reporting was transferred was transferred tax after tax

period to the profit and to the retained

loss of the earnings of the

reporting period. current period.I. Other

comprehensive

income which

cannot be

re-classified into

profit and loss

Where: Amount of

change of the

beneficial plan

remeasured for

setting

Other

comprehensive

income which

cannot be

converted into

gain and loss

based on the

equity method

Movement of the

fair value of the

investment in

other equity

instruments

Movement of the

fair value of the

Company’s own

credit risk

II. Other

comprehensive

income which 5739589. 9405009.07 9405009.07 15144598.96

shall be 89

re-classified into

profit and loss

Where other

comprehensive

income which can

be converted into

gain and loss

based on the

equity method

Change of the fair

value of the

investment in

other creditor

investment

Amount of the

reclassified

98FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

financial assets

counted to the

other

comprehensive

income

Provision for

impairment of the

credit of the other

debt investment

Reserve for cash

flow hedge

Conversion

difference in 5739589. 9405009.07 9405009.07 15144598.96

foreign currency 89

statements

Total other 5739589.comprehensive 89 9405009.07 9405009.07 15144598.96

income

58. Special reserve

In CNY

Items Opening balance Increase in the reporting Decrease in the reportingperiod period Ending balance

Safety production costs 2012064.91 816618.92 81420.83 2747263.00

Total 2012064.91 816618.92 81420.83 2747263.00

59. Surplus Reserve

In CNY

Items Opening balance Increase in the reporting Decrease in the reportingperiod period Ending balance

Statutory surplus reserve 213025507.50 213025507.50

Discretionary surplus 61984894.00 61984894.00

reserve

Total 275010401.50 275010401.50

Note to surplus reserve including the note to its increase/decrease and the cause(s) of its movement in the reporting

period:

According to the Company Law and the Articles of Association the Company provided statutory surplus reserve based

on 10% of the net profit. When the accumulative amount of the statutory surplus reserve exceeds 50% of the

Company’s registered capital no such reserve shall be provided any longer.After provision of the statutory surplus reserve the Company may provide free surplus reserve. With authorization the

free surplus reserve may be used to make up for the deficits of previous years or increase capital stock.

60. Retained earnings

In CNY

Items Reporting period Previous period

Retained earnings at the end of the previous 1479706638.53 1338444326.09

period before the adjustment

After adjustment: Retained earnings at the 1479706638.53 1338444326.09

beginning of the reporting period

Plus: Net profit attributable to the parent 187395067.23 266681451.84

company’s owner in the report period

Dividends of common shares payable 104157772.00 125419139.40

Retained earnings at the end of the reporting 1562943933.76 1479706638.53

period

Statement of adjustment of retained earnings at the beginning of the reporting period:

1). The amount involved in the retroactive adjustment according to the Enterprise Accounting Standards and the

relevant new provisions influencing the retained earnings at the beginning of the reporting period was CNY 0.00.

2). The amount involved in change of the accounting policy influencing the retained earnings at the beginning of the

reporting period was CNY 0.00.

3). The amount involved in correction of the significant accounting errors influencing the retained earnings at the

beginning of the reporting period was CNY 0.00.

99FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

4). The amount involved in change of the consolidation scope caused by the common control influencing the retained

earnings at the beginning of the reporting period was CNY 0.00.

5). The total amount involved in other adjustments influencing the retained earnings at the beginning of the reporting

period was CNY 0.00.

61. Operation Income and Costs

In CNY

Amount incurred in the reporting period Amount incurred in the previous period

Items

Income Cost Income Cost

Principal business 2356716526.00 1512310635.56 2176850503.24 1373173952.09

Other businesses 7788736.56 216846.27 6720245.87 490608.32

Total 2364505262.56 1512527481.83 2183570749.11 1373664560.41

Information in connection with the revenue:

In CNY

Classification of

Contracts Segment 1 Segment 2 Total

Types of commodities

Including:

Watch brand business 396794035.90 396794035.90

Watch retail and services 1813444463.53 1813444463.53

Precision technology 67709263.28 67709263.28

Leases 78768763.29 78768763.29

Others 7788736.56 7788736.56

Classification based on

the operation regions

Including:

South China 1085243222.03 1085243222.03

Northwest China 364119542.91 364119542.91

North China 127379519.35 127379519.35

East China 293815408.18 293815408.18

Northeast China 183610107.98 183610107.98

Southwest China 310337462.11 310337462.11

Information concerning obligation performance:

For the detail refer to Note V. 39.Information related to the transaction price allocated to the remaining obligations performance:

At the end of the reporting period the amount of revenue corresponding to the performance obligations of the contracts

which have been signed but not yet performed or not yet completed is CNY 0.00 of which CNY 0.00 is expected to be

recognized as revenue in year_____ CNY 0.00 is expected to be recognized as revenue in year______ and CNY 0.00

is expected to be recognized as revenue in year _____.

62. Taxes and surcharges

In CNY

Items Amount incurred in the reporting period Amount incurred in the previous period

Consumption tax 1764057.54 1080093.60

Urban maintenance and construction tax 4791269.83 4471185.46

Education Surcharge 3381982.77 3176217.12

Real estate tax 3557771.54 3617599.55

Land use tax 186994.62 202038.96

Tax on using vehicle and boat 2880.00 2880.00

Stamp duty 1492951.96 1271846.47

Others 584547.81 379332.17

Total 15762456.07 14201193.33

100FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

63. Sales expenses

In CNY

Items Amount incurred in the reporting period Amount incurred in the previous period

Payroll to employees 184843963.06 207143891.55

Shopping mall and rental fees 82289084.29 76494295.56

Advertising exhibition and market promotion

fee 66569380.88 57874652.62

Depreciation and amortization 91843176.93 107506179.52

Packing expenses 4588450.00 4439070.05

Water & power supply and property

management fee 11172272.71 11198105.55

Freight 2972928.76 2865405.58

Office expenses 2929620.97 2712847.35

Business travel expenses 3826254.03 2022337.58

Business entertainment 1947349.51 1346935.04

Others 3291148.06 4202320.36

Total 456273629.20 477806040.76

64. Administrative expenses

In CNY

Items Amount incurred in the reporting period Amount incurred in the previous period

Payroll to employees 83415424.92 90844037.52

Depreciation and amortization 11499296.13 11956926.63

Business travel expenses 2036742.28 610091.19

Office expenses 1561690.78 2112092.81

Service fee to intermediary agencies 1750354.69 1632375.61

Water electricity property and rent 1735898.86 1529714.92

Business entertainment 567726.27 288878.74

Trucks and freight 919436.00 631799.40

Communication fee 195521.76 376723.40

Others 939637.92 6733024.47

Total 104621729.61 116715664.69

65. R & D expenditures

In CNY

Items Amount incurred in the reporting period Amount incurred in the previous period

Payroll to employees 22913768.63 19230230.93

Sample and material charges 663576.68 797464.23

Cost of moulds -4970.13 98716.00

Depreciation and amortization 2243045.93 2501878.19

Technical cooperation fee 444619.97 -136897.08

Others 1901429.46 2535321.58

Total 28161470.54 25026713.85

66. Financial expenses

In CNY

Items Amount incurred in the reporting period Amount incurred in the previous period

Interest payment 6690859.35 9731247.68

Less: Interest income 2432180.03 1981825.39

Exchange gain & loss 1335231.32 -1648258.56

Service charges and miscellaneous 6594306.18 5776243.25

Total 12188216.82 11877406.98

67. Other income

In CNY

Source of arising of other income Amount incurred in the reporting period Amount incurred in the previous period

Government subsidies 6691609.41 13369782.95

101FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

68. Return on investment

In CNY

Items Amount incurred in the reporting period Amount incurred in the previous period

Income from long term equity investment -1697481.65 2462626.52

based on equity method

Total -1697481.65 2462626.52

69. Net exposure hedge income

Inapplicable

70. Income from change of the fair value

Inapplicable

71. Loss from impairment of credit

In CNY

Items Amount incurred in the reporting period Amount incurred in the previous period

Provision for bad debt of other receivables 153871.31 174478.00

Loss from bad debt of notes receivable 621723.41 463943.28

Loss from bad debt of accounts receivable 3558352.90 -636572.43

Total 4333947.62 1848.85

72. Loss from impairment of assets

In CNY

Items Amount incurred in the reporting period Amount incurred in the previous period

I. Loss from impairment of assets

II. Loss from price falling of inventory and

loss from impairment of contract -348218.69

performance costs

III. Loss from impairment of long-term equity

investment

IV. Loss from impairment of investment

property

V. Loss from impairment of fixed assets

VI. Loss from impairment of engineering

supplies

VII. Loss from impairment of

construction-in-progress

VIII. Loss of impairment of productive

biological asset

IX. Loss from impairment of oil and gas

assets

X. Loss from impairment of intangible assets

XI. Loss from impairment of goodwill

XII. Loss from impairment of assets

XIII. Others

Total -348218.69

73. Income from disposal of assets

In CNY

Source of income from disposal of assets Amount incurred in the reporting period Amount incurred in the previous period

Profit or loss from disposal of fixed assets -89254.33 -14180.88

Profit or loss from disposal of right-of-use

assets 12564.60 -801840.28

74. Non-operating income

In CNY

Items Amount incurred in the reporting Amount incurred in the previous Amount counted to the currentperiod period non-operating gain and loss

Default compensation income 286740.28 146132.71 286740.28

102FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Accounts payable unnecessary

to be paid 226699.03 0.40 226699.03

Others 83084.52 62454.77 83084.52

Total 596523.83 208587.88 596523.83

Government subsidy counted to the current profit and loss:

Inapplicable

75. Non-operating expenditure

In CNY

Items Amount incurred in the reporting Amount incurred in the previous Amount counted to the currentperiod period non-operating gain and loss

Loss from non-monetary assets

exchange

Outward donation

Fine and overdue fine 208833.38 15080.06 208833.38

default fine 54416.71 693689.72 54416.71

Others 28351.09 117127.58 28351.09

Total 291601.18 825897.36 291601.18

76. Income tax expense

(1) Income tax expense

In CNY

Items Amount incurred in the reporting period Amount incurred in the previous period

Income tax expenses in the reporting period 52147601.16 43213735.62

Deferred income tax expense 4983918.40 -5574641.83

Total 57131519.56 37639093.79

(2) Process of adjustment of accounting profit and income tax expenses

In CNY

Items Amount incurred in the reporting period

Total profit 244526586.79

Income tax expense calculated based on the statutory/ applicable tax 61131646.70

rate

Influence of different tax rates applicable to subsidiaries -3026153.58

Influence of adjustment of the income tax in the previous period 474249.39

Influence of the non-taxable income 424370.41

Influence of the non-offsetable costs expenses and loss 842051.77

The effect of using deductible losses of deferred income tax assets -257100.89

that have not been recognized in the previous period

Influence from the addition of the R & D expenses upon deduction oftax payment (to be stated with “-“) -2457544.24Income tax expense 57131519.56

77. Other comprehensive income

For the detail refer to Note VII. 57.

78. Cash Flow Statement Items

(1) Other operation activities related cash receipts

In CNY

Items Amount incurred in the reporting period Amount incurred in the previous period

Collateral and deposit 4310663.92 6532789.76

Government subsidies 6623312.69 13193456.48

Commodity promotion fee 6824544.07 4611388.01

Interest income 2432180.03 1985621.79

Reserve 3098754.09 2740310.90

Others 14009396.39 8516510.57

103FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Total 37298851.19 37580077.51

(2) Other operation activities related cash payments

In CNY

Items Amount incurred in the reporting period Amount incurred in the previous period

Collateral and deposit 8763786.62 7419015.67

Reserve 6711750.04 5082764.84

Period expenses 162631345.85 138375768.78

Others 4342740.34 4512408.32

Total 182449622.85 155389957.61

(3) Other investment activity related cash receipts

Inapplicable

(4) Other investment activity related cash payments

Inapplicable

(5) Other financing activity related cash receipts

Inapplicable

(6) Other financing activity related cash payments

In CNY

Items Amount incurred in the reporting period Amount incurred in the previous period

Rent cash flow out 56886698.46 63385293.68

Payment for repurchase of shares 35483644.86 53318818.77

Total 92370343.32 116704112.45

79. Supplementary information of the cash flow statement

(1) Supplementary information of the cash flow statement

In CNY

Supplementary information Amount in the reporting period Amount in the previous period

1 Adjustment of net profit into cash flows of

operating activities:

Net profit 187395067.23 140692784.29

Plus: Provision for impairment of assets -4333947.62 346369.84

Depreciation of fixed assets depletion of oil

and gas asset depreciation of productive biological 20546291.19 20129448.57

asset

Depreciation of use right assets 50579624.79 57747319.25

Amortization of intangible assets 1853819.12 2750043.18

Amortization of long term expenses to be 46620603.57 52053443.19

apportioned

Loss (income is stated in “-”) from disposal of

fixed assets intangible assets and other long term 76689.73 816021.16

assets

Loss on scrapping of fixed assets (profit is

stated with “-”)

Loss from change of fair value (profit is stated

with “-”)

Financial expenses (income is stated with “-”) 8026090.67 8082989.12

Investment loss (income is stated with “-”) 1697481.65 -2462626.52

Decrease of the deferred income tax asset 3681918.71 -5564912.60

(increase is stated with “_”)

Increase of deferred income tax liability -57196.06 -327370.24

(decrease is stated with “-”)

Decrease of inventories (Increase is stated 56107015.08 74801604.17

with “-”)

Decrease of operative items receivable -73392204.29 -23794469.22

(Increase is stated with “-”)

104FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Increase of operative items payable 45858589.85 -46884380.59

(Decrease is stated with “-”)

Others

Net cash flows arising from operating 344659843.62 278386263.60

activities

2 Significant investment and fund-raising activities

with no cash income and expenses involved:

Capital converted from liabilities

Convertible company bonds due within a year

Fixed assets under financing lease

3 Net change in cash and cash equivalents:

Ending cash balance 519368795.12 393873930.55

Less: Opening balance of cash 313747463.64 210254737.14

Plus: Ending balance of cash equivalent

Less: Opening balance of cash equivalent

Net increase of cash and cash equivalents 205621331.48 183619193.41

(2) Net cash paid for acquisition of subsidiary in the reporting period

Inapplicable

(3) Net cash received from disposal of subsidiary in the reporting period

Inapplicable

(4) Composition of cash and cash equivalents

In CNY

Items Ending balance Opening balance

I. Cash 519368795.12 313747463.64

Including: Cash in stock 63562.14 173368.68

Bank deposit available for payment at 514412146.09 312433893.29

any time

Other monetary fund used for 4893086.89 1131127.67

payment at any time

Due from central bank available for

payment

Due from banks

Call loan to banks

II. Cash equivalents

Including: bond investment due within three

months

III. Ending balance of cash and cash 519368795.12 313747463.64

equivalents

Including: cash and cash equivalents

restricted for use from the parent company or 398877.12 716733.44

other subsidiaries of the Group

80. Notes to items of statement of change in owner’s equity

Inapplicable

81. Assets restricted in ownership or right-of-use

Inapplicable

82. Foreign currency monetary items

(1) Foreign currency monetary items

In CNY

Items Ending balance of foreign Ending balance of Renminbicurrency Conversion rate converted

105FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Monetary capital

Including: USD 224202.41 7.2258 1620041.77

Euro 505646.07 7.8771 3983024.66

HKD 1501051.23 0.9220 1383939.21

SF 49732.92 8.0614 400916.96

Accounts receivable

Including: USD 848686.02 7.2258 6132435.44

Euro 34286.54 7.8771 270078.50

HKD 2951437.54 0.9220 2721166.38

SF 23815.43 8.0614 191985.71

Long-term Loan

Including: USD

Euro

HKD

Accounts payable

Including: USD 1019.00 7.2258 7363.09

HKD 737465.21 0.9220 679928.17

Other receivables

Including: HKD 116037.61 0.9220 106984.36

SF 66754.63 8.0614 538135.77

Other payables

Including: USD 5672.96 7.2258 40991.67

Euro 489.33 7.8771 3854.50

HKD 54776.05 0.9220 50502.42

SF 68432.87 8.0614 551664.74

(2) Note to overseas operating entities including important overseas operating entities which should be

disclosed about its principal business place function currency for bookkeeping and basis for the choice. In

case of any change in function currency the cause should be disclosed.The Company and its domestic subsidiaries use Renminbi (CNY) as the function currency for book keeping. FIYTA

(Hong Kong) Limited one of the Company's overseas subsidiaries has determined Hong Kong Dollars as its recording

currency for accounting in accordance with the currencies available in its major economic environment where it is

operated. Montres Chouriet SA one of the subsidiaries of FIYTA Hong Kong determines Swiss Franc as its recording

currency for accounting in accordance with the currencies available in its major economic environment where it is

operated and Swiss France is converted into Renminbi in preparing its financial statements. The currency the Company

takes in preparation of these financial statements is Renminbi.

83. Hedging

Inapplicable

84. Government subsidies

(1) Basic information of government subsidies

In CNY

Category Amount Items presented Amount counted to the currentprofit and loss

Special subsidy for the field of

standards in Shenzhen 790936.00 Other income 790936.00

Refund of the service charge for

individual income tax 588360.90 Other income 588360.90

Subsidy for stabilizing

employment 724612.04 Other income 724612.04

Other subsidies 3802.58 Other income 3802.58

Subsidy for special funding

projects for stable commercial 1251400.00 Other income 1251400.00

growth

One-off subsidy for retained

employees training 1500.00 Other income 1500.00

Refund of 51job.com COVID-19

subsidy 12000.00 Other income 12000.00

106FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

“Welfare-to-work” based

application-free direct subsidy 4900.00 Other income 4900.00

Special-purpose fund subsidy for

economic development 100000.00 Other income 100000.00

Award subsidy for recognition of

hi-tech enterprise 100000.00 Other income 100000.00

First subsidy for financing the

fostering of hi-tech enterprise 120000.00 Other income 120000.00

Subsidy for employing the

disabled 9669.71 Other income 9669.71

Heavy precision projects for

technological breakthrough 1000000.00 Other income 1000000.00

Government subsidy for

technological innovation projects 1000000.00 Other income 1000000.00

Financial support for the

fostering of hi-tech enterprise 100000.00 Other income 100000.00

Central government

appropriation for technological

breakthrough and application 868178.18 Other income 868178.18

project of breathing machine and

key parts

Tax rebated to the key

organizations from the central 16250.00 Other income 16250.00

government

(2) Refunding of the government subsidies

Inapplicable

85. Others

Inapplicable

VIII. Change in consolidation scope

1. Business combination involving entities not under common control

(1) Consolidation of enterprises not under common control during the reporting period

Inapplicable

(2) Consolidation cost and goodwill

Inapplicable

(3) Purchasee's distinguishable assets and liabilities as at the date of purchase

Inapplicable

(4) Profit or loss of the equity held before the date of purchase arising from re-measurement based on the fair

value

Does there exist any transaction in which the enterprise consolidation is realized step by step through several

transactions and the control power is obtained within the reporting period.No

(5) Note to the consolidation consideration or the fair value of the distinguishable assets and liabilities of the

purchasee which cannot be reasonably identified as at the date of purchase or at the end of the very period of

consolidation

Inapplicable

(6) Other note

Inapplicable

107FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

2. Business combination involving entities under common control

(1) Consolidation of enterprises under common control during the reporting period

Inapplicable

(2) Consolidation cost

Inapplicable

(3) Book value of the consolidatee's assets and liabilities as at the date of consolidation

Inapplicable

3. Counter purchase

Inapplicable

4. Disposal of subsidiaries

Does there exist any such situation that a single disposal may cause the control power over the investment in a

subsidiary lost?

No

Does there exist any such situation that disposal in steps through a number of transactions may cause the control

power over the investment in a subsidiary lost during the reporting period?

No

5. Change of consolidation scope due to other reason

Inapplicable

6. Others

Inapplicable

IX. Equity in other entities

1. Equity in a subsidiary

(1) Composition of an enterprise group

Subsidiaries Main business

Shareholding proportion

location Place of registration Nature of business Way of acquisitionDirect Indirect

Shenzhen Harmony

World Watches Shenzhen Shenzhen Commerce 100.00% Establishment or

Center Co. Ltd. investment

FIYTA Sales Co.Ltd. Shenzhen Shenzhen Commerce 100.00%

Establishment or

investment

Shenzhen FIYTA

Precision

Technology Co. Shenzhen Shenzhen Manufacture 99.00% 1.00%

Establishment or

investment

Ltd.Shenzhen FIYTA

Technology

Development Co. Shenzhen Shenzhen Manufacture 100.00%

Establishment or

investment

Ltd.Harmony World

Watches Center Sanya Sanya Commerce 100.00% Establishment or

(Hainan) Ltd. investment

Shenzhen

XUNHANG

Precision Shenzhen Shenzhen Manufacture 100.00% Establishment or

Technology Co. investment

Ltd.Emile Chouriet Shenzhen Shenzhen Commerce 100.00% Establishment or(Shenzhen) Limited investment

Liaoning Hengdarui Consolidation of

Commerce & Trade Shenyang Shenyang Commerce 100.00% enterprises under

108FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Co. Ltd. the common control

Shiyuehui Boutique

(Shenzhen) Co. Shenzhen Shenzhen Commerce 100.00% Establishment or

Ltd. investment

Shenzhen Harmony

E-Commerce Shenzhen Shenzhen Commerce 100.00% Establishment or

Limited investment

FIYTA (Hong Kong) Hong Kong Hong Kong Commerce 100.00% Establishment orLimited investment

Business

Montres combination

Chouriet SA Switzerland Switzerland Manufacture 100.00% involving entitiesnot under common

control

Note to the proportion of shareholding in a subsidiary different from the proportion of voting power:

Inapplicable

Basis of holding less than a half of the voting power but still controlling the investee and holding more than a half of the

voting power but not controlling the investee:

Inapplicable

Basis of an important structurized entity being brought to the consolidation scope and being controlled:

Inapplicable

Basis of distinguishing an agent from consignor:

Inapplicable

(2) Important non-wholly-owned subsidiaries

Inapplicable

(3) Key financial information of important non-wholly-owned subsidiaries

Inapplicable

(4) Significant restriction on use of enterprise group’s assets and paying off the enterprise group’s liabilities

Inapplicable

(5) Financial support or other support provided to the structured entities incorporated in the scope of

consolidated financial statements

Inapplicable

2. Transaction with a subsidiary with the share of the owner’s equity changed but still under control

(1) Note to change in the share of the owner's equity in subsidiaries

Inapplicable

(2) Affect of the transaction on the minority equity and owner's equity attributable to the parent company

Inapplicable

3. Equity in joint venture arrangement or associates

(1) Important joint ventures or associates

Shareholding proportion Accounting

Name of joint treatment

venture or Main business Place of Nature of method for

associate location registration business Direct Indirect investment injoint ventures or

associates

Shanghai Watch Shanghai Shanghai Commerce 25.00% Equity method

109FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Industry Co. Ltd.Note to the proportion of the shareholding in a joint venture or an associate different from voting power therein:

Inapplicable

Basis of holding below 20% voting power but having significant influence or holding more than 20% voting power but

not having significant influence

Inapplicable

(2) Key financial information of important joint ventures

Inapplicable

(3) Key financial information of important associates

In CNY

Ending balance/amount incurred in the Opening balance/amount incurred in the

reporting period reporting period

Current assets 165681315.89 175890077.66

Non-current assets 15811254.46 21637323.67

Total assets 181492570.35 197527401.33

Current liabilities 41236245.43 44595566.75

Non-current liabilities 5885583.05

Total liabilities 41236245.43 50481149.80

Minority shareholders’ equity

Equity attributable to the parent company’s 140256324.92 147046251.53

shareholders

Share of net assets calculated according to 35064081.23 36761562.88

the shareholding proportion

Adjustment events 21420524.02 21420524.02

-- Goodwill 21420524.02 21420524.02

-- Unrealized profit from the intracompany

transactions

-- Others

Book value of the equity investment in 56484605.25 58182086.90

associates

Fair value of equity investments in associates

with public quotation

Operation Revenue 63610760.47 65530729.89

Net profit -6789926.61 9850506.06

Net profit from operation termination

Other comprehensive income

Total comprehensive income -6789926.61 9850506.06

Dividends received from associates during

the year

(4) Financial information summary of unimportant joint ventures and associates

Inapplicable

(5) Note to significant restriction on the competence of a joint venture or an associate in transferring funds to

the Company

Inapplicable

(6) Excessive loss incurred to a joint venture or an associate

Inapplicable

110FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

(7) Unrecognized commitment in connection with investment in a joint venture

Inapplicable

(8) Contingent liabilities in connection with investment in joint ventures or associates

Inapplicable

4. Important joint operation

Inapplicable

5. Equity in the structurized entities not incorporated in the consolidated financial statements

Inapplicable

6. Others

Inapplicable

X. Risk disclosure related to financial instrument

The major financial instruments of the Company primarily include cash at bank and on hand equity investments

borrowings accounts receivable accounts payables etc. The Company is exposed to risks from various financial

instruments in day-to-day operation mainly including credit risk liquidity risk and market risk. The risks in connection

with such financial instruments and the risk management policies adopted by the Company to mitigate such risks are

summarized as follows:

The board of directors is responsible for planning and establishing the risk management structure for the Company

developing risk management policies and the related guidelines across the Company and supervising the performance

of risk management measures. The Company has formulated risk management policies to identify and analyze the

risks faced by the Company. These risk management policies clearly stipulate specific risks covering many aspects

such as market risk credit risk and liquidity risk management. The Group regularly evaluates the market environment

and changes in the Company's operating activities to determine whether to update the risk management policy and

system. The Company's risk management is carried out by the Risk Management Committee in accordance with the

policies approved by the Board of Directors. The Risk Management Committee works closely with other business

departments of the Company to identify evaluate and avoid related risks. The internal audit department of the

Company conducts regular audits on risk management controls and procedures and reports the audit results to the

audit committee of the Company. The Company diversifies the risks of financial instruments through appropriate

diversified investment and business portfolios and formulates corresponding risk management policies to reduce the

risks concentrated in a single industry a specific region or a specific counterparty.

1. Credit risk

Credit risk refers to the risk of financial losses to the Company as a result of the failure of performance of contractual

obligations by the counterparties. The management has developed proper credit policies and continuously monitors

credit risk exposures.The Company has adopted the policy of transacting with creditworthy counterparties only. In addition the Company

evaluates the credit qualification of customers and sets up corresponding credit term based on the financial status of

customers the possibility of obtaining guarantees from third parties credit records and other factors such as current

market conditions. The Company monitors the balances and recovery of bills and accounts receivable and contract

assets on a continual basis. As for bad credit customers the Company will use the written reminders shorten the credit

term or cancel the credit term to ensure that the Company is free from material credit losses. In addition the Company

reviews the recovery of financial assets on each balance sheet date to ensure adequate expected credit loss provision

is made for relevant financial assets.The Company's other financial assets include monetary capitalaccounts receivable and other receivables. The credit

risk of these financial assets is derived from the default of the counterparty and the maximum credit exposure is the

carrying amount of each financial asset on the balance sheet. The Company does not provide any other guarantee that

may expose the Company to credit risk.The monetary funds held by the Company are mainly deposited with financial institutions such as state-owned banks

and other large and medium-sized commercial banks. The management believes that these commercial banks have a

higher reputation and assets so there is no major credit risk and the Company would not have any significant losses

111FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

caused by the default by these institutions. The Company’s policy is to control the amount deposited with these famous

financial institutions based on their market reputation operating size and financial background to limit the credit risk

amount of any single financial institution.As a part of its credit risk asset management the Company assesses the credit loss of receivables using aging. The

Company’s receivable and other receivables involve large amount of customers. Aging information can reflect the ability

to repay and risk of bad debt of these customers. The Company determined expected loss rate by calculating historical

bad debt rate for receivables with different aging based on historical data and also taking forecast of future economic

condition into consideration such as GDP growth rate state currency policy etc. For long-term receivables the

Company assesses expected credit loss reasonably by considering settlement period contracted payment terms

debtor’s financial situation and the economic situation of the debtor’s industry.As at June 30 2023 the carrying amount of related assets and corresponding ECL is as follows:

Aging Book balance Provision for impairment

Notes receivable 15140453.97 511155.07

Accounts receivable 436613661.87 37037393.88

Other receivables 61498013.61 4111162.93

Total 513252129.44 41659711.88

As the Company’s customer base is large there exists no material credit concentration risk.As at June 30 2023 the balance of top 5 receivable accounts accounted for 23.89% of total accounts receivables (2022:

32.76%).

2. Liquidity risks

Liquidity risk refers to the risk of short of funds when the company performs its obligation of cash payment or settlement

by other financial assets. The Company’s subordinate member companies are responsible for their respective cash flow

projections. Based on the results thereof the subordinate financial management department continually monitors its

short-term and long-term capital needs at the company level to ensure adequate cash reserves; in the meantime

continually monitors the compliance with loan agreements and secures undertakings for sufficient reserve funds from

major financial institutions to address its short-term and long-term capital needs. Besides the Company mainly signs

financing agreements with banks that have business transactions to provide support to fulfill commercial bill obligation.As at June 30 2023 the Company had financing facilities from several banks amounting to CNY1987.24 million.Amongst CNY 482.24 million had already been used.As at June 30 2023 the discounted contractual cash flows for financial liabilities and off-balance sheet guarantee that

presented in maturity are as follows:

Ending balance (CNY 10000)

Items

Within 1 year 1-2 years 2-3 years Over 3 years Total

Short-term borrowings 39566.56 39566.56

Accounts payable 19148.82 19148.82

Other payables 12627.80 113.89 70.63 104.43 12916.76

Total 71343.18 113.89 70.63 104.43 71632.14

3. Market Risks

1) Exchange rate risk

Except that the Company’s subsidiary in Hong Kong uses HKD as settlement currency and sub-subsidiary in Swiss

used CHF as settlement currency the principal places of operations of the Company are located in China and the major

businesses are settled in Renminbi. However the Company’s recognized foreign currency assets and liabilities as well

as the foreign currency transactions in the future (the functional currencies of foreign assets and liabilities as well as the

transactions are mainly HKD and SF) remain exposed to exchange rate risk

As at June 30 2023 the Renminbi equivalent of financial assets and financial liabilities denominated in foreign

currencies are as follows:

Ending balance

Items

HKD USD EURO SF Total

Financial asset denominated in

foreign

112FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

currency:

Monetary capital 1383939.21 1620041.77 3983024.66 400916.96 7387922.61

Accounts receivable 2721166.38 6132435.44 270078.50 191985.71 9315666.04

Other receivables 106984.36 538135.77 645120.13

Sub-total 4212089.95 7752477.22 4253103.16 1131038.44 17348708.77

Financial liabilities denominated

in foreign

currency:

Accounts payable 679928.17 7363.09 687291.26

Other payables 50502.42 40991.67 3854.50 551664.74 647013.34

Non-current liabilities due within

a year -

Sub-total 730430.60 48354.76 3854.50 551664.74 1334304.60

Sensitivity analysis:

As at June 30 2023 for financial assets and financial liabilities that denominated in foreign currency if Renminbi

appreciate or depreciate of 5% to foreign currency and other factors remain unchanged the net profit will decrease or

increase about CNY 0.6005 million(2022: CNY 1.419 million).

2) Interest rate risk

The interest rate risk of the Company mainly associates with bank borrowings. Floating rate financial liabilities expose

the Company to cash-flow interest rate risk while fixed rate financial liabilities expose the Company to fair-value interest

rate risk. The Company determines the comparative proportion of fixed rate contracts and floating rate contracts based

on the then market conditions.The financial department of the Company continuously monitors the Company’s interest rate level. Rise of interest rates

may increase the cost of new interest-bearing liabilities and interest costs on the Company's outstanding

interest-bearing liabilities at variable rates and have a material adverse effect on the Company's financial results. The

management may make timely adjustments based on the latest market conditions to reduce interest rate risk.Sensitivity analysis:

In case the loan interest rate calculated based on the floating interest rate rises or falls by 50 base points as at June 30

2023 while the other factors keep unchanged the Company's net profit shall decrease or increase by CNY 1.95 million

(as at 2022 about CNY 1.20 million).The above sensitivity analysis is based on the assumption that change has taken place in the interest rates on the

balance sheet date and the change has been applied to all borrowings obtained by the Company at floating interest

rates.XI. Disclosure of Fair Value

1. Fair value at the end of the reporting period of the assets and liabilities measured based on the fair value

Inapplicable

2. Basis for determining the market price of the items measured based on the continuous and non-continuous

first level fair value

Inapplicable

3. Items measured based on the continuous or uncontinuous 2nd level fair value valuation technique as used

nature of important parameters and quantitative information

Inapplicable

4. Items measured based on the continuous or uncontinuous 3rd level fair value valuation technique as used

nature of important parameters and quantitative information

Inapplicable

113FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

5. Items measured based on the continuous 3rd level fair value sensitivity analysis on adjusted information

and unobservable parameters between the book value at beginning and end of the period

Inapplicable

6. In case items measured based on fair value are converted between different levels incurred in the current

period state the cause of conversion and determine conversion time point

Inapplicable

7. Change of valuation technique incurred in the current period and cause of such change

Inapplicable

8. Fair value of financial assets and financial liabilities not measured at fair value

Inapplicable

9. Others

Inapplicable

XII. Related parties and transactions

1. Details of the parent company of the Company

Name of the parent Shareholding ratio of Ratio of vote right of

company Place of registration Nature of business Registered capital the parent company the parent companyin the Company in the Company

AVIC International Shenzhen Business service CNY 1166.162Holding Limited industry million 39.02% 39.02%

Note to the parent company:

AVIC IHL is a subsidiary 100% indirectly held by AVIC International Holding Corporation. Aviation Industry Corporation

of China Limited (AVIC) holds 91.14% equity in AVIC International Holding Corporation.Therefore the eventual controller of the Company is AVIC.

2. Subsidiaries of the Company

Refer to Note IX. 1 for details of subsidiaries of the Company.

3. Joint venture and association of the Company

Inapplicable

4. Other related parties

Names of other related parties Relationship between other related parties and theCompany

AVIC Property Management Co. Ltd. (AVIC Property) An associate of the ultimate controller

Shenzhen AVIC Building Technology Co. Ltd. (AVIC Building) An associate of the ultimate controller

Shenzhen AVIC Nanguang Elevator Co. Ltd. (AVIC Nanguang ) An associate of the ultimate controller

AVIC City Property (Kunshan) Co. Ltd. (AVIC City Property (Kunshan) ) An associate of the ultimate controller

Shenzhen AVIC Security Service Co. Ltd. (AVIC Security Service) An associate of the ultimate controller

Jiujiang 9 Square Commerce Management Co. Ltd. (9 Square Commerce

Management) An associate of the ultimate controller

Rainbow Digital Commercial Co. Ltd. (RAINBOW) Controlled by the same party

Shennan Circuit Co. Ltd. (Shennan Circuit) Controlled by the same party

AVIC Huadong Photoelectric (Shanghai) Co. Ltd. (Huadong Photoelectric

(Shanghai)) Controlled by the same party

Shenyang Xinghua Aero-Electric Appliance Corp. Ltd. (Shenyang Xinghua

Aero-Electric Appliance) Controlled by the same party

114FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

AVIC Huadong Photoelectric Co. Ltd. (Huadong Photoelectric) Controlled by the same party

Shenzhen Lingzhi Digital Technology Co. Ltd. (Lingzhi Digital Technology) Controlled by the same party

Shenzhen AVIC Grand Skylight Hotel Management Co. Ltd. (Grand Skylight

Hotel Management) Controlled by the same party

AVIC Securities Co. Ltd. (AVIC Securities) Controlled by the same party

Shenzhen AVIC Training Center (AVIC Training Center) Controlled by the same party

AVIC Finance Co. Ltd. (AVIC Finance) Controlled by the same party

Gongqingcheng CATIC Cultural Investment Co. Ltd. (Gongqingcheng

CATIC Cultural Investment) Controlled by the same party

AVIC Jonhon Optronic Technology Co.Ltd. (AVIC Optronic) Controlled by the same party

AVIC General Aircraft Co. Ltd. (AVIC General Aircraft) Controlled by the same party

Guizhou Huayang Electric Co. Ltd. (GUIZHOU HUAYANG ELECTRIC) Controlled by the same party

Zhuhai Linghang Composite Material Technology Co. Ltd. (Zhuhai

Linghang Technology) Controlled by the same party

Guangdong International Building Industrial Company (Guangdong

International Building) Controlled by the same party

Director Manager Chief Financial Officer and Secretary of the Board of the

Company (senior executives) A senior executive

5. Related transactions

(1) Related transactions of purchase and sale of commodities and supply and acceptance of labor services

Statement of purchase of commodities and acceptance of labor services

In CNY

Description of

Related party Related Amount incurred in Transaction quota as Has it exceeded the Amount incurred in

Transactions the reporting period approved transaction quota the previous period

Water & power

AVIC Property supply and property 5600171.42 No 5674190.55

management fee

Shopping mall

Rainbow Ltd. fees/purchase of 1939136.26 No 2205812.33

goods

AVIC City Property

(Kunshan) Shopping mall fees 32726.23 45000000.00 No 23584.90

9 Square

Commerce

Management Co. Shopping mall fees 45347.58 No 45264.34

Ltd.AVIC Nanguang Elevatormaintenance 18000.00 No

Statement of sales of goods/supply of services

In CNY

Related party Description of Related Amount incurred in the reporting Amount incurred in the previousTransactions period period

Rainbow Ltd. Products and labor services 30348264.13 29104305.23

Shennan Circuit Sales of materials and supply ofservices 460.80 228541.46

Gongqingcheng CATIC Cultural

Investment Sales of products 154635.87 192621.21

AVIC Optronic Sales of products 406907.87 379058.98

AVIC General Aircraft Sales of products 554207.98

Huadong Photoelectric

(Shanghai) Sales of products 21238.94

Guizhou Huayang Electric Sales of products 50353.97

Zhuhai Linghang Technology Sales of products 75711.51

Shenyang Xinghua

Aero-Electric Appliance Sales of products 145831.01

Note to the related transactions of purchase and sale of commodities and supply and acceptance of labor services

The above transaction volume does not contain tax amount.

115FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

(2) Related entrusted management/contracted and mandatory management/contracting

Inapplicable

(3) Related lease

The Company as lessor:

In CNY

Names of lessees Categories of leasehold Rental income recognized in Rental income recognized inproperties the current period the previous period

AVIC Property Housing 2677492.91 5220338.61

AVIC Securities Housing 705942.84 705942.84

Rainbow Ltd. Housing 309104.34 309104.34

CATIC Public Security Service

Co. Housing 453202.26

The Company as lessee:

In CNY

Rental charges for

short-term leases and Variable rental payment

leases of low-value not included in the Payment of the rental

assets for simplified measurement of the Rent paid liability interest

Increased right-of-use

Categorie processing (if rent liability (if undertaken

assets

Name of s of applicable) applicable)

lessor leasehold

properties Amount Amount Amount Amount Amount Amount Amount Amount Amount Amount

incurred incurred incurred incurred incurred incurred incurred incurred incurred incurred

in the in the in the in the in the in the in the in the in the in the

reporting previous reporting previous reporting previous reporting previous reporting previous

period period period period period period period period period period

AVIC City

Property

(Kunshan Housing 71100.00 75600.00 580.08 3504.11

-66767.1-71606.2

18

)

9 Square

Commerc

e

Managem Housing 41544.03 37267.73

136406.9129495.4

624179.588636.46

145907.0-124732.

908

ent Co.Ltd.Rainbow Housing 218271.0 255127.0 6473.23 7561.36 -195898. -241122.Ltd. 0 0 05 00

(4) Related guarantee

Inapplicable

(5) Borrowings and lendings among related parties

In CNY

Inapplicable

(6) Assets assignment and liabilities reorganization of related parties

Inapplicable

(7)Remuneration to senior executives

Inapplicable

(8) Other related transactions

The Company’s deposit balance deposited with AVIC Finance at the end of the current year amounted to CNY

480544819.75 of which the deposit interest received during the year amounted to CNY 137837.70.

6. Accounts receivable from and payable to related parties

(1) Receivables

In CNY

116FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Ending balance Opening balance

Project name Related parties

Book balance Provision for bad debt Book balance Provision for bad debt

Bank deposit

AVIC Finance 480544819.75 271327031.83

Accounts receivable

Rainbow Ltd. 6971407.56 259780.04 3808470.31 219873.20

Shennan Circuit 7255.14 544.14

AVIC Optronic 117068.05 16639.44 649797.16 48734.79

Gongqingcheng CATIC

Cultural Investment 45430.15 682.44 27297.28 1364.88

9 Square Commerce

Management Co. Ltd. 3430.00 171.50 45762.00 2288.10

AVIC Training Center 2772.00 207.90

Shenyang Xinghua

Aero-Electric Appliance 166077.24 9134.25

AVIC Property 453084.31 22654.22 55910.00 2795.50

GUIZHOU HUAYANG

ELECTRIC 59528.00 4464.60

Zhuhai Linghang

Technology 735622.00 40459.21 1412045.00 105903.38

Notes receivable

AVIC Optronic 639591.82 262429.22

Other receivables

Rainbow Ltd. 834092.43 41704.62 1055557.43 52777.87

AVIC City Property

(Kunshan) 56000.00 2800.00 73000.00 2800.00

Gongqingcheng CATIC

Cultural Investment 6500.00 325.00 6500.00 325.00

9 Square Commerce

Management Co. Ltd. 91751.75 4587.59 50000.00 2500.00

AVIC IHL 49.32 2.47 49.32 2.47

(2) Payables

In CNY

Project name Related parties Ending book balance Opening book balance

Accounts payable

AVIC Building Co. 32992.35

AVIC Optronic 19411.27

Other payables

AVIC Property 1203983.88 2375070.47

Jingzhi Digital Technology 830000.00

AVIC Securities 247080.00 247080.00

AVIC Building Co. 14808.41

Rainbow Ltd. 108186.52 108186.52

CATIC Public Security Service

Co. 158620.80 158620.80

AVIC Nanguang 26424.47 23432.43

Advance from customers

AVIC Securities 123540.00

Rainbow Ltd. 162324.03

7. Related parties’ commitments

Inapplicable

8. Others

Inapplicable

117FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

XIII. Stock payment

1. General

In CNY

Total amount of various equity instruments granted by the Company 0.00

during the reporting period

Total amount of various equity instruments of the Company 3436710.00

exercisable during the reporting period

Total amount of various equity instruments of the Company expired 2201130.00

during the reporting period

The scope of the exercise price of stock options issued at the end of Inapplicable

the reporting period and the remaining time of the contract

The scope of the exercise price of other equity instruments issued at Inapplicable

the end of the reporting period and the remaining time of the contract

2. Stock payment for equity settlement

In CNY

Method for determining the fair value of equity instruments on the Closing price of the Company's stock on the grant date

grant date

Employee service period achievement rate of performance

Basis for determining the quantity of exercisable equity instruments indicators and employee individual performance evaluation result

Cause of significant difference between the estimation of the Nil

reporting period and that of the previous period

Accumulated amount of the equity-settled share-based payment 26899484.20

counted to the capital reserve

Total expenses recognized in the equity-settled share-based payment -5088797.85

during the reporting period

3. Stock payment for cash settlement

Inapplicable

4. Correction and termination of stock payment

Inapplicable

5. Others

Inapplicable

XIV. Commitments and contingencies

1. Important commitments

Important commitments existing as at the balance sheet date

Lease contract that already signed or prepared to fulfill and its financial effect

Disclosure as the lessee:

(1) Lease activities

The Company's lease categories are all housing and buildings including simplified short-term lease and leases other

than short-term rent where right-of-use assets and lease liabilities are recognized.

(2) Simplified treatment of short-term lease and leases of low-value assets

Short-term leases are treated using simplified method. Short-term leases include lease term that is shorter than 12

month and no renew options attached and leases that will be matured in 12 month after first adoption of CAS 21 –

Lease. Short-term lease expenses charged to profit or loss was CNY 496529.80.

(3) Future potential cash outflows that does not included in lease liabilities

1) Variable lease payment

The lessee leased a lot of retail shops which contains variable lease payment terms in connection with sales.Many of the Company’s property lease contain variable lease payment terms in connection with sales. In most

circumstances the Company uses these terms to matches lease payment to shops that can generate more cash flows

lease payment. For standalone shops variable can reach 100% of all lease payment at most and that the scope of

118FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

percentage of sales used is quite large. In some circumstances variable payment terms include annual bottom

payment and upper limit.In the first half year of 2023 the amount of variable lease payments included in the current profit and loss was CNY

45887165.30.

2) Option to renew

Many lease contracts entered by the Company has option to renew. The Company has already estimated the option to

renew reasonably when determining lease terms in measuring lease liabilities.

3)Option to discontinue lease

Some of the lease contract entered by the Company has option to discontinue. The Company has already estimated

the option to discontinue reasonably when determining lease terms in measuring lease liabilities.

4) Residual value guarantee

The Company’s lease does not involve residual value guarantee.

5)Lease that the lessee has already made commitment but not yet started

The Company does not have lease that has already made commitment but not yet started.Disclosure as a lessor:

(1) Lease activities

The Company’s leases are all properties

(2) Risk management strategy of retaining rights over lease assets

To reduce risks of lease the Company normally asks lessee to pay rental in advance and collects 1-3 months rental as

deposit.

2. Contingencies

(1) Significant contingencies existing as at the balance sheet date

Inapplicable

(2) Important contingencies unnecessary to be disclosed but necessary to be explained

Inapplicable

3. Others

Inapplicable

XV. Events after the balance sheet date

1. Significant non-adjustment events

Inapplicable

2. Profit distribution

Inapplicable

3. Sales return

Inapplicable

4. Note to other matters after the balance sheet date

Inapplicable

119FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

XVI. Other significant events

1. Correction of the accounting errors in the previous period

(1) Retroactive restatement

Inapplicable

(2) Prospective application

Inapplicable

2. Liabilities restructuring

Inapplicable

3. Replacement of assets

(1) Non-monetary assets exchange

Inapplicable

(2) Other assets exchange

Inapplicable

4. Annuity plan

Inapplicable

5. Discontinuing operation

Inapplicable

6. Segment information

(1) Basis for determining the reporting segments and accounting policy

Operating segments of the Company are identified on the basis of internal organization structure management

requirements and internal reporting system. An operating segment represents a component of the Company that

satisfied the following criteria simultaneously:

(1) Its business activities are engaged to earn revenue and incur expenses;

(2) Its operating results are regularly reviewed by the Company’s management to make decisions on resources

allocation and performance assessment;

(3) Its financial conditions operating results cash flow and related accounting information are available to the

Company.The Company determines the reporting segment based on the operating segment and the operating segment that

meets any of the following conditions is determined as the reporting segment:

(1) The segment income of the operating segment accounts for 10.00% or more of total income of all segments;

(2) The absolute amount of profits (losses) of the segment account for 10.00% or more of the higher of the absolute

amount of total profits of the profiting segment and the absolute amount of total losses of the unprofitable segment.

120FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

(2) Financial information of the reporting segments

Inapplicable

(3) In case there is no reporting segment or the total assets and liabilities of the reporting segments cannot be

disclosed explain the reason

The Company’s business is simple. The business mainly involves manufacturing and sales of watch. The management

considers the business as a whole in implementing management and assessing its performance. As a result no

segment information is disclosed in this financial statement.

(4) Other note

Inapplicable

7. Other significant transactions and matters that may affect investors' decision making

Inapplicable

8. Others

Inapplicable

XVII. Notes to the parent company’s financial statements

1. Accounts receivable

(1) Accounts receivable disclosed by category

In CNY

Ending balance Opening balance

Categories Book balance Provision for bad debt Book balance Provision for bad debt

Book value

Amount Proportion Amount Provision Amount Proportion Amount Provision

Book value

proportion proportion

Accounts

receivable

for which

bad debt

reserve

has been

provided

based on

individual

items

Including

:

Accounts

receivable

for which

bad debt 9837158.reserve 31 100.00% 309767.44 3.15%

9527390.

87635132.16100.00%31916.135.03%603216.03

has been

provided

based on

portfolios

Including

:

Accounts

receivable 9837158.from other 31 100.00% 309767.44 3.15%

9527390.

87635132.16100.00%31916.135.03%603216.03

customers

9837158.

Total 31 100.00% 309767.44 3.15%

9527390.

87635132.16100.00%31916.135.03%603216.03

Bad debt reserve provided based on portfolio: Grouping of accounts receivable from other customers

In CNY

Ending balance

Description

Book balance Provision for bad debt Provision proportion

Accounts receivable from other

customers 9837158.31 309767.44 3.15%

Total 9837158.31 309767.44

121FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Note to the basis for determining the combination:

Inapplicable

If the provision for bad debts of accounts receivable is accrued in accordance with the general expected credit loss

model please refer to the disclosure of other receivables to disclose the relevant information of the provision for bad

debts:

Inapplicable

Disclosed based on aging

In CNY

Aging Ending balance

Within 1 year (with 1 year inclusive) 9837158.31

Total 9837158.31

(2) Provision recovery or reversal of reserve for bad debts during the reporting period

Provision for bad debt during the reporting period

In CNY

Amount of movement during the reporting period

Categories Opening balance Recovery or Ending balanceProvision reversal Written-off Others

Accounts

receivable with

single provision 85000.00 85000.00

for expected

credit loss

Accounts

receivable with

provision for 31916.13 309576.01 31724.70 309767.44

expected credit

loss by portfolio

Total 31916.13 394576.01 31724.70 85000.00 309767.44

Where the significant amount of the reserve for bad debt recovered or reversed:

Inapplicable

(3) Accounts receivable actually written off in the reporting period

In CNY

Items Amount written-off

Xi'an Tangcheng Group Co. Ltd. 85000.00

Where the important accounts receivable written-off:

Inapplicable

Note to writing-of of accounts receivable:

Inapplicable

(4) Accounts receivable owed by the top five debtors based on the ending balance

In CNY

Proportion in total ending

Organization name Ending balance of the Ending balance of theaccounts receivable balance of accountsreceivable provision for bad debts

Summary of the top five

accounts receivable in the 4754574.43 48.33% 237728.73

ending balance

Total 4754574.43 48.33%

(5) Account receivable with recognition terminated due to transfer of financial assets

Inapplicable

122FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

(6) Amount of assets and liabilities formed through transfer of accounts receivable and continuing to be

involved

Inapplicable

2. Other receivables

In CNY

Items Ending balance Opening balance

Other receivables 667253750.44 839782543.07

Total 667253750.44 839782543.07

(1) Interest receivable

1) Classification of interest receivable

Inapplicable

2) Significant overdue interest

Inapplicable

3) Provision for bad debts

Inapplicable

(2) Dividends receivable

1) Classification of dividends receivable

Inapplicable

2) Significant dividends receivable with age exceeding 1 year

Inapplicable

3) Provision for bad debts

Inapplicable

(3) Other receivables

1) Classification of other receivables based on nature of payment

In CNY

Nature of the fund Ending book balance Opening book balance

Reserve for employees 1120.88 24542.88

Collateral deposit 537615.90 537615.90

Other receivables within FIYTA 666767491.31 839271199.44

Others 13105.95 14855.95

Total 667319334.04 839848214.17

2) Provision for bad debts

In CNY

Stage 1 Stage 2 Stage 3

Expected credit loss in Expected credit loss in

Provision for bad debt Expected credit loss in the whole duration (no the whole duration (credit Total

future 12 months credit impairment impairment already

incurred) incurred)

Balance as at January 65671.10 65671.10

123FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

012023

Balance as at January

01 2023 in the reporting

period

Reversal in the reporting 87.50 87.50

period

Balance as at June 30 65583.60 65583.60

2023

Provision for loss - Change of the book balance with significant amount during the reporting period

Inapplicable

Disclosed based on aging

In CNY

Aging Ending balance

Within 1 year (with 1 year inclusive) 666780480.72

1 to 2 years 498803.32

2 to 3 years 0.00

Over 3 years 40050.00

3 to 4 years 40050.00

Total 667319334.04

3) Provision recovery or reversal of reserve for bad debts during the reporting period

Provision for bad debt during the reporting period

In CNY

Amount of movement during the reporting period

Categories Opening balance Recovery or Ending balanceProvision reversal Written-off Others

Provision for bad

debt 65671.10 87.50 65583.60

Total 65671.10 87.50 65583.60

4) Other receivables actually written off in the reporting period

Inapplicable

5) Accounts receivable owed by the top five debtors based on the ending balance

In CNY

Proportion in total Ending balance of

Organization name Nature of Payment Ending balance Aging ending balance of the provision for bad

other receivables debts

Top five debtors of Within the scope of

the ending balance consolidation of

Summary of other receivables 664807340.64 Within 1 year 99.62% 0.00

receivables Due from relatedparties

Total 664807340.64 99.62% 0.00

6) Accounts receivable involving government subsidy

Inapplicable

7) Other receivables derecognized due to transfer of financial assets

Inapplicable

8) Amount of assets and liabilities formed through transfer of other receivables and continuing to be involved

Inapplicable

3. Long-term equity investments

In CNY

124FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

Ending balance Opening balance

Provisi Provisi

Items

Book balance on for on forimpair Book value Book balance impair Book value

ment ment

Investment in 1490485375.68 1490485375.68 1494128399.60 1494128399.60

subsidiaries

Investment in

associates and 56484605.25 56484605.25 58182086.90 58182086.90

joint ventures

Total 1546969980.93 1546969980.93 1552310486.50 1552310486.50

(1) Investment in subsidiaries

In CNY

Increase/ Decrease (+ / -) in the reporting period Ending

Investees Opening balance (book

balance of

Additional Decrease

Provision Ending balance (book

value) for value) the provision

investment ofinvestment impairmen

Others for

t impairment

Shenzhen

Harmony World

Watches Center 610354397.34 -1376597.97 608977799.37

Co. Ltd.FIYTA Sales Co.Ltd. 458083251.89 -1233973.05 456849278.84

Shenzhen FIYTA

Precision

Technology Co. 102482069.76 -561875.76 101920194.00

Ltd.Shenzhen FIYTA

Technology

Development 51224974.98 -210708.31 51014266.67

Co. Ltd.FIYTA (Hong

Kong) Limited 137737520.00 137737520.00

Shiyuehui

Boutique

(Shenzhen) Co. 5000000.00 5000000.00

Ltd.Shenzhen

Harmony

E-Commerce 11684484.39 11684484.39

Limited

Liaoning

Hengdarui

Commerce & 36867843.96 36867843.96

Trade Co. Ltd.Emile Chouriet

(Shenzhen) 80693857.28 -259868.83 80433988.45

Limited

Total 1494128399.60 -3643023.92 1490485375.68

(2) Investment in associates and joint ventures

In CNY

Increase/ Decrease (+ / -) in the reporting period

Income Ending

from

Opening equity Adjustme Announce Ending

balance

Investees balance Additional

Decrease investme nt of other Other d for Provision balance

of the

(book investme of equity distributin for (book

provision

investme nt comprehevalue) nt recognize nsive movemen g cash impairme

Others

value) for

nt impairmed under income t dividend ntor profit ntequity

method

I. Joint Venture

II. Associates

Shanghai

Watch 5818208 -169748 5648460

Industry 6.90 1.65 5.25

Co. Ltd.

5818208-1697485648460

Sub-total 6.90 1.65 5.25

5818208-1697485648460

Total 6.90 1.65 5.25

(3) Other note

Inapplicable

125FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

4. Operation Income and Costs

In CNY

Amount incurred in the reporting period Amount incurred in the previous period

Items

Income Cost Income Cost

Principal business 90155946.21 22121058.14 90020775.90 19190036.95

Other businesses 1886928.93 1621838.79

Total 92042875.14 22121058.14 91642614.69 19190036.95

5. Return on investment

In CNY

Items Amount incurred in the reporting period Amount incurred in the previous period

Income from long term equity investment -1697481.65 2462626.52

based on equity method

Total -1697481.65 2462626.52

6. Others

Inapplicable

XVIII. Supplementary information

1. Statement of non-recurring gains and losses in the reporting period

In CNY

Items Amount Notes

Gain/loss from disposal of non-current

assets including the part written-off with the -76689.73

provision for impairment of assets.The government subsidies included in the

profits and losses of the current period

( (excluding government grants which are 6691609.41

closely related to the Company’s normal

business and conform with the national

standard amount or quantity)

Reversal of provision for impairment of

accounts receivable that has been separately 5954740.99

tested for impairment

Other non-operating income and expenses 304922.65

with the aforesaid items exclusive

Less: Amount affected by the income tax 2832059.75

Total 10042523.57 --

Details of other gains and losses in compliance with the definition of non-recurring gains and losses.Inapplicable

Explanation of the non-recurring gains and losses listed in the Explanatory Announcement No.1 on Information

Disclosure for Companies Offering Their Securities to the Public as recurring gains and losses

Inapplicable

2. ROE and EPS

Earnings per share

Profit in the reporting period Return on equity weightedaverage Basic earning per share Diluted earning per share

(CNY/share) (CNY/share)

Net profit attributable to the

Company’s shareholders of 5.80% 0.4517 0.4517

ordinary shares

Net profit attributable to the

Company’s shareholders of 5.49% 0.4274 0.4274

ordinary shares less

non-recurring gains and loss

126FIYTA Precision Technology Co. Ltd. 2023 Semi-annual Report Full Text

3. Discrepancy in accounting data between IAS and CAS

(1) Differences in the net profit disclosed in the financial report & the net assets attributable to the Company’s

shareholders respectively according to the IAS and the CAS.Inapplicable

(2) Differences in the net profit & the net assets disclosed in the financial report respectively according to the

IAS and the CAS

Inapplicable

(3) Note to the discrepancy in accounting data under the IAS and the CAS. In case the discrepancy in data

which have been audited by an overseas auditing agent has been adjusted please specify the name of the

overseas auditing agent.Inapplicable

4. Others

Inapplicable

FIYTA Precision Technology Co. Ltd.Board of Directors

August 23 2023

127