2023 Annual Report of FIYTA Precision Technology Co. Ltd.
FIYTAPrecision Technology Co. Ltd.2023 Annual Report
March 2024
12023 Annual Report of FIYTA Precision Technology Co. Ltd.
2023 Annual Report
Section 1 Important Tips Table of Contents and Interpretations
The Company's Board of Directors Board of Supervisors Directors Supervisors and
Senior Officers guarantee the authenticity accuracy and completeness of the annual report
without any false records misleading statements or significant omissions and shall bear
individual and joint legal responsibilities.The Company's person in charge Zhang Xuhua the person in charge of accounting
work Song Yaoming and the head of the accounting agency (accounting supervisor) Tian
Hui declare that they guarantee the authenticity accuracy and completeness of the
financial reports in this year's report.All Directors have attended the Meeting of the Board of Directors to review this report.The forward-looking descriptions of future plans and development strategies involved
in this annual report do not constitute a substantive commitment of the Company to
investors. Investors are advised to pay attention to investment risks.The Company has provided a detailed description of the existing macroeconomic and
operational risks in this report. Please refer to the discussion and analysis of the
management in the third section regarding the Company's future development prospects.The Company's profit distribution plan deliberated and approved by the Board of
Directors is as follows: based on the total share capital on the equity registration date when
the profit distribution plan is implemented in the future (excluding the shares in special
repurchase securities account) a cash dividend of RMB 4.00 will be distributed to all
shareholders for every 10 shares. (tax included) 0 bonus shares will be given (tax included)
and the provident fund will not be converted into share capital.This report is prepared in both Chinese and English versions. If there is any ambiguity
in understanding the report the Chinese version shall prevail.
22023 Annual Report of FIYTA Precision Technology Co. Ltd.
Contents
Section 1 Important Tips Table of Contents and Int... 2
Section 2 Profile and Main Financial Indicators ..... 6
Section 3 Discussion and Analysis of the Managemen... 9
Section 4 Corporate Governance ......................26
Section 5 Environmental and Social Responsibility .. 51
Section 6 Important Matters .........................53
Section 7 Changes in Shares and Shareholders ....... 60
Section 8 Information Related to Preferred Shares ...71
Section 9 Bond Related Information ..................71
Section 10 Financial Reporting ......................72
32023 Annual Report of FIYTA Precision Technology Co. Ltd.
Contents of Reference File
I. The financial statements bearing the signatures and seals of the legal representative chief accountant
and accounting supervisor.II. The original audit report containing the seal of the accounting firm the signature and seal of the
registered accountant.III. The original copies of all documents and announcements of the Company publicly disclosed during the
reporting period.
42023 Annual Report of FIYTA Precision Technology Co. Ltd.
Interpretations
Items Refers to Interpretations
The Company Company FIYTA Refers to FIYTAPrecision Technology Co. Ltd.Aviation industry Refers to Aviation Industry Corporation of China Ltd.AVIC International Refers to AVIC International Holding Corporation
AVIC INTL Refers to AVIC International Holding Limited
AVIC Finance Refers to AVIC Finance Co. Ltd.The Company's 2018 A-share restricted share Incentive
Restricted share incentive scheme (Phase I) Refers to
scheme (Phase I)
The Company's 2018 A-share restricted share Incentive
Restricted share incentive scheme (Phase II) Refers to
Scheme (Phase II)
52023 Annual Report of FIYTA Precision Technology Co. Ltd.
Section 2 Profile and Main Financial Indicators
I. Profile
Stock abbreviation FIYTA FIYTAB Stock code 000026、200026
Stock abbreviation before
None
change (if any)
Stock exchanges for stock
Shenzhen Stock Exchange
listing
Chinese name of the
FIYTAPrecision Technology Co. Ltd.Company
Chinese abbreviation of the
FIYTACompany
Company
Foreign name of the
FIYTAPrecision Technology Co. Ltd.Company (if any)
Abbreviations of the
Company's foreign name (if FIYTA
any)
Legal representative of the
Zhang Xuhua
Company
Registered address FIYTATechnology Building Gaoxin South 1st Road Nanshan District Shenzhen
Postal code (registered
518057
address)
On January 30 1997 the registered address of the Company was changed from Building 6
Zhonghang Yuan Shennan Middle Road Shenzhen to Building 6 Zhonghang Yuan Shennan
Historical changes in the
Middle Road Futian District Shenzhen; On April 5 2000 the registered address was changed to
registered address of the
"FIYTA Building No. 163 Zhenhua Road Futian District Shenzhen"; On February 20 2004
Company
the registered address was changed to "FIYTA Technology Building Gaoxin South 1st Road
Nanshan District Shenzhen".Office address 20th Floor FIYTATechnology Building Gaoxin South 1st Road Nanshan District Shenzhen
Postal code (office address) 518057
Website www.fiytagroup.com
Email investor@fiyta.com.cn
II. Contact person and contact information
Secretary of the Board of Directors Securities Affairs Representative
Name Song Yaoming Xiong Yaojia
20th Floor FIYTA Technology Building 18th Floor FIYTA Technology Building
Address Gaoxin South 1st Road Nanshan Gaoxin South 1st Road Nanshan
District Shenzhen District Shenzhen
Tel. 0755－86013669 0755－86013669
Fax 0755－83348369 0755－83348369
Email investor@fiyta.com.cn investor@fiyta.com.cn
62023 Annual Report of FIYTA Precision Technology Co. Ltd.
III. Information disclosure and preparation location
The website of the stock exchange where the Company
http://www.szse.cn
discloses its annual report
Name and website of the media in which the Company STCN Hong Kong Commercial Daily and CNINF
discloses its annual report (www.cninfo. com. cn)
Location for preparing the Company's annual report The Department of Capital Planning and Operation
IV. Registration changes
Unified Social Credit Code 91440300192189783K
Changes in the main business of the Company since its listing
No changes
(if any)
Previous changes in controlling shareholders (if any) No changes
V. Others
The accounting firm hired by the Company
Name Da Hua CPAs LLP (Special General Partnership)
Room 1101 Building 7 No.16 West Fourth Ring Middle Road
Address
Haidian District Beijing
Name (accountants) Long Jiao Wang Dong
Recommendation agencies hired by the Company to perform continuous supervision responsibilities during the reporting period
Not applicable
Financial advisors hired by the Company to perform continuous supervision duties during the reporting period
Not applicable
VI. Main accounting data and financial indicators
Does the Company need to retrospectively adjust or restate accounting data from previous years
No
Changes compared to
2023 2022 the previous year in 2021
this year
Operating revenue
4569690002.994354096880.364.95%5243733540.93
(RMB)
Net profit attributable
to shareholders of the 333178102.37 266681451.84 24.93% 387840282.95
listed company (RMB)
Net profit attributable
to shareholders of the
listed company after
316806208.13249791455.7326.83%369418754.83
deducting non
recurring gains and
losses (RMB)
Net cash flows from 632401487.98 476228776.52 32.79% 547249108.45
operating activities
72023 Annual Report of FIYTA Precision Technology Co. Ltd.
(RMB)
Basic earnings per
0.80820.639826.32%0.9036
share (RMB/share)
Diluted earnings per
0.80750.639826.21%0.9036
share (RMB/share)
Weighted average ROE 10.28% 8.68% 1.60% 13.39%
Changes at the end of
this year compared to
At the end of 2023 At the end of 2022 At the end of 2021
the end of the previous
year
Total assets (RMB) 4204260897.08 4117143911.99 2.12% 4110579952.49
Net assets attributable
to shareholders of the 3333805752.19 3136423492.15 6.29% 3013232642.53
listed company (RMB)
The lower of the net profits before and after deducting non-recurring gains and losses of the Company in recent three accounting
years are all negative and the audit report of the recent year shows that the Company's going concern is uncertain.No
The lower of the net profit before and after deducting non recurring gains and losses is a negative value
No
VII. Differences in accounting data under domestic and overseas accounting standards
1. Differences in net profit and net assets disclosed in financial
reports under both international accounting standards and Chinese
accounting standards
Not applicable
2. Differences in net profit and net assets in financial reports
disclosed in accordance with overseas accounting standards and
Chinese accounting standards
Not applicable
VIII. Quarterly main financial indicators
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 1200095568.76 1164409693.80 1162738360.51 1042446379.92
Net profit attributable
to shareholders of the 103189489.23 84205578.00 78162925.58 67620109.56
listed company
Net profit attributable
to shareholders of the
listed company after
95484229.7981868313.8775522620.7263931043.75
deducting non
recurring gains and
losses
Net cash flows from
80169964.00264489879.62134414639.49153327004.87
operating activities
82023 Annual Report of FIYTA Precision Technology Co. Ltd.
Is there a significant difference between the above financial indicators or their total amount and the financial indicators related to
the disclosed quarterly and semi annual reports of the Company
No
IX. Non-recurring profit and loss items and amounts
Unit: RMB
Items Amount for 2023 Amount for 2022 Amount for 2021 Note
Non current asset disposal gains and
losses (including the offsetting portion of 685868.57 91925.06 730134.87
the provision for impairment of assets)
Government subsidies included in the
current period's profit and loss (excluding
those that are closely related to the
normal business operations of the
8665506.8518648210.0623476186.50
Company in compliance with national
policy regulations entitled to established
standards and have a sustained impact on
the company's profits and losses).Reversal of impairment provisions for
accounts receivable subject to separate 7570975.54 4389902.44 2225653.32
impairment testing
Other non operating revenue and
3910736.70-1064064.23-3058731.52
expenses other than the above items
Less: income tax impact amount 4461193.42 5175977.22 4951715.05
Total 16371894.24 16889996.11 18421528.12 --
Details of other profit and loss items that meet the interpretation of non-recurring gains and losses:
Not applicable
Explanation on defining the non-recurring profit and loss items listed in No. 1 Explanatory Announcement on Information
Disclosure of Companies Issuing Securities to the Public as recurring profit and loss items
Not applicable
Section 3 Discussion and Analysis of the Management
I. Industry conditions of the Company during the reporting period
In 2023 the National Bureau of Statistics announced a YoY GDP growth of 5.2%. Driven by policies such as expanding
domestic demand and promoting consumption coupled with the growth of household income the driving force of consumption on
economic growth continues to increase gradually becoming the main driving force of economic growth.The domestic watch consumption market is still under overall pressure due to the diversion of Hong Kong and some overseas
regions as well as the rationalization of consumer preferences. Among them the middle and high-end watch consumer market is
facing periodic fluctuations. According to the data released by the Swiss Watch Association the cumulative amount of Swiss
exports to Chinese Mainland increased by about 8% YoY and Chinese Mainland is still the second largest consumer market of
Swiss watches; The consumer market for mid to low-end watches is still sluggish with fierce competition in segmented fields. In
92023 Annual Report of FIYTA Precision Technology Co. Ltd.
an uncertain economic environment the differentiation of watch brands is further highlighted. Brands with high reputation
differentiated characteristics and quality services have stronger consumer resilience.The Company's main watch business covers medium high and fashion brands with multiple types of channels
complementing each other. It continues to attach importance to investment in brand differentiation channel operation customer
service and other aspects. Faced with market fluctuations the main business maintains a healthy development trend as a whole.II. Main businesses engaged by the Company during the reporting period
The Company's establishment and development originated from aviation precision technology and material technology.Adhering to the values of "brand leadership customer orientation value creation cooperation and responsibility and learning and
innovation" with the mission of "inheriting the spirit of serving the country by aviation and creating a quality life" it focuses on
the watch industry and forms a core business layout where its self-owned watch brand and the retail channel of famous watches
promote each other. In addition the Company actively explores and cultivates new businesses such as precision technology and
smart wearables and is in a stage of continuous development.The Company is deeply committed to professional watchmaking capacity building and brand operation and has multiple
self-owned brands such as "FIYTA" and "EMILE CHOORIET" covering different dimensions such as mid to high end mass
professional and fashion cool. Among them the core self-owned brand positioning of "FIYTA" is "a high-quality Chinese watch
brand with aviation and aerospace watches as its characteristic" adhering to the concept of "nation" as the core and "trendy" as the
form continuously creating differentiated characteristics and upgrading to "youthfulness high-end and mainstream"; At the same
time it continuously increases investment in technological innovation fields such as movement and aviation technology
applications relying on the advantages of aviation technology and aerospace quality and continuously provide professional timing
watches for China's aerospace industry gradually establishing a leading position in the domestic industry and expanding our brand
influence.In order to seize the opportunities in the domestic watch market and promote the long-term development of its self-own brand
the Company has established the "Harmony" watch retail channel. "Harmony" is committed to becoming the best comprehensive
service provider for luxury watches and has long-term and in-depth cooperation with numerous watch groups and brands. It has
honed industry-leading operational management and customer service capabilities and has become a leading professional
commercial brand in high-end chain for luxury watches in China.In recent years the Company has adhered to the development principle of "technology sharing the same origin industry
sharing the same roots and value sharing the same direction". With the strength of precision technology and industrial
accumulation the Company has extended and expanded its precision technology business and smart wearable business and has
now begun to take shape.III. Core competitiveness analysis
(I) Brand operation and management capabilities throughout the entire industry chain
The Company has the ability to operate and manage the entire industry chain integrating research and development design
manufacturing sales and service. Through resource integration and business collaboration it has continuously strengthened the
differentiation of the core self-owned brand of "FIYTA". During the reporting period the "FIYTA" brand's aerospace characteristic
products channels and marketing activities continued to innovate and the brand's market share gradually increased.(II) Refined channel operation and management capabilities
The Company has sales channels covering the whole country and some overseas countries and regions. Through its leading
channel operation and management capabilities the Company has continuously improved the efficiency of channel operation.During the reporting period the channel structure continued to be optimized and the unit production of a single store continued to
increase.
102023 Annual Report of FIYTA Precision Technology Co. Ltd.
(III) Digital capabilities to empower business
The Company has digital retail system CRM system SAP system cloud stores and other digital platforms. Through
deepening digital applications in research and development design production sales and service it has empowered business
development and efficiency improvement continuously strengthened private domain operations and integration of online and
offline operations enhanced customer lifecycle management capabilities and continuously improved core indicators such as
potential customer transactions and repeat purchases during the reporting period.(IV) Core technological capabilities in precision technology
As a national enterprise technology center the Company has R&D and production platforms in Shenzhen and Switzerland.By continuously promoting breakthroughs in movement technology aerospace material applications and the development and
application of aerospace precision timing technology the Company accelerated the localization of key components such as
movements. During the reporting period it has achieved commercial launch of its self-developed movements and the technology
development company has been recognized as a national "specialized refined unique and new small giant" enterprise.(V) Professional talent team building capabilities
The Company has a professional and stable talent team and continuously invests in talent team construction based on the
concept of "value creation". It has cultivated multiple outstanding representatives in core fields such as design R&D
manufacturing etc. During the reporting period Liu Zhonghua a senior watch technician of the Company was awarded the
"National May Day Labor Medal" and the honorary title of "National Technical Expert"; The Company has won the Outstanding
Contribution Award in the National Industry Vocational Skills Competition Light Industry Competition issued by the China
National Light Industry Council for its accumulation of innovative talents in technology.IV. Main business analysis
1. Overview
In 2023 the Company adheres to the principle of high-quality development adheres to the business strategy of "seeking
progress while maintaining stability" and "defending and counterattacking" strictly controls costs and expenses prevents asset
risks deeply explores business counterattacks and orderly carries out various business management work achieving steady
growth in overall business performance. During the reporting period the Company achieved an operating revenue of RMB
4569.69 million a year-on-year increase of 4.95%; the total profit was RMB 437 million a year-on-year increase of 28.86%; the
basic earnings per share were RMB 0.8082 a year-on-year increase of 26.32%; the weighted average ROE was 10.28% a
year-on-year increase of 1.6 percentage points.(I) Continuously promoting the upgrading of brand positioning and creating brand differentiation
During the reporting period based on the positioning of "a high-quality Chinese watch brand with aerospace watch as its
feature" "FIYTA" has made concerted efforts focused on the core product matrix concentrated resource investment strengthened
IP cooperation reached strategic cooperation with CNNC etc. and successively launched a number of aerospace-themed watches
such as J-20 Z-20 Y-20 "Spaceman" tourbillon space yacht China-Chic "Green Dragon and White Tiger". The aerospace series
has experienced rapid year-on-year growth and has become the second best-selling series of the brand helping to increase the
average customer price and rejuvenate the brand image; the Company also closely followed hot events to carry out integrated
marketing combining with movie cooperation of Born to Fly China Brand Day and celebrity activities etc. to enhance the
popularity of new products and promote aviation brand culture.(II) Continuously promoting channel structure optimization and leveraging operational management advantages
During the reporting period the "FIYTA" brand upgraded its store image with a focus on aerospace-themed stores Brand
Gallery stores with overall decoration and fashion collection stores continued to optimize its channel structure entered the
mainstream shopping centers in first and second tier cities and opened more than 20 aerospace-themed stores which effectively
improved the average customer price and unit production of its stores; seizing the opportunity of tax exemption the Company has
112023 Annual Report of FIYTA Precision Technology Co. Ltd.
opened new duty-free stores in Hong Kong Macao (the first oversea aerospace-themed store) Haikou and other places with good
sales; the Company has also increased investment in new channels such as Douyin and strengthened online new product
development self-owned live broadcast matrix building and multi-party cooperation. During the "618" shopping festival
e-commerce GMV grew by more than 80%. During the "Double 11" shopping festival it ranked top 1 in Tmall's domestic watch
category with a year-on-year growth of more than 200% on Douyin.For "Harmony" Watch Retail the Company continued to deepen its refined operations developing mid-to-high-end brands
and core high-quality channels around the four elements of "city brand business format and partners" and it has opened and
upgraded a total of 48 new stores; it promoted the integration of online and offline operation to build a "1+N+X" Harmony
marketing matrix on Douyin and continued to improve the comprehensive service capability of famous watches.(III) Continuously increasing investment in technological innovation and strengthening the hardcore strength of
precision technology
During the reporting period the Company increased investment in areas such as movement-related technologies aerospace
material applications and precision timing equipment achieving the localization of movements in some products; it realized
market applications of aerospace aluminum alloys Z-20 gene steel and other materials; it also provided timing equipment for
astronauts in Shenzhou XVI and XVII missions.(IV) Continuously promoting digital transformation and deepening platform applications
During the reporting period the Company continued to focus on digital management and private domain operations and
carried out multiple digital infrastructure construction and management digitization projects; focusing on customer service and
customer value exploration it deepened the refinement of member operations and made improvement in core indicators like
potential customer transactions and repeat purchases by existing customers; it promoted the operation of private domain traffic
matrix using mini programs as the starting point to increase private domain traffic; through online and offline joint marketing
new retail model of live streaming sales and other models it achieved store traffic attraction and conversion.(V) Continuously promoting new business exploration and cultivating new growth drivers
During the reporting period the Company's precision technology business continued to strengthen its technical strength in
matching complex and high-precision products promoting expansion into fields such as aerospace and medical devices and
continuing to push for breakthroughs in new customers; for smart wearable business the Company continued to enhance its
technological research and development capabilities continuously improved software and hardware functions for its products and
focused on new categories new businesses and new channels. Its self-owned brand ADASHER has achieved rapid growth.Year-on-year changes in key financial data
Items in balance sheet
Items Closing balance Opening balance Change ratio Reason for change
Mainly due to an increase in cash flows from operating
Monetary funds 504629153.71 313747463.64 60.84%
activities.Notes receivable 18268972.37 32214912.10 -43.29% Mainly due to the expiration of some commercial bills.Advances from Mainly due to a decrease in advances from customers
10267758.3116960128.83-39.46%
customers from the property business.Mainly due to the impact of repurchase of B-shares and
Treasury stock 78645532.23 50759806.16 54.94%
unlocking of equity incentives.Other
Mainly due to changes in translation differences of
comprehensive 19325335.93 5739589.89 236.70%
foreign currency statements.income
Items in income statement from the beginning of the year to the end of the reporting period
Items Current amountAmount incurred in theChange ratio Reason for change
122023 Annual Report of FIYTA Precision Technology Co. Ltd.
incurred previous period
Mainly due to a decrease in government subsidies
Other income 11435373.78 18648210.06 -38.68%
received.Investment Mainly due to the losses incurred by the held companies
-5819479.603026481.59-292.29%
income this year.Credit Mainly due to an increase in the amount of offsetting the
6827575.824845379.4540.91%
impairment loss provision for bad debts.Mainly due to the impact of the write-back of the
Assets
571980.37 -37625482.96 101.52% inventory depreciation provision for the watch business
impairment loss
in the previous year.Income tax Mainly due to the increase in income tax expenses
103826161.9472440220.0143.33%
expenses caused by the increase in total profit.Items in statement of cash flows from the beginning of the year to the end of the reporting period
Current amountAmount incurred inChange
Items Reason for change
incurred the previous period ratio
Mainly due to the large amount of VAT credit
Refunds of taxes 1937203.71 7793409.24 -75.14%
refunds received in the previous period.Mainly due to decrease in the amount of
Cash received from
250000000.00 845155704.29 -70.42% borrowings obtained this year caused by changes
borrowings
in borrowing methods.Mainly due to decrease in the amount of
Cash paid for debt
290000000.00 794083975.00 -63.48% repayment of loans this year caused by changes
repayment
in borrowing methods.
2. Revenue and cost
(1) Composition of operating revenue
Unit: RMB
20232022
Year-on-year
Proportion in Proportion in
Amount Amount changes
operating revenue operating revenue
Total operating
4569690002.99100%4354096880.36100%4.95%
revenue
By industry
Watch business 4267371133.82 93.38% 4044205847.74 92.88% 5.52%
Precision
technology 135950405.45 2.98% 163114009.23 3.75% -16.65%
business
Lease business 150361811.22 3.29% 129266616.76 2.97% 16.32%
Other 16006652.50 0.35% 17510406.63 0.40% -8.59%
By product
Watch brand
797083010.5017.44%725388535.2216.66%9.88%
business
Watch retail
3470288123.3275.94%3318817312.5276.22%4.56%
service business
Precision 135950405.45 2.98% 163114009.23 3.75% -16.65%
132023 Annual Report of FIYTA Precision Technology Co. Ltd.
technology
business
Lease business 150361811.22 3.29% 129266616.76 2.97% 16.32%
Other 16006652.50 0.35% 17510406.63 0.40% -8.59%
By region
South China 2111088618.01 46.20% 2142082539.80 49.20% -1.45%
Northwest
704042804.9515.41%610765393.0714.03%15.27%
region
North China 217315524.00 4.76% 231541393.72 5.32% -6.14%
East China 570830728.85 12.49% 572584950.61 13.15% -0.31%
Northeast
357656639.087.83%281347840.466.46%27.12%
region
Southwest
608755688.1013.31%515774762.7011.84%18.03%
region
By sales model
Direct sales 4429357639.21 96.93% 4196696430.85 96.39% 5.54%
Distribution 140332363.78 3.07% 157400449.51 3.61% -10.84%
(2) Data of industries products regions and sales models that account for more than 10% of the Company's operating
revenue or profit
Unit: RMB
Changes in Changes in
Changes in
operating gross profit
Gross operating costs
revenue margin
Operating revenue Operating costs profit compared to the
compared to the compared to the
margin same period
same period same period
last year
last year last year
By industry
Watch
4267371133.822745624708.7235.66%5.52%7.39%-1.12%
business
Lease
150361811.2244370528.0970.49%16.32%-3.62%6.10%
business
By product
Watch
brand 797083010.50 263771395.75 66.91% 9.88% 23.41% -3.63%
business
Watch
retail
3470288123.322481853312.9728.48%4.56%5.93%-0.93%
service
business
Lease
150361811.2244370528.0970.49%16.32%-3.62%6.10%
business
By region
South
2111088618.011337000230.4336.67%-1.45%1.30%-1.72%
China
Northwest
704042804.95447894168.6036.38%15.27%14.33%0.52%
region
North
217315524.00131696421.1039.40%-6.14%-8.37%1.47%
China
East
570830728.85367848607.7235.56%-0.31%-0.58%0.18%
China
Northeast
357656639.08240261877.2832.82%27.12%25.46%0.89%
region
142023 Annual Report of FIYTA Precision Technology Co. Ltd.
Southwest
608755688.10380762169.6837.45%18.03%18.18%-0.08%
region
By sales model
Direct
4429357639.212848424998.8635.69%5.54%6.85%-0.79%
sales
Distributi
140332363.7857038475.9559.35%-10.84%-22.14%5.89%
on
The Company's main business data for the past year adjusted based on data of the end of the reporting period (if the statistical data
of the Company's main business is adjusted during the reporting period)
Not applicable
(3) Whether the Company's revenue from physical sales was greater than its revenue from labor services
Yes
Year-on-year
Industry category Items Unit 2023 2022
changes
Sales volume Piece 902955 771846 16.99%
Brand watch Production volume Piece 868480 592041 46.69%
Inventory Piece 782514 816989 -4.22%
Explanation for relevant data with an year-on-year change of more than 30%
The production of brand watches for the year increased by 46.69% year-on-year mainly due to the growth in production of FIYTA
and Jeep brands.
(4) Performance status of major sales contracts and major procurement contracts signed by the Company as of the
reporting period
Not applicable
(5) Composition of operating costs
Industry and product categories
Unit: RMB
20232022
Year-on-y
Industry
Items Proportion
category Amount Proportion
ear
Amount in operating
in operating changescosts
costs
Cost of
Watch purchasing 2481853312.97 85.42% 2342868173.39 85.54% 5.93%
business goods
Raw materials 239031937.74 8.23% 191690987.81 7.00% 24.70%
Unit: RMB
20232022
Year-on-y
Product
Items Proportion in Proportion ear
category Amount operating Amount in operating changes
costs costs
Watch brand Raw materials 239031937.74 8.23% 191690987.81 7.00% 24.70%
152023 Annual Report of FIYTA Precision Technology Co. Ltd.
business
Watch retail Cost of
service purchasing 2481853312.97 85.42% 2342868173.39 85.54% 5.93%
business goods
(6) Whether there were any changes in the scope of consolidation during the reporting period
No
(7) Significant changes or adjustments in the Company's business products or services during the reporting period
Not applicable
(8) Main sales customers and suppliers
Main sales customers of the Company
Total sales of the top five customers (RMB) 838712019.86
The proportion of the total sales of the top five customers to the
18.35%
annual total sales
The proportion of related party sales to annual total sales
0.00%
among the top five customers
Information on the Company's top 5 customers
Proportion to annual total
No. Name Sales revenue (RMB)
sales
1 First place 241354458.49 5.28%
2 Second place 152642841.47 3.34%
3 Third place 150856332.33 3.30%
4 Fourth place 147569135.47 3.23%
5 Fifth place 146289252.10 3.20%
Total -- 838712019.86 18.35%
Other information of main customers
Not applicable
Main suppliers of the Company
Total procurement amount of the top five suppliers (RMB) 2263893779.57
The proportion of the total procurement amount of the top five
80.19%
suppliers to the total annual procurement amount
The proportion of related party procurement to the total annual
0.00%
procurement amount among the top five suppliers
Information on the Company's top 5 suppliers
Proportion to annual total
No. Name Procurement amount (RMB)
procurement amount
1 First place 981561875.51 34.77%
2 Second place 702988090.37 24.90%
3 Third place 220483210.73 7.81%
4 Fourth place 182125111.63 6.45%
5 Fifth place 176735491.33 6.26%
162023 Annual Report of FIYTA Precision Technology Co. Ltd.
Total -- 2263893779.57 80.19%
3. Costs
Unit: RMB
2023 2022 Year-on-year changes Significant changes
Sales expenses 924009179.32 931832830.40 -0.84% Not applicable
Management expenses 205359277.24 219014508.52 -6.23% Not applicable
Financial expenses 21469772.77 21188742.11 1.33% Not applicable
R&D expenses 57802244.08 61088585.61 -5.38% Not applicable
4. R&D investment
Expected
impact on the
Name of main R&D
Purpose Progress Intended goals future
projects
development of
the Company
Provide innovative
A series of new
products with Completed the Develop multiple series of products with Provide
products with
aerospace brand current year's FIYTA characteristics with aerospace as the innovative
FIYTA
characteristics for task theme and launch and sell them as planned products
characteristics
the market
Enhance the Enhance the
New product performance and Completed the Innovate and develop new product performance
innovation structure market current year's structures based on the needs of theme new and market
development competitiveness of task product development competitiveness
new products of new products
Development of Enhance the Enhance the
Develop mechanical watch movements and
mechanical watch performance and Completed the performance
related key components with special
movements with market current year's and market
functions and indication methods based on
brand differentiation competitiveness of task competitiveness
brand differentiation needs
features new products of new products
Provide
Complete the
Provide specialized specialized
Development of a task for the year Develop and deliver specialized equipment
equipment watches equipment
dedicated watch for and deliver watches according to the requirements of
for manned watches for
manned spaceflight multiple batches manned space missions
spaceflight manned
of products
spaceflight
Build a service ecosystem around smart
A smartwatch
wearables deepen efforts in smart AI
product with Enhance the Enhance the
mobile payments transportation music
functions such as performance and Completed the performance
and environmental monitoring functions
shooting payment market current year's and market
and build relevant service support platforms
exercise and health competitiveness of task competitiveness
based on human health sleep and other
and monitoring of new products of new products
fields; widely apply research technologies
human signs
to related listed products
R&D personnel in the Company
2023 2022 Change ratio
Number (person) 119 115 3.48%
Proportion 2.81% 2.66% 0.15%
Educational structure
Undergraduate 62 61 1.64%
172023 Annual Report of FIYTA Precision Technology Co. Ltd.
Master 18 18 0.00%
Doctor 2 2 0.00%
Junior college education or 37 8.82%
34
below
Age composition
Under 30 years old 28 38 -26.32%
30-40 years old 64 51 25.49%
Over 40 years old 27 26 3.85%
R&D investment of the Company
2023 2022 Change ratio
Investment amount (RMB) 57802244.08 61088585.61 -5.38%
Proportion of R&D investment to
1.26%1.40%-0.14%
operating revenue
Capitalized amount of R&D investment
0.000.000.00%
(RMB)
Proportion of capitalized R&D
0.00%0.00%0.00%
investment to R&D investment
Reasons and impacts of significant changes in the composition of R&D personnel in the Company
Not applicable
Reasons for the significant change in the proportion of total R&D investment to operating revenue compared to the previous year
Not applicable
Reasons for significant changes in capitalization rate of R&D investment and their rational explanation
Not applicable
5. Cash flow
Unit: RMB
Items 2023 2022 Year-on-year changes
Sub-total of cash inflows from
5095999854.924997924003.931.96%
operating activities
Sub-total of cash outflows from
4463598366.944521695227.41-1.28%
operating activities
Net cash flows from operating
632401487.98476228776.5232.79%
activities
Sub-total of cash inflows from
1778284.57138721.291181.91%
investment activities
Sub-total of cash outflows from
91104776.03114090573.97-20.15%
investment activities
Net cash flows from investment
-89326491.46-113951852.6821.61%
activities
Sub-total of cash inflows from
250000000.00845155704.29-70.42%
financing activities
Sub-total of cash outflows from
602163687.521106081523.22-45.56%
financing activities
Net cash flows from financing
-352163687.52-260925818.93-34.97%
activities
Net increase in cash and cash 190890764.07 103483652.50 84.46%
182023 Annual Report of FIYTA Precision Technology Co. Ltd.
equivalents
Explanation of the main influencing factors for significant YoY changes in relevant data
Not applicable
Explanation of the significant difference between the net cash flow from the operating activities during the reporting period and
the net profit of the current year
Not applicable
V. Non-main business analysis
Not applicable
VI. Analysis of asset and liabilities
1. Significant changes in asset composition
Unit: RMB
At the end of 2023 At the beginning of 2023
Proportion Changes in Significant
Amount Proportion Amount to total proportion changes
to total assets
assets
Monetary funds 504629153.71 12.00% 313747463.64 7.62% 4.38% Not applicable
Accounts
323142761.64 7.69% 305290959.68 7.42% 0.27% Not applicable
receivable
Contract assets 0.00 0.00% 0.00 0.00% 0.00% Not applicable
Inventory 2100666175.28 49.97% 2141320373.67 52.01% -2.04% Not applicable
Investment real
360255832.14 8.57% 374979494.71 9.11% -0.54% Not applicable
estate
Long-term
equity 51862607.30 1.23% 58182086.90 1.41% -0.18% Not applicable
investment
Fixed assets 355785354.68 8.46% 364628765.17 8.86% -0.40% Not applicable
Construction in
0.00 0.00% 0.00 0.00% 0.00% Not applicable
progress
Assets of right
109452481.64 2.60% 110330512.03 2.68% -0.08% Not applicable
of use
Short-term
250187763.87 5.95% 290237111.11 7.05% -1.10% Not applicable
loans
Contract
12286243.62 0.29% 16844437.47 0.41% -0.12% Not applicable
liabilities
Long-term
0.00 0.00% 0.00 0.00% 0.00% Not applicable
loans
Lease liabilities 43526352.52 1.04% 41642561.58 1.01% 0.03% Not applicable
High proportion of overseas assets
Not applicable
2. Assets and liabilities measured at fair value
Not applicable
192023 Annual Report of FIYTA Precision Technology Co. Ltd.
3. Restricted asset rights as of the end of the reporting period
Not applicable
VII. Investment analysis
1. Overall situation
Investment amount during the reporting Investment amount for the same period
Variation
period (RMB) last year (RMB)
80000000.000.00100.00%
Note: during the reporting period the Company increased the capital of RMB 80 million for its wholly-owned subsidiary
Shenzhen FIYTA Precision Technology Co. Ltd. Please refer to the relevant announcements disclosed by the Company on August
23 2023 and December 1 2023 on CNINF for details.
2. Significant equity investments obtained during the reporting
period
Not applicable
3. Significant non equity investments ongoing during the reporting
period
Not applicable
4. Financial asset investment
(1) Securities investment
Not applicable
(2) Derivative investment
Not applicable
5. Usage of raised funds
Not applicable
VIII. Significant asset and equity sales
1. Sale of significant assets
Not applicable
2. Sale of significant equity
Not applicable
202023 Annual Report of FIYTA Precision Technology Co. Ltd.
XI. Analysis of main holding and participating companies
Main subsidiaries and participating companies with a net profit impact of over 10% on the Company
Unit: RMB
Name Type Main business Registered capital Total assets Net assets Operating revenue Operating profit Net profit
Purchase and
sales of watches
Shenzhen Harmony
and spare and
World Watch Center Subsidiary 600000000 2076571866.37 1162132954.12 3405187991.94 322421713.57 242290924.83
accessory parts
Co. Ltd.and maintenance
services.Design
development and
FIYTASales Co. Ltd. Subsidiary sales of watches 450000000 450015837.37 332583223.76 421566166.83 3261715.88 -2469115.15
and spare and
accessory parts.Manufacturing
Shenzhen FIYTA and production of
Precision Technology Subsidiary watches and spare 180000000 368788920.21 286495846.07 367913873.64 44214426.68 41929647.65
Co. Ltd. and accessory
parts.Production and
Shenzhen FIYTA processing of
Technology Subsidiary precision spare 50000000 199259950.58 162613018.73 164445123.56 12355709.45 11968906.87
Development Co. Ltd. and accessory
parts.Trade and
FIYTA (Hong Kong) investment in
Subsidiary 137737520 268028322.96 252131956.46 87223517.20 13195774.65 10121009.50
Co. Ltd. watches and
accessories.Design
Emile Chouriet development and
Horologe (Shenzhen) Subsidiary sales of watches 41355200 132484518.55 54153791.88 79250452.61 543615.96 310562.68
Co. Ltd. and spare and
accessory parts.Acquisition and disposal of subsidiaries during the reporting period
212023 Annual Report of FIYTA Precision Technology Co. Ltd.
Not applicable
Explanation of main companies with holdings and shares
Not applicable
222023 Annual Report of FIYTA Precision Technology Co. Ltd.
X. Situation of structured entities controlled by the Company
Not applicable
XI. Outlook for the future development of the Company
(I) Development strategy and outlook
In 2024 the Company will continue to implement the national brand strategy focus on value creation goals take
"high-quality development" as the guiding principle adhere to the principle of seeking progress while maintaining stability
strengthen and expand the watch industry and improve core competitiveness; adhere to technological innovation accelerate
transformation and upgrading and enhance core functions. Solidly carry out the following tasks:
1. Continue to promote brand positioning upgrade and increase market share
The "FIYTA" brand will firmly establish its brand positioning as a high-quality Chinese watch brand with aerospace watches
as its characteristic optimize its marketing and communication system and highlight the characteristics of the aviation brand;
Strengthen product planning and operation integrate hardcore technology and use aerospace series to drive brand enhancement.
2. Continue to promote channel structure optimization and strengthen refined operations
The "FIYTA" brand will focus on three key store types aerospace-themed stores Brand Gallery stores with overall
decoration and fashion collection stores seize opportunities for channel transformation and promote the entry of shopping centers;
deepen the "dual excellence" operation system of stores and increase the output of single stores."Harmony" watch retail will focus on developing mid to high end channels and brands; deeply cultivate excellent operations
and improve service quality; promote the integrated development of online and offline.
3. Continue to increase investment in technological innovation and enhance technological attributes
The Company will accelerate the localization of movements high-end customized movements such as tourbillons and the
development of independent key components continuously promote the application of aerospace materials and technology and
create a hardcore capability that matches "aerospace quality".
4. Continue to promote transformation and upgrading and promote the development of new businesses
The Company will adhere to the principle of "technology sharing the same origin industry sharing the same roots and value
sharing the same direction" accelerate the cultivation process of strategic emerging industries and enhance the technological
attributes and scale of precision technology and smart wearable business.The precision technology business will focus on improving its process technology and precision manufacturing solution
capabilities striving for breakthroughs in industry expansion and customer development; The smart wearable business will
continue to enhance its physical operation capabilities achieving scale and efficiency improvement.(II) Risks and countermeasures
1. Consumer market risk
Currently the domestic consumer market is in a weak recovery state and residents have rational and cautious consumption
preferences. The watch consumption industry where the Company is located is still under pressure. On the one hand the Company
will continue to focus on its main business strengthen differentiated product development increase the proportion of aerospace
series strengthen refined management capabilities improve channel operation efficiency and promote the expansion of brand
market share; On the other hand the Company will accelerate the cultivation of strategic emerging industries and seek
breakthroughs in industrial transformation and upgrading.
2. Consumption outflow risk
With the recovery of travel in Hong Kong and overseas the domestic consumer market is facing pressure to diversify. The
Company will continue to strengthen digital construction and application enhance customer lifecycle management and service
capabilities and enhance customer stickiness; seize market opportunities and continue to explore overseas and duty-free channels.
232023 Annual Report of FIYTA Precision Technology Co. Ltd.
XII. Reception research communication interviews and other activities during the
reporting period
Main content of
the discussion Index of basic
Time Address Method Type of object Object and the information of
materials research
provided
Huachuang The Company
Securities Co. communicated
Ltd. Essence and exchanged
Securities Co. ideas with
Ltd. Qianhai investors on
Reinsurance business
Conference
Co. Ltd. operations
February 8 room of FIYTA
Field research Agency Shenzhen watch brand
2023 Technology
Qianhai management
Building
Jinhong Capital retail of luxury
Management watches and
Co. Ltd. Ping development of
An Pension precision
Insurance Co. technology
Ltd. business.In order to
provide
investors with a
comprehensive
and in-depth
understanding http://irm.cninf
of the o.com.cn/ircs/c
Company's ompany/compa
situation the nyDetailstockc
Company held ode=000026&o
an online rgId=gssz00000
The vast performance 26
number of briefing for the
investors year 2022
participating in where
Communication the 2022 online discussions and
https://eseb.cn/
April 3 2023 on online Other performance exchanges were
1379ifdveEw
platforms briefing of the held with
Company investors on the
through remote Company's
network business
participation situation
development
strategy watch
brand
management
business watch
retail business
precision
technology
business and
smart wearable
business
242023 Annual Report of FIYTA Precision Technology Co. Ltd.
development
for the year
2022.
Shenwan
Hongyuan
Securities Co.Ltd. New
China Fund
Management
The Company
Co. Ltd. China
communicated
Asset
and exchanged
Management
ideas with
Company
investors
Limited Guotai
regarding
Junan
Conference business
From May 24 Securities Co.room of FIYTA operations
to May 25 Field research Agency Ltd. China Life
Technology watch brand
2023 Pension
Building management
Company
retail of luxury
Limited
watches and
Kaiyuan
the
Securities Co.development of
Ltd. Shenzhen
smart wearable
Qianhai
businesses.Alliance Asset
Management
Co. Ltd. and
Zhongtai
Securities Co.Ltd.The Company
communicated
and exchanged
ideas with
Cinda investors
Conference Securities Co. regarding
August 31 room of FIYTA Ltd. and business
Field research Agency
2023 Technology Zhongtai operations
Building Securities Co. watch brand
Ltd. management
and the
development of
luxury watch
retail business.The Company
has
communicated
Investors who and exchanged
"Panorama participated in ideas with
Roadshow" Communication this online investors
November 15
website on online Other collective regarding the
2023
WeChat official platforms reception day Company's
account APP event for development
investors. strategy
business
development
situation etc.
252023 Annual Report of FIYTA Precision Technology Co. Ltd.
Section 4 Corporate Governance
I. Basic situation of corporate governance
In 2023 the Company will continue to strictly comply with the requirements of the Company Law Securities Law and
normative documents related to listed company governance issued by the China Securities Regulatory Commission continuously
improve the corporate governance structure and strive to strengthen the construction of modern enterprise systems enhance the
level of standardized operation of the Company. The company's governance status is no different from the normative documents
related to listed company governance issued by the China Securities Regulatory Commission.The Company has strictly followed the provisions of the Company Law other laws regulations normative documents and
the Articles of Association to establish and improve a relatively standardized corporate governance structure and rules of
procedure. It has formed a decision-making and operational management system with the General Meeting Board of Directors
Board of Supervisors and company management as the main structure and has fulfilled all responsibilities stipulated in the
Company Law and Articles of Association in accordance with the law.The General Meeting is the power organ of the Company which decides the Company's business policies and investment
plans reviews and approves the annual financial budget plan final accounts plan profit distribution plan plan to make up for
losses change the use of raised funds equity incentive plans and other matters makes resolutions on the increase or reduction of
the Company's registered capital the issuance of corporate bonds and other financing instruments such as bonds the merger
division dissolution liquidation or change of the Company's form formulates or approves the Articles of Association and the plan
for amending the Articles of Association elects and replaces Directors and Supervisors who are not represented by employees and
decides on the remuneration matters of the relevant Directors and Supervisors.The Board of Directors plays the role of "setting strategies making decisions and preventing risks" is responsible for
executing the resolutions of the General Meeting convening the General Meeting and reporting the Board of Directors' work to
the General Meeting. Within the scope authorized by the General Meeting the Board of Directors can decide on matters such as
external investment acquisition and sale of assets asset mortgage external guarantees related transactions etc. determine the
establishment of the Company's internal management structure and branch offices and appoint or dismiss the Company's General
Manager Secretary of the Board of Directors and other Senior Officers. The Board of Directors of the Company is composed of
nine Directors including three Independent Directors. The Board of Directors has three specialized committees: Strategy Audit
and Nomination and Compensation and Assessment.The Board of Supervisors is the Supervisory body of the Company responsible for reviewing the Company's regular reports
inspecting the Company's finances supervising the Directors and Senior Officers of the Company to perform their duties in
accordance with the law and making recommendations for the removal of Directors and Senior Officers who violate laws
administrative regulations the Company's Articles of Association or resolutions of the General Meeting. The Board of
Supervisors of the Company is composed of three Supervisors including one Employee Representative Supervisor.The management team is responsible for "seeking business implementing and strengthening management". The General
Manager is responsible to the Board of Directors presiding over the Company's production and operation management under the
leadership of the Board of Directors organizing the implementation of resolutions of the meetings of the Board of Directors
reporting to the Board of Directors organizing the implementation of the Company's annual development plan and business plan
drafting the Company's investment plan annual financial budget plan final account plan profit distribution plan and loss
recovery plan and plan to increase or decrease the registered capital of the Company etc.Is there a significant difference between the actual situation of corporate governance and laws administrative regulations and the
provisions on corporate governance issued by the China Securities Regulatory Commission for listed companies
No
262023 Annual Report of FIYTA Precision Technology Co. Ltd.
II. The independent situation of the Company relative to its controlling shareholders and
actual controllers in ensuring the Company's assets personnel finance institutions
business etc.The Company has strictly separated from its controlling shareholders in terms of business personnel assets institutions
finance etc. The Company has independent and complete business and independent operation capabilities.In terms of business: the Company mainly operates in the clock and watch industry with independent production auxiliary
production supporting facilities and procurement and sales systems. There is no industry competition between the Company and
its controlling shareholders.In terms of personnel: the Company has independent institutions and sound systems in labor personnel and salary
management. Except for Mr. Xiao Yi Mr. Li Peiyin Mr. Deng Jianghu Mr. Guo Gaohang the Directors as well as Ms. Hu Min
Chairman of the Board of Supervisors and Mr. Yuan Tianbo the Supervisor who serve as controlling shareholders no other
Directors or Senior Officers have held dual positions in shareholder units and the financial staff has not held any part-time
positions in affiliated companies.In terms of assets: the Company has clear property rights with its controlling shareholders and has independent legal person
property rights over the Company's assets. The Company's assets are completely independent of its controlling shareholders and it
independently owns trademarks such as "FIYTA" and "Harmony".In terms of institutions: The Company's Board of Directors Board of Supervisors and other internal institutions are sound
operate independently and there is no subordinate relationship or joint office situation with the functional departments of its
controlling shareholders. The controlling shareholder shall exercise its rights and assume corresponding obligations in accordance
with the law and shall not directly or indirectly interfere with the Company's operating activities beyond the scope of the General
Meeting.In terms of finance: the Company has established an independent finance department a sound and independent financial
accounting system and financial management system opened an independent bank account and the controlling shareholder has
not interfered with the Company's financial accounting activities.III. Peer competition
Not applicable
IV. Relevant information on Annual and Extraordinary General Meetings held during the
reporting period
1. Information on the General Meetings during this reporting period
Investors'
Sessions Type Date Disclosure date Resolution
participation ratio
Announcement on
the Resolutions of
2022 Annual Annual General
42.07% April 26 2023 April 27 2023 the 2022 Annual
General Meeting Meeting
General Meeting
Announcement on
The 1st the Resolutions of
Extraordinary
Extraordinary the 1st
General 39.13% May 31 2023 June 1 2023
General Meeting in Extraordinary
Meeting
2023 General Meeting
in 2023-031
272023 Annual Report of FIYTA Precision Technology Co. Ltd.
Announcement on
The 2nd the Resolutions of
Extraordinary
Extraordinary the 2nd
General 39.35% September 12 2023 September 13 2023
General Meeting in Extraordinary
Meeting
2023 General Meeting
in 2023-051
Announcement on
The 3rd the Resolutions of
Extraordinary
Extraordinary the 3rd
General 39.36% December 28 2023 December 29 2023
General Meeting in Extraordinary
Meeting
2023 General Meeting
in 2023-067
II. Preferred shareholders with restored voting rights request to
convene an Extraordinary General Meeting
Not applicable
282023 Annual Report of FIYTA Precision Technology Co. Ltd.
V. Situation of Directors Supervisors and Senior Officers
1. Basic information
Shares Shares
Emplo Ge Initial Other Final
A added in reduced in
Name Position yment nd From To holdings changes holdings Reasons for changes in shares
ge this period this period
status er (shares) (shares) (shares)
(shares) (shares)
Zhang Curre M
Chairman 47 July 1 2021 September 8 2024 0 0 0 0 0
Xuhua nt ale
Curre M
Xiao Yi Director 50 February 24 2021 September 8 2024 0 0 0 0 0
nt ale
Li Curre M
Director 38 February 24 2021 September 8 2024 0 0 0 0 0
Peiyin nt ale
Deng Curre M
Director 40 September 8 2021 September 8 2024 0 0 0 0 0
Jianghu nt ale
Guo
Curre M
Gaohan Director 37 December 28 2023 September 8 2024 0 0 0 0
nt ale
g
The Company repurchased and
Director February 24 2021 September 8 2024 cancelled a portion of its A-share
restricted shares that did not meet
Curre M
Pan Bo 48 280000 0 0 -49950 230050 the performance conditions for
General nt ale
January 15 2021 September 8 2024 lifting restrictions at the company
Manager level resulting in a decrease of
49950 shares.
Wang Independent Curre M
54 September 11 2018 September 8 2024 0 0 0 0 0
Jianxin Director nt ale
Zhong
Independent Curre M
Hongmi 49 September 11 2018 September 8 2024 0 0 0 0 0
Director nt ale
ng
Tang Independent Curre M
50 September 11 2018 September 8 2024 0 0 0 0 0
Xiaofei Director nt ale
Chairman of
the Board of Fe January 4 2024 September 8 2024
Supervisors Curre 0 0 0 0 0Hu Min m 39
nt
ale
Supervisor December 28 2023 September 8 2024
292023 Annual Report of FIYTA Precision Technology Co. Ltd.
Yuan Curre M
Supervisor 44 December 28 2023 September 8 2024 0 0 0 0 0
Tianbo nt ale
Fe
Curre
Hu Jing Supervisor m 53 September 7 2021 September 8 2024 9000 0 0 0 9000
nt
ale
Deputy 1. Reduced 70000 shares due to
General August 8 2014 September 8 2024 personal financial needs;
Manager 2. The Company repurchased and
cancelled a portion of its A-share
Lu Curre M
57 280000 0 70000 -49950 160050 restricted shares that did not meet
Wanjun nt ale
General the performance conditions for
October 25 2021 September 8 2024
Counsel lifting restrictions at the company
level resulting in a decrease of
49950 shares.
1. Reduced 70000 shares due to
personal financial needs;
2. The Company has completed
the repurchase and cancellation of
Liu Deputy
Curre M some A-share restricted shares it
Xiaomin General 53 October 17 2016 September 8 2024 280000 0 70000 -49950 160050
nt ale holds that have not met the
g Manager
performance conditions for lifting
restrictions at the company level
resulting in a decrease of 49950
shares.
1. Reduced 70000 shares due to
personal financial needs;
2. The Company has completed
the repurchase and cancellation of
Deputy
Curre M some A-share restricted shares it
Li Ming General 51 October 17 2016 September 8 2024 280040 0 70000 -49950 160090
nt ale holds that have not met the
Manager
performance conditions for lifting
restrictions at the company level
resulting in a decrease of 49950
shares.Chief
February 6 2022 September 8 2024
Song Accountant
Curre M
Yaomin Deputy 57 0 0 0 0 0nt ale
g General April 21 2022 September 8 2024
Manager
302023 Annual Report of FIYTA Precision Technology Co. Ltd.
and
Secretary of
the Board of
Directors
1. Reduced 52500 shares due to
personal financial needs;
2. The Company has completed
the repurchase and cancellation of
Deputy
Tang Curre M some A-share restricted shares it
General 51 September 29 2019 September 8 2024 210000 0 52500 -49950 107550
Haiyuan nt ale holds that have not met the
Manager
performance conditions for lifting
restrictions at the company level
resulting in a decrease of 49950
shares.Xiao
Resig M
Zhangli Director 48 September 20 2017 December 11 2023 0 0 0 0 0
ned ale
n
Chairman of
the Board of March 8 2021 December 28 2023
Zheng Supervisors Resig M 61 0 0 0 0 0
Qiyuan ned ale
Supervisor February 24 2021 December 28 2023
Fe
Cao Resig
Supervisor m 53 February 24 2021 December 28 2023 0 0 0 0 0
Zhen ned
ale
Total -- -- -- -- -- -- 1339040 0 262500 -249750 826790 --
312023 Annual Report of FIYTA Precision Technology Co. Ltd.
Is there any situation where Directors and Supervisors have resigned and Senior Officers have been dismissed during their term of
office during the reporting period
In December 2023 Mr. Xiao Zhanglin Non-independent Director of the Company resigned from his position as a
Non-independent Director of the 10th Board of Directors and member of the Special Committee of the Board of Directors due to
work reasons. After resigning he will not hold any position in the Company; Mr. Zheng Qiyuan Non-employee Representative
Supervisor and Chairman of the Company's Board of Supervisors and Ms. Cao Zhen Non-employee Representative Supervisor
resigned from the aforementioned positions in the 10th Board of Supervisors due to work reasons. After resigning they will not
hold any positions in the Company.During the reporting period the Company has completed the work of filling the vacancies of Directors and Supervisors in
accordance with relevant laws and regulations.Changes in Directors Supervisors and Senior Officers of the Company
Name Position Type Date Reason
Elected as the Non-independent Director of the 10th Board
Guo
of Directors at the 16th Meeting of the 10th Board of
Gaohan Director Elected December 28 2023
Directors and the 3rd Extraordinary General Meeting in
g
2023.
Elected as a Non-employee Representative Supervisor of
the 10th Board of Supervisors at the 14th Meeting of the
Hu Min Supervisor Elected December 28 2023
10th Board of Supervisors and the 3rd Extraordinary
General Meeting in 2023.Chairman of the
Elected as the Chairman of the 10th Board of Supervisors
Hu Min Board of Elected January 4 2024
at the 15th Meeting of the 10th Board of Supervisors.Supervisors
Elected as a Non-employee Representative Supervisor of
Yuan the 10th Board of Supervisors at the 14th Meeting of the
Supervisor Elected December 28 2023
Tianbo 10th Board of Supervisors and the 3rd Extraordinary
General Meeting in 2023.Xiao
Resigne Resigned from the position of Non-independent Director of
Zhangli Director December 11 2023
d the 10th Board of Directors due to work reasons.n
Chairman of the December 28 2023
Zheng Board of Resigne Resigned from the position of Supervisor of the 10th Board
Qiyuan Supervisors d of Supervisors due to work reasons.Supervisor
Cao Resigne December 28 2023 Resigned from the position of Supervisor of the 10th Board
Supervisor
Zhen d of Supervisors due to work reasons.
2. Employment situation
Professional backgrounds main work experiences and current main responsibilities of the current Directors Supervisors and
Senior Officers of the Company.Mr. Zhang Xuhua born in March 1977 holds a Master of Business Administration from Xi'an Jiaotong University and an
EMBA from China Europe International Business School. He is currently the Chairman of the Company. He once served as the
Managing Director Deputy General Manager Assistant General Manager General Manager of the Shopping Center Business
Department General Manager of Chengdu Branch General Manager of the Commodity Center General Manager of the
Dreams-on Department Store Manager of the Procurement Department Head of the Investment Promotion Department of
Rainbow Digital Commercial Co. Ltd. and employee of the Marketing Department of Vanke Industry Co. Ltd.Mr. Xiao Yi born in March 1974 holds an MBA degree from the School of Economics and Management of Beihang University.He is currently a Director of the Company Head of the Party Committee Organization Department/Human Resources Department
of AVIC International Holding Corporation Director of Tianma Microelectronics Co. Ltd. and Director of Shennan Circuit Co.
322023 Annual Report of FIYTA Precision Technology Co. Ltd.
Ltd. He once served as the Project Manager of the Technology Transfer Center of BUAA Holdings Co. Ltd. Supervisor Business
Manager of the Manager Department Assistant Director of the Administrative Management Department Deputy Head and Head
of the Comprehensive Management Department of AVIC International Holding Corporation.Mr. Li Peiyin born in September 1986 is a certified public accountant and senior accountant. He holds a Master's Degree in
Accounting from Xiamen University and an MBA from Missouri State University. He is currently a Director of the Company
Head of the Finance Management Department of AVIC International Holding Corporation Director of Rainbow Digital
Commercial Co. Ltd. Director of Shennan Circuit Co. Ltd. and Director of Tianma Microelectronics Co. Ltd. He once served as
the Business Manager Assistant Head and Deputy Head of the Finance Management Department of AVIC International Holding
Corporation.Mr. Deng Jianghu born in July 1984 holds a Master's Degree in Business Administration from Northeast Normal University. He
is currently a Director of the Company Head of the Business Management Department of AVIC International Holding
Corporation Director of AVIC Supply Corporation Director of AVIC International Holding (Zhuhai) Corporation Director of
Tianma Microelectronics Co. Ltd. Director of Shennan Circuit Co. Ltd. Director of Rainbow Digital Commercial Co. Ltd. and
Director of AVIC Huadong Optoelectronics Co. Ltd. He once served as the Deputy Head of the Planning and Development
Department and the Business Management Department of AVIC International Holding Corporation (in charge of work) Deputy
Manager and Manager of the Planning and Operations Department of the Company Head of the Modern Service Industry Office
of AVIC Shenzhen Co. Ltd. Senior Project Manager of the Business Management Department of AVIC International Holding
Corporation and Senior Strategic Operations and Management Project Manager of the Strategic Development Department of
Shennan Circuit Co. Ltd.Mr. Guo Gaohang born in March 1987 holds a Master's Degree in Materials Physics and Chemistry from Harbin Institute of
Technology. He is currently a Director of the Company Deputy Head of the Planning and Development Department of AVIC
International Holding Corporation (in charge of work) Director of Castic-SMP Machinery Corp. Ltd Director of AVIC Supply
Corporationand Director of Tianma Microelectronics Co. Ltd. He once served as the Assistant Head of the Planning and
Development Department and Assistant Head of the Business Management Department of AVIC International Holding
Corporation Strategic Operations and Management Project Manager of the Planning and Operations Department of AVIC
Shenzhen Co. Ltd. Semiconductor Industry Analyst and Senior Semiconductor Industry Analyst of Trend Force (Shenzhen) Co.Ltd. and Sealing and Testing Process Design Engineer at Shenzhen STS Microelectronics Co. Ltd.Mr. Pan Bo born in March 1976 is an engineer. He holds a Bachelor's Degree in Mechanical and Electrical Engineering from
Beihang University and an EMBA from China Europe International Business School. He is currently the Managing Director of the
Company. He once served as the Deputy General Manager Secretary of the Board of Directors and Assistant General Manager of
the Company as well as the General Manager Deputy General Manager Assistant General Manager Manager of the Sales
Department Manager of the Logistics Department and Manager of the After Sales Department of FIYTA Sales Co. Ltd.Mr. Wang Jianxin born in June 1970 is a certified public accountant and holds a Bachelor's Degree in Auditing from Zhongnan
University of Economics and Law. He is currently an Independent Director of the Company partner of ShineWing CPAs (Special
General Partnership)Independent Director of Shenzhen MeHow Chuangyi Medical Technology Co. Ltd. and Independent
Director of Fortior Technology (Shenzhen) Co. Ltd.Mr. Zhong Hongming born in January 1975 holds a Doctorate in Civil and Commercial Law from Renmin University of China
and a Postdoctoral Degree in Civil and Commercial Law from Southwest University of Political Science and Law. He is currently
an Independent Director of the Company an Associate Researcher at the Law Research Institute of Sichuan Academy of Social
332023 Annual Report of FIYTA Precision Technology Co. Ltd.
Sciences an Independent Director of Chengdu Shengbang Seals Co. Ltd. and also serves as a Director of the China Commercial
Law Society a Director of the Institute of Securities Law of CLS and the Secretary General of the Commercial Law Society of
Sichuan Law Society.Mr. Tang Xiaofei born in May 1974 holds a Doctorate in Management from Southwest Jiaotong University. He is currently an
Independent Director of the Company Professor and Doctoral Supervisor at the School of Business Administration at Southwest
University of Finance and Economics Director of the Institute of Urban Brand Strategy at Southwest University of Finance and
Economics an outstanding talent in the new century recognized by the Ministry of Education Director of the China Marketing
Association and Independent Director of Qianhe Condiment and Food Co. Ltd.Ms. Hu Min born in May 1985 is an economist and holds a Master's Degree in Civil Procedure Law from Peking University. She
is currently the Chairman of the Board of Supervisors of the Company Head and Chief Auditor of the Audit and Legal
Department of AVIC International Holding Corporation. She formerly served as the Deputy Head and Chief Auditor of the Audit
and Legal Department of AVIC International Holding Corporation Deputy Head of the Audit and Legal Department General
Counsel of China National Aero-technology International Engineering Corporation and General Manager of the Legal Affairs and
Discipline Inspection Audit Department Deputy General Counsel and General Manager of the Legal Affairs and Contract
Management Department General Manager of the Legal Affairs and Contract Management and Audit Supervision Department
and Deputy General Manager of the Legal Affairs and Contract Management Department Legal Advisor of the Legal Affairs
Department of AVIC International Holding Corporation.Mr. Yuan Tianbo born in October 1980 is an economist and holds a Master's Degree in Management Science and Engineering
from Northwestern Polytechnical University. He is currently a Supervisor of the Company and Deputy Head of the Department of
Discipline Inspection of AVIC International Holding Corporation (in charge of work). He formerly served as the Deputy General
Manager (in charge of work) and Assistant General Manager of Oriental Jade Co. Ltd. General Manager and Deputy General
Manager of Qinghai AVIC Director of the Administrative and Human Resources Department and Director of the Expansion
Department of Oriental Jade Co. Ltd. Organization and Performance Management of the Human Resources Department of AVIC
International Holding Corporation and Recruitment Management of the Human Resources Department of AVIC Shenzhen Co.Ltd.Ms. Hu Jing born in September 1971 is an accountant and holds a Bachelor's Degree in Accounting from Jiangxi University of
Finance and Economics. She is currently an Employee Representative Supervisor of the Company and Senior Tax Manager of the
Finance Department. She formerly served as the Senior Business Manager of the Audit Department Tax Supervisor of the Finance
Department and Fund Manager of the Company.Mr. Lu Wanjun born in February 1967 is an accountant and holds an EMBA degree from China Europe International Business
School. He is currently a Deputy General Manager and General Counsel of the Company. He formerly served as the Assistant
General Manager of the Company Executive Deputy General Manager Deputy General Manager Assistant General Manager
and Manager of the Finance Department of Shenzhen Harmony World Watch Center Co. Ltd.Mr. Liu Xiaoming born in July 1971 is an engineer and economist and holds a Bachelor's Degree in Manufacturing Engineering
from Beihang University and an EMBA degree from China Europe International Business School. He is currently a Deputy
General Manager of the Company. He formerly served as the General Manager Assistant of the Company Deputy General
Manager and Assistant General Manager of Shenzhen Harmony World Watch Center Co. Ltd.Mr. Li Ming born in September 1973 holds a Bachelor's Degree in Marketing from Zhongnan University of Economics and Law
and an EMBA degree from China Europe International Business School. He is currently a Deputy General Manager of the
Company. He formerly served as the Assistant General Manager and HR Director of the Company Deputy General Manager
Assistant General Manager and Manager of Human Resources Department of Shenzhen Harmony World Watch Center Co. Ltd.;
342023 Annual Report of FIYTA Precision Technology Co. Ltd.
HR Director and General Manager of Marketing Center of China Netcom Shenzhen Company; Key Account Manager and
Marketing Planning Manager of China Telecom Shenzhen Company.Mr. Song Yaoming born in July 1967 is a senior accountant and holds a Master's Degree in Economics from Shaanxi Institute
of Finance & Economics and an EMBA degree from China Europe International Business School. He is currently the Chief
Accountant Deputy General Manager and Secretary of the Board of Directors of the Company. He formerly served as the Deputy
General Manager and Chief Accountant of Rainbow Digital Commercial Co. Ltd. Director of Shenzhen Aoxuan Investment Co.Ltd. Director of Shenzhen Aoer Investment Development Co. Ltd. and Deputy Manager and Accountant of the Finance
Department of Shenyang FAW Jinbei Automobile Co. Ltd.Mr. Tang Haiyuan born in February 1973 is a senior engineer and holds a Bachelor's Degree in Plastic Molding Technology
and Equipment from Hefei University of Technology and an EMBA degree from China Europe International Business School. He
is currently a Deputy General Manager of the Company. He formerly served as the General Manager Deputy General Manager
Assistant General Manager Manager of the Quality Department Manager and Deputy Manager of the Engineering Technology
Department of Shenzhen FIYTA Precision Timing Manufacturing Co. Ltd. as well as the Assistant Technical General Manager
and Manager of Technical Department of Shenzhen FIYTA Technology Development Co. Ltd.Employment in shareholder units
Whether or not
remuneration
Name of Position held in
Name of employee From To allowance is
shareholder units shareholder units
received from
shareholder units
Head of Party
Committee
AVIC International
Organization
Xiao Yi Holding January 18 2021 Yes
Department/Huma
Corporation
n Resources
Department
Head of the
AVIC International
Finance
Li Peiyin Holding February 28 2022 Yes
Management
Corporation
Department
Head of the
AVIC International
Business
Deng Jianghu Holding August 28 2023 Yes
Management
Corporation
Department
Deputy Head of
AVIC International the Planning and
Guo Gaohang Holding Development October 9 2023 Yes
Corporation Department (in
charge of work)
AVIC International Head of the Audit
Hu Min Holding and Legal August 28 2023
Corporation Department
Yes
AVIC International
Hu Min Holding Chief Auditor June 26 2023
Corporation
Deputy Head of
AVIC International the Discipline
Yuan Tianbo Holding Inspection May 29 2023 Yes
Corporation Department (in
charge of work)
Explanation of Not applicable
employment in
352023 Annual Report of FIYTA Precision Technology Co. Ltd.
shareholder units
Employment in other units
Whether or
not
remuneratio
Name of Position held
Name of other units From To n allowance
employee in other units
is received
from other
units
Tianma Microelectronics Co. Ltd. Director February 26 2021 No
Xiao Yi
Shennan Circuit Co. Ltd. Director April 6 2021 No
Rainbow Digital Commercial Co. Ltd. Director February 24 2021 No
Li Peiyin Shennan Circuit Co. Ltd. Director April 6 2021 No
Tianma Microelectronics Co. Ltd. Director July 8 2022 No
AVIC Supply Corporation Director July 192021 No
AVIC International Holding (Zhuhai)
Director December 272021 No
Corporation
Deng Tianma Microelectronics Co. Ltd. Director November 29 2021 No
Jianghu
Shennan Circuit Co. Ltd. Director April 7 2022 No
Rainbow Digital Commercial Co. Ltd. Director September 9 2022 No
AVIC Huadong Optoelectronics Co. Ltd. Director November 27 2023 No
Castic-SMPMachinery Corp. Ltd Director June 282021 No
Guo
AVIC Supply Corporation Director November 27 2023 No
Gaohang
Tianma Microelectronics Co. Ltd. Director March 6 2024 No
ShineWing CPAs (Special General
Partner December 1 2006 Yes
Partnership)
Wang Shenzhen MeHow Chuangyi Medical Independent
February 23 2023 Yes
Jianxin Technology Co. Ltd. Director
Independent
Fortior Technology (Shenzhen) Co. Ltd. June 16 2020 Yes
Director
Law Research Institute of Sichuan Academy Associate
November 24 2017 Yes
Zhong of Social Sciences Researcher
Hongming Independent
Chengdu Shengbang Seals Co. Ltd. November 17 2022 Yes
Director
School of Business Administration at Professor and
Southwest University of Finance and Doctoral September 1 2008 Yes
Tang Economics Supervisor
Xiaofei
Independent
Qianhe Condiment and Food Co. Ltd. November 30 2022 Yes
Director
Explanati
on of
employme Not applicable
nt in other
units
362023 Annual Report of FIYTA Precision Technology Co. Ltd.
Penalties imposed by securities regulatory authorities in the past three years on the Company's current and departing Directors
Supervisors and Senior Officers during the reporting period
Not applicable
3. Remuneration of Directors Supervisors and Senior Officers
Decision-making process determination basis and actual payment of remuneration for Directors Supervisors and Senior Officers
The remuneration of internal Directors and Senior Officers of the Company is based on an annual salary system with an
annual salary structure of basic annual salary and performance-based annual salary. The remuneration of internal Directors is
implemented after approval by the General Meeting and the remuneration of Senior Officers is implemented after approval by the
Board of Directors. The assessment of Senior Officers is carried out in accordance with the Management Measures for
Performance Assessment of Management Members and the Management Measures for Remuneration of Management Members of
the Company.Except for Independent Directors who receive allowances in the Company other external Directors and Non-employee
Representative Supervisors do not receive remuneration in the Company. The remuneration of Employee Representative
Supervisors shall be implemented in accordance with the Company's employee remuneration management measures.Remuneration of Directors Supervisors and Senior Officers during the reporting period
Unit: RMB ten thousand
Total pre-tax
Whether to receive
Employment remuneration
Name Position Gender Age remuneration from related
status received from the
parties of the Company
Company
Zhang Xuhua Chairman Male 47 Current 198.35 No
Xiao Yi Director Male 50 Current Yes
Li Peiyin Director Male 38 Current Yes
Deng Jianghu Director Male 40 Current Yes
Guo Gaohang Director Male 37 Current Yes
Pan Bo Managing Director Male 48 Current 187.49 No
Independent
Wang Jianxin Male 54 Current 9 No
Director
Zhong Independent
Male 49 Current 9 No
Hongming Director
Independent
Tang Xiaofei Male 50 Current 9 No
Director
Chairman of the
Hu Min Board of Female 39 Current Yes
Supervisors
Yuan Tianbo Supervisor Male 44 Current Yes
Hu Jing Supervisor Female 53 Current 37.46 No
Deputy General
Lu Wanjun Manager and Male 57 Current 185.79 No
General Counsel
Deputy General
Liu Xiaoming Male 53 Current 229.61 No
Manager
Deputy General
Li Ming Male 51 Current 180.31 No
Manager
Chief Accountant
Deputy General
Song Yaoming Manager and Male 57 Current 185.82 No
Secretary of the
Board of Directors
Tang Haiyuan Deputy General Male 51 Current 191.42 No
372023 Annual Report of FIYTA Precision Technology Co. Ltd.
Manager
Xiao Zhanglin Director Male 48 Resigned Yes
Chairman of the
Zheng Qiyuan Board of Male 61 Resigned Yes
Supervisors
Cao Zhen Supervisor Female 53 Resigned Yes
Total -- -- -- -- 1423.25 --
VI. Performance of duties by Directors during the reporting period
1. Situation of the Board of Directors during this reporting period
Sessions Date Disclosure date Resolution
Please refer to the Announcement on the
The 11th Meeting of the 10th Resolutions of the 11th Meeting of the 10th
March 16 2023 March 18 2023
Board of Directors Board of Directors 2023-007 disclosed by the
Company on CNINF.The 12th Meeting of the 10th The meeting considered and approved the
April 21 2023 April 25 2023
Board of Directors Company's 2023 Q1 Report.Please refer to the Announcement on the 13th
The 13th Meeting of the 10th
May 15 2023 May 16 2023 Meeting of the 10th Board of Directors 2023-025
Board of Directors
disclosed by the Company on CNINF.Please refer to the Announcement on the 14th
The 14th Meeting of the 10th
August 21 2023 August 23 2023 Meeting of the 10th Board of Directors 2023-044
Board of Directors
disclosed by the Company on CNINF.The 15th Meeting of the 10th The meeting considered and approved the
October 19 2023 October 21 2023
Board of Directors Company's 2023 Q3 Report.Please refer to the Announcement on the
The 16th Meeting of the 10th Resolutions of the 16th Meeting of the 10th
December 11 2023 December 13 2023
Board of Directors Board of Directors 2023-062 disclosed by the
Company on JCNINF.
2. Attendance of Directors at the meetings of the Board of Directors
and the General Meetings
Attendance of Directors at the meetings of the Board of Directors and the General Meetings
Number of Number of Have you not
attendances Number of attendances Number of personally
Number of
required at on-site at the entrusted attended the Number of
absences
the meetings attendances meetings of attendances meetings of attendances
Name of from the
of the Board at the the Board of at the the Board of at the
Director meetings of
of Directors meetings of Directors meetings of Directors for General
the Board of
during this the Board of through the Board of two Meetings
Directors
reporting Directors communicati Directors consecutive
period on times
Zhang Xuhua 6 2 4 0 0 No 4
Xiao Yi 6 1 5 0 0 No 0
Li Peiyin 6 1 5 0 0 No 0
Deng
6 0 6 0 0 No 0
Jianghu
Guo
0 0 0 0 0 No 0
Gaohang
Pan Bo 6 2 4 0 0 No 1
Wang Jianxin 6 2 4 0 0 No 4
Zhong 6 1 5 0 0 No 0
382023 Annual Report of FIYTA Precision Technology Co. Ltd.
Hongming
Tang Xiaofei 6 1 5 0 0 No 0
Xiao
Zhanglin 5 0 5 0 0 No 0
(Resigned)
Explanation of not attending the meetings of the Board of Directors for two consecutive times
Not applicable
3. Objections raised by Directors regarding matters related to the
Company
Whether the Directors have raised any objections regarding matters related to the Company
No
4. Other explanations on the performance of duties by Directors
Whether the Director's suggestions to the Company have been adopted
Yes
Explanation on whether the Director's suggestions to the Company have been adopted or not
During the reporting period the Board of Directors fully played the role of "setting strategies making decisions and
preventing risks" and the Company's Directors strictly followed the provisions of laws and regulations such as the Company Law
and the Code of Governance for Listed Companies as well as the Articles of Association attended meetings of the Board of
Directors on time diligently and responsibly performed their duties and exercised rights as Directors and thoroughly considered
provided suggestions on and voted on resolutions of the Board of Directors. The Company fully considered and adopts the
constructive opinions proposed by the Directors on the development strategy business decision-making internal control
management and other aspects.VII. The situation of special committees under the Board of Directors during the reporting
period
Specific
Important
Number of Other situation of
Meeting opinions and
Name Members meetings Date performance objection
content suggestions
held of duties matters (if
put forward
any)
All members
strictly
followed
relevant laws
Chairman: and
Zhang Xuhua regulations in
It considered
Members: their work
and approved
Deng diligently
Strategic March 16 the 2022
Jianghu Pan 1 and
Committee 2023 Work Report
Bo Tang responsibly
of the Board
Xiaofei Xiao communicate
of Directors.Zhanglin d and
(resigned) discussed the
content of
the
proposals
and
392023 Annual Report of FIYTA Precision Technology Co. Ltd.
unanimously
passed the
relevant
proposals.It considered
and approved
the
Company's
2022 annual
report 2022
profit
distribution
2022 internal
control and
self-assessme
March 16 nt report
2023 2022 internal All members
audit work of the
report the committee
plan to strictly
repurchase followed
some relevant laws
domestically and
listed foreign regulations in
shares their work
(B-shares) diligently
Chairman: and other
and
proposals. responsiblyWang Jianxin
communicate
Members: Li Deliberated
d and
Peiyin and approved
discussed the
Audit Zhong the
4 contents of
Committee Hongming Company's
the
Tang Xiaofei 2023 Q1
Company's
Xiao Report and
internal and
Zhanglin April 21 the 2023 Q1
external audit
(resigned) 2023 Audit Work
work
Report of the
internal
Discipline
control
Inspection
management
Audit and
and share
Legal
repurchase
Department.plan and
Deliberated unanimously
and approved approved the
the relevant
Company's proposals.
2023
Semi-annual
Report and
August 21 abstract
2023 capital
increase to
wholly-owne
d
subsidiaries
and the 2023
Q2 Audit
Work Report
402023 Annual Report of FIYTA Precision Technology Co. Ltd.
of the
Discipline
Inspection
Audit and
Legal
Department.Deliberated
and approved
the
October 19 Company's
2023 Q3 Report
and the 2023
Q3 Audit
Work Report.Deliberated All members
and approved of the
the proposal committee
on the strictly
remuneration followed
of Directors relevant laws
and Senior and
March 16 Officers for regulations in
2023 2022 as well their work
as the diligently
repurchase and
and responsibly
cancellation reviewed and
Chairman: of some approved the
Zhong restricted remuneration
Hongming shares plan for
Members: Deliberated Directors and
Xiao Yi and approved Senior
Wang the proposal Officers the
Jianxin Tang on implementati
Nomination Xiaofei Xiao May 15 repurchasing on of the
Compensatio Zhanglin 2023 and Company's
n and (resigned) 4 canceling restricted
Assessment some share
Committee restricted incentive
shares scheme and
Deliberated the
and approved qualifications
the proposal of candidates
on for
August 21 repurchasing Non-indepen
2023 and dent
canceling Directors.some They fully
restricted communicate
shares d and
Chairman: discussed the
Deliberated
Zhong content of
and approved
Hongming the proposal
the proposal
Members: December and
on change in
Xiao Yi 11 2023 unanimously
non-indepen
Wang passed the
dent
Jianxin Tang relevant
Directors
Xiaofei proposals.
412023 Annual Report of FIYTA Precision Technology Co. Ltd.
VIII. Work of the Board of Supervisors
During the reporting period the Board of Supervisors discovered any risks in the Company's supervisory activities
No
IX. Employees
1. Number professional composition and education background
Number of current employees of the parent company at the end
200
of the reporting period (person)
Number of employees in major subsidiaries at the end of the
4038
reporting period (person)
Total number of in-service employees at the end of the
4238
reporting period (person)
Total number of employees receiving salary in the current
4238
period (person)
Number of retired employees whose expenses need to be borne
0
by the parent company and major subsidiaries (person)
Professional composition
Professional composition category Number of professional members (person)
Production personnel 338
Sales personnel 2964
Technical personnel 333
Financial personnel 114
Administrative personnel 489
Total 4238
Education background
Education background Quantity (person)
Master's degree or above 77
Undergraduate 791
Junior college 1309
Below junior college 2061
Total 4238
2. Remuneration
Based on business development planning and management practices the Company adheres to the core concept of value
creation follows the principles of hierarchical management budget regulation performance orientation efficiency priority
fairness positive incentives and long-term focus to formulate remuneration policies. Continuously establish and improve a salary
system based on annual salary assessment for middle and senior management personnel performance-based salary system for
employee positions and a joint production and efficiency remuneration system for production and operation personnel and
implement the following management measures:
Management of total salary: Based on the annual business plan conduct an annual remuneration budget comprehensively
consider factors such as market salary level organizational efficiency improvement and talent team adjustment to regulate the
total salary and achieve management goals of benefit orientation positive incentives classified management and adjustment of
distribution;
422023 Annual Report of FIYTA Precision Technology Co. Ltd.
Classified and hierarchical management: Establish a differentiated job rank system based on job characteristics and establish
a standardized remuneration framework that matches market conditions on this basis;
Value orientation co-creation and sharing: The Company designs an incentive system based on a closed-loop value chain of
value creation evaluation and distribution. By establishing a value evaluation system and real-time incentive system that is
consistent with strategic development goals it has formed an incentive mechanism where remuneration follows the Company's
benefits and individual performance with incremental remuneration tilted towards core key positions and outstanding talents.
3. Training plan
Talents are the primary productive force for the development of a company. The Company attaches great importance to the
development and training of talents. In order to cultivate a high-quality talent team support the implementation of the company's
strategy and create an organizational learning atmosphere the Company has formulated the Employee Training Management
System established a comprehensive and systematic employee training system and training management system and built an
online learning platform+offline training center to provide continuous growth space for employees. For details please refer to
Chapter V Training Development on Employee in the Company's Environmental Social and Governance (ESG) Report 2023
disclosed on CNINF on March 14 2024.
4. Labor outsourcing
Not applicable
X. The Company's profit distribution and conversion of capital reserves into share capital
The development implementation or adjustment of profit distribution policies especially for cash dividend policies during the
reporting period
The 2022 profit distribution plan of the Company has been deliberated and approved at the 11th Meeting of the 10th Board of
Directors held on March 16 2023 and the 2022 Annual General Meeting held on April 26 2023. The resolution is to distribute a
cash dividend of RMB 2.50 (including tax) to all shareholders for every 10 shares based on the total number of shares on the
equity registration date of the profit distribution plan after deducting the number of shares in the special repurchase securities
account. A total of cash dividends of no more than RMB 104406990.00 will be distributed with 0 bonus shares to be issued and
without capital increase through conversion of provident fund.During the period from disclosure to implementation of this equity distribution plan the Company repurchased a total of
996872 B-shares through a special repurchase securities account. The Company distributes cash dividends of RMB 2.50
(including tax) to all shareholders for every 10 shares based on 416631088 shares of distributable share capital (total share capital
of 417627960 shares on the equity registration date excluding 996872 repurchased B-shares). The actual total amount of cash
dividends to be distributed is RMB 104157772.00.The profit distribution plan was implemented on June 19 2023. Please refer to the 2022 Equity Distribution Implementation
Announcement 2023-035 disclosed by the Company on CNINF.Special Explanation on Cash Dividend Policy
Whether it complies with the Articles of Association or the resolutions of the General Meeting: Yes
Are the dividend standards and ratios clear and explicit: Yes
Are the relevant decision-making processes and mechanisms complete Yes
Whether Independent Directors have fulfilled their duties and played their due role: Yes
If the Company does not distribute cash dividends specific reasons as well as the measures to be taken to
Not applicable
enhance investor returns should be disclosed:
Whether small and medium-sized shareholders have sufficient opportunities to express their opinions and
Yes
demands and have their legitimate rights and interests been fully protected:
432023 Annual Report of FIYTA Precision Technology Co. Ltd.
Whether the conditions and procedures for adjusting or changing cash dividend policies are compliant and
Not applicable
transparent:
During the reporting period the Company was profitable and the parent company had a positive profit available for shareholder
distribution but no cash dividend distribution plan was proposed
Not applicable
Profit distribution and conversion of capital reserve to share capital during this reporting period
Number of dividend shares per 10 shares (shares) 0
Dividend payout per 10 shares (RMB) (including tax) 4.00
The total number of share capital on the equity registration date
Distribution plan's share capital base (shares) when the profit distribution plan is implemented in the future
(excluding shares in the special repurchase securities account)
Cash dividend amount (RMB) (including tax) 166087988.00
Cash dividend amount in other ways (such as repurchase of
64340669.42
shares) (RMB)
Total cash dividends (including other methods) (RMB) 230428657.42
Distributable profit (RMB) 106362983.35
The proportion of total cash dividends (including other
100%
methods) to total profit distribution
Current cash dividend
Other
Detailed explanation of profit distribution or capital-reserve conversion plan
The 2023 profit distribution plan of the Company has been deliberated and approved at the 18th Meeting of the 10th Board of
Directors held on March 12 2024. It is proposed to distribute a cash dividend of RMB 4.00 (including tax) to all shareholders for
every 10 shares based on the total number of registered share capital on the future implementation of the profit distribution plan
(excluding shares in the special repurchase securities account) with 0 bonus shares to be issued and without capital increase
through conversion of provident fund.If there is a change in the total share capital of the Company from the disclosure of this profit distribution plan to its
implementation the Company plans to adjust the total distribution amount according to the principle of fixed distribution ratio.The profit distribution plan for this time needs to be deliberated and approved by the General Meeting before
implementation.XI. Implementation of the Company's equity incentive plans employee stock ownership
plans or other employee incentive measures
1. Equity incentives
(1) Restricted share incentive scheme (Phase I)
The Company decided to launch the restricted share incentive scheme (Phase I) at the 3rd Meeting of the 9th Board of
Directors held on November 12 2018 and the 1st Extraordinary General Meeting held on January 11 2019. After deliberation and
approval at the 5th Meeting of the 9th Board of Directors held on January 11 2019 the Company ultimately granted 4.224 million
A-share restricted shares to 128 incentive objects with a grant price of RMB 4.40/share which were granted and registered for
listing on January 30 2019. For details please refer to the relevant announcement disclosed on the CNINF on January 12 2019.The specific implementation during the reporting period is as follows:
After deliberation and approval by the 10th Meeting of the 10th Board of Directors of the Company the Company's restricted
share incentive scheme (Phase I) has met the third condition for lifting restrictions of the period. The 1162320 A-share restricted
shares involved in lifting the restrictions have been listed and circulated on January 31 2023. Please refer to the relevant
announcement disclosed by the Company on CNINF on January 19 2023.
442023 Annual Report of FIYTA Precision Technology Co. Ltd.
As of the end of the reporting period the Company's restricted share incentive scheme (Phase I) has met three conditions for
lifting restrictions of the period. The three batches of A-share restricted shares involved in lifting restrictions have been lifted from
restrictions and listed for circulation.
(2) Restricted share incentive scheme (Phase II)
The Company decided to launch the restricted share incentive scheme (Phase II) at the 23rd Meeting of the 9th Board of
Directors held on December 4 2020 and the 1st Extraordinary General Meeting held on January 6 2021. After being reviewed and
approved at the 25th Meeting of the 9th Board of Directors held on January 15 2021 the Company finally granted 7.66 million
A-shares of restricted stock to 135 incentive objects with a grant price of RMB 7.60/share which were granted and registered for
listing on January 29 2021. For specific details please refer to the relevant announcement disclosed on CNINF on January 16
2021. The specific implementation during the reporting period is as follows:
After deliberation and approval at the 10th Meeting of the 10th Board of Directors of the Company the Company has met the
first condition for lifting the restriction for the Company's restricted share incentive scheme (Phase II) . The 2274390 A-share
restricted shares involved in lifting the restriction have been listed and circulated on January 31 2023. Please refer to the relevant
announcement disclosed by the Company on CNINF on January 19 2023.After deliberation and approval by the 11th Meeting of the 10th Board of Directors and the 2022 Annual General Meeting
the Company has decided to repurchase and cancel the 146740 A-share restricted shares held by the four former incentive objects
who have resigned which have been granted but have not yet lifted the restrictions; Considering that the Company has not met the
second company-level performance condition for lifting restrictions during the restricted share incentive scheme (Phase II) the
Company has decided to repurchase and cancel 2201130 A-share restricted stocks that have not met the conditions for lifting
restrictions. The above-mentioned shares have all been deregistered. Please refer to the relevant announcements disclosed by the
Company on CNINF on March 18 2023 April 27 2023 and July 8 2023.After deliberation and approval by the 13th Meeting of the 10th Board of Directors and the 1st Extraordinary General
Meeting in 2023 the Company has decided to repurchase and cancel 13360 restricted A-share restricted shares held by one
former incentive object who has resigned and has been granted but not yet lifted the restrictions. Please refer to the relevant
announcements disclosed by the Company on CNINF on May 16 2023 June 1 2023 and August 2 2023.After deliberation and approval by the 14th Meeting of the 10th Board of Directors and the 2nd Extraordinary General
Meeting in 2023 the Company has decided to repurchase and cancel the 46760 restricted A-shares collectively held by the two
former incentive recipients who have resigned. The said A-shares have been granted but the restrictions have not yet been lifted.Please refer to the relevant announcements disclosed by the Company on August 23 2023 September 13 2023 and November 8
2023 on CNINF.
452023 Annual Report of FIYTA Precision Technology Co. Ltd.
Equity incentives received by the Directors and Senior Officers
Unit: shares
Number Number Number
Number Number Exercise Number
of newly Number of of newly
of stock Number of of prices of Number of
granted of stock Market price restricted granted Price for
options exercisable exercised exercised of restricted
stock options at the end of stocks restricted granting
held at shares shares shares unlocked stocks
Name Position options held at the reporting held at stocks restricted
the during the during during the shares in held at
during the end of period the during shares
beginning reporting the reporting this the end of
the the (RMB/share) beginning the (RMB/share)
of the period reporting period period the
reporting period of the reporting
year period (RMB/share) period
period period period
Zhang
Chairman 0 0 0 0 0 0 0 0 0 0 0
Xuhua
Xiao Yi Director 0 0 0 0 0 0 0 0 0 0 0
Li Peiyin Director 0 0 0 0 0 0 0 0 0 0 0
Deng
Director 0 0 0 0 0 0 0 0 0 0 0
Jianghu
Guo
Director 0 0 0 0 0 0 0 0 0 0 0
Gaohang
Managing
Pan Bo 0 0 0 0 0 0 0 176720 76670 0 50100
Director
Wang Independent
00000000000
Jianxin Director
Zhong Independent
00000000000
Hongming Director
Tang Independent
00000000000
Xiaofei Director
Deputy
General
Lu
Manager 0 0 0 0 0 0 0 176720 76670 0 50100
Wanjun
and General
Counsel
Deputy
Liu
General 0 0 0 0 0 0 0 176720 76670 0 50100
Xiaoming
Manager
462023 Annual Report of FIYTA Precision Technology Co. Ltd.
Deputy
Li Ming General 0 0 0 0 0 0 0 176720 76670 0 50100
Manager
Chief
Accountant
Deputy
General
Song
Manager 0 0 0 0 0 0 0 0 0 0 0
Yaoming
and
Secretary of
the Board of
Directors
Deputy
Tang
General 0 0 0 0 0 0 0 170040 69990 0 50100
Haiyuan
Manager
Xiao Director
00000000000
Zhanglin (resigned)
Total -- 0 0 0 0 -- 0 -- 876920 376670 0 -- 250500
Given the failure to lift the selling restrictions at the Company level during the second lifting restriction period of the Restricted Share Incentive Scheme Phase II
Notes (if any) the Company has completed the repurchase and cancellation of restricted A-shares that have not reached the lifting restriction conditions and the number of the
said restricted A-shares has been deducted from the quantity of restricted stocks held by the relevant Directors and Senior Officers at the end of the period.
47The evaluation mechanism and incentives for Senior Officers
To establish a sound incentive and constraint mechanism for Senior Officers fully leverage and mobilize the work enthusiasm of
the Company's Senior Executives improve the Company's operational ability and economic benefits and ensure the achievement of
the Company's strategic goals the Company continuously improves the term system and contractual management of Senior Executives
conducts annual/term-based performance assessments and continuously promotes the implementation of rigid rewards and
punishments based on assessment results use additional income as the strong incentives and hard constraints adhere to performance
orientation and strengthen effective incentives through precise assessment.
2. Implementation status of employee stock ownership plan
Not applicable
3. Other employee incentive measures
Not applicable
XII. Construction and implementation of the internal control system during the reporting
period
1. Construction and implementation of the internal control system
To strengthen the internal control promote standardized operation and healthy development of the Company and protect the
legitimate rights and interests of shareholders the Company has established improved and effectively implemented its internal
control system by laws and regulations of the Company Law and the Securities Law.During the reporting period the Company continued to promote the integration and optimization of internal control risk
management and compliance management supervision and there were no major or significant deficiencies in internal control.
2. Specific conditions of major internal control deficiencies discovered
during the reporting period
No
XIII. Management and control of subsidiaries by the Company during the reporting period
Not applicable
XIV. Internal control evaluation report or internal control audit report
1. Internal control evaluation report
Disclosure date of the full text of
the internal control evaluation March 14 2024
report
Disclosure index of the full text of
the internal control evaluation www.cninfo.com.cn
report
The proportion of total assets of 100.00%
48units included in the evaluation
scope to the total assets in the
Company's consolidated financial
statements
The proportion of operating
revenue of units included in the
evaluation scope to the operating 100.00%
revenue in the Company's
consolidated financial statements
Defect identification criteria
Category Financial reports Non-financial reporting
(1) Serious violations of national laws
administrative regulations and normative
documents;
(2) The following matters namely the
"decision-making on major matters
appointment and removal of important
(1) This defect involves fraud by Directors
cadres decisions on investing major
Supervisors and Senior Officers;
projects and the use of large amounts of
(2) Correcting disclosed financial
funds" have not gone through the collective
statements;
decision-making process;
(3) Certified public accountants have
(3) The serious loss of management and
discovered significant misstatements in the
technical personnel in key positions;
Qualitative criteria current financial statements which were
(4) System control lacks in important
not detected while conducting internal
business related to the Company's
control;
production and operation or the system
(4) The supervision of internal control by
fails;
the Company's Audit Committee and the
(5) The failure of internal control over
Discipline Inspection Audit and Legal
information disclosure has led to the
Department is ineffective.Company being publicly condemned by
regulatory authorities;
(6) The results of internal control
evaluation especially significant defects or
significant deficiencies have not been
rectified.
(1) Major defect: misreporting ≥ 5% of (1) Major defect: misreporting ≥ 5% of
pre-tax profit pre-tax profit
(2) Important deficiency: 1% of pre-tax (2) Important deficiency: 1% of pre-tax
Quantitative standards profit ≤ misreporting ＜ 5% of pre-tax profit ≤ misreporting ＜ 5% of pre-tax
profit profit
(3) General defect: misreporting<1% of (3) General defect: misreporting<1% of
pre-tax profit pre-tax profit
Number of major defects in
0
financial reports (entries)
Number of major defects in
0
non-financial reports (entries)
Number of significant defects in
0
financial reports (entries)
Number of significant defects in
0
non-financial reports (entries)
2. Internal control audit report
Column of deliberations in the internal control audit report
We believe that FIYTA Company has maintained effective internal control over financial reporting in all material aspects as of
49December 31 2023 following the Basic Standards for Enterprise Internal Control and relevant regulations.
Disclosure of internal control audit report Disclosure
Disclosure date of the full text of the internal control audit
March 14 2024
report
Disclosure index of the full text of the internal control audit
www.cninfo.com.cn
report
Types of opinions on internal control audit reports Standard unqualified opinions
Whether there were significant deficiencies in non-financial
No
reports
Did the accounting firm issue an internal control audit report with non-standard opinions
No
Was the internal control audit report issued by the accounting firm consistent with the self-evaluation report of the board of Directors
Yes
XV. Rectification of self-inspection issues in the special action on corporate governance of
Listed Companies
The Company has fully completed the self-inspection work following the requirements of the Announcement on Carrying out the
Special Action on Corporate Governance of Listed Companies issued by the China Securities Regulatory Commission and has
rectified the problems found during the self-inspection. The corporate governance complies with the requirements of laws and
regulations of the Company Law Securities Law and Code of Conduct for Listed Companies. The governance structure is relatively
complete and the operation is standardized.
50Section 5 Environmental and Social Responsibility
I. Major environmental issues
Are the listed company and its subsidiaries included in the key polluting units announced by the Environmental Protection Department
No
Administrative penalties imposed due to environmental issues during the reporting period
Not applicable
Refer to other environmental information disclosed by key polluting units
The Company strictly complies with the laws and regulations of the Law of the People's Republic of China on the Prevention and
Control of Atmospheric Pollution the Law of the People's Republic of China on the Prevention and Control of Environmental
Pollution by Solid Waste and the Law of the People's Republic of China on Prevention and Control of Water Pollution and carries out
pollutant management work. Its subsidiaries are not classified as key polluting units. The Company has established the Wastewater
Exhaust Gas Dust and Noise Control Procedure Waste Management and Control Procedure and Chemical Management and Control
Procedure internally and entrusts external qualified institutions to monitor the emission of exhaust gas slag wastewater and noise
every year to ensure that the discharge of exhaust gas slag and wastewater meets emission standards.On December 31 2022 Shanghai Watch Co. Ltd. a joint venture of the Company shut down businesses related to pollution
discharge and completed the cancellation of the Sewage Discharge Permission on April 24 2023. It has been downgraded from a key
polluting unit to a general management unit.Measures taken to reduce its carbon emissions during the reporting period and effects
The Company actively responds to the call of "achieving carbon peak by 2030 and carbon neutrality by 2060" and has developed
a Resource and Energy Conservation Control Procedure to conduct daily inspections and controls on resource and energy consumption
explore space for energy conservation and water conservation encourage all employees to explore the selection and application of
energy-saving technologies and prioritize energy-saving and consumption reducing products when purchasing equipment such as
water-saving faucets high-energy efficiency household appliances etc. In terms of the use of raw materials production auxiliary
materials and office supplies the Company evaluates the usage before procurement to determine the appropriate purchase quantity
and avoid expiration and waste of materials.Reasons for not disclosing other environmental information
Not applicable
II. Social responsibility situation
For details please refer to the Company's Environmental Social and Governance (ESG) Report 2023 disclosed on
CNINF(www.cninfo.com.cn)on March 14 2024.
51III. Consolidate and expand the achievements in poverty alleviation and rural revitalization
During the reporting period the Company actively responded to the policies of the Central Committee of the Communist Party of
China and the State Council on comprehensively promoting rural revitalization fully leveraged the joint efforts of state-owned
enterprises in poverty alleviation by consuming products and services from poor areas alleviating the problem of unsold farm products
in poverty-stricken areas formulated the Aviation Industry's Rural Revitalization Work Plan 2023 and organized participation in the
"State-owned Enterprises' Efforts to Alleviate Poverty through Consumption of Farm Products to Greet the Spring Festival". On the
e-commerce platform and the Courtesy · Aviation platform of state-owned enterprises for poverty alleviation through consumption
state-owned enterprises provide targeted assistance through centralized procurement and sales assistance and pairing assistance to sell
county farm products.
52Section 6 Important Matters
I. Fulfillment of commitments
1. Commitments that have been fulfilled during the reporting period
and commitments that have not been fulfilled as of the end of the
reporting period by the actual controller shareholders related parties
acquirers of the Company the Company and other interested parties
Not applicable
2. If there is a profit forecast on the Company's assets or projects and
the reporting period is still in the profit forecast period the Company
shall explain the reasons for the assets or projects living up to the
original profit forecast
Not applicable
II. Non-operating capital occupation by controlling shareholders and other related parties of
the listed company
Not applicable
III. Provision of external guarantees in violation of regulations
Not applicable
Ⅳ. Explanation by the Board of Directors on the latest Non-standard Audit Report
Not applicable
V. Explanation by the Board of Directors Board of Supervisors and Independent Directors
(if any) on the Non-standard Audit Report of the accounting firm for the current reporting
period
Not applicable
VI. Explanation of changes in accounting policies estimates or significant accounting errors
compared to the previous year's financial report
Not applicable
VII. Explanation of changes in the scope of consolidated financial statements compared to
the previous year's financial report
Not applicable
53VIII. Appointment and dismissal of the accounting firm
The accounting firm currently employed
Name Da Hua CPAs LLP (Special General Partnership)
Remuneration for domestic accounting firms (RMB ten
120
thousand)
Continuous years of audit services provided by the domestic
3
accounting firm
Name of CPAs Long Jiao Wang Dong
Continuous years of audit services provided by CPAs of the
3
domestic accounting firms
Whether to hire a new accounting firm in the current accounting period
No
Employment of internal control audit and accounting firms financial advisors or sponsors
Deliberated and approved by the 2022 Annual General Meeting the Company appointed Da Hua CPAs LLP (Special General
Partnership) as the auditing body for the Company's financial statements and internal control for the year 2023.Ⅸ. Facing delisting after the disclosure of the annual report
Not applicable
X. Related matters about bankruptcy reorganization
Not applicable
XI. Major litigation and arbitration matters
Not applicable
XII. Punishment and rectification situation
Not applicable
XIII. Integrity status of the Company its controlling shareholders and actual controllers
Not applicable
XIV. Significant related transactions
1. Related transactions related to daily operations
Not applicable
2. Related transactions arising from the acquisition or sale of assets or
equity
Not applicable
543. Related transactions for joint outward investment
Not applicable
4. Related debt and credit transactions
Not applicable
5. Transactions with related finance companies
Deposit business
Current amount incurred
Daily
maximum Opening TotalTotal deposit ClosingRelated Range of
deposit balance withdrawal balance
Related parties relationship deposit interest amount for
limit (RMB (RMB ten amount forthis period (RMB tens rates
ten thousand) this period(RMB ten thousand)
thousand) (RMB tenthousand)
thousand)
Finance
company
AVIC Finance with related 80000 1.15%-1.25% 27133 462596 442955 46774
relationship
s
Loan business
Current amount incurred
Maximum
Opening Total
Related loan Total loan
Closing
Loan interest balance repayment balance
Related parties relationship amount amount for
rate range (RMB ten amount for
s (RMB ten the period
(RMB ten
thousand) the period thousand)
thousand) (RMB ten (RMB ten
thousand)
thousand)
Finance
company
AVIC Finance with related 80000 2.7% 0 0 0 0
relationship
s
Credit or other financial services
During the reporting period the maximum daily amount of related deposits and loan balances incurred by the Company with
AVIC Finance did not exceed the limit specified in the financial service agreement and there have been no credit or other financial
transactions. At the same time the Company issued the Risk Assessment Report on Related Deposits and Loans with AVIC Finance
Co. Ltd. every six months in respect of the aforementioned matters.
6. Transactions between finance companies controlled by the Company
and related parties
Not applicable
7. Other significant related transactions
At the 11th Meeting of the 10th Board of Directors held on March 16 2023 and the 2022 Annual General Meeting held on April
26 2023the Company reviewed and approved the Proposal on the Estimation of Daily Related Transactions for 2023. During the
55reporting period the cumulative transaction amounts of various related transactions related to the Company's daily operations were
within the expected annual range.Related queries on the website for disclosure of interim reports on major related transactions
Interim announcement Name of website for disclosure of
Interim announcement name
disclosure date interim announcements
Announcement on the Resolutions of the 11th Meeting of
March 18 2023 http://www.cninfo.com.cn/
the 10th Board of Directors 2023-007
Announcement on the Estimation of Daily Related
March 18 2023 http://www.cninfo.com.cn/
Transactions in 2023 2023-010
Announcement on the Resolutions of the 2022 Annual
April 27 2023 http://www.cninfo.com.cn/
General Meeting 2023-031
XV. Major contracts and their performance
1. Custody contracting and lease matters
(1) Custody
Not applicable
(2) Contracting
Not applicable
(3) Lease
Not applicable
2. Significant guarantee
Unit: RMB ten thousand
External guarantees provided by the Company and its subsidiaries (excluding guarantees for subsidiaries)
Disclosu
re date of Whether
Guarant announc Actual it's a
Actual Counter
ee ements Guarante guarante Guarante Collatera Guarante Complet related-p
occurren guarante
compan relating e limit e e type l (if any) e period ed or not arty
ce date e (if any)
y to amount guarante
guarante e
e limit
Not
applicab
le
Total amount of Total actual amount
external guarantee of external
limit approved 0 guarantees incurred 0
during the reporting during the reporting
period (A1) period (A2)
Total amount of Total actual balance
00
external guarantee of external
56limit approved at the guarantees at the end
end of the reporting of the reporting
period (A3) period (A4)
Guarantee to its subsidiaries by the Company
Disclosu
re date of Whether
Guarant announc Actual it's a
Actual Counter
ee ements Guarante guarante Guarante Collatera Guarante Complet related-p
occurren guarante
compan relating e limit e e type l (if any) e period ed or not arty
ce date e (if any)
y to amount guarante
guarante e
e limit
Shenzhe
n
Joint and
Harmon
Decemb several
y World March
30000 er 30 12000 liability One year No No
Watch 18 2023
2023 guarante
Center
e
Co.Ltd.Total amount of Total actual amount
guarantee limit for of guarantees
subsidiaries provided to
3000012000
approved during the subsidiaries during
reporting period the reporting period
(B1) (B2)
Total amount of
Total balance of
guarantee limit to
actual guarantees to
subsidiaries
30000 subsidiaries at the 12000
approved at the end
end of the reporting
of the reporting
period (B4)
period (B3)
Guarantee to subsidiaries by other subsidiaries
Disclosu
re date of Whether
Guarant announc Actual it's a
Actual Counter
ee ements Guarante guarante Guarante Collatera Guarante Complet related-p
occurren guarante
compan relating e limit e e type l (if any) e period ed or not arty
ce date e (if any)
y to amount guarante
guarante e
e limit
Not
applicab
le
Total amount of Total actual amount
guarantee limit for of guarantees
subsidiaries provided to
00
approved during the subsidiaries during
reporting period the reporting period
(C1) (C2)
Total amount of Total actual
guarantee limit to guarantee balance
subsidiaries 0 for subsidiaries at 0
approved at the end the end of the
of the reporting reporting period
57period (C3) (C4)
Total amount of the Company's guarantees (i.e. the total of the above three main items)
Total amount of Total actual amount
guarantee limit of guarantees
approved during the 30000 incurred during the 12000
reporting period reporting period
(A1+B1+C1) (A2+B2+C2)
Total amount of Total actual
guarantee limit guarantee balance at
approved at the end 30000 the end of the 12000
of the reporting reporting period
period (A3+B3+C3) (A4+B4+C4)
The proportion of actual total guarantee
amount (i.e. A4+B4+C4) to the Company's 3.60%
net assets
Among them:
Balance of guarantees provided to
shareholders actual controllers and their 0
affiliates (D)
Balance of debt guarantees provided directly
or indirectly to the guaranteed object with an 0
asset liability ratio exceeding 70% (E)
The amount of guarantee exceeding 50% of
0
net assets (F)
The total amount of the three guarantees
0
mentioned above (D+E+F)
Situations where there is guarantee liability
or evidence indicating the possibility of joint
and several repayment liability for unexpired Not applicable
guarantee contracts during the reporting
period (if any)
External guarantees provided in violation of
Not applicable
prescribed procedures (if any)
Specific situation of the use of composite guarantees
Not applicable
3. Cash asset management entrusted to others
(1) Entrusted financial management
Not applicable
(2) Entrusted loan
Not applicable
4. Other major contracts
Not applicable
58XVI. Other significant matters
1. Repurchase some domestically listed foreign shares (B Shares)
At the 11th Meeting of the 10th Board of Directors and the 2022 Annual General Meeting the Company approved the Program
on the Repurchase of Some Domestically Listed Foreign Shares (B Shares) and subsequently disclosed the repurchase report and a
series of progress announcements in accordance with relevant regulations. As of December 31 2023 the Company has cumulatively
repurchased 9355763 shares of B shares through a special repurchase securities account through centralized bidding with a total
amount paid of HKD 70401771.17 (excluding transaction fees). For details please refer to the relevant progress announcements
disclosed by the Company on CNINF.
2. Change of business scope and revision of the Articles of Association
After deliberation and approval by the 13th Meeting of the 10th Board of Directors and the 1st Extraordinary General Meeting in
2023 the Company has decided to expand its business scope adjust the standardized expression of the existing business scope and
revise the corresponding provisions of the Articles of Association based on the changed business scope. For details please refer to the
Announcement on the Resolutions of the 13th Meeting of the 10th Board of Directors 2023-025 Announcement on Changing the
Business Scope and Amending the Articles of Association 2023-027 and Announcement on Resolutions of the 1st Extraordinary
General Meeting 2023-031 which were disclosed by the Company on May 16 2023 and June 1 2023 on CNINF.
3. Capital increase to wholly-owned subsidiaries
At the 14th Meeting of the 10th Board of Directors the Company approved the Proposal on Capital Increase to Wholly-owned
Subsidiary Shenzhen FIYTA Precision Technology Co. Ltd. and decided to increase the capital of its wholly-owned subsidiary
Shenzhen FIYTA Precision Technology Co. Ltd. by RMB 80 million. For details please refer to the Announcement on Capital
Increase to Wholly-owned Subsidiary Shenzhen FIYTA Precision Technology Co. Ltd. 2023-047 and Announcement on Completion
of Industrial and Commercial Change Registration for Capital Increase of Wholly-owned Subsidiary 2023-059 disclosed by the
Company on August 23 2023 and December 1 2023 on CNINF.
4. Revision of the Company's internal system matters
The 16th Meeting of the 10th Board of Directors and the 3rd Extraordinary General Meeting in 2023 reviewed and approved the
Proposal on Amending the Articles of Association Proposal on Amending the Rules of Procedure of the General Meeting Proposal on
Amending the Rules of Procedure of the Board of Directors Proposal on Amending the Working System of Independent Directors
and Proposal on Amending the Related Transaction Management System. For details please refer to the relevant announcements
disclosed by the Company on December 13 2023 and December 29 2023 on CNINF.XVII. Material matters of the Company's subsidiaries
Not applicable
59Section 7 Changes in Shares and Shareholders
I. Changes in shares
1. Changes in shares
Unit: shares
Before this change Increase/decrease in this change (+ -) After this change
Conve
Bon
rsion
Proporti New us Proporti
Quantity from Other Subtotal Quantity
on issue issu on
reserv
e
es
I. Shares
with selling 8227310 1.97% 0 0 0 -5497450 -5497450 2729860 0.66%
restrictions
1. State
shareholdin 0 0.00% 0 0 0 0 0 0 0.00%
g
2.
State-owned
legal person 0 0.00% 0 0 0 0 0 0 0.00%
shareholdin
g
3. Other
domestic
82273101.97%000-5497450-549745027298600.66%
shareholdin
g
Includi
ng: shares
held by
00.00%0000000.00%
domestic
legal
persons
Domes
tic natural
person 8227310 1.97% 0 0 0 -5497450 -5497450 2729860 0.66%
shareholdin
g
4.
Foreign
00.00%0000000.00%
shareholdin
g
Includi
ng: shares
held by
00.00%0000000.00%
overseas
legal
persons
Overse 0 0.00% 0 0 0 0 0 0 0.00%
as natural
60person
shareholdin
g
II. Shares
without
40940065098.03%0003089460308946041249011099.34%
selling
restrictions
1.
RMB-deno
minated 359463953 86.07% 0 0 0 3089460 3089460 362553413 87.31%
ordinary
shares
2.
Domesticall
y listed 49936697 11.96% 0 0 0 0 0 49936697 12.03%
foreign
shares
3.
Foreign
00.00%0000000.00%
shares listed
overseas
4. Other 0 0.00% 0 0 0 0 0 0 0.00%
III. Total
100.00100.00
number of 417627960 0 0 0 -2407990 -2407990 415219970
%%
shares
Reasons for changes in shares
1. During the reporting period the unlocking conditions for the third unlocking period of the Company's restricted share incentive
scheme (Phase I) and the first unlocking period of the restricted share incentive scheme (Phase II) have been satisfied and the
corresponding unlocked shares have been listed and circulated resulting in a decrease of 3436710 shares with selling restrictions
(with a corresponding increase in shares without selling restrictions);
2. During the reporting period due to the Company's failure to meet the company-level performance conditions for unlocking of
restricted shares during the second unlocking period of the restricted share incentive scheme (Phase II) the Company repurchased and
cancelled 2201130 restricted A share that did not meet the unlocking conditions in accordance with regulations; Due to the
resignation of 7 former incentive recipients the Company repurchased and cancelled 206860 A-share restricted shares held by them in
aggregate in accordance with regulations resulting in a total reduction of 2407990 shares with selling restrictions (with a
corresponding decrease in the total share capital of the Company);
3. During the reporting period due to the adjustment of the transfer limit for Senior Executives 347250 shares with selling
restrictions were added (a corresponding decrease in shares without selling restrictions).Due to the above reasons at the end of the reporting period the total number of shares with selling restrictions of the Company
decreased by 5497450; the total number of shares without selling restrictions increased by 3089460; and the total number of shares
decreased by 2407990.Approval status of share changes
61Approved by the 10th Meeting of the 10th Board of Directors of the Company the Board of Directors in accordance with the
authorization of the 1st Extraordinary General Meeting in 2019 and the 1st Extraordinary General Meeting in 2021 has processed the
lifting of restrictions on 3436710 A shares that meet the conditions for lifting restrictions.Approved by the 2022 Annual General Meeting the 1st Extraordinary General Meeting in 2023 and the 2nd Extraordinary
General Meeting in 2023 the Company has processed the repurchase and cancellation of 2407990 restricted A-shares.Transfer situation of share changes
During the reporting period the transfer of changes in the Company's shares as audited and confirmed by the Shenzhen Branch
of China Securities Depository and Clearing Corporation Limited were as follows:
on July 6 2023 the repurchase and cancellation of 2347870 restricted A shares were completed;
on July 31 2023 the repurchase and cancellation of 13360 restricted A shares were completed;
on November 3 2023 the repurchase and cancellation of 46760 restricted A shares were completed.Impact of share changes on financial indicators such as basic earnings per share diluted earnings per share and net assets per share
attributable to common shareholders of the Company for the most recent year and period
Earnings per share
Weighted average ROE (%)
Basic earnings per share (RMB/share) Diluted earnings per share (RMB/share)
202320222023202220232022
10.28%8.68%0.80820.63980.80750.6398
Other disclosures deemed necessary by the Company or required by securities regulatory authorities
Not applicable
2. Changes in restricted shares
Unit: shares
Increase in
Number of Number of
restricted
Name of Number of restricted restricted Reason for
Sharehold restricted
shares
shares lifted shares at the restricted Date of lifting sales restrictions
shares at the during theers during the end of the sales
beginning of period period period
the period (note)
Locked
1. On January 31 2023 76670
shares held
restricted shares under the incentive
by Senior
scheme were unlocked;
Executives
2. The remaining restricted shares
and
Li Ming 214250 22500 76670 160080 will be unlocked in accordance with
restricted
the conditions for locked shares held
shares that
by Senior Executives and the
have not yet
Company's equity incentive
been
management measures.unlocked
Locked 1. On January 31 2023 76670
Pan Bo 214220 22500 76670 160050
shares held restricted shares under the incentive
62by Senior scheme were unlocked;
Executives 2. The remaining restricted shares
and will be unlocked in accordance with
restricted the conditions for locked shares held
shares that by Senior Executives and the
have not yet Company's equity incentive
been management measures.unlocked
Locked
1. On January 31 2023 76670
shares held
restricted shares under the incentive
by Senior
scheme were unlocked;
Executives
2. The remaining restricted shares
Lu and
214220 22500 76670 160050 will be unlocked in accordance with
Wanjun restricted
the conditions for locked shares held
shares that
by Senior Executives and the
have not yet
Company's equity incentive
been
management measures.unlocked
Locked
1. On January 31 2023 76670
shares held
restricted shares under the incentive
by Senior
scheme were unlocked;
Executives
2. The remaining restricted shares
Liu and
214220 22500 76670 160050 will be unlocked in accordance with
Xiaoming restricted
the conditions for locked shares held
shares that
by Senior Executives and the
have not yet
Company's equity incentive
been
management measures.unlocked
Locked
1. On January 31 2023 69990
shares held
restricted shares under the incentive
by Senior
scheme were unlocked;
Executives
2. The remaining restricted shares
Tang and
170040 7500 69990 107550 will be unlocked in accordance with
Haiyuan restricted
the conditions for locked shares held
shares that
by Senior Executives and the
have not yet
Company's equity incentive
been
management measures.unlocked
1. On January 31 2023 93340
restricted shares under the incentive
Unlocked scheme were unlocked;
Chen
213400 -59940 93340 60120 restricted 2. The remaining restricted shares
Libin
shares shall be unlocked in accordance with
the Company's equity incentive
management measures.
1. On January 31 2023 60000
restricted shares under the incentive
Unlocked scheme were unlocked;
Bao
140040 -39960 60000 40080 restricted 2. The remaining restricted shares
Xianyong
shares shall be unlocked in accordance with
the Company's equity incentive
management measures.
1. On January 31 2023 60000
restricted shares under the incentive
Unlocked
scheme were unlocked;
Sun Lei 140040 -39960 60000 40080 restricted
2. The remaining restricted shares
shares
shall be unlocked in accordance with
the Company's equity incentive
63management measures.
1. On January 31 2023 60000
restricted shares under the incentive
Unlocked scheme were unlocked;
Sheng Li 140040 -39960 60000 40080 restricted 2. The remaining restricted shares
shares shall be unlocked in accordance with
the Company's equity incentive
management measures.Locked
shares held 1. On January 31 2023 2786700
by outgoing restricted shares under the incentive
Senior scheme were unlocked;
Other Executives 2. The remaining restricted shares
sharehold 6566840 -1978420 2786700 1801720 and shall be unlocked in accordance with
ers restricted the conditions for locked shares held
shares that by outgoing Senior Executives and
have not yet the Company's equity incentive
been management measures.unlocked
Total 8227310 -2060740 3436710 2729860 -- --
Note: the increase in the number of restricted shares in the period has deducted the restricted A share that were repurchased and
cancelled due to the failure to meet the unlocking conditions during the second unlocking period of the Company's restricted share
incentive scheme (Phase II).II. Securities issuance and listing
1. Securities issuance (excluding preferred shares) during the reporting
period
Not applicable
2. Changes in the total number of shares and shareholder structure of
the Company as well as changes in the Company's asset and liability
structure
As described in the "Reasons for changes in shares" section.
3. Existing internal employee shares
Not applicable
III. Shareholders and actual controllers
1. Number of shareholders and their holdings
Unit: shares
Total Total number of Total number of preferred
Total number number of preferred shareholders with restored
of common common shareholders with voting rights at the end of
shareholders sharehold restored voting28145 28183 0 the previous month prior 0
at the end of ers at the rights at the end to the disclosure date of
the reporting end of the of the reporting the annual report (if any)
period previous period (if any) (see Note 8)
month (see Note 8)
64prior to
the
disclosure
date of the
annual
report
Shareholdings of shareholders holding more than 5% or the top 10 shareholders (excluding shares lent through refinancing)
Number Situations of
of pledge marking
Number of shares Number of or freezing
shares held at Changes during held shares held
Name of Nature of Holding
the end of the the reporting with with unlimited
Shareholders shareholders ratio
reporting period limited sales Quanti
period sales conditions Share ty
conditio status
ns
AVIC
Not
International State-owned
39.25% 162977327 0 0 162977327 applicab 0
Holding legal person
le
Limited
Domestic Not
#Wu Jilin natural 4.35% 18043627 98013 0 18043627 applicab 0
persons le
Domestic Not
#Xu Guoliang natural 1.74% 7242768 1978000 0 7242768 applicab 0
persons le
Domestic Not
Qiu Hong natural 0.59% 2470000 100000 0 2470000 applicab 0
persons le
Domestic Not
#Zhu Rui natural 0.34% 1407100 -295500 0 1407100 applicab 0
persons le
CITIC
Not
Securities State-owned
0.33% 1368078 1248109 0 1368078 applicab 0
Company legal person
le
Limited
Domestic Not
#Qu Yongjie natural 0.31% 1286800 20000 0 1286800 applicab 0
persons le
Industrial and
Commercial
Bank of China
Not
Ltd. - GF CSI
Other 0.29% 1212700 1212700 0 1212700 applicab 0
Guoxin
le
Central-SOEs
Shareholder
Return ETF
Domestic Not
Chen Hao natural 0.27% 1101643 12700 0 1101643 applicab 0
persons le
China
Construction
Bank Not
Corporation - Other 0.26% 1071900 1071900 0 1071900 applicab 0
China le
Universal CSI
Guoxin
65Central-SOEs
Shareholder
Return ETF
Situation where strategic
investors or general legal
persons become the top 10
Not applicable
shareholders due to the
placement of new shares (if
any) (see Note 3)
Explanation of related
relationships or concerted The Company is unaware of whether the 10 shareholders mentioned above have any related
actions of the above relationships or are concerted actors.shareholders
Explanation of the
The shareholder AVIC International Holding Limited had authorized representatives to exercise
above-mentioned
voting rights on behalf of the company at the 2022 Annual General Meeting the 1st Extraordinary
shareholders' involvement in
General Meeting of 2023 the 2nd Extraordinary General Meeting of 2023 and the 3rd Extraordinary
the delegation/entrustment of
General Meeting of 2023. The number of representative shares was 162977327 and the voting
voting rights or the waiver of
results were detailed in the relevant announcements disclosed by the Company on CNINF.voting rights
Special explanation for the The number of common shares held by the Company's B-share special repurchase account "FIYTA
existence of special Precision Technology Co. Ltd. Special Repurchase Securities Account" at the end of the reporting
repurchase accounts among period is 9355763 shares and the holding ratio is 2.25% mainly due to the Company's
the top 10 shareholders (if implementation of B-share repurchase. According to regulations the special repurchase account is
any) (see Note 10) not included in the list of the top 10 shareholders.Holdings of the top 10 shareholders without selling restrictions
Number of shares held without selling Types of shares
Name of Shareholders restrictions at the end of the reporting
period Types of shares Quantity
Renminbi
AVIC International Holding Limited 162977327 162977327
common shares
Renminbi
#Wu Jilin 18043627 18043627
common shares
Renminbi
#Xu Guoliang 7242768 7242768
common shares
Renminbi
Qiu Hong 2470000 2470000
common shares
Renminbi
#Zhu Rui 1407100 1407100
common shares
Renminbi
CITIC Securities Company Limited 1368078 1368078
common shares
Renminbi
#Qu Yongjie 1286800 1286800
common shares
Industrial and Commercial Bank of China Ltd. - GF Renminbi
12127001212700
CSI Guoxin Central-SOEs Shareholder Return ETF common shares
Renminbi
Chen Hao 1101643 1101643
common shares
China Construction Bank Corporation - China
Renminbi
Universal CSI Guoxin Central-SOEs Shareholder 1071900 1071900
common shares
Return ETF
Explanation of the related relationships or
concerted actions among the top 10 shareholders of
The Company is unaware of whether the 10 shareholders mentioned above
unrestricted shares as well as between the top 10
have any related relationships or are concerted actors.shareholders of unrestricted shares and the top 10
shareholders
Explanation of the participation of the top 10 1. In addition to holding 10597777 shares through the ordinary securities
66common shareholders in the margin trading and account shareholder Wu Jilin also holds 7445850 shares through the
securities lending business (if any) (see Note 4) customer credit trading guarantee securities account of China CICC Wealth
Management Securities Company Limited totaling 18043627 shares;
2. In addition to holding 6640868 shares through the ordinary securities
account shareholder Xu Guoliang also holds 601900 shares through the
customer credit trading guarantee securities account of Guosen Securities Co.Ltd. totaling 7242768 shares;
3. In addition to holding 62000 shares through the ordinary securities account
shareholder Zhu Rui also holds 1345100 shares through the customer credit
trading guarantee securities account of First Capital Securities Co. Ltd.totaling 1407100 shares;
4. In addition to holding 42800 shares through the ordinary securities account
shareholder Qu Yongjie also holds 1244000 shares through the customer
credit trading guarantee securities account of Shanxi Securities Company
Limited totaling 1286800 shares.Top 10 shareholders participating in the lending of shares through refinancing business
Not applicable
Changes in the top 10 shareholders compared to the previous period
Unit: shares
Changes in the top 10 shareholders compared to the end of the previous period
Number of shares held in the
New Number of shares lent through ordinary account and credit account
additions/exits refinancing and not yet repaid of shareholders as well as the shares
Name of Shareholders (Full Name) during this at the end of the period lent through refinancing and not yet
reporting repaid at the end of the period
period Total Proportion to the Proportion to the
Total quantity
quantity total share capital total share capital
CITIC Securities Company Limited New addition 0 0.00% 1368078 0.33%
Industrial and Commercial Bank of China
Ltd. - GF CSI Guoxin Central-SOEs New addition 0 0.00% 1212700 0.29%
Shareholder Return ETF
China Construction Bank Corporation -
China Universal CSI Guoxin New addition 0 0.00% 1071900 0.26%
Central-SOEs Shareholder Return ETF
Li Shuyuan Exit 0 0.00% 811500 0.20%
Zhang Mingrong Exit 0 0.00% 0 0.00%
Lv Shaowen Exit 0 0.00% 0 0.00%
Whether the top 10 common shareholders and the top 10 common shareholders without selling restrictions engaged in agreed
repurchase transactions during the reporting period
No
2. Information about the controlling shareholder
Nature: central state-owned holding
Type: legal person
Legal
Name representative/Person in Establishment date Organization code Main businesses
charge of the unit
Investment in industrial
AVIC International development (specific
Li Bin June 20 1997 91440300279351229A
Holding Limited projects to be declared
separately); Domestic
67commercial and
material supply and
marketing industries
(excluding exclusive
controlled and sold
goods); Engaging in
import and export
business (excluding
projects prohibited by
laws administrative
regulations and
decisions of the State
Council and restricted
projects shall obtain
permission before
operation).Equity situation of other
domestic and foreign
listed companies
controlled and AVIC INTL holds 11.86% of the equity in Tianma Microelectronics Co. Ltd. (STM 000050) and 63.97%
participated in by the of the equity in Shennan Circuit Co. Ltd. (SNDL 002916).controlling shareholder
during the reporting
period
Changes in the controlling shareholder during the reporting period
Not applicable
3. Actual controller and its concerted actor
Nature: central state-owned asset management agency
Legal
Name representative/Person in Establishment date Organization code Main businesses
charge of the unit
Operating state-owned assets within
the scope authorized by the State
Council; Research design
development testing production
sales maintenance support and
service of military aircraft and
engines guided weapons military
gas turbines weapon equipment
supporting systems and products;
Aviation
Investment and management in
Industry
industries such as finance leasing
Corporation Tan Ruisong November 6 2008 91110000710935732K
general aviation services
of China
transportation healthcare
Ltd.engineering survey and design
engineering contracting and
construction and real estate
development; Design R&D testing
production sales and maintenance
services for civil aircraft and
engines onboard equipment and
systems gas turbines automobiles
and motorcycles and engines
68(including components)
refrigeration equipment electronic
products environmental protection
equipment and new energy
equipment; Equipment leasing;
Engineering survey and design;
Engineering contracting and
construction; Real estate
development and operation;
Technology transfer and technical
services related to the above
businesses; Import and export
business; Technological
development and sales of ships;
Development of engineering
equipment technology;
Technological development of new
energy products. (Enterprises shall
independently choose their business
projects and carry out business
activities in accordance with the
law. For projects that require
approval according to the law they
shall carry out business activities in
accordance with the approved
content after obtaining approval
from relevant departments. They
shall not engage in business
activities prohibited or restricted by
the industrial policies of this city.)
In addition to holding equity in the Company AVIC directly or indirectly holds and controls the shares of domestic and
foreign listed companies including:
1. Tianma Microelectronics Co. Ltd. (SZ. 00050) with a holding ratio of 28%;
2. AVIC Xi'an Aircraft Industry Group Company Ltd. (SZ. 000768) with a holding ratio of 55%;
3. AVIC Jonhon Optronic Technology Co. Ltd. (SZ.002179) with a holding ratio of 40%;
4. Chengfei Integration Technology Co. Ltd. (SZ.002190) with a holding ratio of 51%;
5. Rainbow Digital Commercial Co. Ltd. (SZ.002419) with a holding ratio of 45%;
Equity
6. AVIC Zhonghang Electronic Measuring Instruments Co. Ltd. (SZ.300114) with a holding ratio of 54%;
situation of
7. AVICOPTER PLC (SH.600038) with a holding ratio of 50%;
other
8. Jiangxi Hongdu Aviation Industry Co. Ltd. (SH.600316) with a holding ratio of 48%;
domestic
9. AVICAirborne Systems Co. Ltd. (SH.600372) with a holding ratio of 56%;
and foreign
10. Guizhou Guihang Automotive Components Co. Ltd. (SH.600523) with a holding ratio of 46%;
listed
11. AVIC Industry-Finance Holdings Co. Ltd. (SH.600705) with a holding ratio of 51%;
companies
12. AVIC Shenyang Aircraft Company Limited (SH.600760) with a holding ratio of 69%;
controlled
13. AVIC Heavy Machinery Co. Ltd. (SH.600765) with a holding ratio of 37%;
by the actual
14. Baosheng Science & Technology Innovation Co. Ltd. (SH.600973) with a holding ratio of 40%;
controller
15. AVICAviation High-Technology Co. Ltd. (SH.600862) with a holding ratio of 45%;
during the
16. Shennan Circuit Co. Ltd. (002916) with a holding ratio of 64%;
reporting
17. Hefei Jianghang Aircraft Equipment Co. Ltd. (SH.688586) with a holding ratio of 56%;
period
18. AVIC (Chengdu) UAS Co. Ltd. (688297. SH) with a holding ratio of 54%;
19. AVIC Forstar S&T Co. Ltd. (BJ.835640) with a holding ratio of 47%;
20. Nexteer Automotive Group Ltd. (HK.1316) with a holding ratio of 44%;
21. AVIChina Industry and Technology Co. Ltd. (HK. 2357) with a holding ratio of 60%;
22. Continental Aerospace Technologies Holding Limited (HK. 0232) with a holding ratio of 46%;
23. KHD Humboldt Wedag International AG (KWG: GR) with a holding ratio of 89%;
24. FACCAG (AT00000 FACC) with a holding ratio of 55%.
Type: legal person
69Changes in actual controller during the reporting period
Not applicable
Block diagram of property rights and control relationship between the Company and the actual controller
The actual controller controls the Company through trust or other asset management methods
Not applicable
4. The cumulative number of pledged shares held by the controlling
shareholder or the largest shareholder of the Company and their
concerted actors accounts for 80% of the shares they hold in the
Company
Not applicable
5. Other corporate shareholders holding more than 10% of the shares
Not applicable
6. Restricted reduction of shares held by the controlling shareholder
actual controller restructuring parties and other committed entities
Not applicable
IV. Specific implementation of share repurchase during the reporting period
Progress in the implementation of share repurchase
Proposed
Number of Proportion of
Disclosure Proportion to repurchase Proposed Repurchased
shares to be Purpose of repurchased
date of the the total share amount repurchase quantity
repurchased repurchase shares to the
plan capital (RMB ten period (shares)
(shares) underlying
thousand) shares
70involved in
the equity
incentive plan
(if any)
No less than Cancellation
RMB 50 and reduction
6.66 million April 27
March 18 1.59% to million and of registered
to 13.32 2023 to April 9355763
2023 3.19% no more than capital in
million shares 26 2024
RMB 100 accordance
million with the law
Progress in the implementation of reducing and repurchasing shares through centralized bidding trading
Not applicable
Section 8 Information Related to Preferred Shares
Not applicable
Section 9 Bond Related Information
Not applicable
71FIYTAPrecision Technology Co. Ltd.
Independent Auditor’s Report
D.H.S.Z. [2024]0011000766
DaHuaCertified PublicAccountants（Special General Partnership）
72FIYTA Precision Technology Co. Ltd.
Independent Auditor’s Report and Financial Statements
(1 January 2023 to 31 December 2023)
Content Page
I. Independent Auditor’s Report 1-7
II. Audited Financial Statements
Consolidated Balance Sheet 1-2
Consolidated Statement of Comprehensive 3
Income
Consolidated Cash Flow Statement 4
Consolidated Statement of Changes in Equity 5-6
Parent Company’s Balance Sheet 7-8
Parent Company’s Statement of Comprehensive 9
Income
Parent Company’s Cash Flow Statement 10
Parent Company’s Statement of Changes in 11-12
Equity
Notes to Financial Statements 13-121Da Hua Certified Public Accountants (Special General Partnership)
12th Floor Building 7 No. 16 Xisihuan Middle Road Haidian District Beijing [100039]
Tel: 86 (10) 5835 0011 Fax: 86 (10) 5835 0006
www.dahua-cpa.com
I n d e p e n d e n t A u d i t o r ’ s R e p o r t
D.H.S.Z.[2024] 0011000766
To the Shareholders of FIYTA Precision Technology Co. Ltd.:
I.Audit Opinion
We have audited the accompanying financial statements of FIYTA Precision
Technology Co. Ltd. (herein after “FIYTA Ltd.” or the Company) which comprise
the consolidated and the parent company’s balance sheet as at 31 December 2023 the
consolidated and the parent company’s statement of comprehensive income the
consolidated and the parent company’s cash flow statements and the consolidated and
the parent company’s statement of changes in equity for the year then ended and
notes to the financial statements.In our opinion the accompanying financial statements present in all material
respects in accordance with the requirements of Accounting Standards for Business
Enterprises and fairly reflect FIYTA Ltd.’s financial position at 31 December 2023
and the financial performance and cash flows for the year then ended.II.Basis forAudit Opinion
We conducted our audit in accordance with CICPA Standards on Auditing
(“CSAs”) . In ‘Certified Public Accountant’s Responsibilities for the Audit of
Financial Statements’ of this report our responsibilities under these standards are
described. Those standards require that we comply with CICPA professional ethical
requirements that we are independent from FIYTA Ltd. and have fulfilled all other
ethical obligations. We believe that we have obtained sufficient and appropriate audit
evidence as basis of for our opinion.III.Key Audit Matters
Independent Auditor’s Report - Page 1D.H.S.Z.[2023]000189
Key audit matters are those matters that in our professional judgment were of
most significance in our audit of the financial statements of the current period. These
matters were addressed in the context of our audit of the financial statements as a
whole and in forming our opinion thereon and we do not provide a separate opinion
on these matters.We have determined the following key audit matters that need to be
communicated in audit report.(I) Existence of inventory and its net realizable value
1. Description
As at 31 December 2023 the book balance provision for decline in value and
carrying amount of inventory were RMB2172.58 million RMB71.91 million and
RMB2100.67 million respectively. The carrying amount of inventory accounts for
49.97% of the total assets of the Company.
(i) As the main business of FIYTA Ltd is selling FIYTA brand watches and other
branded watches the main inventory of FIYTA Ltd are finished watches and watch
components. The inventories are distributed in stores regional warehouses resellers’
warehouses and the Company’s warehouses which caused difficulty in inventory
physical observation;
(ii) The management of FIYTA Ltd measures inventory at lower of cost and net
realizable value (NRV) at balance sheet date. Where the cost of an inventory exceeds
its NRV the difference is recognized as provision for decline in value. The
determination of NRV involves significant judgment and estimates by the
Management.Inventory value is significant to the Company’s assets and it requires significant
judgement by the Management as a result we identified existence of inventory and
its net realizable value as key audit matters.
2. How our audit addressed the key audit matter
Major audit procedures we have conducted include:
(i) Understanding evaluating and testing the design and operating effectiveness
of internal controls of procurement and payment production and storage and the
provision for decline in value of inventory;
(ii) Using the work of experts to conduct IT audit to information system and
evaluating the authenticity and accuracy of business data which related to financial
Independent Auditor’s Report - Page 2D.H.S.Z.[2023]000189
statements.(iii) Understanding and evaluating the appropriateness of the Company’s policy
in provision for decline in value;
(iv) Understanding and inquiring the locations of inventory storage
measurement method of inventory so as to determining the scope of inventory
physical observation;
(v) Discussing physical inventory count status with the Management and
attending the physical inventory count and conducting observation and test count on
site to check the quantity of the inventories and observe their condition.(vi) Obtaining the ageing report of inventory and taking into consideration of
inventory condition in order to perform analytical review on the ageing as well as
analyze the reasonableness of provision for decline in value;
(vii) Reviewing and evaluating the appropriateness of significant estimates made
by the Management in determining the NRV of inventory;
(viii) Obtaining the calculation of provision for decline in value of inventory
reviewing whether the provision was made in compliance with relevant accounting
policies and performing recalculation of provision. Checking the movements of prior
year’s provision and analyzing whether the provision was adequately accrued in prior
period.(ix) Tracing samples of large purchases in current period to their corresponding
contracts and tax invoices and inspecting their purchase requisition form and goods
receipt notes.Based on audit work conducted above we believe that the inventory exists and
the measurement is reasonable stated according to the Company’s policies.(II) Revenue recognition
1. Description
In 2023 the Company’s income from main business was RMB4553.71 million.The Company’s revenue mainly comes from sales of FIYTA brand watches and
distribution of other branded watches. Except for small amount of sales by direct sales
and consignment sales of FIYTA brand watches most of the sales of FIYTA brand
watches and other branded watches are sold through shops in department store and
on-line shops. Refer to Note III 32 for accounting policy relating to revenue
recognition.Independent Auditor’s Report - Page 3D.H.S.Z.[2023]000189
Operating revenue represents major line item in income statement and is main
source of profit the accuracy and completeness of revenue recognition have
significant impact to the Company’s profit as a result we identified revenue
recognition as a key audit matter.
2. How our audit addressed the key audit matter
Major audit procedures we have conducted include:
(i) Understanding evaluating and testing the design and operating effectiveness
of internal controls relating to revenue recognition;
(ii) Using the work of experts to conduct IT audit to information system and
evaluating the authenticity and accuracy of business data which related to financial
statements.(iii) Obtaining and understanding accounting policies relating to revenue
recognition and reviewing and evaluating whether the point in time of control right
transfer measurement of transaction price and accounting for special transactions are
complied with the accounting standards;
(iv) Selecting samples from current year’s transaction records and tracing them
to supporting documents such as contract tax invoice and goods dispatch note (if
applicable) and courier waybill (if applicable) ;
(v) In connection with audit of accounts receivable selecting major customers
and confirming corresponding sales in current year and year-end balance and
procedures were implemented to check for post-dated returns;
(vi) Conducting cut-off test to revenue recognized before and after the balance
sheet date by selecting samples to check supporting documents such as contract tax
invoice and goods dispatch note (if applicable) and courier waybill (if applicable) to
evaluate whether the revenue was recorded in appropriate accounting period.Based on audit work conducted above we believe that the Company’s revenue
recognition is in conformity to its revenue recognition policy.IV.Other Information
The management of FIYTA Ltd (the “Management”) are responsible for the
Other Information. The Other Information comprises all of the information included
in the Company’s annual report other than the financial statements and our auditors’
report thereon.Our opinion expressed on the financial statements does not cover the Other
Independent Auditor’s Report - Page 4D.H.S.Z.[2023]000189
Information and we do not express any form of assurance conclusion thereon.In connection with our audit of the financial statements our responsibility is to
read the Other Information and in doing so consider whether the Other Information
is materially inconsistent with the financial statements or our knowledge obtained in
the audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material
misstatement of this Other Information we are required to report that fact. We have
nothing to report in this regard.V.Responsibilities of the Management and those Charged with
Governance for the Financial Statements
The Management of the Company is responsible for the preparation of the
financial statements that give a fair view in accordance with Accounting Standards for
Business Enterprises and for the design implementation and maintenance of such
internal controls as the Management determine is necessary to enable the preparation
of financial statements that are free from material misstatement whether due to fraud
or error.In preparing the financial statements the Management is responsible for
assessing the Company’s ability to continue as a going concern disclosing as
applicable matters related to going concern and using the going concern basis of
accounting unless the Management either intend to liquidate the Company or to cease
operations or have no realistic alternative but to do so.Those who charged with governance is responsible for overseeing the
Company’s financial reporting process.VI.Auditors’ Responsibilities for the Audit of the Financial
Statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement whether due to fraud or
error and to issue an auditors’ report that includes our opinion. Reasonable assurance
is a high level of assurance but is not a guarantee that an audit conducted in
accordance with China Standards on Auditing will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if individually or in the aggregate they could reasonably be
Independent Auditor’s Report - Page 5D.H.S.Z.[2023]000189
expected to influence the economic decisions of users taken on the basis of these
financial statements.As part of an audit in accordance with China Standards on Auditing we exercise
professional judgment and maintain professional skepticism throughout the audit. We
also:
1. Identify and assess the risks of material misstatement of the financial
statements whether due to fraud or error design and perform audit procedures
responsive to those risks and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error as fraud may involve
collusion forgery intentional omissions misrepresentations or the override of
internal control.
2. Obtain an understanding of internal control relevant to the audit in order to
design audit procedures that are appropriate in the circumstances.
3. Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by the
Management.
4. Conclude on the appropriateness of the Management’s use of the going
concern basis of accounting and based on the audit evidence obtained whether a
material uncertainty exists related to events or conditions that may cast significant
doubt on the Company’s ability to continue as a going concern. If we conclude that a
material uncertainty exists we are required according to China Standards on
Auditing to draw attention in our auditors’ report to the related disclosures in the
financial statements or if such disclosures are inadequate to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditors’
report. However future events or conditions may cause the Company to cease to
continue as a going concern.
5. Evaluate the overall presentation structure and content of the financial
statements including the disclosures and whether the financial statements represent
the underlying transactions and events in a manner that achieves fair presentation.
6. Obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business activities within FIYTA Ltd to express an
opinion on the financial statements. We are responsible for the direction supervision
Independent Auditor’s Report - Page 6D.H.S.Z.[2023]000189
and performance of the group audit. We remain solely responsible for our audit
opinion.We communicate with those charged with governance regarding among other
matters the planned scope and timing of the audit and significant audit findings
including any significant deficiencies in internal control that we identify during our
audit.We also provide those charged with governance with a statement that we have
complied with relevant ethical requirements regarding independence and to
communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence and where applicable related safeguards.From the matters communicated with those charged with governance we
determine those matters that were of most significance in the audit of the financial
statements of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when in extremely rare circumstances we determine
that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.DaHuaCertified PublicAccountants
(Special General Partnership) CICPA:
Engagement partner Long Jiao
Beijing China CICPA:
Wang Dong
12 March 2024
Independent Auditor’s Report - Page 7FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
II. Audited Financial Statements
Consolidated Balance Sheet
As at 31 December 2023
Prepared by: FIYTA Precision Technology (Unless otherwise indicated the currency is
Co. Ltd. expressed in RMB)
Assets Note ClosingV Balance Closing Balance of prior period
Current assets:
Monetary funds note 1 504629153.71 313747463.64
Financial assets held for trading
Derivative financial assets
Notes receivable note 2 18268972.37 32214912.10
Accounts receivable note 3 323142761.64 305290959.68
Accounts receivable financing
Prepayments note 4 6571239.98 8039794.97
Other receivables note 5 57725792.00 56918019.48
Inventories note 6 2100666175.28 2141320373.67
Contract assets
Held-for-sale assets
Current portion of non-current assets
Other current assets note 7 72249391.81 66339505.32
Total current assets 3083253486.79 2923871028.86
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments note 8 51862607.30 58182086.90
Investment in other equity instruments note 9 85000.00
Other non-current financial assets
Investment properties note 360255832.110 4 374979494.71
Fixed assets note 355785354.611 8 364628765.17
Construction in progress
Productive biological assets
Oil and gas assets
Right-of-use assets note 109452481.612 4 110330512.03
Intangible assets note13 31664380.77 33200218.63
Development expenditure
Goodwill
Long-term deferred expenses note 122324355.114 3 144488452.18
Deferred tax assets note15 80227771.46 95784611.94
Other non-current assets note16 9434627.17 11593741.57
Total non-current assets 1121007410.29 1193272883.13
Total assets 4204260897.08 4117143911.99
Legal Representative:Zhang Xuhua Finance Officer (CFO):Song Yaoming Financial Manager:Tian Hui
Page 1FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Consolidated Balance Sheet (Continued)
As at 31 December 2023
Prepared by: FIYTA Precision Technology Co. (Unless otherwise indicated the currency is
Ltd. expressed in RMB)
Liability and Equity NoteV Closing Balance Closing Balance of prior period
Current liabilities:
Short-term borrowings note17 250187763.87 290237111.11
Financial liabilities held for trading
Derivative financial liabilities
Notes payable note18 2000600.00
Accounts payable note19 173825907.71 170589456.67
Payments received in advance note20 10267758.31 16960128.83
Contract liabilities note21 12286243.62 16844437.47
Employee benefits payable note22 120084810.60 136587939.38
Tax payables note23 64188161.31 60770168.30
Other payables note24 121937801.07 165060122.58
Held-for-sale liabilities
Current portion of non-current liabilities note25 66399004.20 71546316.16
Other current liabilities note26 1589635.30 1686806.01
Total current liabilities 820767085.99 932283086.51
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred stock
Including: Perpetual debt
Lease liabilities note27 43526352.52 41642561.58
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income note28 952785.69 1295926.80
Deferred tax liabilities note15 5208920.69 5498844.95
Other non-current liabilities
Total non-current liabilities 49688058.90 48437333.33
Total liabilities 870455144.89 980720419.84
Equity:
Share capital note29 415219970.00 417627960.00
Other equity instruments
Including: Preferred stock
Including: Perpetual debt
Capital reserves note30 990159033.17 1007086643.48
Less: Treasury stock note31 78645532.23 50759806.16
Other comprehensive income note32 19325335.93 5739589.89
Special reserves note33 3223158.06 2012064.91
Surplus reserve note34 275010401.50 275010401.50
Retained earnings note35 1709513385.76 1479706638.53
Equity attributable to parent company 3333805752.19 3136423492.15
Non-controlling interests
Total shareholders' equity 3333805752.19 3136423492.15
Total liabilities and shareholders' equity 4204260897.08 4117143911.99
Legal Representative:Zhang Xuhua Finance Officer (CFO):Song Yaoming Financial Manager:Tian Hui
Page 2FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2023
(Unless otherwise indicated the currency is
Prepared by: FIYTA Precision Technology Co. Ltd.expressed in RMB)
Items Note V Current Period Prior Period
1. Operating revenue note 36 4569690002.99 4354096880.36
Less: Operating costs note 36 2905463474.81 2738972791.11
Taxes and surcharges note 37 36193846.10 30800199.73
Selling expenses note 38 924009179.32 931832830.40
Administrative expenses note 39 205359277.24 219014508.52
Research and development expenses note 40 57802244.08 61088585.61
Finance expenses note 41 21469772.77 21188742.11
Including: Interest expenses 12824222.06 16846749.14
Interest income 5722586.39 3923999.48
Add: Other income note 42 11435373.78 18648210.06
Income from investments note 43 -5819479.60 3026481.59
Including: Investment income from associates and joint ventures -5819479.60 3026481.59
Derecognition of financial assets at amortized cost
Gains or losses from net exposure hedging
Gains or losses from changes in fair values
Credit impairment losses note 44 6827575.82 4845379.45
Impairment losses note 45 571980.37 -37625482.96
Gains or losses from asset disposals note 46 685868.57 91925.06
2. Operating profit 433093527.61 340185736.08
Add: Non-operating income note 47 4770506.80 1287202.08
Less: Non-operating expenses note 48 859770.10 2351266.31
3. Profit before tax 437004264.31 339121671.85
Less: Income tax note 49 103826161.94 72440220.01
4. Net profit 333178102.37 266681451.84
Including: Net profit realized before business combinations under common control
I. Net profit classified by going concernNet profit from continuing operations（"-" for net loss) 333178102.37 266681451.84Net profit from discontinuing operations（"-" for net loss)II. Net profit classified by ownership
Net profit attributable to parent company 333178102.37 266681451.84
Net profit attributable to non-controlling interests
5. Other comprehensive income after tax 13585746.04 13397936.29
Other comprehensive income after tax attributable to parent company 13585746.04 13397936.29
I. Items of other comprehensive income that will not be reclassified to profit or loss
i. Changes in remeasurement of defined benefit plans
Other comprehensive income that cannot be transferred to profit or loss under the
ii.equity method
iii. Changes in fair value of investments in equity instruments
iv. Changes in fair value of the Company's own credit risk
II. Items of other comprehensive income that will be reclassified to profit or loss 13585746.04 13397936.29
Other comprehensive income that can be transferred to profit or loss under the
i.equity method
ii. Changes in fair value of other debt investments
iii. Amount of financial assets reclassified into other comprehensive income
iv. Provisions for credit impairment of other debt investments
v. The effective portion of gains or losses arising from cash flow hedging
vi. Translation differences arising from financial statements in foreign currencies 13585746.04 13397936.29
Other comprehensive income attributable to non-controlling interests after tax
6. Total comprehensive income 346763848.41 280079388.13
Total comprehensive income attributable to parent company 346763848.41 280079388.13
Total comprehensive income attributable to non-controlling interests
7. Earnings per share
I. Basic earnings per share 0.8082 0.6398
II. Diluted earnings per share 0.8075 0.6398
(Attached notes to statements are part of the consolidated financial statements)
Legal Representative:Zhang Xuhua Finance Officer (CFO):Song Yaoming Financial Manager:Tian Hui
Page 3FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Consolidated Cash Flows Statement
For the year ended 31 December 2023
Prepared by: FIYTA Precision Technology Co. Ltd. (Unless otherwise indicated the currency is expressed in RMB)
Items Note V Current Period Prior Period
1. Cash flows from operating activities
Cash received from sales and services 5025883440.00 4910473741.41
Tax and surcharge refunds 1937203.71 7793409.24
Other cash receipts related to operating activities note 50 68179211.21 79656853.28
Total cash inflows from operating activities 5095999854.92 4997924003.93
Cash paid for goods and services 3155385386.12 3266497299.47
Cash paid to and for employees 624495756.20 659058385.84
Taxes and surcharges paid 296079135.93 272103882.56
Other cash payments related to operating activities note 50 387638088.69 324035659.54
Total cash outflows from operating activities 4463598366.94 4521695227.41
Net cash flows from operating activities 632401487.98 476228776.52
2. Cash flows from investing activities
Cash received from withdrawal of investments
Cash received from investment income 500000.00
Net proceeds from disposals of fixed assets intangible assets and other
1278284.57138721.29
long-term assets
Net proceeds from disposal of subsidiaries and other business units
Other cash receipts related to investing activities
Total cash inflows from investing activities 1778284.57 138721.29
Cash paid for fixed assets intangible assets and other long-term assets 91104776.03 114090573.97
Cash paid for investments
Net cash paid for acquiring subsidiaries and other business units
Other cash payments related to investing activities
Total cash outflows from investing activities 91104776.03 114090573.97
Net cash flows from investing activities -89326491.46 -113951852.68
3. Cash flows from financing activities
Cash received from investments by others
Including: Cash received by subsidiaries from non-controlling investors
Cash received from borrowings 250000000.00 845155704.29
Other cash receipts related to other financing activities
Total cash inflows from financing activities 250000000.00 845155704.29
Cash repayments for debts 290000000.00 794083975.00
Cash paid for distribution of dividends and profit and for interest expenses 114106711.75 134519807.76
Including: Dividends or profit paid by subsidiaries to non-controlling
investors
Other cash payments related to financing activities note 50 198056975.77 177477740.46
Total cash outflows from financing activities 602163687.52 1106081523.22
Net cash flows from financing activities -352163687.52 -260925818.93
4. Effect of changes in foreign exchange rates on cash and cash
-20544.932132547.59
equivalents
5. Net increase in cash and cash equivalents 190890764.07 103483652.50
Add: Opening balance of cash and cash equivalents 313738389.64 210254737.14
6. Closing balance of cash and cash equivalents note 51 504629153.71 313738389.64
(Attached notes to statements are part of the consolidated financial statements)
Legal Representative:Zhang Xuhua Finance Officer (CFO):Song Yaoming Financial Manager:Tian Hui
Page 4FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
Prepared by: FIYTA Precision Technology Co. Ltd. (Unless otherwise indicated the currency is expressed inRMB)
Items Current Period
Equity attributable to parent company
Less: Treasury Other Non-controllinShare capital Capital reserves stock comprehensiv
Special Surplus Retained Total shareholders' equity
e income reserves reserves earnings
g interests
1. Closing balance of prior year 417627960.0 1007086643.4 50759806.16 5739589.89 2012064.9 275010401.5 1479706638.50 8 1 0 3 3136423492.15
Add: Increase/decrease due to changes
in accounting policies
Increase/decrease due to
corrections of errors in prior period
Business combination under
common control
Others
2. Opening balance of current year 417627960.0 1007086643.4 50759806.16 5739589.89 2012064.9 275010401.5 1479706638.50 8 1 0 3 3136423492.15
3. Increase/decrease for current year -2407990.00 -16927610.31 27885726.07 13585746.04 1211093.15 229806747.23 197382260.04
I. Total comprehensive income 13585746.04 333178102.37 346763848.41
II. Owner's contributions to and
withdrawals of capital -2407990.00 -16927610.31 27885726.07 -47221326.38
i. Common stock contributed/paid-in
capital by shareholders/owners 64340669.42 -64340669.42
ii. Capital contributed by other
equity instruments holders
iii. Share-based payments to
owners' equity -2407990.00 -16915253.76
-36454943.3
517131699.59
iv. Others -12356.55 -12356.55
III. Profits distribution -103371355.14 -103371355.14
i. Appropriation of surplus reserve
ii. Distribution to owners -103371355.14 -103371355.14
iii. Others
IV. Transfers within owners' equity
i. Capital reserves transferred to
paid-in capital
ii. Surplus reserve transferred to
paid-in capital
iii. Use of surplus reserve to cover
previous losses
iv. Changes in remeasurement of
defined benefit plans transferred to
retained earnings
v. Other comprehensive income
transferred to retained earnings
vi. Others
V. Special reserves 1211093.15 1211093.15
i. Appropriated during current 1537825.2
year 2 1537825.22
ii. Used during current year -326732.07 -326732.07
VI. Others
4. Closing balance of current year 415219970.00 990159033.17 78645532.23 19325335.93
3223158.0275010401.51709513385.7
6063333805752.19
Legal Representative:Zhang Xuhua Finance Officer (CFO):Song Yaoming Financial Manager:Tian Hui
Page 5FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
Prepared by: FIYTA Precision Technology Co. Ltd. (Unless otherwise indicated the currency is expressed in RMB)
Items Prior Period
Equity attributable to parent company
Less: Other Total
Share capital Capital reserves Treasury comprehensive Special Surplus Retained
Non-controlling
interests shareholders'
stock income reserves reserves earnings equity
1. Closing balance of prior year 426051015.00 1040908194.13 60585678.92 -7658346.40 1062731.13 275010401.50 1338444326.09 3013232642.53
Add: Increase/decrease due to changes
in accounting policies
Increase/decrease due to
corrections of errors in prior period
Business combination under
common control
Others
2. Opening balance of current year 426051015.00 1040908194.13 60585678.92 -7658346.40 1062731.13 275010401.50 1338444326.09 3013232642.53
3. Increase/decrease for current year -8423055.00 -33821550.65 -9825872.76 13397936.29 949333.78 141262312.44 123190849.62
I. Total comprehensive income 13397936.29 266681451.84 280079388.13
II. Owner's contributions to and
withdrawals of capital -8423055.00 -33821550.65 -9825872.76 -32418732.89
i. Common stock contributed/paid-in
capital by shareholders/owners -7987217.00 -42265614.88 -50252831.88
ii. Capital contributed by other
equity instruments holders
iii. Share-based payments to
owners' equity -435838.00 8459107.40 -9825872.76 17849142.16
iv. Others -15043.17 -15043.17
III. Profits distribution -125419139.40 -125419139.40
i. Appropriation of surplus reserve
ii. Distribution to owners -125419139.40 -125419139.40
iii. Others
IV. Transfers within owners' equity
i. Capital reserves transferred to
paid-in capital
ii. Surplus reserve transferred to
paid-in capital
iii. Use of surplus reserve to cover
previous losses
iv. Changes in remeasurement of
defined benefit plans transferred to
retained earnings
v. Other comprehensive income
transferred to retained earnings
vi. Others
V. Special reserves 949333.78 949333.78
i. Appropriated during current year 1246390.69 1246390.69
ii. Used during current year -297056.91 -297056.91
VI. Others
4. Closing balance of current year 417627960.00 1007086643.48 50759806.16 5739589.89 2012064.91 275010401.50 1479706638.53 3136423492.15
Legal Representative:Zhang Xuhua Finance Officer (CFO):Song Yaoming Financial Manager:Tian Hui
Page 6FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Parent Company's Balance Sheet
As at 31 December 2023
Prepared by: FIYTA Precision Technology (Unless otherwise indicated the currency is
Co. Ltd. expressed in RMB)
Assets Note ClosingXVI Balance Closing Balance of prior period
Current assets:
Monetary funds 308230255.35 274691023.16
Financial assets held for trading
Derivative financial assets
Notes receivable
Accounts receivable note 1 1822916.61 603216.03
Accounts receivable financing
Prepayments
Other receivables note 2 696328419.85 839782543.07
Inventories
Contract assets
Held-for-sale assets
Current portion of non-current assets
Other current assets 15886769.82 14107604.63
Total current assets 1022268361.63 1129184386.89
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments note 3 1633041716.11 1552310486.50
Investment in other equity instruments 85000.00
Other non-current financial assets
Investment properties 293695692.68 305676084.09
Fixed assets 207209890.94 209495642.59
Construction in progress
Productive biological assets
Oil and gas assets
Right-of-use assets
Intangible assets 23460211.70 23522355.93
Development expenditure
Goodwill
Long-term deferred expenses 4795846.73 8240653.62
Deferred tax assets 640783.05 1904597.73
Other non-current assets 710807.49 2051932.75
Total non-current assets 2163554948.70 2103286753.21
Total assets 3185823310.33 3232471140.10
Legal Representative:Zhang Xuhua Finance Officer (CFO):Song Yaoming Financial Manager:Tian Hui
Page 7FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Parent Company's Balance Sheet (Continued)
As at 31 December 2023
Prepared by: FIYTA Precision Technology Co. Ltd. (Unless otherwise indicated the currency is expressedin RMB)
Liability and Equity Note ClosingXVI Balance Closing Balance of prior period
Current liabilities:
Short-term borrowings 250187763.87 290237111.11
Financial liabilities held for trading
Derivative financial liabilities
Notes payable
Accounts payable 2285657.88 1048201.41
Payments received in advance 10267758.31 16960128.83
Contract liabilities
Employee benefits payable 25886702.67 27139007.97
Tax payables 3322241.54 778299.01
Other payables 224668548.77 299198966.56
Held-for-sale liabilities
Current portion of non-current
liabilities
Other current liabilities
Total current liabilities 516618673.04 635361714.89
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred stock
Including: Perpetual debt
Lease liabilities
Long-term payables
Long-term employee benefits
payable
Provisions
Deferred income 952785.69 1295926.80
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 952785.69 1295926.80
Total liabilities 517571458.73 636657641.69
Equity:
Share capital 415219970.00 417627960.00
Other equity instruments
Including: Preferred stock
Including: Perpetual debt
Capital reserves 993037528.98 1010917776.19
Less: Treasury stock 78645532.23 50759806.16
Other comprehensive income
Special reserves
Surplus reserve 275010401.50 275010401.50
Retained earnings 1063629483.35 943017166.88
Total owners' equity 2668251851.60 2595813498.41
Total liabilities and owners' equity 3185823310.33 3232471140.10
Legal Representative:Zhang Xuhua Finance Officer (CFO):Song Yaoming Financial Manager:Tian Hui
Page 8FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Parent Company's Statement of Comprehensive Income
For the year ended 31 December 2023
Prepared by: FIYTA Precision Technology Co. Ltd. (Unless otherwise indicated the currency is expressed in RMB)
Items NoteXVI Current Period Prior Period
1. Operating revenue note 4 180874926.74 155284801.05
Less: Operating costs note 4 49729440.87 41765441.70
Taxes and surcharges 7815174.54 5984017.16
Selling expenses 16395826.35 4340253.59
Administrative expenses 53755060.51 64698540.45
Research and development expenses 12959491.24 16464924.76
Finance expenses -947061.34 -1030335.57
Including: Interest expenses 2405575.67 3264769.63
Interest income 4460371.04 3699364.22
Add: Other income 1097603.80 1221085.39
Income from investments note 5 192180520.40 243622178.29
Including: Investment income from associates
and joint ventures -5819479.60 3026481.59
Derecognition of financial assets
at amortized cost
Gains or losses from net exposure hedging
Gains or losses from changes in fair values
Credit impairment losses -104859.73 108040.61
Impairment losses
Gains or losses from asset disposals 635033.80 -14615.44
2. Operating profit 234975292.84 267998647.81
Add: Non-operating income 8037.20 191981.02
Less: Non-operating expenses 312375.33 21262.34
3. Profit before tax 234670954.71 268169366.49
Less: Income tax 10687283.10 6174714.67
4. Net profit 223983671.61 261994651.82Net profit from continuing operations（"-" for net loss) 223983671.61 261994651.82Net profit from discontinuing operations（"-" for net loss)
5. Other comprehensive income after tax
I. Items of other comprehensive income that will not
be reclassified to profit or loss
i. Changes in remeasurement of defined benefitplans
ii Other comprehensive income that cannot be. transferred to profit or loss under the equitymethod
ii Changes in fair value of investments in equity
i. instruments
i
v Changes in fair value of the Company's own credit. risk
II. Items of other comprehensive income that will be
reclassified to profit or loss
Other comprehensive income that can be
i. transferred to profit or loss under the equity
method
ii. Changes in fair value of other debt investments
ii Amount of financial assets reclassified into other
i. comprehensive income
i
v Provisions for credit impairment of other debt. investments
v The effective portion of gains or losses arising. from cash flow hedging
v Translation differences arising from financial
i. statements in foreign currencies
6. Total comprehensive income 223983671.61 261994651.82
Legal Representative:Zhang Xuhua Finance Officer (CFO):Song Yaoming Financial Manager:Tian Hui
Page 9FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Parent Company's Cash Flows Statement
For the year ended 31 December 2023
Prepared by: FIYTA Precision Technology Co. Ltd. (Unless otherwise indicated the currency is expressed inRMB)
Not
Items eXV Current Period Prior Period
I
1. Cash flows from operating activities
Cash received from sales and services 189464980.58 166402067.64
Tax and surcharge refunds 7647.56
Other cash receipts related to operating activities 4225525553.06 4309971160.78
Total cash inflows from operating activities 4414990533.64 4476380875.98
Cash paid for goods and services 9573850.00
Cash paid to and for employees 61402333.15 59513788.17
Taxes and surcharges paid 20428198.75 20686403.89
Other cash payments related to operating activities 4154707540.94 4383872472.45
Total cash outflows from operating activities 4246111922.84 4464072664.51
Net cash flows from operating activities 168878610.80 12308211.47
2. Cash flows from investing activities
Cash received from withdrawal of investments
Cash received from investment income 198500000.00 240595696.70
Net proceeds from disposals of fixed assets intangible assets and other
long-term assets 1146737.46 3973887.69
Net proceeds from disposal of subsidiaries and other
business units
Other cash receipts related to investing activities
Total cash inflows from investing activities 199646737.46 244569584.39
Cash paid for fixed assets intangible assets and other
long-term assets 7686801.71 5810205.37
Cash paid for investments 90000000.00
Net cash paid for acquiring subsidiaries and other business
units
Other cash payments related to investing activities
Total cash outflows from investing activities 97686801.71 5810205.37
Net cash flows from investing activities 101959935.75 238759379.02
3. Cash flows from financing activities
Cash received from investments by others
Cash received from borrowings 250000000.00 830000000.00
Other cash receipts related to other financing activities
Total cash inflows from financing activities 250000000.00 830000000.00
Cash repayments for debts 290000000.00 790000000.00
Cash paid for distribution of dividends and profit and for
interest expenses 114106711.75 134389016.01
Other cash payments related to financing activities 83148230.83 53390338.09
Total cash outflows from financing activities 487254942.58 977779354.10
Net cash flows from financing activities -237254942.58 -147779354.10
4. Effect of changes in foreign exchange rates on cash and cash
equivalents -44371.78 380393.85
5. Net increase in cash and cash equivalents 33539232.19 103668630.24
Add: Opening balance of cash and cash equivalents 274691023.16 171022392.92
6. Closing balance of cash and cash equivalents 308230255.35 274691023.16
Legal Representative:Zhang Xuhua Finance Officer (CFO):Song Yaoming Financial Manager:Tian Hui
Page 10FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Parent Company's Statement of Changes in Equity
For the year ended 31 December 2023
Prepared by: FIYTA Precision Technology Co. Ltd. (Unless otherwise indicated the currency is expressed in RMB)
Items Current Period
Other
Share capital Capital reserves Less: Treasury comprehensive Special Surplus Retained Total shareholders'stock income reserves reserves earnings equity
1. Closing balance of last year 417627960.00 1010917776.19 50759806.16 275010401.50 943017166.88 2595813498.41
Add: Increase/decrease due to changes in accounting
policies
Increase/decrease due to corrections of
errors in prior period
Others
2. Opening balance of current year 417627960.00 1010917776.19 50759806.16 275010401.50 943017166.88 2595813498.41
3. Increase/decrease for current year -2407990.00 -17880247.21 27885726.07 120612316.47 72438353.19
I. Total comprehensive income 223983671.61 223983671.61
II. Owner's contributions to and withdrawals of capital -2407990.00 -17880247.21 27885726.07 -48173963.28
i. Common stock contributed/paid-in capital by
shareholders/owners 64340669.42 -64340669.42
ii. Capital contributed by other equity
instruments holders
iii. Share-based payments to owners' equity -2407990.00 -17867890.66 -36454943.35 16179062.69
iv. Others -12356.55 -12356.55
III. Profits distribution -103371355.14 -103371355.14
i. Appropriation of surplus reserve
ii. Distribution to owners -103371355.14 -103371355.14
iii. Others
IV. Transfers within owners' equity
i. Capital reserves transferred to paid-in capital
ii. Surplus reserve transferred to paid-in capital
iii. Use of surplus reserve to cover previous
losses
iv. Changes in remeasurement of defined
benefit plans transferred to retained earnings
v. Other comprehensive income transferred to
retained earnings
vi. Others
V. Special reserves
i. Appropriated during current year
ii. Used during current year
VI. Others
4. Closing balance of current year 415219970.00 993037528.98 78645532.23 275010401.50 1063629483.35 2668251851.60
Legal Representative:Zhang Xuhua Finance Officer (CFO):Song Yaoming Financial Manager:Tian Hui
Page 11FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Parent Company's Statement of Changes in Equity
For the year ended 31 December 2023
Prepared by: FIYTA Precision Technology Co. Ltd. (Unless otherwise indicated the currency is expressed in RMB)
Items Prior Period
Other Spe
Share capital Capital reserves Less: Treasury cialstock comprehen rese Surplus reserves Retained earnings Total shareholders' equitysive income rves
1. Closing balance of last year 426051015.00 1045449410.67 60585678.92 275010401.50 806441654.46 2492366802.71
Add: Increase/decrease due to changes in
accounting policies
Increase/decrease due to
corrections of errors in prior period
Others
2. Opening balance of current year 426051015.00 1045449410.67 60585678.92 275010401.50 806441654.46 2492366802.71
3. Increase/decrease for current year -8423055.00 -34531634.48 -9825872.76 136575512.42 103446695.70
I. Total comprehensive income 261994651.82 261994651.82
II. Owner's contributions to and withdrawals of
capital -8423055.00 -34531634.48 -9825872.76 -33128816.72
i. Common stock contributed/paid-in
capital by shareholders/owners -7987217.00 -42265614.88 -50252831.88
ii. Capital contributed by other equity
instruments holders
iii. Share-based payments to owners'
equity -435838.00 7749023.57 -9825872.76 17139058.33
iv. Others -15043.17 -15043.17
III. Profits distribution -125419139.40 -125419139.40
i. Appropriation of surplus reserve
ii. Distribution to owners -125419139.40 -125419139.40
iii. Others
IV. Transfers within owners' equity
i. Capital reserves transferred to paid-in
capital
ii. Surplus reserve transferred to paid-in
capital
iii. Use of surplus reserve to cover
previous losses
iv. Changes in remeasurement of defined
benefit plans transferred to retained earnings
v. Other comprehensive income
transferred to retained earnings
vi. Others
V. Special reserves
i. Appropriated during current year
ii. Used during current year
VI. Others
4. Closing balance of current year 417627960.00 1010917776.19 50759806.16 275010401.50 943017166.88 2595813498.41
Legal Representative:Zhang Xuhua Finance Officer (CFO):Song Yaoming Financial Manager:Tian Hui
Page 12FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
I.Company status
1. Registered place organization and address of headquarters
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 both the Company was listed on Shenzhen Stock Exchange.The Company holds business license with the Unified Social Credit Code of
91440300192189783K.
As at 31 December 2023 the outstanding shares issued by the Company was 415.22 million
shares and the registered capital was RMB415.22 million after a series of share dividend right
offering share capital conversion from retained earnings and issuing of new shares. The
Company’s registered address is FIYTA Hi-Tech Building Gao Xin Nan Yi Dao Nanshan
District Shenzhen Guangdong Province where the Company’s headquarters locates. The parent
company of the Company is CATIC Shenzhen Holdings Limited (CATIC Shenzhen) and the
ultimate controlling party of the Company is Aviation Industry Corporation of China Ltd.
(AVIC) .
2. Nature of the Company’s business and main operating activities
The business nature and main operating activities of the Company and its subsidiaries
mainly include: Watch and Clock Sales; Watch and Timing Instrument Manufacturing; Watch
and Timing Instrument Sales; Jewelry Wholesale; Jewelry Retail; Wearable Intelligent Devices
Manufacturing; Wearable Intelligent Devices Sales; Property Management; Non-residential Real
Estate Leasing; Professional Design Services; Import and Export of Goods; Sales of Household
Electrical Appliances; Sales of Satellite Mobile Communication Terminals; Import and Export
Business (according to Shen Mao Jin Zhun Zi No.2001-2204) .
3. Scope of consolidation
There were 12 subsidiaries that are included in the Company’s scope of consolidation for
year 2023 see Note VI for details. The scope of consolidation was the same as last year.
4. Authorization for issue
The financial statements have been approved and authorized for issue by the Board of
Page 13FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Directors on 12 March 2024.II.Basis of preparation
1. Basis of preparation
The financial statement is prepared in accordance with the requirements of Accounting
Standards for Business Enterprises and associated application guidance illustrations to thestandards and related pronouncements (collectively known as “Accounting Standards forBusiness Enterprises” or “CAS”) . These financial statements also comply with the disclosurerequirements of “Regulation on the Preparation of Information Disclosure of Companies IssuingPublic Shares No. 15: General Requirements for Financial Reports” (revised in 2023) issued by
China Securities Regulatory Commission (CSRC) .
2. Going concern
The Company assesses the going concern ability to the extent of 12 month after the balance
sheet date. No issues that would result in significant doubt about the Company’s going concern
is noted. As a result the financial statements of the Company have been prepared on going
concern basis.
3. Basis and principles of accounting
Accrual basis is adopted for the Group’s accounting activity. Except for some financial
instruments the financial statements are measured using historical cost. In case of impairment
occurred on assets provisions for impairment are provided for in accordance with related
regulations.III.Significant accounting policies and accounting estimates
1. Highlight to specific accounting policies and estimates
(1) The Company make specific accounting policies and estimates according to its nature of
business. Accounting policies and estimates mainly includes: method of estimated credit loss
accrual (Note III. 13 Note III. 14 and Note III. 15) measurement of inventory (Note III. 16)
depreciation of investment property and fixed asset and amortization of intangible asset (Note III.
19 Note III. 20 and Note III. 24) revenue (Note III 32) etc.
(2) Based on historical experience and other factors including reasonable estimation to future
events the Company continues to evaluate significant accounting estimates and key assumptions.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) Measurement of Expected Credit Loss of accounts receivable and other receivables
The management estimates impairment loss provision to accounts receivable and other
Page 14FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
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 to 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: (a) whether the events affect the
asset impairment have already incurred; (b) whether the discounted cash flow from continue usage
of the asset or disposal is lower than its carrying amount; and (c) 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.(a) 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.(b) 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.(c) Deferred tax asset. Deferred 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.(d) Corporate income tax. The final tax treatment of many transaction and events are with
Page 15FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
uncertainty in the normal course of operation. Significant judgments involves in accrual of
corporate income tax. If there is 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.
2. Statement of compliance with Accounting Standards for Business Enterprises
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 as at 31 December 2023 the results of
operations and the cash flows for the year then ended of the Company.
3. Accounting period
The accounting period of the Company is the calendar year i.e. from 1 January to 31
December of each year.
4. 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.
5. Recording currency
The Company and its domestic subsidiaries adopt Renminbi (“RMB”) as the recording
currency. FIYTA (Hong Kong) Limited (“FIYTA Hong Kong”) a subsidiary of the Company
outside mainland China and Station 68 Limited (“Station 68”) a subsidiary of FIYTA Hong
Kong use Hong Kong Dollar (“HKD”) as the recording currency according to the main economic
environment where the companies operated in. Montres Chouriet SA a subsidiary of FIYTAHong
Kong (“Swiss Company”) uses Swiss Franc as the recording currency according to the main
economic environment where the Swiss Company operated in. The recording currencies
mentioned above will be translated to Renminbi when preparing financial statements. The
currency used in preparing the Group’s financial statements is Renminbi.
6. Methodology for determining materiality criteria and basis for selection
Item Materiality criteria
Accounts receivable with significant amount of bad Individual closing balance of 0.50
debt provision reversed or recovered during the period million or more
Significant other accounts payable aged over one year Individual closing balance of 1.00million or more
7. Accounting treatment for business combinations involving entities under common
control and not under common 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
Page 16FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
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
For a business combination involving enterprises under common control the assets acquired
and liabilities assumed are measured based on their carrying amounts in the consolidated financial
statements of the ultimate controlling party at the combination date except for adjustments due to
different accounting policies. 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 reserve (share premium) . If the capital reserve is not
sufficient to absorb the difference any excess is adjusted against retained earnings. he 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 combinations 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
Page 17FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
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 it shall be treated as follows: In the separate financial statements the
initial investment cost is the sum of the carrying amount of equity investment of the acquiree
held prior to the acquisition date and additional investment cost at the acquisition date. When the
previously-held equity investment which was accounted for under the e Accounting treatment for
business combinations involving entities under common control and not under common control
equity method before the acquisition date any other comprehensive income previously
recognized is not adjusted on acquisition date. When the investment is disposed of in later date
the amount that was recognized in other comprehensive income is recognized on the same basis
as would be required if the investee had disposed directly of the related assets or liabilities. The
owners’ equity recognized as the changes of the investee’s other owners’ equity except for net
profit or loss other comprehensive income and profit distribution are transferred to profit or loss
for the current period when disposing the investment. When the previously-held equity
investment which was measured at fair value before the acquisition date the accumulated
changes in fair value included in other comprehensive income is transferred to profit or loss for
the current period upon commencement of the cost method.
(4) Transaction costs for business combination
Page 18FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
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.
8. Criteria for judging control and the preparation of consolidated financial
statements
(1) Criteria for determining control
Control means that the investor has power over the investee enjoys variable returns through
participation in the investee's relevant activities and has the ability to use its power over the
investee to influence the amount of its returns.The Company makes a judgment on whether or not to control an investee based on a
comprehensive consideration of all relevant facts and circumstances. The Company re-evaluates
its judgment once changes in relevant facts and circumstances result in a change in the relevant
elements involved in the definition of control. Relevant facts and circumstances mainly include：
* the purpose for which the investee was established;
* relevant activities of the investee and how decisions are made about relevant activities;
* whether the investor enjoys rights that currently give it the ability to dominate the
investee's relevant activities;
* whether the investor enjoys a variable return through participation in the investee's
relevant activities;
* the ability of the investor to use its power over the investee to influence the amount of its
return;
* relationships between investors and other parties.
(2)
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.
(3) 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
Page 19FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
policies and accounting period. If there are differences the subsidiaries shall adjust its policies
and accounting period accordingly.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 portion of a subsidiary’s equity that is not attributable to the parent is treated as
non-controlling interests and presented separately in the consolidated balance sheet within
shareholders’ equity. The portion of net profit or loss of subsidiaries for the period attributable to
non-controlling interests is presented separately in the consolidated income statement below the
“net profit” line item. When the amount of loss for the current period attributable to the
non-controlling shareholders of a subsidiary exceeds the non-controlling shareholders’ share of
the opening owners’ equity of the subsidiary the excess is still allocated against the
non-controlling interests.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.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
Page 20FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
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.Where a subsidiary or business has been acquired through a business combination not
involving enterprises under common control by means of investment addition in the reporting
period equity held before the purchase date shall be re-measured at fair value. Difference between
the fair value and the carrying amount shall be charged to current period investment gain. 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 subsidiary or business
a) General principal
In the reporting period if the Company dispose of subsidiary or business the subsidiary’s
revenue expenses profit and cash flows from the beginning of the period to the disposal date shall
be included in consolidated financial statements.When the Company loses control over a subsidiary because of disposing part of equity
investment or other reasons the remaining part of the equity investment is re-measured at fair
value at the date when the control is lost. 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.b) 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:
i) the transactions were entered into at the same time or by considering each other’s
influence;
ii) a complete business result can only be achieved by combining all these transactions
together;
iii) the performing of one transaction is depended on at least one other transaction;
iv) 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 disposal was categorized as one-basket transaction the Company dealt with all
Page 21FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
transactions as one transaction that resulted in lost control over subsidiary. But before losing
control the difference between disposal consideration and the portion of net asset of the disposal
part shall be recognized in other comprehensive income each time of disposal and charged to
income statement in whole in the period loss control.If the disposal does not belong to one-basket transaction the accounting treatment before lost
control shall be in accordance with policies of disposal equity but not losing control. At the time
control lost deal with as normal subsidiary disposal.
3) Acquiring non-controlling interests of subsidiary
Where the Company acquires a non-controlling interest from a subsidiary’s non-controlling
shareholders the book value of shareholder’s equity attributed to the Company and to the
non-controlling interest is adjusted to reflect the change in the Company’s interest in the
subsidiaries. The difference between the proportion interests of the subsidiary’s net assets being
acquired or disposed and the amount of the consideration paid or received is adjusted to the capital
reserve in the consolidated balance sheet with any excess adjusted to retained earnings.
4) Partially disposal subsidiary equity without losing control
The difference between the consideration received from partial disposal of the long-term
equity investment in the subsidiary without losing control and the share of net assets of the
subsidiary that is continuously calculated from the purchase date or the merger date corresponding
to the disposal of the long-term equity investment to adjust the share premium in the capital
reserve in the consolidated balance sheet if the share premium in the capital reserve is insufficient
to offset adjust the retained earnings.
9. Joint arrangement classification and accounting treatment for joint operation
(1) Classification
The Company classifies joint 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;
(2) Accounting treatment to joint operation
Page 22FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
The Company recognizes the following items relating to its interest in a joint operation and
account for them in accordance with relevant accounting standards:
1) its solely-held assets and its share of any assets held jointly;
2) its solely-assumed liabilities and its share of any liabilities assumed jointly;
3) its revenue from the sale of its share of the output arising from the joint operation;
4) its share of the revenue from the sale of the output by the joint operation; and
5) its solely-incurred expenses and its share of any expenses incurred jointly.
The Company contribute or disposal of assets (except that asset constitute business) . Before
these assets are sold to third party the Company only recognizes the portion of profit or losses
that attributes to the other party. If the assets incurred impairment (meets the requirements of the
"Accounting Standards for Business Enterprises No. 8 - Impairment of Assets") the Company
recognizes losses in full.For the assets purchased from joint operation (except that constitutes business) before it is
sold to third party only the portion that attributable to the other parties. If assets incurred
impairment (meets the requirements of the "Accounting Standards for Business Enterprises No.
8 - Impairment of Assets") the Company recognizes losses based on its share.
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.
10. Cash and cash equivalents
When preparing cash flow statement the Company recognizes cash in hand and bank
deposit that available for payment as cash. Cash equivalents include short-term (generally
expires within three months from the date of purchase)highly liquid investments that are readily
convertible to known amounts of cash and are subject to an insignificant risk of change in value.
11. Foreign currency transactions and translation of foreign currency financial
statements
(1) Foreign currency transactions
Foreign currency transactions are translated into the functional currency of the Company
using the exchange rates prevailing at the dates of the transactions.Monetary items denominated in foreign currencies are translated to Renminbi at the spot
exchange rate at the balance sheet date. The resulting exchange differences between the spot
exchange rate on balance sheet date and the spot exchange rate on initial recognition or on the
previous balance sheet date are recognized in profit or loss. Non-monetary items that are
measured at historical cost in foreign currencies are translated to Renminbi using the exchange
Page 23FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
rate at the transaction date.Non-monetary items that are measured at fair value in foreign currencies are translated using
the exchange rate at the date the fair value is determined. The resulting exchange differences are
recognized in profit or loss or other comprehensive income.
(2) Translation of foreign currency financial statements
When translating the foreign currency financial statements of overseas subsidiaries assets
and liabilities of foreign operation are translated to Renminbi at the spot exchange rate at the
balance sheet date. Equity items excluding “retained earnings” are translated to Renminbi at the
spot exchange rates at the transaction dates.When disposing overseas operations foreign translation difference that related to the
overseas business shall be charged to current period profit or losses from other comprehensive
income. If the disposal resulted in decrease in shareholding but still maintain control the
translation difference will be included in non-controlling interest. If the disposal related to
associate entity or joint venture entities the translation difference will be included in current
period profit or loss.
12. Financial instruments
The Company recognizes financial assets or financial liabilities when the Company become a
party of the financial instruments.Effective interest rate method refer to calculating the amortized cost of financial assets or
liabilities and amortizes interest income or expenses into corresponding accounting period
accordingly.Effective interest rate refers to the interest that is used to discount the estimated future cash
flows of existing financial assets or financial liabilities to its amortized cost. When determining
the effective interest rate the cash flow is estimated taking consideration of all contractual terms
of financial assets or financial liabilities but does not including estimated credit loss.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) Recognition and derecognition of financial instruments
Financial assets are classified into the following three categories depends on the Company’s
business mode of managing financial assets and cash flow characteristics of financial assets
1) Financial assets measured at amortized cost
2) Financial assets at fair value through other comprehensive income
3) Financial assets at fair value through profit or loss
Financial assets are measured at fair value at initial recognition. But it is recognized using
Page 24FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
trading price for accounts receivable or notes receivable arose from sale of goods or providing of
service that does not including material financing component or does not consider financing
component within one year.For financial assets at fair value through profit or loss the related transaction costs are
directly recognized through profit or loss and the related transaction costs of other types of
financial assets are included in the initial recognition amounts.Only when the Company changes its business model of managing financial assets all the
financial assets affected shall be reclassified on the first day of the first reporting period after the
business model changes.
1) Financial assets measured at amortized cost
The Company shall classify financial assets that meet the following conditions and are not
designated as financial assets at fair value through profit or loss as financial assets measured at
amortized cost: The Company’s business model for managing the financial assets is to collect
contractual cash flows; The terms of the financial asset contract stipulate that cash flows generated
on a specific date are only payments of principal and interest based on the amount of outstanding
principal. Financial assets measured at amortized cost of the Company includes cash and bank
balances notes receivable accounts receivables and other receivables.After initial recognition the effective interest rate method is used to measure the amortized
cost of such financial assets. Profits or losses arising from financial assets measured at amortized
costs and not part of any hedging relationship are included in current profit or loss when the
recognition is terminated amortized or impaired according to the effective interest rate.a) for financial assets that already impaired when it is acquired the Company determines its
interest income using adjusted effective interest rate based on its amortized cost.b) for financial assets that does not impaired when it is acquired but impaired latterly the
Company determines its interest income using adjusted effective interest rate based on its
amortized cost. If there is no credit impairment in later period due to changes to risk factors the
Company uses effective interest rate times of carrying amount of the financial asset to determine
interest income.
2) Financial assets at fair value through other comprehensive income
The Company shall classify financial assets that meet the following conditions and are not
designated as financial assets measured at fair value and whose changes are recorded in current
profit or loss as financial assets measured at fair value through other comprehensive income: The
Group’s business model for managing the financial assets is both to collect contractual cash flows
and to sell the financial assets and the terms of the financial asset contract stipulate that cash
flows generated on a specific date are only payments of principal and interest based on the amount
of outstanding principal.Page 25FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
After initial recognition financial assets are subsequently measured at fair value. Interest
impairment losses or gains and exchange gains calculated by the effective interest rate method are
recognized in profit or loss while other gains or losses are recognized in other comprehensive
income. When derecognized the accumulated gains or losses previously recognized in other
comprehensive income are transferred from other comprehensive income and recorded in current
profit or loss.Notes receivable and accounts receivable measured at fair value through other comprehensive
income are listed as receivables financing and other such financial assets are listed as other debt
investments of which: one year from the balance sheet date Other debt investments due within
one year are listed as non-current assets due within one year and other debt investments with an
original maturity date within one year are listed as other current assets.
3) Financial assets designated as fair value through other comprehensive income
At initial recognition the Company may designate non-trading equity instrument investments
as financial assets at fair value through other comprehensive income presented as other equity
instrument investment and recognize dividend income when the conditions are met (the
designation cannot be revoked once it is made) .The fair value changes of this kind of financial asset shall be included in other comprehensive
income and no impairment provision is needed. When de-recognizing the financial asset
accumulated gain or loss in other comprehensive income shall be transferred out of other
comprehensive income and charged to retained earnings. During the investing period when the
Company holds equity instruments the Company recognizes dividends in current period profit or
loss when the right of receiving dividends is confirmed and the associated economic benefit is
probable to flow into the Company and that the amount can be measured reliably. The Company
treated this kind of financial instrument under other equity investment.The designated equity instrument investment does not belong to the following: the purpose of
obtaining the financial asset is mainly for the recent sale; it is part of the identifiable financial
asset instrument combination under centralized management at initial recognition and there is
objective evidence that the short-term gain actually exists in the near future; it is a derivative
(except for derivatives that meet the definition of a financial guarantee contract and are designated
as effective hedging instruments) .
4) Financial assets at fair value through profit or loss
The financial assets other than financial assets measured at amortized cost and financial
assets at fair value through other comprehensive income are classified as financial assets at fair
value through profit or loss.After initial recognition the financial assets are subsequently measured at fair value and the
profits or losses generated from which are recognized in profit or loss.Page 26FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
The Company present the financial assets as financial asset held for trade other non-current
financial assets.
5) Financial assets designated at fair value through profit or loss.
At initial recognition if the accounting mismatch can be eliminated or significantly reduced
the financial assets can be designated as financial assets at fair value through profit or loss.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.After initial recognition the financial assets are subsequently measured at fair value and the
profits or losses generated from which are recognized in profit or loss.The Company present the financial assets as financial asset held for trade other non-current
financial assets.
(2) Classification and measurement of financial liabilities
The Company categorizes financial liabilities into financial liabilities and equity instrument
based on the contract terms and economical nature rather than solely on its legal form. Financial
liabilities initially recognized as financial liabilities at fair value through profit or loss other
financial liabilities and derivative instrument designated as effective hedging instrument.The financial liabilities of the Company are initially measured at fair value. The related
transaction costs of financial liabilities at fair value through profit or loss are directly recognized
in profit or loss. The related transaction costs of other categories of financial liabilities are
included in the initial recognition amount.Subsequent measurement of financial liabilities depends on its category:
1) Financial liabilities at fair value through profit or loss
This category includes financial liabilities held for trade (including derivatives that are
financial liabilities) and financial liabilities designated at fair value through 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 at fair value through profit or loss (the designation cannot be revoked once it is made) :
the aim of undertaking related financial liabilities is to sell or repurchase in the short run; it is part
of identifiable financial instruments and there is objective evidence indicated that the enterprise
adopts short-term profitability mode; belong to derivative instrument except for derivative
instrument designated as effective hedging instrument and financial guarantee contract. Financial
Page 27FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
liabilities held for trade 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) management and performance evaluation of financial liability portfolios or combinations
of financial assets and financial liabilities based on fair value according to corporate risk
management or investment strategies as stated in formal written documents and report to key
management personnel 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:
a) Financial liabilities at fair value through profit or 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
Financial guarantee contracts that are not designated as financial liabilities measured at fair
value through profit or loss are initially recognized at fair value. Subsequent to initial recognition
the subsequent measurement is determined according to the higher loss allowance of contingent
liabilities under expected credit loss model and the initial recognition amount deducting by the
accumulated amortization.
(3) Derecognition of financial instruments
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.b) The financial asset has been transferred and the transfer meets the requirements of the
Page 28FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
“Accounting Standards for Business Enterprises No. 23 – Transfer of Financial Assets” regarding
derecognition of financial assets.
2) Conditions of 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 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 control over 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 asset is retained the relevant financial asset shall be
continuously recognized according to the degree of its continuous involvement in the transferred
financial asset 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 bears the risk or reward of the value change of the transferred financial assets
When judging whether the transfer of financial assets satisfies the conditions for
Page 29FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
derecognition above the principle of substance over form is adopted. The Company divides the
transfer of financial assets into the overall transfer and partial transfer of financial assets:
1) If the overall transfer of financial assets meets the conditions for derecognition the
difference between the following is included in the current profit or 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 a financial asset does not meet the conditions for derecognition the financial
asset will continue to be recognized and the consideration received is recognized as a financial
liability
(5) Method for determining the fair value of financial assets and financial liabilities
The fair value of financial assets or financial liabilities with active market is determined by
active market quotations; active market quotations include quotations that are readily and
regularly available from exchanges dealers brokers industry groups pricing agencies or
regulatory authorities for related assets or liabilities and represent actual and frequently
occurring market transactions on a fair trade basis.The fair value of financial assets initially acquired or derived or financial liabilities assumed
shall be determined on the basis of the market transaction price.The fair value of financial assets or financial liabilities without active market is determined
using valuation techniques. In valuation the Company adopts valuation techniques that are
applicable under current circumstances and that are supported by adequate available data and
other information selects inputs with consistent asset or liability characteristics considered by
market participants in trading related asset or liability and uses relevant observable inputs where
possible. Unobservable inputs are used where the relevant observable inputs are not available or
are impracticable.
(6) Provision for impairment of financial assets
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.The expected credit loss refers to the weighted average of the credit losses of financial
instruments that are weighted by the risk of default. Credit loss refers to the difference between all
Page 30FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
contractual cash flows discounted at the original effective interest rate and receivable from the
contract and all cash flows expected to be received by the Company and the present value of all
cash shortages. 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.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 above-mentioned simplified measurement methods and purchased or
originated credit-impaired assets the Company assesses whether the credit risk of the other
financial assets 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 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.b) If the credit risk of the financial instruments has increased significantly since the initial
recognition but no impairment has occurred 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.c) For financial instruments in the third stage which the financial instrument has been
impaired since initial recognition 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
Page 31FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
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 loss provision is recognized
in other comprehensive income and will not offset the financial asset’s carrying amount in
balance sheet.If the Company recognized credit loss provision in prior accounting period in terms of
life-time credit loss but on current period balance sheet date the associated financial asset does
not belong to the situation of risk increased after the initial recognition the Company shall
accrue credit loss provision for this financial asset based on the next 12 month expected credit
loss. Difference arose from above changes shall be included in current period profit or loss as
impairment gain.
1) Assessment of significant increase of credit risk
By comparing the default risk of financial instruments on balance sheet day 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.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 legal
environment will have a significant negative impact on the debtor’s repayment capacity.c) Serious deterioration of external or internal credit ratings (if any) of financial instruments
that have occurred or are expected to occur;
d) Whether the expected performance and repayment of debtor changes significantly.e) Whether the Company changed the way of managing financial assets.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) Provision for impairment of financial assets
When one or more events that adversely affect the expected future cash flows of a financial
Page 32FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
asset occur the financial asset becomes a financial asset that has suffered credit impairment.Evidence that credit impairment has occurred in a financial asset includes the following
observable information:
a) significant financial difficulties of the issuer or debtor;
b) the debtor breaches the contract such as failure to pay or delay in the payment of interest
or principal;
c) the creditor gives the debtor a concession which would not have been made under any
other circumstances for economic or contractual considerations relating to the financial difficulties
of the debtor;
d) the debtor is likely to go bankrupt or carry out other financial restructurings;
e) the financial difficulties of the issuer or the debtor cause the active market of the financial
asset to disappear;
f) purchase or source a financial asset at a substantial discount that reflects the fact that credit
losses have occurred.The credit impairment of financial assets may be caused by the joint action of multiple events
and may not be caused by separately 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 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
Page 33FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
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
If the Company no longer reasonably expects that the financial assets contract cash flow can
be recovered fully or partially the financial assets book balance will be reduced directly. Such
reduction constitutes the derecognition of the financial assets.
(7) Offset of financial assets and financial liabilities
Financial assets and financial liabilities are presented separately in the balance sheet and are
not offset. However if all of the following conditions are met the net amount offset by each
other is presented in the balance sheet:
1) The Company has a statutory right to offset the recognized amount and such legal right is
currently enforceable;
2) The Company plans to settle in net amount or to realize the financial assets and settle the
financial liabilities at the same time.
13. Bill receivables
Refer to Note XII. 6 Financial instrument impairment for details of ECL determination and
accounting method to bill receivable.If the Company has sufficient evidence to evaluate the ECL of bill 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 Basis method
Risk-free
banker’s The issuer has higher level of credit rating and Referencing historical impairment experience
acceptance no default in past and has strong ability to and taking into consideration of current
note fulfil its contractual cash follow obligation situation and estimation of future conditions
Business
acceptance Bill receivables with same aging have similarcredit risk characteristics Based on aging analysisnote
14. Accounts receivables
Refer to Note XII. 6 Financial instrument impairment for details of ECL determination and
accounting method to accounts receivable.Page 34FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
If the Company has sufficient evidence to evaluate the ECL of account 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 account receivable into different portfolios. The basis for portfolios is determined
as follows:
Portfolio Basis method
Receivables for related Account receivables for related parties in Referencing historical impairment
parties in scope of scope of consolidation have similar credit experience and taking into
consolidation risk characteristics consideration of current situation andestimation of future conditions
Accounts receivables Account receivables with same aging have
from other parties similar credit risk characteristics Based on aging analysis
15. Other receivables
Refer to Note XII. 6 Financial instrument impairment for details of ECL determination and
accounting method to other receivables.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 receivable into different portfolios. The basis for portfolios is determined as
follows:
Portfolio Basis method
Receivables of down payment The portfolio has similar
and guarantee credit risk characteristics Based on aging and ECL rate
The portfolio has similar Referencing historical impairment experience
Petty cash for employees credit risk characteristics and taking into consideration of current situation
and estimation of future conditions
Social security payment paid The portfolio has similar Referencing historical impairment experience
on-behalf of employees credit risk characteristics and taking into consideration of current situationand estimation of future conditions
Receivables from related The portfolio has similar Referencing historical impairment experience
parties within scope of credit risk characteristics and taking into consideration of current situation
consolidation and estimation of future conditions
Others The portfolio has similarcredit risk characteristics Based on aging and ECL rate
16. Inventory
(1) Inventory categories issue valuation method inventory system amortization
method for low value consumables and packages.
1)Classification
Inventory refers to the finished products or commodities that the Company holds for sale in
Page 35FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
its daily activities semi-products in the production process materials and consumables used in
the production process or the provision of labour services. Inventories include raw materials
work in progress and finished goods.
2)Valuation method of inventory
When inventory is acquired it is initially measured at cost including procurement costs
processing costs and other costs. When the inventory is issued it is measured by the weighted
average method (except for branded watches) and specific identification method (for branded
watches) .
3) Inventory count system
The Company maintains a perpetual inventory system.
4)Amortization methods of low-value consumables and packaging materials
Low-value consumables and packaging materials are charged to profit or loss when they are
used.
(2) Basis for determining and method for provision for obsolete 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.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.Provision for decline in value of inventories by portfolio is as follows:
Page 36FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Basis for determining net realizable
categories Basis for category determination
value for this category
New products launched in the
Inventory ageing portfolio No provision for decline in value
current year under our own brand
17. 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.Refer to Note XII 6 for impairment to contract asset.
18. Long-term Equity Investment
(1) Determination of investment cost
1) 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 VII.
2) Long-term equity investment obtained by other means
The initial investment cost of the long-term equity investment obtained by cash payment is
the actual purchase price. 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
1) Cost method
Page 37FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
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.
2) 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 obtaining the long-term equity investment the Company shall recognize the investment
income and other comprehensive income according to the share of net profit and loss and other
comprehensive income realized by the investee that is entitled or should be shared respectively
and adjust the carrying amount of the long-term equity investment; and reduces the carrying
amount of the long-term equity investment based on portion of the profit or cash dividend
declared to be distributed by the investee; and for other changes in the owners’ equity other than
the net profit or loss other comprehensive income and profit distribution of the investee the
carrying amount of the long-term equity investment is adjusted and included in the owners’
equity.When recognizing the share of the net profit or loss of the investee the Company shall adjust
and recognize the net profit of the investee based on the fair value of the identifiable assets of the
investee at the time of obtaining the investment. The unrealized internal transaction gains and
losses between the Company and the associates and joint ventures shall be offset against the
portion attributable to the Company in accordance with the proportion to be enjoyed on the basis
of which the investment gains and losses are recognized.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
Page 38FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
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 investmentoriginally held in accordance with the “Accounting Standards for Business Enterprises No. 22 –Recognition and Measurement of Financial 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.Page 39FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
If the equity investment held before the purchase date is accounted for in accordance with therelevant provisions of the “Accounting Standards for Business Enterprises No. 22 – Recognitionand 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 equity investment or otherwise the remaining equity after disposal shall beaccounted for according to the “Accounting Standards 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
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 exert significant influence on the investee the relevantprovisions of the “Accounting Standards for Business Enterprises No. 22 – Recognition andMeasurement 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
Page 40FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
investment in a subsidiary satisfy one or more of the following cases the multiple transactions are
treated as a package transaction:
1) The transactions are made simultaneously or with consideration of each other’s influence;
2) The transactions as a whole can achieve a complete business outcome;
3) The occurrence of a transaction depends on the occurrence of at least one other
transaction;
4) A transaction is uneconomic alone but it is economic when considered together 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:
a) In the individual financial statements the difference between the carrying amount of the
disposed equity and the actual purchase price is included in the current profit or 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
joint control or significant influence over the investee it shall be accounted for by the relevantprovisions of the “Accounting Standards for Business Enterprises No. 22 – Recognition andMeasurement 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.b) 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:
Page 41FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
a) 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.b) 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.
(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 to participate in the decision-making of
the financial and operating policies of the investee but it cannot control or jointly control the
formulation of these policies with other parties. 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.
19. Investment Property
Investment property refers to property held for the purpose of earning rent or capital
appreciation or both including leased land use rights land use rights held and prepared for
transfer after appreciation and leased buildings. Besides for empty constructions that the
Company held for rent lately but with the written resolution from the board stated that it will be
used as operating lease and that intention will not be changed in short-term it can be treated as
investment property.Page 42FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
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:
Category Estimated useful life(years) Residual value rate % Depreciation rate %
Property 20-35 5.00 2.71-4.85
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.
20. Fixed assets
(1) Recognition conditions of fixed assets
Fixed assets refer to tangible assets held for the purpose of producing goods providing labour
services renting or operating management and having a useful life of more than one fiscal year.Fixed assets are recognized when they meet all of the following conditions:
1) the economic benefits associated with the fixed assets are likely to flow into the enterprise;
2) the cost of the fixed assets can be reliably measured.
(2) Initial measurement of fixed assets
The fixed assets of the Company are initially measured at cost.
1) The cost of outsourcing fixed assets includes the purchase price import duties and other
related taxes and fees as well as other expenses that can be directly attributed to the assets before
they reach their intended usable state.
2) The cost of self-built fixed assets is determined by the necessary expenditures incurred
before the assets reach their expected usable state.Page 43FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
3) For fixed assets invested by investors the value agreed in the investment contract or
agreement is regarded as the book value but the value agreed in the contract or agreement is not
accounted for at fair value.
4) If the payment for the purchase of fixed assets is delayed beyond the normal credit
conditions and is of a financing nature in essence the cost of fixed assets is determined on the
basis of the present value of the purchase price. The difference between the actual payment and
the present value of the purchase price is recorded in the current profit or loss during the credit
period except where it should be capitalized.
(3) Subsequent measurement and disposal of fixed assets
1) Depreciation of fixed assets
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 use of fixed assets. At the end of the year the service life the estimated
net residual value and the depreciation method of the fixed assets are reviewed. If there is a
difference from the original estimate corresponding adjustments will be made.The depreciation method depreciation period and annual depreciation rate of various fixed
assets are as follows.Estimated useful
Class Method of depreciation life Residual value Depreciation
(years) rate % rate %
Property and plant Straight-line 20-35 5.00 2.71-4.85
Machinery and Straight-line
equipment 10 5.00-10.00 9.00-9.50
Electronic equipment Straight-line 5 5.00 19.00
Motor vehicles Straight-line 5 5.00 19.00
Others Straight-line 5 5.00 19.00
2) Subsequent expenditures on fixed assets
Subsequent expenditures related to fixed assets that meet the conditions for recognition of
fixed assets are included in the cost of fixed assets; those that do not meet the conditions for
recognition of fixed assets are included in the current profit or loss when they occur.
3) Disposal of fixed assets
When a fixed asset is disposed of or no economic benefit is expected to result from its use or
disposal the fixed asset is derecognized. The amount of disposal income from sale transfer
retirement or damage of the fixed asset after deducting its book value and related taxes is
included into the current profit or loss.Page 44FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
21. Construction in Progress
(1) Initial measurement of 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. The
Company’s construction in progress is classified into projects when in accounting
(2) Criteria for and time point of construction in progress to convert into fixed asset
The total expenditure incurred before the construction in progress project is constructed to
reach the intended usable condition shall be recorded as the book value of the fixed assets. For
the construction in progress built which has reached the intended usable condition but has not
yet completed the final accounts since the date of reaching expected use condition according to
the project budget cost or actual project costs it shall be converted into fixed assets at the
estimated value and fixed assets shall be depreciated in accordance with the depreciation policy
of the Company for fixed assets. After the completion of the final accounts the original estimated
value shall be adjusted according to the actual cost but the original depreciation amount shall not
be adjusted.
22. Borrowing Costs
(1) Recognition principle for capitalization of borrowing costs
If the borrowing costs of the Company can be directly attributable to the acquisition and
construction or production of assets eligible for capitalization it shall start capitalization and be
included in the cost of relevant assets in the case of eligible for capitalization; other borrowing
costs shall be recognized as expenses at the time of occurrence and shall be included in the
current profit or loss.Assets that are eligible for capitalization are assets that require a long period of time to
purchase or produce activities to achieve fixed assets investment property and inventory that are
available for intended use or sale.Borrowing costs begin to capitalize when all of the following conditions are met:
1) Assets expenditure has occurred including expenditure incurred in the form of cash
payment transfer of non-cash assets or assuming of interest-bearing debt for the acquisition and
construction or production of assets eligible for capitalization;
2) Borrowing costs have already occurred;
3) The purchase and construction or production activities necessary for the assets to reach the
intended use or saleable status have started.
(2) Capitalization period of borrowing costs
The period of capitalization refers to the period from the point of time when the borrowing
Page 45FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
costs are capitalized to the point of time where the capitalization is stopped excluding the period
during which the borrowing costs are suspended from capitalization.The borrowing costs shall cease to be capitalized when the assets acquired or produced that
meet the conditions for capitalization are ready for intended use or sale.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.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 the assets that meet the capitalization conditions are interrupted abnormally during the
construction or production process and the interruption time lasts for more than 3 months the
capitalization of borrowing costs shall be suspended; the borrowing costs shall continue to be
capitalized if the acquisition or production of assets eligible for capitalization is necessary to meet
the required usable status or the availability of sales. The borrowing costs incurred during the
interruption are recognized as profit or loss for the current period and the borrowing costs continue
to be capitalized until the acquisition or production of assets is resumed.
(4) Calculation for capitalization 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.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.
23. 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;
Page 46FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
(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 beginning of the lease term the Company adopts the cost model for subsequent
measurement of the right-of-use assets
If it is reasonably certain to obtain the ownership of the leased assets at the expiration of the
lease term the Company shall depreciate the leased assets within the remaining useful life of the
leased assets. If it is not reasonably certain to obtain the ownership of the leased assets at the
expiration of the lease term the Company shall depreciate the leased assets within the shorter of
the lease term and the remaining useful life of the leased assets. 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.
24. Intangible Assets and Development Expenditure
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.
(1) Initial measurement of intangible assets
The cost of externally purchased intangible assets includes the purchase price relevant
taxation and other expenses directly attributable to bringing the assets to expected usage. If
payment for the purchase price of intangible assets is delayed beyond normal credit conditions and
is in fact financing in nature the cost of the intangible assets is determined based on the present
value of the purchase price.For intangible asset obtained through debt restructuring for offsetting the debt of the debtor
its initial measurement cost includes the fair value of the waived creditor’s rights and taxes and
other costs directly attributable to bringing the asset to expected usage. The difference between the
fair value of the waived creditor’s rights and the carrying amount shall be recognized in profit or
loss for the period.The book value of intangible asset received in exchange for non-monetary asset is based on
the fair value of the asset surrendered and relevant taxes payable provided that the exchange of
nonmonetary asset has a commercial substance and the fair value of both the asset received and
the asset surrendered can be reliably measured except there is definite evidence that the fair value
of the asset received is more reliable; for exchange of non-monetary asset that cannot satisfy the
above conditions the cost of the intangible asset received is based on the carrying amount of the
asset surrendered and relevant taxes payable 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
Page 47FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
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 cost of an internally developed intangible asset includes the materials consumed in
developing the intangible asset labour costs registration fees amortization of other patented
rights and licensed rights used during the development process interest expenses meeting
capitalization conditions and other direct costs for bringing the intangible asset to expected usage.
(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.
1) 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:
Item Estimated useful life Amortization method
Land use right 50 Straight-line
Software systems 5 Straight-line
Right to use the trademark 5-10 Straight-line
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.
(3) Specific basis for determining the research stage and development stage of internal
research and development projects of the Company
Research stage: a stage of scheduled innovative investigations and research activities for the
acquisition and understanding of new scientific or technical knowledge.Development stage: before the commercial production or use the research results or other
knowledge will be applied to a plan or design to produce new or substantial improvements in
materials devices products and other activities.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
(4) Specific standard for capitalization of expenditure in the development stage
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:
1) It is technically feasible to complete the intangible asset so that it can be used or sold;
2) With an intention to complete the intangible asset and to use or sell it;
Page 48FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
3) 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;
4) 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;
5) 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.
25. Impairment on 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 asset impairment loss is recognized the depreciation or amortization expenses of
the impaired assets will be adjusted accordingly in the future period so that the assets’ book value
after adjustment (deducting the estimated net residual value) will be systematically apportioned
over the remaining useful life of the assets.No matter whether there is any sign of impairment or not the impairment test is carried out
every year for goodwill and intangible assets with an indefinite useful life arising from an
enterprise merger.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
Page 49FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
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.
26. Long-term Deferred Expenses
(1) Amortization method
Long-term deferred expenses 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 deferred expenses are amortized in benefit period
(2) Amortization period
Category Amortization period Note
Counter fabrication expenses 2-3
Decoration expenses 3-5
Others 2-3
27. 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
28. Employee Remuneration
Employee remuneration refers to the various forms of remuneration or compensation given
by the Company to obtain the services provided by the employees or to terminate the labour
relationship. Employee remuneration includes short-term remuneration post-employment benefits
termination benefits and other long-term employee benefits.
(1) Short-term remuneration
Short-term remuneration refers to the employee compensation other than post-employment
benefits and termination benefits required to be fully paid by the Company within 12 months
after the end of the annual reporting period in which the employees render relevant services.During the accounting period in which the employees render services the Company recognizes
the short-term remuneration payable as liabilities and includes the same in related asset costs or
expenses according to the object which benefits from the services rendered by employees.
(2) Post-employment benefits
Page 50FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Post-employment benefits refer to various forms of remuneration and benefits other than
short-term remuneration and termination benefits provided by the Company after the retirement
of employees or termination of labour relationship with the Company in exchange for the
services rendered by employees.The Company’s post-employment benefits is defined contribution plan.Defined contribution plan of the post-employment benefits mainly refers to the social basic
endowment insurance unemployment insurance etc. organized and implemented by local labour
and social security institutions; During the accounting period when employees render services to
the Company amount payable calculated by the defined contribution plan is recognized as a
liability and included in the current profit or loss or related asset costs.The Company will no longer have any other payment obligations after making the
above-mentioned payments on a regular basis in accordance with the standards and annuity plans
prescribed by the State.
(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: 1) 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 2) 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
Page 51FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
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 attributed to the
period during which the employees provide services and are included in the current profit or loss
or related asset costs.
29. Projected 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.Page 52FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
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.
30. 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.
31. Share-based payment
(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) Recognition method of fair value of equity instrument
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.
Page 53FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
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. For those exercisable immediately after the grant they shall be included in
the relevant costs or expenses at the fair value of equity instruments at the grant date with an
increase in capital reserve accordingly. For those exercisable only after provision of services or
satisfaction of prescribed performance conditions within the vesting period on each balance sheet
date within the vesting period the Company will recognize the services received in the current
period in related costs or expenses and capital reserves at the fair value of equity instruments on
the grant date based on the best estimate of the number of exercisable equity instruments. After the
vesting period relevant costs or expenses and total owners’ equity which have been recognized
will not be adjusted.Cash-settled share-based payments are calculated by the fair value of liabilities assumed in
accordance with the Company’s shares or other equity instruments. For those exercisable
immediately after the grant they shall be included in the relevant costs or expenses at the fair
value of the liabilities assumed by the Company at the grant date with an increase in liabilities
accordingly. For cash-settled share-based payments exercisable only after provision of services or
satisfaction of prescribed performance conditions within the vesting period on each balance sheet
date within the vesting period the Company will recognize the services received in the current
period in costs or expenses and corresponding liabilities at the amount of fair value of the
liabilities assumed by the Company based on the best estimate of the number of exercisable equity
instruments. At each balance sheet date and the settlement date prior to the settlement of relevant
liabilities the fair value of the liabilities is re-measured through profit or loss.During the vesting period if the equity instruments granted are cancelled the Company will
Page 54FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
treat the cancelled equity instruments granted as accelerated vesting and the amount within the
remaining period should be recognized immediately in profit or loss while recognizing the capital
reverse. If employees or other parties can meet non-vesting conditions but do not meet within the
vesting period the Company will treat it as cancelled equity instruments granted.
32. Revenue
The Company’s revenue mainly come from:
1) Sales of watch
2) Precision manufacturing
3) Property leasing
(1) General principal of revenue recognition
The Group 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.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. 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 for 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:
Page 55FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
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 III 36. (4) for details.
(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
Page 56FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
standards. When additional service is provided by the Company it is considered as a single
performance obligation and under accounting treatment according to the standards on revenue;
otherwise quality assurance obligations will be under accounting treatment according to the
accounting standards on contingent matters
33. Contract costs
(1) Contract performance cost
The Company recognizes the cost of contract performance as an asset for the cost of
performing the contract as meeting all of the following conditions:
1) The cost is directly related to a current or expected contract including direct labour direct
materials manufacturing expenses (or similar expenses) costs clearly to be borne by the customer
and other costs incurred solely for the contract;
2) This cost increases the resources that the company will use to fulfill its performance
obligations in the future.
3) The cost is expected to be recovered
The asset will be presented under inventory or other non-current assets based on the length of
its amortization period.
(2) Contract obtainment cost
If the incremental cost of the Company is expected to be recovered the contract acquisition
cost is recognized as an asset. Incremental cost refers to the cost that the Company will not occur
without obtaining a contract such as sales commission. For the amortization period not exceeding
one year it is included in the current profit or loss when it occurs.
(3) Amortization of contract costs
The Company recognizes the contract performance cost and the contract acquisition cost on
the same basis as the commodity income related to the contract cost asset and amortizes it at the
time when the performance obligation is performed or in accordance with the performance of the
performance obligation and is included in the current profit or loss.
(4) Contract cost impairment
For assets related to contract costs if the book value is higher than the difference between the
remaining consideration expected to be received by the Company for transfer of the goods related
to the assets and the estimated cost of transferring the relevant goods the excess should be
depreciated and confirmed as an asset impairment loss
If the factors caused impairment changed after impairment provision is accrued impairment
provision shall be reversed and included in current period profit or loss but the carrying amount
of asset after the reversal shall not exceed the carrying amount at the reversal date as if there was
no impair.
34. Government Subsidies
Page 57FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
(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 (RMB1) 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 are recognized as deferred income and are recognized
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
Page 58FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
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
35. 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 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
Page 59FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
(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.
36. Lease
On the commencement date of the contract the Company evaluates whether the contract is
a lease or contains a lease. If one party to a contract gives up the right to control the use of one or
more identifiable assets for a period of time in exchange for consideration the contract is a lease
or contains a lease.
(1) Splitting a lease contract
When the contract contains a number of separate leases the Company will split the contract
into separate leases for accounting individually.When the contract contains both leasing and non-leasing parts the Company will split the
leasing and non-leasing parts. The leasing part shall be accounted for in accordance with the
lease standards and the non-leasing part shall be accounted for in accordance with other
applicable accounting standards for business enterprises.
(2) Combination of lease contracts
When two or more lease-containing contracts concluded by the Company with the same
trader or its related parties at the same time or at a similar time meet one of the following
conditions the Company shall merge them into one contract for accounting:
1) Such two or more contracts are concluded for general commercial purposes and
constitute a package of transactions. If these are not considered as a whole these overall
commercial purposes cannot be recognized.
2) The amount of consideration for a contract in such two or more contracts depends on the
pricing or performance of other contracts.
3) The right-of-use assets transferred by such two or more contracts together constitute a
separate lease.
(3) Accounting treatment for the Company as a lessee
On the commencement date of lease term the Company recognizes right-of-use assets and
lease liabilities for leases in addition to short-term leases and low-value asset leases with
Page 60FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
simplified treatment.
1) Short-term lease and low value lease
Short-term lease refers to a lease that does not include purchase options and has a lease term
not exceeding 12 months. Low-value asset lease refers to the lease with lower value when a
single leased asset is a new asset.The Company does not recognize right-of-use assets and lease liabilities for short-term lease
and low value lease. The payment of such leases shall be charged to profit or loss using
straight-line method or other systematic method.
2) Refer to Note III. 23 and Note III. 30 for accounting policies for right-of-use assets and
lease liabilities.
(4) Accounting treatment for the Company as a lessor
1) Classification of leases
The Company divides leases into financial leases and operating leases on the start date of the
lease. Financial lease refers to a lease that essentially transfers almost all of the risks and rewards
related to the ownership of leased assets. Its ownership may or may not be transferred eventually.Operating leases refer to leases other than financial leases.If a lease has one or more of the following characteristics the Company usually classifies it
as a financial lease:
* At the expiry of the lease term the ownership of the leased assets is transferred to the
lessee.* 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.* Although the ownership of the assets is not transferred the lease term accounts for the
majority of the life of the leased assets.* 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.* 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:
* If the lessee stops the lease the lessee shall bear the losses caused by the termination of
the lease to the lessor.Page 61FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
* The profits or losses caused by the fluctuation of the fair value of the balance of assets
belong to the lessee.* The lessee can continue to lease far below the market level for the next period.
2) Accounting treatment for financial leases
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:
* Fixed payments and substantive fixed payments after deducting the relevant amount of
lease incentives;
* Variable lease payments depending on an index or rate;
* In the case of reasonably determining that the lessee will exercise the purchase option
the lease receipts include the exercise price of purchase option;
* 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;
* 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.
3) Accounting treatment for operating leases
The Company adopts the straight line method or other systematic and reasonable method to
recognize the lease receipts from operating leases as rental income during each period of the
lease term. Capitalization of the initial direct expenses incurred in connection with operating
leases shall be apportioned on the same basis as the recognition of rental income during the lease
term and shall be recorded in the profit or loss of the current period. Variable lease payments
obtained in connection with operating leases that are not incorporated in the lease receipts shall
be incorporated in the profit or loss of the period when they actually occur.
37. Termination of business
The Company recognizes components as termination of business components if one of the
Page 62FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
following condition is met and that the component has already been disposed or classified as
held-for-sale assets and identifiable.
(1) The component represents a stand along major business or a stand along major area in
conducting business.
(2) The component is part of plan connecting to disposal of a stand along major business or
major area of conducting business.
(3) The component is a subsidiary that obtained specifically for resale.
Operating profit or loss such as the impairment loss and the amount of reversal shall be
presented in income statement as profit or loss from terminated business.
38. Re-purchase of shares
Before written-off or transfer the shares that the Company re-purchased are dealt as treasury
shares. All expenses incurred for the re-purchase are charged in the cost of treasury shares.Consideration and transaction expenses paid during the share re-purchase shall decrease
shareholder’s equity. No gain or losses shall be recognized during re-purchase transfer or
written-off of the Company’s shares.If the treasury shares is transferred the difference between amount actually received and the
share’s carrying amount shall be charged to capital reserve if the capital reserve is not sufficient to
offset surplus reserve and retained earing shall be offset. If the treasury share is to written-off the
share capital shall be decreased based on the face value of shares and the difference between the
carrying amount and its face value shall offset the capital reserve. If the capital reserve is not
sufficient to offset deducting surplus reserve and retained earnings.
39. Safety production fee
The safety production fee is accrued by the Company in accordance with national regulations
and is included in the cost of related products or current profit or loss and is also recorded in the
"specific reserve" item. When using the safety production fee if it is an expense expenditure it
shall be directly offset against the special reserve. If the fixed assets are formed the expenses
incurred through the collection of "construction in progress" will be recognized as fixed assets
when the safety project is completed and reach the intended usable state; at the same time the cost
of forming fixed assets will be offset against the special reserve and recognize the accumulated
depreciation of the same amount. The fixed assets will not be depreciated in the subsequent
period.
40. Significant changes in accounting policies and estimates
(1) Changes in accounting policies
There were no significant changes in accounting policies during the year.
(2)Significant changes in accounting estimates
Page 63FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
There were no significant changes in accounting estimates during the year.IV.Taxes
1.Main types of taxes and corresponding tax rates
Tax type Basis Tax rate note
Domestic sales providing manufacturing
13%
and repairing services
VAT Property leasing 9%
Other taxable services 6%
Simplified method 5%
Consumption tax Luxury watches 20%
Urban
maintenance and Turnover tax payable 7%、5%
construction tax
Corporate income
tax Taxable income See below table
70% or 80% of the original cost of property
Property tax 1.2%、12%
or rental income
Corporate income tax of different entities:
Name of entities CIT rate
Shenzhen HARMONYWorld Watch Center Co.Ltd.( ) 25%*
FIYTASales Co. Ltd.(* ) 25%
Shenzhen FIYTA Precision Technology Co.Ltd.( ) 15%*
Shenzhen FIYTATechnology Development Co.Ltd.(* ) 15%
HARMONYWorld Watch Center(Hainan) Co.Ltd.( ) 20%*
Shenzhen Xunhang Precision Technology Co. Ltd. 25%
Emile Choureit Timing (Shenzhen) Ltd. 25%
Liaoning Hengdarui Commercial & Trade Co. Ltd. 25%
EMPORAL (Shenzhen) Co. Ltd. 25%
Shenzhen Harmony E-commerce Co. Ltd.(* ) 20%
FIYTA (Hong Kong) Ltd.(* ) 16.5%
Montres Chouriet SA(* ) 30%Note * :According to the regulations stated in “Interim Administration Method for Levy ofCorporate Income Tax to Enterprise 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 tax submission method of“unified calculation managing by classes pre-paid in its registered place settlement in total andPage 64FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023adjustment 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 * :The Company enjoyed for “Reduction and Exemption in Corporate Income TaxRate for High and New Technology 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.
2.Preferential treatment and corresponding approvalAccording to “Proclamation of Ministry of Finance and State Administration of Taxation inPreferential Tax Rate to Small and Low Profit Enterprises and Sole-proprietors” (Caishui (2023) No.6)
small low-profit enterprises will be included in taxable income at 25% and to be taxed at a rate of 20%.According to “Notice of Ministry of Finance and State Administration of Taxation in ExtendingExpiration Period of Utilizing Losses for High-Tech Enterprises and Scientific Oriented Medium andSmall Enterprises” (Cai Shui [2018] No. 76) starting from January 1 2018.， unutilized lossesincurred in prior 5 years before obtaining the status of High and New Tech Enterprise can be carried
forward and utilized in future years. The longest period was extended from 5 years to 10 years.According to the Announcement of the Ministry of Finance and the State Administration of
Taxation on Further Improving the Policy of Pre-tax Deduction of Research and Development
Expenses (Cai Shui [2023] No. 7) the research and development expenses actually incurred by
enterprises in carrying out research and development activities which have not been formed into
intangible assets and recognized as profit and loss for the current period shall be deducted on the basis
of actual deduction in accordance with the regulations and then deducted in accordance with 100% of
the actual amount incurred before tax starting from 1 January 2023; and if they are formed into If the
intangible assets are formed starting from January 1 2023 the intangible assets will be amortized at
200% of the cost of the intangible assets before tax.
A two-tier profits tax system will be implemented in Hong Kong from 2019 providing that
the profits tax rate for Hong Kong companies will be reduced to 8.25% for the first
HK2000000.00 with profits thereafter continuing to be taxed at 16.5%.V.Notes to main items of the consolidated financial statements
(Unless otherwise indicated the currency unit is Renminbi Yuan the end of the period refers to
December 312023the beginning of the period refers to January 1 2023 and the end of the last period
refers to December 31 2022)
Note 1. Monetary funds
Page 65FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Item Closing balance Opening balance
Cash on hand 178996.87 173368.68
Cash at bank 35443378.12 41106861.46
Other monetary funds 1262979.96 1140201.67
Deposit in finance company 467743798.76 271327031.83
Total 504629153.71 313747463.64
Including: Total overseas deposits 1202601.86 716733.44
Deposit in finance company mainly deposited with AVIC Finance Co. Ltd.As of December 31 2023 The Company has no amounts pledged frozen or at potential risk
of recovery.Cash with restricted usage is as follows
Item Closing balance Opening balance
Overseas deposit with restrictions remitting
back 1202601.86 716733.44
Note 2. Bill receivable
1．Presented by category
Item Closing balance Opening balance
Bank acceptance bills 10363449.00 10690221.03
Commercial acceptance bills 7905523.37 21524691.07
Total 18268972.37 32214912.10
2．Presented by ECL types
Closing balance
Type Carrying amount Provision
Amount Percentage
Book value
(%) Amount
Percentage
(%)
Notes receivable that
provided expected credit
losses on single basis
Notes receivable that
provided expected credit 18685052.55 100.00 416080.18 2.23 18268972.37
losses on single basis
Including: Commercial
acceptance bills 8321603.55 44.54 416080.18 5.00 7905523.37
Risk-free Bank
acceptance bills 10363449.00 55.46 10363449.00
Total 18685052.55 100.00 416080.18 2.23 18268972.37
Continued：
Opening balance
Type
Carrying amount Provision Book value
Page 66FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Amount Percentage(%) Amount
Percentage
(%)
Notes receivable that
provided expected credit
losses on single basis
Notes receivable that
provided expected credit 33347790.58 100.00 1132878.48 3.40 32214912.10
losses on single basis
Including: Commercial
acceptance bills 22657569.55 67.94 1132878.48 5.00 21524691.07
Risk-free Bank
acceptance bills 10690221.03 32.06 10690221.03
Total 33347790.58 100.00 1132878.48 3.40 32214912.10
3．Notes receivable with expected credit loss provided based on credit risk
characteristic portfolio
Closing balance
Portfolio
Carrying amount Provision Percentage (%)
Bank acceptance bills 8321603.55 416080.18 5.00
Commercial acceptance bills 10363449.00
Total 18685052.55 416080.18
4．Bad debt movements in current period
Movements
Types Opening Closingbalance Accrual Received orreversal Written-off
Other balance
changes
Notes receivable
that provided
expected credit
losses on single
basis
Notes receivable
that provided
expected credit 1132878.48 716798.30 416080.18
losses on single
basis
Including:
Commercial 1132878.48 716798.30 416080.18
acceptance bills
Risk-free
Bank acceptance
bills
Total 1132878.48 716798.30 416080.18
5．Bills have been endorsed but not yet due at the end of the period.
Item Amount de-recognized Amount not de-recognized
Bank acceptance bills 47646674.86
Note 3. Accounts receivable
Page 67FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
1．Presentation by aging
Aging Closing balance Opening balance
Within 1 year 333204160.07 311934503.90
1-2 years 2123874.00 14972671.61
2-3 years 4200458.08 2781542.85
Over 3 years 18005255.95 16064539.96
Subtotal 357533748.10 345753258.32
Less: provision for bad debt 34390986.46 40462298.64
Total 323142761.64 305290959.68
2．Presentation by method of providing bad debt
Closing balance
Category Carrying amount Bad debt provision
Amount Percentage Amount ECL rate
Book value
(%)(%)
Accounts receivable that
provided expected credit 24708541.73 6.91 23148792.25 93.69 1559749.48
losses on single basis
Accounts receivable that
provided expected credit 332825206.37 93.09 11242194.21 3.38 321583012.16
losses on portfolio basis
Including: Receivable from
other customers 332825206.37 93.09 11242194.21 3.38 321583012.16
Total 357533748.10 100.00 34390986.46 323142761.64
Continued：
Opening balance
Category Carrying amount Bad debt provision
Percentage Book valueAmount (%) Amount
ECL rate
(%)
Accounts receivable that
provided expected credit 34982967.68 10.12 29705797.13 84.92 5277170.55
losses on single basis
Accounts receivable that
provided expected credit 310770290.64 89.88 10756501.51 3.46 300013789.13
losses on portfolio basis`
Including: Receivable from
other customers 310770290.64 89.88 10756501.51 3.46 300013789.13
Total 345753258.32 100.00 40462298.64 11.70 305290959.68
3．Accounts receivable that provided expected credit losses on single basis included in
the closing balance
Closing balance
Name
Carrying amount Bad debt ECL rateprovision (%) Reasons
Receivable from other
customers 24708541.73 23148792.25 93.69
Existence of disputes
customer
Page 68FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Closing balance
Name
Carrying amount Bad debt ECL rateprovision (%) Reasons
mismanagement etc.
4．In the portfolio accounts receivable with expected credit loss provided based on
credit risk characteristic portfolio
Portfolio of receivable from other customers
Closing balance
Aging
Carrying amount Bad debt provision ECL rate (%)
Within 1 year 330569799.62 9694581.78 2.93
1-2 years 786438.13 78643.81 10.00
2-3 years
Over 3 years 1468968.62 1468968.62 100.00
Total 332825206.37 11242194.21
5．Movements of provision during the period
Movements during the period
Types Opening Closingbalance Accrual Recovered or Written-off Other balancereversed movements
Accounts
receivable that
provided expected 29705797.13 1013478.97 7508493.54 85000.00 -23009.69 23148792.25
credit losses on
single basis
Accounts
receivable that
provided expected 10756501.51 1052151.99 751246.27 -184786.98 11242194.21
credit losses on
portfolio basis`
Including:
Receivable from 10756501.51 1052151.99 751246.27 -184786.98 11242194.21
other customers
Total 40462298.64 2065630.96 8259739.81 85000.00 -207796.67 34390986.46
Including：main recovery of bad debt provision in current period:
Name Amount Way of recovery Note
Fuzhou Cangshan Suning e-buy Plaza
Co. Ltd. 4547371.89 Bank transfer
Shanghai Pudong Suning e-buy Business
Management Co. Ltd. 791000.00 Bank transfer
Fuzhou Suning e-buy Plaza Co. Ltd. 706157.30 Bank transfer
6．Accounts receivable actually written off during the period
Item Amount written off
Accounts receivable actually written off 85000.00
Page 69FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Including：main accounts receivable write-offs:
Whether
arising
Write-off from
Name Nature Amount Reasons for write-offs procedures connecte
performed d
transacti
ons
Xi’an Tangcheng Payment for General
Limited goods 85000.00 Too old to take back manager's Cloggedoffice
Total 85000.00
7．Top 5 receivable accounts
Proportion in total
Name Closing balance closing balance ofaccounts Bad debt provision
receivable (%)
Top 5 receivables accounts in total 76589281.00 21.42 3829464.05
Note 4. Prepayments
1．Presentation of prepayments by aging
Closing balance Opening balance
Aging
Amount Percentage(%) Amount
Percentage
(%)
Within one year 6564760.64 99.90 8039794.97 100.00
1-2 years 6479.34 0.10
2-3 years
Total 6571239.98 100.00 8039794.97 100.00
2．Top 5 prepayments
Name Closing balance Proportion in total closingbalance of prepayments (%)
Top 5 prepayments in total 2884693.00 43.90
Note 5. Other receivable
1．Presentation of other receivables by aging
Aging Closing balance Opening balance
Within one year 22481619.93 59711314.91
1 - 2 years 38313327.26 216120.00
2- 3 years 119250.00 649029.90
Over 3 years 1159704.90 606105.00
Subtotal 62073902.09 61182569.81
Less: bad debt provision 4348110.09 4264550.33
Page 70FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Aging Closing balance Opening balance
Total 57725792.00 56918019.48
2．Presented by nature
Nature Closing balance Opening balance
Security deposit 51775226.86 49430408.24
Petty cash 1549821.50 2841915.70
Others 8748853.73 8910245.87
Subtotal 62073902.09 61182569.81
Less: bad debt provision 4348110.09 4264550.33
Total 57725792.00 56918019.48
3．Presented according to three stages of financial assets impairment
Closing balance Opening balance
Item Carrying Bad debt Carrying Bad debt
Book value Book value
amount provision amount provision
First stage 60655587.19 2980723.19 57674864.00 59703389.91 2850206.43 56853183.48
Second stage
Third stage 1418314.90 1367386.90 50928.00 1479179.90 1414343.90 64836.00
Total 62073902.09 4348110.09 57725792.00 61182569.81 4264550.33 56918019.48
4．Presented by bad debt provision method
Closing balance
category Carrying amount Bad debt provision
Percentage Book valueAmount (%) Amount
ECL rate
(%)
Other receivables that provided
expected credit losses on single 1418314.90 2.28 1367386.90 96.41 50928.00
basis
Other receivables that provided
expected credit losses on 60655587.19 97.72 2980723.19 4.91 57674864.00
portfolio basis
Including: Security deposit
portfolio 51304601.86 82.65 2603277.66 5.07 48701324.20
Petty cash portfolio 1549821.50 2.50 1549821.50
Social security payment
on-behalf portfolio 284862.55 0.46 284862.55
Portfolio of others 7516301.28 12.11 377445.53 5.02 7138855.75
Total 62073902.09 100.00 4348110.09 57725792.00
Continued
Category Opening balance
Page 71FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Carrying amount Bad debt provision
Amount Percentage Amount ECL rate
Book value
(%)(%)
Other receivables that provided
expected credit losses on single 1479179.90 2.42 1414343.90 95.62 64836.00
basis
Other receivables that provided
expected credit losses on 59703389.91 97.58 2850206.43 4.77 56853183.48
portfolio basis
Including: Security deposit
portfolio 48600258.24 79.43 2476810.04 5.10 46123448.20
Petty cash portfolio 2841915.70 4.64 2841915.70
Social security payment
on-behalf portfolio 279769.98 0.46 279769.98
Portfolio of others 7981445.99 13.05 373396.39 4.68 7608049.60
Total 61182569.81 100.00 4264550.33 6.97 56918019.48
5．Other receivables that provided expected credit losses on single basis included in the
closing balance
Closing balance
Name
Carrying amount Bad debt ECL rateprovision (%) Reason
Receivable from others 1418314.90 1367386.90 96.41 Commercial disputes
6．In the portfolio other receivables with expected credit loss provided based on credit
risk characteristic portfolio
（1）Security deposit portfolio
Closing balance
Aging
Carrying amount Bad debt provision ECL rate (%)
Within 1 year 28136399.98 1406820.01 5.00
1 - 2 years 23028151.88 1151407.65 5.00
2- 3 years 100000.00 5000.00 5.00
Over 3 years 40050.00 40050.00 100.00
Total 51304601.86 2603277.66
（2）Petty cash portfolio
Closing balance
Aging
Carrying amount Bad debt provision ECL rate (%)
Within 1 year 1511048.50
1 - 2 years 19523.00
2- 3 years 19250.00
Total 1549821.50
Page 72FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
（3）Social security payment on-behalf portfolio
Closing balance
Aging
Carrying amount Bad debt provision ECL rate (%)
Within 1 year 284862.55
（4）Portfolio of others
Closing balance
Aging
Carrying amount Bad debt provision ECL rate (%)
Within 1 year 7516301.28 377445.53 5.02
7．Provision for bad debts of other receivables
First stage Second stage Third stage
Bad debt provision Expected credit
Lifetime expected Lifetime expected
Total
losses over the next credit losses (no credit losses (credit
12 months credit impairment impairmentoccurred) occurred)
Opening balance 2850206.43 1414343.90 4264550.33
Opening balance
movements in current
period
—Transfer into the
second stage
—Transfer into the
third stage
—Reverse back to
the second stage
—Reverse back to
the first stage
Accrual during the
period 188362.28 15525.00 203887.28
Reversed during the
period -58073.95 -62482.00 -120555.95
Recovered during the
period
Written-off during the
period
Other movements 228.43 228.43
Closing balance 2980723.19 1367386.90 4348110.09
8．No other receivables were written-off during the period.
9．Top 5 other receivable accounts
Proportion to Closing balance
Name Closing balance closing balance ofother receivables of bad debts
(%) provision
Top 5 other receivables in total 7763649.48 12.51 388182.48
Note 6. Inventory
Page 73FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
1．Classification
Closing balance Opening balance
Item Carrying
Provision Book value Carrying amount Provision Book value
amount
Raw
167281491.845290855.71161990636.13162338704.6517241512.65145097192.00
material
WIP 12060525.88 12060525.88 7204699.11 7204699.11
Stored
1993236975.3666621962.091926615013.272085640712.3796622229.811989018482.56
goods
Total 2172578993.08 71912817.80 2100666175.28 2255184116.13 113863742.46 2141320373.67
2．Provision for inventory
Opening Increase in current period Decrease in current periodItem Closingbalance Accrual Other Reversed Realized Others balance
Raw
material 17241512.65 1767804.67 198541.68 13917003.29 5290855.71
Stored
goods 96622229.81 11782189.77 16398.16 14121974.81 27676880.84 66621962.09
Total 113863742.46 13549994.44 214939.84 14121974.81 41593884.13 71912817.80
Notes to provision for inventory
Item Evidence of determine NRV and future selling cost Reason for reversal or realized
Raw Estimated selling price less estimated cost to Factors that caused impairment has been
material complete and selling and distribution expenses and disappeared and the NAV is higher than itsassociated taxes carrying amount
Stored goods Estimated selling price less estimated selling and Inventory that already provided for was sold ordistributing expenses and associated taxes used in current period.
3．The provision is accrued by portfolio of assets
Closing balance
Portfolio Carrying Provision for inventory Criteria for accrued
Book value
amount Amount Percentage (%) benefits
Inventory New products of own
ageing 42498540.45 42498540.45 brands launched in the
portfolio year are not subject towrite-downs.Total 42498540.45 42498540.45
Continued：
Portfolio Opening balance
Page 74FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Provision for inventory
Carrying Criteria for accrued
Amount Percentage Book value
amount benefits
(%)
Inventory New products of own
ageing 40147783.30 40147783.30 brands launched in the
portfolio year are not subject towrite-downs.Total 40147783.30 40147783.30
Note 7. Other current assets
Item Closing balance Opening balance
Input VAT 21032239.30 12967188.47
Input VAT not yet certified 31717607.91 39454283.19
Prepaid corporate income tax 1364632.40 3419026.38
Others 18134912.20 10499007.28
Total 72249391.81 66339505.32
Note 8. Long-term equity investment
Movements during the period
Investee Opening Addition/new
Investment gains Adjustment of
balance investment Withdrawn and losses otherrecognized by comprehensive
equity method income
Associate
Shanghai Watch Co. Ltd.(Shanghai Watch) 58182086.90 -5819479.60
Continued
Movements during the period Closing
Investee Cash Closing balance balance ofChanges in dividend Impairmen Others impairmenother equity declared t provision t provision
Associate
Shanghai Watch -500000.00 51862607.30
Note 9. Other equity instrument investments
Item Closing balance Opening balance
Xi’an Tangcheng Limited 85000.00
Note 10. Investment property
1. Details of investment property
Item Property
I. Original cost
Page 75FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Item Property
1．Opening balance 619762618.36
2．Addition 572405.53
Purchase
Transferred from fixed assets 572405.53
Other reasons
3．Decrease
Disposal
Other reasons
4．Closing balance 620335023.89
II. Accumulated depreciation
1．Opening balance 244783123.65
2．Increased in current period 15296068.10
Accrual 15044992.22
Transferred from fixed assets 251075.88
Other reasons
3．Decreased in current period
Disposal
Other reasons
4．Closing balance 260079191.75
III. Impairment provision
1．Opening balance
2．Increased in current period
Accrual
Transferred from fixed assets
Other reasons
3．Decreased in current period
Disposal
Other reasons
4．Closing balance
IV. Book value
1．Carrying amount at end of the period 360255832.14
2．Carrying amount at opening of the period 374979494.71
2. Notes to investment property
During the reporting period certain self-use property of the Company were changed to lease
out and they were transferred from fixed assets to investment properties measured at cost model.Page 76FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Note 11. Fixed assets
1. Status of fixed assets
Item Property andbuildings Machinery
Transportation Electronic Other
vehicles devices equipment Total
I.Original cost
1. Opening
balance 436320947.20 117552809.38 14472510.38 47600350.65 45458802.97 661405420.58
2. Increased in
current period 6274155.66 13247259.25 22133.50 5638594.91 1095999.30 26278142.62
Re-classification
Purchased 914818.16 9069828.71 22133.50 5638411.80 1095999.30 16741191.47
Translation
difference 5359337.50 4177430.54 183.11 9536951.15
Other
increase
3. Decrease in
current period 1005470.23 132279.42 1217550.05 2581726.49 2460547.92 7397574.11
Disposal or
retired 433064.70 132279.42 1217550.05 2260776.40 1552373.54 5596044.11
Transferred to
investment 572405.53 572405.53
property
Translation
difference 309957.34 908174.38 1218131.72
Other
decrease 10992.75 10992.75
4. Closing
balance 441589632.63 130667789.21 13277093.83 50657219.07 44094254.35 680285989.09
II. Accumulated
depreciation
1. Opening
balance 135388740.98 71466324.74 12901120.89 37167150.60 39853318.20 296776655.41
2. Increased in
current period 17371592.78 11708223.48 334169.25 2754128.08 1490096.27 33658209.86
Re-classification
Accrual 13829319.29 8286484.22 334169.25 2673316.21 1490096.27 26613385.24
Translation
difference 3542273.49 3421739.26 80811.87 7044824.62
Other
increase
3. Decrease in
current period 553306.35 40954.90 1156620.74 1964736.59 2218612.28 5934230.86
Disposal or
retired 302230.47 40954.90 1156620.74 1964736.59 1281465.83 4746008.53
Transferred to
investment 251075.88 251075.88
property
Translation
difference 937146.45 937146.45
Other
decrease
4. Closing
balance 152207027.41 83133593.32 12078669.40 37956542.09 39124802.19 324500634.41
III. Impairment
provision
1. Opening
balance
Page 77FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Item Property and Machinery Transportation Electronic Otherbuildings vehicles devices equipment Total
2. Increase in
current period
Re-classification
Accrual
Translation
difference
Other
increase
3. Decrease in
current period
Disposal or
retired
Transferred
into
investment
property
Translation
difference
Other
decrease
4. Closing
balance
IV. Book value
1. Carrying
amount at end of 289382605.22 47534195.89 1198424.43 12700676.98 4969452.16 355785354.68
period
2. Carrying
amount at
beginning of 300932206.22 46086484.64 1571389.49 10433200.05 5605484.77 364628765.17
period
2. Fixed assets that do not have certificate for property right
Item Book value Reason for not having certificate for property rights
Property 190716.25 Issues relating to property right
Note 12. Right-of-use assets
Item Property
I. Original cost
1．Opening balance 362417078.85
2．Increase in current period 103612246.80
Re-classification
Lease 100802964.10
Translation difference 3116.50
Other increase 2806166.20
3．Decrease in current period 312819427.84
Maturity of lease term 304816556.54
Translation difference
Page 78FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Item Property
Other decrease 8002871.30
4．Closing balance 153209897.81
II. Accumulated depreciation
1．Opening balance 252086566.82
2．Increase in the period 103960161.59
Reclassification
Accrual 103958386.94
Translation difference 1774.65
Other increase
3．Decrease in the period 312289312.24
Maturity of lease term 304816556.54
Translation difference
Other decrease 7472755.70
4．Closing balance 43757416.17
III. Impairment provision
1．Opening balance
2．Increase in the period
Reclassification
Accrual
Translation difference
Other increase
3．Decrease in the period
Maturity of lease term
Translation difference
Other decrease
4．Closing balance
IV. Book value
1．Carrying amount at end of period 109452481.64
2．Carrying amount at beginning of period 110330512.03
Note 13. Intangible asset
1．Status
Item Land-use right Software system Right to usetrademarks Total
I. Original cost
1．Opening
balance 34933822.40 33197692.51 16518590.29 84650105.20
2．Increase in the
period 2072450.42 80894.93 2153345.35
Page 79FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Item Land-use right Software system Right to usetrademarks Total
Purchase 2072450.42 80894.93 2153345.35
Internal R&D
Other source
3．Decrease in the
period 27470.38 27470.38
Disposal 27470.38 27470.38
Other reasons
4．Closing balance 34933822.40 35242672.55 16599485.22 86775980.17
II. Accumulated
amortization
1．Opening
balance 16515922.01 25903908.15 9030056.41 51449886.57
2．Increase in the
period 733553.29 1717415.91 1238214.01 3689183.21
Accrual 733553.29 1717415.91 1238214.01 3689183.21
Other reasons
3．Decrease in the
period 27470.38 27470.38
Disposal 27470.38 27470.38
Other reasons
4．Closing balance 17249475.30 27593853.68 10268270.42 55111599.40
III. Impairment
provision
1．Opening
balance
2．Increase in the
period
Accrual
Other reasons
3．Decrease in the
period
Transfer
Other reasons
Other transfer
4．Closing balance
IV. Book value
1．Book value at
end of the period 17684347.10 7648818.87 6331214.80 31664380.77
2．Book value at
beginning of the 18417900.39 7293784.36 7488533.88 33200218.63
period
Note 14. Long-term deferred expenses
Item Opening balance Increase Amortized Other decrease Closing balance
Counter fabrication
expenses 22247070.17 22066842.07 23175000.62 2130567.78 19008343.84
Page 80FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Item Opening balance Increase Amortized Other decrease Closing balance
Renovation expenses 116030323.61 39047795.69 58272039.86 509069.24 96297010.20
Others 6211058.40 7760754.71 6952812.02 7019001.09
Total 144488452.18 68875392.47 88399852.50 2639637.02 122324355.13
Note 15. Deferred tax assets and deferred tax liabilities
1．Detail of deferred tax assets before offsetting
Closing balance Opening balance
Item Deductible temporary
Deferred tax assetsDeductible temporarydifference Deferred tax assetsdifference
Impairment provision 107672653.16 24371732.35 143503292.94 30225885.07
Unrealized profit for related
party transactions 83620908.60 20855280.62 75781866.09 18681772.44
Deductible losses 126562143.51 31197892.87 157860317.75 37779977.71
Restricted shares 6263007.85 1449733.06 23141270.85 5411762.47
Advertisement expenses that
allowed to deduct in future years 515068.99 128767.25
Lease liabilities 109682960.95 27420740.27 113136916.00 28284229.00
Others 5168527.80 1292131.95 7295926.80 1823981.80
Total 438970201.87 106587511.12 521234659.42 122336375.74
2．Detail of deferred tax liabilities before offsetting
Closing balance Opening balance
Item taxable temporary Deferred tax Taxable temporary Deferred tax
difference liabilities difference liabilities
One-off deduction of fixed asset
before Corporate income tax 28437227.07 4265584.06 29872344.91 4480851.74
Right-of-use asset 109212305.15 27303076.29 110279028.02 27569757.01
Total 137649532.22 31568660.35 140151372.93 32050608.75
3．Net-off of deferred tax asset or liabilities
Amount off-set at Closing balance of Amount off-set at Opening balance ofItem current period deferred tax asset orliability after off-set prior period
deferred tax asset or
liability after off-set
deferred tax asset 26359739.66 80227771.46 26551763.80 95784611.94
deferred tax liabilities 26359739.66 5208920.69 26551763.80 5498844.95
4．Details of deductible temporary difference and deductible losses that does not recognize
as deferred income tax asset
Item Closing balance Opening balance
Impairment provision 3395341.37 16220176.97
Deductible losses 52523345.89 50761915.00
Page 81FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Item Closing balance Opening balance
Total 55918687.26 66982091.97
Deductible losses ofMontres Chouriet SA which are sub-subsidiary of the Company is not
recognized as deferred income tax asset as it’s uncertain that the companies can get sufficient taxable
income in future. FIYTA（Hong Kong）Ltd a subsidiary of the Company does not need to recognize
the deferred income tax assets for impairment provision according to the local tax policy.
5．Deductible losses that are not recognized as deferred tax asset will due in the following
years：
Year Closing balance Opening balance Note
20238456818.95
202423049503.3718449678.50
202529473842.5223855417.55
Total 52523345.89 50761915.00
Note 16. Other non-current assets
Closing balance Opening balance
Item Carrying
Provision Book value Carrying amount Provision Book value
amount
Prepayment for
construction and 9434627.17 9434627.17 11593741.57 11593741.57
equipment
Total 9434627.17 9434627.17 11593741.57 11593741.57
Note 17. Short-term loan
Item Closing balance Opening balance
Credit loans 250000000.00 290000000.00
Accrued interest payable 187763.87 237111.11
Total 250187763.87 290237111.11
Note 18. Notes payable
Types Closing balance Opening balance
Commercial bills payable 2000600.00
Note 19. Account payables
Item Closing balance Opening balance
Trade payables 148281377.41 149811781.06
Payables for material purchased 23371455.42 19729474.20
Payables for project 2173074.88 1048201.41
Total 173825907.71 170589456.67
Page 82FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Note 20. Advances from customer
Item Closing balance Opening balance
Rental received in advance 10267758.31 16960128.83
Total 10267758.31 16960128.83
Note 21. Contract liabilities
Item Closing balance Opening balance
Advances for goods received 12286243.62 16844437.47
Total 12286243.62 16844437.47
Note 22. Employee remuneration payable
1．Status
Item Opening balance Increase Decrease Closing balance
Short-term employee benefits 122389603.47 573249889.40 581435441.84 114204051.03
Post-employment benefits -
defined contribution plans 9282692.00 45699776.34 49401016.98 5581451.36
Termination benefits 4915643.91 3561468.21 8177803.91 299308.21
Total 136587939.38 622511133.95 639014262.73 120084810.60
2．Short-term employee benefits
Item Opening balance Increase Decrease Closing balance
Salaries bonus allowances 121169046.53 514306267.70 522193272.18 113282042.05
Staff welfare 10643.28 9991313.96 9839862.22 162095.02
Social insurances 404028.29 22623655.78 23027605.75 78.32
Including:1.Medical
insurance 404028.29 20961272.11 21365300.40
2. Supplementary
medical insurance
3.Work-related injury
insurance 894581.96 894503.64 78.32
4.Maternity insurance 767801.71 767801.71
Housing Fund 169121.00 19257855.90 19413425.90 13551.00
Labor union fees and
education fee 636764.37 7070796.06 6961275.79 746284.64
Total 122389603.47 573249889.40 581435441.84 114204051.03
3．Defined contribution plans
Item Opening balance Increase Decrease Closing balance
Basic pension insurance 290781.95 40649553.03 40732129.01 208205.97
Unemployment insurance 581.68 1203467.38 1203669.18 379.88
Annuity 8991328.37 3846755.93 7465218.79 5372865.51
Total 9282692.00 45699776.34 49401016.98 5581451.36
Page 83FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Note 23. Taxes payable
Item Closing balance Opening balance
VAT 38997243.97 39086878.23
Corporate income tax 21276050.77 16751872.66
Individual income tax 1101633.76 1070872.15
Urban maintenance and
construction tax 1047680.77 1353097.21
Educational surcharges 748598.11 966809.02
Others 1016953.93 1540639.03
Total 64188161.31 60770168.30
Note 24. Other payables
Item Closing balance Opening balance
Dividends payable 2058352.24 6324013.97
Other payables 119879448.83 158736108.61
Total 121937801.07 165060122.58
Note: Other payables in above table refers to other payables excluding interest payable and
dividends payable.
1. Dividends payable
Item Closing balance Opening balance Reasons for not beingpaid
Dividends for ordinary shares 2058352.24 6324013.97 unlock
Total 2058352.24 6324013.97
2. Other payables
(1) Other payables by nature
Nature Closing balance Opening balance
Security deposit 34075198.63 38319837.05
Shop activity fund 17335559.49 16105216.84
Decoration expenses 10214019.04 12827532.03
Repurchase liability for restricted shares 14304862.81 50759806.16
Other 43949808.86 40723716.53
Total 119879448.83 158736108.61
(2) Material other receivables with aging over 1 year
Name Closing balance Reasons for not being paid
Company A 4614077.01 Undue
Page 84FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Name Closing balance Reasons for not being paid
Company B 2032676.76 Undue
Company C 2020950.20 Undue
Company D 1807296.80 Undue
Company E 1442275.27 Undue
Company F 1060132.00 Undue
Total 12977408.04
Note 25. Non-current liabilities due within one year
Item Closing balance Opening balance
Lease liabilities due in one year 66399004.20 71546316.16
Total 66399004.20 71546316.16
Note 26. Other current liabilities
Item Closing balance Opening balance
Output VAT not yet realized 1589635.30 1686806.01
Total 1589635.30 1686806.01
Note 27. Lease liabilities
Item Closing balance Opening balance
Buildings and Structures 113786386.87 113365689.55
Less: unrecognised finance costs 3861030.15 176811.81
Subtotal present value of lease
receipts 109925356.72 113188877.74
Less: lease liabilities due in one year 66399004.20 71546316.16
Total 43526352.52 41642561.58
Interest expenses for lease liabilities recognized in current period was RMB4583361.68.Note 28. Deferred income
Item Openingbalance Increase Decrease
Closing
balance Reason
Asset related
government subsidy 1295926.80 343141.11 952785.69
Revenue related
government subsidy
Total 1295926.80 343141.11 952785.69
Deferred income related to government subsidy
The Company's government subsidy are detailed in Note VIII Government subsidy.1 for
liability items involving government grants.Page 85FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Note 29. Share capital
Movements: increase(+) decrease(－)
Capitalizati
Item Opening balance Newly Bonus on of Closing balance
Others Subtotal
issued share capital
reserves
Total shares 417627960.00 -2407990.00 -2407990.00 415219970.00
Total 417627960.00 -2407990.00 -2407990.00 415219970.00
Notes to movements：
1. Pursuant to the "Proposal on the Repurchase and Cancellation of Certain Restricted
Shares under the 2018 A-share Restricted Share Incentive Plan (Phase II)" considered and
approved by the Board of Directors and the general meeting of the Company 206860 A-share
restricted shares held by seven departing former incentive recipients which had been granted but
not yet released from restriction on sale were repurchased and cancelled.
2. Pursuant to the ''Proposal on the Failure to Achieve the Conditions for Release of
Restricted Shares during the Second Release Period of the 2018 A-share Restricted Share
Incentive Plan (Phase II) and the Repurchase and Cancellation of Certain Restricted Shares''
considered and approved by the Board of Directors and the General Meeting of Shareholders of
the Company 2201130 restricted shares of A-shares held by 120 incentive recipients for whom
the conditions for release of restricted shares have not been fulfilled are to be repurchased and
cancelled.Note 30. Capital reserve
Item Item Openingbalance Increase Decrease
Share premium 969665728.36 12799265.10 14207807.55 968257185.91
Other capital reserve 37420915.12 3184288.69 18703356.55 21901847.26
Total 1007086643.48 15983553.79 32911164.10 990159033.17
Notes to capital reserve:
1. Pursuant to the ''Resolution on the fulfillment of the conditions for the release of restricted
shares during the first release period of the 2018 A-share Restricted Stock Incentive Plan (Phase
II)'' and the ''Resolution on the fulfillment of the conditions for the release of restricted shares
during the third release period of the 2018 A-share Restricted Stock Incentive Plan (Phase I)''
considered and approved by the Board of Directors and the General Meeting of Shareholders of
the Company in the year of 2023 RMB3436710000 A-share restricted shares which met the
conditions for release from restricted sale were released from restricted sale and the capital
surplus of RMB12799265.10 corresponding to the restricted shares of the above incentive
recipients was transferred from "Other capital surplus" to "Share premium".Page 86FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
2. As described in Note V. 29 the Company repurchased restricted shares and the equity
premium was reduced by RMB14195451.00 accordingly.
3. Pursuant to the "Program on the Repurchase of Certain Domestically Listed Foreign
Shares (B Shares)" considered and approved at the Eleventh Meeting of the Tenth Session of the
Board of Directors and the General Meeting of Shareholders of the Company in 2023 the
transaction costs incurred by the Company for the repurchase of the Company's shares through
the repurchase of the special securities account amounted to RMB12356.55 which was offset
against the equity premium of RMB12356.55.
4. Pursuant to the Proposal on the Grant of Restricted Shares to the Incentive Recipients
under the Company's 2018 A-Share Restricted Stock Incentive Plan (Phase II) which was
considered and approved by the Board of Directors and the General Meeting of Shareholders of
the Company. In 2023 the services obtained by the Company from the above incentive recipients
were included in the relevant costs or expenses and increased the other capital surplus by
RMB1825092.95 accordingly.
5. Pursuant to the ''Proposal on the Failure to Achieve the Conditions for Release of
Restricted Shares during the Second Release Period of the 2018 A-Share Restricted Stock
Incentive Plan (Phase II) and the Repurchase and Cancellation of Certain Restricted Shares''
considered and approved by the Board of Directors and the General Meeting of Shareholders of
the Company in the year 2023 2201130 A-share restricted shares held by 120 incentive
recipients for whom the conditions for release of restricted shares have not been reached were
repurchased and cancelled. Eliminate the services of the above incentive recipients charged to the
relevant costs or expenses and reduce the other capital surplus by RMB5904091.45 accordingly.
6. The amount of income tax effect of the difference between the amount deducted before
income tax for the current year and the amount of related costs and expenses recognized during
the waiting period resulting from the difference between the fair price at the time of unlocking of
restricted shares and the grant price at the time of grant was adjusted to other capital surplus by
RMB1359195.74 accordingly.Note 31. Treasury shares
Item Opening balance Increase Decrease Closing balance
Share repurchase 64340669.42 64340669.42
Share based payment 50759806.16 36454943.35 14304862.81
Total 50759806.16 64340669.42 36454943.35 78645532.23
Notes to treasury shares:
1. In 2023 the Company repurchased an aggregate of 9355763 B shares of the Company
through the Shenzhen Stock Exchange by way of centralized bidding and paid a repurchase
amount of HK70401771.17 (excluding transaction costs) equivalent to RMB64340669.42
Page 87FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
thus increasing "Reduction of registered capital repurchase" by RMB64340669.42.
2. As described in Note V. 29. 2 the Company repurchased and canceled the A-share
restricted shares for which the conditions for release from restriction on sale had not been met
thereby reducing the "Restricted share-based payments" by RMB15187797.00.
3. As described in Note V. 29. 1 the Company repurchased and canceled the A-share
restricted shares that had been granted but not yet released from restriction thereby reducing
"Restricted share-based payments" by RMB1415644.00; and reduced "Restricted share-based
payments" by RMB588620.00 in respect of the corresponding cash dividends.
4. As described in Note V. 30. 1 for those shares that meet the unlocking conditions for
restricted shares and do not need to be repurchased the corresponding repurchase obligations
were derecognized thus reducing "Restricted share-based payments" by RMB19262882.35.Page 88FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Note 32. Other Comprehensive income
Amount in current period
Less: Less: Less:
record record record
ed in ed in Less: ed in
OCI in OCI in reserv OCI in
prior prior e ofperiod hedgin Attribute Less:
prior
period and g Les Attribute to move
period
Item Opening and non-contr ments
and Closing
balance Pre-tax
amount transfe
transfe transfe s: to parent olling of transfe balance
rred to rred to rred to CI companyfinanci related T after tax sharehold defied
rred to
profit ers after benefit retaine
or loss al assetsassets or tax plan
d
in earnin
curren at liabilit gs in
t amorti ies curren
period zed tcost period
I. Other
comprehens
ive income
items which
will not be
reclassified
subsequentl
y to profit or
loss
II. Other
comprehens
ive income
items which
may be 57395 13585 13585 19325
reclassified 89.89 746.04 746.04 335.93
subsequentl
y to profit or
loss
Including:t
ranslation 57395 13585 13585 19325
difference 89.89 746.04 746.04 335.93
Total 57395 13585 13585 1932589.89 746.04 746.04 335.93
Page 89FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Note 33. Specific reserve
Item Opening balance Increase Decrease Closing balance
Safety production fee 2012064.91 1537825.22 326732.07 3223158.06
Total 2012064.91 1537825.22 326732.07 3223158.06
Note 34. Surplus reserve
Item Opening balance Increase Decrease Closing balance
Statutory surplus reserve 213025507.50 213025507.50
Discretionary surplus
reserve 61984894.00 61984894.00
Total 275010401.50 275010401.50
Notes to surplus reserve:
Note: According to the Company Law and Articles of Association the Company draws
statutory surplus reserve at 10% of net profit. If the statutory surplus reserve is over 50% of the
Company’s registered capital drawing of statutory surplus reserve will be stopped.The Company can draw discretionary surplus reserve after drawing statutory surplus reserve.If approved discretionary surplus reserve can be used to make up for losses in previous years or
increase share capital.Note 35. Undistributed profit
Item Current period Prior period
Undistributed profit at the end of prior year before
adjustments 1479706638.53 1338444326.09
Adjustments to undistributed profit at the
beginning of year (“+” for increase and “-“ fordecrease)
Undistributed profit at the beginning of year after
adjustment 1479706638.53 1338444326.09
Plus: Net profit attributable to the owner of the
parent company for the year 333178102.37 266681451.84
Less: statutory surplus reserve drawn
Dividends payable to ordinary shares 103371355.14 125419139.40
Undistributed profit at the end of year 1709513385.76 1479706638.53
Note 36. Operating income and operating cost
1．Operating income and operating cost
Amount in current period Amount in prior period
Item
Revenue Cost Revenue Cost
Main business 4553706250.49 2904751241.51 4336586473.74 2738100529.23
Other business 15983752.50 712233.30 17510406.62 872261.88
Page 90FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Item Amount in current period Amount in prior period
Total 4569690002.99 2905463474.81 4354096880.36 2738972791.11
2．Revenue generated by contract
Types of contract Amount in current period Amount in prior period
I. Types of goods
Watch
business 4270245173.86 4044205847.75
Precision
manufacturing 133103042.03 163114009.23
Other business 15916680.92 17510406.62
II. Categorized
based on timing
of goods transfer
At a point of
time 4410670831.14 4212548175.21
During a
period of time 8594065.67 12282088.39
Note: revenue generated by contract does not include lease income of RMB150425106.18
which is regulated under “CAS No.21 – Lease”.Note 37. Tax and surcharges
Item Amount in current period Amount in prior period
Consumption tax 12205585.22 10509059.81
Urban maintenance and
construction tax 5188370.21 4483205.18
Educational surcharge 3452657.63 2988250.62
Property tax 7512564.92 5824577.36
Stamp duty 3040109.98 3814124.17
Others 4794558.14 3180982.59
Total 36193846.10 30800199.73
Note 38. Selling and distribution expenses
Item Amount in current period Amount in prior period
Salary 364493305.57 390723066.47
Department store expense and rental 159738493.87 154977256.13
Market promotion expenses 146787677.11 114559488.13
Depreciation and amortization 187456893.25 210324656.21
Packaging expenses 10367129.63 8210424.75
Utilities and property management expenses 22673870.27 22115070.79
Shipping fees 5921929.02 5928120.89
Office expenses 6285406.47 5617713.76
Page 91FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Item Amount in current period Amount in prior period
Travel expenses 8415884.60 4533814.79
Entertainment expenses 4581476.42 3081324.66
Others 7287113.11 11761893.82
Total 924009179.32 931832830.40
Note 39. Administrative expenses
Item Amount in current period Amount in prior period
Salary 159074391.51 169831180.19
Depreciation and amortization 23462090.05 23584581.61
Travel expenses 4773457.90 1651207.39
Office expenses 3174249.82 3967189.58
Agents fees 1917258.68 1764355.96
Rental and utilities 1359636.27 941300.03
Entertainment expenses 1368967.18 764414.05
Vehicle and transportation expenses 1884805.22 1528304.66
Telecommunication expenses 368370.99 825712.63
Others 7976049.62 14156262.42
Total 205359277.24 219014508.52
Note 40. R&D expenses
Item Amount in current period Amount in prior period
Salary 43658293.35 47534889.46
Sample and material expenses 2219443.20 1964204.63
Molding expenses 2263.43 853056.11
Depreciation and amortization 4300190.56 4852325.18
Technical cooperation fee 2758347.16 217203.80
Others 4863706.38 5666906.43
Total 57802244.08 61088585.61
Note 41. Financial expenses
Item Amount in current period Amount in prior period
Interest expenses 12824222.06 16846749.14
Less: Interest income 5722586.39 3923999.48
Exchange gain or losses 1879443.15 -3053760.78
Bank charges 12488693.95 11319753.23
Total 21469772.77 21188742.11
Note 42. Other income
Page 92FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
1．Details
Sources of other income Amount in current period Amount in prior period
Government subsidy 9105016.49 18648210.06
Commission on IIT payment 494598.35
VAT plus credit 1835758.94
Total 11435373.78 18648210.06
2．Government subsidy included in other income
The Company's government subsidy are detailed in Note VIII Government subsidy.2 for
government subsidy recognized in profit or loss.Note 43. Investment gain
Item Amount in current period Amount in prior period
Gain from long-term equity investments
accounted for using equity method -5819479.60 3026481.59
Total -5819479.60 3026481.59
Note 44. Credit impairment loss
Item Amount in current period Amount in prior period
Bad debt loss 6827575.82 4845379.45
Total 6827575.82 4845379.45
Note 45. Asset impairment loss
Item Amount in current period Amount in prior period
Inventory decline in value 571980.37 -37625482.96
Total 571980.37 -37625482.96
Note 46. Gains from assets disposal
Item Amount in current period Amount in prior period
Gains (losses) from assets disposal 527753.57 -203932.45
Gains (losses) from right-of-use
158115.00295857.51
assets disposal
Total 685868.57 91925.06
Note 47. Non-operating income
Item Amount in current
Amount included in
period Amount in prior period non-recurring gains orlosses in current period
Payables cannot be paid 1346926.73 305066.79 1346926.73
Compensation 2215389.10 860904.01 2215389.10
Revenues from rights-based
compensation 938486.50 938486.50
Page 93FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Others 269704.47 121231.28 269704.47
Total 4770506.80 1287202.08 4770506.80
Note 48. Non-operating expense
Amount included in
Item Amount in current Amount in prior non-recurring gains orperiod period losses in current
period
Donation 311464.98 78860.00 311464.98
Fine and penalty for late payment 6014.28 403084.07 6014.28
Payment for breach of agreement 37725.30 1412548.66 37725.30
Others 504565.54 456773.58 504565.54
Total 859770.10 2351266.31 859770.10
Note 49. CIT expenses
1．Details
Item Amount in current period Amount in prior period
Current tax expense for the year
based on tax law and regulations 88559245.72 86356685.06
Changes in deferred tax
assets/liabilities 15266916.22 -13916465.05
Total 103826161.94 72440220.01
2．Reconciliation between income tax expenses and accounting profit is as follows:
Item Amount in current period
Profits before tax 437004264.31
Income tax calculated based on statutory tax rate 109251066.08
Effect of different tax rates applied by subsidiaries -10206789.27
Adjustment to income tax of previous years 6187582.94
Effect of non-taxable income 1454869.90
Effect of non-deductible costs expenses and losses 781125.37
Effect of using the deductible temporary differences or deductible losses
for which no deferred tax asset was recognized in prior period -337571.86
Effect of deductible temporary differences or deductible losses for which
no deferred tax asset was recognized this year
Effect of research and development expenses super deduction -4769518.22
Others 1465397.00
Income tax expenses 103826161.94
Note 50. Notes to cash flow statement
1. Cash received from other operating activities
Item Amount in current period Amount in prior period
Security deposit 7550296.24 15956047.24
Page 94FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Item Amount in current period Amount in prior period
Government subsidy 8796670.12 18151302.96
Promotion expenses 12561700.18 12201925.26
Interest income 5722586.39 3923999.48
Return of petty cash 7787782.02 8030966.63
Others 25760176.26 21392611.71
Total 68179211.21 79656853.28
2. Cash paid for other operating activities
Item Amount in current period Amount in prior period
Security deposit 11191285.76 24008323.15
Petty cash advanced to employee 22048433.11 11049894.11
Current period expenses 293728229.26 288360173.00
Others 60670140.56 617269.28
Total 387638088.69 324035659.54
3. Cash paid for other financing activities
Item Amount in current period Amount in prior period
Lease payment 114908744.94 124087402.37
Cash paid for re-purchase of shares 83148230.83 53390338.09
Total 198056975.77 177477740.46
Note 51. Supplement information to cash flow statement
1. Supplement to cash flow statement
Item Amount in currentperiod Amount in prior period
1. Reconciliation of net profit/loss to cash flows from
operating activities：
Net profit 333178102.37 266681451.84
Add: Credit impairment loss -6827575.82 -4845379.45
Impairment for assets -571980.37 37625482.96
Depreciation of fixed assets、oil and gas assets and
productive biological assets 41658377.46 40524642.37
Depreciation of right-of-use assets 103958386.94 110464700.15
Intangible asset amortization 3689183.21 5009348.81
Amortization of long-term deferred expenses 91039489.52 110435014.09
Loss on disposal of fixed assets intangible assets andother long-term assets (“-“ for gain) -685868.57 -91925.06Loss on scrap of fixed assets (“-“ for gain)Loss on changes of fair value (“-“ for gain)Page 95FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Item Amount in currentperiod Amount in prior periodFinancial expenses (“-“ for income) 10346099.61 16846749.14Investment loss (“-“ for gain) 5819479.60 -3026481.59Decrease in deferred tax assets (“-“ for increase) 15556840.48 -14551337.29Increase in deferred tax liabilities (“-“ for decrease) -289924.26 262330.92Decrease in inventories (“-“ for increase) 82605123.05 -92627165.17Decrease in operating receivables (“-“ for increase) 34507754.85 121164749.65Increase in operating payables (“-“ for decrease) -77781831.49 -117643404.85Others -3800168.60
Net cash flows from operating activities 632401487.98 476228776.52
2. Significant investment or financing activities not
involving cash:
Debts converted to capital
Convertible debts mature within one year
Added right-of-use assets in the current period
3．Net changes in cash and cash equivalents:
Cash at end of year 504629153.71 313738389.64
Less: cash at beginning of year 313738389.64 210254737.14
Plus: cash equivalents at end of year
Less: cash equivalents at beginning of year
Net increase in cash and cash equivalents 190890764.07 103483652.50
2. Total cash outflows related to leaseTotal cash outflows related to lease amounted to RMB114908744.94.（ Prior period：RMB124087402.37）
3. Cash and cash equivalents
Item Closing balance Opening balance
I. Cash 504629153.71 313738389.64
Incl. Cash on hand 178996.87 173368.68
Bank deposit available for immediate payment 503187176.88 312433893.29
Other monetary funds available for immediate
1262979.961131127.67
payment
II. Cash equivalents
Including Bond investment due in three months
III. Cash and cash equivalents at the end of year 504629153.71 313738389.64
Including Restricted cash and cash equivalents for the 1202601.86 716733.44
Page 96FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Item Closing balance Opening balance
Company and its subsidiaries
4. Restricted use but still presented as cash and cash equivalents
Item Amount for the period rationaleFunds in the accounts of the Company's subsidiaryFIYTA（HongKong）Ltd and its grandson Montres Chouriet SA which are kept
Cash at bank 1202601.86
outside the country and are subject to restrictions on repatriation of
funds but do not affect their daily use.Note 52. Monetary items denominated in foreign currency
1．Monetary items denominated in foreign currency
Balance denominated in
Balance translated in
Item foreign currency as at 31 Exchange rate
RMB as at 31 Dec 2023
Dec 2023
Monetary fund 4912660.52
USD 197793.98 7.0827 1400915.42
EUR 109603.02 7.8592 861392.06
HKD 1594744.82 0.9062 1445189.46
CHF 143158.27 8.4184 1205163.58
Accounts receivable 7180426.44
USD 496860.67 7.0827 3519115.06
HKD 3737843.78 0.9062 3387308.79
EUR 4824.46 7.8592 37916.39
CHF 28044.07 8.4184 236086.20
Other receivables 243119.93
HKD 119645.92 0.9062 108425.53
CHF 16000.00 8.4184 134694.40
Accounts payable 8936497.51
HKD 552191.52 0.9062 500407.00
CHF 1002101.41 8.4184 8436090.51
Other payables 810006.84
HKD 585023.91 0.9062 530160.37
CHF 33242.24 8.4184 279846.47
2．Overseas operational entity
For main business location and recording currency of important overseas operating entities refer
to Note III. 5.Page 97FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Note 53. Tenancy
The Company as a lessor:
The Company's right-of-use assets lease liabilities and total cash outflows related to leases are
detailed in Note 12 Note 27 and Note 51.The Company as a lessee is recognized in profit or loss as
follows:
Item Amount in current period Amount in prior period
Interest on lease liabilities 4583361.68 8442125.35
Short-term rental costs 784401.29 407454.71
Lease costs for low-value assets
Variable lease payments not included in the
measurement of the lease liability 85741239.56 85618040.29
Income from sublease of right-to-use assets
Sale and leaseback transactions
Additional information on the Company as lessee is set forth below:
1. Lease activities
All lease of the Company is property lease including short-term lease and other leased that
recognized right-of-use asset and lease liabilities.
2. Short-term lease
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 RMB 784401.29.
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 percentage of sales used is quite large. In
some circumstances variable payment terms include annual bottom payment and upper limit.In 2023 the variable lease payment included in the current profit and loss is RMB
85741239.56.
(2) Option to renew
Page 98FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
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.
(1) 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.
(2) Residual value guarantee
The Company’s lease does not involve residual value guarantee.
(3) 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. Information relating to operating leases
Gains related to operating leases are shown below:
Including: not recognized
Item Rental income in lease receipts Incomerelating to variable lease
payments
Property 150425106.18
Total 150425106.18
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.VI.Research and development expenditures
1.Presentation by nature of costs
Item Amount in current period Amount in prior period
Salary 43658293.35 47534889.46
Sample and material expenses 2219443.20 1964204.63
Molding expenses 2263.43 853056.11
Depreciation and amortization 4300190.56 4852325.18
Technical cooperation fee 2758347.16 217203.80
Others 4863706.38 5666906.43
Total 57802244.08 61088585.61
Page 99FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
2.Development expenditure on R&D projects eligible for capitalization
Nil.VII.Interests in other entities
1.Equity in subsidiary
(1) Composition of enterprise group
Shareholding ratio
Name Place of
Place of
registratio Nature of (%)operation n business
Ways acquired
Direct Indirect
Shenzhen Harmony World Shenzhen Shenzhen Commerce 100.00 incorporated orWatch Center Co. Ltd. investment
FIYTASales Co. Ltd. Shenzhen Shenzhen Commerce 100.00 incorporated orinvestment
Shenzhen FIYTAPrecision
Technology Co. Ltd. Shenzhen Shenzhen Manufacturing 99.00 1.00
incorporated or
investment
Shenzhen FIYTA
Technology Development Shenzhen Shenzhen Manufacturing 100.00 incorporated or
Co. Ltd. investment
Harmony World Watch incorporated or
Center (Hainan) Co. Ltd. Sanya Sanya Commerce 100.00 investment
Shenzhen Xunhang
Precision Technology Co. Shenzhen Shenzhen Manufacturing 100.00 incorporated or
Ltd. investment
Emile Choureit Timing incorporated or
(Shenzhen) Ltd. Shenzhen Shenzhen Commerce 100.00 investment
Liaoning Hengdarui Business
Commercial & Trade Co. Shenyang Shenyang Commerce 100.00 combination
Ltd. under commoncontrol
TEMPORAL (Shenzhen)
Co. Ltd. Shenzhen Shenzhen Commerce 100.00
incorporated or
investment
Shenzhen Harmony incorporated or
E-commerce Co. Ltd. Shenzhen Shenzhen Commerce 100.00 investment
FIYTA (Hong Kong) Ltd. Hong HongKong Kong Commerce 100.00
incorporated or
investment
Business
combination
Montres Chouriet SA Swiss Swiss Manufacturing 100.00 not under
common
control
2. Equity in joint arrangement or associates
(1) Significant associates
Shareholding ratio
Name Place of
Place of Nature of (%) Accounting
operation registration business treatmentDirect Indirect
Shanghai Watch Co. Ltd. Shanghai Shanghai Commercial 25% Equity method
(2) Principal financial information of significant associate company
Page 100FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Item Closing balance/Amount in Opening balance/Amount incurrent period prior period
Current assets 165796119.65 175890077.66
Non-current assets 16753785.07 21637323.67
Total assets 182549904.72 197527401.33
Current liabilities 60781571.60 44595566.75
Non-current liabilities 5885583.05
Total liabilities 60781571.60 50481149.80
Non-controlling interest
Equity attributable to parent company 121768333.12 147046251.53
Portion of net asset calculated based on
shareholding 30442083.28 36761562.88
Adjustment matters 21420524.02 21420524.02
- Goodwill 21420524.02 21420524.02
- Unrealized profit or losses from
internal transaction
- Others
Carrying value of investment to associates 51862607.30 58182086.90
Fair value of equity investment that has
public quotation
Operating income 110947629.04 141379376.32
Net profit -23277918.41 12105926.36
Net profit from discontinued operation
Other comprehensive income
Total comprehensive income -23277918.41 12105926.36
Dividends received from associated
company during the year 500000.00
VIII.Government subsidy
1．Liability items involving government grants
Include in
non-operat Include in Offsettin Related to
Item Opening Additi ing other gains g Closingbalance on income in in current expense balance asset
current period or cost /income
period
Special fund for
Shenzhen
industrial design 314539.36 4882.52 309656.84 Asset related
industry
development
Funding project
for construction
of National
Enterprise 338833.33 293147.06 45686.27 Asset related
Technology
Center
Page 101FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Provincial
Specialized Fund
for Industrial and 642554.11 45111.53 597442.58 Asset related
Information
Total 1295926.80 343141.11 952785.69
2．Government subsidy recognized in profit or loss
Item Amount in current Amount in prior Asset orperiod period income related
Subsidy to promote consumption 7920500.00 Income related
Trade and Distribution Industry Funding Projects 2579700.00 Income related
Quality and Branding Promotion Multiplication
Subsidy 1180000.00 Income related
Relief Policy Subsidy 1058150.00 Income related
Shenzhen Special Fund for Technology Research 1000000.00 1000000.00 Income related
Training subsidy 4900.00 953220.00 Income related
Subsidy for stabilizing job position 824116.60 819833.38 Income related
Subsidy to Foster High and New Technology
Enterprise 220000.00 700000.00 Income related
Commission on IIT payment 730811.84 Income related
Other subsidies 104887.83 624893.74 Income related
Shenzhen Standard Special Fund 660468.00 550694.00 Income related
Shenzhen E-commerce Innovation and
Development Support Program Subsidy 330000.00 Income related
Professional SpecializeUnique and New" SME
Development Subsidy 200000.00 Income related
State certified R&D center 293147.06 293147.06 Asset related
Provincial industry and information special
subsidy 45111.53 128176.25 Asset related
Special fund for Shenzhen industrial designing 4882.52 75583.79 Asset related
2019 Headquarters Economic Contribution
Award -496500.00 Income related
2022 Second Half of Nanshan District
Industry and Information Technology
Bureau Business Stable Growth Special 1251400.00 Income related
Funding Project Grant
Industrial Insurance Fund 17566.00 Income related
2023 Technology Innovation Project
Support Program and Manufacturing 1000000.00 Income related
Individual Champion Incentive
Subsidy to assist high quality development
of fashion industry 900188.00 Income related
Special Funds for Civil-Military
Integration and Funds for the Fifth Project 200000.00 Income related
Grant Scheme
Specialized Economic Development
Funding Grants 100000.00 Income related
High-tech Enterprise Recognition Reward
Subsidy 100000.00 Income related
Page 102FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Subsidies for Production Expansion and
Efficiency Incentives in the Third Quarter
of Bureau of Industry and Information 70000.00 Income related
Technology
Epidemic subsidies 12000.00 Income related
Employment subsidies 5382.00 Income related
Incentive subsidy for employers of
persons with disabilities 14920.77 Income related
Specialized funding in the field of
Shenzhen standards 130468.00 Income related
Ventilator and key components research
and application project 868178.18 Income related
VAT relief for key groups 179400.00 Income related
Funding for technological improvements 350000.00 Income related
Key projects for technology development 250000.00 Income related
Ministry of Industry and Information
Technology-Joint security projects 300000.00 Income related
Incentive payments from the Bureau of
Science Technology and Industry to
encourage the standardization and 200000.00 Income related
upgrading of micro and small enterprises
to above-scale enterprisesGovernment subsidies for《E-Commerce-2000.00 Income relatedMasters》
Total 9105016.49 18648210.06
3．Subsidy returned
Item Type Amount in Amount in priorcurrent period period Reasons for return
Refund of government subsidies for
《E-Commerce Masters Income related 2000.00 Not qualified》
Total 2000.00
IX.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 and bond payables. 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
developed risk management policies to identify and analyse risks exposed by the Company. These
Page 103FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
risk management policies have clear regulations over specific risks covering various aspects of
market risk credit risk and liquidity risk management. The Company will evaluate the market
environment and changes of the Company’s operating activities on a regular basis to decide
whether to update the risk management policies and systems. Risk management of the Company is
carried out by the Risk Management Committee based on the policies as approved by the board of
directors. Risk Management Committee identifies evaluates and mitigates related risks by
working closely with other business divisions of the Company. Internal Audit Department of the
Company will review the risk management control and process regularly and submit the review
results to Audit Committee of the Company. The Company spreads the risks of financial
instruments through appropriate diversified investment and business portfolio and mitigates the
risk of focusing on any single industry specific regions or counterparties by way of formulating
the corresponding policies for risk management.
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 currency funds and other receivables. The
credit risk relating to these financial assets arises from the default of counterparties but the
maximum exposure to credit risk is the carrying amount of each financial asset in 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 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
Page 104FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
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 31 December 2023 the carrying amount of related assets and corresponding ECL is as
follows:
Aging Carrying amount Provision
Bill receivable 18685052.55 416080.18
Accounts receivable 357533748.10 34390986.46
Other receivable 62073902.09 4348110.09
Total 438292702.74 39155176.73
As the Company’s customer base is large no material credit concentration risk.As at 31 December 2023 the balance of top 5 receivable accounts accounted for 21.42% of
total accounts receivables (2022: 32.76%) .
2. Liquidity risk
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 31 December 2023 the
Company has financing facilities from several banks amounting to RMB2375.95 million.Amongst RMB375.95 million has already been used.As at 31 December 2023 the discounted contractual cash flows for financial liabilities and
off-balance sheet guarantee that presented in maturity are as follows:
Closing balance in ten thousands yuan
Item
Within 1 year 1 - 2 years 2 - 3 years Over 3 years Total
Page 105FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Closing balance in ten thousands yuan
Item
Within 1 year 1 - 2 years 2 - 3 years Over 3 years Total
Short term loan 25018.78
Bills payable
Accounts payable 17382.59
Other payables 12193.78
Total 54595.15
3. Market risk
(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 RMB. 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 CHF) remain exposed to exchange rate risk
As at 31 December 2023 the RMB equivalent of financial assets and financial liabilities
denominated in foreign currencies are as follows:
Closing balance
Item
HKD USD EUR CHF Total
Financial asset
denominated in 0.9062 7.0827 7.8592 8.4184
foreign currency:
Monetary fund 1445189.46 1400915.42 861392.06 1205163.58 4912660.52
Accounts receivable 3387308.79 3519115.06 37916.39 236086.20 7180426.44
Other receivables 108425.53 134694.40 243119.93
Subtotal 4940923.78 4920030.48 899308.45 1575944.18 12336206.89
Financial liabilities
denominated in
foreign currency:
Accounts payables 500407.00 8436090.51 8936497.51
Other payables 530160.37 279846.47 810006.84
Total 1030567.37 8715936.98 9746504.35
Sensitivity analysis
As at 31 December 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
Page 106FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
unchanged the net profit will decrease or increase about RMB0.130 million(31 Dec 2022:RMB1.419
million) .
(2) Interest rate risk
The interest rate risk of the Company mainly associates with bank borrowings bonds payable
etc. 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 interest rate risk of the Company mainly associates with bank borrowings bonds payable
etc. 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 latest market conditions.Sensitivity analysis:
As at 31 December 2023 it is estimated that a general increase or decrease 50 basis points in
the borrowings with floating interest rates with all other variables held constant the Company’s
net profit and shareholder’s equity for the year will decrease or increase by approximately
RMB307300.00 (2022: RMB1200000.00) .The above sensitivity analysis assumes that interest rate changed on the balance sheet date
and applicable to all loans with floating interest rate terms.X.Fair value
1. Financial instruments measured at fair value
As at 31 December 2023 the Company does not have financial instruments measured at fair
value.
2. Status of financial assets and financial liabilities not measured at fair value
Financial assets and financial liabilities not measured at fair value include: accounts
receivable short-term loans accounts payable long-term loans due within one year and equity
instrument investment that does not have public quotation in an active market and its fair value
cannot be measured reliably.The difference between fair value and carrying amount of the above financial assets and
liabilities that not measured at fair value is insignificant.XI.Related party and related transaction
1. The parent company of the Company
Page 107FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Shareholdin Ratio of vote
Registered
capital g ratio of right of
Registration (in ten parent parentName Type of business
place thousand company to company to
RMB) the the
Company % Company%
CATIC Shenzhen Shenzhen Commercial 116616.20 39.25 39.25
(4) Notes to the parent company
CATIC Shenzhen is a subsidiary that 100.00% held indirectly by AVIC International and AVIC
directly holds 100.00% of the equity of AVIC International.
(5) The ultimate controlling party of the Company is AVIC.
2. Refer to Note VI. 1 for information about the Company’s subsidiaries
3. Refer to Note VI. 2 for information about the Company’s material associates
4. Other related parties
Name of other related parties Relationship
Shenzhen CATIC Property Management Limited (CATIC Property Management) Associate company of thecontrolling shareholder
Rainbow Digital Science Co. Ltd. and its associated companies (Rainbow Company Controlled by the same party
Shennan Circuits Co. Ltd. and its associated companies (Shennan Circuits) Controlled by the same party
AVIC Huadong Photoelectric Co. Ltd.(AVIC Huadong Photoelectric) Controlled by the same party
AVIC Xi’an Flight Automatic Control Research Institute(AVIC Xi’an Flight Institute) Controlled by the same party
Shenzhen Grand Skylight Hotel Management Co. Ltd (Grand Skylight Hotel
Management Company) Controlled by the same party
AVIC Securities Co. Ltd. (AVIC Securities Company) Controlled by the same party
AVIC Training Center Controlled by the same party
AVIC Finance Co. Ltd. (AVIC Finance Company) Controlled by the same party
Gongqingcheng CATIC Culture Investment Co. Ltd (Gongqingcheng CATIC
Culture Investment Company) Controlled by the same party
Avic Jonhon Optronic Technology Co. Ltd.(AVIC Jonhon) Controlled by the same party
AVIC International Holdings (Zhuhai) Co. Ltd. (AVIC Zhuhai) Controlled by the same party
Guizhou HUAYANG Electronics Co. Ltd. Controlled by the same party
Zhuhai Pilot Composite Material Technology Co. Ltd. Controlled by the same party
Guangdong International Mansion Industrial Co. Ltd. (Guangdong International
Mansion) Controlled by the same party
Shenzhen Zhonghang Technology Checking & Measuring Institute (Shenzhen
ZHTCMI) Controlled by the same party
Shenyang Xinghua Aviation Electric Co. Ltd.（Shenyang Xinghua） Controlled by the same party
Shenzhen AVIC Changtai Investment Development Co. Ltd.（Avic Changtai） Controlled by the same party
AVIC China Aviation Futures Co. Ltd.（AVIC Futures） Controlled by the same party
Anhui AVIC Display Technology Co. Ltd（Anhui AVIC） Controlled by the same partyShenzhen Lingzhi Digital Technology Co. Ltd.（Shenzhen Lingzhi Digital Controlled by the same partyPage 108FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Name of other related parties RelationshipTechnology）
Shenzhen Aero-Fasteners MFG Co. Ltd.（Shenzhen Aero-Fasteners） Controlled by the same party
Castic-SMPMachinery Corp. Ltd.（Castic-SMPMachinery） Controlled by the same party
Company directors managers CFO and secretary of the board Key management member
5. Related party transactions
(1) Related transaction between subsidiaries and between parent company and
subsidiaries which are in the scope of consolidation have already been offset.
(2) Purchase good and receiving service
Related parties Related transaction Amount in current Amount in prior
content period period
CATIC Property Management Property management 11593446.00 11834156.05
Department store
Rainbow Company expenses/ Commodity 13276756.38 4184883.88
purchase
AVIC Jonhon Purchase of goods 242771.36 238755.07
Gongqingcheng CATIC Culture Departmental store
Investment Company expense 28667.09 25733.73
Grand Skylight Hotel
Management Company Purchase of goods 3855.65
Guangdong International
Mansion Property management 18157.71
Shenzhen ZHTCM Accept labour 6590.00
AVIC Xi’an Flight Automatic
Control Research Institute(AVIC Accept labour 179245.28
Xi’an Flight Institute)
Total 25141640.83 16491377.37
Notes: All amount listed above exclude tax
(3) Sale of goods and providing services
Related party Nature of Amount in current Amount in priortransaction period period
Gongqingcheng CATIC Culture
Investment Company Sale of product 293786.47 310404.70
Shennan Circuit Sale of material andproviding service 460.80 335070.20
AVIC Training Center Others 2725.66 2453.10
Rainbow Company Product and service 58044173.59 53197052.19
AVIC International Sale of product 7710.59
AVIC Jonhon Sale of product 500559.59 1252054.56
AVIC Zhuhai Sale of product 8800.00
CATIC Property Management Share of Utilitiesand management fee 3363663.82 3298502.35
Guizhou HUAYANG Electronics Sale of product 18814.16 87263.71
Page 109FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Co. Ltd.AVIC Huadong
PHOTOELECTRIC Sale of product 21238.94
Zhuhai Pilot Composite Material
Technology Co. Ltd. Sale of product 865256.63 1805929.20
Shenzhen Aero-Fasteners Sale of product 227747.79
Castic-SMPMachinery Sale of product 3960.18
Shenyang Xinghua Sale of product 464331.51
Anhui AVIC Sale of product 75504.42
Total 63868695.21 60318768.95
Notes: All amount listed above exclude tax
(4) Related party lease
1) The Company as lessor
Lessee Type of leased assets Recognized rental Recognized rental incomeincome in current year in prior year
CATIC Property Management Property 1811657.16 4947314.30
AVIC Securities Company Property 1411885.68 1411885.68
Rainbow Company Property 606792.94 437897.82
Total 3830335.78 6797097.80
2) The Company as lessee
Variable lease payments that
are not included in lease Rental payment Interest payment of leaseliabilities Addition of right-of-use asset
Lessor Type liabilities
Current
period Prior period
Current
period Prior period Current period Prior period
Current
period Prior period
Guangdong
International
Mansion Property 40527.84 3572.58 51030.81
Industrial Co.Ltd.CATIC Property
Management Property 59899.04 60513.53 501788.87 811476.76 6776.94 29337.67 489781.90 138708.90
Rainbow
Company Property 323382.81 417268.91 9642.03 14378.80 247505.55
Total 59899.04 60513.53 825171.68 1269273.51 16418.97 47289.05 489781.90 437245.26
(5) Related party fund lending and borrowing
Nil.
(6) Remuneration to key management
Item Amount in current period Amount in prior period
Remuneration to key management 14232500.00 15148600.00
Total 14232500.00 15148600.00
(7) Other related transactions
The year-end balance of the Company’s cash that is deposited with AVIC Finance Company
is RMB467743798.76. Interests received from the deposit during the year were RMB342896.12.Page 110FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
(8) Receivables from and payables to related parties
1) Receivables from related parties
Closing balance Opening balance
Item Related party Carrying Bad debt Carrying Bad debt
amount provision amount provision
Monetary
fund
AVIC Finance Company 467743798.76 271327031.83
Accounts
receivable
Gongqingcheng CATIC
Culture Investment 22684.75 832.29 27297.28 1364.88
Company
Shennan Circuit 7255.14 544.14
Rainbow Company 5973322.25 248095.43 3808470.31 219873.20
AVIC Jonhon 202712.86 12162.77 649797.16 48734.79
CATIC Property
183123.059156.15101672.005083.60
Management
Guizhou HUAYANG
21260.001275.6059528.004464.60
Electronics Co. Ltd.Zhuhai Pilot Composite
Material Technology Co. 1412045.00 105903.38
Ltd.AVIC Training Center 2772.00 207.90
Shenyang Xinghua 292370.58 17542.23
Anhui AVIC 15800.00 790.00
Bill
receivable
AVIC Jonhon 262429.22
Zhuhai Pilot Composite
Material Technology Co. 892185.99 44609.30
Ltd.Anhui AVIC 192339.42
Other
receivables
Gongqingcheng CATIC
Culture Investment 6500.00 325.00 6500.00 325.00
Company
Rainbow Company 143990.00 7199.50 123000.00 5300.00
AVIC 834903.00 43170.15 1055557.43 52777.87
Page 111FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
2）Payables to related parties
Item Related party Closing balance Opening balance
Accounts
payable
CATIC Property Management 32992.35 32992.35
AVIC Jonhon 391.96 19411.27
Other
payables:
Rainbow Company 1935611.93 108186.52
CATIC Property Management 1023487.21 2590116.05
AVIC Securities Company 247080.00 247080.00
Avic Changtai 4064.81
Advance
received
Rainbow Company 162324.03
AVIC Securities Company 123540.00
AVIC Futures 9435.48
XII.Share-based payments
1.General information about share-based payments
(1) Equity instrument
Category
of grant Granted during Exercised during Unlocked in current period Voided in current
recipients current period current period period
Quantity Amount Quantity Amount Quantity Amount Quantity Amount
Some of
the
company's
directors 3436710.00 3436710.00
supervisors
and core
cadres
合计3436710.003436710.00
(2) Stock options or other equity instruments issued and outstanding at the end of the
period
Nil.
2.Equity settled share-based payment
Method of determining fair value of equity
instrument on grant date Close price of share on grant date
Evidence to determine the number of Term of employee service status of target completion
exercisable equity instrument and personal performance assessment
Page 112FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Reasons for significant difference between
current period estimation and prior period Nil
estimation
Accumulated amount charged to capital reserve
for equity settled share-based payment 27909283.55
Total expenses for equity settled share-based
payment recognized in current period -4078998.50
3. Expenses for share-based payment recognized in current period
Expenses for equity
Category of grant recipients settled share-based Expenses for cash settled share-based
payment payment
Some of the company's
directors supervisors and core -4078998.50
cadres
XIII. Commitment and contingencies
1. Significant commitments
(1) Lease contract that already signed or prepared to fulfil and its financial effect
Refer to Note V.53 for details.
2. Contingencies on balance sheet date
The Company does not have material contingent events that need to be disclosed
XIV. Post balance sheet date events
1. Profit distribution
Profit distributions or dividends proposed Cash dividend of RMB4.00 (tax inclusive) forevery 10 shares held
2.Other events after the balance sheet date
(1) Financing and guarantee after the balance sheet date
1) On 12 March 2024 pursuant to approval by the 18th meeting of the 10th Board of directors the
Company proposed to apply for financing facility of no more than RMB1200 million by means of
credit pledge and mortgage in 2024. The resolution is pending for approval by the shareholder’s
meeting.
2) On 12 March 2024 pursuant to approval by the 18th meeting of the 10th Board of directors the
Company proposed to provide guarantee for the Company’s wholly-owned subsidiary to borrow from
banks of no more than RMB600 million in 2024. The credit line is included in the actual usage limit of
RMB1200 million mentioned above. The resolution is waiting approval from the shareholder’s
meeting.Page 113FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
(2) Others
As at 14 March 2024 the Company does not have other post-balance sheet events that need
to be disclosed.XV. Other material information
1. Segments
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.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.
2. Other material events
As at 31 December 2023 the Company does not have other significant matters that require to
disclose.XVI. Notes to the parent company’s financial statement
Note 1. Accounts receivables
1. Presented by aging
Aging Closing balance Opening balance
Within 1 year 1875782.07 635132.16
Over 1 year 23346.03
Subtotal 1899128.10 635132.16
Page 114FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Aging Closing balance Opening balance
Less: bad debt provision 76211.49 31916.13
Total 1822916.61 603216.03
2. Presentation by method of providing bad debt
Closing balance
Category Carrying amount Bad debt provision
Percentage Book valueAmount (%) Amount
ECL rate
(%)
Accounts receivable that
provided expected credit
losses on single basis
Accounts receivable that
provided expected credit 1899128.10 100.00 76211.49 4.01 1822916.61
losses on portfolio basis`
Including: Receivable from
other customers 1898159.02 99.95 76211.49 4.02 1821947.53
Including: Related party in
scope of consolidation 969.08 0.05 969.08
Total 1899128.10 100.00 76211.49 1822916.61
Continued
Opening balance
Category Carrying amount Bad debt provision
Book value
Amount Percentage ECL rate(%) Amount (%)
Accounts receivable that
provided expected credit
losses on single basis
Accounts receivable that
provided expected credit 635132.16 100.00 31916.13 5.03 603216.03
losses on portfolio basis`
Including: Receivable from
other customers 635132.16 100.00 31916.13 5.03 603216.03
Including: Related party in
scope of consolidation
Total 635132.16 100.00 31916.13 603216.03
3. In the portfolio accounts receivable with expected credit loss provided based on
credit risk characteristic portfolio
(1) Portfolio of receivable from other customer
Closing balance
Aging
Carrying amount Bad debt provision ECL rate (%)
Within 1 year 1874812.99 73876.89 3.94
1 - 2 years 23346.03 2334.60 10.00
Total 1898159.02 76211.49 4.02
4. Movements of provision during the period
Category Opening Movements during the period Closing
balance balance
Page 115FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Accrual Recovered or Otherreversed Written-off movements
Accounts receivable
that provided
expected credit 85000.00 85000.00
losses on single
basis
Accounts receivable
that provided
expected credit 31916.13 44295.36 76211.49
losses on portfolio
basis`
Including:
Receivable from 31916.13 44295.36 76211.49
other customers
Total 31916.13 129295.36 85000.00 76211.49
5. No actual write-off of accounts receivable during the current period.
6. Top 5 receivable accounts
Proportion in
total closing
Name Closing balance balance of Bad debt provision
accounts
receivable (%)
Top 5 receivables accounts in total 1301233.17 68.52 66197.12
Total 1301233.17 68.52 66197.12
Note 2. Other receivables
1．Presentation of other receivables by aging
Aging Closing balance Opening balance
Within 1 year 614472373.93 839808164.17
1 - 2 years 81857231.39
2- 3 years
Over 3 years 40050.00 40050.00
Subtotal 696369655.32 839848214.17
Less: bad debt provision 41235.47 65671.10
Total 696328419.85 839782543.07
2．Presented by nature
Nature Closing balance Opening balance
Related party in scope of
consolidation 696041965.52 839174096.87
Security deposit 49581.90 537615.90
Petty cash 24542.88
Others 278107.90 111958.52
Page 116FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Nature Closing balance Opening balance
Total 696369655.32 839848214.17
Less: bad debt provision 41235.47 65671.10
Total 696328419.85 839782543.07
3．Presented according to three stages of financial assets impairment
Closing balance Opening balance
Item Carrying Bad debt Bad debt
Book value Carrying amount Book value
amount provision provision
First stage 696369655.32 41235.47 696328419.85 839848214.17 65671.10 839782543.07
Second stage
Third stage
Total 696369655.32 41235.47 696328419.85 839848214.17 65671.10 839782543.07
4．Presented by bad debt provision method
Closing balance
Category Carrying amount Bad debt provision Book value
Amount Percentage ECL rate(%) Amount (%)
Other receivables that provided expected
credit losses on single basis
Other receivables that provided expected
credit losses on portfolio basis 696369655.32 100.00 41235.47 0.01 696328419.85
Including: Security deposit portfolio 49581.90 0.01 40526.60 81.74 9055.30
Petty cash portfolio
Social security payment on-behalf
portfolio 263930.39 0.04 263930.39
Receivables from related parties
within scope of consolidation 696041965.52 99.95 696041965.52
Portfolio of others 14177.51 708.87 5.00 13468.64
Total 696369655.32 100.00 41235.47 696328419.85
Continued
Opening balance
Category Carrying amount Bad debt provision
Percentage ECL rate Book valueAmount (%) Amount (%)
Other receivables that provided expected
credit losses on single basis
Other receivables that provided expected
credit losses on portfolio basis 839848214.17 100.00 65671.10 0.01 839782543.07
Including: Security deposit portfolio 537615.90 0.06 64928.30 12.08 472687.60
Petty cash portfolio 24542.88 0.01 24542.88
Social security payment on-behalf
portfolio 97102.57 0.01 97102.57
Page 117FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Opening balance
Category Carrying amount Bad debt provision
Book value
Amount Percentage ECL rate(%) Amount (%)
Receivables from related parties
within scope of consolidation 839174096.87 99.92 839174096.87
Portfolio of others 14855.95 0.00 742.80 5.00 14113.15
Total 839848214.17 100.00 65671.10 0.01 839782543.07
5．In the portfolio other receivables with expected credit loss provided based on credit
risk characteristic portfolio
(1) Security deposit portfolio
Closing balance
Aging
Carrying amount Bad debt provision ECL rate (%)
Within 1 year
1 - 2 years 9531.90 476.60 5.00
2- 3 years
Over 3 years 40050.00 40050.00 100.00
Total 49581.90 40526.60
(2) Social security payment on-behalf portfolio
Closing balance
Aging
Carrying amount Bad debt provision ECL rate (%)
Within 1 year 263930.39
Total 263930.39
(3) Receivables from related parties within scope of consolidation
Closing balance
Aging
Carrying amount Bad debt provision ECL rate (%)
Within 1 year 696041965.52
Total 696041965.52
(4) Portfolio of others
Closing balance
Aging
Carrying amount Bad debt provision ECL rate (%)
Within 1 year 14177.51 708.87 5.00
Total 14177.51 708.87 5.00
6．Bad debt provision status
Page 118FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
First stage Second stage Third stage
Bad debt provision Expected credit
Lifetime expected Lifetime expected
losses over the next credit losses (no credit losses (credit
Total
12 months credit impairment impairmentoccurred) occurred)
Opening balance 65671.10 65671.10
Opening balance
movements in current
period
—Transfer into the
second stage
—Transfer into the
third stage
—Reverse back to
the second stage
—Reverse back to
the first stage
Accrual during the
period
Reversed during the
period -24435.63 -24435.63
Recovered during the
period
Written-off during the
period
Other movements
Closing balance 41235.47 41235.47
7．No other receivables were written-off during the period.
8．Top 5 other receivable accounts
Proportion to
Name closing balance of Bad debt provisionClosing balance
other receivables Closing balance
(%)
Top 5 other receivables in total 696041965.52 99.95
Total 696041965.52 99.95
Note 3. Long-term equity investment
Closing balance Opening balance
Nature
Carrying amount Provision Book value Carrying amount Provision Book value
Investment in
1581179108.811581179108.811494128399.601494128399.60
subsidiaries
Investment in
associates 51862607.30 51862607.30 58182086.90 58182086.90
Total 1633041716.11 1633041716.11 1552310486.50 1552310486.50
1．Investment in subsidiaries
Page 119FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Provisio
n Closing
Addition/new balance
Investee Opening Closing accruedbalance investment Withdrawn balance in of
current provisio
period n
Shenzhen Harmony World
Watch Center Co. 610354397.34 1058906.51 609295490.83
Shenzhen Harmony
E-commerce Co. Ltd. 11684484.39 11684484.39
Shenzhen FIYTA Precision
Technology Co. Ltd. 102482069.76 80000000.00 437608.56 182044461.20
Shenzhen FIYTATechnology
Development Co. Ltd. 51224974.98 162083.31 51062891.67
FIYTA (Hong Kong) Ltd. 137737520.00 137737520.00
TEMPORAL (Shenzhen) Co.Ltd. 5000000.00 5000000.00
FIYTA Sales Co. Ltd. 458083251.89 1090795.72 456992456.17
Liaoning Hengdarui
Commercial & Trade Co. 36867843.96 36867843.96
Ltd.Emile Choureit Timing
(Shenzhen) Ltd. 80693857.28 199896.69 80493960.59
HARMONYWorld Watch
Center(Hainan) Co. Ltd. 10000000.00 10000000.00
Total 1494128399.60 90000000.00 2949290.79 1581179108.81
2．Investment in associates
Movements in current period
Investment gain
Investee Opening balance Addition/new
investment Withdrawn recognized Adjustment tounder equity OCI
method
Associates
Shanghai Watch 58182086.90 -5819479.60
Continued
Movements in current period
Cash dividends Closing
Investee Other equity declared or Impairment Closing balance balance of
movements distribution of provision Others provision
profit accrual
Associates
Shanghai Watch -500000.00 51862607.30
Note 4. Operating income and operating cost
Amount in current period Amount in prior period
Item
Revenue Cost Revenue Cost
Main business 177350230.18 49729440.87 148557095.50 41765441.70
Other business 3524696.56 6727705.55
Page 120FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Item Amount in current period Amount in prior period
Total 180874926.74 49729440.87 155284801.05 41765441.70
Note 5. Investment gain
Item Amount in currentperiod Amount in prior period
Gain from long-term equity investments accounted for
using equity method -5819479.60 3026481.59
Gain from long-term equity investments accounted for
using cost method 198000000.00 240595696.70
Total 192180520.40 243622178.29
XVII. Supplementary information
1. Details of non-recurring gain or loss for the year
Item Amount Note
Disposal gain or loss of non-current assets，including elimination ofprovision for impairment of assets 685868.57
Government grants included in current profit or loss (except for the fixed
or quantitative government grants enjoyed in a consecutive way which
closely related to the enterprise businesses and according to nation 8665506.85
policies)
Except for effective hedging business related to normal operating
business profit and loss from changes in fair value incurred in financial
assets and financial liabilities and the investment gain from disposal of
financial assets financial liabilities and available-for-sale financial assets
Charges for the possessions of funds collected from non-monetary
enterprises
Profit and loss from entrusting others to invest or manage assets
Asset impairment provision accrued due to force majeure such as natural
disasters
Impairment provision reversal of accounts receivable under standalone
impairment test 7570975.54
Gain from investment in subsidiaries joint venture and cooperative
enterprises when cost of investment is less than the profit incurred in
identifiable net asset fair value of invested unit when investment
Current net profit and loss of subsidiaries from business combination
under common control from the opening period to combination date
Profit and loss of non-monetary assets exchange
Profit and loss of debt restructuring
Enterprise restructuring expenses such as expenses for arranging
employees integrating cost
One-time effect on current period's profit or loss due to adjustments in
tax accounting and other laws and regulations
Overridden approval or without official approval document or incidental
tax return or exemption
For cash-settled share-based payments gains and losses arising from
changes in the fair value of employee compensation payable after the date
of exercise of options
Profit and loss incurred in fair value change of investment property
subsequently measured in fair value mode
Profit and loss over fair value part accrued in transactions of unreasonable
transaction price
Profit and loss incurred contingent matters unrelated to normal operating
business
Income from trustee fee obtained by trusting operation
Page 121FIYTAPrecision Technology Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2023
Item Amount Note
Other non-operating income and expenses other than the above items 3910736.70
Profit and loss items pursuant to the definition of non-recurring profit and
loss
Less：Effect of income tax of non-recurring profit or loss 4461193.42
Effect of non-recurring profit or losses attributable to minority
shareholders (after tax)
Total 16371894.24
2. Return on Equity (ROE) and Earnings per share (EPS)
EPS
Profit of the reporting period Weighted average ROE % Basic EPS Diluted EPS
Net profit attributable to ordinary
shareholders of the Company 10.28 0.8082 0.8075
Net profit attributable to ordinary
shareholders of the Company after 9.77 0.7685 0.7678
deducting non-recurring profit or loss
FIYTAPrecision Technology Co. Ltd.Board of Directors
14 March 2024
Page 122
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