FIYTA Precision Technology Co. Ltd.2024 Semi-annual
Financial Report
1I. Audit Report
Whether the semi-annual report has been audited
No
2. Financial statements
The unit of the financial statements in the notes is RMB
1. Consolidated balance sheet
Prepared by: FIYTA Precision Technology Co. Ltd.June 30 2024
Unit: RMB
Item Ending Balance Opening balance
Current assets:
Cash and bank balances 404356009.13 504629153.71
Deposit reservation for balance
Lending funds
Trading financial assets
Derivative financial assets
Notes receivable 16338392.31 18268972.37
Accounts receivable 355483465.81 323142761.64
Receivables financing
Prepayment 6569774.50 6571239.98
Premiums receivable
Cession premiums receivable
Provision of cession receivable
Other receivables 59436540.53 57725792.00
Including: Interest receivable
Dividend receivable
Redemptory monetary capital for
sale
Inventories 2128331242.49 2100666175.28
Including: Data resources
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 89039020.97 72249391.81
Total current assets 3059554445.74 3083253486.79
Non-current assets:
Loans and advances offered
Debt investment
2Other debt investment
Long-term receivables
Long-term equity investments 51952479.36 51862607.30
Other equity instrument
investments
Other non-current financial assets
Investment properties 352408837.92 360255832.14
Fixed assets 345651268.72 355785354.68
Construction in progress
Productive biological assets
Oil and gas assets
Right-of-use assets 109386646.99 109452481.64
Intangible assets 30848580.73 31664380.77
Including: Data resources
Development expenditures
Including: Data resources
Goodwill
Long-term prepaid expenses 120110202.46 122324355.13
Deferred income tax assets 75893868.97 80227771.46
Other non-current assets 2185332.57 9434627.17
Total non-current assets 1088437217.72 1121007410.29
Total assets 4147991663.46 4204260897.08
Current liabilities:
Short-term loans 320207333.32 250187763.87
Borrowing from the central bank
Borrowed funds
Trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 131372308.62 173825907.71
Advances from customer 8242987.93 10267758.31
Contract liabilities 18804742.85 12286243.62
Financial assets sold for
repurchase
Deposits from customers and
interbank
Receivings from vicariously traded
securities
Funds received as stock
underwrite
Employee benefits payable 73285559.36 120084810.60
Taxes payable 52552871.74 64188161.31
Other payables 110793067.03 121937801.07
Including: Interest payable
3Dividend payable 2907796.73 2058352.24
Service charges and commissions
payable
Cession premiums payable
Liabilities held for sale
Non-current liabilities due within
69943530.9566399004.20
one year
Other current liabilities 2078002.76 1589635.30
Total current liabilities 787280404.56 820767085.99
Non-current liabilities:
Insurance contract reserve
Long-term loans
Bonds payable
Including: preferred stock
Perpetual bonds
Lease liabilities 38967635.39 43526352.52
Long-term payables
Long-term employee benefits
payable
Estimated liabilities
Deferred income 952785.69 952785.69
Deferred tax liability 5462841.29 5208920.69
Other non-current liabilities
Total non-current liabilities 45383262.37 49688058.90
Total liabilities 832663666.93 870455144.89
Owner's equity:
Share capital 405864207.00 415219970.00
Other equity instruments
Including: preferred stock
Perpetual bonds
Capital reserve 936080193.96 990159033.17
Less: treasury stock 13445814.81 78645532.23
Other comprehensive income 13747808.17 19325335.93
Special reserve 3765015.42 3223158.06
Surplus reserves 275010401.50 275010401.50
General risk provisions
Undistributed profits 1694306185.29 1709513385.76
Total equity attributable to the owner
3315327996.533333805752.19
of the parent company
Minority interests
Total owner's equity 3315327996.53 3333805752.19
Total liabilities and owner's equity 4147991663.46 4204260897.08
Legal Representative: Zhang Xuhua CFO: Song Yaoming Financial Manager: Tian Hui
2. Balance Sheet of parent company
Unit: RMB
4Item Ending Balance Opening balance
Current assets:
Cash and bank balances 309352375.23 308230255.35
Trading financial assets
Derivative financial assets
Notes receivable
Accounts receivable 11175784.69 1822916.61
Receivables financing
Prepayment
Other receivables 646226304.77 696328419.85
Including: Interest receivable
Dividend receivable
Inventories 44792.57
Including: Data resources
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 13231838.08 15886769.82
Total current assets 980031095.34 1022268361.63
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investments 1633784801.52 1633041716.11
Other equity instrument
investments
Other non-current financial assets
Investment properties 287220334.04 293695692.68
Fixed assets 202865789.95 207209890.94
Construction in progress
Productive biological assets
Oil and gas assets
Right-of-use assets
Intangible assets 22875581.52 23460211.70
Including: Data resources
Development expenditures
Including: Data resources
Goodwill
Long-term prepaid expenses 3934381.48 4795846.73
Deferred income tax assets 834088.92 640783.05
Other non-current assets 1106563.00 710807.49
Total non-current assets 2152621540.43 2163554948.70
5Total assets 3132652635.77 3185823310.33
Current liabilities:
Short-term loans 320207333.32 250187763.87
Trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 3325588.05 2285657.88
Advances from customer 8242987.93 10267758.31
Contract liabilities
Employee benefits payable 17686842.19 25886702.67
Taxes payable 3322230.50 3322241.54
Other payables 257308884.44 224668548.77
Including: Interest payable
Dividend payable
Liabilities held for sale
Non-current liabilities due within
one year
Other current liabilities
Total current liabilities 610093866.43 516618673.04
Non-current liabilities:
Long-term loans
Bonds payable
Including: preferred stock
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits
payable
Estimated liabilities
Deferred income 952785.69 952785.69
Deferred tax liability
Other non-current liabilities
Total non-current liabilities 952785.69 952785.69
Total liabilities 611046652.12 517571458.73
Owner's equity:
Share capital 405864207.00 415219970.00
Other equity instruments
Including: preferred stock
Perpetual bonds
Capital reserve 938958689.77 993037528.98
Less: treasury stock 13445814.81 78645532.23
Other comprehensive income
Special reserve
Surplus reserves 275010401.50 275010401.50
Undistributed profits 915218500.19 1063629483.35
Total owner's equity 2521605983.65 2668251851.60
6Total liabilities and owner's equity 3132652635.77 3185823310.33
Legal Representative: Zhang Xuhua CFO: Song Yaoming Financial Manager: Tian Hui
3. Consolidated income statement
Unit: RMB
Item Semi-annual 2024 Semi-annual 2023
I. Total operating income 2076397911.32 2364505262.56
Including: Operating revenue 2076397911.32 2364505262.56
Interest income
Premiums earned
Income from service
charges and commissions
II. Total operating cost 1892890643.96 2129534984.07
Including: Operating costs 1304482455.55 1512527481.83
Interest expense
Expenditures of service
charges and commissions
Surrender value
Net payments for insurance
claims
Withdrawal of net provision
for insurance contracts
Expenditure of policy
dividend
Reinsurance costs
Taxes and surcharges 12260457.55 15762456.07
Selling and Distribution
449785002.40456273629.20
Expenses
General and Administrative
89213932.54104621729.61
Expenses
R&D Expenditures 27525998.33 28161470.54
Financial expenses 9622797.59 12188216.82
Including: interest
5169603.476690859.35
expenses
Interest income 2185535.51 2432180.03
Plus: other income 3103884.50 6691609.41
Investment income ("-" for
313834.17-1697481.65
losses)
Including: income from
investment in associates and joint 89872.06 -1697481.65
ventures
Gains from
derecognition of financial assets
measured at amortized cost
Foreign exchange gains ("-"
for losses)
7Net exposure hedging income
("-" for losses)
Gains from changes in fair
value ("-" for losses)
Credit impairment losses ("-"
2724678.434333947.62
for losses)
Asset impairment losses ("-"
28336.82
for losses)
Asset disposal income ("-" for
2906210.67-76689.73
losses)
3. Operating profits ("-" for losses) 192584211.95 244221664.14
Plus: non-operating revenue 1378138.85 596523.83
Less: non-operating expenses 278833.35 291601.18
4. Total profits ("-" for total losses) 193683517.45 244526586.79
Less: income tax expenses 46545035.11 57131519.56
5. Net profits ("-" for net losses) 147138482.34 187395067.23
(I) Classified by business continuity
1. Net profit from continuing
147138482.34187395067.23
operations ("-" for net losses)
2. Net profit from discontinued
operations ("-" for net losses)
(II) Classified by ownership
1. Net profit attributable to
shareholders of the parent company 147138482.34 187395067.23
("-" for net losses)
2. Minority interest income ("-"
for net losses)
VI. Net of tax from other
-5577527.769405009.07
comprehensive income
Net amount of other
comprehensive income after tax
-5577527.769405009.07
attributable to owners of the parent
company
(I) Other comprehensive
incomes that cannot be reclassified
into profit and loss
1. Changes in re-
measurement of the defined benefit
plan
2. Other comprehensive
income that cannot be transferred to
profit or loss under the equity method
3. Changes in fair value of
other equity instrument investments
4. Changes in fair value of
enterprise's own credit risk
5. Other
(II) Other comprehensive income
that can be re-classified into profit -5577527.76 9405009.07
and loss
1. Other comprehensive
income that can be carried forward to
profit and loss under the equity
method
82. Changes in fair value of
other debt investments
3. The amount of financial
assets reclassified and included in
other comprehensive income
4. Credit impairment reserves
of other debt investment
5. Cash flow hedge reserve
6. Translation difference of
-5577527.769405009.07
foreign currency financial statements
7. Other
Net of tax from other
comprehensive income attributable to
minority shareholders
VII. Total comprehensive income 141560954.58 196800076.30
Total comprehensive income
attributable to owners of the parent 141560954.58 196800076.30
company
Total comprehensive income
attributable to minority shareholders
VIII. Earnings per share:
(I) Basic earnings per share 0.3568 0.4517
(II) Diluted earnings per share 0.3564 0.4517
Legal Representative: Zhang Xuhua CFO: Song Yaoming Financial Manager: Tian Hui
4. Profit Statement of Parent Company
Unit: RMB
Item Semi-annual 2024 Semi-annual 2023
I. Operating revenue 95651893.86 92042875.14
Less: operating cost 28763610.04 22121058.14
Taxes and surcharges 3754920.70 3858296.21
Selling and Distribution
13488147.65510613.70
Expenses
General and Administrative
27338182.1829511087.70
Expenses
R&D Expenditures 6949411.52 5986203.21
Financial expenses -888010.29 -103859.98
Including: interest expenses 305742.86 1476552.70
Interest income 1605624.26 1953770.61
Plus: other income 194361.73 753278.99
Investment income ("-" for
89872.06-1697481.65
losses)
Including: income from
investment in associates and joint 89872.06 -1697481.65
ventures
Gains from
derecognition of financial assets
measured at amortized cost ("-" for
losses)
Net exposure hedging income
9("-" for losses)
Gains from changes in fair
value ("-" for losses)
Credit impairment losses ("-"
-520369.57-362763.81
for losses)
Asset impairment losses ("-"
for losses)
Asset disposal income ("-" for
2920369.62-37783.55
losses)
2. Operating profits ("-" for losses) 18929865.90 28814726.14
Plus: non-operating revenue 973.45 8037.20
Less: non-operating expenses 334515.20 837.18
3. Total profits ("-" for total losses) 18596324.15 28821926.16
Less: income tax expenses 4661624.51 8154082.65
4. Net profits ("-" for net losses) 13934699.64 20667843.51
(1) Net profit from continuing
13934699.6420667843.51
operations ("-" for net losses)
(2) Net profit from discontinued
operations ("-" for net losses)
V. Net of tax of other comprehensive
income
(I) Other comprehensive
incomes that cannot be reclassified
into profit and loss
1. Changes in re-
measurement of the defined benefit
plan
2. Other comprehensive
income that cannot be transferred to
profit or loss under the equity method
3. Changes in fair value of
other equity instrument investments
4. Changes in fair value of
enterprise's own credit risk
5. Other
(II) Other comprehensive income
that can be re-classified into profit
and loss
1. Other comprehensive
income that can be carried forward to
profit and loss under the equity
method
2. Changes in fair value of
other debt investments
3. The amount of financial
assets reclassified and included in
other comprehensive income
4. Credit impairment reserves
of other debt investment
5. Cash flow hedge reserve
6. Translation difference of
foreign currency financial statements
7. Other
VI. Total comprehensive income 13934699.64 20667843.51
10VII. Earnings per share:
(I) Basic earnings per share
(II) Diluted earnings per share
Legal Representative: Zhang Xuhua CFO: Song Yaoming Financial Manager: Tian Hui
5. Consolidated Cash Flow Statement
Unit: RMB
Item Semi-annual 2024 Semi-annual 2023
I. Cash flows from operating
activities:
Cash received from sale of goods
2242943860.282544494031.57
and rendering of services
Net increase in deposits from
customers and interbank
Net increase in borrowings from
the central bank
Net increase in funds borrowed
from other financial institutions
Cash received for premiums under
the original insurance contract
Net cash received from
reinsurance business
Net increase in deposits from the
insured and investment funds
Cash received for interest service
charges and commissions
Net increase in borrowed funds
Net increase in funds of
repurchasing business
Net cash received from vicariously
traded securities
Refund of taxes and surcharges 1361806.68 850371.86
Cash received from other
22763002.9537298851.19
operating activities
Sub-total of cash inflow from
2267068669.912582643254.62
operating activities
Cash paid for purchase of goods
1493308339.251584272785.87
and rendering of services
Net increase in loans and
advances to customers
Net increase in deposits in the
central bank and deposits from
interbank
Cash paid for the compensation
under the original insurance contract
Net increase in lending funds
Cash paid for interest service
charges and commissions
Cash paid for policy dividends
Cash paid to and for employees 336053098.67 336029420.86
Taxes and fees paid 115761812.75 135231581.42
11Other cash payments relating to
185414622.72182449622.85
operating activities
Sub-total of cash outflow from
2130537873.392237983411.00
operating activities
Net Cash Flows from Operating
136530796.52344659843.62
Activities
II. Cash flows from investing
activities:
Cash received from disinvestment
Cash received from investment
196270.19
income
Net cash received from disposal of
fixed assets intangible assets and 4813262.87 3545.41
other long-term assets
Net cash received from disposal of
subsidiaries and other business units
Cash received from other investing
120049969.61
activities
Sub-total of cash inflow from
125059502.673545.41
investing activities
Cash paid to acquire and construct
fixed assets intangible assets and 43613301.74 36273631.65
other long-term assets
Cash paid for investments
Net increase in pledged loans
Net cash paid to acquire
subsidiaries and other business units
Cash paid for other investing
165092806.07
activities
Sub-total of cash outflow from
208706107.8136273631.65
investing activities
Net cash flows from operating
-83646605.14-36270086.24
activities
III. Cash flows from financing
activities:
Cash received from investors
Including: Cash received from the
investment of minority shareholders
of the subsidiaries
Cash received from borrowings 320000000.00 250000000.00
Cash received from other financing
activities
Sub-total of cash inflow from
320000000.00250000000.00
financing activities
Cash paid for debt repayments 250000000.00 150000000.00
Cash paid for distribution of
dividends and profits or payment of 164868413.68 110259489.52
interest
Including: Dividends and profits
paid by subsidiaries to minority
shareholders
Cash paid for other financing
58254091.9892370343.32
activities
Sub-total of cash flows from financing
473122505.66352629832.84
activities
Net cash flows from financing -153122505.66 -102629832.84
12activities
IV. Effect of exchange rate changes
-34830.30-138593.06
on cash and cash equivalents
V. Net increase in cash and cash
-100273144.58205621331.48
equivalents
Add: opening balance of cash and
504629153.71313747463.64
cash equivalents
VI. Closing balance of cash and cash
404356009.13519368795.12
equivalents
Legal Representative: Zhang Xuhua CFO: Song Yaoming Financial Manager: Tian Hui
6. Cash Flow Statement of Parent Company
Unit: RMB
Item Semi-annual 2024 Semi-annual 2023
I. Cash flows from operating
activities:
Cash received from sale of goods
92269424.3884192699.46
and rendering of services
Refund of taxes and surcharges
Cash received from other
1967128778.522141372420.70
operating activities
Sub-total of cash inflow from
2059398202.902225565120.16
operating activities
Cash paid for purchase of goods
9782620.00
and rendering of services
Cash paid to and for employees 44398658.47 29190598.81
Taxes and fees paid 12856580.23 5480282.08
Other cash payments relating to
1899095301.142002201028.42
operating activities
Sub-total of cash outflow from
1966133159.842036871909.31
operating activities
Net Cash Flows from Operating
93265043.06188693210.85
Activities
II. Cash flows from investing
activities:
Cash received from disinvestment
Cash received from investment
income
Net cash received from disposal of
fixed assets intangible assets and 4741325.47 200.00
other long-term assets
Net cash received from disposal of
subsidiaries and other business units
Cash received from other investing
activities
Sub-total of cash inflow from
4741325.47200.00
investing activities
Cash paid to acquire and construct
fixed assets intangible assets and 1946698.06 4515871.59
other long-term assets
Cash paid for investments
Net cash paid to acquire
subsidiaries and other business units
Cash paid for other investing
activities
13Sub-total of cash outflow from
1946698.064515871.59
investing activities
Net cash flows from operating
2794627.41-4515671.59
activities
III. Cash flows from financing
activities:
Cash received from investors
Cash received from borrowings 320000000.00 250000000.00
Cash received from other financing
activities
Sub-total of cash inflow from
320000000.00250000000.00
financing activities
Cash paid for debt repayments 250000000.00 150000000.00
Cash paid for distribution of
dividends and profits or payment of 164868413.68 110259489.52
interest
Cash paid for other financing
79409.9135483644.86
activities
Sub-total of cash flows from financing
414947823.59295743134.38
activities
Net cash flows from financing
-94947823.59-45743134.38
activities
IV. Effect of exchange rate changes
10273.00109517.02
on cash and cash equivalents
V. Net increase in cash and cash
1122119.88138543921.90
equivalents
Add: opening balance of cash and
308230255.35274691023.16
cash equivalents
VI. Closing balance of cash and cash
309352375.23413234945.06
equivalents
Legal Representative: Zhang Xuhua CFO: Song Yaoming Financial Manager: Tian Hui
7. Consolidated Statement of Changes in Owner’s Equity
Amount in current period
Unit: RMB
Semi-annual 2024
Equity attributable to owners of the parent company
Other equity Oth Tot
instruments Les er Gen Und Min
Cap Spe Sur al
Item Sha s: com eral istri ority
Pref Per ital cial plus Sub ownre trea pre risk but Oth inte
capi erre pet
res res res - er's
Oth sury hen pro ed er
rest
tal d ual
erv erv erv total s equi
er stoc sive visi prof
stoc bon e e es ty k inco ons its
k ds me
173333
1. Balance 415 990 78 19 275
32093333
at the end 21 15 645 325 01
23513805805
of the 99 90 53 33 04
158387575
previous 70. 33. 2.2 5.9 01..065.72.12.1
year 00 17 3 3 50
699
Add:
Change in
14accounting
policy
Co
rrection of
previous
errors
Ot
her
173333
2. Balance 415 990 78 19 275
32093333
at the 21 15 645 325 01
23513805805
beginning of 99 90 53 33 04
158387575
the current 70. 33. 2.2 5.9 01..065.72.12.1
year 00 17 3 3 50
699
3. Changes
in - - - - -
--
increase/de 54 65 541 15 18 18
9355
crease in 078 199 85 207 477 477
5577
the current 83 71 7.3 20 75 75
763527
period ("-" 9.2 7.4 6 0.4 5.6 5.6.00.76
for 1 2 7 6 6
decrease)
-147141141
(I) Total 55 13 56 56
comprehen 77 84 09 09
sive income 527 82. 54. 54..76345858
(II) - -
-
Contribution 54 65 17 17
93
and 078 199 65 65
55
withdrawal 83 71 115 115
763
of capital by 9.2 7.4 .21 .21.00
owners 1 2
--
-
1. Common 54 64
93
stock 984 340
55
contributed 90 66
763
by owners 6.4 9.4.00
22
2. Capital
invested by
holders of
other equity
instruments
3. Share-
-
based 906 17 17
859
payment 06 65 65
04
recognized 7.2 115 115
8.0
in owners' 1 .21 .21
0
equity
4. Others
---
(III) Profit 162 162 162
distribution 34 34 34
565656
1582.82.82.
818181
1.
Withdrawal
of surplus
reserve
2.
Withdrawal
of general
risk
reserves
3.---
Distribution 162 162 162
to owners 34 34 34
(or 56 56 56
shareholder 82. 82. 82.s) 81 81 81
4. Others
(4) Internal
carry-
forward of
owners'
equity
1. Capital
reserve
transferred
to paid-in
capital (or
share
capital)
2. Surplus
reserve
transferred
to paid-in
capital (or
share
capital)
3. Surplus
reserve
offsetting
losses
4. Changes
in defined
benefit
plans
carried
forward to
retained
earnings
5. Other
comprehen
sive income
transferred
to retained
16earnings
6. Others
541541541
(V) Special 85 85 85
reserves 7.3 7.3 7.3
666
1.
760760760
Withdrawal
555555
in the
6.46.46.4
current
000
period
---
2. Utilization
218218218
in the
696969
current
9.09.09.0
period
444
(VI) Others
163333
4. Balance 405 936 13 13 275
37941515
at the end 86 08 445 747 01
65306327327
of the 42 01 81 80 04
015189999
current 07. 93. 4.8 8.1 01..425.26.56.5
period 00 96 1 7 50
933
Amount Last Year
Unit: RMB
Semi-annual 2023
Equity attributable to owners of the parent company
Other equity Oth Tot
instruments Les er Gen Und Min
Cap Spe Sur al
Item Sha s: com eral istri ority
ital cial plus Sub own
re Pref Per trea pre risk but Oth inte
erre pet res res res - er's capi Oth sury hen pro ed er rest
d ual erv erv erv total equital er stoc sive visi prof s
stoc bon e e es ty k inco ons its
k ds me
10143131
1. Balance 417 50 275
075720793636
at the end 62 759 01
0863912706423423
of the 79 80 04
64589064634949
previous 60. 6.1 01.
3.4.89.918.52.12.1
year 00 6 50
8355
Add:
Change in
accounting
policy
Co
rrection of
previous
errors
Ot
her
2. Balance 417 10 50 57 20 275 14 31 31
at the 62 07 759 39 12 01 79 36 36
17beginning of 79 086 80 589 064 04 706 423 423
the current 60. 64 6.1 .89 .91 01. 63 49 49
year 00 3.4 6 50 8.5 2.1 2.1
8355
3. Changes
in
--839393
increase/de 94 735
3736237275275
crease in 05 19
3230292525
the current 009 8.0
3360885.24.34.3
period ("-" .07 9.52.51388
for
decrease)
187196196
94
(I) Total 39 80 80
05
comprehen 50 00 00
009
sive income 67. 76. 76..07
233030
(II)
----
Contribution
3736102102
and
32302424
withdrawal
3360888.08.0
of capital by.52.5111
owners
--
17
1. Common 17 17
007
stock 007 007
83
contributed 83 83
0.7
by owners 0.7 0.7
0
00
2. Capital
invested by
holders of
other equity
instruments
3. Share- -
-1616
based 20
37908908
payment 637
293131
recognized 91
6027.17.1
in owners' 9.2.1100
equity 1
---
272727
4. Others
34.34.34.
414141
---
104104104
(III) Profit 15 15 15
distribution 77 77 77
72.72.72.
000000
1.
Withdrawal
of surplus
reserve
2.
Withdrawal
18of general
risk
reserves
3.---
Distribution 104 104 104
to owners 15 15 15
(or 77 77 77
shareholder 72. 72. 72.s) 00 00 00
4. Others
(4) Internal
carry-
forward of
owners'
equity
1. Capital
reserve
transferred
to paid-in
capital (or
share
capital)
2. Surplus
reserve
transferred
to paid-in
capital (or
share
capital)
3. Surplus
reserve
offsetting
losses
4. Changes
in defined
benefit
plans
carried
forward to
retained
earnings
5. Other
comprehen
sive income
transferred
to retained
earnings
6. Others
735735735
(V) Special 19 19 19
reserves 8.0 8.0 8.0
999
1.816816816
Withdrawal 61 61 61
19in the 8.9 8.9 8.9
current 2 2 2
period
2. Utilization - - -
in the 81 81 81
current 420 420 420
period .83 .83 .83
(VI) Others
10153232
4. Balance 417 47 15 275
0327622929
at the end 62 129 144 01
35447943698698
of the 79 71 59 04
30263937474
current 60. 7.6 8.9 01.
6.9.003.76.56.5
period 00 5 6 50
6633
Legal Representative: Zhang Xuhua CFO: Song Yaoming Financial Manager: Tian Hui
8. Variation of equity attributable to owners of the parent company
Amount in current period
Unit: RMB
Semi-annual 2024
Other equity Other
instruments UndisCapit Less: comp Speci Surpl Total
Item Share tributal treas rehen al us owne
capita PerpePrefe ed Other
tual reser ury sive reser reser r's l rred Other profit
bond ve stock incom ve ves equity
stock s
s e
1. Balance
10632668
at the end 4152 9930 7864 2750
629251
of the 1997 3752 5532 1040
483.3851.6
previous 0.00 8.98 .23 1.50
50
year
Add:
Change in
accounting
policy
Co
rrection of
previous
errors
Ot
her
2. Balance
10632668
at the 4152 9930 7864 2750
629251
beginning of 1997 3752 5532 1040
483.3851.6
the current 0.00 8.98 .23 1.50
50
year
3. Changes
-----
in
93555407651914841466
increase/de
763.8839971710984586
crease in
00.21.423.167.95
the current
20period ("-"
for
decrease)
(I) Total 1393 1393
comprehen 4699 4699
sive income .65 .65
(II)
Contribution - - -
1765
and 9355 5407 6519
115.
withdrawal 763. 8839 9717
21
of capital by 00 .21 .42
owners
1. Common - - -
stock 9355 5498 6434
contributed 763. 4906 0669
by owners 00 .42 .42
2. Capital
invested by
holders of
other equity
instruments
3. Share-
based
-1765
payment 9060
8590115.
recognized 67.21
48.0021
in owners'
equity
4. Others
--
(III) Profit 1623 1623
distribution 4568 4568
2.812.81
1.
Withdrawal
of surplus
reserve
2.
Distribution - -
to owners 1623 1623
(or 4568 4568
shareholder 2.81 2.81
s)
3. Others
(4) Internal
carry-
forward of
owners'
equity
1. Capital
reserve
transferred
to paid-in
capital (or
share
21capital)
2. Surplus
reserve
transferred
to paid-in
capital (or
share
capital)
3. Surplus
reserve
offsetting
losses
4. Changes
in defined
benefit
plans
carried
forward to
retained
earnings
5. Other
comprehen
sive income
transferred
to retained
earnings
6. Others
(V) Special
reserves
1.
Withdrawal
in the
current
period
2. Utilization
in the
current
period
(VI) Others
4. Balance
2521
at the end 4058 9389 1344 2750 9152
605
of the 6420 5868 5814 1040 1850
983.6
current 7.00 9.77 .81 1.50 0.19
5
period
Amount Last Year
Unit: RMB
Semi-annual 2023
Other equity Other Undis
Capit Less: Speci Surpl Total
Item Share
instruments comp tribut
al treas al us owne
capita Perpe rehen ed Other
Prefe reser ury reser reser r's l tual Other sive profit
rred ve stock ve ves equity
bond incom s
22stock s e
1. Balance
10102595
at the end 4176 5075 2750 9430
917813
of the 2796 9806 1040 1716
776.1498.4
previous 0.00 .16 1.50 6.88
91
year
Add:
Change in
accounting
policy
Co
rrection of
previous
errors
Ot
her
2. Balance
10102595
at the 4176 5075 2750 9430
917813
beginning of 2796 9806 1040 1716
776.1498.4
the current 0.00 .16 1.50 6.88
91
year
3. Changes
in
increase/de - - - -
crease in 4684 3630 8348 8454
the current 973. 088. 9928 4813
period ("-" 42 51 .49 .40
for
decrease)
(I) Total 2066 2066
comprehen 7843 7843
sive income .51 .51
(II)
Contribution - - -
and 4684 3630 1054
withdrawal 973. 088. 884.of capital by 42 51 91
owners
1. Common -
1700
stock 1700
7830
contributed 7830.70
by owners .70
2. Capital
invested by
holders of
other equity
instruments
3. Share-
based - -
1595
payment 4682 2063
5680
recognized 239. 7919.20
in owners' 01 .21
equity
23--
4. Others 2734 2734.41.41
--
(III) Profit 1041 1041
distribution 5777 5777
2.002.00
1.
Withdrawal
of surplus
reserve
2.
Distribution - -
to owners 1041 1041
(or 5777 5777
shareholder 2.00 2.00
s)
3. Others
(4) Internal
carry-
forward of
owners'
equity
1. Capital
reserve
transferred
to paid-in
capital (or
share
capital)
2. Surplus
reserve
transferred
to paid-in
capital (or
share
capital)
3. Surplus
reserve
offsetting
losses
4. Changes
in defined
benefit
plans
carried
forward to
retained
earnings
5. Other
comprehen
sive income
transferred
to retained
24earnings
6. Others
(V) Special
reserves
1.
Withdrawal
in the
current
period
2. Utilization
in the
current
period
(VI) Others
4. Balance
10062511
at the end 4176 4712 2750 8595
232268
of the 2796 9717 1040 2723
802.7685.0
current 0.00 .65 1.50 8.39
71
period
Legal Representative: Zhang Xuhua CFO: Song Yaoming Financial Manager: Tian Hui
3. Company profile
1. Company's registered location organizational form and headquarters address
FIYTA Precision Technology Co. Ltd. (hereinafter referred to as the "Company") was restructured and
established by "Shenzhen FIYTA Timing Industry Company" on December 25 1992 with the approval of the SFBF
[1992] No. 1259 Document of the General Office of the People's Government of Shenzhen Municipality by Shenzhen
Industry and Trade Center of China Aviation Technology Import & Export (later renamed as "China Aviation
Technology Shenzhen Co. Ltd.") as the initiator. The company was listed on the Shenzhen Stock Exchange on June 3
1993 and now holds a business license with a unified social credit code of 91440300192189783K.
After the distribution of bonus shares placement of new shares capital stock conversion and further issue of new
shares over the years as of June 30 2024 the company has issued a total of 405864207 shares in total with a
registered capital of RMB405864207. The registered address is FIYTA Technology Building Gaoxin South 1st Road
Nanshan District Shenzhen City Guangdong Province. The controlling shareholder is AVIC International Holdings
Limited and the actual controller is Aviation Industry Corporation of China LTD.
2. Business nature and main operating activities of the company
The business nature and main operating activities of the Company and its subsidiaries include: general business
items: sales of clocks and watches; Manufacturing of clocks and timekeeping instruments; Sales of clocks watches
and timekeeping instruments; Jewelry wholesale; Jewelry retail; Manufacturing of wearable smart devices; Sales of
wearable smart devices; leasing of non-residential real estate; professional design services; Sales of household
appliances; Sales of mobile satellite communication terminals. (except for projects subject to approval by laws
business activities independently carried out according to law with business license) Licensed items: property
management; Goods import and export. (Any business which requires to be approved by law can only be carried out
after approval of relevant authorities. Specific business items are subject to the approval documents or licenses issued
by these authorities.)
3. Scope of the consolidated financial statements
25There are 12 subsidiaries included in the scope of consolidation in the current period. See Note 10 Equity in other
entities for details. There is no change in the entities included in the scope of the consolidated financial statements for
the current period compared to the previous period.
4. Approval on the issuance of the financial statements
These financial statements were approved for issuance by the Company's Director on Aug. 19 2024.
4. Preparation Basis of Financial Statements
1. Basis of preparation
The Company recognized and measured transactions and events that have actually occurred in accordance with the
Basic Standard for Enterprise Accounting issued by the Ministry of Finance specific enterprise accounting standards
application guidelines interpretations and other relevant provisions (collectively referred to as 'Enterprise Accounting
Standards). On this basis combined with the provisions of No.15 Rules on Information Disclosure and Compilation of
Companies Offering Securities to the Public-General Provisions on Financial Reports (revised in 2023) by China
Securities Regulatory Commission the Company prepared the financial statements.
2. Going concern
The Company evaluated its ability of going concern for 12 months from the end of the reporting period and found no
matters or circumstances that have serious doubts about the ability of going concern. Therefore the financial
statements were prepared on the assumption of going concern.
5. Important accounting policies and estimates
Tips on specific accounting policies and accounting estimates:
1. The Company determines specific accounting policies and accounting estimates according to the
characteristics of production and operation mainly reflected in the method of expected credit loss of receivables
(Notes V.12 Notes V.13 Notes V.15) the valuation method of inventories (Notes V.17) the depreciation of investment
properties fixed assets and intangible assets (Notes V.23 Notes V.24 Notes V.29) income (Notes V.37) etc.
2. The Company continuously evaluates the important accounting estimates and key assumptions adopted based
on historical experience and other factors including reasonable expectations of future events. The following significant
accounting estimates and key assumptions if subject to substantial changes may have a significant impact on the
carrying amounts of assets and liabilities in future accounting periods:
(1) Provision for bad debts of accounts receivable and other receivables is made according to the accounting
standards. The provision for impairment of accounts receivable and other receivables should be estimated by
describing the expected credit losses of accounts receivable and others receivable judged by the management. If any
events or changes in circumstances indicate that the Company may not be able to recover the relevant balances it is
necessary to use estimates to accrue provisions for accounts receivable and other receivables. If the expected figure
is different from the original estimate the difference will affect the book value of accounts receivable and other
receivables as well as the impairment provision during the change in estimate.
(2) Estimation of inventory impairment. It shall describe that the inventories are measured at the lower of cost and
net realizable value on the balance sheet date and the calculation of net realizable value requires the use of
assumptions and estimates. If management revises the estimated selling prices and the costs and expenses to be
26incurred upon completion it will affect the estimated net realizable value of inventories. This difference will impact the
provision for inventory write-downs.
(3) Estimation of impairment of long-term assets. It should be described that when the management judges
whether there is impairment of long-term assets it mainly evaluates and analyzes from the following aspects: (1)
whether the events that affect the impairment of assets have occurred; (2) Whether the present value of the cash flows
expected to be obtained due to the continuous use or disposal of the assets is lower than the book value of the assets;
And (3) whether the important assumptions used in the present value of expected future cash flows are appropriate.If the assumptions used by the company to determine impairment such as profitability discount rate and growth
rate assumptions in the present value method of future cash flows change this may significantly impact the present
value used in impairment testing and result in the impairment of the company's long-term assets.
(4) Depreciation and amortization. The Company's estimates of the estimated useful life and estimated net
residual value of the investment properties fixed assets and intangible assets are based on the actual useful life and
net residual value of the assets with similar nature and functions in the past. During the use of the assets the
economic environment technological environment and other environments in which the assets are located may have a
greater impact on the useful life and estimated net residual value of the assets. If there is any difference between the
estimated useful life and net residual value of the assets and the original estimates the management will make
appropriate adjustments.
(5) Share-based payment. On each balance sheet date within the waiting period the management makes the best
estimate of the number of equity instruments expected to vest is revised based on subsequent information such as
changes in the number of employees eligible for vesting. If there is any difference between the change in the number
of employees with exercisable rights in the current year and the original estimates the management will make
appropriate adjustments.
(6) Deferred tax assets Deferred tax assets should be recognized for all unused tax losses to the extent that it is
probable that there will be sufficient taxable profits to offset the losses. This requires the management to use a lot of
judgment to estimate the time and amount of future taxable profits combined with tax planning strategies to determine
the amount of deferred tax assets that should be recognized.
(7) Income tax. It should be described in normal business activities there are uncertainties in the final tax
treatment of many transactions and matters. Significant judgments need to be made when accruing income tax. If
there is a difference between the final recognized outcome for these taxes and the initial received amount it will have
an impact on the above-mentioned taxes in the final recognition period.
1. Statement of Compliance with Accounting Standard for Business Enterprises
The financial statement prepared by the Company meets the requirements of accounting standards for
enterprises and authentically and completely reflects financial status business performance cash flow and other
relative information on the Company during the reporting period.
2. Accounting period
An accounting year is from January 1 to December 31 of the Gregorian calendar.
273. Operating cycle
The operating cycle refers to the period from the acquisition of assets for processing to the realization of cash or
cash equivalents. The Company takes 12 months as an operating cycle and takes it as the classification standard for
the liquidity of assets and liabilities.
4. Functional currency
The Company and its domestic subsidiaries use RMB as its functional currency. FIYTA (HONG KONG) LIMITED
an overseas subsidiary of the Company determines HKD as its functional currency according to the currency in the
main economic environment in which it operates. Montres Chouriet SA a subsidiary of FIYTA (HONG KONG)
LIMITED determines Swiss franc as its functional currency based on the currency in the main economy environment
in which it operates which is converted into RMB when preparing the financial statements. The currency adopted by
the Company for the preparation of the financial statements is RMB.
5. Determination method and selection basis of materiality criteria
Item Materiality criteria
Accounts receivable with significant amount reversed
from provision for bad debts or recovered in the current Single ending balance of more than RMB500000
period
Significant other payable with an aging of over one year Single ending balance of more than RMB1000000
6. Accounting treatment methods of business merger under the common control and not
under the common control
1. If the terms conditions and economic impact of each transaction in the process of step-by-step
business combination meet one or more of the following conditions multiple transactions will be taken as a
package transaction for accounting treatment.
(1) These transactions are concluded at the same time or under the consideration of mutual influence;
(2) These transactions collectively achieve a complete commercial result;
(3) The occurrence of one transaction depends on the occurrence of at least one other transaction;
(4) A transaction is uneconomical on its own but economical when considered together with other transactions.
2. Business combination under common control
The assets and liabilities acquired by the Company in business combination shall be measured according to the
book value of the assets and liabilities (including the goodwill formed by the acquisition of the merged party by the
ultimate controller) of the merged party on the combination date in the consolidated financial statements of the ultimate
controller. For the difference between the book value of the net assets acquired in the merger and the book value of
the merger consideration paid (or the total par value of the issued shares) the stock premium in the capital reserve
shall be adjusted. If the stock premium in the capital reserve is insufficient to cover the difference the retained
earnings shall be adjusted.If there is contingent consideration and it is necessary to recognize estimated liabilities or assets the capital
reserve (capital premium or stock premium) shall be adjusted based on the difference between the amount of the
estimated liabilities or assets and the subsequent settlement amount of the contingent consideration. If the capital
reserve is insufficient the retained earnings shall be adjusted.
28For the business combination finally realized through multiple transactions which belongs to a package
transaction the transactions shall be taken as a transaction that obtains control for accounting treatment; If it does not
belong to a package transaction the capital reserve shall be adjusted based on the difference between the initial
investment cost of the long-term equity investment and the book value of the long-term equity investment before the
merger plus the book value of the newly paid consideration of the shares on the merger date; if the capital reserve is
insufficient to cover the difference the retained earnings shall be adjusted. For the equity investment held before the
merger date other comprehensive income recognized due to accounting by equity method or accounting by financial
instruments and measurement standards will not subject to accounting treatment temporarily until the investment is
disposed of on the same basis as the related assets or liabilities directly disposed by the investee; Other changes in
the owner's equity in the net assets of the investee except net profit or loss and other comprehensive income and
profit distribution which are recognized by the equity method will not subject to accounting treatment temporarily until
the investment is transferred to the current profit and loss.
3. Business combination not under common control
Acquisition date refers to the date when the Company actually obtains the control over the acquiree that is the
date when the control over the net assets or production and operation decisions of the acquiree is transferred to the
Company. When the following conditions are met at the same time the Company generally considers that the control
has been transferred:
* The business combination contract or agreement has been approved by the company's internal authority.* Where the business combination needs to be examined and approved by the relevant national competent
authorities the approval has been obtained.* The necessary formalities for the transfer of property rights have been handled.* The Company has paid most of the merger price and has the ability and plan to pay the remaining amount.* The Company has actually controlled the financial and operating policies of the acquiree and enjoys the
corresponding benefits and bears the corresponding risks.On the acquisition date the Company measures the assets paid as the consideration for business combination
and the liabilities incurred or assumed at their fair values. The difference between the fair value and the book value is
recognized in the current profit or loss.The Company recognizes as goodwill the excess of the merger costs over the fair value of the identifiable net
assets acquired in the merger; The excess of the fair value of the identifiable net assets acquired over the cost of the
acquisition after review should be recognized in the current period's profit or loss.If the business combination not under common control realized step by step through multiple transactions belongs
to a package transaction the transactions shall be taken as a transaction that obtains control for accounting treatment;
If it does not belong to a package transaction and the equity investments held before the merger date is accounted for
by the equity method the initial investment cost is the sum of the book value of the equity investment in the acquiree
held before the acquisition date and the additional investment cost on the acquisition date; Other comprehensive
income recognized from equity investments accounted for by the equity method before the acquisition date is
accounted for on the same basis as the direct disposal of related assets or liabilities by the investee. If the equity
investment held before the merger date is accounted for under the financial instruments recognition and measurement
guidelines the initial investment cost on the merger date is the sum of the fair value of the equity investment on the
merger date plus the additional investment cost. The difference between the fair value and the book value of the
previously held equity and the cumulative fair value changes previously recognized in other comprehensive income
shall be all transferred to the investment income of the current period on the merger date.
4. Costs of business combination
29Intermediary expenses such as audit legal services evaluation and consultation and other directly related
expenses incurred for business combination are recognized in the current profit and loss upon occurrence.Transaction costs for issuing equity securities due to business combination can be directly deducted from equity.
7. Control criteria and preparation method of consolidated financial statements
1. Control criteria
Control refers to the power the investor has over the investee enjoying variable returns by participating in relevant
activities of the investee and having the ability to influence the amount of returns by using its power over the investee.The Company judges its control over the investee based on a comprehensive consideration of all relevant facts
and circumstances. Should changes in relevant facts and circumstances alter the elements involved in the definition of
control the Company will make re-assessment. Relevant facts and circumstances mainly include:
(1) The establishment purpose of the investee.
(2) The investee's relevant activities and how decisions about those activities are made.
(3) Whether the rights enjoyed by the investor enable it to dominate the related activities of the investee at present.
(4) Whether the investor enjoys variable returns by participating in the related activities of the investee.
(5) Whether the investor has the ability to use the power over the investee to influence its return amount.
(6) The relationship between investors and other parties.
2. Scope of consolidation
The scope of the Company's consolidated financial statements is based on control and all subsidiaries (including
individual entities controlled by the Company) are included in the consolidated financial statements.
3. Combination procedures
The Company prepares consolidated financial statements based on the financial statements of itself and its
subsidiaries and other relevant information. In preparing consolidated financial statements the Company regards the
whole enterprise group as an accounting entity and reflects the overall financial position operating results and cash
flow of the enterprise group according to the recognition measurement and presentation requirements of relevant
accounting standards for business enterprises and unified accounting policies.The accounting policies and accounting periods adopted by all subsidiaries included in the consolidation scope of
consolidated financial statements are consistent with those of the Company. If the accounting policies and accounting
periods adopted by subsidiaries are inconsistent with those of the Company necessary adjustments shall be made
based on those of the Company when preparing consolidated financial statements.When preparing consolidated financial statements the impact of internal transactions between the Company and
its subsidiaries and among the subsidiaries themselves on the consolidated balance sheet consolidated income
statement consolidated statement of cash flows and consolidated statement of changes in shareholders' equity shall
be offset. If the recognition of the same transaction from the perspective of consolidated financial statements of
enterprise groups is different from that of the Company or its subsidiaries as accounting entities the transaction shall
be adjusted from the perspective of enterprise groups.The owner's equity of subsidiaries the current net profit and loss and the share belonging to minority shareholders
in the current comprehensive income are listed separately under the owner's equity item in the consolidated balance
sheet the net profit item in the consolidated income statement and the total comprehensive income item. If the current
period losses shared by the minority shareholders of a subsidiary exceed the portion of owners' equity held by the
minority shareholders at the beginning of the period the excess is offset against the minority shareholders' equity.For subsidiaries acquired through business combinations under common control their financial statements shall
be adjusted based on the book value of assets and liabilities (including goodwill formed by the ultimate controller's
acquisition of the subsidiary) as reflected in the financial statements of the ultimate controller.
30For subsidiaries acquired through business combinations not under common control their financial statements
shall be adjusted based on the fair value of identifiable net assets on the acquisition date.
(1) Addition of subsidiaries or businesses
During the reporting period if subsidiaries or businesses are added due to business combinations under common
control the opening balances of the consolidated balance sheet shall be adjusted. The incomes expenses and profits
from the beginning of the period to the end of the reporting period for the subsidiaries or businesses merged shall be
included in the consolidated income statement. The cash flows of subsidiaries or businesses from the beginning of the
current period to the end of the reporting period shall be included into the statement of cash flows and the related
items of the comparative statements shall be adjusted as if the reporting entity had existed since the point of control by
the ultimate controller.If control over an investee under common control is achieved due to additional investments it is assumed that all
parties involved in the consolidation existed in their current state from the time the ultimate controller began to exercise
control. The equity investment held before the acquisition of the control right of the merged party the relevant profit
and loss recognized from the date when the original equity is acquired or the merge party and the merged party are
under common control (whichever is later) to the merger date other comprehensive income and other changes in net
assets are used to respectively offset the initial retained income or current profit and loss during the comparative
statement period.If a subsidiary or business is added through a business combination under different control during the reporting
period the opening balances of the consolidated statement of financial position are not adjusted; the incomes
expenses and profits of the subsidiary or business from the acquisition date to the end of the reporting period shall be
included in the consolidated income statement; the cash flows of the subsidiary or business from the acquisition date
to the end of the reporting period shall be included in the statement of cash flows.If the investee not under common control can be controlled due to additional investment the Company will re-
measure the equity of the investee held before the acquisition date according to the fair value of the equity on the
acquisition date and the difference between the fair value and its book value will be included in the current investment
income. For equity interests in the acquiree held before the acquisition date that involve other comprehensive income
and changes in other owners' equity under the equity method accounting excluding net gains or losses other
comprehensive income and profit distribution the related other comprehensive income and changes in other owners'
equity are reclassified to investment income of the current period on the acquisition date except for other
comprehensive income arising from remeasurement of the defined benefit plan net liability or net assets of the
investee.
(2) Disposal of subsidiaries or businesses
1) General methods
During the reporting period if the Company disposes of a subsidiary or business the incomes expenses and
profits from the beginning of the period to the date of disposal are included in the consolidated income statement; The
cash flows from the beginning of the period to the date of disposal of the subsidiary or business are included in the
consolidated statement of cash flows.When losing control over an investee due to the disposal of a partial equity investment or other reasons the
Company re-measures the remaining equity investment at its fair value on the date of loss of control. The sum of the
consideration obtained from the disposal of the shares and the fair value of the remaining shares minus the difference
between the share of the original subsidiary's net assets that shall be continuously calculated from the acquisition date
or the merger date and the sum of goodwill is included in the investment income in the current period when the control
right is lost. Other comprehensive income related to the equity investment in the original subsidiary or changes in
other owners' equity excluding net loss other comprehensive income and profit distribution are reclassified as current
31period investment income upon loss of control except for other comprehensive income arising from the
remeasurement of the net liability or net assets of the defined benefit plan of the investee.
2) Step-by-step disposal of a subsidiary
When disposing of equity investments in a subsidiary in multiple transactions until control is lost the terms
conditions and economic effects of each transaction in disposing of the equity investments in the subsidiary typically
indicate that the multiple transactions shall be accounted for as a package transaction if they meet one or more of the
following situations:
A. These transactions are concluded at the same time or under the consideration of mutual influence;
B. These transactions collectively achieve a complete commercial result;
C. The occurrence of one transaction depends on the occurrence of at least one other transaction;
D. A transaction is uneconomical on its own but economical when considered together with other transactions.When transaction related to the disposal of equity investments in subsidiaries until control is lost belongs to a
package transaction the Company accounts for the transactions as a disposal of a subsidiary and loss of control;
However before the loss of control the difference between each disposal consideration and the corresponding share
of the subsidiary's net assets is recognized as other comprehensive income in the consolidated financial statements
and is reclassified to profit or loss of the period when the control is lost.If the transaction related to the disposal of equity investments in subsidiaries until control is lost does not belong to
a package transaction they are accounted for according to the policy for partial disposals of equity investments in
subsidiaries without losing control; At the time of loss of control the accounting treatment is performed in the same
way as a general disposal of a subsidiary.
(3) Acquisition of minority interests in subsidiaries
The Company shall adjust the stock premium in the capital reserve in the consolidated balance sheet for the
difference between the newly acquired long-term equity investment due to the acquisition of minority shares and the
share of net assets that shall be continuously calculated by the subsidiaries from the acquisition date (or merger date)
according to the new shareholding ratio. If the stock premium in the capital reserve is insufficient the retained earnings
shall be adjusted.
(4) Partial disposal of equity investments in subsidiaries without losing control
In cases of partial disposal of long-term equity investments in subsidiaries without losing control the difference
between the disposal consideration and the corresponding share of the subsidiary's net assets continuously calculated
from the acquisition date or the merger date is adjusted in the stock premium within the capital reserve in the
consolidated balance sheet. If the share premium in the capital reserve is insufficient retained earnings shall be
adjusted.
8. Classification of joint venture arrangements and accounting treatment of joint operations
1. Classification of joint venture arrangements
According to the structure legal form terms agreed in the joint venture arrangement and other relevant facts and
circumstances the Company divides the joint venture arrangement into joint operation and joint venture.Joint venture arrangements not reached through a separate entity shall be classified as joint operation; Joint
venture arrangements reached through a separate entity are usually divided into joint ventures; However if there is
strong evidence that any of the following conditions is met and the joint venture arrangement complies with the
relevant laws and regulations it shall be classified as a joint operation:
The legal form of the joint venture arrangement indicates that the joint venture shall respectively enjoy the rights
and assume the obligations for the relevant assets and liabilities in the arrangement.
32The contractual terms of the joint venture arrangement stipulate that the joint venture shall respectively enjoy the
rights and assume the obligations for the relevant assets and liabilities in the arrangement.Other relevant facts and circumstances indicate that the joint venture has rights to the assets and obligations for
the liabilities related to the arrangement such as when the joint venture enjoys almost all of the output related to the
joint arrangement and the settlement of liabilities depends continuously on the support of the joint venture.
2. Accounting treatment for joint operation
The Company recognizes the following items related to the Company in the share of interests in joint operation
and carries out accounting treatment in accordance with the relevant accounting standards for business enterprises:
Recognize the assets held individually and the assets held jointly based on their shares;
Recognize the liabilities assumed individually and the liabilities undertaken jointly based on their shares;
Recognize the income generated from the sale of its share of joint operation output;
Recognize the income generated from the sale of output in the joint operation based on their shares;
Recognize the expenses incurred individually and the expenses incurred in joint operation based on their shares.The Company recognizes only the portion of gains and losses attributable to other participants in the joint
operation when contributing or selling assets (except for those constituting a business) to the joint operation until such
assets are sold to a third party. If an impairment loss occurs on assets invested or sold that meets the provisions of
"Accounting Standard for Business Enterprises No. 8 – Asset Impairment" the company will fully recognize the loss.The Company recognizes only the portion of gains and losses attributable to other participants in the joint
operation when acquiring assets (except for those constituting a business) from the joint operation until such assets
are sold to a third party. If an impairment loss occurs on assets purchased that meets the provisions of "Accounting
Standard for Business Enterprises No. 8 – Asset Impairment" the company will fully recognize the loss.If the Company does not have joint control over the joint operation but enjoys the relevant assets and bears the
relevant liabilities of the joint operation accounting should still be conducted according to the above principles.Otherwise accounting should be conducted in accordance with the relevant enterprise accounting standards.
9. Recognition criteria for cash and cash equivalents
In preparing the cash flow statement the Company recognizes its cash on hand and the deposits that can be used for
payment at any time. Investments that meet the four conditions of short-term maturity (generally within three months
from the acquisition date) high liquidity easy conversion into a known amount of cash and minimal risk of change in
value as cash equivalents.
10. Foreign currency transactions and conversion of foreign currency financial statements
1. Foreign currency transactions
Foreign currency transactions are initially recorded at the spot exchange rate of the transaction date when initially
recognized.On the balance sheet date foreign currency monetary items are converted at the spot exchange rate of the
balance sheet date. The resulting exchange differences except for those arising from foreign currency borrowings
related to the acquisition or construction of assets meeting the capitalization criteria which are treated in accordance
with the principle of borrowing cost capitalization are all recognized in the current profit or loss. Foreign currency non-
monetary items measured at historical cost are still converted at the spot exchange rate of the transaction date
without changing their recorded amount in the functional currency.Foreign currency non-monetary items measured at fair value are converted at the spot exchange rate of the fair
value determination date. The difference between the converted amount in the functional currency and the original
33recorded amount in the functional currency is treated as a fair value change (including changes of exchange rate) and
is recognized in the current profit or loss or as other comprehensive income.
2. Foreign currency financial statements
Assets and liabilities in the balance sheet are converted at the spot exchange rate of the balance sheet date;
Equity items except for the "undistributed profits" item are converted at the spot exchange rate at the time of
occurrence. The income and expense items in the income statement are converted at the current average exchange
rate of the transaction date. The exchange differences arising from the conversion of foreign currency financial
statements as described above are recognized in other comprehensive income.When disposing of a foreign operation the exchange differences related to that foreign operation and presented in
other comprehensive income items in the balance sheet are transferred from other comprehensive income items to the
current profit or loss; In the case of disposing of a part of an equity investment or for other reasons that lead to a
reduction in the ownership interest in a foreign operation without losing control over it the exchange differences
related to the partial disposal of the foreign operation are attributed to minority interests and are not transferred to the
current profit or loss. When disposing of a portion of equity in overseas operations that are joint ventures or associates
the foreign currency translation differences related to the overseas operations are transferred to the disposal period's
profit or loss in proportion to the disposal scale.
11. Financial instruments
The Company recognizes financial assets or financial liabilities when it becomes a party to the financial instrument
contract.The effective interest method is the calculation of the amortized cost of financial assets or financial liabilities and
the allocation of interest income or interest expense over the accounting periods.The effective interest rate is the rate used to discount the estimated future cash flows of financial assets or
financial liabilities over the expected life to the book value of the financial asset or the amortized cost of the financial
liability. In determining the effective interest rate the expected cash flows are estimated based on all contractual terms
of the financial asset or financial liability (such as prepayment extension call options or other similar options) without
considering expected credit losses.The amortized cost of financial assets or financial liabilities is the initial recognition amount minus principal
repayments plus or minus the cumulative amortization of the difference between the initial recognition amount and the
maturity amount using the effective interest method less any cumulative impairment loss provision (applicable only to
financial assets).
1. Classification recognition and measurement of financial assets
The Company classifies financial assets into the following three categories based on the business model for
managing the financial assets and the contractual cash flow characteristics of the financial assets:
A. Financial assets measured at amortized cost.B. Financial assets measured at fair value with changes recognized in other comprehensive income.C. Financial assets measured at fair value with changes recognized in profit or loss.Financial assets are initially measured at fair value. However receivables from the sale of goods or provision of
services that do not include a significant financing component or consider financing components of not more than one
year are initially measured at the transaction price.For financial assets measured at fair value with changes recognized in profit or loss related transaction costs are
directly recognized in profit or loss. For other categories of financial assets related transaction costs are included in
their initial recognition amount.
34Subsequent measurement of financial assets depends on their classification. Reclassification of all affected
financial assets occurs only when the Company changes its business model for managing financial assets.
1) Financial assets measured at amortized cost
Financial assets whose contractual terms generate cash flows on specified dates that are solely payments of
principal and interest on the outstanding principal amount and are managed with the objective of collecting contractual
cash flows are classified by the Company as financial assets measured at amortized cost. The Company's financial
assets classified at amortized cost include cash notes receivable accounts receivable and other receivables.The Company recognizes interest income on such financial assets using the effective interest method measures
them subsequently at amortized cost and includes any impairment losses or gains or losses on de-recognition or
modification in profit or loss. Except in the following situations the Company calculates interest income based on the
actual interest rate multiplied by the financial asset's book value:
A. For financial assets that have incurred credit impairment upon acquisition or origination the Company
calculates interest income from the initial recognition based on the amortized cost of the financial asset and the
effective interest rate adjusted for credit.B. For financial assets that have not incurred credit impairment upon acquisition or origination but subsequently
become credit-impaired the Company calculates interest income in subsequent periods based on the amortized cost
and the effective interest rate of the financial asset. If the financial instrument is no longer credit-impaired in
subsequent periods due to an improvement in credit risk the Company calculates interest income by multiplying the
effective interest rate by the book value of the financial asset.
2) Financial assets measured at fair value with changes recognized in other comprehensive income
If the contractual terms of financial assets require cash flows on a specified date that are solely payments of
principal and interest on the principal amount outstanding and the business model for managing the financial asset is
both to collect contractual cash flows and to sell the financial asset then the Company classifies the financial asset as
measured at fair value with changes recognized in other comprehensive income.The Company recognizes interest income on such financial assets using the effective interest method. Apart from
interest income impairment losses and foreign exchange gains or losses recognized in profit or loss other fair value
changes are recognized in other comprehensive income. When the financial asset is de-recognized the cumulative
gains or losses previously recognized in other comprehensive income are reclassified from other comprehensive
income to profit or loss.Financial assets measured at fair value with changes recognized in other comprehensive income such as trade
receivables and accounts receivable are reported as receivables financing and other such financial assets are
reported as other debt investments. Among them other debt investments maturing within one year from the balance
sheet date are reported as non-current assets due within one year and other debt investments with original maturities
within one year are reported as other current assets.
3) Financial assets designated at fair value with changes recognized in other comprehensive income
At initial recognition the Company may irrevocably designate non-trading equity instrument investments based on
a single financial asset as measured at fair value through other comprehensive income.The fair value changes of such financial assets are recognized in other comprehensive income without the need
for impairment provisions. When the financial asset is de-recognized the accumulated gains or losses previously
recognized in other comprehensive income are reclassified to retained earnings. During the period the Company holds
the equity instrument investment dividend income is recognized and included in the current profit or loss when the
Company's right to receive dividends is established the economic benefits related to the dividends are likely to flow
into the Company and the amount of dividends can be reliably measured. The Company reports such financial assets
under other equity instrument investments.
35An equity instrument investment that meets one of the following conditions is classified as financial assets
measured at fair value through profit or loss: The primary purpose of acquiring the financial asset is for sale in the near
term; At initial recognition it is part of an identifiable financial asset group under centralized management and there is
objective evidence indicating the existence of a short-term profit pattern recently; It is a derivative instrument
(excluding those meeting the definition of a financial guarantee contract and those designated as effective hedging
instruments).
4) Classified as financial assets measured at fair value through profit or loss
Financial assets that do not meet the conditions for measurement at amortized cost or at fair value through other
comprehensive income and are not designated as measured at fair value through other comprehensive income are
classified as measured at fair value through profit or loss.Such financial assets are subsequently measured at fair value. Gains or losses from changes in fair value as well
as dividends and interest income related to such financial assets are included in the current profit and loss.The Company shall present such financial assets in the items of transactional financial assets and other non-
current financial assets according to their liquidity.
5) Financial assets designated to be measured by fair value through current profit and loss
At initial recognition in order to eliminate or significantly reduce accounting mismatches the Company may
irrevocably designate financial assets as financial assets measured at fair value through current profit or loss on the
basis of individual financial asset.If a hybrid contract contains one or more embedded derivative instruments and its master contract does not
belong to the above financial assets the Company can designate it as a whole as a financial instrument measured at
fair value through current profit and loss. Except for the following circumstances:
A. The embedded derivative instruments will not have a significant change in the cash flows of the hybrid contract.B. When determining whether a similar hybrid contract needs to be split for the first time it can be made clear that
the embedded derivatives contained therein should not be split with little analysis. For example the prepayment right
embedded in the loan allows the holder to prepay the loan at an amount close to the amortized cost and the
prepayment right does not need to be split.Such financial assets are subsequently measured at fair value. Gains or losses from changes in fair value as well
as dividends and interest income related to such financial assets are included in the current profit and loss.The Company shall present such financial assets in the items of transactional financial assets and other non-
current financial assets according to their liquidity.
2. Classification recognition and measurement of financial liabilities
The Company classifies the financial instrument or its components as financial liabilities or equity instruments at
initial recognition based on the contractual terms of the issued financial instruments and their economic substance
rather than merely legal form in conjunction with the definitions of financial liabilities and equity instruments. Financial
liabilities are classified at initial recognition as: financial liabilities measured at fair value through profit or loss other
financial liabilities and derivatives designated as effective hedging instruments.Financial liabilities are measured at fair value at initial recognition. For financial liabilities measured at fair value
through profit or loss the relevant transaction costs are directly included in the current profit or loss; For other
categories of financial liabilities related transaction costs are included in the initially recognized amount.Subsequent measurement of financial liabilities depends on their classification:
1) Financial liabilities measured at fair value through profit or loss.
This category includes trading financial liabilities (including derivatives that are financial liabilities) and those
designated at initial recognition as measured at fair value through profit or loss.
36Financial liabilities is considered trading if it is incurred primarily for the purpose of selling or re-acquiring in the
near term; Or if it is part of an identifiable portfolio of financial instruments that the enterprise manages together and
there is evidence of a recent actual pattern of short-term profit-taking. Belongs to derivative instruments except for
those designated and effective as hedging instruments and derivatives that meet the criteria of financial guarantee
contracts. Trading financial liabilities (including derivatives that are financial liabilities) are measured at fair value
subsequently with all fair value changes recognized in the current profit or loss except for those related to hedge
accounting.At initial recognition to provide more relevant accounting information the Company designates financial liabilities
that meet one of the following conditions as financial liabilities measured at fair value through profit or loss which
cannot be revoked:
A. Capable of eliminating or significantly reducing accounting mismatches.B. Managed and performance evaluated on a fair value basis for a portfolio of financial liabilities or a combination
of financial assets and financial liabilities as documented in formal written documents reflecting the Company's risk
management or investment strategy and reported internally to key management personnel on this basis.The Company subsequently measures such financial liabilities at fair value with changes in fair value due to the
Company's own credit risk recognized in other comprehensive income and all other fair value changes recognized in
the current profit or loss. Unless recognizing changes in fair value due to the Company's own credit risk in other
comprehensive income would create or enlarge an accounting mismatch in profit or loss the Company recognizes all
fair value changes (including the effect of changes in its own credit risk) in the current profit or loss.
2) Other financial liabilities
Except for the following items the Company classifies financial liabilities as those measured at amortized cost
using the effective interest method for subsequent measurement at amortized cost with gains or losses arising from
de-recognition or amortization recognized in the current profit or loss:
A. Financial liabilities measured at fair value through profit or loss.B. Financial liabilities caused by the transfer of financial assets that do not meet the conditions for de-recognition
or continue to be involved in the transferred financial assets.C. Financial guarantee contracts that do not fall under the first two categories mentioned above and loan
commitments that are not under the Category 1) and are provided at an interest rate lower than the market rate.A financial guarantee contract refers to an agreement that requires the issuer to compensate the contract holder
for a specific amount if a particular debtor fails to repay the debt on the due date according to the original or modified
terms of the debt instrument. Financial guarantee contracts that are not designated as financial liabilities measured at
fair value with changes recognized in profit or loss are measured after initial recognition at the higher of the amount of
the loss allowance and the balance of the initial recognition amount less the cumulative amortization during the
guarantee period.
3. De-recognition of financial assets and financial liabilities
1) Financial assets are de-recognized when it meets one of the following conditions i.e. it is removed from the
accounts and the balance sheet:
A. The contractual right to receive cash flows from the financial asset has expired.B. The financial asset has been transferred and the transfer complies with the provisions for the de-recognition of
financial assets.
2) Conditions for derecognition of financial liabilities
Financial liabilities (or part of it) is de-recognized when the present obligation is terminated.An agreement is signed between the Company and the lender to replace the original financial liability with a new
financial liability and if the terms of the new financial liability are substantially different from the original financial
37liability or if there are substantial modifications to the terms of the original financial liability (or a part of it) then the
original financial liability is de-recognized and a new financial liability is recognized. The difference between the book
value and the consideration paid (including non-cash assets transferred or liabilities assumed) is recognized in the
current profit or loss.When the Company re-acquires part of financial liabilities the book value of the entire financial liabilities is
allocated based on the proportion of the fair value of the part that continues to be recognized and the part that is de-
recognized on the re-acquisition date. The difference between the book value allocated to the de-recognized part and
the consideration paid (including non-cash assets transferred or liabilities assumed) should be recognized in the
current profit or loss.
4. Recognition basis and measurement method for the transfer of financial assets
When transferring financial assets the Company assesses the extent to which it retains the risks and rewards of
ownership of the financial assets and deals with the following situations accordingly:
(1) If almost all the risks and rewards of ownership of the financial asset are transferred then the financial asset is
de-recognized and the rights and obligations arising from the transfer or retained are separately recognized as assets
or liabilities.
(2) If substantially all the risks and rewards associated with the ownership of financial assets are retained the
financial asset continues to be recognized.
(3) If almost all risks and rewards in the ownership of financial assets are neither transferred nor retained (that is
other circumstances except (1) and (2) of this Article) the following circumstances shall be handled according to
whether the control over the financial assets is retained:
A. If no control over the financial assets is retained the financial assets shall be de-recognized and the rights and
obligations arising from or retained in the transfer shall be separately recognized as assets or liabilities.B. If the control over the financial assets is retained the relevant financial assets shall continue to be recognized
according to the degree of its continuous involvement in the transferred financial assets and the relevant liabilities
shall be recognized accordingly. The term "continuous involvement in the transferred financial asset" refers to the
extent to which the Company bears the risks or rewards of changes in the value of the transferred financial asset.The principle of substance over form is adopted to determine whether the transfer of financial assets meets the above
de-recognition conditions for financial assets. The Company divides the transfer of financial assets into overall transfer
and partial transfer of financial assets.If the entire transfer of financial assets meets the de-recognition conditions the difference between the amounts
of the following two items shall be included in the current profit and loss:
A. The book value of the transferred financial asset on the de-recognition date.B. The consideration received for transferring financial assets which is the sum of the amount corresponding to
the part of the cumulative fair value changes originally recognized in other comprehensive income that is de-
recognized (involving transferred financial assets measured at fair value with changes recognized in other
comprehensive income).If financial assets are partially transferred and the transferred part fully meets the de-recognition condition the
book value of the entire financial asset before the transfer is allocated between the de-recognized part and the
continuing recognized part (in this case the retained servicing asset is considered part of the continuing recognized
financial asset) based on their relative fair values on the transfer date. The difference between the following two
amounts is recognized in the current profit or loss:
A. The book value of the de-recognized part on the de-recognition date.
38B. The sum of the consideration received for the de-recognized part and the amount corresponding to the part of
the cumulative fair value changes originally recognized in other comprehensive income (involving transferred financial
assets measured at fair value with changes recognized in other comprehensive income).If the transfer of financial assets does not meet the de-recognition condition the financial asset continues to be
recognized and the consideration received is recognized as financial liabilities.
5. Determination method for the fair value of financial assets and financial liabilities
For financial assets or liabilities with an active market its fair value is determined by the quoted price in the active
market unless there is a restriction on the sale of the financial assets itself. For financial assets with restrictions on the
sale of the assets itself its fair value is determined by deducting the compensation amount required by market
participants for bearing the risk of not being able to sell the financial asset in the open market during the specified
period from the quoted price in the active market. Quoted prices in an active market include those that are readily and
regularly obtainable from exchanges dealers brokers industry groups pricing services or regulatory authorities and
can represent the actual and frequent market transactions on the basis of fair trade.The fair value of initially acquired or derived financial assets or incurred financial liabilities is based on the
transaction price in the market.Financial assets or liabilities without an active market are valued using valuation techniques to determine their fair
value. In valuation the Company uses valuation techniques that are applicable under current circumstances and
supported by sufficient available data and other information selecting input values consistent with the characteristics
of the assets or liabilities considered by market participants in transactions and prioritizes the use of relevant
observable input values wherever possible. In cases where relevant observable input values are not available or not
feasible to obtain unobservable input values are used.
6. Impairment of financial instruments
The Company measures impairment and recognizes loss allowances for financial assets measured at amortized
cost financial assets classified as measured at fair value through other comprehensive income lease receivables
contract assets loan commitments that are not measured at fair value through profit or loss financial liabilities that are
not measured at fair value through profit or loss and financial guarantee contracts formed by the transfer of financial
assets that do not meet the derecognition criteria or continue to be involved in the transferred financial assets based
on expected credit losses.Expected credit losses refer to the weighted average value of credit losses of financial instruments weighted by
the risk of default. Credit loss refers to the difference between all contractual cash flows receivable from the contract
and all cash flows expected to be received by the Company at the original effective interest rate that is the present
value of all cash shortages. For financial assets acquired or originated that have experienced credit impairment they
shall be discounted using the effective interest rate adjusted for credit.For receivables contract assets and lease receivables arising from transactions regulated by the revenue
standards the company applies a simplified measurement approach measuring loss allowances at an amount equal
to the expected credit losses over the entire lifetime of the assets.For acquired or originated financial assets that have experienced credit impairment only the cumulative change in
expected credit losses over the entire life from initial recognition is recognized as a provision for losses at each
balance sheet date. At each balance sheet date the change in expected credit losses over the entire life is recognized
as an impairment loss or gain in the current profit or loss. Even if the expected credit losses determined at the balance
sheet date for the entire life are less than the amount of expected credit losses reflected by the estimated cash flows at
initial recognition the favorable change in expected credit losses is recognized as an impairment gain.Apart from the aforementioned simplified measurement method and acquired or originated financial assets that
have experienced credit impairment the Company assesses whether the credit risk of the relevant financial
39instruments has significantly increased since initial recognition at each balance sheet date measures its loss provision
and recognizes expected credit losses and their changes according to the following situations:
A. If the credit risk of the financial instrument has not increased significantly since initial recognition and is in
phase I loss allowance is measured in the amount equal to the expected credit losses over the next 12 months and
interest income is calculated based on the book value and the effective interest rate.B. If the credit risk of the financial instrument has increased significantly since initial recognition but no credit
impairment has occurred and is in phase II loss allowance is measured in the amount equal to the expected credit
losses over the entire lifetime of the financial instrument and interest income is calculated based on the book value
and the effective interest rate.C. If the financial instrument has experienced credit impairment since initial recognition and is in phase III the
Company measures loss allowance in the amount equal to the expected credit losses over the entire lifetime of the
financial instrument and interest income is calculated based on the amortized cost and the effective interest rate.Increases or reversals of credit loss allowance for financial instruments are recognized as impairment losses or
gains in the current profit or loss. Except for financial assets classified at fair value through other comprehensive
income credit loss allowance reduces the book value of financial assets. For financial assets classified at fair value
through other comprehensive income the Company recognizes credit loss allowance in other comprehensive income
without reducing the book value of the financial asset presented in the balance sheet.If the Company had previously measured loss allowance for a financial instrument in the amount equal to the
expected credit losses over the entire lifetime of the financial instrument but as of the current balance sheet date the
financial instrument no longer exhibits a significant increase in credit risk since initial recognition the Company
measures loss allowance at the current balance sheet date in the amount equal to the expected credit losses over the
next 12 months. The resulting reversal of loss allowance is recognized as an impairment gain in the current profit or
loss.
1) Significant increase in credit risk
The Company uses reasonable and supportable forward-looking information available to determine whether the
credit risk of a financial instrument has increased significantly since initial recognition by comparing the risk of default
at the balance sheet date with the risk of default at the initial recognition date. For financial guarantee contracts when
applying the impairment requirements for financial instruments the Company considers the date on which the
Company becomes the party to the irrevocable commitment as the initial recognition date.The Company considers the following factors when assessing whether there has been a significant increase in
credit risk:
A. Whether there has been a significant change in the debtor's operational results actual or expected;
B. Whether there has been a significant adverse change in the regulatory economic or technological
environment in which the debtor operates;
C. Whether there has been a significant change in the value of collateral securing the debt or in the quality of
guarantees or credit enhancements provided by third parties which are expected to reduce the debtor's economic
incentive to repay on time as per the contract or affect the probability of default;
D. Whether there has been a significant change in the debtor's expected performance and repayment behavior;
E. Whether there has been a change in the Company's credit management methods for financial instruments etc.As of the balance sheet date if the Company determines that a financial instrument has low credit risk it is
assumed that the credit risk of the financial instrument has not increased significantly since initial recognition. If a
financial instrument has low default risk the borrower has a strong ability to fulfill its contractual cash flow obligations
in the short term and even if there are adverse changes in the economic situation and operating environment over a
40longer period it does not necessarily reduce the borrower's ability to fulfill its contractual cash flow obligations then
the financial instrument is considered to have low credit risk.
2) Financial assets with credit impairment
When one or more events occur that are expected to have an adverse effect on the future cash flows of financial
assets the financial asset becomes one that has experienced credit impairment. Evidence of credit impairment for
financial assets includes the following observable information:
A. The issuer or the debtor is experiencing significant financial difficulties;
B. The debtor has breached the contract such as defaulting on interest or principal payments or being overdue;
C. The creditor for economic or contractual considerations related to the debtor's financial difficulties grants
concessions to the debtor that would not be made under any other circumstances;
D. It is likely that the debtor will go bankrupt or undergo other financial restructuring;
E. The disappearance of an active market for the financial assets due to the issuer's or the debtor's financial
difficulties;
F. Acquiring or originating financial assets at a significant discount which reflects the occurrence of credit losses.Credit impairment of financial assets may result from the combined effect of multiple events and may not
necessarily be caused by individually identifiable events.
3) Determination of expected credit losses
The Company assesses the expected credit losses of financial instruments based on individual and Combination
evaluations taking into account reasonable and substantiated information regarding past events current conditions
and forecasts of future economic conditions.The Company classifies financial instruments into different combinations based on common credit risk
characteristics. The common credit risk characteristics adopted by the Company include: type of financial instruments
aging combination contract settlement cycle industry of debtors etc. For details on the individual assessment criteria
and combination credit risk characteristics of the relevant financial instruments refer to the accounting policies of the
financial instruments.The Company determines the expected credit losses of the relevant financial instruments using the following
methods:
A. For financial assets the credit loss is the present value of the difference between the contractual cash flows
due to the Company and the expected cash flows to be collected.B. For lease receivables the credit loss is the present value of the difference between the contractual cash flows
due to the Company and the expected cash flows to be collected.C. For financial guarantee contracts the credit loss is the expected payment to be made by the Company to
compensate for the credit loss incurred by the holder of the contract minus the present value of the difference
between the amount the Company expects to collect from the holder of the contract the debtor or any other party.D. For financial assets that have incurred credit impairment as of the balance sheet date but are not acquired or
originated credit-impaired the credit loss is the difference between the book value of the financial asset and the
present value of the estimated future cash flows discounted at the original effective interest rate.The methods used by the Company to measure the expected credit losses of financial instruments reflect factors
including: the unbiased probability-weighted average amount determined by evaluating a range of possible outcomes;
The time value of money. Information that can be obtained on the balance sheet date without the need for
unnecessary additional costs or efforts which is reasonable and substantiated relating to past events current
conditions and forecasts of future economic circumstances.
4) Write-down of financial assets
41When the Company no longer has reasonable expectation that the cash flows from the financial asset contract
can be fully or partially recovered the book value of the financial asset is directly written down. This write-down
constitutes the de-recognition of the related financial assets.
7. Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are presented separately in the balance sheet without offsetting each other.However if the following conditions are met they are presented in the Balance Sheet as a net amount after offsetting:
A. The Company has a legally enforceable right to offset the recognized amounts and this right is currently
enforceable;
B. The Company intends to settle on a net basis or to realize the financial asset and settle the financial liability
simultaneously.
12. Notes receivable
The Company's determination method and accounting treatment method of expected credit loss of notes
receivable are detailed in the Notes V.11.The Company separately determines the credit loss of receivables with sufficient evidence that can assess the
expected credit loss at a reasonable cost at the level of individual instrument.When there is no sufficient evidence to evaluate the expected credit loss at a reasonable cost at the level of
individual tools the Company refers to the historical credit loss experience combines the current situation and the
judgment of future economic conditions and divides the notes receivable into several combinations according to the
credit risk characteristics and calculates the expected credit loss on the basis of the combination. The basis for
determining the combination is as follows:
Combination name Basis for determining the combination Provision method
The provision for bad debts is
The drawer has a high credit rating and has no bill
measured with reference to the
Risk-free bank default in history so the risk of credit loss is extremely
historical credit loss experience and
acceptance draft low and also has a strong ability to fulfill the obligation to
in combination with the current
combination pay the cash flow of the contract in a short period of
situation and the expectation of time.future economic conditions.Provision is made based on the
Commercial
Accounts receivable with the same aging have similar comparison table of aging and
acceptance draft
credit risk characteristics expected credit loss rate over the combination
entire duration
13. Accounts receivable
The Company's determination method and accounting treatment method of expected credit loss of accounts
receivable are detailed in the Notes V.11.The Company separately determines the credit loss of accounts receivable with sufficient evidence that the
expected credit loss can be assessed at a reasonable cost at the level of a single instrument.When there is no sufficient evidence to evaluate the expected credit loss at a reasonable cost at the level of
individual tools the Company refers to the historical credit loss experience combines the current situation and the
judgment of future economic conditions and divides the accounts receivable into several combinations according to
the credit risk characteristics and calculates the expected credit loss on the basis of the combination. The basis for
determining the combination is as follows:
Combination
Basis for determining the combination Provision method name
Combination of Accounts receivable of related parties within the scope of The provision for bad debts is
receivables of consolidation have similar credit risk characteristics measured with reference to the
42related parties historical credit loss experience and
within the scope in combination with the current
of consolidation situation and the expectation of
future economic conditions.Provision is made based on the
Combination of
Accounts receivable with the same aging have similar credit comparison table of aging and
other customers'
risk characteristics expected credit loss rate over the receivables
entire duration
14. Receivables financing
Not applicable
15. Other receivables
Determination method and accounting treatment method of expected credit loss of other receivables
The Company's determination method and accounting treatment method of expected credit loss of other accounts
receivable are detailed in the Notes V.11.The Company individually determines the credit losses for other receivables that have sufficient evidence to
assess expected credit losses at a reasonable cost on an individual instrument level.When sufficient evidence to assess expected credit losses at a reasonable cost is not available on an individual
instrument level the Company refers to historical credit loss experience combined with current conditions and
judgments about future economic conditions and classifies other receivables into several combinations to calculate
expected credit losses on a combination basis. The basis for determining the combination is as follows:
Combination name Basis for determining the combination Provision method
Provision is made based on the
According to the nature of business
Combination of margin and comparison table of aging and
margin and deposits have similar credit risk deposit receivables expected credit loss rate over the characteristics
entire duration
The provision for bad debts is
measured with reference to the
According to the nature of business
Combination of employee historical credit loss experience and in
employees' reserve receivables have reserve receivable combination with the current situation similar credit risk characteristics
and the expectation of future economic
conditions.The provision for bad debts is
measured with reference to the
According to the nature of business social
Combination of social security historical credit loss experience and in
security advances have similar credit risk
advances receivable combination with the current situation
characteristics
and the expectation of future economic
conditions.The provision for bad debts is
measured with reference to the
Combination of receivables of Accounts receivable of related parties
historical credit loss experience and in
related parties within the scope within the scope of consolidation have
combination with the current situation of consolidation similar credit risk characteristics
and the expectation of future economic
conditions.Provision is made based on the
Accounts receivable with the same aging comparison table of aging and Combination of other financings
have similar credit risk characteristics expected credit loss rate over the
entire duration
4316. Contract assets
The Company recognizes a right to consideration from the transfer of goods to customers as a contract asset
when that right is conditional on factors other than the passage of time. The Company's unconditional rights to
consideration from customers (i.e. solely time-based) are presented separately as receivables.The Company's determination method and accounting treatment method of expected credit loss of contractual
assets are detailed in the Notes V.11.
17. Inventories
1. Inventory categories cost valuation methods for outgoing inventory inventory system and
amortization methods for low-value consumables and packaging materials
(1) Classification of inventory
Inventory refers to the finished products or goods held for sale products in production and materials and
materials consumed during the production process or service provision that the Company holds in its daily activities. It
mainly includes raw materials products in process finished products (stock commodities) etc.
(2) Cost valuation methods for inventory
At acquisition inventory is initially measured at cost including purchasing cost processing cost and other costs.Raw materials and inventory items are issued using the weighted average method for valuation except for branded
watch inventory items which are valued using the specific identification method.
(3) Inventory system
The inventory system is a perpetual inventory system.
(4) Amortization methods for low-value consumables and packaging materials
Low-value consumables are amortized using the one-time charge-off method;
Packaging materials are amortized using the one-time charge-off method;
2. Criteria and methods for recognizing and provisioning for inventory impairment
At the end of the period after a comprehensive inventory check inventory impairment provisions are made or
adjusted based on the lower of cost or net realizable value. For finished goods merchandise inventory and materials
for sale that are directly intended for sale in the normal course of business their net realizable value is determined by
the estimated selling price minus the estimated selling expenses and related taxes. For material inventory that requires
processing in the normal course of business its net realizable value is determined by the estimated selling price of the
produced finished goods minus the estimated costs to completion estimated selling expenses and related taxes. For
inventory held to fulfill sales or service contracts the net realizable value is calculated based on the contract price. If
the quantity of inventory held exceeds the quantity ordered in the sales contract the net realizable value of the excess
inventory is calculated based on the general selling price.At the end of the period inventory impairment provisions are made for individual inventory items; However for
inventories that are numerous and have low unit prices provisions for inventory impairment are made based on
inventory categories. Inventory that is related to the product series produced and sold in the same region with the
same or similar final uses or purposes and that is difficult to measure separately shall be combined for the provision
of inventory impairment.If the factors that led to the inventory write-down have disappeared the amount of the write-down is reversed and
included in the current profit and loss within the amount of inventory impairment provision originally recognized.The provision for inventory depreciation by combination is as follows:
44Determination basis of the net realizable Category Determination basis of category
value of the category
Combination of merchandise New products launched by private brands in
inventory years No provision for revaluation reserve the current year
18. Assets held for sale
Not applicable
19. Debt investment
Not applicable
20. Other debt investment
Not applicable
21. Long-term receivables
Not applicable
22. Long-term equity investments
1. Determination of initial investment cost
A. Long-term equity investments formed through business combinations see the Notes 6 for specific accounting
policies on business combinations under common control and those not under common control.B. Long-term equity investments acquired through other means
Long-term equity investments acquired by paying cash are measured at the actual acquisition price as the initial
investment cost. Initial investment cost includes directly related expenses taxes and other necessary expenditures
incurred in acquiring the long-term equity investment.Long-term equity investments acquired by issuing equity securities are measured at the fair value of the issued
securities as the initial investment cost; Transaction costs incurred in issuing or acquiring own equity instruments can
be directly deducted from equity in equity transactions.Under the premise that a non-monetary asset exchange has commercial substance and the fair value of the asset
received or surrendered can be reliably measured the initial investment cost of the long-term equity investment
acquired in a non-monetary asset exchange is based on the fair value of the surrendered asset unless there is
conclusive evidence that the fair value of the received asset is more reliable; For non-monetary asset exchanges that
do not meet the above premise the initial investment cost of the long-term equity investment acquired is based on the
book value of the surrendered asset and related taxes and fees payable.Long-term equity investments obtained through debt restructuring are initially measured at cost based on fair
value.
2. Subsequent measurement and recognition of profit or loss
A. Cost method
45The Company accounts for long-term equity investments over which it has control using the cost method
measured at initial investment cost with additional investments or withdrawals adjusting the cost of the long-term
equity investment.Apart from cash dividends or profits declared but not yet distributed included in the price or consideration paid at
the time of investment the Company recognizes cash dividends or profits distributed by the investee as current
investment income.B. Equity method
The Company uses the equity method to account for long-term equity investments in associates and joint
ventures; For a portion of equity investments in associates held indirectly through venture capital organizations mutual
funds trust companies or similar entities including investment-linked insurance funds fair value measurement is used
and changes are recognized in profit or loss.If the initial cost of a long-term equity investment is greater than the fair value share of the identifiable net assets
of the investee at the time of investment the initial investment cost is not adjusted; If the initial investment cost is less
than the fair value share of the identifiable net assets of the investee at the time of investment the difference is
recognized in the current profit or loss.After acquiring long-term equity investments the Company recognizes investment income and other
comprehensive income based on its share of net gains or losses and other comprehensive income realized by the
investee and adjusts the book value of the long-term equity investment accordingly; it also calculates the share of
profits or cash dividends declared by the investee and correspondingly reduces the book value of the long-term equity
investment; For changes in the investee's equity other than net profits or losses other comprehensive income and
profit distribution the book value of long-term equity investment shall be adjusted and included in the owner's equity.When recognizing the share of the net profit and loss of the investee the Company adjusts and recognizes the
net profit of the investee based on the fair value of the identifiable assets of the investee at the time of investment.Unrealized profits and losses of internal transactions between the Company and its associated enterprises and joint
ventures shall be offset by the portion that belongs to the Company according to the due proportion and the
investment profits and losses shall be recognized on this basis.When recognizing its share of losses incurred by the investee the Company shall handle it in the following order:
first it offsets the book value of the long-term equity investment. Next if the book value of the long-term equity
investment is insufficient to offset the losses the Company continues to recognize investment losses limited to the
book value of other long-term equity interests that substantially constitute a net investment in the investee offsetting
the book value of long-term receivables and other items. Finally after the above actions if the Company still has
additional obligations as stipulated by the investment contract or agreement it recognizes a provision for liabilities
based on the expected obligation and includes it in the current investment losses.If the investee realizes profits in subsequent periods the Company reverses the process described above after
deducting the share of unrecognized losses. It reduces the book value of recognized provisions for liabilities restores
other long-term equity interests and the book value of long-term equity investments that substantially constitute a net
investment in the investee and then resumes recognizing investment income.
3. Conversion of accounting methods for long-term equity investments
1) Fair value measurement to equity method accounting
For equity investments in investees over which the Company originally had no control joint control or significant
influence and which were accounted for in accordance with financial instruments recognition and measurement
guidelines if additional investments enable the Company to exert significant influence or joint control without
constituting control the fair value of the original equity investment determined by the Accounting Standards for
46Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments plus the cost of the additional
investment shall be the initial investment cost under the equity method.If the initial investment cost under the equity method is less than the difference between the fair value share of the
identifiable net assets of the investee on the date of the additional investment calculated based on the new
shareholding scale post-investment the book value of the long-term equity investment is adjusted and the difference
is recognized in current non-operating income.
2) Fair value measurement or equity method accounting to cost method accounting
For equity investments in investees over which the Company originally had no control joint control or significant
influence and which were accounted for in accordance with financial instruments recognition and measurement
guidelines or for long-term equity investments in associates and joint ventures if additional investments lead to control
over the investee not under common control in preparing individual financial statements the book value of the original
equity investment plus the cost of the additional investment shall be the initial investment cost under the cost method.Other comprehensive income recognized from equity investments accounted for by the equity method before the
acquisition date is accounted for on the same basis as the direct disposal of related assets or liabilities by the investee.For equity investments held before the acquisition date that were accounted for in accordance with the Accounting
Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments the cumulative
fair value changes previously recognized in other comprehensive income shall be reclassified to current profit or loss
under the cost method.
3) Equity method accounting to fair value measurement
If the Company loses joint control or significant influence over the investee due to partial divestment of equity
investments the remaining equity investments after the disposal shall be subject to accounting treatment in
accordance with the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of
Financial Instruments and the difference between the fair value and the book value on the date of losing joint control
or significant influence shall be recognized in current profit or loss.For original equity investments that recognized other comprehensive income under the equity method other
comprehensive income shall be subject to accounting treatment on the same basis as if the investee had directly
disposed of the related assets or liabilities not under the equity method.
4) Cost method to equity method
If the Company loses the control over the investee due to disposal of part of equity investments or other reasons
in the preparation of individual financial statements the remaining equity after disposal that can exercise joint control
or significant influence over the investee shall be subject to accounting treatment under the equity method and the
remaining equity shall be deemed to have been adjusted under the equity method since acquisition.
5) Cost method to fair value measurement
If the Company loses the control over the investee due to disposal of part of equity investments and other reasons
in the preparation of individual financial statements the remaining equity after disposal that cannot exercise joint
control or exert significant influence on the investee shall be subject to accounting treatment in accordance with the
relevant provisions of the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of
Financial Instruments and the difference between the fair value and the book value on the date when the control is
lost shall be included in the current profit and loss.
4. Disposal of long-term equity investments
For disposal of long-term equity investment the difference between the book value and the actual price shall be
included in the current profit and loss. For long-term equity investments accounted for under the equity method when
47disposing of the investment the part originally included in other comprehensive income shall be subject to accounting
treatment according to the corresponding scale on the same basis as the investee directly disposes of the relevant
assets or liabilities.If the terms conditions and economic impact of the transactions related to the disposal of the equity investment in
subsidiaries meet one or more of the following circumstances multiple transactions will be taken as a package
transaction for accounting treatment:
A. These transactions are concluded at the same time or under the consideration of mutual influence;
B. These transactions collectively achieve a complete commercial result;
C. The occurrence of one transaction depends on the occurrence of at least one other transaction;
D. A transaction is uneconomical on its own but economical when considered together with other transactions.Where the control over the original subsidiaries is lost due to disposal of part of equity investments or other
reasons and it does not belong to a package transaction relevant accounting treatment shall be made by
distinguishing individual financial statements from consolidated financial statements:
1) In the individual financial statements for the disposal of equity the difference between the book value and the
actual acquisition price shall be included in the current profit and loss. If the remaining equity after disposal can
exercise joint control or significant influence on the investee it shall be subject to accounting treatment under the
equity method and the remaining equity shall be adjusted as if it had been accounted for under the equity method
since acquisition; If the remaining equity after disposal cannot exercise joint control or significant influence on the
investee it shall be subject to accounting treatment in accordance with the relevant provisions of the Accounting
Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments and the
difference between the fair value and the book value on the date when the control is lost shall be included in the
current profit and loss.
2) In the consolidated financial statements for various transactions before the loss of control over the subsidiaries
the capital reserves (stock premium) are adjusted according to the difference between the disposal price and the share
of net assets of the subsidiaries continuously calculated from the acquisition date or the combination date
corresponding to the disposal of long-term equity investment. If the capital reserves are insufficient the retained
earnings shall be adjusted; When the control over subsidiaries is lost the remaining equity shall be re-measured at its
fair value on the date of loss of control. The difference between the sum of the consideration obtained from the
disposal of equity and the fair value of the remaining equity less the share of the net assets of the original subsidiary
calculated continuously from the acquisition date according to the original shareholding ratio is included in the
investment income in the period of losing control and the goodwill is also written down. Other comprehensive income
related to equity investments in the original subsidiary shall be converted into current investment profits at the loss of
control.If the transactions of disposal of equity investments in subsidiaries until the loss of control belong to a package
transaction the transactions shall be accounted for as a transaction of disposal of equity investment in subsidiaries
and loss of control and the relevant accounting treatment shall be carried out by distinguishing individual financial
statements and consolidated financial statements:
1) In individual financial statements the difference between each disposal price and the book value of long-term
equity investment corresponding to the disposed equity before the loss of control is recognized as other
comprehensive income and transferred to the current profit or loss at the loss of control.
2) In the consolidated financial statements the difference between each disposal price and the share of net
assets of the subsidiary corresponding to each disposal of investment before the loss of control is recognized as other
comprehensive income which is converted to the current profit or loss at the loss of control.
5. Judgment criteria for common control and significant influence
48If the Company collectively controls an arrangement according to the relevant agreement with other participants
and decisions on activities that significantly affect the returns of the arrangement require unanimous consent from the
participants sharing control then the Company is considered to jointly control the arrangement with other participants
which constitutes a joint venture.When a joint venture is established through a separate entity the Company's rights over the net assets of the
separate entity are determined according to the relevant agreement. The separate entity is then accounted for as a
joint venture using the equity method. If according to the relevant agreement the Company is not deemed to have
rights over the net assets of the separate entity the entity is considered as joint operation. The Company recognizes
items related to its share of the joint operation's profits and accounts for them in accordance with the relevant
accounting standards.Significant influence refers to the power to participate in decision-making over the financial and operating policies
of the investee without having control or joint control over the formulation of those policies. The Company assesses
whether it has significant influence over the investee by considering all facts and circumstances and through one or
more of the following situations: (1) having representation on the board of directors or similar governing body of the
investee; (2) participating in the process of setting financial and operating policies of the investee; (3) engaging in
significant transactions with the investee; (4) appointing managerial personnel to the investee; (5) providing essential
technical information to the investee.
23. Investment properties
Measurement model of investment property
Measured under cost method
Depreciation or amortization method
Investment properties refer to real estate held for earning rental income or capital appreciation or both including
leased land use rights land use rights held for appreciation and subsequent transfer and leased buildings.Furthermore for vacant buildings held by the Company for operational leasing if the Board of Directors issues a
written resolution explicitly stating the intent to use them for operational leasing and that the holding intention will not
change in the short term they are also reported as investment properties.The Company's investment properties are recorded at cost as their entry value which for externally acquired
investment properties includes the acquisition price related taxes and fees and other expenditures that can be directly
attributed to the asset. The cost of self-constructed investment properties consists of necessary expenditures incurred
before the asset reaches its intended usable state.The Company uses the cost model for subsequent measurement of investment properties providing depreciation
or amortization for buildings and land use rights based on their expected service lives and net residual value rates.The expected service lives net residual value rates and annual depreciation (amortization) rates of investment
properties are listed as follows:
Expected service life Expected net residual value Annual depreciation Category
(years) rate (%) (amortization) rate (%)
Houses and buildings 20-35 5.00 2.71-4.85
When the use of investment property is changed to owner-occupied from the date of change the Company
reclassifies the investment property as fixed assets or intangible assets. When the use of owner-occupied property is
changed to earn rental income or capital appreciation from the date of change the Company reclassifies fixed assets
or intangible assets as investment property. At the time of conversion the book value before conversion is used as the
recorded value after conversion.
49When investment property is disposed of or permanently withdrawn from use and no economic benefits are
expected from its disposal the recognition of such investment property is ceased. The income from the sale transfer
scrapping or destruction of investment property after deducting its book value and related taxes is recognized in the
current profit or loss.
24. Fixed assets
(1) Recognition conditions
Fixed assets refer to tangible assets held for the production of goods provision of services leasing or
administrative purposes and have a service life exceeding one accounting year. Fixed assets are recognized when
they meet the following conditions:
1) It is probable that the economic benefits associated with the fixed asset will flow into the enterprise;
2) The cost of the fixed asset can be measured reliably.
(2) Depreciation methods
Annual depreciation
Category Depreciation method Depreciation period Residual value rate
rate
Houses and
Straight-line method 20-35 5 2.71-4.85
buildings
Machinery
Straight-line method 10 5.00-10.00 9.50-9.00
equipment
Electronic equipment Straight-line method 5 5 19
Transport equipment Straight-line method 5 5 19
Other equipment Straight-line method 5 5 19
1. Depreciation of fixed assets
The depreciation of fixed assets is accrued over their expected service lives based on their book-entry values
minus their expected net residual values. For fixed assets with provision for impairment the depreciation amount will
be determined in the future according to the book value after deducting the impairment provision and the service life;
Fixed assets that have been fully depreciated and are still in use shall not be depreciated.The Company determines the useful life and estimated net residual value of the fixed assets according to their
nature and usage. At the end of each fiscal year the Company reviews the useful life estimated net residual value
and depreciation method of fixed assets and makes corresponding adjustments if there are differences from the
original estimates.
2. Subsequent expenditures on fixed assets
Subsequent expenditures related to fixed assets that meet the recognition criteria for fixed assets are included in
the cost of fixed assets; Those that do not meet the recognition criteria for fixed assets are included in the current
profits and losses when incurred.
3. Disposal of fixed assets
Fixed assets are derecognized upon disposal or when no future economic benefits are expected from their use or
disposal. The net amount of disposal income from fixed assets through sale transfer scrapping or damage after
deducting their book value and related taxes is recognized in the current profits and losses.
25. Construction in progress
1. Initial measurement of construction in progress
50The Company values self-constructed construction in progress at actual cost. Actual costs comprise necessary
expenditures incurred to bring the asset to the intended usable state including material costs labor costs related
taxes capitalized borrowing costs and apportioned indirect costs.
2. Standard and timing for transferring of construction in progress to fixed assets
The total expenses incurred before the construction in progress asset is ready for its intended use are recorded as
the entry value of the fixed asset. Construction in progress is transferred to fixed assets at the total expenditure
incurred before the asset reaches its intended usable state. If the project is usable but final settlement has not been
completed it is transferred based on estimated value and depreciated according to the Company's depreciation policy.Adjustments are made to the estimated value upon final settlement but previously recognized depreciation is not
adjusted.
26. Borrowing costs
1. Recognition principle of capitalization of borrowing costs
Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and construction
or production of assets eligible for capitalization such costs shall be capitalized; And other borrowing costs shall be
recognized as expenses and included in current profits and losses when incurred.Qualifying capitalized assets are those that require a substantial period to get ready for their intended use or sale
including fixed assets investment properties and inventories.Borrowing costs begin to be capitalized when the following conditions are met:
(1) Expenditures for the asset have been incurred including cash payments transfers of non-cash assets or
incurring interest-bearing debt for the acquisition and construction or production of the asset;
(2) Borrowing costs have been incurred;
(3) Acquisition and construction or production activities necessary to bring the asset to its intended use or sale
have commenced.
2. Capitalization period of borrowing costs
The capitalization period spans from when borrowing costs begin to be capitalized until they cease excluding any
periods when capitalization is suspended.The borrowing costs shall stop being capitalized when acquired and constructed or produced assets eligible for
capitalization are available for use or sale.If parts of an asset being acquired and constructed or produced are completed and can be used independently
capitalization of borrowing costs for those parts ceases.When various parts of an asset are completed separately but the asset can only be used or sold as a whole upon
total completion capitalization of borrowing costs ceases when the entire asset is finished.
3. Suspension of capitalization period
Where the acquisition and construction or production of assets eligible for capitalization is interrupted abnormally
and the interruption lasts for more than 3 months the capitalization of borrowing costs shall be suspended; If the
interruption is a necessary procedure for the asset to be ready for use or sale the capitalization of borrowing costs
continues. Borrowing costs incurred during the interruption are recognized as current profits and losses until the
acquisition and construction or production activities resume and the capitalization of borrowing costs continues.
4. Calculation method of capitalized amount of borrowing costs
51Interest expenses on specific borrowings (after deducting interest income earned from unused borrowings
deposited in the bank or investment returns from temporary investments) and related ancillary costs are capitalized
until the qualifying asset is ready for its intended use or sale.The interest amount of general borrowings to be capitalized is calculated based on the weighted average of the
asset expenditures exceeding the specific borrowings multiplied by the simple average at end of the period and the
capitalization rate of the general borrowings occupied. The capitalization rate is calculated and determined based on
the weighted average interest rate of general borrowings.For borrowings issued at a discount or premium the amount of discount or premium amortized in each accounting
period is determined using the effective interest method adjusting the interest amount for each period.
27. Biological assets
Not applicable
28. Oil and gas assets
Not applicable
29. Intangible assets
(1) Service life and its determination basis estimation amortization method or review
procedure
Intangible assets refer to identifiable non-monetary assets without physical substance that the Company owns or
controls including land use rights software systems and trademark use rights.
1) Initial measurement of intangible assets
The cost of externally acquired intangible assets includes the purchase price related taxes and fees and other
expenses directly attributable to preparing the asset for its intended use. If the payment for intangible assets exceeds
normal credit terms and essentially represents financing the cost of the intangible assets is determined based on the
present value of the purchase price.Intangible assets acquired through debt restructuring to settle debts are measured at their fair value upon
recognition and any difference between the book value of the restructured debt and the fair value of the intangible
assets is recognized in the current profit or loss.In a non-monetary asset exchange that has commercial substance and where the fair value of the assets received
or surrendered can be reliably measured the cost of the intangible assets acquired is based on the fair value of the
assets surrendered unless there is conclusive evidence that the fair value of the acquired assets is more reliable; For
non-monetary asset exchanges that do not meet the above conditions the cost of the intangible assets acquired is
based on the book value of the assets surrendered and the related taxes and fees paid without recognizing any profit
or loss.Intangible assets acquired through business combination under common control are measured at the book value
of the merged party; For mergers not under common control intangible assets are recognized at fair value.Intangible assets developed internally include costs for materials used labor registration fees amortization of
other patents and licenses used during development interest expenses that meet capitalization criteria and other
direct expenses incurred before the intangible assets are ready for their intended use.
522) Subsequent measurement of intangible assets
The Company classifies intangible assets as having either finite or indefinite useful lives upon acquisition.Intangible assets with limited useful life
Intangible assets with a finite useful life are amortized on a straight-line basis over their beneficial periods. The
estimated useful life and basis for intangible assets with a finite useful life are as follows:
Item Estimated service life Basis
Land use rights 50 Straight-line method
Software system 5 Straight-line method
Right to use trademark 5-10 Straight-line method
At the end of each period the useful life and amortization method of intangible assets with a finite useful life are
reviewed. If there are differences from the original estimates adjustments are made accordingly.Upon review there were no changes in the estimated useful life and amortization method of intangible assets at
the end of the current period.
(2) Collection scope of R&D expenses and related accounting treatment methods
1) Specific standards for classifying the research stage and development stage of the Company's internal
research and development projects
Research stage: This stage involves original and planned investigation activities undertaken to acquire and
understand new scientific or technical knowledge.Development stage: This stage involves applying research findings or other knowledge to a plan or design for
producing new or substantially improved materials devices products etc. before commercial production or use.Expenditures during the research stage of internal research and development projects are recognized as an
expense in the current profits and losses when incurred.
2). Specific criteria for capitalizing expenditures during the development stage
Expenditures during the development stage of internal research and development projects are recognized as
intangible assets when the following conditions are met:
A. Complete such intangible asset to make it usable or salable with technical feasibility;
B. Intention of completing such intangible asset for use or sale;
C. The ways in which intangible assets generate economic benefits include being able to demonstrate that
products produced using the intangible assets have a market or that the intangible assets themselves have a market.If the intangible assets are intended for internal use their utility must be proven;
D. There is sufficient support from technical financial resources and other resources to complete development of
such intangible assets and the ability of using or selling such intangible assets;
E. The expenditures attributable to development stage of such intangible assets shall be measured reliably.Expenditures in the development stage that do not meet the above conditions shall be included in the current
profits and losses when incurred. Development expenditures recognized in profits and losses in prior periods shall not
be subsequently reclassified as assets. Capitalized development phase expenditures are presented as development
expenditures on the balance sheet and are reclassified as intangible assets from the date the project is ready for its
intended use.
5330. Long-term assets impairment
The Company assesses whether there are any indications that long-term assets may be impaired as of the
balance sheet date. If indications of impairment exist in long-term assets their recoverable amount is estimated based
on individual assets; If it is difficult to estimate the recoverable amount of an individual asset the recoverable amount
of the asset group to which the asset belongs is determined.The estimate of the recoverable amount of an asset is based on the higher of its fair value less costs to sell and
the present value of the expected future cash flows.If the estimated recoverable amount of a long-term asset is lower than its carrying amount the carrying amount of
the long-term asset is written down to its recoverable amount. The impairment loss is recognized in current profits and
losses and an impairment provision is made accordingly. Once recognized impairment losses for assets shall not be
reversed in subsequent accounting periods.After the recognition of an impairment loss the depreciation or amortization expense of the impaired asset is
adjusted in future periods to systematically allocate the asset's adjusted carrying amount (less the expected net
residual value) over its remaining useful life.Goodwill arising from business combinations and intangible assets with indefinite useful lives are tested for
impairment annually regardless of whether there are any indications of impairment.When testing for impairment of goodwill the carrying amount of goodwill is allocated to the asset groups or
combinations that are expected to benefit from the synergies of the business combination. When testing for
impairment of asset groups or combinations that include goodwill if there are indications of impairment for the asset
groups or combinations related to goodwill the asset groups or combinations that do not include goodwill are tested
for impairment first. The recoverable amount is calculated and compared with the related carrying amount to recognize
the corresponding impairment loss. Then the asset groups or combinations that include goodwill are tested for
impairment comparing the carrying amount of these related asset groups or combinations (including the allocated
portion of the carrying amount of goodwill) with their recoverable amount. If the recoverable amount of the related
asset groups or combinations is lower than their carrying amount the impairment loss of goodwill is recognized.
31. Long-term deferred expenses
1. Amortization method
Long-term deferred expenses refer to expenses that have been incurred by the Company but are to be borne by
the current and subsequent periods with an amortization period of more than 1 year. Long-term deferred expenses
are amortized on a straight-line basis over the benefit period.
2. Amortization period
Category Amortization period
Counter production fee 2-3
Decoration fee 3-5
Other 2-3
32. Contract liabilities
Contract liabilities are the obligations for which the company has received or is entitled to receive consideration from
customers for the transfer of goods.
5433. Employee compensation
(1) Accounting treatment methods for short-term compensation
Short-term compensation is employee compensation that is expected to be fully paid within twelve months after
the end of the annual reporting period in which employees provide related services excluding post-employment and
termination benefits. During the accounting period when services are provided by employees the company recognizes
payable short-term compensation as liabilities and includes them in the cost of related assets and expenses based on
the beneficiaries of the services provided.
(2) Accounting treatment method for post employment benefits
Post-employment benefits are various forms of remuneration and benefits provided to employees after they retire
or terminate their employment with the company excluding short-term compensation and termination benefits.The company's post-employment benefit plans are classified into defined contribution plans.Post-employment defined contribution plans mainly consist of participation in social basic pension insurance
unemployment insurance etc. organized and implemented by local labor and social security institutions. During the
accounting period in which employees provide services the company recognizes the contributions payable under
defined contribution plans as a liability and includes them in the current profits and losses or the cost of related assets.After the Company makes the above payments on a regular basis in accordance with the standards stipulated by
the state and the annuity plan it will have no other payment obligations.
(3) Accounting treatment method for dismissal benefits
Termination benefits are compensations paid to employees as a result of the company's decision to terminate
their employment before the contractual retirement date or to encourage voluntary resignation. The liability for
termination benefits is recognized when the company cannot unilaterally withdraw the plan to terminate employment or
the proposal to encourage voluntary resignation whichever is earlier. The liability is included in the current profits and
losses.The company provides early retirement benefits to employees who accept internal retirement arrangements. Early
retirement benefits refer to wages paid to employees who have not reached the statutory retirement age and have
voluntarily left their positions with the approval of the company's management as well as social insurance
contributions paid on their behalf. From the start date of the internal retirement arrangement until the employee
reaches the normal retirement age the company pays early retirement benefits to the early retired employees. For
early retirement benefits the company accounts for them in the same way as severance benefits. When the conditions
for recognizing severance benefits are met the wages and social insurance contributions intended to be paid from the
date the employee ceases to provide services until the normal retirement date are recognized as liabilities and
charged to current profits and losses in a lump sum. Differences arising from changes in actuarial assumptions and
adjustments to benefit standards for early retirement benefits are recognized in current profits and losses when
occurred.
(4) Accounting treatment of other long-term employee benefits
Other long-term employee benefits refer to all employee benefits other than short-term salaries post-employment
benefits and dismissal benefits.
55For other long-term employee benefits meeting the conditions of defined contribution plans the company
recognizes the contributions payable as a liability during the accounting period in which employees render services
and includes them in the current profits and losses or the cost of related assets. For other long-term employee benefits
not meeting these conditions an independent actuary uses the projected unit credit method at each balance sheet
date to calculate the benefit obligations attributable to the period in which employees provide services and these are
included in the current profits and losses or the cost of related assets.
34. Estimated liabilities
1. Recognition criteria for estimated liabilities
In case that an obligation connected to contingencies meets all of the following conditions the Company
recognizes the obligation as a provision:
The obligation is a present obligation of the Company;
The fulfillment of the obligation is likely to result in an outflow of economic benefits;
The amount of the obligation can be measured reliably.
2. Measurement of estimated liabilities
The company measures its provisions based on the best estimate of the expenditures required to settle the
present obligations.When determining the best estimate the company comprehensively considers factors related to contingent items
such as risk uncertainty and the time value of money. For significant impacts of the time value of money the best
estimate is determined by discounting the related future cash outflows.The best estimate is treated as follows:
If the required expenditure falls within a continuous range (or interval) with equal likelihood of various outcomes
the best estimate is determined by the average of the range's upper and lower limits.If there is no continuous range (or interval) for the required expenditure or the likelihood of various outcomes
within the range is not equal such as in the case of contingent items involving a single project the best estimate is
determined by the most likely amount. If the contingent items involve multiple projects the best estimate is calculated
based on the various possible outcomes and their associated probabilities.If the company expects to be reimbursed by a third party for all or part of the expenditure required to settle a
provision the reimbursement amount is recognized as an asset when it is virtually certain to be received and the
recognized amount does not exceed the carrying amount of the provision.
35. Share-based payment
1. Types of share-based payments
The company's share-based payments are categorized into equity-settled and cash-settled.
2. Determination method for the fair value of equity instruments
For granted options and other equity instruments with an active market their fair value is determined based on
quoted prices in the active market. For granted options and other equity instruments without an active market their fair
value is estimated using option pricing models which consider the following factors: (1) the exercise price of the option;
(2) The option's term; (3) The current price of the underlying stock; (4) The expected volatility of the stock price; (5)
The expected dividends of the shares; (6) The risk-free interest rate during the option's term.
56When determining the fair value of equity instruments on the grant date the impact of market and non-vesting
conditions as stipulated in the share-based payment agreement is considered. For share-based payments with non-
vesting conditions as long as the employee or other party meets all non-market conditions among the vesting
conditions (such as service period) the cost corresponding to the services received is recognized.
3. Basis for the best estimate of vesting equity instruments
On each balance sheet date within the waiting period the best estimate of the number of equity instruments
expected to vest is revised based on subsequent information such as changes in the number of employees eligible for
vesting. On the vesting date the final expected number of equity instruments to vest matches the actual number
vested.
4. Accounting treatment
For equity-settled share-based payments they are measured at the fair value of the equity instruments granted to
employees. If immediately exercisable upon grant they are recognized in related costs or expenses at the grant date's
fair value with a corresponding increase in capital reserve. If exercisable only after completing the service or achieving
performance conditions within the vesting period each balance sheet date during the vesting period will reflect the
best estimate of the number of vestable equity instruments. The fair value on the grant date is used to allocate the
service costs obtained in the current period into related costs or expenses and capital reserve. Post-vesting date no
adjustments are made to the recognized costs or expenses and total equity.For cash-settled share-based payments they are measured at the fair value of the liabilities calculated based on
the Company's shares or other equity instruments. If immediately exercisable upon grant they are recognized in
related costs or expenses at the fair value of the liabilities assumed at the grant date with a corresponding increase in
liabilities. If exercisable only after completing the service or achieving performance conditions within the vesting period
each balance sheet date during the vesting period will reflect the best estimate of the exercisable situation. The fair
value of the liabilities assumed is used to allocate the service costs obtained in the current period into costs or
expenses and corresponding liabilities. On each balance sheet date and settlement date before the settlement of
relevant liabilities the fair value of liabilities shall be re-measured and the changes shall be included in the current
profits and losses.If the granted equity instruments are cancelled within the vesting period the Company treats the cancellation as
accelerated vesting recognizing the remaining amount to be recognized in the vesting period immediately in current
profits and losses and simultaneously increasing capital reserves. If employees or other parties have the option to
meet non-vesting conditions but fail to meet them within the vesting period the Company treats it as a cancellation of
the granted equity instruments.
36. Other financial instruments like preferred shares and perpetual bonds
Not applicable
37. Revenue
Disclosure of accounting policies adopted for recognition and measurement of revenue by business type
The Company's revenue mainly comes from the following business types:
(1) Watch sales business
(2) Precision manufacturing business
(3) Property leasing business
571. General principles of revenue recognition
Revenue is recognized at the transaction price allocated to the performance obligation when the Company fulfills
its performance obligations under a contract by transferring control of goods or services to the customer.Performance obligation refers to the commitment in the contract that the Company can transfer to the customer
the goods or services that can be clearly distinguished.Control over the relevant goods is transferred when the customer can direct the use of and obtain substantially all
the remaining benefits from the goods or services.On the contract commencement date the Company assesses the contract to identify each distinct performance
obligation and determines whether each obligation is satisfied over time or at a point in time. If one of the following
conditions is met it is considered that the performance obligation is fulfilled over a period of time and the Company
recognizes revenue based on the progress of performance over time: (1) The customer simultaneously receives and
consumes the economic benefits as the company performs; (2) The customer controls the goods in progress as the
company performs; (3) The goods produced by the company's performance have no alternative use and the company
has the right to payment for the performance completed to date throughout the contract period. Otherwise the
Company recognizes revenue at the point in time when the customer obtains control of the relevant goods or services.For performance obligations fulfilled over a period of time the Company determines the appropriate progress of
performance based on the nature of goods and services using the input method. The output method determines the
progress of performance based on the value of goods transferred to the customer (the input method determines the
progress of performance based on the company's inputs to fulfill the performance obligation). Where the progress of
performance cannot be reasonably determined if the costs incurred by the Company are expected to be compensated
revenue shall be recognized according to the amount of costs incurred until the progress of performance can be
reasonably determined.
2. Specific methods of revenue recognition
The company has three main business segments: watch sales precision manufacturing and property leasing.According to the Company's own business model and settlement method the specific methods for recognizing sales
revenue of various businesses are disclosed as follows:
(1) Watch sales business
The Company's watch sales business is a performance obligation performed at a certain point in time.* Online sales
Revenue is recognized when the products are delivered signed for by the customer and payment has been
received by the platform.* Offline sales
Revenue is recognized when the product is delivered to the customer and accepted by the customer the price
has been received or the right to receive the payment has been obtained and the relevant economic benefits are likely
to flow in.* Commissioned sales
Under the commissioned sales model the Company recognizes revenue when it receives the sales list from the
commissioned seller and confirms that the control over the goods has been transferred to the purchaser.* Consignment-in
Under the consignment-in model when the Company delivers the external consignment products to the customer
and confirms that the control of the goods has been transferred to the buyer the revenue is recognized by net method.
(2) Precision manufacturing business
58The Company's precision manufacturing and sales business fulfills the performance obligations at a point in time.
Domestic sales revenue is recognized when the company delivers the product to the contractually agreed delivery
location the products are accepted by the customer payment has been received or the right to receive payment has
been obtained and the related economic benefits are likely to flow in. Export sales revenue is recognized when the
company has declared the products for export according to the contract obtained the Bill of Lading received the
payment or obtained the right to receive payment and the related economic benefits are likely to flow in.
(3) Property leasing business
For details of specific accounting policies please refer to Note V.41 Accounting treatment of the Company as a
lessor.
3. Revenue treatment principles for specific transactions
(1) Contracts with sales return clauses
Revenue is recognized at the amount expected to be entitled from the transfer of goods to the customer when the
customer obtains control of the relevant goods (i.e. excluding the amount expected to be refunded due to sales
returns). A liability is recognized for the amount expected to be refunded due to sales returns.The carrying amount of goods expected to be returned less the estimated costs to recover such goods (including
any impairment of the returned goods) is accounted for under the item "refund assets."
(2) Contracts with quality assurance clauses
Evaluate whether the quality assurance provides a separate service in addition to assuring the customer that the
goods sold meet the established standards. If the Company provides additional services it shall be treated as a single
performance obligation and subject to accounting treatment in accordance with the provisions of the revenue
standards; Otherwise the quality assurance responsibility shall be subject to accounting treatment in accordance with
the provisions of the accounting standards for contingencies.Different revenue recognition and measurement methods involved in different business models adopted by the same
type of business
Not applicable
38. Contract costs
1. Contract performance costs
The costs incurred by the company for the performance of a contract which do not fall within the scope of other
accounting standards outside of revenue standards and meet the following conditions are recognized as an asset:
(1) The costs are directly related to a current or expected contract including direct labor direct materials
manufacturing overhead (or similar costs) costs explicitly borne by the customer and other costs incurred solely due
to the contract;
(2) The costs that increase the resources of the enterprise for future performance obligations;
(3) The costs that are expected to be recoverable.
These assets are classified as inventory or other non-current assets based on whether their amortization period
exceeds a normal operating cycle from the time of initial recognition.
2. Contract acquisition costs
The incremental costs incurred by the company to obtain a contract that are expected to be recoverable are
recognized as an asset. Incremental costs refer to costs that would not have been incurred if the contract had not been
obtained such as sales commissions. For amortization periods not exceeding one year these costs are recognized in
the current profits and losses upon occurrence.
593. Amortization of contract costs
Assets related to contract costs are amortized on the same basis as the revenue recognition for the associated
goods or services. They are amortized at the point in time or according to the progress of the performance obligations
and recognized in the current profits and losses.
4. Impairment of Contract Costs
For assets related to contract costs if the carrying amount exceeds the difference between the expected
consideration receivable from transferring the goods related to the asset and the estimated costs to transfer those
goods an impairment provision should be recognized for the excess and recorded as an asset impairment loss.After the impairment loss is provided for if there is a change in the factors that caused the impairment in previous
periods resulting in the above difference exceeding the carrying amount of the asset the previously provided
impairment loss is reversed and recognized in the current profits and losses. However the carrying amount of the
asset after reversal should not exceed the carrying amount on the reversal date assuming no impairment loss had
been provided.
39. Government subsidies
1. Type
Government grants are monetary and non-monetary assets obtained by the company from the government
without compensation. Based on the beneficiary specified in the relevant government documents government grants
are classified into asset-related and income-related government grants.Government subsidies related to assets refer to government subsidies obtained by the Company for the purchase
construction or other forms of long-term assets of government subsidies. Government subsidies related to income
refer to government subsidies other than government subsidies related to assets.
2. Recognition of government subsidies
Government grants are recognized at the receivable amount at the end of the period if there is evidence that the
company meets the relevant conditions of the financial support policy and expects to receive the financial support
funds. Otherwise government grants are recognized when actually received.Government grants in the form of monetary assets are measured at the amount received or receivable. Non-
monetary government grants are measured at fair value; If fair value cannot be reliably determined they are measured
at the nominal amount (RMB1). Government grants measured at a nominal amount are directly included in the current
profits and losses.
3. Accounting treatment method
Based on the economic substance of the transactions the Company determines whether to use the gross method
or net method for accounting treatment of a certain type of government grant transaction. Usually the Company uses
only one method for similar or related government grant transactions and consistently applies that method to the
transactions.For asset-related government grants the grants are either deducted from the carrying amount of the related asset
or recognized as deferred income. Asset-related government grants recognized as deferred income are systematically
recognized in profits and losses over the useful life of the constructed or purchased asset using a reasonable and
systematic method.For income-related government grants those used to compensate for related expenses or losses incurred by the
company in subsequent periods are recognized as deferred income and included in profit or loss or deducted from
related costs in the period when the related expenses or losses are recognized; Those used to compensate for related
60expenses or losses already incurred by the company are directly included in profit or loss or deducted from related
costs when received.Government grants related to the entity's routine activities are recognized as other income or deducted from
related cost expenses; Government grants not related to the entity's routine activities are recognized as non-operating
income and expenses.Government grants received for interest subsidies on policy-based preferential loans are used to offset related
borrowing costs; For policy-based preferential interest rate loans provided by lending banks the actual loan amount
received is taken as the borrowing's book value and the relevant borrowing costs are calculated based on the loan
principal and the policy-based preferential interest rate.When previously recognized government grants need to be returned if they were initially deducted from the
carrying amount of related assets the asset carrying amount shall be adjusted; If there is a balance of related deferred
income the balance of deferred income is reduced and the excess is included in the current profits and losses; If
there is no related deferred income the amount is directly included in the current profits and losses.
40. Deferred tax assets and deferred tax liabilities
Deferred tax assets and liabilities are recognized based on the differences between the tax bases of assets and
liabilities and their carrying amounts (temporary differences). On the balance sheet date the deferred income tax
assets and deferred income tax liabilities shall be measured according to the tax rate applicable to the period during
which the assets are expected to be recovered or the liabilities are expected to be paid off.
1. Recognition basis of deferred tax assets
Deferred tax assets arising from deductible temporary differences that are recognized to the extent that taxable
income will be probable to be available against the deductible temporary difference deductible losses and tax credits
that can be carried forward to subsequent periods. However the deferred tax assets arising from the initial recognition
of assets or liabilities in a transaction with the following characteristics at the same time shall not be recognized: (1)
The transaction is not a business combination; (2) The transaction affects neither the accounting profit nor the taxable
income or deductible loss.For deductible temporary differences related to investments in associates the corresponding deferred tax assets
are recognized when all the following conditions are met: the temporary difference may be reversed in the foreseeable
future and taxable income will be available against which the deductible temporary differences can be used.
2. Recognition basis of deferred income tax liabilities
The company recognizes the taxable temporary differences payable but not paid in the current period and prior
periods as deferred income tax liabilities. But excluding:
(1) Temporary differences arising from the initial recognition of goodwill;
(2) Transactions or events that are not formed by business combination and the occurrence of such transactions
or events affects neither the accounting profit nor the temporary differences formed by the taxable income (or
deductible losses);
(3) For taxable temporary differences related to investments in subsidiaries and associates the time of their
reversal can be controlled and they are not likely to be reversed in the foreseeable future.
3. Deferred tax assets and liabilities are presented as a net amount when the following conditions are met
simultaneously:
(1) The enterprise has the legal right to offset current tax assets against current tax liabilities on a net basis;
61(2) The deferred tax assets and liabilities are related to income taxes levied by the same taxation authority on the
same taxable entity or different taxable entities and for each significant period in which the deferred tax assets and
liabilities reverse the involved taxable entities intend to settle current tax assets and liabilities on a net basis or realize
the assets and settle the liabilities simultaneously.
41. Leasing
(1) Accounting treatment method of leasing as a lessee
At the commencement date of the lease except for short-term leases and leases of low-value assets subject to
simplified treatment the company recognizes right-of-use assets and lease liabilities.Short-term leases and leases of low-value assets
Short-term leases are those without a purchase option and with a lease term of not more than 12 months. Leases
of low-value assets refer to leases where the leased asset if new is of low value.The company does not recognize right-of-use assets and lease liabilities for short-term leases and leases of low-
value assets; instead related lease payments are recognized on a straight-line method or other systematic and
reasonable methods over the lease term as part of the cost of the related assets or as current period profit or loss.
(2) Accounting treatment method of leasing as a lessor
(1) Classification of leases
The company classifies leases as finance leases or operating leases on the commencement date of the lease.Finance lease refers to a lease that substantially transfers all risks and rewards related to ownership of the leased
asset where ownership may or may not ultimately be transferred. Operating lease refers to all other leases that are
not finance leases.A lease is typically classified as a finance lease by our company if one or more of the following conditions exist:
1) Ownership of the leased asset is transferred to the lessee at the end of the lease term;
2) The lessee has the option to purchase the leased asset at a price sufficiently lower than its fair value at the
time the option is expected to be exercised making it reasonably certain that the lessee will exercise the option at the
lease commencement date;
3) Although ownership is not transferred the lease term covers a major part of the useful life of the asset;
4) At the inception of the lease the present value of the lease receipts is nearly the fair value of the leased asset;
5) The leased asset is of such a specialized nature that only the lessee can use it without major modifications.
A lease may also be classified as a finance lease by our company if it exhibits one or more of the following
indicators:
1) If the lessee cancels the lease the lessee bears the losses associated with the cancellation for the lessor;
2) Gains or losses arising from fluctuations in the fair value of the residual value of assets are attributed to the
lessee.
3) The lessee has the ability to continue leasing at a rent significantly below market level for the next period.
(2) Accounting treatment for finance leases
On the lease commencement date the Company recognizes the finance lease receivables for the finance lease
and terminates the recognition of the finance lease assets.At the initial recognition of finance lease receivables the unguaranteed residual value and the present value of
lease receipts not received on the commencement date of lease term discounted at the interest rate implicit in the
lease are summed to determine the entry value of the finance lease receivables. Lease receipts include:
621) Fixed payments and substantially fixed payments after deducting lease incentives;
2) Variable lease payments that depend on an index or rate;
3) In cases where it is reasonably certain that the lessee will exercise the purchase option lease receipts include
the exercise price of the purchase option;
4) If the lease term reflects that the lessee is expected to exercise the termination option lease receipts include
the amount payable by the lessee upon exercising the termination option;
5) Guaranteed residual value provided to the lessor by the lessee parties related to the lessee and independent
third parties with the financial capacity to fulfill the guarantee obligations.The company calculates and recognizes interest income for each period within the lease term based on a fixed
implicit lease rate. Variable lease payments not included in the net investment in the lease are recognized in the
current period's profit or loss when they occur.
(3) Accounting treatment for operating leases
The company recognizes lease receipts from operating leases as rental income over the lease term using the
straight-line method or another systematic and rational method; Initial direct costs associated with operating leases are
capitalized and amortized over the lease term on the same basis as rental income recognition and are included in the
current period's profit or loss; Variable lease payments related to operating leases that are not included in lease
receipts are recognized in the current period's profit or loss when they occur.
42. Other significant accounting policies and accounting estimates
Not applicable
43. Changes in significant accounting policies and estimates
(1) Changes in significant accounting policies
Not applicable
(2) Changes in significant accounting estimates
Not applicable
(3) Adjustment of items related to the financial statements at the beginning of the year when the new
accounting standards are implemented for the first time since 2024
Not applicable
44. Others
Not applicable
VI. Taxes
1. Main taxes and tax rates
63Tax Type Tax Basis Tax rates
Domestic sales and provision of
processing repairs and replacement 13%
services
VAT
Real estate leasing services 9%
Other taxable sales of services 6%
Simple tax method 5%
Consumption tax High-end watches 20%
Urban maintenance and construction
Paid-in turnover tax 7%、5%
tax
Enterprise income tax Taxable income See the table below for details
Tax basis: 70% or 80% of the original
Property tax 1.2%、12%
value of the house property
Disclosure of information about taxpayers with different enterprise income tax rates
Name of taxpayer Income tax rate
Shenzhen Harmony World Watch Centre Co. Ltd. (* ) 25%
FIYTA Sales Co. Ltd. (* ) 25%
Shenzhen FIYTA Precision Technology Co. Ltd. (* ) 15%
Shenzhen FIYTA STD Co. Ltd. (* ) 15%
Shenzhen Harmony World Watch Centre Co. Ltd. (* ) 20%
Shenzhen Xunhang Precision Technology Co. Ltd. 25%
Emile Chouriet Horologe (Shenzhen) Co. Ltd. 25%
Liaoning Hengdarui Commerce and Trade Co. Ltd. 25%
Temporal (Shenzhen) Co. Ltd. 25%
Shenzhen Harmony E-commerce Co. Ltd. (* ) 20%
FIYTA (HONG KONG) LIMITED (* ) 16.5%
Montres Chouriet SA（* ） 30%
Note * : According to the relevant provisions of the "Interim Measures for the Administration of Enterprise Income
Tax Collection for Enterprises with Trans-regional Operations and Consolidated Tax Payments" issued by the State
Administration of Taxation the headquarters and its subordinate branches of such companies implement a
consolidated tax payment method for enterprise income tax. This method involves "unified calculation hierarchical
management local prepayment consolidated settlement and fiscal transfer of accounts." 50% of the prepayment is
shared among branches and 50% is shared by the head office;
Note * : These companies enjoy the "tax rate reduction and exemption for high-tech enterprises that need key
support from the state";
Note * : the Company's registered location is Hong Kong and the local profits tax in Hong Kong is applicable and
the applicable tax rate for this year is 16.50%;
Note * : the Company is registered in Switzerland. According to the applicable tax rate in registration location the
comprehensive tax rate for this year is 30%;
Notes * : these companies are small low-profit enterprises and are subject to enterprise income tax at a rate of
20%.
2. Tax preference
According to the "Announcement on Preferential Income Tax Policies for Small and Micro Enterprises and
Individual Businesses" (CS [2023] No. 6) issued by the Ministry of Finance and the State Administration of Taxation
small and micro-profit enterprises include only 25% of their taxable income and pay enterprise income tax at a rate of
20%. According to the "Notice on Extending the Loss Carry Forward Period for High-Tech Enterprises and
Technology-Based Small and Medium-Sized Enterprises" (CS [2018] No. 76) issued by the Ministry of Finance and the
64State Administration of Taxation starting from January 1 2018 losses incurred in the five fiscal years prior to
obtaining high-tech enterprise qualification that have not yet been offset are allowed to be carried forward to
subsequent years for offsetting with the maximum carry forward period extended from 5 years to 10 years.According to the "Announcement on Further Improving the Policy of Pre-tax Additional Deduction of R&D
Expenses" (CS [2023] No. 7) issued by the Ministry of Finance and the State Administration of Taxation starting from
January 1 2023 enterprises' actual R&D expenses incurred in conducting R&D activities which are not converted into
intangible assets and are included in the current profit and loss can be additionally deducted at 100% of the actual
amount incurred on top of the actual deduction as per regulations. Where intangible assets are formed they shall be
amortized before tax at 200% of the cost of intangible assets as of January 1 2023.Since 2019 Hong Kong implemented a two-tiered profits tax regime whereby the profits tax rate for the first
HKD2000000 of profits earned by Hong Kong companies is reduced to 8.25% and the remaining profits are taxed at
the standard rate of 16.5%.
3. Others
Not applicable
7. Notes to items in the consolidated financial statements
1. Monetary funds
Unit: RMB
Item Ending Balance Opening balance
Cash on hand 107494.56 178996.87
Cash in bank 21352343.64 35443378.12
Other monetary funds 2109236.20 1262979.96
Deposit in finance companies 380786934.73 467743798.76
Total 404356009.13 504629153.71
Including: total amount
1951883.151202601.86
deposited abroad
Other notes
The deposits in finance companies were mainly the deposits in AVIC Finance Co. Ltd.As of June 30 2024 the Company had no pledged or frozen funds. Details of the Company's funds placed
overseas with restrictions on fund repatriation are as follows:
Item Ending Balance Opening balance
Funds placed overseas with restrictions on fund repatriation 1951883.15 1202601.86
2. Trading financial assets
Not applicable
3. Derivative financial assets
Not applicable
654. Notes receivable
(1) Classified presentation of notes receivable
Unit: RMB
Item Ending Balance Opening balance
Bank acceptance note 7483190.50 10363449.00
Commercial acceptance note 8855201.81 7905523.37
Total 16338392.31 18268972.37
(2). Disclosure under the methods of provision for bad debts by category
Unit: RMB
Ending Balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Categor
y Drawing Book Drawing Book
Amount Scale Amount percent value Amount Scale Amount percent value
ages ages
In
which:
Notes
receiva
ble with
provisio
n for 16654 100.00 316420 16338 18685 100.00 416080 18268
1.90%2.23%
bad 813.30 % .99 392.31 052.55 % .18 972.37
debts
by
combin
ation
In
which:
Comme
rcial
accepta
91716316420885528321641608079055
nce 55.07% 3.45% 44.54% 5.00%
22.80.9901.8103.55.1823.37
draft
combin
ation
Risk-
free
bank
accepta 74831 74831 10363 10363
44.93%0.00%55.46%0.00%
nce 90.50 90.50 449.00 449.00
draft
combin
ation
16654100.003164201633818685100.0041608018268
Total 1.90% 2.23%
813.30%.99392.31052.55%.18972.37
Name of provision with provision for bad debts by combination: commercial acceptance bill combination
Unit: RMB
66Ending Balance
Name
Book balance Bad debt provision Drawing percentages
Commercial acceptance
9171622.80316420.993.45%
draft combination
Total 9171622.80 316420.99
Description of the basis for determining the combination:
Accounts receivable with the same aging have similar credit risk characteristics.Catalog name with provision for bad debts by combination: non-risk bank acceptance bill combination
Unit: RMB
Ending Balance
Name
Book balance Bad debt provision Drawing percentages
Risk-free bank acceptance
7483190.500.00%
draft combination
Total 7483190.50
Description of the basis for determining the combination:
The drawer has a high credit rating and has no bill default in history so the risk of credit loss is extremely low and
also has a strong ability to fulfill the obligation to pay the cash flow of the contract in a short period of time.If the provision for bad debts of notes receivable is made according to the general expected credit loss model:
Not applicable
(3) Status of bad debt provision recovery or reversal for the period
Provision for bad debts in the current period:
Unit: RMB
Amount of change for the period
Opening Ending
Category
balance Recovered or Provision Write-off Other Balance
transferred
Notes
receivable
with provision
for bad debts
by individual
Notes
receivable
with provision
for bad debts
by
combination
Including:
commercial
acceptance
416080.1899659.19316420.99
bill
combination
Risk-free bank
acceptance
draft
combination
67Total 416080.18 99659.19 316420.99
Where accounts receivable with significant from provision for bad debts or recovered in the current period
Not applicable
(4) Notes receivable pledged by the Company at the end of the period
Not applicable
(5) Receivables notes or discounted at period-end not yet due on the Company's balance
sheet date
Unit: RMB
Termination confirmation amount at
Item Unconfirmed amount at period-end
period-end
Bank acceptance note 24056305.26 0.00
Total 24056305.26 0.00
(6). Situation of notes receivable actually written off in the current period
Not applicable
5. Accounts receivable
1. Disclosure by aging
Unit: RMB
Aging Book balance at period end Beginning book balance
Within 1 year (including 1 year) 363748311.83 333204160.07
1-2 years 3035192.98 2123874.00
2-3 years 1519611.03 4200458.08
More than 3 years 19089043.69 18005255.95
3-4 years 19089043.69 18005255.95
Total 387392159.53 357533748.10
(2). Disclosure under the methods of provision for bad debts by category
Unit: RMB
Ending Balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Categor
y Drawing Book Drawing Book
Amount Scale Amount percent value Amount Scale Amount percent value
ages ages
Account
s
2014119908233006247082314815597
receiva 5.20% 98.84% 6.91% 93.69%
411.68405.24.44541.73792.2549.48
ble with
provisio
68n for
bad
debts
by
individu
al
In
which:
Account
s
receiva
ble with
provisio
3672501200035525033282511242321583
n for 94.80% 3.27% 93.09% 3.38%
747.85288.48459.37206.37194.21012.16
bad
debts
by
combin
ation
In
which:
Combin
ation of
other
3672501200035525033282511242321583
custom 94.80% 3.27% 93.09% 3.38%
747.85288.48459.37206.37194.21012.16
ers'
receiva
bles
387392100.0031908355483357533100.0034390323142
Total 8.24% 9.62%
159.53%693.72465.81748.10%986.46761.64
Category name of provision for bad debts by individual: accounts receivable from other customers
Unit: RMB
Opening balance Ending Balance
Name Drawing Bad debt Bad debt Provision
Book balance Book balance percentag
provision provision Reason
es
Receiva
bles from
Less likely to
other 24708541.73 23148792.25 20141411.68 19908405.24 98.84%
be withdrawn
customer
s
Total 24708541.73 23148792.25 20141411.68 19908405.24
Category name of provision for bad debts by combination: accounts receivable from other customers
Unit: RMB
Ending Balance
Name
Book balance Bad debt provision Drawing percentages
Receivables from other
367250747.8512000288.483.27%
customers
Total 367250747.85 12000288.48
Description of the basis for determining the combination:
69Accounts receivable with the same combination have similar credit risk characteristics.
If the provision for bad debts of accounts receivable is made according to the general expected credit loss model:
Not applicable
(3) Status of bad debt provision recovery or reversal for the period
Provision for bad debts in the current period:
Unit: RMB
Amount of change for the period
Opening
Category
balance Recovered or
Ending Balance
Provision Write-off Other
transferred
Accounts
receivable
with provision
23148792.253253930.73-13543.7219908405.24
for expected
credit losses
by individual
Accounts
receivable
with provision
for expected 11242194.21 822060.56 54756.65 9209.64 12000288.48
credit losses
by
combination
Total 34390986.46 822060.56 3308687.38 -4334.08 31908693.72
Where accounts receivable with significant from provision for bad debts or recovered in the current period
Unit: RMB
Recovered or Determine the basis and
Reason for Recovery
Company name reversed rationality of the original
reversal method
amount provision for bad debts
Payment
Provision based on the
Shijiazhuang Yuhua Suning.com has been Bank
358855.97 estimated recoverable
Commercial Management Co. Ltd. received collection
amount
normally
Payment
Provision based on the
Nanjing Jianye Suning Yigou Plaza has been Bank
776062.11 estimated recoverable
Commercial Management Co. Ltd. received collection
amount
normally
Payment
Provision based on the
Baotou Galaxy Suning Yigou Plaza Co. has been Bank
504733.73 estimated recoverable
Ltd. received collection
amount
normally
Payment
Provision based on the
has been Bank
Yinchuan Suning.com Plaza Co. Ltd. 636843.63 estimated recoverable
received collection
amount
normally
Payment
Provision based on the
Shanghai Pudong Suning.com has been Bank
818227.34 estimated recoverable
Commercial Management Co. Ltd. received collection
amount
normally
Total 3094722.78
70(4). Situation of accounts receivable actually written off in the current period
Not applicable
(5) Accounts receivable and contractual assets collected from the debtors which rank the first
five at the end of period
Unit: RMB
Ending balance
Proportion in the of provision for
Ending balance total ending bad debts of
Accounts Ending
of accounts balance of accounts
receivable balance balance of
Company name receivable and accounts receivable and
at the end of contractual
contractual receivable and provision for
period assets
assets contractual impairment of
assets contractual
assets
Summary of
accounts
receivable which
81395716.91387392159.5321.01%3973834.24
ranks the first
five at the end of
period
Total 81395716.91 387392159.53 21.01% 3973834.24
6. Contract assets
Not applicable
7. Receivables financing
Not applicable
8. Other receivables
Unit: RMB
Item Ending Balance Opening balance
Other receivables 59436540.53 57725792.00
Total 59436540.53 57725792.00
(1) Interest receivable
1) Classification of interest receivable
Not applicable
2) Important overdue interest
Not applicable
713). Disclosure under the methods of provision for bad debts by category
Not applicable
4). Status of bad debt provision recovery or reversal for the period
Not applicable
5) Situation of interest receivable actually written off in the current period
Not applicable
(2) Dividends receivable
1) Classification of dividends receivable
Not applicable
2) Important dividends receivable with aging over 1 year
Not applicable
3). Disclosure under the methods of provision for bad debts by category
Not applicable
4). Status of bad debt provision recovery or reversal for the period
Not applicable
5) Situation of dividends receivable actually written off in the current period
Not applicable
(3) Other receivables
1) Classification of other receivables by nature
Unit: RMB
Payment nature Book balance at period end Beginning book balance
Margin and deposits 53774307.13 51775226.86
Employee reserve 3740041.27 1549821.50
Other 6132069.36 8748853.73
Total 63646417.76 62073902.09
722) Disclosure by aging
Unit: RMB
Aging Book balance at period end Beginning book balance
Within 1 year (including 1 year) 33867092.11 22481619.93
1-2 years 24429192.98 38313327.26
2-3 years 4155060.57 119250.00
More than 3 years 1195072.10 1159704.90
3-4 years 1195072.10 1159704.90
Total 63646417.76 62073902.09
3). Disclosure under the methods of provision for bad debts by category
Unit: RMB
Ending Balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Categor
y Drawing Book Drawing Book
Amount Scale Amount percent value Amount Scale Amount percent value
ages ages
Provisio
n for
bad
139311363229928.141831367350928.
debts 2.19% 97.85% 2.28% 96.41%
47.7819.780014.9086.9000
on an
individu
al basis
In which:
Provisio
n for
bad
debts 62253 28466 59406 60655 29807 57674
97.81%4.57%97.72%4.91%
on a 269.98 57.45 612.53 587.19 23.19 864.00
combin
ation
basis
In which:
Combin
ation of
margin
and 53259 26338 50625 51304 26032 48701
83.68%4.95%82.65%5.07%
deposit 849.25 75.69 973.56 601.86 77.66 324.20
receiva
ble
Combin
ation of
employ
37400374001549815498
ee 5.88% 0.00% 2.50% 0.00%
41.2741.2721.5021.50
reserve
receiva
ble
73Combin
ation of
social
security 508259 508259 284862 284862
0.80%0.00%0.46%0.00%
advanc .76 .76 .55 .55
es
receiva
ble
Combin
ation of
47451212781453237516337744571388
other 7.46% 4.48% 12.11% 5.02%
19.70.7637.9401.28.5355.75
financin
gs
63646100.00420985943662073100.004348157725
Total 6.61% 7.00%
417.76%77.23540.53902.09%10.09792.00
Number of categories with provision for bad debts by individual: 1
Category name of provision for bad debts by individual: other accounts receivable
Unit: RMB
Opening balance Ending Balance
Name Bad debt Bad debt Drawing Provision
Book balance Book balance
provision provision percentages Reason
Other There is a
1418314.901367386.901393147.781363219.7897.85%
receivables dispute
Total 1418314.90 1367386.90 1393147.78 1363219.78
Number of categories with provision for bad debts by combination: 4
Category name of provision for bad debts by combination: combination of margin and deposit receivable
Unit: RMB
Ending Balance
Name
Book balance Bad debt provision Drawing percentages
Combination of margin and
53259849.252633875.694.95%
deposit receivable
Total 53259849.25 2633875.69
Description of the basis for determining the combination: payments of the same nature have similar credit risk
characteristics.Category name of provision for bad debts by combination: combination of employee reserve receivable
Unit: RMB
Ending Balance
Name
Book balance Bad debt provision Drawing percentages
Combination of employee
3740041.270.00%
reserve receivable
Total 3740041.27
Description of the basis for determining the combination: payments of the same nature have similar credit risk
characteristics.Category name of provision for bad debts by combination: combination of social security receivable on behalf of the
payer
Unit: RMB
Name Ending Balance
74Book balance Bad debt provision Drawing percentages
Combination of social
security advances 508259.76 0.00%
receivable
Total 508259.76
Description of the basis for determining the combination: payments of the same nature have similar credit risk
characteristics.Category name of provision for bad debts by combination: other accounts receivable
Unit: RMB
Ending Balance
Name
Book balance Bad debt provision Drawing percentages
Combination of other
4745119.70212781.764.48%
financings
Total 4745119.70 212781.76
Description of the basis for determining the combination: payments of the same nature have similar credit risk
characteristics.Provision for bad debts made according to the general expected credit loss model:
Unit: RMB
Stage I Stage II Stage III
Expected Expected credit loss
Bad debt provision Expected credit loss Total
credit loss in throughout the duration
throughout the duration
the next 12 (credit impairment has
(no credit impairment)
months occurred)
Balance as of Jan. 1 2024 2980723.19 1367386.90 4348110.09
Balance on Jan. 1 2024 in
the current period
- Transfer to phase II
- Transfer to phase III
- Reversal to phase II
- Reversal to phase I
Provision in the current
40599.8040599.80
period
Reversal in the current
-129992.21-49000.00-178992.21
period
Write-off in the current
period
Write-off in the current
period
Other changes 159.55 159.55
75Balance as of June 30 2024 2891490.33 1318386.90 4209877.23
The basis for the division of each stage and the ratio of provisions for bad debts
The phase I is the bad debt provision for other receivables within one year. The phase II is the bad debt provision for
accounts receivable over one year that have not been individually assessed. The phase III is the bad debt provision for
individually assessed accounts receivable.Changes in book balance with significant amount of loss provision in the current period
Not applicable
4). Status of bad debt provision recovery or reversal for the period
Provision for bad debts in the current period:
Unit: RMB
Amount of change for the period
Ending
Category Opening balance Recovered Write-off or
Provision or Other Balance
impairment
transferred
Bad debt provision 4348110.09 40599.80 -178992.21 159.55 4209877.23
Total 4348110.09 40599.80 -178992.21 159.55 4209877.23
Where the bad-debt provision amount recovered or reversed this period is important:
Not applicable
5) Situation of other accounts receivable actually written off in the current period
Not applicable
6). Other receivables collected from the debtors which rank the first five at the end of period
Unit: RMB
Proportion in
End-of-period
the total ending
Payment balance of
Company name Ending Balance Aging balance of
nature provision for bad
other
debt
receivables
Summary of other
accounts
receivable which Deposits and Within 1 year 1-
8634010.6813.57%431700.53
rank the first five margin 2 years
at the end of
period
Total 8634010.68 13.57% 431700.53
7) Presented in other receivables due to centralized management of funds
Not applicable
769. Prepayments
(1) Prepayments are presented by aging
Unit: RMB
Ending Balance Opening balance
Aging
Amount Scale Amount Scale
Within 1 year 6569774.50 100.00% 6564760.64 99.90%
1-2 years 0.00% 6479.34 0.10%
Total 6569774.50 6571239.98
Reasons for not timely settlement of prepayments with aging over 1 year and significant amount:
Not applicable
(2). Top five of advances to suppliers in terms of the ending balance presented by advance
receivers
Company name Ending Balance Percentage of total advances (%)
Summary of prepayments collected from
the debtors which rank the first five at 4185055.26 63.70%
the end of period
10. Inventories
Whether the Company needs to comply with the disclosure requirements of the real estate industry
No
(1) Classification of inventory
Unit: RMB
Ending Balance Opening balance
Provision for Provision for
impairment of impairment of
Item inventory or inventory or
Book balance Book value Book balance Book value
contract contract
performance performance
costs costs
Raw 161344020.8 155942127.2 167281491.8 161990636.1
5401893.565290855.71
material 5 9 4 3
Unfinishe
d 10779027.93 10779027.93 12060525.88 12060525.88
products
Merchan
2026413760.1961610087.1993236975.1926615013.
dise 64803673.59 66621962.09
86273627
inventory
2198536809.2128331242.2172578993.2100666175.
Total 70205567.15 71912817.80
64490828
77(2) Data resources recognized as inventory
Not applicable
(3) Provision for impairment of inventory or contract performance costs
Unit: RMB
Decrease amount in the current
Increase for the current period
Opening period Ending
Item
balance Reversal or Balance
Provision Other Other
write-off
Raw
5290855.71253915.61142877.765401893.56
material
Merchan
dise 66621962.09 126606.77 7749.55 1952644.82 64803673.59
inventory
Total 71912817.80 380522.38 7749.55 2095522.58 70205567.15
Notes to provision for inventory write-down
Specific basis for determining the net realizable
Reversal or write-off in the current period Item value/residual consideration and the cost to be
Reasons to provision for inventory write-down
incurred
The factors affecting the previous write-down of
Estimated selling prices of manufactured products
Raw inventory value have disappeared resulting in
minus estimated costs to completion estimated material the net realizable value of inventory higher than
selling expenses and related taxes and surcharges
its book value
The inventory with provision for inventory
Merchandis Estimated selling price minus estimated sales
depreciation at the beginning of the period has e inventory expenses and related taxes
been consumed/sold in the current period
The provision for inventory depreciation by combination
Not applicable
Provision criteria for provision of inventory depreciation reserve by combination
Not applicable
(4) Notes to the ending balance of inventories including the capitalization amount of
borrowing costs
Not applicable
(5) Notes to the amortization amount of contract performance costs in the current period
Not applicable
11. Assets held for sale
Not applicable
12. Non-current assets due within one year
Not applicable
78(1) Debt investments due within one year
Not applicable
(2) Other debt investments due within one year
Not applicable
13. Other current assets
Unit: RMB
Item Ending Balance Opening balance
Amount of value-added tax deduction 14705036.13 21032239.30
Input tax to be recognized 13980706.95 31717607.91
Prepaid income tax 384254.22 1364632.40
Other taxes prepaid 491655.06
Fixed deposits 45001594.79
Other 14475773.82 18134912.20
Total 89039020.97 72249391.81
14. Debt investments
(1) Debt investments situation
Not applicable
(2) Important debt investments at the end of the period
Not applicable
(3) Provision for impairment
Not applicable
(4). Situation of debt investments actually written off in the current period
Not applicable
15. Other debt investments
(1) Other debt investments situation
Not applicable
(2) Other important debt investments at the end of the period
Not applicable
79(3) Provision for impairment
Not applicable
(4). Situation of other debt investments actually written off in the current period
Not applicable
16. Investment in other equity instruments
Not applicable
17. Long-term receivables
(1) Long-term receivables
Not applicable
(2). Disclosure under the methods of provision for bad debts by category
Not applicable
(3) Status of bad debt provision recovery or reversal for the period
Not applicable
(4). Situation of accounts receivable actually written off in the current period
Not applicable
18. Long-term equity investments
Unit: RMB
Increase or decrease in the current period
Invest End-
Begin ment Cash
Begin ning Other
of-
incom divide Endin period
ning balan compr Provis
The e or nds or
g
Additi Reduc ehens Other ion for balanbalan ce of
invest loss profits
balan
ce of
ce provisi onal tion of ive chang impair ce
ee recog declar Other invest invest incom es in ment provisi(book on for nized ed to (book on for
value) impair ment ment e equity accruunder be value) impair
ment adjust ed equity distrib
ments ment
metho uted
d
1. Joint ventures
2. Associated enterprise
Shang 5186 8987 5195
80hai 2607. 2.06 2479.
Watch 30 36
Indust
ry
Co.Ltd.
51865195
Sub- 8987
2607.2479.
total 2.06
3036
51865195
8987
Total 2607. 2479.
2.06
3036
The recoverable amount is determined by the net amount of the fair value less the disposal expenses
Not applicable
The recoverable amount is determined at the present value of the expected future cash flows
Not applicable
Reasons for the difference between the aforementioned information and the information used in the impairment test of
previous years or external information
Not applicable
Reasons for the difference between the information used in the company's impairment test in previous years and the
actual situation in the current year
Not applicable
Other notes
Not applicable
19. Other non-current financial assets
Not applicable
20. Investment properties
(1) Investment property measured at cost
Unit: RMB
Houses and Construction in
Item Land use rights Total
structures progress
I. Original book value
1. Beginning
620335023.89620335023.89
balance
2. Increase for
the current period
(1) Outsourcing
(2) Transfers from
inventories\fixed
assets\construction
in progress
(3) Increase from
business
81combinations
3. Decrease for
the current period
(1) Disposal
(2) Other transfers
out
4. Ending
620335023.89620335023.89
balance
II. Accumulated
depreciation and
amortization
1. Beginning
260079191.75260079191.75
balance
2. Increase for
7846994.227846994.22
the current period
(1) Provision or
7846994.227846994.22
amortization
(2) Transfer from
fixed assets
3. Decrease for
the current period
(1) Disposal
(2) Other transfers
out
4. Ending
267926185.97267926185.97
balance
III. Impairment
provision
1. Beginning
balance
2. Increase for
the current period
(1) Provision
3. Decrease for
the current period
(1) Disposal
(2) Other transfers
out
4. Ending
balance
IV. Book value
1. Ending book
352408837.92352408837.92
value
2. Beginning
360255832.14360255832.14
book value
The recoverable amount is determined by the net amount of the fair value less the disposal expenses
Not applicable
The recoverable amount is determined at the present value of the expected future cash flows
82Not applicable
Reasons for the difference between the aforementioned information and the information used in the impairment test of
previous years or external information
Not applicable
Reasons for the difference between the information used in the company's impairment test in previous years and the
actual situation in the current year
Not applicable
Other notes:
Not applicable
(2) Investment property measured at fair value
Not applicable
(3) Convert to investment property and measure at fair value
Not applicable
(4) Investment property without certificate of title
Not applicable
21. Fixed assets
Unit: RMB
Item Ending Balance Opening balance
Fixed assets 345651268.72 355785354.68
Liquidation of fixed assets 0.00 0.00
Total 345651268.72 355785354.68
(1). Status of fixed assets
Unit: RMB
Houses and Machinery Transport Electronic Other
Item Total
buildings equipment equipment equipment equipment
1. Original
book value:
1. Beginning 441589632.6 130667789.2 680285989.0
13277093.8350657219.0744094254.35
balance 3 1 9
2. Increase for
the current 20027.36 2328766.75 1473437.61 663176.09 4485407.81
period
(1)
2320494.701473351.07663176.094457021.86
Acquisitions
(2) Transfer
from
construction in
progress
83(3) Increase
from business
combinations
(4). Exchange
differences
arising from
20027.368272.0586.5428385.95
foreign
currency
transactions
3. Decrease
for the current 3199869.02 1423289.61 1026085.81 680665.17 453955.74 6783865.35
period
(1) Disposal
570550.00128105.051026085.81631965.29335369.812692075.96
or scrapping
(2). Exchange
differences
arising from
2629319.021295184.5648699.88118585.934091789.39
foreign
currency
transactions
4. Ending 438409790.9 131573266.3 677987531.5
12251008.0251449991.5144303474.70
balance 7 5 5
II.Accumulated
depreciation
1. Beginning 152207027.4 324500634.4
83133593.3212078669.4037956542.0939124802.19
balance 1 1
2. Increase for
the current 6534045.86 4469874.54 167437.90 1580401.82 674908.55 13426668.67
period
(1) Provision 6517095.45 4462019.71 167437.90 1580319.60 674908.55 13401781.21
(2). Exchange
differences
arising from
16950.417854.8382.2224887.46
foreign
currency
transactions
3. Decrease
for the current 2238221.77 1295744.31 974781.52 597648.74 484643.91 5591040.25
period
(1) Disposal
395811.20113925.59974781.52554287.43366283.772405089.51
or scrapping
(2). Exchange
differences
arising from
1842410.571181818.7243361.31118360.143185950.74
foreign
currency
transactions
4. Ending 156502851.5 332336262.8
86307723.5511271325.7838939295.1739315066.83
balance 0 3
III. Impairment
provision
1. Beginning
84balance
2. Increase for
the current
period
(1) Provision
3. Decrease
for the current
period
(1) Disposal
or scrapping
4. Ending
balance
IV. Book value
1. Ending 281906939.4 345651268.7
45265542.80979682.2412510696.344988407.87
book value 7 2
2. Beginning 289382605.2 355785354.6
47534195.891198424.4312700676.984969452.16
book value 2 8
(2) Temporarily idle fixed assets
Not applicable
(3) Fixed assets leased out through operating leases
Not applicable
(4) Fixed assets without certificates of title
Unit: RMB
Reasons for not completing the
Item Book value
certificate of title
Houses and buildings 182663.79 Defects in property rights
(5) Impairment test of fixed assets
Not applicable
(6) Liquidation of fixed assets
Not applicable
22. Construction in progress
Not applicable
(1) Status of construction in progress
Not applicable
85(2) Changes in important construction in progress in the current period
Not applicable
(3) Status of impairment of construction in progress in the current period
Not applicable
(4) Status of impairment test of construction in progress
Not applicable
(5) Project materials
Not applicable
23. Productive biological assets
(1) Productive biological assets measured at cost
Not applicable
(2) Impairment test of productive biological assets measured at cost
Not applicable
(3) Productive biological assets measured at fair value
Not applicable
24. Oil and gas assets
Not applicable
25. Right-of-use assets
(1) Right-of-use assets situation
Unit: RMB
Item Houses and buildings Total
I. Original book value
1. Beginning balance 153209897.81 153209897.81
2. Increase for the current period 54191179.24 54191179.24
(1) Lease 54188231.32 54188231.32
(2). Exchange differences arising
2947.922947.92
from foreign currency transactions
3. Decrease for the current
79521232.1879521232.18
period
86(1) Disposal 1437591.74 1437591.74
(2) The lease expires 78083640.44 78083640.44
4. Ending balance 127879844.87 127879844.87
II. Accumulated depreciation
1. Beginning balance 43757416.17 43757416.17
2. Increase for the current period 52810274.43 52810274.43
(1) Provision 52808948.49 52808948.49
(2). Exchange differences arising
1325.941325.94
from foreign currency transactions
3. Decrease for the current
78074492.7278074492.72
period
(1) Disposal 928227.37 928227.37
(2) The lease expires 77146265.35 77146265.35
4. Ending balance 18493197.88 18493197.88
III. Impairment provision
1. Beginning balance
2. Increase for the current period
(1) Provision
3. Decrease for the current
period
(1) Disposal
4. Ending balance
IV. Book value
1. Ending book value 109386646.99 109386646.99
2. Beginning book value 109452481.64 109452481.64
(2) Impairment test of right-of-use assets
Not applicable
26. Intangible assets
(1) Intangible assets
Unit: RMB
Land use Non-Patent Software Right to use
Item Patent right Total
rights Technology] system trademark
I. Original
book value
1. Beginning
34933822.4035242672.5516599485.2286775980.17
balance
2. Increase for
the current 1006663.53 5867.94 1012531.47
period
(1)
1006663.535867.941012531.47
Acquisitions
(2) Internal
87research and
development
(3) Increase
from business
combinations
3. Decrease
for the current 7357.60 0.43 7358.03
period
(1) Disposal 7357.60 0.43 7358.03
4. Ending
34933822.4036241978.4816605352.7387781153.61
balance
II.Accumulated
amortization
1. Beginning
17249475.3027593853.6810268270.4255111599.40
balance
2. Increase for
the current 366776.65 1427172.01 27392.70 1821341.36
period
(1) Provision 366776.65 1427172.01 27392.70 1821341.36
3. Decrease
for the current 367.88 367.88
period
(1) Disposal 367.88 367.88
4. Ending
17616251.9529020657.8110295663.1256932572.88
balance
III. Impairment
provision
1. Beginning
balance
2. Increase for
the current
period
(1) Provision
3. Decrease
for the current
period
(1) Disposal
4. Ending
balance
IV. Book value
1. Ending
17317570.457221320.676309689.6130848580.73
book value
2. Beginning
17684347.107648818.876331214.8031664380.77
book value
The proportion of intangible assets formed by the Company's internal research and development at the end of the
current period to the balance of intangible assets is 0.00%
88(2) Data resources recognized as intangible assets
Not applicable
(3) Land use right without certificate of title
Not applicable
(4) Impairment test of intangible assets
Not applicable
27. Goodwill
(1) Original book value of goodwill
Not applicable
(2) Provision for impairment of goodwill
Not applicable
(3) Information on the asset group or combination of asset groups where the goodwill is
located
Not applicable
(4) Specific determination method of recoverable amount
Not applicable
(5) Completion of performance commitments and corresponding impairment of goodwill
Not applicable
28. Long-term deferred expenses
Unit: RMB
Amortization
Increase for the
Item Opening balance amount for the Other decreases Ending Balance
current period
current period
Counter
19008343.848377686.409745039.421078053.5116562937.31
production fee
Decoration fee 96297010.20 27813498.18 24501735.62 177816.39 99430956.37
Other 7019001.09 441460.90 3258250.73 85902.48 4116308.78
Total 122324355.13 36632645.48 37505025.77 1341772.38 120110202.46
8929. Deferred tax assets/deferred tax liabilities
(1) Deferred income tax assets without offset
Unit: RMB
Ending Balance Opening balance
Item Deductible Deductible Deferred income tax Deferred income tax
temporary temporary
assets assets
difference difference
Provision for impairment
103493511.3823491810.64107672653.1624371732.35
of assets
Unrealized profits from
61698023.0615215058.3183620908.6020855280.62
internal transactions
Deductible losses 132264495.42 31790112.52 126562143.51 31197892.87
Equity incentive 8686896.23 2038524.01 6263007.85 1449733.06
Publicity expenses that
can be carried forward to 4438509.76 1109627.44
subsequent years
Lease liabilities 162217563.49 40554390.88 109682960.95 27420740.27
Other 5150706.68 1287676.67 5168527.80 1292131.95
Total 477949706.02 115487200.47 438970201.87 106587511.12
(2) Deferred income tax liabilities without offset
Unit: RMB
Ending Balance Opening balance
Item Taxable temporary Taxable temporary
Deferred tax liability Deferred tax liability
differences differences
One-time pre-tax
29215672.674382350.9028437227.074265584.06
deduction of fixed assets
Right-of-use assets 162695287.60 40673821.90 109212305.15 27303076.29
Total 191910960.27 45056172.80 137649532.22 31568660.35
(3) Deferred tax assets or liabilities presented by net amount after offset
Unit: RMB
Amount of deferred Balance of deferred
Amount of deferred Ending balance of
tax assets and tax assets or
tax assets and deferred tax assets
Item liabilities offset at the liabilities after offset
liabilities offset at the or liabilities after
beginning of the at the beginning of
end of the period offset
period the period
Deferred income tax
39593331.5175893868.9726359739.6680227771.46
assets
Deferred tax liability 39593331.51 5462841.29 26359739.66 5208920.69
(4) Details of unrecognized deferred tax assets
Unit: RMB
Item Ending Balance Opening balance
90Provision for impairment of assets 3444117.03 3395341.37
Deductible losses 52393966.99 52523345.89
Total 55838084.02 55918687.26
(5) The deductible losses of the unrecognized deferred tax assets will become due in the
following years:
Unit: RMB
Year Ending amount Beginning amount Remarks
202421759088.2123049503.37
202527823763.8929473842.52
2026
2027
2028
2029
2030
20312811114.89
Total 52393966.99 52523345.89
30. Other non-current assets
Unit: RMB
Ending Balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Prepayment for
long-term 2185332.57 2185332.57 9434627.17 9434627.17
assets
Total 2185332.57 2185332.57 9434627.17 9434627.17
31. Assets with restricted ownership or usage rights
Not applicable
32. Short-term loans
(1) Classification of short-term debts
Unit: RMB
Item Ending Balance Opening balance
Credit loans 320000000.00 250000000.00
Unexpired interest payable 207333.32 187763.87
Total 320207333.32 250187763.87
(2) Overdue and outstanding short-term debts
Not applicable
9133. Trading financial liabilities
Not applicable
34. Derivative financial liabilities
Not applicable
35. Notes payable
Not applicable
36. Accounts payable
(1) Presentation of accounts payable
Unit: RMB
Item Ending Balance Opening balance
Payable for goods 109737172.05 148281377.41
Materials payable 20600336.04 23371455.42
Construction payables 1034800.53 2173074.88
Total 131372308.62 173825907.71
(2). Significant payable aging over 1 year or overdue
Not applicable
37. Other payables
Unit: RMB
Item Ending Balance Opening balance
Dividend payable 2907796.73 2058352.24
Other payables 107885270.30 119879448.83
Total 110793067.03 121937801.07
(1) Interest payable
Not applicable
(2) Dividends payable
Unit: RMB
Item Ending Balance Opening balance
Common stock dividends 2907796.73 2058352.24
Total 2907796.73 2058352.24
92(3) Other payables
1). Other payable listed by nature
Unit: RMB
Item Ending Balance Opening balance
Deposits and margin 33574986.55 34075198.63
Expenses for store activities 21585739.68 17335559.49
Decoration fee 4893296.60 10214019.04
Restricted stock repurchase
13379181.8114304862.81
obligations
Other 34452065.66 43949808.86
Total 107885270.30 119879448.83
2) Other significant payable with aging over 1 year or overdue
Unit: RMB
Reasons for non-repayment or non-
Item Ending Balance
transfer
Property lease deposit 14498179.29 Settlement period not reached
Total 14498179.29
38. Advance receipts
(1) Presentation of advances received
Unit: RMB
Item Ending Balance Opening balance
Advance rent 8242987.93 10267758.31
Total 8242987.93 10267758.31
(2) Significant advance receivable with aging over 1 year or overdue
Not applicable
39. Contract liabilities
Unit: RMB
Item Ending Balance Opening balance
Payment for goods 18804742.85 12286243.62
Total 18804742.85 12286243.62
Significant contractual liabilities with aging over 1 year
Not applicable
Significant changes in book value during the reporting period amounts and reasons
Not applicable
9340. Employee compensation
(1). Employee compensation breakdown
Unit: RMB
Increase in the Decrease in the
Item Opening balance Ending Balance
current period current period
I. Short-term
114204051.03262318167.18309320717.1667201501.05
compensations
II. Post-employment
benefits - defined 5581451.36 23863509.40 23378302.45 6066658.31
contribution plans
III. Termination
299308.213044542.523326450.7317400.00
benefits
Total 120084810.60 289226219.10 336025470.34 73285559.36
(2). Short-term compensation breakdown
Unit: RMB
Increase in the Decrease in the
Item Opening balance Ending Balance
current period current period
1. Wages bonus
allowance and 113282042.05 227106252.78 274396607.52 65991687.31
subsidy
2. Staff welfare 162095.02 10037372.97 9883253.98 316214.01
3. Social insurance
78.3211937649.2111921628.7616098.76
premium
Including: medical
10978630.5810962684.1915946.38
insurance premium
Work-related
injury insurance 78.32 489199.84 489125.78 152.38
premium
Birth
469818.79469818.79
insurance premium
Housing provident
13551.009652267.109488972.22176845.89
funds
5. Labor Union fee
and staff education 746284.64 3584625.12 3630254.68 700655.08
expenses
Total 114204051.03 262318167.18 309320717.16 67201501.05
(3). Defined contribution plan breakdown
Unit: RMB
Increase in the Decrease in the
Item Opening balance Ending Balance
current period current period
1. Basic endowment
208205.9720260935.2420251259.03217882.18
insurance
2. Unemployment 379.88 877646.96 877338.68 688.16
94insurance premium
3. Enterprise annuity
5372865.512724927.202249704.745848087.97
payment
Total 5581451.36 23863509.40 23378302.45 6066658.31
41. Taxes payable
Unit: RMB
Item Ending Balance Opening balance
VAT 23145061.97 38997243.97
Enterprise income tax 24686272.16 21276050.77
Individual income tax 1023995.40 1101633.76
Urban maintenance and construction
184082.841047680.77
tax
Education surcharges 132497.14 748598.11
Other 3380962.23 1016953.93
Total 52552871.74 64188161.31
42. Liabilities held for sale
Not applicable
43. Non-current liabilities due within one year
Unit: RMB
Item Ending Balance Opening balance
Lease liabilities due within one year 69943530.95 66399004.20
Total 69943530.95 66399004.20
44. Other current liabilities
Unit: RMB
Item Ending Balance Opening balance
Output tax amount to be transferred 2078002.76 1589635.30
Total 2078002.76 1589635.30
45. Long-term loans
(1) Classification of long-term loans
Not applicable
46. Bonds payable
(1) Bonds payable
Not applicable
95(2) Increase/decrease in bonds payable (excluding preferred stock perpetual bonds and other
financial instruments divided into financial liabilities)
Not applicable
(3) Notes to convertible corporate bonds
Not applicable
(4) Description of other financial instruments divided into financial liabilities
Not applicable
47. Lease liabilities
Unit: RMB
Item Ending Balance Opening balance
Houses and buildings 111899576.39 113786386.87
Unrecognized financing charges -2988410.05 -3861030.15
Lease liabilities due within one year -69943530.95 -66399004.20
Total 38967635.39 43526352.52
48. Long-term payable
Not applicable
(1) Long-term payable listed by nature
Not applicable
(2) Special payable
Not applicable
49. Long-term employee compensation payable
(1) Table of long-term employee compensation payable
Not applicable
(2) Changes in defined benefit plans
Not applicable
50. Estimated liabilities
Not applicable
9651. Deferred income
Unit: RMB
Opening Increase in the Decrease in the
Item Ending Balance Reasons for formation
balance current period current period
Government
952785.69952785.69
subsidies
Total 952785.69 952785.69
Other notes:
Deferred income related to government subsidies
For details of the Company's government subsidies please refer to Note XI.2 Liabilities related to government
subsidies.
52. Other non-current liabilities
Not applicable
53. Capital stock
Unit: RMB
Increase/decrease in this change (+ -)
Capital
Opening
Right conversion Ending Balance
balance IPO s of Other Sub-total
issue provident
funds
Total
number
415219970.00-9355763.00-9355763.00405864207.00
of
shares
Other notes:
According to the Plan on the Repurchase of Partial Domestic Listed Foreign-Invested Shares (B Shares)
deliberated and adopted at the 11th meeting of the 10th Board of Directors held on March 16 2023 and the 2022
Annual General Meeting of Shareholders held on April 26 2023 the Company is agreed to use its own funds to
repurchase part of domestic listed foreign-invested shares (B Shares) through centralized bidding transactions. The
cancellation of 9355763 B shares repurchased by the company has been completed at the China Securities
Depository and Clearing Corporation Limited (CSDC) Shenzhen Branch on May 10 2024.
54. Other equity instruments
(1) Basic information of preferred stock perpetual bonds and other financial instruments issued at the end of
the period
Not applicable
97(2) Table of changes in preferred stock perpetual bonds and other financial instruments issued at the end of
the period
Not applicable
55. Capital reserve
Unit: RMB
Increase in the Decrease in the
Item Opening balance Ending Balance
current period current period
Capital premium (equity
968257185.9154984906.42913272279.49
premium)
Other capital reserves 21901847.26 906067.21 22807914.47
Total 990159033.17 906067.21 54984906.42 936080193.96
Other notes including the changes in the current period and the reasons for the changes:
1. According to the Proposal on Granting Restricted Stocks to the Incentive Objects of the Company's 2018 A-
Shares Restricted Stock Incentive Plan (Phase II) deliberated and approved by the Board of Directors and the General
Meeting of Shareholders of the Company in 1H24 the services obtained by the Company from the above incentive
objects were included in the relevant costs or expenses and the "other capital reserves" was increased by
RMB906067.21 accordingly.
2. As stated in Note VII.53 the Company reduced the capital reserve by RMB54984906.42 for the repurchase
and cancellation of B shares.
56. Treasury stock
Unit: RMB
Increase in the Decrease in the
Item Opening balance Ending Balance
current period current period
Reduction of
registered capital for 64340669.42 64340669.42
repurchase
Restricted share-
14304862.81859048.0013445814.81
based payment
Total 78645532.23 65199717.42 13445814.81
Other notes including the changes in the current period and the reasons for the changes:
1. As stated in Note VII.53 the Company reduced the treasury stock by RMB64340669.42 for the repurchase
and cancellation of B shares.
2. In 1H24 the treasury stock was reduced by RMB859048.00 for the cash dividends corresponding to the
remaining restricted stocks.
57. Other comprehensive income
Unit: RMB
Amount for the current period
Opening
Amount Less: Less:
Less: Net Net Ending
Item
balance before Amounts Amounts income income income Balance
income previously previously tax attributabl attributabl
tax for the included included expenses e to e to
98current in other in other parent minority
period comprehe comprehe company sharehold
nsive nsive ers
income income for
reclassifie retained
d to profit earnings
or loss in in the
the current
current period
period
I. Other
comprehe
nsive
income
that
cannot be
transferre
d to profit
or loss
Including:
changes
in re-
measurem
ent of the
defined
benefit
plan
Other
comprehe
nsive
income
that
cannot be
transferre
d to profit
or loss
under the
equity
method
Changes
in fair
value of
other
equity
instrument
investmen
ts
Changes
in fair
value of
the
company's
credit risk
99II. Other
comprehe
nsive
income - -
19325331374780
that will be 5577527. 5577527.
5.938.17
reclassifie 76 76
d into
profit or
loss
Including:
other
comprehe
nsive
income
that can
be carried
forward to
profit and
loss under
the equity
method
Changes
in fair
value of
other debt
investmen
ts
Amount of
financial
assets
reclassifie
d into
other
comprehe
nsive
incomes
Provision
for credit
impairmen
t of other
debt
investmen
ts
Cash flow
hedge
reserves
Translatio
n - -
difference 1932533 13747805577527. 5577527.of foreign 5.93 8.17 76 76
currency
financial
100statement
s
Total
other - -
19325331374780
comprehe 5577527. 5577527.
5.938.17
nsive 76 76
income
58. Special reserves
Unit: RMB
Increase in the Decrease in the
Item Opening balance Ending Balance
current period current period
Work safety charges 3223158.06 760556.40 218699.04 3765015.42
Total 3223158.06 760556.40 218699.04 3765015.42
59. Surplus reserve
Unit: RMB
Increase in the Decrease in the
Item Opening balance Ending Balance
current period current period
Legal surplus
213025507.50213025507.50
reserve
Discretionary surplus
61984894.0061984894.00
reserves
Total 275010401.50 275010401.50
Description of surplus reserves including the changes in the current period and the reasons for the changes:
According to the provisions of the Company Law and the Articles of Association the Company withdraws statutory
surplus reserves at 10% of the net profit. If the cumulative amount of statutory surplus reserves reaches more than 50%
of the registered capital of the Company no further allocation is required.After withdrawing the statutory surplus provident funds the Company may withdraw any surplus provident funds.Upon approval the any surplus provident funds can be used to make up for the losses of previous years or increase
the share capital.
60. Undistributed profits
Unit: RMB
Item Increase for the current Previous period
Undistributed profit at the end of the
1709513385.761479706638.53
previous period before adjustment
Total adjusted undistributed profit at
the beginning of the period (increase 0.00 0.00
+ decrease -)
Undistributed profit at the beginning
1709513385.761479706638.53
of the period after adjustment
Add: Net profit attributable to owners
of the parent company for the current 147138482.34 333178102.37
period
101Less: withdrawal of legal surplus
0.000.00
reserves
Common stock dividends
162345682.81103371355.14
payable
Undistributed profit at the end of the
1694306185.291709513385.76
period
Details of undistributed profit at the beginning of the period after adjustment
1) Due to the retrospective adjustment of the Accounting Standards for Business Enterprises and its relevant new
provisions the retained profit at the beginning of the period was affected by RMB0.00.
2) Due to the change in accounting policies the retained profit at the beginning of the period was affected by
RMB0.00.
3) Due to the correction of major accounting errors the retained profit at the beginning of the period was affected
by RMB0.00.
4) Due to the change in the scope of consolidation caused by the same control the retained profit at the beginning
of the period was affected by RMB0.00.
5) The total impact of other adjustments on the retained profit at the beginning of the period was RMB0.00.
61. Operating income and operating costs
Unit: RMB
Amount for the current period Amount for the previous period
Item
Revenue Cost Revenue Cost
Main business 2070514213.15 1304312255.31 2356716526.00 1512310635.56
Other businesses 5883698.17 170200.24 7788736.56 216846.27
Total 2076397911.32 1304482455.55 2364505262.56 1512527481.83
Breakdown of operating income and operating cost:
Unit: RMB
Classification of Divisional 1 Total
contracts Operating revenue Operating cost Operating revenue Operating cost
Business type
In which:
Watch brand
384620560.57121046208.60384620560.57121046208.60
business
Watch retail service
1526078368.101087364062.781526078368.101087364062.78
business
Precision technology
88908749.8577451749.7688908749.8577451749.76
business
Leasing business 70906534.63 18450234.17 70906534.63 18450234.17
Other 5883698.17 170200.24 5883698.17 170200.24
Classified by
business area
In which:
South China 985168650.24 623886476.28 985168650.24 623886476.28
Northwest China 299728304.42 183377627.30 299728304.42 183377627.30
North China 67039768.59 36074332.54 67039768.59 36074332.54
East China 258928020.96 163307282.94 258928020.96 163307282.94
Northeast China 175024033.83 115936550.01 175024033.83 115936550.01
Southwest China 290509133.28 181900186.48 290509133.28 181900186.48
102Information related to performance obligations:
See Note V.37 for details.Information related to the transaction price allocated to the remaining performance obligations:
At the end of the reporting period the revenue corresponding to the performance obligations that have been
signed but not performed or not completed is RMB0.00.Information about variable consideration in the contract:
Not applicable
Changes in major contracts or adjustments to major transaction prices:
Not applicable
62. Taxes and surcharges
Unit: RMB
Item Amount for the current period Amount for the previous period
Consumption tax 913936.41 1764057.54
Urban maintenance and construction
3480924.404791269.83
tax
Education surcharges 2468662.07 3381982.77
Property tax 3689322.24 3557771.54
Land use tax 203766.80 186994.62
Vehicle and vessel usage tax 1020.00 2880.00
Stamp duty 1095430.07 1492951.96
Other 407395.56 584547.81
Total 12260457.55 15762456.07
63. Administrative expenses
Unit: RMB
Item Amount for the current period Amount for the previous period
Employee remuneration 66869323.72 83415424.92
Depreciation and amortization 10112949.88 11499296.13
Travel expense 1603647.72 2036742.28
Office allowance 1670705.64 1561690.78
Fees for hiring intermediary agencies 1961271.79 1750354.69
Water and electricity property and
1784853.951735898.86
rental fees
Business entertainment expenses 456485.67 567726.27
Automobile and transportation
598205.06919436.00
expenses
Communication charges 173259.63 195521.76
Other 3983229.48 939637.92
Total 89213932.54 104621729.61
64. Selling expenses
Unit: RMB
Item Amount for the current period Amount for the previous period
103Employee remuneration 181510506.64 184843963.06
Shopping malls and rental expenses 72573677.88 82289084.29
Advertising exhibition and marketing
73779075.7066569380.88
expenses
Depreciation and amortization 91305090.93 91843176.93
Packing expenses 4665459.60 4588450.00
Water and electricity and property
11430327.9611172272.71
management fees
Transport cost 2742617.08 2972928.76
Office allowance 2697327.59 2929620.97
Travel expense 3648244.84 3826254.03
Business entertainment expenses 2008292.89 1947349.51
Other 3424381.29 3291148.06
Total 449785002.40 456273629.20
65. Research and development expenses
Unit: RMB
Item Amount for the current period Amount for the previous period
Employee remuneration 19756648.13 22913768.63
Sample and material costs 1285353.22 663576.68
Mold fees 318637.69 -4970.13
Depreciation and amortization 2382614.08 2243045.93
Technical cooperation fee 1469929.58 444619.97
Other 2312815.63 1901429.46
Total 27525998.33 28161470.54
66. Financial expenses
Unit: RMB
Item Amount for the current period Amount for the previous period
Interest expense 5169603.47 6690859.35
Less: interest income 2185535.51 2432180.03
Exchange gains and losses 944148.29 1335231.32
Handling fees and others 5694581.34 6594306.18
Total 9622797.59 12188216.82
67. Other income
Unit: RMB
Sources of other income Amount for the current period Amount for the previous period
Government subsidies 1414439.38 6691609.41
Personal income tax service fee
511868.05
refund
Additional deduction of VAT 1177577.07
68. Net exposure hedging income
Not applicable
10469. Gains from changes in fair value
Not applicable
70. Investment income
Unit: RMB
Item Amount for the current period Amount for the previous period
Long-term equity investment income
accounted for using the equity 89872.06 -1697481.65
method
Interest income from fixed deposits 223962.11
Total 313834.17 -1697481.65
71. Credit impairment losses
Unit: RMB
Item Amount for the current period Amount for the previous period
Losses from bad debts in notes
99659.19621723.41
receivable
Losses from bad debt in accounts
2486626.833558352.90
receivable
Losses from bad debt in accounts
138392.41153871.31
receivable
Total 2724678.43 4333947.62
72. Asset impairment losses
Unit: RMB
Item Amount for the current period Amount for the previous period
1. Inventory depreciation loss and
contract performance cost 28336.82
impairment loss
2. Losses from impairment of long-
term equity investments
3. Losses from impairment of
investment properties
4. Losses from impairment of fixed
assets
5. Losses from impairment of project
materials
6. Losses from impairment of
construction in progress
7. Losses from impairment of
productive biological assets
8. Losses from impairment of oil and
gas assets
9. Losses from impairment of
105intangible assets
10. Losses from impairment of
goodwill
11. Losses from impairment of
contract assets
12. Others
Total 28336.82
73. Income from asset disposals
Unit: RMB
Source of income from assets
Amount for the current period Amount for the previous period
disposal
Gains or losses from disposal of fixed
2871991.80-89254.33
assets
Gains or losses on disposal of right-
34218.8712564.60
of-use assets
Total 2906210.67 -76689.73
74. Non-operating income
Unit: RMB
Amount included in the
Amount for the current Amount for the previous
Item current non-recurring profit
period period
and loss
Income from liquidated
685500.07286740.28685500.07
damages
Payable not required to be
250659.03226699.03250659.03
paid
Income from rights
protection and 397868.50 397868.50
compensation
Other 44111.25 83084.52 44111.25
Total 1378138.85 596523.83 1378138.85
75. Non-operating expenditure
Unit: RMB
Amount included in the
Amount for the current Amount for the previous
Item current non-recurring profit
period period
and loss
Losses from non-monetary
asset exchange
External donation 243626.35 243626.35
Fines and overdue fines 1348.47 208833.38 1348.47
Liquidated damages 4075.11 54416.71 4075.11
Other 29783.42 28351.09 29783.42
Total 278833.35 291601.18 278833.35
10676. Income tax expense
(1) Table of income tax expense
Unit: RMB
Item Amount for the current period Amount for the previous period
Current income tax expenses 41957212.02 52147601.16
Deferred income tax expense 4587823.09 4983918.40
Total 46545035.11 57131519.56
(2) Accounting profit and income tax expense adjustment process
Unit: RMB
Item Amount for the current period
Gross profit 193683517.45
Income tax expenses calculated at statutory/applicable
48420879.36
tax rate
Effect of different tax rates applicable to subsidiaries -1174196.24
Effect of adjusting income tax in prior periods 526448.25
Effect of non-taxable income -22468.02
Effect of non-deductible costs expenses and losses 1066134.58
Tax payment effect of markup deduction of research and
-2271762.82
development expenses ("-")
Income tax expense 46545035.11
77. Other comprehensive income
See Note VII.57 for details.
78. Cash flow statement items
(1) Cash related to operating activities
Cash received from other operating activities
Unit: RMB
Item Amount for the current period Amount for the previous period
Deposits and margin 3891700.17 4310663.92
Government subsidies 1685999.41 6623312.69
Commodity promotion expenses 3815826.53 6824544.07
Interest income 2197067.47 2432180.03
Petty cash 1656985.54 3098754.09
Other 9515423.83 14009396.39
Total 22763002.95 37298851.19
Notes of cash received from other operating activities
Not applicable
Other cash payments relating to operating activities
Unit: RMB
107Item Amount for the current period Amount for the previous period
Deposits and margin 4378182.27 8763786.62
Petty cash 3510492.16 6711750.04
Period expense 171248817.83 162631345.85
Other 6277130.46 4342740.34
Total 185414622.72 182449622.85
Notes of cash paid for other operating activities
Not applicable
(2) Cash related to investing activities
Cash received from other investing activities
Unit: RMB
Item Amount for the current period Amount for the previous period
Recovery of fixed deposits 120049969.61
Total 120049969.61
Cash received from significant investing activities
Not applicable
Cash paid for other investing activities
Unit: RMB
Item Amount for the current period Amount for the previous period
Purchase of fixed deposit products 165092806.07
Total 165092806.07
Cash paid for important investing activities
Not applicable
(3) Cash related to financing activities
Cash received from other financing activities
Not applicable
Cash paid for other financing activities
Unit: RMB
Item Amount for the current period Amount for the previous period
Lease cash outflow 58174682.07 56886698.46
Payment for share repurchase 79409.91 35483644.86
Total 58254091.98 92370343.32
Notes of cash paid for other financing activities:
Not applicable
Changes in liabilities arising from financing activities:
Not applicable
(4) Notes to net presentation of cash flows
Not applicable
108(5) Major activities and financial impacts that do not involve current cash receipts and
payments but affect the financial position of the enterprise or may affect the cash flows of the
enterprise in the future
Not applicable
79. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
Unit: RMB
Additional information Amount in current period Amount of previous period
1. Reconciliation of net profit to cash
flows from operating activities
Net profit 147138482.34 187395067.23
Plus: provision for asset
-2753015.25-4333947.62
impairment
Depreciation of fixed assets
consumption of oil and gas assets 21248775.43 20546291.19
and productive biological assets
Depreciation of right-of-use
52808948.4950579624.79
asset
Amortization of intangible
1821341.361853819.12
assets
Long-term unamortized
37505025.7746620603.57
expenses
Losses from disposal of fixed
assets intangible assets and other
-2906210.6776689.73
long-term assets (income to be listed
with "-")
Losses from discarding of
fixed assets (income to be listed with
"-")
Losses from fair value
changes (income to be listed with "-")
Financial expenses (income to
6113751.768026090.67
be listed with "-")
Investment loss (income to be
-313834.171697481.65
listed with "-")
Decrease in deferred income
tax assets (increase to be listed with 4333902.49 3681918.71
"-")
Increase in deferred income
tax liabilities (decrease to be listed 253920.60 -57196.06
with "-")
Decrease in inventory
-25957816.5656107015.08
(increase to be listed with "-")
Decrease in operating
-29498881.56-73392204.29
receivables (increase to be listed with
109"-")
Increase in operating payables
-73263593.5145858589.85
(decrease to be listed with "-")
Other
Net Cash Flows from
136530796.52344659843.62
Operating Activities
II. Significant investing and financing
activities not related to cash deposit
and withdrawal
Conversion of debt into capital
Convertible corporate bonds due
within one year
Fixed assets under financing lease
3. Net change in cash and cash
equivalents
Ending balance of cash 404356009.13 519368795.12
Less: Beginning balance of cash 504629153.71 313747463.64
Add: Ending balance of cash
equivalents
Less: Beginning balance of cash
equivalents
Net increase in cash and cash
-100273144.58205621331.48
equivalents
(2) Net cash paid for acquisition of subsidiaries in the current period
Not applicable
(3) Net cash received from disposal of subsidiaries in the current period
Not applicable
(4). Composition of cash and cash equivalents
Unit: RMB
Item Ending Balance Opening balance
I. Cash 404356009.13 504629153.71
Including: Petty cash 107494.56 178996.87
Bank deposits available for
402139278.38503187176.88
immediate payment
Other monetary funds available
2109236.201262979.96
for immediate payment
II. Cash equivalents
Including: bond investment due within
three months
III. Closing balance of cash and cash
404356009.13504629153.71
equivalents
110Including: cash and cash equivalents
restricted for use by the parent
1951883.151202601.86
company or subsidiaries within the
group
(5) The situation where the scope of use is limited but still belongs to the presentation of cash
and cash equivalents
Unit: RMB
Amount in Amount of
Item current previous Reasons for remaining cash and cash equivalents
period period
The remittance of funds deposited in overseas accounts of the
Cash in company's overseas subsidiaries is restricted which does not affect
1951883.151202601.86
bank the daily use.Total 1951883.15 1202601.86
(6) Cash not belonging to cash and cash equivalents
Not applicable
(7) Description of other major activities
Not applicable
80. Notes to items of the statement of changes in Owners' equity
Not applicable
81. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
Balance converted into
Foreign currency ending
Item Conversion exchange rate RMB at the end of the
balance
period
Cash and bank balances 6824404.89
Including: USD 273845.27 7.1268 1951640.49
EUR 181785.03 7.6617 1392782.33
HKD 1671648.98 0.9127 1525680.59
CHF 245913.79 7.9471 1954301.48
Accounts receivable 6181874.23
Including: USD 406931.54 7.1268 2900119.70
EUR 7.6617
HKD 3390101.20 0.9127 3094077.56
CHF 23615.78 7.9471 187676.97
Other receivables 789748.94
Including: HKD 769061.82 0.9127 701907.34
CHF 11053.29 7.9471 87841.60
111Accounts payable 813157.24
Including: USD 1019.00 7.1268 7262.21
HKD 754624.08 0.9127 688730.30
CHF 14743.08 7.9471 117164.73
Other payables 627505.26
Including: USD 9339.10 7.1268 66557.92
HKD 252649.49 0.9127 230588.13
CHF 41569.78 7.9471 330359.20
Long-term loans
Including: USD
EUR
HKD
(2) Description of overseas operating entities including for important overseas operating
entities the main overseas business place functional currency and selection basis shall be
disclosed and the reasons for changes in functional currency shall also be disclosed.Not applicable
82. Leasing
(1) The Company as the lessee
See Note 25 Note 47 and Note 79 for the Company's right-of-use assets lease liabilities and total cash outflow
related to leases. The Company as the lessee is included in the profit and loss as follows:
Item Amount for the current period Amount for the previous period
Interest on lease liabilities 2155222.71 2222605.26
Short-term leases expenses 76946.63 496529.80
Low-value asset leases expenses
Variable lease payments not included in 38721311.76 45887165.30
the measurement of lease liabilities
Revenue from subleasing right-of-use
assets
Sale and leaseback transactions
The Company as the lessee other information as follows:
Leasing activities
The Company's leases are all houses and buildings including short-term leases simplified and treated and leases
other than short-term leases recognized as the right-of-use assets and lease liabilities.Variable lease payments not included in the measurement of lease liabilities
1) Variable lease payments
The lessee has a large number of real estate leases for retail stores and many leases contain variable payment
terms linked to store sales.Many of our real estate leases contain variable lease payment terms linked to the sales volume of the leased
stores. Where possible the Company uses these terms to match lease payments with stores that generate more cash
flows. For individual stores up to 100% of the lease payment can be based on variable payment terms and the sales
scale used is relatively large. In some cases variable payment terms also include the bottom line and upper limit of
annual payment
In 1H24 the variable lease payments included in the current profit and loss were RMB38721311.76.
1122) Renewal option
Many of the lease contracts signed by the Company contain renewal options and the Company has reasonably
estimated the exercise of the renewal options when measuring the lease liabilities to determine the lease term.
3) Termination of lease option
Some of the lease contracts signed by the Company contain the option to terminate the lease. and the Company
has reasonably estimated the exercise of the termination of lease options when measuring the lease liabilities to
determine the lease term.
4) Residual value guarantee
There is no residual value guarantee for the Company's leases.
5) Lease committed by the lessee but not yet started
There is no lease committed by the lessee but not yet started
Simplified treatment of short-term leases or leasing fees for low-value assets
The Company's short-term leases which are simplified in processing include leases with a term of no more than 12
months and without purchase options as well as leases completed within 12 months after the initial implementation of
"Accounting Standard for Business Enterprises No. 21 - Leases." In 1H24 the short-term rental expenses included in
the current profit and loss were RMB76946.63.Circumstances involving sale and leaseback transactions
Not applicable
(2) The Company as the lessor
Operating lease as a lessor
Unit: RMB
Including: income related to variable
Item Leasing income lease payments not included in the
lease receipts
Lease of houses and buildings 70906534.63 0.00
Total 70906534.63 0.00
Financing lease as a lessor
Not applicable
Undiscounted lease receipts for each of the next five years
Not applicable
Reconciliation table of undiscounted lease receipts and net lease investment
Not applicable
(3) Recognize profit or loss on finance lease sales as a manufacturer or distributor
Not applicable
83. Data resources
Not applicable
11384. Others
8. R&D expenditure
Unit: RMB
Item Amount for the current period Amount for the previous period
Employee remuneration 19756648.13 22913768.63
Sample and material costs 1285353.22 663576.68
Mold fees 318637.69 -4970.13
Depreciation and amortization 2382614.08 2243045.93
Technical cooperation fee 1469929.58 444619.97
Other 2312815.63 1901429.46
Total 27525998.33 28161470.54
Including: Expensed R&D
27525998.3328161470.54
expenditures
Capitalized R&D expenditures 0.00 0.00
1. R&D projects eligible for capitalization
Not applicable
2. Important outsourcing projects under research
Not applicable
9. Changes in the scope of consolidation
1. Business combination not under common control
(1) Business combination not under common control occurred in the current period
Not applicable
(2) Combination costs and goodwill
Not applicable
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
Not applicable
(4) Gains or losses arising from the re-measurement of equity held before the acquisition date at fair value
Whether there is a transaction that achieves the business combination step by step through multiple transactions and
obtains the control during the reporting period
No
114(5) Relevant explanations for the inability to reasonably determine the acquisition consideration or the fair
value of identifiable assets and liabilities of the acquiree at the acquisition date or the end of the reporting
period of combination.Not applicable
(6) Other notes
Not applicable
2. Business combination under common control
(1) Business combination under common control occurred in the current period
Not applicable
(2) Combination cost
Not applicable
(3) Book value of the combined party's assets and liabilities on the combination date
Not applicable
3. Reverse acquisition
Not applicable
4. Disposal of subsidiaries
Whether there is any transaction or event that results in the loss of control over the subsidiaries in the current period
No
Whether there is a situation where the investment in subsidiaries is disposed of through multiple transactions and the
control is lost in the current period
No
5. Changes in the scope of consolidation for other reasons
Not applicable
6. Others
Not applicable
11510. Equity interests in other entities
1. Equity in subsidiaries
(1) Composition of the enterprise group
Unit: RMB
Main Percentage of
busine Registr Nature shares
Registered Method of
Name of subsidiaries ss ation of
Capital acquisition
premis place business IndireDirect
e ct
Establishme
Shenzhen Harmony World Shenz Shenz Commer 100.00
600000000.00 nt or
Watch Centre Co. Ltd. hen hen ce %
investment
Establishme
Shenz Shenz Commer 100.00
FIYTA Sales Co. Ltd. 450000000.00 nt or
hen hen ce %
investment
Establishme
Shenzhen FIYTA Precision Shenz Shenz Manufac
180000000.00 99.00% 1.00% nt or
Technology Co. Ltd. hen hen turing
investment
Establishme
Shenz Shenz Manufac 100.00
Shenzhen FIYTA STD Co. Ltd. 50000000.00 nt or
hen hen turing %
investment
Establishme
Shenzhen Harmony World Commer 100.00
10000000.00 Sanya Sanya nt or
Watch Centre Co. Ltd. ce %
investment
Establishme
Shenzhen Xunhang Precision Shenz Shenz Manufac 100.00
10000000.00 nt or
Technology Co. Ltd. hen hen turing %
investment
Establishme
Emile Chouriet Horologe Shenz Shenz Commer 100.00
41355200.00 nt or
(Shenzhen) Co. Ltd. hen hen ce %
investment
Business
combination
Liaoning Hengdarui Commerce Sheny Sheny Commer 100.00
51000000.00 under
and Trade Co. Ltd. ang ang ce %
common
control
Establishme
Shenz Shenz Commer 100.00
Temporal (Shenzhen) Co. Ltd. 5000000.00 nt or
hen hen ce %
investment
Establishme
Shenzhen Harmony E- Shenz Shenz Commer 100.00
10000000.00 nt or
commerce Co. Ltd. hen hen ce %
investment
Establishme
Hong Hong Commer 100.00
FIYTA (HONG KONG) LIMITED 137737520.00 nt or
Kong Kong ce %
investment
Business
combination
Montres Switze Switze Manufac 100.0
97958426.10 not under
Chouriet SA rland rland turing 0%
common
control
Description of the shareholding ratio in the subsidiary that is different from the voting rights ratio:
Not applicable
116Basis for holding half or less of the voting rights but still controlling the investee and holding more than half of the
voting rights but not controlling the investee:
Not applicable
For important structured entities included in the scope of consolidation basis for control:
Not applicable
Basis for determining whether the company is an agent or a principal:
Not applicable
(2) Significant non-wholly-owned subsidiaries
Not applicable
(3) Main financial information of significant non-wholly-owned subsidiaries
Not applicable
(4) Major restrictions on the use of the assets of the enterprise group and the settlement of the debts of the
enterprise group
Not applicable
(5) Financial support or other support provided to structured entities included in the scope of consolidated
financial statements
Not applicable
2. Transactions of changes in the share of Owners' equity in subsidiaries and still control the
subsidiaries
(1) Description of changes in the share of Owners' equity in subsidiaries
Not applicable
(2) Impact of the transaction on minority equity and equity attributable to shareholders
Not applicable
3. Equity in joint venture arrangements or associates
(1) Important joint ventures or associated enterprises
Percentage of shares Accounting
Name of joint treatment of
Main
venture or Registration Nature of investments in
business
associated place business
premise Direct Indirect
joint ventures
enterprise or associated
enterprise
117Shanghai Watch
Shanghai Shanghai Commerce 25.00% Equity method
Industry Co. Ltd.Description of the different shareholding scales of joint ventures or associated enterprises from the voting scale:
Not applicable
Basis for holding less than 20% of voting rights but having significant influence or holding 20% or more of voting rights
but not having significant influence:
Not applicable
(2) Main financial information of important joint ventures
Not applicable
(3) Main financial information of important associated enterprise
Unit: RMB
Ending balance/amount incurred in Beginning balance/amount incurred
the current period in the previous period
Current assets 185298448.35 165796119.65
Non-current assets 13596917.44 16753785.07
Total assets 198895365.79 182549904.72
Current liabilities 76767544.41 60781571.60
Non-current liabilities
Total liabilities 76767544.41 60781571.60
Minority interests
Equity attributable to shareholders of
122127821.38121768333.12
the parent company
Share of net assets calculated by
30531955.3430442083.28
shareholding scale
Adjustment matters 21420524.02 21420524.02
- Goodwill 21420524.02 21420524.02
- Unrealized profits from internal
transactions
- Others
Book value of equity investment in
51952479.3651862607.30
associated enterprise
Fair value of equity investments in
associated enterprises at publicly
quoted prices
Operating revenue 58283918.10 63610760.47
Net profit 359488.26 -6789926.61
Net profits from discontinued
operations
Other comprehensive income
Total comprehensive income 359488.26 -6789926.61
Dividends received from associated
118enterprise in the current year
(4) Summary financial information of insignificant joint ventures and associated enterprise
Not applicable
(5) Explanation on significant restrictions on the ability of joint ventures or associated
enterprises to transfer funds to the Company
Not applicable
(6) Excess losses incurred by joint ventures or associated enterprise
Not applicable
(7) Unrecognized commitments related to investment in joint ventures
Not applicable
(8) Contingent liabilities related to investments in joint ventures or associated enterprise
Not applicable
4. Important joint operation
Not applicable
5. Equity in structured entities not included in the scope of consolidated financial statements
Not applicable
6. Others
Not applicable
11. Government subsidies
1. Government subsidies recognized as receivable at the end of the reporting period
Not applicable
2. Liability items involving government subsidies
Unit: RMB
Amount of Amount Amount Other Related to
Accounting Opening Ending
new included in transferred changes in assets/inco
item balance Balance
subsidies in non- to other the current me
119the current operating income in period
period income in the current
the current period
period
Deferred Related to
952785.69952785.69
income assets
3. Government subsidies included in the current period's profit and loss
Unit: RMB
Accounting item Amount for the current period Amount for the previous period
Other income 1414439.38 6691609.41
12. Risks related to financial instruments
1. Various risks arising from financial instruments
The Company's main financial instruments include cash equity investment borrowings accounts receivable accounts
payable etc. In daily activities it faces the risks of various financial instruments mainly including credit risk liquidity
risk and market risk. The risks associated with these financial instruments and the risk management policies adopted
by the Company to mitigate these risks are as follows:
The Board of Directors is responsible for planning and establishing the risk management framework of the Company
formulating the risk management policies and relevant guidelines of the Company and supervising the implementation
of risk management measures. The Company has formulated risk management policies to identify and analyze the
risks faced by the Company. These risk management policies clearly stipulate specific risks and cover many aspects
such as market risk credit risk and liquidity risk management. The Company regularly assesses the changes in the
market environment and the Company's operating activities to decide whether to update the risk management policies
and systems. The Company's risk management is carried out by the Risk Management Committee in accordance with
the policies approved by the Board of Directors. The Risk Management Committee identifies evaluates and mitigates
relevant risks through close cooperation with other business departments of the Company. The internal Audit
Department of the Company conducts regular audits on risk management controls and procedures and reports the
audit results to the Audit Committee of the Company. The Company diversifies the risks of financial instruments
through appropriate diversified investments and business combinations and reduces the risks of concentration in a
single industry a specific region or a specific counter party by formulating corresponding risk management policies.
1. Credit risk
Credit risk refers to the risk of financial loss to the company resulting from a counter party's failure to fulfill contractual
obligations. Management has established appropriate credit policies and continuously monitors the exposure to credit
risk.The Company has adopted a policy of only dealing with creditworthy counter parties. In addition the Company
assesses customers' creditworthiness based on their financial condition the possibility of obtaining guarantees from
third parties credit history and other factors such as current market conditions and sets corresponding credit terms.The Company continuously monitors the balances and recovery of notes receivable and accounts receivable. For
customers with poor credit history the company uses measures such as written reminders shortening credit terms or
canceling credit terms to ensure that the company does not face significant credit losses. In addition the Company
reviews the recovery of financial assets on each date of Balance Sheet to ensure that the relevant financial assets
have been fully provisioned for expected credit losses.
120The Company's other financial assets include cash accounts receivable and other receivables. The credit risk of
these financial assets arises from counter party default with the maximum credit risk exposure being the carrying
amount of each financial asset as stated on the balance sheet. The Company has not provided any other guarantees
that may expose the Company to credit risks.The Company's cash is primarily deposited with state-controlled banks and other large and medium-sized commercial
banks. Management believes that these commercial banks have high creditworthiness and sound financial conditions
posing no significant credit risk and are not expected to incur any substantial losses due to counter party default. The
Company's policy is to control the amount of deposits held with various reputable financial institutions based on their
market reputation operating scale and financial background in order to limit the credit risk exposure to any single
financial institution.As part of the management of the Company's credit risk assets the Company uses aging to assess the impairment
loss of accounts receivable and other receivables. The Company's accounts receivable and other receivables involve
a large number of customers. The aging information can reflect these customers' ability to pay accounts receivable
and other receivables as well as the risk of bad debts. The Company calculates the historical actual bad debt rate for
different aging periods based on historical data and adjusts it considering forward-looking information such as
forecasts of current and future economic conditions including national GDP growth and national monetary policy to
derive the expected loss rate. For long-term receivables the Company makes a reasonable assessment of the
expected credit loss after comprehensively considering the settlement period the payment period agreed in the
contract the debtor's financial situation and the economic dynamics of the debtor's industry and considering the
above-mentioned forward-looking information.As of June 30 2024 the book balance and expected credit loss of related assets are as follows:
Item Book balance Impairment provision
Notes receivable 16654813.30 316420.99
Accounts receivable 387392159.53 31908693.72
Other receivables 63646417.76 4209877.23
Total 467693390.59 36434991.94
Due to the Company having a wide range of customers there is no significant concentration of credit risk.As of June 30 2024 the accounts receivable of the Company's top five customers accounted for 21.01% (in 2023:
21.42%) of the Company's total accounts receivable.
2. Liquidity risk
Liquidity risk refers to the risk of shortage of funds when the Company fulfills its obligations to settle by delivering cash
or other financial assets. The member companies subordinate to the Company are responsible for their own cash flow
forecasts. The company continuously monitors the short-term and long-term funding needs at the corporate level
based on the cash flow forecasts of its member enterprises to ensure adequate cash reserves. Additionally it
continuously monitors compliance with loan agreements and secures commitments from major financial institutions to
provide sufficient standby funds to meet short-term and long-term funding needs. In addition the Company entered
into financing line credit agreements with major business banks to provide support for the Company to perform its
obligations related to commercial paper. As of June 30 2024 the company has bank credit lines provided by a
number of domestic banks amounting to RMB2348784900 of which: the used credit amount is RMB458784900.As of June 30 2024 the Company's financial liabilities and off-balance sheet guarantee items are presented in
terms of undiscounted contractual cash flows according to the remaining term of the contract as follows:
Ending balance (RMB10000)
Item More than 3
Within 1 year 1-2 years 2-3 years Total
years
Short-term loans 32020.73 32020.73
121Accounts payable 13137.23 13137.23
Other payables 11079.31 11079.31
Total 56237.27 - - - 56237.27
3. Market risk
1) Exchange rate risk
Except that the subsidiary established in Hong Kong holds assets with HKD as the settlement currency and the sub-
subsidiary established in Switzerland holds assets with CHF as the settlement currency other main business activities
of the Company are mainly settled with RMB. However the Company's recognized foreign currency assets and
liabilities and future foreign currency transactions (foreign currency assets liabilities and foreign currency transactions
are mainly denominated with HKD and CHF) still have exchange rate risks.As of June 30 2024 the amounts of foreign currency financial assets and foreign currency financial liabilities held
by the Company converted into RMB are listed as follows:
Ending Balance
Item
HKD items USD items Euro items CHF items Total
Foreign currency
financial assets:
Cash and bank
1525680.591951640.491392782.331954301.486824404.89
balances
Accounts receivable 3094077.56 2900119.70 - 187676.97 6181874.23
Other receivables 701907.34 87841.60 789748.94
Sub-total 5321665.49 4851760.19 1392782.33 2229820.05 13796028.05
Foreign currency
financial liabilities:
Accounts payable 688730.30 7262.21 117164.73 813157.24
Other payables 230588.13 66557.92 330359.20 627505.26
Sub-total 919318.43 73820.13 - 447523.93 1440662.50
Sensitivity analysis:
As of June 30 2024 for the Company's various foreign currency financial assets and foreign currency financial
liabilities if the RMB appreciates or depreciates by 5% against foreign currencies and other factors remain unchanged
the Company will reduce or increase the net profit by about RMB617700 (about RMB129500 in 2023).
2) Interest rate risk
The Company's interest rate risk mainly arises from bank borrowings. Financial liabilities with floating interest
rates expose the Company to cash flow interest rate risk and financial liabilities with fixed interest rate expose the
Company to fair value interest rate risk. The Company determines the relative scale of fixed-rate and floating-rate
contracts according to the market environment at that time.The Company's Financial Department continuously monitors company's interest rate level. An increase in interest
rates will raise the cost of new interest-bearing debt and the interest expenses on the company's existing floating-rate
debt significantly adversely affecting the company's financial performance. Management will make timely adjustments
based on the latest market conditions to mitigate interest rate risk.Sensitivity analysis:
As of June 30 2024 if the borrowing interest rate calculated at the floating interest rate increases or decreases by
50 basis points while other factors remain unchanged the Company's net profit will decrease or increase by about
RMB800000 (about RMB307300 in 2023).The sensitivity analysis above assumes that interest rate changes have occurred on the date of Balance Sheet
and have been applied to all loans obtained by the Company at floating interest rates.
1222. Hedging
(1) The company carries out hedging business for risk management
Not applicable
(2) The company carries out eligible hedge business and applies hedge accounting
Not applicable
(3) The company carries out hedging business for risk management and is expected to achieve the risk
management objectives but has not applied hedge accounting
Not applicable
3. Financial assets
(1) Classification of transfer methods
Unit: RMB
Amount of
Nature of transferred Determination basis
Transfer methods transferred financial Derecognition
financial assets of derecognition
assets
Banks with high
creditworthiness
Discount and
Bank acceptance bill 24056305.26 Derecognized undertake bills of
endorsement
exchange with
minimal credit risk
Total 24056305.26
(2) Financial assets derecognized due to transfer
Unit: RMB
Way of transfer of financial Amount of financial assets Gains or losses related to
Item
assets derecognized derecognition
Bank acceptance bill Discount and endorsement 24056305.26 0.00
Total 24056305.26 0.00
(3) Assets transfer financial assets that continue to be involved
Not applicable
13. Disclosure of fair value
1. Ending fair value of assets and liabilities measured at fair value
Not applicable
1232. Basis for determining the market price of items measured at fair value of the first level on a
continuous and non-continuous basis
Not applicable
3. Qualitative and quantitative information on valuation techniques and important parameters
adopted for continuous and non-continuous Level 2 fair value measurement items
Not applicable
4. Qualitative and quantitative information on valuation techniques and important parameters
adopted for continuous and non-continuous Level 3 fair value measurement items
Not applicable
5. Sensitivity analysis of adjustment information and non-observable parameters between
opening and closing book value of continuous third-level fair value measurement items
Not applicable
6. For items measured at fair value on a going concern if there is any transfer between
different levels in the current period the reason for the transfer and the policy for determining
the transfer time
Not applicable
7. Changes in valuation techniques in the current period and the reasons for the changes
Not applicable
8. Fair value of financial assets and financial liabilities not measured at fair value
Not applicable
9. Others
Not applicable
14. Related parties and related transactions
1. Parent company information
Shareholding Voting rights
Registrati Nature of Registered scale of the scale of the
Parent company name
on place business Capital parent company parent company
in the Company in the Company
AVIC International Commercial RMB11661620
Shenzhen 40.16% 40.16%
Holding Co. Ltd. services 00.00
124Description of the parent company
AVIC International Holdings Limited is a 100.00% indirectly owned subsidiary of AVIC International Holding
Corporation Aviation Industry Corporation of China LTD. holds 100.00% equity of AVIC International Holding
Corporation
The ultimate controller of the enterprise is Aviation Industry Corporation of China LTD.
2. Subsidiaries of the Company
For details of the subsidiaries of the Company please refer to Note X.1.
3. Joint ventures and associates of the Company
See Note X.3 for details of the important joint ventures or associates of the enterprise.
4. Other related parties
Relationship between other related
Names of other related parties
parties and the enterprise
Associated enterprise of the actual
AVIC Property Management Co. Ltd. (AVIC Property)
controller
Rainbow Digital Commercial Co. Ltd. (Rainbow) Controlled by the same party
Shennan Circuits Co. Ltd. (SCC) Controlled by the same party
AVIC East China Optoelectronics (Shanghai) Co. Ltd. (East China
Controlled by the same party
Optoelectronics (Shanghai))
AVIC Xi'an Flight Automatic Control Research Institute (AVIC Xi'an Flight
Controlled by the same party
Automatic Control Research Institute)
Shenzhen Grand Skylight Hotel Management Co. Ltd. (Grand Skylight
Controlled by the same party
Hotel Management)
AVIC Securities Co. Ltd. (AVIC Securities Company) Controlled by the same party
Shenzhen AVIC Group Training Center (AVIC Training Center) Controlled by the same party
AVIC Finance Co. Ltd. (AVIC Finance Company) Controlled by the same party
Gongqingcheng AVIC Cultural Investment Co. Ltd.(Gongqingcheng AVIC
Controlled by the same party
Cultural Investment)
AVIC Jonhon Optronic Technology Co. Ltd. (AVIC JONHON) Controlled by the same party
AVIC International Holdings (Zhuhai) Co. Ltd. (AVIC INTL (Zhuhai)) Controlled by the same party
Guizhou Huayang Electronics Co. Ltd. (Guizhou Huayang Electronics) Controlled by the same party
Zhuhai Pilot Composite Material Technology Co. Ltd. (Zhuhai
Controlled by the same party
PilotTechnology)
Guangdong International Mansion Industrial Co. Ltd.(Guangdong
Controlled by the same party
International Mansion)
Shenzhen AVIC Technical Testing Institute Co. Ltd. (Shenzhen AVIC
Controlled by the same party
Technical Testing Institute)
Shenyang Xinghua AVIC Electrical Appliance Co. Ltd. (Shenyang
Controlled by the same party
Xinghua)
Shenzhen AVIC Changtai Investment Development Co. Ltd. (AVIC
Controlled by the same party
Changtai)
AVIC Futures Co. Ltd. (AVIC Futures) Controlled by the same party
Anhui AVIC Display Technology Co. Ltd. (Anhui AVIC) Controlled by the same party
Shenzhen Aero-Fasteners MFG Co. Ltd. (SHBC) Controlled by the same party
Castic-SMP Machinery Corp.Ltd. (CSM) Controlled by the same party
Shijiazhuang Aircraft Industry Co. Ltd. (Shijiazhuang Aircraft Industry) Controlled by the same party
Sichuan Aviation Industry Chuanxi Machinery Co. Ltd. (Sichuan Chuanxi
Controlled by the same party
Machinery)
AVIC International Holding Corporation (AVIC INTL) Controlled by the same party
125Company Director Manager Chief Financial Officer and Secretary of the
Key management personnel
Board of Directors (key management personnel)
5. Related party transactions
(1) Related transactions for the purchase and sale of commodities the provision and receipt
of services
Purchase of goods/receipt of labor services
Unit: RMB
Amount for Whether the
Content of related Approved Amount for the
Related party the current transaction limit is
party transaction transaction limit previous period
period exceeded
Water and
electricity and
AVIC Property 5642393.30 No 5600171.42
property
management fees
Rainbow Digital Shopping mall
Commercial Co. expenses/commodi 9301602.91 No 1939136.26
Ltd. ty purchase
China Aviation City
Shopping mall
Real Estate 33486.54 No 32726.23
expenses
(Kunshan) Co. Ltd.Jiufang Commercial 65000000.00
Shopping mall
Management Co. 64792.60 No 45347.58
expenses
Ltd.Elevator
AVIC Nanguang
maintenance 12286.27 No 18000.00
Office
premium
Fire fighting
AVIC Louyu Office 4740.00 No
maintenance fee
Gongqingcheng
Shopping mall
AVIC Cultural 8478.92 No
expenses
Investment Co. Ltd.Sales of goods/rendering of services
Unit: RMB
Content of related party Amount for the current Amount for the previous
Related party
transaction period period
Rainbow Digital
Products and services 24031549.70 30348264.13
Commercial Co. Ltd.Sales of materials and
SCC 460.80
rendering of services
Gongqingcheng AVIC
Cultural Investment Co. Product sales 175983.10 154635.87
Ltd.AVIC JONHON Product sales 1865.30 406907.87
AVIC INTL Product sales 2824.77
East China Optoelectronics
Product sales 10619.47
(Shanghai)
Guizhou Huayang
Product sales 5309.73
Electronics
Zhuhai PilotTechnology Product sales 75711.51
Shenyang Xinghua Product sales 739635.19 145831.01
126Shijiazhuang Aircraft
Product sales 234915.96
Industry
Sichuan Chuanxi
Product sales 70796.46
Machinery
(2) Associated trusteeship/contracting and commissioned management/outsourcing situation
Not applicable
(3) Related leasing
As the lessor:
Unit: RMB
Lease income recognized Lease income recognized
Name of lessee Type of leased assets
in the current period in the previous period
AVIC Property Premises 2477133.06 2677492.91
AVIC Securities Company Premises 705942.84 705942.84
Rainbow Digital
Premises 274857.12 309104.34
Commercial Co. Ltd.AVIC Futures Premises 44700.47
The Company as the lessee:
Unit: RMB
Simplified
Variable lease
processing of
payments not
rental fees for Interest expense
included in the Increase in right-
short-term leases Rent paid on assumed
measurement of of-use assets
and leases of lease liabilities
Type lease liabilities (if
Name low-value assets
of applicable)
of (if applicable)
leased
lessor
assets Amoun Amoun Amoun Amoun AmounAmoun Amoun Amoun Amoun Amoun
t for t for t for t for t for
t for t for t for t for t for
the the the the the
the the the the the
previo previo previo previo previo
current current current current current
us us us us us
period period period period period
period period period period period
China
Aviatio
n City
Real - -
Premis 67714 71100
Estate 791.99 580.08 66765 66767
es .26 .00
(Kunsh .72 .11
an)
Co.Ltd.Jiufang
Comm
ercial
Premis 41544 19752 13640 6947. 4179. 14590
Manag 455.75
es .03 2.76 6.96 61 58 7.09
ement
Co.Ltd.Rainbo Premis 78102 21827 1463. 6473. - -
127w es .84 1.00 37 23 75092 19589
Digital .94 8.05
Comm
ercial
Co.Ltd.
(4) Related guarantees
Not applicable
(5) Loans from and to related parties
Not applicable
(6) Assets transfer and debt restructuring of related parties
Not applicable
(7) Remuneration of key management personnel
Not applicable
(8) Other related party transactions
As at the end of the current year the balance of deposits placed by the Company in AVIC Finance amounted to
RMB380786934.73 of which the deposit interest received in the current year amounted to RMB210559.83.
6. Receivables from and payable to related parties
(1) Receivable items
Unit: RMB
Ending Balance Opening balance
Item Related party Bad debt Bad debt
Book balance Book balance
provision provision
Cash in
bank
AVIC Finance 380786934.73 467743798.76
Accounts
receivable
Rainbow Digital
2490562.71115297.655973322.25248095.43
Commercial Co. Ltd.AVIC JONHON 162478.08 7311.51 202712.86 12162.77
Gongqingcheng AVIC
Cultural Investment 56510.95 2825.55 22684.75 832.29
Co. Ltd.Shenyang Xinghua 848596.59 38186.85 292370.58 17542.23
AVIC Property 245170.39 12258.52 183123.05 9156.15
Guizhou Huayang 21260.00 1275.60
128Electronics
Anhui AVIC 15800.00 790.00
AVIC Securities
247080.0012354.00
Company
Sichuan Chuanxi
40000.001800.00
Machinery
Notes
receivable
Zhuhai
892185.9944609.30
PilotTechnology
Shenyang Xinghua 194183.16 192339.42
Other
receivables
Rainbow Digital
855943.0042797.15834903.0043170.15
Commercial Co. Ltd.Gongqingcheng AVIC
Cultural Investment 6500.00 325.00 6500.00 325.00
Co. Ltd.AVIC Property 133990.00 6699.50 143990.00 7199.50
(2) Payable items
Unit: RMB
Item Related party Book balance at period end Beginning book balance
Accounts payable
AVIC Property 32992.35
AVIC JONHON 391.96
Other payables
AVIC Property 1058235.04 1023487.21
AVIC Securities Company 247080.00 247080.00
AVIC Louyu Office 14808.41
Rainbow Digital
96200.001935611.93
Commercial Co. Ltd.AVIC Changtai 4064.81
AVIC Nanguang Office 23943.22
Prepayments
AVIC Securities Company 123540.00
AVIC Futures 9435.48
AVIC INTL 7640.00
7. Commitments of related parties
Not applicable
8. Others
Not applicable
15. Share-based payment
1. Overall situation of share-based payment
Unit: RMB
129Category Grant in the current Exercise in the current Unlocked in the current Invalid in the current
of grant period period period period
object Quantity Amount Quantity Amount Quantity Amount Quantity Amount
2. Equity-settled share-based payment
Unit: RMB
Determination method for the fair value of equity Closing price of the company's shares on the date of
instruments on the grant date grant
Employee service period achievement rate of
Important parameters for the fair value of equity
performance indicator and employee personal
instruments on the grant date
performance evaluation results
For equity-settled share-based payments exchanged for
employee services that can only be exercised after the
completion of the vesting period or upon meeting
specified performance conditions at each balance sheet
date during the vesting period the company should
account for the fair value of the equity instruments
granted on the grant date based on the best estimate of
Determination basis for the number of exercisable equity the number of equity instruments expected to vest by
instruments including the cost of the services received for the period
in the relevant costs or expenses and capital reserves. At
the Balance Sheet Date if subsequent information
indicates that the number of equity instruments expected
to vest differs from previous estimates adjustments
should be made. The number of equity instruments
should be adjusted to the actual number vested on the
vesting date.Reasons for significant differences between the estimates
None
in the current period and those in the previous period
Cumulative amount of equity-settled share-based
28815350.76
payment included in capital reserves
Total expenses recognized in the equity-settled share-
906067.21
based payment in the current period
3. Cash-settled share-based payment
Not applicable
4. Share-based payment expenses in the current period
Unit: RMB
Equity-settled share-based payment Cash-settled share-based payment
Category of grant object
expenses expenses
Some Directors Supervisors Senior
Executives and core backbones of 906067.21
the company
Total 906067.21
1305. Modification and termination of share-based payment
Not applicable
6. Others
Not applicable
16. Commitments and contingencies
1. Important commitments
Significant commitments existing on the Balance Sheet Date
1. Signed lease contracts being performed or to be performed and their financial impact
See Note VII. 82 for details
2. Significant contingencies existing on the Balance Sheet Date
There were no significant contingencies required to be disclosed.
2. Contingencies
(1). Significant contingencies existing on the Balance Sheet Date
Not applicable
(2) If the company has no important contingencies required to be disclosed it shall also be
explained
There were no significant contingencies required to be disclosed.
3. Others
Segment information
The Company determines the operating segments based on the internal organizational structure management
requirements and internal reporting system. The Company's operating segment refers to the component that meets
the following conditions at the same time:
(1) The component can generate income and expenses in daily activities;
(2) The management is able to regularly evaluate the operating results of the component in order to determine the
allocation of resources to them and evaluate their performance;
(3) The financial position operating results cash flows and other relevant accounting information of the
component can be obtained.The Company determines report segments on the basis of operating segments and the operating segments that
meet one of the following conditions are recognized as report segments:
(1) The segment revenue of the operating segment accounts for 10% or more of the total revenue of all segments;
(2) The absolute amount of the segment's profit (loss) accounts for 10% or more of the greater of the total profit of
all profitable segments or the total loss of all loss-making segments.
131The Company operates a single line of business primarily the production and sale of watches. Management
views and manages this business as a whole and evaluates its operating results accordingly. Therefore this financial
statement does not report segment information.As of June 30 2024 the Company had no other significant events that should be disclosed.
17. Events after the balance sheet date
1. Important non-adjusting matters
Not applicable
2. Profit distribution
Not applicable
3. Sales returns
Not applicable
4. Notes to other events after the Balance Sheet Date
18. Other significant events
1. Correction of accounting previous errors
(1) Retrospective restatement method
Not applicable
(2) Future applicable law
Not applicable
2. Debt restructuring
Not applicable
3. Assets replacement
(1) Exchange of non-monetary assets
Not applicable
(2) Replacement of other assets
Not applicable
1324. Annuity plan
Not applicable
5. Discontinued operation
Not applicable
6. Segment information
(1) Determination basis and accounting policies for report segments
The Company determines the operating segments based on the internal organizational structure management
requirements and internal reporting system. The Company's operating segment refers to the component that meets
the following conditions at the same time:
(1) The component can generate income and expenses in daily activities;
(2) The management is able to regularly evaluate the operating results of the component in order to determine the
allocation of resources to them and evaluate their performance;
(3) The financial position operating results cash flows and other relevant accounting information of the
component can be obtained.The Company determines report segments on the basis of operating segments and the operating segments that
meet one of the following conditions are recognized as report segments:
(1) The segment revenue of the operating segment accounts for 10% or more of the total revenue of all segments;
(2) The absolute amount of the segment's profit (loss) accounts for 10% or more of the greater of the total profit of
all profitable segments or the total loss of all loss-making segments.The Company operates a single line of business primarily the production and sale of watches. Management
views and manages this business as a whole and evaluates its operating results accordingly. Therefore this financial
statement does not report segment information.
(2) Financial information of report segments
Not applicable
(3) If the company has no report segments or cannot disclose the total assets and total
liabilities of each report segment it shall explain the reasons
Not applicable
(4) Other notes
Not applicable
7. Other important transactions and events that affect the decision-making of investors
Not applicable
1338. Others
Not applicable
19. Notes to the major items of the Parent Company's Financial Statements
1. Accounts receivable
1. Disclosure by aging
Unit: RMB
Aging Book balance at period end Beginning book balance
Within 1 year (including 1 year) 11424830.46 1875782.07
1-2 years 341772.29 23346.03
Total 11766602.75 1899128.10
(2). Disclosure under the methods of provision for bad debts by category
Unit: RMB
Ending Balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Categor
y Drawing Book Drawing Book
Amount Scale Amount percent value Amount Scale Amount percent value
ages ages
Account
s
receiva
ble with
provisio
n for
bad
debts
by
individu
al
In
which:
Account
s
receiva
ble with
provisio
11766100.005908181117518991100.0076211.18229
n for 5.02% 4.01%
602.75%.06784.6928.10%4916.61
bad
debts
by
combin
ation
In
which:
134Receiva
bles
from 11469 590818 10878 18981 76211. 18219
97.47%5.15%99.95%4.02%
other 482.48 .06 664.42 59.02 49 47.53
custom
ers
Combin
ation of
related
parties
within 297120 297120
2.53%0.00%969.080.05%0.00%969.08
the .27 .27
scope
of
consoli
dation
11766100.005908181117518991100.0076211.18229
Total 5.02% 4.01%
602.75%.06784.6928.10%4916.61
Category name of provision for bad debts by combination: accounts receivable from other customers
Unit: RMB
Ending Balance
Name
Book balance Bad debt provision Drawing percentages
Receivables from other
11469482.48590818.065.15%
customers
Total 11469482.48 590818.06
Description of the basis for determining the combination:
Not applicable
Name of provision for bad debts by combination: combination of related parties within the scope of consolidation
Unit: RMB
Ending Balance
Name
Book balance Bad debt provision Drawing percentages
Combination of related
parties within the scope of 297120.27
consolidation
Total 297120.27
Description of the basis for determining the combination:
Not applicable
If the provision for bad debts of accounts receivable is made according to the general expected credit loss model:
Not applicable
(3) Status of bad debt provision recovery or reversal for the period
Provision for bad debts in the current period:
Unit: RMB
Opening Amount of change for the period Ending
Category
balance Provision Recovered or Write-off Other Balance
135transferred
Accounts
receivable with
provision for
expected credit
losses by
combination
Including:
combination of
76211.49539312.8824706.31590818.06
other customers'
receivables
Total 76211.49 539312.88 24706.31 590818.06
Where accounts receivable with significant from provision for bad debts or recovered in the current period
Not applicable
(4). Situation of accounts receivable actually written off in the current period
Not applicable
(5) Accounts receivable and contractual assets collected from the debtors which rank the first
five at the end of period
Unit: RMB
Ending balance
Proportion in of provision for
Ending balance the total ending bad debts of
Accounts
of accounts balance of accounts
receivable Ending balance of
Company name receivable and accounts receivable and
balance at the contractual assets
contractual receivable and provision for
end of period
assets contractual impairment of
assets contractual
assets
Summary of
accounts
receivable which
8284824.1111766602.7570.41%414241.21
ranks the first
five at the end of
period
Total 8284824.11 11766602.75 70.41% 414241.21
2. Other receivables
Unit: RMB
Item Ending Balance Opening balance
Other receivables 646226304.77 696328419.85
Total 646226304.77 696328419.85
136(1) Interest receivable
1) Classification of interest receivable
Not applicable
2) Important overdue interest
Not applicable
3). Disclosure under the methods of provision for bad debts by category
Not applicable
4). Status of bad debt provision recovery or reversal for the period
Not applicable
5) Situation of interest receivable actually written off in the current period
Not applicable
(2) Dividends receivable
1) Classification of dividends receivable
Not applicable
2) Important dividends receivable with aging over 1 year
Not applicable
3). Disclosure under the methods of provision for bad debts by category
Not applicable
4). Status of bad debt provision recovery or reversal for the period
Not applicable
5) Situation of dividends receivable actually written off in the current period
Not applicable
137(3) Other receivables
1) Classification of other receivables by nature
Unit: RMB
Payment nature Book balance at period end Beginning book balance
Payments of related parties within
645692800.05696041965.52
the scope of consolidation
Margin and deposits 129081.90 49581.90
Other 451421.29 278107.90
Total 646273303.24 696369655.32
2) Disclosure by aging
Unit: RMB
Aging Book balance at period end Beginning book balance
Within 1 year (including 1 year) 646224474.36 614472373.93
1-2 years 5615.00 81857231.39
2-3 years 3163.88
More than 3 years 40050.00 40050.00
3-4 years 40050.00 40050.00
Total 646273303.24 696369655.32
3). Disclosure under the methods of provision for bad debts by category
Unit: RMB
Ending Balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Categor
y Drawing Book Drawing Book
Amount Scale Amount percent value Amount Scale Amount percent value
ages ages
Account
s
receiva
ble with
provisio
n for
bad
debts
by
individu
al
In
which:
Provisio
n for
bad 646273 100.00 46998. 646226 696369 100.00 41235. 696328
0.01%0.01%
debts 303.24 % 47 304.77 655.32 % 47 419.85
on a
combin
138ation
basis
In
which:
Combin
ation of
margin
1290812496.812658549581.40526.9055.3
and 0.02% 1.93% 0.01% 81.74%.907.0390600
deposit
receiva
ble
Combin
ation of
receiva
bles of
related
parties 645692 645692 696041 696041
99.91%0.00%99.95%0.00%
within 800.05 800.05 965.52 965.52
the
scope
of
consoli
dation
Combin
ation of
social
security 263930 263930
0.00%0.04%0.00%
advanc .39 .39
es
receiva
ble
Combin
ation of
45142144501.40691914177.13468.
other 0.07% 9.86% 0.00% 708.87 5.00%.2960.695164
financin
gs
646273100.0046998.646226696369100.0041235.696328
Total 0.01% 0.01%
303.24%47304.77655.32%47419.85
Number of categories with provision for bad debts by individual: 0
Number of categories with provision for bad debts by combination: 3
Category name of provision for bad debts by combination: combination of margin and deposit receivable
Unit: RMB
Ending Balance
Name
Book balance Bad debt provision Drawing percentages
Combination of margin and
129081.902496.871.93%
deposit receivable
Total 129081.90 2496.87
Description of the basis for determining the combination: payments of the same nature have similar credit risk
characteristics.Name of provision for bad debts by combination: combination of accounts receivable related parties within the scope
of consolidation
Unit: RMB
Name Ending Balance
139Book balance Bad debt provision Drawing percentages
Combination of receivables of
related parties within the scope 645692800.05
of consolidation
Total 645692800.05
Description of the basis for determining the combination: payments of the same nature have similar credit risk
characteristics.Category name of provision for bad debts by combination: other accounts receivable
Unit: RMB
Ending Balance
Name
Book balance Bad debt provision Drawing percentages
Combination of other
451421.2944501.609.86%
financings
Total 451421.29 44501.60
Description of the basis for determining the combination: payments of the same nature have similar credit risk
characteristics.Provision for bad debts made according to the general expected credit loss model:
Unit: RMB
Stage I Stage II Stage III
Expected credit loss
Expected credit loss
Bad debt provision Expected credit loss throughout the throughout the Total
in the next 12 duration (credit
duration (no credit
months impairment has
impairment)
occurred)
Balance as of Jan. 1
41235.4741235.47
2024
Balance on Jan. 1
2024 in the current
period
--Transfer to phase II
- Transfer to phase
III
- Reversal to phase II
- Reversal to phase I
Provision in the
5763.005763.00
current period
Reversal in the
current period
Write-off in the
current period
Write-off in the
current period
Other changes
Balance as of June 46998.47 46998.47
140302024
The basis for the division of each stage and the ratio of provisions for bad debts
The phase I is the bad debt provision for other receivables within one year. The phase II is the bad debt provision for
accounts receivable over one year that have not been individually assessed. The phase III is the bad debt provision for
individually assessed accounts receivable.Changes in book balance with significant amount of loss provision in the current period
Not applicable
4). Status of bad debt provision recovery or reversal for the period
Provision for bad debts in the current period:
Unit: RMB
Amount of change for the period
Opening Ending
Category
balance Recovered or Write-off or Provision Other Balance
transferred impairment
Provision for
bad debts on
41235.475763.0046998.47
a combination
basis
Total 41235.47 5763.00 46998.47
Where the bad-debt provision amount recovered or reversed this period is important:
Not applicable
5) Situation of other accounts receivable actually written off in the current period
Not applicable
6). Other receivables collected from the debtors which rank the first five at the end of period
Unit: RMB
Proportion in the End-of-period
total ending balance of
Company name Payment nature Ending Balance Aging
balance of other provision for bad
receivables debt
Summary of
other accounts Receivables of
receivable which related parties
645692800.05 Within 1 year 99.91% 0.00
rank the first five within the scope
at the end of of consolidation
period
Total 645692800.05 99.91% 0.00
7) Presented in other receivables due to centralized management of funds
Not applicable
1413. Long-term equity investments
Unit: RMB
Ending Balance Opening balance
Impair Impai
Item ment rment
Book balance Book value Book balance Book value
provis provi
ion sion
Investment in
1581832322.161581832322.161581179108.811581179108.81
subsidiaries
Investments in
associates
51952479.3651952479.3651862607.3051862607.30
and joint
ventures
Total 1633784801.52 1633784801.52 1633041716.11 1633041716.11
(1) Investment in subsidiaries
Unit: RMB
Increase or decrease in the current period End-of-
Beginning
period
Beginning balance of Ending
Reduction Provision balance of The balance provision Additional balance
investee (book for of for
provision
investmen Other (book for
value) impairmen investmen impairment value)
t t t accrued
impairmen
t
Shenzhen
Harmony
World 6092954 283653.8 6095791
Watch 90.83 3 44.66
Centre
Co. Ltd.Shenzhen
Harmony
11684481168448
E-
4.394.39
commerce
Co. Ltd.Shenzhen
FIYTA
1820444123186.51821676
Precision
61.20247.72
Technolog
y Co. Ltd.Shenzhen
FIYTA 5106289 5111151
48625.00
STD Co. 1.67 6.67
Ltd.FIYTA
(HONG 1377375 1377375
KONG) 20.00 20.00
LIMITED
Temporal
(Shenzhe 5000000. 5000000.n) Co. 00 00
Ltd.
142FIYTA
4569924137775.94571302
Sales Co.
56.17032.07
Ltd.Liaoning
Hengdarui
Commerc 3686784 3686784
e and 3.96 3.96
Trade Co.Ltd.Emile
Chouriet
Horologe 8049396 8055393
59972.10
(Shenzhe 0.59 2.69
n) Co.Ltd.Shenzhen
Harmony
World 1000000 1000000
Watch 0.00 0.00
Centre
Co. Ltd.
1581179653213.31581832
Total
108.815322.16
(2). Investments in associates and joint ventures
Unit: RMB
Increase or decrease in the current period
Invest End-
Begin ment Cash
Begin ning Other
of-
incom divide Endin
ning balan compr Provis
period
g
Invest e or nds or balan
balan ce of Additi Reduc ehens Other ion for
ment loss profits
balan
onal tion of ive chang impair ce of ce provisi
unit recog declar Other
ce
(book on for invest invest incom es in ment
provisi
nized ed to (book on for
value) impair ment ment e equity accruunder be value)
adjust ed impairment equity distrib
ments ment
metho uted
d
1. Joint ventures
2. Associated enterprise
Shang
hai
Watch 5186 5195
8987
Indust 2607. 2479.
2.06
ry 30 36
Co.Ltd.
51865195
Sub- 8987
2607.2479.
total 2.06
3036
51865195
8987
Total 2607. 2479.
2.06
3036
The recoverable amount is determined by the net amount of the fair value less the disposal expenses
143Not applicable
The recoverable amount is determined at the present value of the expected future cash flows
Not applicable
Reasons for the difference between the aforementioned information and the information used in the impairment test of
previous years or external information
Not applicable
Reasons for the difference between the information used in the company's impairment test in previous years and the
actual situation in the current year
Not applicable
(3) Other notes
Not applicable
4. Operating income and operating costs
Unit: RMB
Amount for the current period Amount for the previous period
Item
Revenue Cost Revenue Cost
Main business 93442375.61 28763610.04 90155946.21 22121058.14
Other businesses 2209518.25 1886928.93
Total 95651893.86 28763610.04 92042875.14 22121058.14
5. Investment income
Unit: RMB
Item Amount for the current period Amount for the previous period
Long-term equity investment income
accounted for using the equity 89872.06 -1697481.65
method
Total 89872.06 -1697481.65
6. Others
Not applicable
20. Additional information
1. Breakdown of current non-recurring profit and loss
Unit: RMB
Item Amount Notes
Losses from disposal of non-current
2906210.67
assets
Government grants recognized in
1414439.38
current profit and loss (excluding
144those closely related to the
Company's normal operations in
compliance with national policies
entitled in accordance with set
standards and having a sustained
impact on the Company's profit and
loss)
Reversal of provision for impairment
of receivables subject to individual 3302930.73
impairment testing
Other operating incomes and
1099305.50
expenses excluding the above items
Less: Income tax impact 2029625.75
Total 6693260.53 --
Specific circumstances of other items that meet the definition of non-recurring gains and losses:
Not applicable
Explanation of circumstances where items listed as non-recurring gains and losses in Explanatory Announcement No.
1 on Information Disclosure of Companies Issuing Securities Publicly - Non-recurring Gains and Losses are classified
as recurring
Not applicable
2. Return on equity and Earnings per share
Earnings per share
Weighted average
Profit during the reporting period
return on equity Basic earnings per share Diluted earnings per share
(RMB/share) (RMB/share)
Net profit attributable to
common stock shareholders of 4.36% 0.3568 0.3564
the company
Net profit attributable to
common stock shareholders of
4.16%0.34050.3401
the company after deducting
non-recurring gains and losses
3. Differences in accounting data under domestic and overseas accounting standards
(1). Differences in net profit and net assets in the financial reports disclosed in accordance
with international accounting standards and Chinese accounting standards
Not applicable
(2). Differences in net profit and net assets in the financial reports disclosed in accordance
with overseas accounting standards and Chinese accounting standards
Not applicable
145(3) Explanation of the reasons for the differences in accounting data under domestic and
overseas accounting standards. If the data has been audited by an overseas audit institution
for difference adjustment the name of the overseas institution shall be indicated
4. Others
Not applicable
FIYTA Precision Technology Co. Ltd.Board of Directors
August 21 2024
146
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