FIYTA Holdings Ltd. 2013 Annual Report, Full Text FIYTA Holdings Ltd.
2013 Annual Report
March, 2014
FIYTA Holdings Ltd. 2013 Annual Report, Full Text Section 1 Important Notice, Table of Contents and Definitions
The Board of Directors, the Supervisory Committee, directors, supervisors and senior executives hereby individually and collectively accept responsibility for the correctness, accuracy and completeness of the contents of this report and confirm that there exist no mendacious record, misleading statement, or material omissions in the Report.
All the directors attended the board meeting for reviewing the Annual Report.
The profit distribution preplan reviewed and approved at the Board Meeting is summarized as follows: With theCompany’s total share capital as at December 31, 2013 as the base, the Company is going to distribute cash dividend to all its shareholders at the rate of CNY 1.00 for every 10 shares (with tax inclusive) and bonus share at the rate of 0 share (with tax inclusive). No reserve shall be converted into share capital.
Mr. Lai Weixuan, the Company leader, Mr. Li Dehua, chief financial officer and the Mr. Hu Xinglong, the person in charge of the accounting department (the person in charge of the accounting) hereby confirm the authenticity and completeness of the financial report enclosed in this annual report.
Any perspective description, such as future plan, development strategy, etc. involved in the Annual Report shall not constitute theCompany’s substantial commitment to the investors and the investors should please pay attention to their investment risks.
FIYTA Holdings Ltd. 2013 Annual Report, Full Text Table of Contents
2013 Annual Report
I. Important Notice, Table of Contents and Definitions
II. Company Profile
III. Financial Highlights
IV. Report of the Board of Directors
V. Significant Events 41
IV. Changes in Shares and Particulars about the Shareholders
VII. Directors, Supervisors, Senior Executives and Staff
VIII. Corporate Governance
IX. Internal Control
X. Financial Report
XI. List of Documents Available for Inspection
FIYTA Holdings Ltd. 2013 Annual Report, Full Text Definition
||||
|-|-|-|
|Terms to be defined|Refers to|Definition|
|This Company, the Company or Fiyta|Refers to|F IYTA Holdings Ltd.|
|AVIC International Holdings|Refers to|A VIC International Holdings Limited|
|HARMONY|Refers to|S henzhen Harmony World Watches Center Co., Ltd.|
|Rainbow Supermarket|Refers to|R ainbow Supermarket Co., Ltd.|
|CATIC Real Estate|Refers to|C ATIC Real Estate Co., Ltd.|
|CATIC Property|Refers to|C ATIC Property Management Co., Ltd.|

FIYTA Holdings Ltd. 2013 Annual Report, Full Text Important Risk Notice
Securities Times, Hong Kong Commercial Daily and www.cninfo.com.cn are the media designated for disclosing our information for the year 2013. All theCompany’s information is subject to the information disclosed in the aforesaid media as designated. Investors are requested to pay attention to the risks involved in your investment.
FIYTA Holdings Ltd. 2013 Annual Report, Full Text Section 2 Company Profile
I. Company Information
|||||
|-|-|-|-|
|Short form of the stock:|FIYTA A, FIYTA B|Stock Codes:|000026 and 200026|
|Stock Exchange Listed with|Shenzhen Stock Exchange|||
|Company Name In Chinese|飞亚达（集团）股份有限公司|||
|Abbreviation of Registered||||
||飞亚达公司|||
|Company Name in Chinese||||
|Company name in foreign||||
||FIYTA HOLDINGS LTD.|||
|language (if any)||||
|Short form of the Company||||
|name in foreign language (if|FIYTA|||
|any)）||||
|Legal Representative|LAI Weixuan|||
|Registered address:|FIYTA Technology Building, Gaoxin S. Road One, Nanshan District, Shenzhen|||
|Postal Code of the||||
||518057|||
|Registered Address||||
|Office Address|20th Floor, FIYTA Technology Building, Gaoxin S. Road One, Nanshan District, Shenzhen|||
|Postal Code of the Office||||
||518057|||
|Address||||
|Internet Web Site|http:// www.fiytagroup.com|||
|E-mail|investor@fiyta.com.cn|||

II. Liaison Person and Communication Information
||||
|-|-|-|
||Secretary of the Board|Securities Affairs Representative|
|Names|Chen Libin|Zhang Yong|
||20th Floor, FIYTA Technology Building,|20th Floor, FIYTA Technology Building,|
|Liaison Address|Gaoxin S. Road One, Nanshan District,|Gaoxin S. Road One, Nanshan District,|
||Shenzhen|Shenzhen|
|Tel.|0755－86013992|0755－86013669|
|Fax|0755－83348369|0755－83348369|
|E-mail|investor@fiyta.com.cn|investor@fiyta.com.cn|

FIYTA Holdings Ltd. 2013 Annual Report, Full Text III. Information Disclosure and Place of Regular Reports Prepared for Inquiry
|||
|-|-|
|Newspapers Designated for Disclosing the|Securities Times|
|Information:|and Hong Kong Commercial Daily|
|Internet Web Site Designated by China||
|Securities Regulatory Commission for|http://www.cninfo.com.cn|
|Publishing the Company‟s semi-annual report:||
|Place of the Company‟s Semi-annual Report||
||Office of the Board of Directors|
|Prepared for Inquiry||

IV. Changes in Registration
|||||||
|-|-|-|-|-|-|
||||Number of|||
||Date of|Authority|Business License|Taxation||
||||||Organization Code|
||Registration|Registered with|of Enterprise as|Registration No.:||
||||Legal Person|||
|||Shenzhen||||
|||Municipal l||||
|Initial registration|March 30, 1990|Administration for|19218978-3|44030152010001|19218978-3|
|||Industry and||||
|||Commerce||||
|||Market Supervision||||
|Registration at the||||||
|||Administration of||||
|end of the|April 03, 2013||440301103196089|440301192189783|19218978-3|
|||Shenzhen||||
|reporting period||||||
|||Municipality||||
|||June 22 1993||||
|||Before the change: Production and sales of various pointer type quartz watches||||
|||and driving units, spares and parts, various timekeeping instruments;||||
|||mechanical watches and digital display electronic watches. After the change:||||
|||Production and sales of various pointer type quartz watches and driving units,||||
|||spares and parts, various timekeeping instruments; processing and wholesale||||
|||of K gold ornament watches. domestic commerce and supply and sale of goods||||
|Changes in principal business activities||and materials (excluding the commodities monopolized for operation, under||||
|since listing (if any)||control of and for exclusive sale by the central government);||||
|||January 30 1997||||
|||Before the change: Production and sales of various pointer type quartz watches||||
|||and driving units, spares and parts, various timekeeping instruments;||||
|||processing and wholesale of K gold ornament watches; domestic commerce||||
|||and supply and sale of goods and materials (excluding the commodities||||
|||monopolized for operation, under control of and for exclusive sale by the central||||
|||government); After the change: Production and sales of various pointer type||||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
||
|-|
|quartz watches and driving units, spares and parts, various timekeeping|
|instruments; processing and wholesale of K gold ornament watches; domestic|
|commerce and supply and sale of goods and materials (excluding the|
|commodities monopolized for operation, under control of and for exclusive sale|
|by the central government).|
|February 10, 1999|
|Before the change: Production and sales of various pointer type quartz watches|
|and driving units, spares and parts, various timekeeping instruments;|
|processing and wholesale of K gold ornament watches; domestic commerce|
|and supply and sale of goods and materials (excluding the commodities|
|monopolized for operation, under control of and for exclusive sale by the central|
|government). After the change: Production and sales of various pointer type|
|quartz watches and driving units, spares and parts, various timekeeping|
|instruments; processing and wholesale of K gold ornament watches; domestic|
|commerce and supply and sale of goods and materials (excluding the|
|commodities monopolized for operation, under control of and for exclusive sale|
|by the central government); property management.|
|January 10, 2001|
|Before the change: Production and sales of various pointer type quartz watches|
|and driving units, spares and parts, various timekeeping instruments;|
|processing and wholesale of K gold ornament watches; domestic commerce|
|and supply and sale of goods and materials (excluding the commodities|
|monopolized for operation, under control of and for exclusive sale by the central|
|government); property management. After the change: Production and sales of|
|various pointer type quartz watches and driving units, spares and parts, various|
|timekeeping instruments; processing and wholesale of K gold ornament|
|watches; domestic commerce and supply and sale of goods and materials|
|(excluding the commodities monopolized for operation, under control of and for|
|exclusive sale by the central government); property management. Self-run|
|import and export (implemented according to Document SHEN MAO GUAN|
|DENG ZHENG ZI NO. 2000-072).|
|February 20, 2004|
|Before the change: Production and sales of various pointer type quartz watches|
|and driving units, spares and parts, various timekeeping instruments;|
|processing and wholesale of K gold ornament watches; domestic commerce|
|and supply and sale of goods and materials (excluding the commodities|
|monopolized for operation, under control of and for exclusive sale by the central|
|government); property management. Self-run import and export (implemented|
|according to Document SHEN MAO GUAN DENG ZHENG ZI NO. 2000-072).|
|After the change: Production and sales of various pointer type quartz watches|
|and driving units, spares and parts, various timekeeping instruments;|
|processing and wholesale of K gold ornament watches (the promises are|
|subject to submission of separate report to the authority) ; domestic commerce|

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
|||
|-|-|
||and supply and sale of goods and materials (excluding the commodities|
||monopolized for operation, under control of and for exclusive sale by the central|
||government); property management. Self-run import and export (implemented|
||according to Document SHEN MAO GUAN DENG ZHENG ZI NO. 2000-072).|
||February 29, 2008|
||Before the change: Production and sales of various pointer type quartz watches|
||and driving units, spares and parts, various timekeeping instruments;|
||processing and wholesale of K gold ornament watches (the promises are|
||subject to submission of separate report to the authority) ; domestic commerce|
||and supply and sale of goods and materials (excluding the commodities|
||monopolized for operation, under control of and for exclusive sale by the central|
||government); property management. Self-run import and export (implemented|
||according to Document SHEN MAO GUAN DENG ZHENG ZI NO. 2000-072).|
||After the change: Production and sales of various pointer type quartz watches|
||and driving units, spares and parts, various timekeeping instruments;|
||processing and wholesale of K gold ornament watches (the promises are|
||subject to submission of separate report to the authority) ; domestic commerce|
||and supply and sale of goods and materials (excluding the commodities|
||monopolized for operation, under control of and for exclusive sale by the central|
||government); property management, property lease; self-run import and export|
||(implemented according to Document SHEN MAO GUAN DENG ZHENG ZI|
||NO. 2000-072).|
||Fiyta Holdings Ltd. (hereinafter referred to as the Company) was reorganized,|
||incorporated and renamed from Shenzhen Fiyta Timer Industry Company on|
||December 25 1992 with approval by the General Office of Shenzhen Municipal|
||People‟s Government with Document SHEN FU BAN FU [1992] No. 1259 and|
||with China National Aero-Technology Import & Export Corporation Shenzhen|
||Industry & Trade Center (which was renamed as China National|
||Aero-Technology Corporation Shenzhen) as the sponsor.|
||On March 10, 1993, the Company, with approval by the People‟s Bank of China|
||Shenzhen Special Economic Zone Branch [SHEN REN YIN FU ZI (1993) No.|
|Changes in the controlling shareholder||
||070], issued publically domestic CNY based common shares (A-shares) and|
|in the past (if any)||
||CNY based special shares (B-shares). In accordance with the Approval|
||Document of Shenzhen Municipal Securities Regulatory Office SHEN ZHENG|
||BAN FU [1993] No. 20 and the Approval Document of Shenzhen Stock|
||Exchange SHEN ZHENG SHI ZI (1993) No. 16, the Company‟s A-shares and|
||B-shares were all listed with Shenzhen Stock Exchange for trading commencing|
||from June 3, 1993.|
||On January 30, 1997, with approval by Shenzhen Municipal Administration for|
||Industry and Commerce, the Company was renamed as Shenzhen Fiyta|
||Holdings Ltd.|

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
||
|-|
|On July 4, 1997, according to the equity assignment agreement between China|
|National Aero-Technology Corporation Shenzhen (CATIC Shenzhen|
|Corporation) and CATIC Shenzhen Holdings Limited ( with original name of|
|Shenzhen CATIC Group Co., Ltd. (hereinafter referred to as CATIC Shenzhen),|
|CATIC Shenzhen Corporation assigned 72.36 million corporate shares (taking|
|52.24% of the Company‟s total shares) to CATIC Shenzhen. From then on, the|
|Company‟s controlling shareholder turned to be CATIC Shenzhen from CATIC|
|Shenzhen Corporation.|
|CATIC Shenzhen Holdings completed the registration change with the|
|administration for industry and commerce resulted from its non-public issuing|
|and assets rerestructuring and the Company‟s controlling shareholder turned to|
|be AVIC International Holdings Limited。 Ended December 31, 2013, the|
|proportion of the Company‟s equity held by AVIC International Holdings Limited|
|was 41.49%.|

V. Other Relevant Information
CPAs engaged
|||
|-|-|
|Name of the CPAs|Ruihua Certified Public Accountants (special ordinary partnership)|
||5-11/F,West Tower of China Overseas Property Plaza, Building 7, NO.8,Yongdingmen|
|Office address||
||Xibinhe Road, Dongcheng District, Beijing|
|Names of the Certified Public||
||Liao Shiguo and Xing Xiangzong|
|Accountants as the signatories||

The sponsor performing persistent supervision duties engaged by the Company in the reporting period
Inapplicable
The financial advisor performing persistent supervision duties engaged by the Company in the reporting period
Inapplicable
FIYTA Holdings Ltd. 2013 Annual Report, Full Text Section 3 Financial Highlights
I. Summary of Accounting/Financial Data
May the Company make retroactive adjustment or restatement of the accounting data of the previous years due to change of the accounting policy and correction of accounting errors
□Yes√No
||||||
|-|-|-|-|-|
||||Year-on-year||
||2013|2012|increase/decrease|2011|
||||(%)||
|Turnover in CNY|3,103,496,962.22|3,023,962,527.25|2.63%|2,561,111,471.33|
|Net profit attributable to the|130,125,124.48|116,003,746.03|||
|Company‟s shareholders, in|||12.17%|143,318,684.51|
|CNY|||||
|Net profit attributable to the|||||
|Company‟s shareholders less|127,158,503.02|113,231,625.62|12.3%|155,515,717.50|
|the non-recurring items, in CNY|||||
|Net cash flows arising from|79,047,490.92|45,846,659.76|||
||||72.42%|-411,201,758.57|
|operating activities, in CNY|||||
|Basic earning per share|0.331|0.295|||
||||12.2%|0.365|
|(CNY/share)|||||
|Diluted earning per share|0.331|0.295|||
||||12.2%|0.365|
|(CNY/share)|||||
|Return on equity, weighted|||||
||8.69%|8.18%|0.51%|12.05%|
|average (%)|||||
||||Increase/decrease at||
||||the end of the year||
||End of 2013|End of 2012||End of 2011|
||||over the end of the||
||||previous year (%)||
|Total assets, in CNY|3,558,702,591.28|3,326,763,824.86|6.97%|3,061,600,094.74|
|Net assets attributable to the|1,536,434,684.56|1,446,677,625.13|||
|Company‟s shareholders|||||
|(owner‟s equity attributable to|||6.2%|1,425,864,692.45|
|the Company‟s shareholders, in|||||
|CNY)|||||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text II. Difference in the Accounting Data based on the Accounting Standards Outside Mainland China 1. Difference in Net Profit and Net Assets in the Financial Report as Disclosed according to the International Accounting Standards and the Chinese Accounting Standards
In CNY
||||||
|-|-|-|-|-|
||||Net assets attributable to the Company‟s||
||Net profit attributable to the Company‟s||||
||||shareholders||
||shareholders||||
||Amount in the|Amount in the previous|End of the Reporting|Beginning of the|
||reporting period|period|Period|reporting period|
|According to CAS|130,125,124.48|116,003,746.03|1,536,434,684.56|1,446,677,625.13|
|Items and amount adjusted according to IAS.|||||

2. Difference in Net Profit and Net Assets in the Financial Report as Disclosed Respectively according to the Accounting Standards Outside Mainland China and the Chinese Accounting Standards
In CNY
||||||
|-|-|-|-|-|
||Net profit attributable to the Company‟s||Net assets attributable to the Company‟s||
||shareholders||shareholders||
||Amount in the|Amount in the previous|End of the Reporting|Beginning of the|
||reporting period|period|Period|reporting period|
|According to CAS|130,125,124.48|116,003,746.03|1,536,434,684.56|1,446,677,625.13|
|Items and amount adjusted according to IAS.|||||

3. Note to the Difference in the Accounting Data based on the Accounting Standards of CAS and IAS.
III. Non-recurring gain/loss items and the amount involved
Inapplicable
In CNY
||||||
|-|-|-|-|-|
|Items|Amount in 2013|Amount in 2012|Amount in 2011|Notes|
||388,966.99|||Income fromdisposal of the idledoffice property in thereporting year|
|Gain/Loss from disposal of non-current|||||
|assets, including the part offset with the||-236,304.20|-369,798.63||
|provision for impairment of assets|||||
|Tax rebate or reduction with approval by|0.00|||Inapplicable|
|overstepping authority, or without formal||0.00|0.00||
|approval document|||||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
||||||
|-|-|-|-|-|
|Government subsidy recognized in|3,610,593.36|||Inapplicable|
|current gain and loss (excluding those|||||
|closely related to the Company‟s|||||
|||5,176,129.77|4,006,718.21||
|business and granted under the state‟s|||||
|policies according to certain quota of|||||
|amount or volume)|||||
|Fund occupancy consideration received|0.00|||Inapplicable|
|from non-financial institution counted to||0.00|0.00||
|the current gains and losses|||||
|Income from the costs of the|0.00|||Inapplicable|
|investments in the subsidiaries,|||||
|associates and joint ventures as|||||
|acquired less than the fair value of the|||||
|||0.00|0.00||
|enjoyable recognizable net assets of the|||||
|investees at the time of investment|||||
|acquired.|||||
|Exchange gain/loss from non-monetary|0.00|||Inapplicable|
|||0.00|0.00||
|assets|||||
|Gain/loss from entrusted investment or|0.00|||Inapplicable|
|||0.00|0.00||
|asset management|||||
|Provision for impairment of various|0.00|||Inapplicable|
|assets arising from force majeure, such||0.00|0.00||
|as natural disaster|||||
|Gains and losses from debts|0.00|||Inapplicable|
|||0.00|0.00||
|reorganization|||||
|Enterprise reorganization fee, such as|0.00|||Inapplicable|
|expenses for arrangement for||0.00|0.00||
|employees, integration fee, etc.|||||
|Gains/losses exceeding the fair value|0.00|||Inapplicable|
|arising from transactions with obviously||0.00|0.00||
|unfair prices|||||
|Net gain and loss of the subsidiary under|0.00|||Inapplicable|
|the common control and produced from|||||
|enterprise consolidation from the||-2,130,265.54|-16,139,115.49||
|beginning of the period to the|||||
|consolidation date|||||
|Gain and loss arising from contingent|0.00|||Inapplicable|
|matters irrelevant with the Company‟s||0.00|0.00||
|normal operation business|||||
|Gain and loss from change of the fair|0.00|0.00|0.00|Inapplicable|

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
||||||
|-|-|-|-|-|
|value arising from transactional|||||
|monetary assets, transactional financial|||||
|liabilities as held as well as the|||||
|investment income arising from disposal|||||
|of the transactional monetary assets,|||||
|transactional financial liabilities and|||||
|financial assets available for sale|||||
|excluding the effective hedging|||||
|transaction in connection with the|||||
|Company‟s normal business|||||
|Reverse of the provision for impairment|0.00|||Inapplicable|
|of accounts receivable undergoing||0.00|0.00||
|impairment test individually|||||
|Gain/loss from external entrusted loan|0.00|0.00|0.00|Inapplicable|
|Gain and loss arising from change in the|0.00|||Inapplicable|
|fair value of the investment based real|||||
|||0.00|0.00||
|estate measured afterwards by means of|||||
|fair value model|||||
|Influence upon the current gains and|0.00|||Inapplicable|
|losses from the once-and-for-all|||||
|adjustment over the current gains and||0.00|0.00||
|losses according to the taxation and|||||
|accounting laws and regulations|||||
|Income from custodian charge obtained|0.00|||Inapplicable|
|||0.00|0.00||
|from entrusted operation|||||
||-153,915.17|||Increase of donationoutlay in thereporting period|
|Operating income and expenses other|||||
|||1,389,127.26|1,256,250.60||
|than the aforesaid items|||||
|Other gains/losses in compliance with|0.00|||Inapplicable|
|||0.00|0.00||
|the definition of non-recurring gain/loss|||||
|Less: Amount affected by the income tax|873,382.95|1,425,666.23|918,100.27|Inapplicable|
|Amount affected by minority equity (after|5,640.77|||Inapplicable|
|tax)||900.65|32,987.41||
|Total|2,966,621.46|2,772,120.41|-12,197,032.99|--|

For theCompany‟s non-recurring gain/loss items as defined in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering their Securities to the Public– Non-recurring Gains and Losses and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering
their Securities to the Public– Non-recurring Gains and Losses which have been defined as recurring gains and losses, it
is necessary to explain the reason.
Inapplicable
FIYTA Holdings Ltd. 2013 Annual Report, Full Text Section 4 Report of the Board of Directors
I. General
In 2013, restricted by slow-down of the growth of the domestic economy and affected by the relevant policy, retail industry, especially watch industry the Company is engaged in experienced great change which showed that high-end consumption market, especially top brand watch demand dropped significantly while the middle-end consumption market grew steadily. Meanwhile, the Internet has been continuously impacting traditional industry and has opened a new profit model. Under such a background, the Company continued to insist on the brand operation strategy, constantly optimized the sales channels and product structure, carried out flexible and diversiform promoting activities integrated with such elements as holidays, VIP customers, etc., made great efforts to increase sales income and improve the output of individual shops; meanwhile, continuously optimized the critical process, tried to improve the asset turnover efficiency, enhanced control of costs and expenses, carried out various profit management and innovation projects and ensured profit growth of the whole year. In the reporting period, the Company realized a revenue amounting to CNY 3,103.50 million, a2.63% growth over the previous year; realized net profit amounting to CNY 130.13 million, a12.17% growth over the previous year.
Retail of Famous Brand Watches:
In the reporting period, facing the serious market environment and sluggish atmosphere of industry, HARMONY carried out the business closely around the work theme of “clear understanding of the situation, starting from the heart, innovation and breakthrough, constantly striving to become stronger”. In the reporting year, HARMONY strove to excavate the market opportunity, carried out various sales activities in holidays and ensured the company in maintaining steady level of the income; enhanced the digestion of the receivables from watch sales by means of the activities of enjoying time with respect and pleasing time, etc. and tried hard to optimize the inventory structure; speeded up the capital velocity by means of “gold washing activity”, reduced fund tie-up, reduced various costs and expenditures; on the basis of consolidating the existing brand channels close cooperation relationship, and cautiously developed high-end shops. The company consolidated the first and second tier cities and attached importance on development of the third and fourth tier cities; continued to enhance the strong regions and paid attention to the opportunity of developing the weak regions; kept carrying forward various training activities, including “sales executives training camp”, “spring ploughing program”, “Lohas School”, “star of tomorrow”, etc. and improved thestaff‟s qualification and technical level.
FIYTA Watches:
In the reporting period, the Company kept carrying out various work by focusing on“4P+C” brand elements and ensured continuous quick growth of retail business by sales competition activities with profound theme; brought the effect of spokesperson into full play, conducted event spread through network and print media and elevated the brand recognition; kept upgrading the quality of channels, vigorously expended outlets, franchise houses and comprehensive shops, quickly expanded the channels to the third and fourth tier cities and improved profit of individual shops; steadily carried forward e-commerce business and the sales income of the e-business kept growing quickly; achieved great progress in overseas business in Southeast Asia, Taiwan, Macao, etc. The Company, as the unique watch brand in China, has entered Exhibition Hall I of Basel Watch Fair successively for three years; continuously upgraded the exiting products and added products of new design for competition, launched and richened products of various styles, including HEARTSTRING,
FIYTA Holdings Ltd. 2013 Annual Report, Full Text TOURBILLON, PHOTOGRAPHER, DRYAD, etc. which have powerfully supported the frontline sales; gradually improved the human resource system based on the brand upgrading and business growth; improved the techniques of such personnel as management, sales managers, shopping guiders, etc., improvedemployees‟ professional development passage, optimized human resource structure and supported quick development of the business.
Property Operation:
In the reporting period, the Company kept steady growth in its property operation and the overall management service level was further improved by communication and coordination with the property management company and daily communication with customers. While the self-use area has kept growing, the Company has realized a growth in the rent from the new and renewed tenants.
II. Analysis on Principal Business
1. General
Increase/D
Items 2013 2012 ecrease Cause of Movements
(%)
Revenue 3,103,496.22 3,023,962,527.25 2.63%
Operating costs 1,990,125,145.74 1,982,326,103.21 0.39%
Sales expenses 649,297,842.92 575,687,442.96 12.79%
Administrative
186,296,159.43 193,404,713.40 -3.68%
expenses
Financial
100,268,241.55 118,655,716.47 -15.50%
expenses
R&D Investment 28,586,506.35 31,219,000.00 -8.43% -
The network
development rate has
Net cash flow been properly
arising from 79,047,490.92 45,846,659.76 72.42% controlled and
operation activities management of cash
flow has been
enhanced.
Net cash flow
arising from
-118,283,033.43 -115,539,661.90 2.37%
investment
activities
Net cash flow Issuing company
7,030,524.33 29,894,776.58 -76.48%
arising from bonds and repayment
FIYTA Holdings Ltd. 2013 Annual Report, Full Text financing activities of bank loan and
interest
The Company reviewed and summarized the development plan as disclosed previously and the progress during the reporting period
Inapplicable
Reason of theCompany‟s actual operation results lower or higher than predicted profit as pubilically disclosed in the reporting year
Inapplicable
2. Revenue
Note:
Items Amount in the reporting Amount in the same Increase/Decrease
period period of the previous
year
Income from principal 3,065,746,163.46 2,991,864,757.79 2.47%
business
Income from other 37,750,798.76 32,097,769.46 17.61%
businesses
Total 3,103,496,962.22 3,023,962,527.25 2.63%
Is the income from sales in kind greater than the service income?
√ Yes□ No
||||||
|-|-|-|-|-|
|Classification of||||Year-on-year|
||Items|2013|2012||
|Sectors||||increase/decrease (%)|
||Sales volume|629,021|620,221|1.42%|
|Sales of FIYTA|||||
||Productin output|768,500|757,537|1.45%|
|watches|||||
||Inventory|647,090|507,611|27.48%|

 Note to the year-on-year change rate of the relevant data by over30%:
√ Inapplicable
Significant Orders in Hand:
√Inapplicable
Significant change in or adjustment of the products or services in the reporting period:
√Inapplicable
FIYTA Holdings Ltd. 2013 Annual Report, Full Text TheCompany‟s major trade debtors
|||
|-|-|
|Total sales to the top five customers, in CNY||
||364,634,780.38|
|Proportion of the total sales to the top five customers||
||11.75%|
|in the total sales of the year, %||

Information of the top 5 customers
√ Applicable□ Inapplicable
|||||
|-|-|-|-|
||||Proportion in the total sales of the year|
|No|Customers|Sales (CNY)||
||||(%)|
|1|1st|84,763,275.50|2.73%|
|2|2nd|82,782,435.60|2.67%|
|3|3rd|77,635,424.56|2.5%|
|4|4th|61,844,018.26|1.99%|
|5|5th|57,609,626.45|1.86%|
|Total|--|364,634,780.37|11.75%|

 3. Costs
Classification of Sectors
In CNY
||||||||
|-|-|-|-|-|-|-|
|||2013||2012|||
|||||||Year-on-year|
|Classification of|||Proportion in||Proportion in||
||Items|||||increase/decrea|
|Sectors||Amount|operation costs|Amount|operation costs||
|||||||se (%)|
||||(%)||(%)||
|||1,957,755,888.8||1,947,898,460.6|||
|Watch|Watch||98.37%||98.26%|0.11%|
|||0||1|||
|Lease|Lease|13,967,490.25|0.7%|20,995,127.45|1.06%|-0.36%|

 Classification of Products
In CNY
||||||||
|-|-|-|-|-|-|-|
|||2013||2012|||
|||||||Year-on-year|
|Classification of|||Proportion in||Proportion in||
||Items|||||increase/decrea|
|Sectors||Amount|operation costs|Amount|operation costs||
|||||||se (%)|
||||(%)||(%)||
|Famous brand|Famous brand|1,733,324,366.4|87.1%|1,743,211,337.4|87.94%|-0.84%|

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
||||||||
|-|-|-|-|-|-|-|
|watches|watches|7||2|||
|FIYTA Watch|FIYTA Watch|224,431,522.33|11.28%|204,687,123.19|10.33%|0.95%|
|Lease|Lease|13,967,490.25|0.7%|20,995,127.45|1.06%|-0.36%|

 Note
Inapplicable
Principal Suppliers
|||
|-|-|
|Total amount of purchase from top five suppliers, in||
||1,299,943,290.24|
|CNY||
|The purchase amount from the top five suppliers||
|accounting in the Company‟s total purchase|58.33%|
|amount, %||

Information about the top 5 suppliers
√ Applicable□ Inapplicable
|||||
|-|-|-|-|
||||Proportion in the total purchases of the|
|No.|Suppliers|Purchase amount, in CNY||
||||year (%)|
|1|1st|645,476,901.35|28.96%|
|2|2nd|261,120,407.65|11.72%|
|3|3rd|220,268,603.62|9.88%|
|4|4th|99,170,647.36|4.45%|
|5|5th|73,906,730.26|3.32%|
|Total|--|1,299,943,290.24|58.33%|

 4. Expenses
|||||
|-|-|-|-|
|Statement items|2013|2012|Increase/Decrease (%)|
|Sales expenses|649,297,842.92|575,687,442.96|12.79%|
|Administrative expenses|186,296,159.43|193,404,713.40|-3.68%|
|Financial expenses|100,268,241.55|118,655,716.47|-15.50%|

 5. R& D Expenses
The Company has attached importance on technology innovation work all the time, enhances its core competitiveness
through innovation of the technology with own intellectual property, consolidate its leading position of self-innovation in
China‟s clock and watch brands so as to realize its vision of becoming an international brand and improve its international
competitiveness in the industry. In 2013, theCompany‟s total R& D expenses amounted to CNY 37.197 million, taking
FIYTA Holdings Ltd. 2013 Annual Report, Full Text5.45% of the operating income of FIYTA watches, or taking2.42% of the net assets based on the latest audit, taking1.2% of the turnover of the latest audit.
6. Cash Flow
in CNY
|||||
|-|-|-|-|
||||Year-on-year|
|Items|2013|2012||
||||Increase/Decrease (%)|
|Sub-total of cash flow|3,501,829,105.59|3,432,855,080.96||
|received from operation|||2.01%|
|activities||||
|Subtotal of cash flow paid for|3,422,781,614.67|3,387,008,421.20||
||||1.06%|
|operating activities||||
|Net cash flow arising from|79,047,490.92|45,846,659.76||
||||72.42%|
|operating activities||||
|Sub-total of cash flow-in|681,892.51|768,471.62||
|received from investing|||-11.27%|
|activities||||
|Sub-total of cash flow paid|118,964,925.94|116,308,133.52||
||||2.28%|
|for investment activities||||
|Net cash flow arising from|-118,283,033.43|-115,539,661.90||
||||2.37%|
|investment activities||||
|Sub-total cash flow received|1,791,109,369.63|2,534,134,250.00||
||||-29.32%|
|from financing activities||||
|Sub-total cash flow paid for|1,784,078,845.30|2,504,239,473.42||
||||-28.76%|
|financing activities||||
|Net cash flow arising from|7,030,524.33|29,894,776.58||
||||-76.48%|
|financing activities||||
|Net increase in cash and|-32,757,883.97|-39,551,435.31||
||||-17.18%|
|cash equivalents||||

Note to the year-on-year change of the relevant data by over30%
√ Applicable□ Inapplicable
In the reporting period, the year-on-year growth of the net cash flow arising from operating activities by72.42% was mainly due to that the Company made proper control over the network development speed and enhanced management of the cash flow.
In the reporting period, the year-on-year drop of the net cash flow arising from financing activity by76.48% was mainly due
to that the Company issued company bonds and repaid bank loan and interest.
FIYTA Holdings Ltd. 2013 Annual Report, Full Text Note to the big difference between cash flow from operating activities and net profit in the reporting year:
Inapplicable
III. Composition of Principal Businesses
In CNY
||||||||
|-|-|-|-|-|-|-|
||||||Increase/decrea||
|||||||Increase/decrea|
|||||Increase/decrea|se of principal||
|||||||se of gross|
|||||se of revenue in|business cost||
||Operating||Gross profit rate|||profit rate over|
|||Operating costs||the same period|over the same||
||revenue||(%)|||the same period|
|||||of the previous|period of||
|||||||of the previous|
|||||year (%)|previous year||
|||||||year (%)|
||||||(%)||
|Sectors|||||||
||2,984,547,987.1|1,957,755,888.8|||||
|Watches|||34.4%|2.17%|0.51%|1.08%|
||9|0|||||
|Lease|81,198,176.27|13,967,490.25|82.8%|15.07%|-33.47%|12.55%|
|Products|||||||
|Foreign top|2,301,861,216.9|1,733,324,366.4|||||
||||24.7%|-1.66%|-0.57%|-0.82%|
|brand watches|7|7|||||
|FIYTA watches|682,686,770.22|224,431,522.33|67.13%|17.56%|9.65%|2.38%|
|Lease|81,198,176.27|13,967,490.25|82.8%|15.07%|-33.47%|12.55%|
|Regions|||||||
|South China|976,738,481.63|607,835,407.97|37.77%|9.05%|6.42%|1.54%|
|Northwest|||||||
||558,311,345.16|363,009,177.34|34.98%|-15.32%|-17.17%|1.45%|
|China|||||||
|North China|493,280,745.22|322,405,824.15|34.64%|2.93%|0.65%|1.48%|
|East China|432,760,214.07|281,143,805.58|35.03%|7.07%|5.08%|1.23%|
|Northeast China|282,672,877.95|184,819,369.04|34.62%|-0.58%|-2.76%|1.47%|
|Northwest|||||||
||321,982,499.43|212,509,794.97|34%|19.63%|17.07%|1.44%|
|China|||||||

Under the circumstance that the statistic specifications for theCompany‟s principal business data experienced adjustment in the reporting period, the principal business data upon adjustment of the statistic specifications at the end of the reporting period in the latest year.
Inapplicable
FIYTA Holdings Ltd. 2013 Annual Report, Full Text IV. Analysis on Assets and Liabilities
1. Significant Change in Assets
In CNY
||||||||
|-|-|-|-|-|-|-|
||End of 2013||End of 2012||Proportion||
|||Proportion in|||increase/d||
|||||||Note to the significant change|
||Amount|the total|||ecrease||
|||assets (%)|||(%)||
|Monetary fund|107,663,110.74|3.03%|140,420,994.71|4.22%|-1.19%|Inapplicable|
|Accounts|324,457,339.19||309,117,274.31||||
|||9.12%||9.29%|-0.17%|Inapplicable|
|receivable|||||||
||2,123,342,820.93||1,883,265,248.76||||
|Inventories||59.67%||56.61%|3.06%|Inapplicable|
|Investment based|235,235,684.76||244,379,430.63||||
|||6.61%||7.35%|-0.74%|Inapplicable|
|real estate|||||||
|Long-term equity|43,322,940.12||41,733,741.79||||
|||1.22%||1.25%|-0.03%|Inapplicable|
|investment|||||||
|Fixed assets|306,888,964.31|8.62%|317,801,267.87|9.55%|-0.93%|Inapplicable|
|Construction-in-pro|6,608,187.55||3,866,365.79||||
|||0.19%||0.12%|0.07%|Inapplicable|
|cess|||||||

2. Significant Change in Liabilities
In CNY
||||||||
|-|-|-|-|-|-|-|
||2013||2012||||
||||||Proportion||
|||Proportion in|||||
||||||increase/decr|Note to the significant change|
||Amount|the total assets|||||
||||||ease (%)||
|||(%)|||||
|Short-term|1,023,000,000.00||1,409,800,000.00||||
|||28.75%||42.38%|-13.63%|Inapplicable|
|borrowing|||||||
|Long term|173,274,950.01||48,383,020.45||||
|||4.87%||1.45%|3.42%|Inapplicable|
|borrowings|||||||

3. Assets and Liabilities Measured with Fair Value
Inapplicable
V. Analysis on Core Competitiveness
FIYTA‟s core competitiveness is a collection consisting of a set of techniques and technology which enables the Company
FIYTA Holdings Ltd. 2013 Annual Report, Full Text to provide customers with particular values, is the competitive power on which a series of products or services rely in achieving the leading position. It consists of the ability of brand building, ability of offering top quality services, ability of product innovation, ability of knowledge management and ability of management of strategic human resources.
In the reporting period, the Company achieved great success in technology platform construction and innovation of science and technology. Through over 10years‟ unremitting efforts, theCompany‟s technology center was certified as an enterprise technology center at national level in 2013 relying on its innovation mechanism construction, technology center platform construction, innovation environment construction and talent cultivation, R& D and achievements. The In-cabin Space Suite Watch, theAstronauts‟ Working Watches and theAstronautess‟ Working Watch delivered by the Company accompanied the astronauts and astronautess of Shenzhou X in successful fulfillment ofChina‟s first manned spaceship rendezvous and docking mission as well as assisted the astronautess in her first space lecturing; the technology project was rewarded the science and technology progress award of Shenzhen Municipality and science and technology progress award (standard award) of Shenzhen Municipality respectively; FIYTA China Manned Space Flight Project 21st AnniversaryCollector‟s Edition Watch was rewarded the China Innovative Design Red Start Award granted by China Red Star Award Committee; FIYTA Watch (LY03) was honorably rewarded honorable mention of the
15th
China Industrial Design granted by State Intellectual Property Office; HUARONGDAO Watch was rewarded Bronze at China (Blue Light Cup) Watch Design Competition; Photographer Series Limited Edition GA.8380.BBB, Flight series, and Feature Design of TRIUMPH Series No. 1 and No. 2 were respectively rewarded honorable mention at hina (Blue Light Cup) Watch Design Competition; Both Shenzhen FIYTA Sophisticated Timepieces Manufacture Co., Ltd. and Shenzhen FIYTA Technology Development Co., Ltd., two of theCompany‟s controlled subsidiaries, have successfully been certified as hi-tech enterprise of Shenzhen; in the whole year, the Company submitted iapplication for 3 invention patents, 7 utility model patents and 30 design patents and the Company was granted 1 invention patent, 10 utility model and 27 design; the Company took lead or participated in preparation or revision of 7 national industrial standards
VI. Analysis on Investment Status
1. External Equity Investment
(1) External Investment
||||
|-|-|-|
|External Investment|||
|Investment amount in the reporting|Investment in the same Period of the||
|period (in CNY)|Previous Year (in CNY)|Change rate (%)|
|0.00|28,050,000.00|-100%|
|Particulars of Investees|||
|Company Name|Principal business|Proportion in the investees‟ equity (%)|

 (2) Holding of the Equipty in Financial Enterprises
Inapplicable
FIYTA Holdings Ltd. 2013 Annual Report, Full Text (3) Investment in Securities
Inapplicable
2. Entrusted Financing, Investment in Derivative Products and Entrusted Loan
(1) Entrusted Financing
Inapplicable
(2) Investment in Derivative Products
Inapplicable
(3) Entrusted Loan
Inapplicable
3. Application of the Proceeds Raised through Share Offering
(1) General Application of the Raised Capital
In CNY10,000
|||
|-|-|
|Total raised capital|40,000|
|Total raised capital invested in the reporting period|40,000|
|Total raised capital accumulatively invested|40,000|
|Total raised capital whose application has been||
||0|
|changed in the reporting period||
|Total raised capital whose application has been||
||0|
|changed accumulatively||
|Proportion of the total raised capital whose||
||0%|
|application has been changed accumulatively (%)||
|Note to Application of the Raised Capital||
|The Company held the 33rd meeting of the Sixth Board of Directors on June 19, 2012. The meeting reviewed and||
|approved the Proposal of Issuing Company Bonds, etc. according to which, the Company planned to issue company||
|bonds with a size not exceeding CNY400 million and with a term not exceeding 5 years (with 5 years inclusive) which||
|would be used for replacing bank loan and replenishing the working capital. On September 9, 2012, approved through||
|verification by China Securities Regulatory Commission (CSRC) with Document ZHENG JIAN XU KE [2012] No. 1209,||
|the Company was approved to issue company bonds with the size not exceeding CNY 400 million. The Company issued||
|CNY 400 million of bonds in the current period. After deduction of the issuing costs, the net raised capital amounting to||
|CNY396.9 million was remitted to the bank account designated by the Company on March 5, 2013.||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
||
|-|
|RSM China CPAs, the CPAs engaged by the Company issued the capital verification reports of ZHONG RUI YUE HUA|
|YAN ZI [2013] No. 0053, ZHONG RUI YUE HUA YAN ZI [2013] No. 0054 and ZHONG RUI YUE HUA YAN ZI [2013] No.|
|0055 respectively for the frozen capital for subscription of the on-line bond issuing, the frozen capital for subscription of|
|the off-line placement and the actual raised capital conditions. Approved by Shenzhen Stock Exchange with Document|
|SHEN ZHENG SHANG [2013] No. 99, the bonds have been listed for trading with both SZSE Centralized Bidding|
|System and the Comprehensive Agreement Based Transaction Platform commencing from March 29, 2013 with the|
|abbreviation of the security as “12 YADA BOND” and security code as “112152”. The issuing of the company bonds has|
|been completed. The capital raised from the issuing was remitted to the bank account designated by the Company on|
|March 5, 2013. Ended December 31, 2013, the Company had used up all the raised capital and no change has taken|
|place in the application purpose of the raised capital.|

(2) Promised Projects with Raised Capital
In CNY10,000
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||Has|
||||||Amount|Investmen|Date when||||
||Has the|||||||||significant|
|||Total|||accumulati|t progress|the project||Has the||
||project||Total|||||Result||change|
|Promised investment||promised||Amount|vely|by the end|has||predicted||
||been||investmen|||||realized in||taken|
|projects and investment||investmen||invested in|invested|of the|reached||operation||
||changed||t after|||||the||place in|
|with the over-raised||t with||the report|up to the|report|the||result||
||(including||adjustmen|||||reporting||the|
|capital||raised||period|end of the|period (%)|predicted||been||
||partial||t (1)|||||period||feasibility|
|||capital|||report|(3) =|applicable||reached?||
||change)|||||||||of the|
||||||period (2)|(2)/(1)|status||||
|||||||||||project?|
|Investment projects as promised|||||||||||
|Repayment of bank loan|No|30,000|30,000|30,000|30,000|100%||0|Yes|No|
|Replenishing the|||||||||||
||No|10,000|10,000|10,000|10,000|100%||0|Yes|No|
|working capital.|||||||||||
|Sub-total of investment|||||||||||
||--|40,000|40,000|40,000|40,000|--|--|0|--|--|
|projects as promised|||||||||||
|Investment with over-raised capital|||||||||||
|Inapplicable||0|0|0|0|0%||0|||
|Sub-total of investment|||||||||||
||--|0|0|0|0|--|--|0|--|--|
|with over-raised capital|||||||||||
|Total|--|40,000|40,000|40,000|40,000|--|--|0|--|--|
|Note to failure to comply|||||||||||
|with the planned progress|||||||||||
|and predicted earnings|Inapplicable||||||||||
|and the cause(s) (based|||||||||||
|on the specific projects)|||||||||||
|Explanation of the|||||||||||
||Inapplicable||||||||||
|significant change in|||||||||||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
|||
|-|-|
|project feasibility||
|Amount of over-raised|Inapplicable|
|capital, application and||
|progress of use||
|Change of the||
|implementation site of the||
|projects invested with the||
|raised capital||
|Change of the|Inapplicable|
|implementation site of the||
|projects invested with the||
|raised capital||
|Adjustment of the|Inapplicable|
|implementation method||
|of the projects invested||
|with the raised capital||
|About the initial|Inapplicable|
|investment in the projects||
|planned to be invested||
|with the raised capital||
|and the replacement||
|Using the idle raised|Inapplicable|
|capital to supplement the||
|working capital on||
|temporary basis||
|Balance of the raised|Inapplicable|
|capital incurred in||
|process of project||
|implementation and the||
|cause||
|About application and||
|status of the raised|Inapplicable|
|capital unused||
|Problems existing in||
|application of the raised||
|capital and the|Inapplicable|
|information disclosure or||
|other issues||

(3) Change of the Projects Invested with the Raised Capital
Inapplicable
FIYTA Holdings Ltd. 2013 Annual Report, Full Text 4. Analysis on Principal Subsidiaries and Mutual Shareholding Companies
Particulars about the Principal Subsidiaries and Mutual Shareholding Companies
In CNY
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||Leading|||Net assets||Operating||
|Company|Company|Sectors||Registered|Total assets,||Turnover in||Net profit (in|
||||products and|||(CNY)||profit (in||
|Names|type|engaged in||capital|in CNY||CNY||CNY)|
||||services|||||CNY)||
||||Mainly|||||||
||||engaged in|||||||
||||sales of|||||||
|Shenzhen|||world famous|||||||
|Harmony|||brand watch,|||||||
|World|||including||2,225,968,98|683,087,942.|2,360,212,50|39,227,850.5|29,858,927.8|
||Subsidiary|Retail||600,000,000||||||
|Watches|||purchase,||5.87|62|3.57|0|9|
|Center Co.,|||sales and|||||||
|Ltd.|||maintenance|||||||
||||service of|||||||
||||timepieces|||||||
||||and parts|||||||
||||Sales and|||||||
||||repairing of|||||||
||||clocks and|||||||
|FIYTA Sales|||watches and||558,092,839.|35,561,591.7|653,897,619.|15,710,663.8|12,854,793.5|
||Subsidiary|Retail||50,000,000||||||
|Co., Ltd.|||parts, sales||55|9|56|4|1|
||||of jewelry|||||||
||||and|||||||
||||ornaments.|||||||
||||Mainly|||||||
||||engaged in|||||||
||||production|||||||
||||and sales of|||||||
||||FIYTA|||||||
||||watches,|||||||
|Shenzhen||||||||||
||||including|||||||
|FIYTA||||||||||
||||production|||||||
|Sophisticated|||||208,585,917.|114,555,819.|402,805,964.|114,374,951.|98,601,444.9|
||Subsidiary|Manufacture|and|10,000,000||||||
|Timepieces|||||62|38|50|82|1|
||||maintenance|||||||
|Manufacture||||||||||
||||of clocks and|||||||
|Co., Ltd.||||||||||
||||watches, and|||||||
||||driving units,|||||||
||||spares and|||||||
||||parts,|||||||
||||sophisticated|||||||
||||timepieces.|||||||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||R & D,|||||||
||||production|||||||
||||and sales of|||||||
||||watches,|||||||
|Shenzhen||||||||||
||||production,|||||||
|FIYTA||||||||||
||||machining,||53,480,219.6|22,403,972.4|139,514,959.|13,008,751.0|10,910,788.1|
|Technology|Subsidiary|Manufacture||10,000,000||||||
||||sales and||0|2|17|7|1|
|Development||||||||||
||||technology|||||||
|Co., Ltd.||||||||||
||||development|||||||
||||of|||||||
||||sophisticated|||||||
||||parts.|||||||
||||Mainly|||||||
||||engaged in|||||||
||||trade and|||||||
|FIYTA (Hong||||||||||
||||overseas|HK$65,060,0|323,196,284.|129,769,752.|156,091,829.|10,969,545.6||
|Kong)|Subsidiary|Retail|||||||8,835,923.15|
||||market|00|64|48|75|5||
|Limited||||||||||
||||development|||||||
||||of FIYTA|||||||
||||watches|||||||
||||Sales of|||||||
||||clocks and|||||||
||||watches and|||||||
|Shenzhen|||gifts and|||||||
|Symphony|||consultation||26,149,344.2|-2,589,304.5|11,325,910.6|-2,811,765.4|-2,151,740.5|
||Subsidiary|Retail||5,000,000||||||
|Trading Co.,|||of relevant||2|2|6|3|7|
|Ltd.|||information|||||||
||||and other|||||||
||||domestic|||||||
||||trading|||||||
|Shanghai|Mutual||Sales of|||||||
|Watch|shareholding||watches and||96,176,699.3|81,466,182.5|72,493,931.1|||
|||Manufacture||15,350,000||||6,011,142.11|6,356,793.32|
|Industry Co.,|company||spares and||4|6|4|||
|Ltd.|||parts|||||||

Particulars about the Principal Subsidiaries and Mutual Holding Companies:
That FIYTA Sales Co., Ltd. made good a deficit in the reporting year was mainly due to that with growth of FIYTA Brand in the year the market share got elevated and the revenue and profit increased correspondingly;
The year-on-year profit growth of Shenzhen FIYTA Sophisticated Timepieces Manufacture Co. Ltd. by51.85% was mainly due to that with growth of FIYTA Brand in the year the market share got elevated and the revenue and profit
increased correspondingly;
The year-on-year revenue and profit growth achieved by Shenzhen FIYTA Technology Development Co., Ltd. by65.79%
FIYTA Holdings Ltd. 2013 Annual Report, Full Text was mainly due to that with growth of FIYTA Brand in the year the market share got elevated and the revenue and profit increased correspondingly;
That revenue earned by Shenzhen Harmony World Watches Center Co., Ltd. kept basically unchanged for the corresponding period last year and the total profit dropped by44.19% was mainly due to that affected by the market environment, the revenue growth slowed down, the gross profit rate went down somewhat and expenses grew.
That revenue earned by FIYTA (Hong Kong) Limited kept basically unchanged for the corresponding period last year and the total profit dropped by52.42% was mainly due to that affected by the market environment, the revenue growth slowed down, the gross profit rate went down somewhat and expenses grew.
Acquisition and disposal of subsidiaries in the reporting period
Inapplicable
5. Projects Invested with Funds not Raised through Share Offering
Inapplicable
VII. Prediction of the Operation Performances from January to March 2014
Inapplicable
VIII. Entities Controlled by the Company for Special Purpose
Inapplicable
IX. Development Prospect
(I) Development Trend of the Industry
In 2013, restricted by slow-down of the growth of the domestic economy and affected by the relevant policy, retail industry, especially watch industry the Company is engaged in experienced great change which showed that high-end consumption market, especially top brand watch demand dropped significantly while the middle-end consumption market grew steadily. Meanwhile, the Internet has been continuously impacting traditional industry and has opened a new profit model. In 2014, as the consumption structure is still unstable and the online consumption develops quickly, there still exists big uncertainty in retail industry. However, with various reform measures of the central government keeping going deep through and the domestic economy keeping steady growth,people‟s consumption level shall continually rise and the consumer confidence shall be recovered gradually. The Company still has powerful confidence in the retail industry. (II) Development Strategy
In 2013, the Company shall insist on the brand operation strategy with all the work closely focusing on the annual strategic theme of “deepening the values, improving efficiency and enhancing integration”, positively meet the challenge from the overall accelerated decline of the industry, reinforce the coordination of the self-owned brand with retail channels according to the strategy of steady development, enhance operation management, improve per unit yield, strictly control the costs and expenses and improve economic performance. WhereHARMONY‟s retail of world brand watches shall be further
FIYTA Holdings Ltd. 2013 Annual Report, Full Text restructured with priority in developing popular bazaars, middle end famous watch brands; FIYTA watch shall be further enhanced in brand upgrading, strengthen product differentiation, channel optimization, precise marketing management and expand market share at high speed; the Company shall strive to promote capacity construction in such key fields of driving units, expand earning from technical services of repairing, explore and develop new business of e-commerce, and at the same time enhance core expertise construction in the fields of brand building, product innovation, high quality service, know-how management and strategic human resource, etc.
(III) 2014 Business Plan
1. HARMONY World Watches
In 2014, HARMONY shall enhance the 3-level marketing, improvecustomers‟ satisfaction level, and take rise of the unit shop yield and returns on investment as the starting point; carry out various work with efficiency as the key, strive to realize steady growth in annual revenue and profit, focus the work on implementation of marketing innovation, expand the operation platform, improve channel quality, deepen relationship with the cooperation partners, optimize inventory structure and fund allocation, put emphasis on unit shop yield and making good deficits of partial shops, reinforce HARMONY brand position, do a good job in construction of thestaff‟s ability and team as well as carrying out the work of saving on expenditure and reducing consumption as well as managing profit, etc.
2. Self-owned Watch Brand Business
In 2014, the Company shall keep paying attention to improvement of efficiency and profit in the business of the self-owned watch brand; focus the key work on optimizing the existing retail channels, speed up fostering the newly built shops and improve unit shop yield; enhance the inventory management, improve the order decision-making mechanism, do a good job in putting in good order purchase of raw materials, supply of products, launching new products in market and terminal sales watch supply chain, improve the existing inventory turnover ratio; keep improving product seriation and standardization level, optimize management of suppliers and the purchase process, effectively reduce costs, continuously improve gross profit ratio of products; perform key monitoring over the key projects, study and evaluate returns on resource investment, enhance rigid constraint on the budget, strictly control expenditures beyond the budget; improve the managed profit-making level, speed up asset turnover, improve earning power in the principal business and quicken the progress of disposal of low efficiency and non-leading business assets, etc.
(IV) Capital Necessary for Future Development
According to the business development plan and financial budget program in 2014, for the purpose of satisfying the demand on investment and operation capital and at the same time timely grasping the opportunity of merger and acquisition possibly to be brought about from the market change, the Company plans to apply for a financing credit line not exceeding CNY1.8 billion with the relevant banks by means of various ways, including secured loan, loan to subsidiaries, mortgage, etc.
(V) Risks Possibly to be Confronted with
1. Affected by the macro economy and policy environment, change has taken place in the domestic famous brand watch market consumption and demand, the Company shall be confronted with the operation pressure in retail of famous brand watches.
FIYTA Holdings Ltd. 2013 Annual Report, Full Text 2. The Internet shall keep changingpeople‟s life style and promote growth of the new business model. Engaged in retail industry, the Company needs to quickly understand the Internet from the real significance– to understand the e-business and understand the change in the consumption of people.
3. Due to the difference in the brand strategy and development path, by comparison of theCompany‟s business with the earning result of its competitors, there shall still exist some gap in a short term, the Company needs to keep improvement and upgrading.
4. Based on theCompany‟s business development model, the Company needs to maintain higher investment in inventories to meet the requirements for business development. The extensive demand on capital and quick turnover of inventories shall still be an important support for theCompany‟s business development.
X. Explanation of the Board of Directions and the Supervisory Committee on the QualifiedAuditor’s Report Issued by the CPAs
Inapplicable
XI. Change in accounting policy, accounting estimate and way of accounting in comparison with the latest annual report
Inapplicable
XII. Retrospective Restatement Necessary for Correction of Significant Accounting Errors during the Reporting Period
Inapplicable
XIII. Changes in Range of the Consolidated Statements in Comparison with the Financial Report of the Previous Year.
Inapplicable
XIV. Dividend Distribution
Preparation, Implementation or Adjustment of theCompany‟s Profit Distribution Policy, Especially Cash Dividend Distribution Policy in the Reporting Period
√ Applicable□ Inapplicable
TheCompany‟s profit distribution plan for 2012 was reviewed and approved at the
2nd
meeting of the Seventh Board of Directors held on February 27, 2013 and 2012 Annual General Meeting held on June 21, 2013 and determined that with the total share capital totaling 392,767,870 shares as at December 31, 2012 as the base the Company distributed cash dividend at the rate of CNY 1.00 for every 10 shares (with tax inclusive) to the whole shareholders. As a result, totally CNY 39,276,787.00 of cash dividend was distributed. The profit distribution plan was finished in implementation by August 13, 2013.
FIYTA Holdings Ltd. 2013 Annual Report, Full Text
|||
|-|-|
|Special description of the cash dividend distribution policy||
|Whether the plan complies with the Articles of Association and||
||Yes|
|resolution of the General Meeting:||
|Whether the dividend distribution rate and proportion are clear and||
||Yes|
|definite:||
|Whether the relevant decision making procedures and mechanism||
||Yes|
|are complete:||
|Have the independent directors have done their duty and brought||
||Yes|
|their due role into full play:||
|Have the minority shareholders fully expressed their opinions and||
|been given the opportunity of fully expressing their opinions and|Yes|
|appeal and has their legal interests have been fully protected:||
|Are any adjustment or alteration, conditions and procedures of the||
||Yes|
|cash dividend policy in compliance or transparent:||

The profit distribution preplan or proposal and the preplan or proposal of conversion of the capital reserve into share capital in the past three years (with the reporting period inclusive):
According to the provisions concerning cash dividend distribution in the Articles of Association, the Company prepared specific cash dividend distribution plan after the Board of Directors and theShareholders‟ General Meeting have reviewed strictly according to the requirements. In the past three years, the Company has well implemented the cash dividend distribution policy, fully asked for the independentdirectors‟ opinions, effectively ensured the minorityshareholders‟ benefit and made timely and accurate disclosure in its annual report and the relevant media, where the cash dividend distributed in 2011 amounted to CNY 39,276,787.00 (with tax inclusive), taking27.41% of the net profit attributable to theCompany‟s sharehodlers as stated in the consolidated statement; the cash dividend distributed in 2012 amounted to CNY 39,276,787.00 (with tax inclusive), taking33.86% of the net profit attributable to theCompany‟s sharehodlers as stated in the consolidated statement; the cash dividend distributed in 2013 amounted to CNY 39,276,787.00 (with tax inclusive), taking30.18% of the net profit attributable to theCompany‟s sharehodlers as stated in the consolidated statement; the accumulative amount of cash dividend distributed in the past three years taking90.77% of the latest annual average net profit complies with the regulations.
Cash dividends distributed in the past three years:
In CNY
|||||
|-|-|-|-|
||||Rate of the net profit|
|||Net profit attributable to the||
||Amount of Cash Dividend||attributable to the Company‟s|
|Year of Dividend Distribution||shareholders in the||
||(including tax)||shareholders in the|
|||consolidated statement||
||||consolidated statement (%)|
|2013|39,276,787.00|130,125,124.48|30.18%|
|2012|39,276,787.00|116,003,746.03|33.86%|
|2011|39,276,787.00|143,318,684.51|27.41%|

FIYTA Holdings Ltd. 2013 Annual Report, Full Text In the reporting period, both theCompany‟s profit and the parentcompany‟s retained earnings were positive however not cash dividend distribution proposal has been put forward.
Inapplicable
XV. Preplan for Profit Distribution and Conversion of Capital Reserve into Share Capital in the Reporting Period
|||
|-|-|
|Bonus shares distributed at the rate of ___|0|
|(share) for every 10 shares||
|Dividend distributed at the rate of CNY___ for|1.00|
|every 10 shares (with tax inclusive)||
|Share capital base for the dividend distribution||
||392,767,870|
|preplan (shares)||
|Total cash dividend distributed (with tax||
||39,276,787.00|
|inclusive)||
|Profit available for distribution (CNY)|341,134,316.88|
|Proportion of the cash dividend in the total||
||100%|
|profit available for distribution (%)||
|Cash Dividend Policy:||
|Others||
|Detailed information for profit distribution or conversion of capital reserve into share capital preplan||
|The Company‟s profit distribution plan for 2013 was reviewed and approved at the 8th meeting of the Seventh Board of||
|Directors held on February 27, 2014 and is going to be submitted to 2013 Annual General Meeting for review. According||
|to the plan, the Company is going to distribute cash dividend at the rate of CNY 1.00 for every 10 shares (with tax||
|inclusive) to the whole shareholders with the total share capital as at December 31, 2013 totaling 392,767,870 shares as||
|the base, and totally CNY 39,276,787.00 of cash dividend is going to be distributed. The profit distribution plan is subject||
|to review and approval of the General Meeting before implementation.||

XIV. Social Responsibility
The Social Responsibility Report was published on www.cninfo.com.cn on March 1, 2014.
XVII Statement of such activities as reception, research, communication, interview in the reporting period
|||||||
|-|-|-|-|-|-|
||||||Discussion topics and|
|Reception Time|Reception place|Way of reception|Types of Visitors|Visitors received||
||||||provision of materials|

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
|||||||
|-|-|-|-|-|-|
|||||SINOLINK||
||||||Development trend of the|
|||||SECURITIES CO.,||
||||||domestic luxury goods sector,|
|||||LTD, China Galaxy||
||||||some measures concerning|
|||||Securities Co., Ltd.,||
||||||the Company‟s strategic|
|||||Shenzhen Golden||
||||||development, brand|
|March 25, 2013|Company|On-Site Survey|Institution|Investment||
||||||construction, channel|
|||||Management Co.,||
||||||management in the past three|
|||||Ltd., Changsheng||
||||||years. Provision of the|
|||||Fund Management||
||||||Company‟s public brochures|
|||||Co., Ltd. and Guosen||
||||||in 2013.|
|||||Securities Co., Ltd.||
||||||Development trend of the|
||||||domestic luxury goods sector,|
||||||some measures concerning|
|||||UBS Securities Co.,||
||||||the Company‟s strategic|
|||||Ltd., Huaxia Fund||
||||||development, brand|
|May 7, 2013|Company|On-Site Survey|Institution|Management Co.,||
||||||construction, channel|
|||||Ltd., and Guosen||
||||||management in the past three|
|||||Securities Co., Ltd.||
||||||years. Provision of the|
||||||Company‟s public brochures|
||||||in 2013.|
||||||Development trend of the|
||||||domestic luxury goods sector,|
||||||some measures concerning|
|||||Hanlun Investment||
||||||the Company‟s strategic|
|||||Consulting||
||||||development, brand|
|May 23, 2013|Company|On-Site Survey|Institution|(Shanghai) Co., Ltd.,||
||||||construction, channel|
|||||and Rising Securities||
||||||management in the past three|
|||||Co., Ltd.||
||||||years. Provision of the|
||||||Company‟s public brochures|
||||||in 2013.|
||||||Development trend of the|
|||||Hongyuan Securities|domestic luxury goods sector,|
|||||Co., Ltd., Essence|some measures concerning|
|||||Fund Management|the Company‟s strategic|
|||||Co., Ltd., Gold State|development, brand|
|June 4, 2013|Company|On-Site Survey|Institution|||
|||||Securities Co., Ltd.|construction, channel|
|||||and Guangdong|management in the past three|
|||||Wens Investment|years. Provision of the|
|||||Co., Ltd.|Company‟s public brochures|
||||||in 2013.|
|||||Pingan Securities|Development trend of the|
|July 8, 2013|Company|On-Site Survey|Institution|||
|||||Co., Ltd., Rising|domestic luxury goods sector,|

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
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|-|-|-|-|-|-|
|||||Securities Co., Ltd.|some measures concerning|
|||||King Tower Asset|the Company‟s strategic|
|||||Management|development, brand|
|||||Company Ltd., ICBC|construction, channel|
|||||Credit Suisse Asset|management in the past three|
|||||Management Co.|years. Provision of the|
|||||Ltd., HuaChuang|Company‟s public brochures|
|||||Securities Brokerage|in 2013.|
|||||CO,.LTD,||
|||||CITIC-Prudential||
|||||Fund Management||
|||||Company Ltd, Orient||
|||||Fund Management||
|||||Co., Ltd., Lighthorse||
|||||Asset Management||
|||||Co., Ltd., Lombarda||
|||||China Fund||
|||||Management Co.,||
|||||Ltd., and China||
|||||Southern Fund||
|||||Management Co.,||
|||||Ltd.,||
||||||Development trend of the|
||||||domestic luxury goods sector,|
|||||ICBC Credit Suisse||
||||||some measures concerning|
|||||Asset Management||
||||||the Company‟s strategic|
|||||Co. Ltd., Galaxy||
||||||development, brand|
|August 27, 2013|Company|On-Site Survey|Institution|Asset Management||
||||||construction, channel|
|||||Co., Ltd., and||
||||||management in the past three|
|||||UBS Securities Co.,||
||||||years. Provision of the|
|||||Ltd.||
||||||Company‟s public brochures|
||||||in 2013.|
||||||Development trend of the|
||||||domestic luxury goods sector,|
|||||Penghua Fund|some measures concerning|
|||||Management Co.,|the Company‟s strategic|
|September 25,||||Ltd., TEAM-TOP|development, brand|
||Company|On-Site Survey|Institution|||
|2013||||INVESTMENT, and|construction, channel|
|||||Minsheng Securities|management in the past three|
|||||Co., Ltd.|years. Provision of the|
||||||Company‟s public brochures|
||||||in 2013.|
|October 24, 2013|Company|On-Site Survey|Institution|SHENGBEILE|Development trend of the|

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
|||||||
|-|-|-|-|-|-|
|||||FINANCE, Chinalion|domestic luxury goods sector,|
|||||Securities Co., Ltd.,|some measures concerning|
|||||CAPITAL SYNERGY|the Company‟s strategic|
|||||INVEST|development, brand|
|||||MANAGEMENT CO.,|construction, channel|
|||||LTD., Shenzhen|management in the past three|
|||||Daoyi Assets|years. Provision of the|
|||||Management Co.,|Company‟s public brochures|
|||||Ltd., TEBON|in 2013.|
|||||SECURITIES CO.,||
|||||LTD., Morgan Stanley||
|||||Huaxin Fund Manage||
|||||ment Company||
|||||Limited,||
|||||Galaxy Securities,||
|||||Soochow Asset||
|||||Management Co.,||
|||||Ltd., Hongta Hotland||
|||||Asset Management||
|||||Co., Ltd., and||
|||||Shenzhen Gemboom||
|||||Investment||
|||||Management Co.,||
|||||Ltd.||
||||||Development trend of the|
||||||domestic luxury goods sector,|
||||||some measures concerning|
|||||Value Partner Fund|the Company‟s strategic|
|November 29,||||Management Co.,|development, brand|
||Company|On-Site Survey|Institution|||
|2013||||Ltd., and Guosen|construction, channel|
|||||Securities Co., Ltd.|management in the past three|
||||||years. Provision of the|
||||||Company‟s public brochures|
||||||in 2013.|
|||||Shenyin & Wanguo|Development trend of the|
|||||Securities, Co., Ltd.,|domestic luxury goods sector,|
|||||Morgan Stanley|some measures concerning|
|||||Huaxin Fund Manage|the Company‟s strategic|
|December 18,||||||
||Company|On-Site Survey|Institution|ment Company|development, brand|
|2013||||||
|||||Limited,|construction, channel|
|||||China International|management in the past three|
|||||Capital Corporation|years. Provision of the|
|||||Limited, Shenzhen|Company‟s public brochures|

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
|||
|-|-|
|Kangqiao Assets|in 2013.|
|Management Co.,||
|Ltd., GF Securities||
|Co., Ltd.,||
|Boshi Fund Manage||
|ment Co., Ltd.||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text Section 5 Significant Events
I. Major Lawsuits and Arbitration Affairs
Inapplicable
II. Media Query
Inapplicable
III. Non-operation Oriented Fund Occupancy by the Controlling Shareholder and/or Related Parties
Inapplicable
IV. Bankruptcy or Reorganization Related Events
Inapplicable
V. Asset Transactions
1. Acquisition of Assets
Inapplicable
2. Sales of Assets
Inapplicable
3. Enterprise Consolidation
Inapplicable
VI. Implementation of theCompany’s Equity Incentive Plan and its Influences
Inapplicable
VII. Material Related Transactions
1. Related transactions in connection with daily operation
FIYTA Holdings Ltd. 2013 Annual Report, Full Text
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|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||Proportion|||||
||||Descriptio|Principle of||Amount of||Way of||||
||||||Price of||in the|||||
|||Type of|n of|pricing of||the related||settlement||||
|Related|Relationsh||||related||amount of||Market|Disclosure|Disclosure|
|||related|Related|the related||transaction||for the||||
|Parties|ip||||transaction||the similar||price|date|index|
|||parties|Transactio|transaction||(in CNY||related||||
||||||s||transaction|||||
||||ns|s||10,000)||transaction||||
||||||||s (%)|||||
|China||||||||||||
|||Revenue||||||Bank||||
|National||||||||||||
||Common|from|Sale of|Market||||account||March 1,|www.cninf|
|Aviation||||||190.62|0.06%|||||
||controller|principal|goods|price||||transferen||2014|o.com.cn|
|Industry||||||||||||
|||business||||||ce||||
|Group Co.||||||||||||
|||Revenue||||||Bank||||
|Rainbow||||||||||||
||Common|from|Sale of|Market||||account||March 1,|www.cninf|
|Supermark||||||8,090.1|2.71%|||||
||controller|principal|goods|price||||transferen||2014|o.com.cn|
|et||||||||||||
|||business||||||ce||||
|China||||||||||||
|||Revenue||||||Bank||||
|National||||||||||||
||Common|from|Sale of|Market||||account||March 1,|www.cninf|
|Aviation||||||2,427.41|75.51%|||||
||controller|principal|goods|price||||transferen||2014|o.com.cn|
|Industry||||||||||||
|||business||||||ce||||
|Group Co.||||||||||||
|Zhonghan||||||||||||
|g||Revenue||||||Bank||||
|Electronic|Common|from|Sale of|Market||||account||March 1,|www.cninf|
|||||||16.87|0.52%|||||
|Measuring|controller|principal|goods|price||||transferen||2014|o.com.cn|
|Instrument||business||||||ce||||
|s Co., Ltd.||||||||||||
|||Revenue||||||Bank||||
|CATIC||||||||||||
||Common|from|Property|Market||||account||March 1,|www.cninf|
|Real||||||150.88|1.86%|||||
||controller|principal|lease|price||||transferen||2014|o.com.cn|
|Estate||||||||||||
|||business||||||ce||||
|Shenzhen||||||||||||
|||Revenue||||||Bank||||
|Makway||||||||||||
||Common|from|Property|Market||||account||March 1,|www.cninf|
|Cable TV||||||23.33|0.29%|||||
||controller|principal|lease|price||||transferen||2014|o.com.cn|
|Equipment||||||||||||
|||business||||||ce||||
|Co., Ltd.||||||||||||
|||Revenue||||||Bank||||
|CATIC|Common|from|Property|Market||||account||March 1,|www.cninf|
|||||||266.05|3.28%|||||
|Property|controller|principal|lease|price||||transferen||2014|o.com.cn|
|||business||||||ce||||
|CATIC||Revenue||||||Bank||||
||Common||Property|Market||||||March 1,|www.cninf|
|Securities,||from||||103.73|1.28%|account||||
||controller||lease|price||||||2014|o.com.cn|
|Co., Ltd.||principal||||||transferen||||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
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|-|-|-|-|-|-|-|-|-|-|
|||business|||||ce|||
|Shenzhen||||||||||
|CATIC City||Revenue|||||Bank|||
|Property|Common|from|Property|Market|||account|March 1,|www.cninf|
||||||2.23|0.03%||||
|Developm|controller|principal|lease|price|||transferen|2014|o.com.cn|
|ent Co.,||business|||||ce|||
|Ltd.||||||||||
|Shenzhen||||||||||
|||Revenue|||||Bank|||
|CATIC City||||||||||
||Common|from|Property|Market|||account|March 1,|www.cninf|
|Developm|||||2.23|0.03%||||
||controller|principal|lease|price|||transferen|2014|o.com.cn|
|ent Co.,||||||||||
|||business|||||ce|||
|Ltd.||||||||||
|Shenzhen||||||||||
|CATIC||||||||||
|Guanlan||Revenue|||||Bank|||
|Real|Common|from|Property|Market|||account|March 1,|www.cninf|
||||||8.93|0.11%||||
|Estate|controller|principal|lease|price|||transferen|2014|o.com.cn|
|Developm||business|||||ce|||
|ent Co.,||||||||||
|Ltd.||||||||||
|Shenzhen||||||||||
|CATIC||||||||||
|||Revenue|||||Bank|||
|Changtai||||||||||
||Common|from|Property|Market|||account|March 1,|www.cninf|
|Investment|||||128.56|1.58%||||
||controller|principal|lease|price|||transferen|2014|o.com.cn|
|Developm||||||||||
|||business|||||ce|||
|ent Co.,||||||||||
|Ltd.||||||||||
|Xi‟an||Revenue|||||Bank|||
|Tianyue|Common|from|Property|Market|||account|March 1,|www.cninf|
||||||350|4.31%||||
|Hotel Co.,|controller|principal|lease|price|||transferen|2014|o.com.cn|
|Ltd.||business|||||ce|||
|||Revenue|||||Bank|||
|Rainbow||||||||||
||Common|from|Property|Market|||account|March 1,|www.cninf|
|Supermark|||||66.71|0.82%||||
||controller|principal|lease|price|||transferen|2014|o.com.cn|
|et||||||||||
|||business|||||ce|||
|Shenzhen||Revenue|||||Bank|||
|CATIC City|Common|from|Property|Market|||account|March 1,|www.cninf|
||||||9|0.11%||||
|Investment|controller|principal|lease|price|||transferen|2014|o.com.cn|
|Co., Ltd.||business|||||ce|||
|Shenzhen||Revenue|||||Bank|||
||Common||Property|Market||||March 1,|www.cninf|
|CATIC||from|||37.81|0.47%|account|||
||controller||lease|price||||2014|o.com.cn|
|Jiufang||principal|||||transferen|||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
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|-|-|-|-|-|-|-|-|-|-|
|Assets||business|||||ce|||
|Managem||||||||||
|ent Co.,||||||||||
|Ltd.||||||||||
|Shenzhen||||||||||
|CATIC||Revenue|||||Bank|||
|Theme|Common|from|Property|Market|||account|March 1,|www.cninf|
||||||94.56|1.16%||||
|Real|controller|principal|lease|price|||transferen|2014|o.com.cn|
|Estate Co.,||business|||||ce|||
|Ltd.||||||||||
|Zhonghan||||||||||
|g|||||||Bank|||
|||Administra||||||||
|Electronic|Common||Processin|Market|||account|March 1,|www.cninf|
|||tive|||3.89|0.32%||||
|Measuring|controller||g charges|price|||transferen|2014|o.com.cn|
|||expenses||||||||
|Instrument|||||||ce|||
|s Co., Ltd.||||||||||
||||||||Bank|||
|||Administra|Property|||||||
|CATIC|Common|||Market|||account|March 1,|www.cninf|
|||tive|managem||178.18|100%||||
|Property|controller|||price|||transferen|2014|o.com.cn|
|||expenses|ent fee|||||||
||||||||ce|||
|Ganzhou||||||||||
|CATIC||||||||||
||||||||Bank|||
|Real||Administra||||||||
||Common|||Market|||account|March 1,|www.cninf|
|Estate||tive|Rent||94.99|1.3%||||
||controller|||price|||transferen|2014|o.com.cn|
|Developm||expenses||||||||
||||||||ce|||
|ent Co.,||||||||||
|Ltd.||||||||||
|Chengdu||||||||||
|CATIC||||||||||
||||||||Bank|||
|Real||Administra||||||||
||Common|||Market|||account|March 1,|www.cninf|
|Estate||tive|Rent||54.69|0.75%||||
||controller|||price|||transferen|2014|o.com.cn|
|Developm||expenses||||||||
||||||||ce|||
|ent Co.,||||||||||
|Ltd.||||||||||
||||||||Bank|||
|Rainbow||||||||||
||Common|Sales|Market|Market|||account|March 1,|www.cninf|
|Supermark|||||239.39|5.64%||||
||controller|costs|expenses|price|||transferen|2014|o.com.cn|
|et||||||||||
||||||||ce|||
|Shenzhen|||||||Bank|||
|||Administra||||||||
|CATIC|Common||Training|Market|||account|March 1,|www.cninf|
|||tive|||28.1|17.18%||||
|Enterprise|controller||fees|price|||transferen|2014|o.com.cn|
|||expenses||||||||
|Group|||||||ce|||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Training||||||||||||
|Center||||||||||||
|||||||||Bank||||
|AVIC||||||||||||
||Common|Financial|Guarantee|Market||||account||March 1,|www.cninf|
|Internation||||||208|100%|||||
||controller|expenses|fee|price||||transferen||2014|o.com.cn|
|al Holdings||||||||||||
|||||||||ce||||
|Total||||--|--|12,776.26|--|--|--|--|--|
|Details of the rejection of the goods already||||||||||||
|||||Inapplicable||||||||
|sold in big amount||||||||||||
|Necessity, persistence and choice of related||||All the above related transactions are favorable to the Company‟s principal business and belong||||||||
|transactions and causes of the transaction with||||to normal business of the Company. For the related transaction, the transaction price is||||||||
|the related parties (non-market other||||determined with reference to the market price of the same category. It is fair and reasonable and||||||||
|transaction party)||||has not caused any harm to the Company‟s interests.||||||||
|Influence of the related transaction upon the||||The aforesaid transactions have not affected independence of the Company and the Company||||||||
|independence of the listed company||||shall not be dependent on or be controlled by the related parties due to such transactions.||||||||
|Dependence of the Company on the related||||||||||||
|party and the corresponding measures for||||Inapplicable||||||||
|solution (if any)||||||||||||
|In case the total amount of the regular related||||||||||||
|transaction incurred in the reporting period has||||||||||||
|been predicted based on categories, state the||||||||||||
|||||Inapplicable||||||||
|actual implementation of the in the reporting||||||||||||
|period (if any)||||||||||||
|Cause of the big difference between the||||||||||||
|transaction price and the market reference||||Inapplicable||||||||
|price. (if applicable)||||||||||||

2. Related transactions concerning assets acquisition/sales
Inapplicable
3. Important Related Transitions with Joint Investments
Inapplicable
4. Current Associated Rights of Credit and Liabilities
Did there exist any non-operational related rights of credit and liabilities
□ Yes√ No
|||||||||
|-|-|-|-|-|-|-|-|
|Related Parties|Relationship|Types of rights|Reasons of|Does there|Opening|Amount|Ending|

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
|||||||||
|-|-|-|-|-|-|-|-|
|||of credit and|formation|exist|balance (in|incurred in the|balance (in|
|||liabilities||non-operation|CNY 10,000)|reporting period|CNY 10,000)|
|||||oriented fund||(in CNY||
|||||occupancy?||10,000)||
|||Related||||||
||Common|party‟s rights||||||
|CATIC Property|||Lease|No|0|0.67|0.67|
||controller|of credit||||||
|||receivable||||||
|||Related||||||
|Xi‟an Tianyue Hotel|Common|party‟s rights||||||
||||Rent|No|0|175|175|
|Co., Ltd.|controller|of credit||||||
|||receivable||||||
|||Related||||||
|Rainbow|Common|party‟s rights||||||
||||Loan|No|79.93|135.48|215.41|
|Supermarket|controller|of credit||||||
|||receivable||||||
|||Related||||||
|Rainbow|Common|party‟s rights|Shopping|||||
|||||No|11.94|4.85|16.79|
|Supermarket|controller|of credit|mall deposit|||||
|||receivable||||||
|||Related||||||
|Shenzhen CATIC||||||||
||Common|party‟s rights||||||
|Enterprise Group|||Training fees|No|15.18|-14.04|1.14|
||controller|of credit||||||
|Training Center||||||||
|||receivable||||||
|||Related||||||
|China National||||||||
||Eventual|party‟s rights||||||
|Aviation Industry|||Loan|No|67.68|-3.27|64.41|
||controller|of credit||||||
|Group||||||||
|||receivable||||||
|||Related||||||
|China National||||||||
||Common|party‟s rights||||||
|Aviation Industry|||Loan|No|183.16|905.27|1,088.43|
||controller|of credit||||||
|Group Co.||||||||
|||receivable||||||
|||Related||||||
|Zhonghang||||||||
||Common|party‟s rights||||||
|Electronic Measuring|||Loan|No|0|19.74|19.74|
||controller|of credit||||||
|Instruments Co., Ltd.||||||||
|||receivable||||||
|Chengdu CATIC||Related||||||
|Real Estate|Common|party‟s rights|Rental|||||
|||||No|10.05|1.51|11.56|
|Development Co.,|controller|of credit|deposit|||||
|Ltd.||receivable||||||
|Ganzhou CATIC|Common|Related|Rental|No|12.27|0|12.27|

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
|||||||||
|-|-|-|-|-|-|-|-|
|Real Estate|controller|party‟s rights|deposit|||||
|Development Co.,||of credit||||||
|Ltd.||receivable||||||
|||Related||||||
|China National||||||||
||Common|party‟s rights||||||
|Aviation Industry|||Loan|No|200|500|700|
||controller|of credit||||||
|Group Co.||||||||
|||receivable||||||
|||Related||||||
|Zhonghang||||||||
||Common|party‟s rights||||||
|Electronic Measuring|||Loan|No|0|10|10|
||controller|of credit||||||
|Instruments Co., Ltd.||||||||
|||receivable||||||
|||Related||||||
|Chengdu CATIC|Common|party‟s rights||||||
||||Loan|No|0.41|-0.41|0|
|SunlightReal Estate|controller|of credit||||||
|||receivable||||||
|||Related||||||
|Shenzhen CATIC||||||||
||Common|parties‟|Rental|||||
|Building Technology||||No|0.82|0|0.82|
||controller|liabilities|deposit|||||
|Co., Ltd.||||||||
|||payable||||||
|||Related||||||
|Shenzhen CATIC||||||||
||Common|parties‟|Rental|||||
|Nanguang Elevator||||No|0.34|0|0.34|
||controller|liabilities|deposit|||||
|Engineering Co., Ltd.||||||||
|||payable||||||
|||Related||||||
|Shenzhen CATIC||||||||
||Common|parties‟|Rental|||||
|City Investment Co.,||||No|3.77|0|3.77|
||controller|liabilities|deposit|||||
|Ltd.||||||||
|||payable||||||
|||Related||||||
|CATIC Securities|Common|parties‟|Rental|||||
|||||No|17.04|0.85|17.89|
|Co., Ltd.|controller|liabilities|deposit|||||
|||payable||||||
|||Related||||||
||Common|parties‟|Rental|||||
|CATIC Real Estate||||No|42.48|0|42.48|
||controller|liabilities|deposit|||||
|||payable||||||
|Shenzhen CATIC||Related||||||
|Changtai Investment|Common|parties‟|Rental|||||
|||||No|22.17|0|22.17|
|Development Co.,|controller|liabilities|deposit|||||
|Ltd.||payable||||||
|Shenzhen CATIC|Common|Related|Rental|||||
|||||No|0|6.06|6.06|
|Jiufang Assets|controller|parties‟|deposit|||||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
|||||||||
|-|-|-|-|-|-|-|-|
|Management Co.,||liabilities||||||
|Ltd.||payable||||||
|||Related||||||
|Rainbow|Common|parties‟|Rental|||||
|||||No|6|0|6|
|Supermarket|controller|liabilities|deposit|||||
|||payable||||||
|||Related||||||
|Shenzhen Makway||||||||
||Common|parties‟|Rental|||||
|Cable TV Equipment||||No|6.46|-6.46|0|
||controller|liabilities|deposit|||||
|Co., Ltd.||||||||
|||payable||||||
|||Related||||||
|Zhonghang||||||||
||Common|parties‟||||||
|Electronic Measuring|||Loan|No|0|4.55|4.55|
||controller|liabilities||||||
|Instruments Co., Ltd.||||||||
|||payable||||||
|Chengdu CATIC||Related||||||
|Real Estate|Common|parties‟|Rental|||||
|||||No|0|0.44|0.44|
|Development Co.,|controller|liabilities|deposit|||||
|Ltd.||payable||||||
|||Related||||||
|China National||||||||
||Eventual|parties‟||||||
|Aviation Industry|||Loan|No|0|1.55|1.55|
||controller|liabilities||||||
|Group||||||||
|||payable||||||
|Influence of the related rights of credit and||||||||
|liabilities upon the Company‟s operation||Inapplicable||||||
|results and financial position.||||||||

5. Other Material Related Transactions
The
3rd
meeting of the Seventh Board of Directors held on April 3, 2013 reviewed and approved the Proposal for the Financial Service Agreement Signed by AVIC Finance Co., Ltd. For the relevant contents, refer to the Announcement on the Resolutions of the
3rd
Meeting of the Seventh Board of Directors (2013-013) and the Announcement on the Related Transaction Involved in the Financial Service Agreement Signed by AVIC Finance Co., Ltd. (2013-015). The proposal needs to be submitted to the General Meeting for review.
Relevant inquiry with the Internet website for disclosing provisional report on material related transactions
||||
|-|-|-|
||Date of disclosing provisional|Description of the website for disclosing|
|Description of provisional announcement|||
||announcement|provisional announcements|
|The Announcement on the RelatedTransaction Involved in the FinancialService Agreement Signed by AVICFinance Co., Ltd. (2013-015)|April 3, 2013|http://www.cninfo.com.cn/|

FIYTA Holdings Ltd. 2013 Annual Report, Full Text VIII. Important Contracts and Implementation
1. Custody, Contacting and Leases
(1) Custody
Inapplicable
(2) Contracts
Inapplicable
(3) Leases
Inapplicable
2. Guarantees
In CNY10,000
||||||||||
|-|-|-|-|-|-|-|-|-|
|Outward guarantees (excluding guarantee to the subsidiaries)|||||||||
||Date of the||||||||
||||Date of|||||Guarantee|
||announceme||||||Implement||
|||Guarantee|occurrence (date|Actual amount of|Type of|Guarantee||to related|
|Names of Gurantees|nt on the||||||ation||
|||line|of agreement|guarantee|guarantee|period||party?|
||guarantee||||||status||
||||execution)|||||(Y/N)|
||line||||||||
|Inapplicable|||||||||
|||||Total amount of outward|||||
|Total amount of outward guarantee|||||||||
|||0||guarantee actually incurred in the||0|||
|approved in the report period (A1)|||||||||
|||||report period (A2)|||||
|Total amount of outward guarantee||||Total ending balance of outward|||||
|already approved at the end of the||0||guarantee at the end of the report||0|||
|report period (A3)||||period (A4)|||||
|Guarantees to the Subsidiaries|||||||||
||Date of the||||||||
||||Date of|||||Guarantee|
||announceme||||||Implement||
|||Guarantee|occurrence (date|Actual amount of|Type of|Guarantee||to related|
|Names of Guarantees|nt on the||||||ation||
|||line|of agreement|guarantee|guarantee|period||party?|
||guarantee||||||status||
||||execution)|||||(Y/N)|
||line||||||||
|Shenzhen Harmony|||||Guarantee with||||
||March 1,||||||||
|World Watches Center||20,000|July 3, 2013|5,000|joint|1 year|No|No|
||2013||||||||
|Co., Ltd.|||||responsibility||||
|Shenzhen Harmony|March 1,|20,000|July 18, 2013|5,000|Guarantee with|1 year|No|No|

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
||||||||||
|-|-|-|-|-|-|-|-|-|
|World Watches Center|2013||||joint||||
|Co., Ltd.|||||responsibility||||
|Shenzhen Harmony|||||Guarantee with||||
||March 1,||||||||
|World Watches Center||10,000|July 23, 2013|2,000|joint|1 year|No|No|
||2013||||||||
|Co., Ltd.|||||responsibility||||
|Shenzhen Harmony|||||Guarantee with||||
||March 1,||||||||
|World Watches Center||10,000|July 26, 2013|5,000|joint|1 year|No|No|
||2013||||||||
|Co., Ltd.|||||responsibility||||
|Shenzhen Harmony|||||Guarantee with||||
||March 1,||||||||
|World Watches Center||10,000|July 30, 2013|3,000|joint|1 year|No|No|
||2013||||||||
|Co., Ltd.|||||responsibility||||
|Shenzhen Harmony|||||Guarantee with||||
||March 1,||December 30,||||||
|World Watches Center||10,000||10,000|joint|1 year|No|No|
||2013||2013||||||
|Co., Ltd.|||||responsibility||||
||||||Guarantee with||||
||March 1,||||||||
|Fiyta (Hong Kong) Ltd.||3,931|October 5, 2012|1,572|joint|2 years|No|No|
||2013||||||||
||||||responsibility||||
||||||Guarantee with||||
||March 1,||November 9,||||||
|Fiyta (Hong Kong) Ltd.||3,931||2,359|joint|2 years|No|No|
||2013||2012||||||
||||||responsibility||||
||||||Guarantee with||||
||March 1,||||||||
|Fiyta (Hong Kong) Ltd.||11,793|July 11, 2013|3,931|joint|3 years|No|No|
||2013||||||||
||||||responsibility||||
||||||Guarantee with||||
||March 1,||||||||
|Fiyta (Hong Kong) Ltd.||11,793|August 5, 2013|3,931|joint|3 years|No|No|
||2013||||||||
||||||responsibility||||
|Total guarantee quota to the|||||||||
|||||Total amount of guarantee to the|||||
|subsidiaries approved in the reporting|||||||||
|||100,000||subsidiaries actually incurred in||41,793|||
|period (B1)|||||||||
|||||the reporting period (B2)|||||
|Total guarantee quota to the||||Total balance of actual guarantee|||||
|subsidiaries approved at the end of||100,000||to the subsidiaries at the end of||49,931|||
|the reporting period (B3)||||the reporting period (B4)|||||
|The Company‟s total guarantee (i.e. total of the first two main items)|||||||||
|||||Total amount of guarantee|||||
|Total guarantee quota approved in|||||||||
|||100,000||actually incurred in the reporting||41,793|||
|the reporting period (A1+B1)|||||||||
|||||period (A2+B2)|||||
|Total guarantee quota already||||Total balance of the actual|||||
|approved at the end of the reporting||100,000||guarantee at the end of the||49,931|||
|period (A3+B3)||||reporting period (A4+B4)|||||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
|||
|-|-|
|Proportion of the actual guarantees in the Company‟s net assets||
||32.5%|
|(namely A4+B4) (%)||
|Including:||
|Amount of guarantees offered to the shareholders, actual controller||
||0|
|and its related parties (C)||
|Amount of guarantee for liabilities directly or indirectly offered to the||
||0|
|guarantees with the asset-liability ratio exceeding 70%. (D)||
|Guarantee with total amount exceeding 50% of the net assets (E)|0|
|Total amount of the aforesaid three guarantees (C+D+E)|0|
|Description of the possibility of bearing joint repayment liability due to||
||Inapplicable|
|undue guarantee||
|Description of external guarantee against the specified procedures|Inapplicable|

Description of the guarantee with complex method
Inapplicable
(1) Outward guarantee against law
Inapplicable
3. Other Important Contracts
Inapplicable
4. Other Important Transactions
Inapplicable
IX. Implementation of Commitments
1.The commitments of the Company and its shareholders holding over5% of theCompany’s total shares in the report year or extending to the report year from previous year(s).
|||||||
|-|-|-|-|-|-|
|Commitments|Promiser|Description|Commitment time|Commitment term|Implementation|
|Commitment for Equity Separation Reform||||||
|Commitments in the acquisition report or thewritten report on change of equity||||||
|Commitment made at the time of assetreorganization||||||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
|||||||
|-|-|-|-|-|-|
|Commitment made at IPO or re-financing||AVIC International||||
|||Holdings Limited||||
|||shall not assign||||
|||the shares new||||
|||subscribed within||||
|||36 months||||
|||commencing from||||
|||the end of the||||
|||non-public||||
|||offering by Fiyta||||
|||Holdings Ltd.||||
|||(December 30,||||
|||2010 to||||
|||December 29,||||
|||2013) according||||
|||to the Measures||||
|||for Administration||||
|||of Issuing of||||
|||Securities by||||
|||Listed||||
||AVIC International||December 29,||Finished in|
|||Companies, the||3 years||
||Holdings Limited||2010||implementation|
|||Rules for||||
|||Implementation of||||
|||Non-public||||
|||Issuing of Shares||||
|||by Listed||||
|||Companies and||||
|||the Rules of||||
|||Shenzhen Stock||||
|||Exchange on||||
|||Listing Stocks,||||
|||and other law,||||
|||rules and||||
|||regulations as||||
|||well as the||||
|||Contract for||||
|||Subscription of||||
|||Shares||||
|||Non-publically||||
|||Issued by Fiyta||||
|||Holdings Ltd.||||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
|||||||
|-|-|-|-|-|-|
|||The Company||||
|||commits that in||||
|||case it is||||
|||predicted that the||||
|||Company may be||||
|||unable to duly pay||||
|||the principal and||||
|||interest of the||||
|||bond or fail to duly||||
|||pay the principal||||
|||and interest of the||||
|||bond when it is||||
|||||Deadline of the||
|||due, the Company||||
|||||bonds (The valid||
|||shall at least take||||
|||||term of the bonds||
|||the following||||
|||||is 5 years||
|||measures: 1. not||||
|||||attached with the||
|||profit distribution||||
|||||investors‟ option||
|||to the||||
|||||of selling back,||
|||shareholders shall||||
||FIYTA Holdings|||the Company‟s|In process of|
|||be conducted. 2.|February 27, 2013|||
||Ltd.|||option of|implementation|
|||implementation of||||
|||||redemption and||
|||any capital||||
|||||option of||
|||expenditure||||
|||||up-regulation of||
|||projects, such as||||
|||||the nominal||
|||material external||||
|||||interest rate at the||
|||investment,||||
|||||end of the 3rd||
|||acquisition and||||
|||||year).||
|||merger, etc. shall||||
|||be suspended. 3.||||
|||salaries and||||
|||bonus to the||||
|||directors and||||
|||senior executives||||
|||shall be adjusted||||
|||down or||||
|||suspended. 4.||||
|||None of the key||||
|||officers may be||||
|||transferred out.||||
|Other commitments to the minorityshareholders||||||
|Has the commitment been timely||||||
||Yes|||||
|implemented?||||||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
|||
|-|-|
|The specific cause of failure in implementation||
||Inapplicable|
|and the next plan (if any)||

2. There existed profit anticipation for theCompany’s assets or projects while the reporting period was still within the duration of the profit anticipation. The Company made explanation on whether the assets or projects reached the anticipated profit and the cause
Inapplicable
X. Engagement/Disengagement of CPAs
CPAs currently engaged
|||
|-|-|
|Name of the domestic CPAs|Ruihua Certified Public Accountants (Special Ordinary Partnership)|
|Remuneration to the domestic CPAs (in||
|CNY10,000)|95|
|Successive years of the domestic CPAs offering||
||1|
|auditing services||
|Names of the certified public accountants from||
||Liao Shiguo and Xing Xiangzong|
|the domestic CPAs||

Has the CPAs been changed in the current period?
√ Yes□ No
Was the CPAs changed during auditing?
□ Yes√ No
Did the Company implement the approval process in change of the CPAs?
√ Yes□ No
Description of Renewal or Change of the CPAs
2012 Annual General Meeting of the Company reviewed and approved the Proposal on Payment of the Audit Fee of Year 2012 and New Engagement of RSM China CPAs (Special Ordinary Partnership) as theCompany‟s Auditor for Year 2013. The General Meeting approved the engagement of RSM China CPAs (Special Ordinary Partnership) (RSM China CPAs) as theCompany‟s auditor of the financial report of year 2013 and the internal control for a term of one year. For the purpose of better compliance with the requirements of the economic development of China and offering professional services to the customers at deeper level and in a comprehensive way, RSM China CPAs and Crowe Horwath China CPAs Co., Ltd. (Special Ordinary Partnership) (Crowe Horwath China CPAs) entered into the Merger Agreement, according to which the former RSM China CPAs was merged with Crowe Horwath China CPAs. After the merger, the CPAs would take the legal entity of Crowe Horwath China CPAs and has been renamed as RSM China CPAs (Special Ordinary Partnership). With a view to maintaining the continuity and stability of theCompany‟s audit work and ensuring the
audit quality of theCompany‟s financial statements, the Audit Committee under the Board of Directors of the Company
proposed to replace RSM China CPAs with Ruihua Certified Public Accountants (Special Ordinary Partnership) which
FIYTA Holdings Ltd. 2013 Annual Report, Full Text shall take charge of auditing theCompany‟s financial report and the internal control of year 2013.
The
7th
meeting of the Seventh Board of Directors held on January 8, 2014 reviewed and approved the Proposal on New Engagement of Ruihua Certified Public Accountants (Special Ordinary Partnership) as theCompany‟s Auditor of Year 2013 and the proposal was reviewed and approved at 2014
1st
Extraordinary General Meeting held on January 24, 2014. Description of the CPAs, financial adiver or sponsor engaged for internal control auditing
√ Applicable□ Inapplicable
The Company has engaged Ruihua Certified Public Accountants (Special Ordinary Partnership) as theCompany‟s auditor of year 2013. The audit work for year 2013 has been finished and the Company is going to pay service charge for auditing the financial report amounting to CNY 0.65 million and that for auditing the internal control amounting to CNY 0.30 million to Ruihua Certified Public Accountants (Special Ordinary Partnership).
XI. Explanation of the Supervisory Committee and Independent Directors (if applicable) on the QualifiedAuditor’s Report Issued by the CPAs
Inapplicable
XII. Punishment and Rectification
Inapplicable
XIII. Situation of being Confronted of Suspension or Termination of Listing upon Disclosure of the Annual Report
Inapplicable
XIV. Notes to Other Significant Events
Ended November 30, 2013, the 162,977,327 restricted shares in FIYTA Holdings Ltd. held by AVIC International Holdings Limited had satisfied the conditions for relieving the restriction for sale, of them 155,981,701 shares were the restricted shares from the equity division reform and 6,995,626 shares as the restricted shares from non-public issuing of A shares. Authorized by AVIC International Holdings Limited, the Company finished the procedures for relieving the restriction for sales of the shares. For the detail, please refer to the Indicative Announcement on Relieving the Restriction for Sales of the Restricted Shares from the Equity Division Reform No. 2013-031 and the Indicative Announcement on Relieving the Restriction for Sales of the Restricted Shares from Non-public Issuing No. 2013-032.
XV. Significant Events of Subsidiaries
Inapplicable
FIYTA Holdings Ltd. 2013 Annual Report, Full Text XVI. Issuing of Company Bonds
The 33rd meeting of the Sixth Board of Directors held on June 19, 2012 reviewed and approved the Proposal on Issuing Company Bonds, etc., according to which the Company planned to issued company bonds with amount not exceeding CNY 400 million and the term not exceeding 5 years (with 5 years inclusive). The proceeds would be used for substituting bank loan and replenishing the working capital. On September 9, 2012, approved by China Securities Regulatory Commission with Document ZHENG JIAN XU KE[2012] No. 1209, the Company was permitted to issue company bonds with amount not exceeding CNY 400 million. The Company issued totally CNY 400 million of bonds in the current period. After deduction of the issuing costs, the new proceeds raised therefrom amounted to CNY 396.9 million, which was remitted to the bank account designated by the Company on March 5, 2013. RSM China CPAs, the CPAs appointed by the Company respectively issued the capital verification reports ZHONG RUI YUE HUA YAN ZI[2013] No. 0053, ZHONG RUI YUE HUA YAN ZI[2013] No. 0054 and ZHONG RUI YUE HUA YAN ZI[2013] No. 0055 for the frozen funds for subscription of the on-line issued bonds, the frozen fund for subscription of the off-line placement and the proceeds actually raised. Approved by Shenzhen Stock Exchange with Document SHEN ZHENG SHANG[2013] No. 99, the bonds were listed for trading with both SZSE centralized bidding system and the comprehensive agreement based trading platform with the abbreviation the securities “12 YA DA ZHAI” and security code of “112152”. For the detail, refer to “Announcement on Issuing Company Bond 2013-003” disclosed on February 25, 2013. The Company finished the first interest payment for the company bond on February 27, 2014. For the detail, refer to “Announcement on Interest Payment for “12 YA DA ZHAI” No 2014-006”.
FIYTA Holdings Ltd. 2013 Annual Report, Full Text Section 6 Change of Shares and Particulars about Shareholders I. Change of Shares
In Shares
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before the change||Increase / Decrease (+/ -)|||||After the change||
||||||Shares|||||
|||Proportion|New|Bonus|converted||||Proportion|
||Quantity|||||Others|Sub-total|Quantity||
|||(%)|issuing|shares|from||||(%)|
||||||reserve|||||
||163,027,06|||||-162,977,3|-162,977,3|||
|I. Restricted shares||41.5%|0|0|0|||49,733|0.01%|
||0|||||27|27|||
|1. Shares held by the||||||||||
||0|0%|0|0|0|0|0|0|0%|
|state||||||||||
||162,977,32|||||-162,977,3|-162,977,3|||
|2. State corporate shares||41.49%|0|0|0|||0|0%|
||7|||||27|27|||
|3. Other domestic shares|49,733|0.01%|0|0|0|0|0|49,733|0.01%|
|Including: Domestic corporate||||||||||
||0|0%|0|0|0|0|0|0|0%|
|shares||||||||||
|Shares held by domestic||||||||||
||49,733|0.01%|0|0|0|0|0|49,733|0.01%|
|natural persons||||||||||
|4、Foreign invested shares|0|0%|0|0|0|0|0|0|0%|
|Including: Foreign corporate||||||||||
||0|0%|0|0|0|0|0|0|0%|
|shares||||||||||
|Shares held by foreign||||||||||
||0|0%|0|0|0|0|0|0|0%|
|natural persons||||||||||
||229,740,81|||||162,977,32|162,977,32|392,718,13||
|II. Unrestricted shares||58.5%|0|0|0||||99.99%|
||0|||||7|7|7||
||148,092,81|||||162,977,32|162,977,32|311,070,13||
|1. CNY ordinary shares||37.71%|0|0|0||||79.2%|
||0|||||7|7|7||
|2. Foreign invested shares||||||||||
||81,648,000|20.79%|0|0|0|0|0|81,648,000|20.79%|
|listed in Mainland China||||||||||
|3、Foreign invested shares||||||||||
||0|0%|0|0|0|0|0|0|0%|
|listed abroad||||||||||
|4. Others|0|0%|0|0|0|0|0|0|0%|
||392,767,87|||||||392,767,87||
|III. Total shares||100%|0|0|0|0|0||100%|
||0|||||||0||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text II. Issuing and Listing
1. Issuing Activities over the Past Three Years
||||||||
|-|-|-|-|-|-|-|
|Description of stock|||||||
|||Issuing price (or|||Quantity approved|Expiration date of|
|and its Derivative|Issuing date||Issuing quantity|Listing Date|||
|||interest rate)|||for listing|transaction|
|Securities|||||||
|Stocks|||||||
|Convertible company bonds, detachable convertible bond and corporate bonds|||||||
|Corporate bonds|February 27, 2013|5.04%|4,000,000|March 29, 2013|4,000,000||
|Warrants|||||||

Issuing Activities over the Past Three Years
The 33rd meeting of the Sixth Board of Directors held on June 19, 2012 reviewed and approved the Proposal on Issuing Company Bonds, etc., according to which the Company planned to issued company bonds with amount not exceeding CNY 400 million and the term not exceeding 5 years (with 5 years inclusive). The proceeds would be used for substituting bank loan and replenishing the working capital. On September 9, 2012, approved by China Securities Regulatory Commission with Document ZHENG JIAN XU KE[2012] No. 1209, the Company was permitted to issue company bonds with amount not exceeding CNY 400 million. The Company issued totally CNY 400 million of bonds in the current period. After deduction of the issuing costs, the new proceeds raised therefrom amounted to CNY 396.9 million, which was remitted to the bank account designated by the Company on March 5, 2013. RSM China CPAs, the CPAs appointed by the Company respectively issued the capital verification reports ZHONG RUI YUE HUA YAN ZI[2013] No. 0053, ZHONG RUI YUE HUA YAN ZI[2013] No. 0054 and ZHONG RUI YUE HUA YAN ZI[2013] No. 0055 for the frozen funds for subscription of the on-line issued bonds, the frozen fund for subscription of the off-line placement and the proceeds actually raised. Approved by Shenzhen Stock Exchange with Document SHEN ZHENG SHANG[2013] No. 99, the bonds were listed for trading with both SZSE centralized bidding system and the comprehensive agreement based trading platform with the abbreviation the securities “12 YA DA ZHAI” and security code of “112152”. For the detail, refer to “Announcement on Issuing Company Bond 2013-003” disclosed on February 25, 2013.
2. Change of theCompany’s Total Shares and the Strucutre and the Change of theCompany’s Asset and Liability Structure Arising Therefrom
Inapplicable
3. About the existingemployees’ shares
Inapplicable
III. Shareholders and Actual Controlling Shareholder
1. Number of Shareholders and Shareholding
In shares
|||||
|-|-|-|-|
|Total shareholders in the reporting||Total shareholders at the end of the 5th day from the||
||28,314||29,449|
|period||date of disclosing the annual report||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
||||||||||
|-|-|-|-|-|-|-|-|-|
|Shares held by the top ten shareholders|||||||||
|||Shares held||||Number of|Pledging or freezing||
||||Quantity at|Increase/d|Number of||||
|Shareholder|Shares held by the|by the topten|the end of|ecrease in|the|thenon-restrict|||
||top tenshareholders||thereporting|thereporting|restrictedshares||Status of theshares||
|names||shareholder||||ed shares||Quantity|
|||s(%)|period|period|held|held|||
|AVIC InternationalHoldings Limited|State-ownedcorporate|41.49%|162,977,327||0|162,977,327|||
|National SocialSecurity Fund No.110 Portfolio|Domestic non-statecorporate|2.04%|8,000,190|-776,099|0|8,000,190|||
|China MerchantsSecurities (HK)Co., Ltd.|Foreign corporate|1.84%|7,230,150|-356,120|0|7,230,150|||
|Zh|Domestic non-statecorporate|1.1%|4,337,900|1,337,900|0|4,337,900|||
|EssenceInternationalSecurities (HongKong) Limited|Foreign corporate|1.05%|4,133,285|1,355,093|0|4,133,285|||
|GOLDEN CHINAPLUS MASTERFUND|Foreign corporate|0.87%|3,418,284|-|0|3,418,284|||
|Hu Zongqi|Domestic naturalperson|0.86%|3,379,000|3,379,000|0|3,379,000|||
|Hua An Fund –Minsheng Bank –TianshouInvestmentStructure PortfolioNo. 1 AssetManagementProgram|Domestic non-statecorporate|0.85%|3,356,047|3,356,047|0|3,356,047|||
|KGI ASIA LIMITED|Foreign corporate|0.77%|3,012,085|-|0|3,012,085|||
|Dai Wen|Domestic naturalperson|0.32%|1,239,100|23,900|0|1,239,100|||
|About the fact that a strategic investor or|||||||||
|ordinary corporate became one of the||Inapplicable|||||||
|top ten shareholders due to placement|||||||||
|of new shares (if any) (Refer to Note 3)|||||||||
|Explanation on associated relationship||The Company has found neither affiliation among the aforesaid shareholders nor concerted actor as|||||||
|or consistent action of the above||specified in the Measures for Administration of Information on the Shareholder Equity Change of Listed|||||||
|shareholders||Companies.|||||||
|Shareholding of top 10 shareholders of unrestricted shares|||||||||
|||Quantity of unrestricted shares held at the end of the|||||Share type||
|Shareholder‟s Name||reporting period|||||||
||||||||Share type|Quantity|
|AVIC International Holdings Limited||162,977,327|||||A-shares|162,977,327|
|National Social Security Fund No. 110Portfolio||8,000,190|||||||
||||||||A-shares|8,000,190|
|China Merchants Securities (HK) Co.,Ltd.||7,230,150|||||||
||||||||B-shares|7,230,150|

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
|||||
|-|-|-|-|
||4,337,900|||
|||A-shares|4,337,900|
|Essence International Securities (HongKong) Limited|4,133,285|||
|||B-shares|4,133,285|
|GOLDEN CHINA PLUS MASTERFUND|3,418,284|||
|||B-shares|3,418,284|
|Hu Zongqi|3,379,000|A-shares|3,379,000|
|Hua An Fund – Minsheng Bank –Tianshou Investment Structure PortfolioNo. 1 Asset Management Program|3,356,047|||
|||A-shares|3,356,047|
|KGI ASIA LIMITED|3,012,085|B-shares|3,012,085|
|Dai Wen|1,239,100|A-shares|1,239,100|
|Explanation to the associated||||
|relationship or consistent action among||||
|the top 10 shareholders of|The Company has found neither affiliation among the aforesaid shareholders nor concerted actor as|||
|non-restricted negotiable shares and|specified in the Measures for Administration of Information on the Shareholder Equity Change of Listed|||
|that between the top 10 shareholders of|Companies.|||
|non-restricted negotiable shares and top||||
|10 shareholders.||||
|Note to the top 10 shareholders involved||||
|in margin financing & securities lending|Inapplicable|||
|(if any) (Refer to Note 4)||||

Did the shareholders conduct agreed repurchase securities trading in the reporting period?
□ Yes√ No
2. Controlling Shareholder
Legal person
|||||||
|-|-|-|-|-|-|
||Legal|Date of||||
|Name of the Controlling|||||Principal business|
||Representati|incorporat|Organization code|Registered Capital||
|Shareholder|||||activities|
||ve /Leader|ion||||
||||||Investing and initiating|
||||||entities (separate|
||||||application is to be|
||||||submitted for a specific|
||||||project); domestic|
||||||commerce, supply and|
||||||sales of goods and|
||||||materials (excluding the|
||||||goods for exclusive sale,|
|AVIC International|Wu|June 20,||CNY 1110.631996||
||||27935122-9||under special control and|
|Holdings Limited|Guangquan|1997||million||
||||||monopolized goods);|
||||||import and export|
||||||(excluding the goods|
||||||forbidden by law,|
||||||administrative rules and|
||||||regulations, decision of|
||||||the State Council; the|
||||||restrictive goods is not|
||||||allowed for operation until|

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
||||
|-|-|-|
|||permit is granted)|
||AVIC International Holdings Limited has not yet completed the auditing work for year 2013.||
||Its development strategy is: To become a comprehensive platform for AVIC in opening up the||
|Operation result, financial|international market, developing the relevant industries and expanding the international||
|position, cash flow, future|investment by means of overall listing and integrating the businesses; to set up an||
|development strategy, etc.|administration and control model adaptable to diversified business and trans-region||
||development, realize breakthrough growth so as to become a multinational corporation with||
||international competitiveness.||
|Equity in other domestic|||
|and foreign listed|||
|companies held by the|||
||Holding 22.35% equity in CATIC Real Estate, 45.62% equity in Shen Tian Ma, and 41.49%||
|controlling shareholder by|||
||equity in FIYTA.||
|means of control and|||
|mutual shareholding in the|||
|reporting period|||

Change of the controlling shareholder in the reporting period
Inapplicable
3. Actual Controller
Corporate
|||||||
|-|-|-|-|-|-|
||Legal|Date of||||
||||||Principal business|
|Name of the Actual Controller|Representati|incorporat|Organization code|Registered Capital||
||||||activities|
||ve /Leader|ion||||
||||||International aviation,|
||||||trading and logistic, retail|
||||||and high-end|
|CATIC International|Wu||||consumption goods, real|
|||April 12,|10000099-9|CNY 8459 million||
|Holdings Limited|Guangquan||||estate and hotel,|
|||1983||||
||||||electronics and hi-tech,|
||||||resource development,|
||||||etc.|
||CATIC International Holdings Limited has not yet completed auditing work for the year 2013.|||||
|Operation result, financial|The development strategy is:|||||
|position, cash flow, future|To implement the strategy of “Surpassing commerc and taking lead in the industry”, to build itself into a first|||||
|development strategy, etc.|class 、enterprise group and become a world outstanding enterprise highly loved by the staff, praised highly by|||||
||customers and respected by the society.|||||
|Equity in other domestic||||||
|and foreign listed|AVIC International Holdings Limited (HK.0161) directly holds 39.37% equity in the Company|||||
|companies held by the|and indirectly holds 35.63% equity in AVIC International Holdings Limited (HK.0161) by|||||
|actual controller in the|means of AVIC International Shenzhen Company Limited, totally holding 75% equity.|||||
|reporting period||||||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text Change of the actual controller in the reporting period
Inapplicable
FIYTA Holdings Ltd. 2013 Annual Report, Full Text Block Diagram of the Ownership and Control Relations between the Company and the Actual Controller
State-owned Assets Supervision and Administration
Commission of the State Council
100%
N a ti o n a l C o un c i l fo r
B e ij in g P u tu o H a n h ua
Aviation Industry AVIC CCB Aviation Industry Investment Management
Social Security Fund Center Corporation of China Equity Investment (Tianjin) Co., Ltd.
14.31% 14.31% 62.52% 8.86%
CATIC International Holdings Limited
100%
AVIC International Shenzhen Company Limited
39.37%
35.63%
AVIC International Holdings Limited
41.49%
Fiyta Holdings Ltd.
The actual controller controls the Company by means of trust or managing the assets in other ways:
Inapplicable
4. Other Corporate Shareholder Holding over10% of theCompany’s Shares
Inapplicable
IV. Share Acquisition Plan Proposed or Implemented by theCompany’s Shareholder and its Concerted Actor in the Reporting Period
Inapplicable
FIYTA Holdings Ltd. 2013 Annual Report, Full Text Section 7 Directors, Supervisors, Senior Executives and Staff I. Change in Shares Held by Directors, Supervisors and Senior Executives
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||||Number of|Volume of||Number of|
||||||||||Volume of||
||||||||shares|shares||shares held|
||||||||||shares sold||
||||||Starting||acquired at|acquired||at end of|
|||Office||||Expiry date|||during the||
|Names|Positions||Gender|Age|date of||end of the|during the||the|
|||Status||||of tenure|||reporting||
||||||tenure||reporting|reporting||reporting|
||||||||||period(shar||
||||||||period(shar|period(shar||period|
||||||||||es)||
||||||||es)|es)||(shares)|
|Lai|||||September|September|||||
||Chairman|In office|male|50|||||||
|Weixuan|||||10, 2012|10, 2015|||||
|Xu|Managing||||September|September|||||
|||In office|male|48|||||||
|Dongsheng|Director||||10, 2012|10, 2015|||||
|Wang|||||September|September|||||
||Director|In office|male|48|||||||
|Mingchuan|||||10, 2012|10, 2015|||||
|Huang|||||September|September|||||
||Director|In office|male|40|||||||
|Yongfeng|||||10, 2012|10, 2015|||||
|Wu|||||September|September|||||
||Director|Retired|male|44|||||||
|Xiaohua|||||10, 2012|30, 2013|||||
|Wang|||||September|September|||||
||Director|In office|female|43|||||||
|Xiaohua|||||10, 2012|10, 2015|||||
|Zhang|Independen||||September|September|||||
|||In office|male|58|||||||
|Hongguang|t director||||10, 2012|10, 2015|||||
|Zhang|Independen||||September|September|||||
|||In office|male|48|||||||
|Shunwen|t director||||10, 2012|10, 2015|||||
||Independen||||September|September|||||
|Wang Yan||In office|male|57|||||||
||t director||||10, 2012|10, 2015|||||
||Chairman of||||||||||
||||||September|September|||||
|Sui Yong|Supervisory|In office|male|56|||||||
||||||10, 2012|10, 2015|||||
||Committee||||||||||
||||||September|September|||||
|Tang Boxue|S upervisor|In office|male|53|||||||
||||||10, 2012|10, 2015|||||
||||||September|September|||||
|Chen Zhuo|Supervisor|In office|male|38|||||||
||||||10, 2012|10, 2015|||||
||Deputy GM||||||||||
||||||October 22,|September|||||
|Chen Libin|& Secretary|In office|male|50|||||||
||||||2012|10, 2015|||||
||of the Board||||||||||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Lu|||||October 22,|September|||||
||Deputy GM|In office|male|53|||66,311|0|0|66,311|
|Bingqiang|||||2012|10, 2015|||||
||Deputy GM||||||||||
||||||October 22,|September|||||
|Li Dehua|& Chief|In office|male|54|||||||
||||||2012|10, 2015|||||
||Accountant||||||||||
||||||October 22,|September|||||
|Li Bei|Deputy GM|In office|male|59|||||||
||||||2012|10, 2015|||||
||||||October 22,|September|||||
|Fang Juan|Deputy GM|In office|female|55|||||||
||||||2012|10, 2015|||||
|Total|--|--|--|--|--|--|66,311|0|0|66,311|

 II. Posts Holding
Work Experience in the Past Five Years of Directors, Supervisors and Senior Executives in Current Office
Mr. Lai Weixuan, born in July 1964, senior accountant, PhD of management of Tongji University and EMBA of Guanghua School of Management of Peking University. He is now the Chairman of the Company, deputy general manager& vice-secretary of the branch CPC Team of CATIC International Holdings Limited, chairman of Rainbow Supermarket Co., Ltd. and director of Shenzhen Aoxuan Investment Co., Ltd. He used to be the manager of the import& export management department and GM assistant of Shenzhen CATIC Trading Co., Ltd., deputy GM and GM of Rainbow Supermarket Co., Ltd., deputy GM, director and the secretary of the CPC Committee of CATIC Shenzhen Company Limited, vice chairman of the Company, vice chairman of Tianma Microelectronics Co., Ltd., director of Shanghai Microelectronics Co., Ltd. and vice chairman of China National Aviation Industry Group Co.
Mr. Xu Dongsheng, born in April 1966 research fellow senior economist, MBA of Tongji University. and PhD of Beijing University of Aeronautics& Astronautics. He is now the managing director of the Company, vice president of China Timepieces Association and chairman of Shenzhen Timepieces Association. Mr. Xu used to the secretary of CYL Committee of CATIC Shenzhen Company Limited, GM of the Collective Life Service Co., Ltd. of Shenzhen CATIC Enterprise Group, vice secretary of the discipline committee, manager and president assistant of the supervision and audit department of CATIC Shenzhen Company Limited.
Mr. Wang Mingchuan, born in December 1966, senior accountant, master of management engineering of Tongji University. Mr. Wang is a director of the Company, vice chief accountant of CATIC International Holdings Limited, chief accountant of CATIC Shenzhen Company Limited, director of Tianma Microelectronics Co., Ltd., director of CATIC Real Estate Co., Ltd. and director of Rainbow Supermarket Co., Ltd. He used to be a financial supervisor of the finanical division of Chengdu Engine Company, manager of the financial department of Shenzhen Shenrong Engineering Plastic Company, manager of the comprehensive management department and chief financial officer of Shenzhen CATIC Trading Co., Ltd., deputy manager of the financial and audit department, deputy manager and manager of the financial department and vice chief accountant of CATIC Shenzhen Company Limited.
Mr. Huang Yongfeng, born in May 1974, senior engineer, master of management engineering of Beijing University of
Aeronautics& Astronautics and EMBA of China Europe International Business School. He is now a director of the
Company, secretary of the Board of AVIC International Holdings Limited, director of CATIC Real Estate Co., Ltd., director
of Rainbow Supermarket Co., Ltd., director of Tianma Microelectronics Co., Ltd. and chairman of Shenzhen Zhongshi
FIYTA Holdings Ltd. 2013 Annual Report, Full Text Machinery Equipment Co., Ltd. He used to be manager of the enterprise strategy and management department and GM assistant of CATIC Shenzhen Company Limited, and managing director of Shenzhen Zhongshi Machinery Equipment Co., Ltd.
Madam Wang Xiaohua, born in October 1971, economist, master of commercial economy of Wuhan University of Technology and on-campus EMBA of China Europe International Business School. She is now director of the Company, manager of the human resource department of CATIC Shenzhen Company Limited and director of CATIC Real Estate Co., Ltd. She used to be manager of the human resource department of Rainbow Supermarket Co., Ltd.
Mr. Zhang Hongguang, born in March 1956, senior engineer, bachelor of light industry machinery of Dalian Polytechnic University. He is now an independent director of the Company, vice president of China Timepieces Association. He used to be GM of Shenzhen Qixin Construction Group, deputy GM of Shenzhen Zhongyin Industrial Co., Ltd., manager of Shenzhen Xinghua Co., Ltd. and deputy chief of the education department of the Ministry of Light Industry.
Mr. Zhang Shunwen, born in May, 1966, senior accountant, a CPA, and master of Zhongnan University of Economics and Law. He is now an independent director of the Company, a partner of Lixin Certified Public Accountants (special general partnership), an expert member of the Third Assessment Committee of Guangdong Senior Accountants, vice president of Shenzhen Service Trade Association, practicing tutor of College of Economics of Shenzhen University, Shenzhen Gongjin Electronics Co., Ltd. and Guangdong Lily Blue Culture Flame Communications Co., Ltd. He used to be a vice president of Shenzhen Association of CPAs and a member of CPPCC of Shenzhen Municipality.
Mr. Wang Yan, born in February 1957 senior economist, master of business administration of State University of New York. He is now an independent director of the Company, professor of Intellectual Property Academy of South China University of Technology, deputy director of South China Training Base of the State Intellectual Property Bureau, independent director of Shenzhen Maxonic Automation Control Co., Ltd. He used to be assistant to the director of the Management Department of the State Intellectual Property Bureau, chief economist of the domestic listing company of China Merchants Group (China Merchants Harbor Service), senior executive of First State China Fund Management Co., Ltd., associate professor of Southwest University of Political Science& Law and deputy director of Shenzhen Intellectual Property Bureau.
Mr. Sui Yong, born in January 1958, senior accountant, bachelor of management engineering of Beijing University of Aeronautics& Astronautics. He is the Chairman of the Supervisory Committee of the Company, deputy GM of CATIC Shenzhen Company Limited. He used to be deputy manager and manager of the financial department, manager of the settlement center, manager of the financial department, vice chief accountant and chief accountant of China National Aero-Technology Import& Export Corporation Shenzhen Company and chairman of the supervisory committee of CATIC Real Estate Co., Ltd.
Mr. Tang Boxue, born in July 1961, accountant, graduated from university. He is now a supervisor and the manager of the audit department of the Company. He used to be deputy manager of the audit deparment and project manager of the financial department of the Company and GM of Shenzhen Pengmen Restaurant Co., Ltd.
Mr. Chen Zhuo, born in September 1976, accountant, MBA of Wuhan University, on-campus EMBA China Europe International Business School. He is now a supervisor of the Company and manager of the strategy and information department. He used to be deputy manager of the strategy and information department of the Company, deputy GM and
FIYTA Holdings Ltd. 2013 Annual Report, Full Text manager of the financial information department of FIYTA Sales Co., Ltd. and securities affairs representative of the Company.
Mr. Chen Libin, born in June 1964, postgraduate of economics of the Party School of Guangdong Provincial CPC Committee and EMBA of Sun Yat-Sen University. He is now the Secretary of the CPC Committee and deputy GM of the Company and Secretary of the Board. Mr. Chen used to be deputy director and director of theParty‟s affairs of the Party-masses Work Department and senior commissioner, deputy manager and manager of the enterprise culture department of AVIC Shenzhen.
Mr. Lu Bingqiang, born in December 1961, senior economist, bechalor of Guangzhou Jinan University. Mr. Lu is deputy GM of the Company and Managing Director of FIYTA (Hong Kong) Limited. He used to be the president secretary of AVIC Shenzhen, GM assistant amd director of the Company, and GM and chairman of Shenzhen Harmony World Watches Center.
Mr. Li Dehua, born in February 1960, senior accountant, graduated from Beijing University of Aeronautics& Astronautics. He is deputy GM& chief accountant of the Company. Mr. Li used to be cost accountant of Shenyang Liming Engine Manufacture Co., Ltd., comptroller of AVIC Shenzhen, manager of the financial department and chief financial officer of the Company.
Mr. Li Bei, born in October 1955, senior engineer at research fellow level, graduated from Shenyang Liming Polytechnical College. He is deputy GM of the Company. He used to be department manager of Shenzhen Feida Watch Co., Ltd. and GM of Shenzhen Feibiao Watch Appearance Pieces Co., Ltd.
Madam Fang Juan, born in October 1959, graduated from Jiangxi Normal University and EMBA of China Europe International Business School She now is deputy GM of the Company and managing director of Harmony World Watches Center. She used to be a translator of Jiangxi Ceramics Co., director of the scientific information office of Jingdezhen City, Jiangxi Province, manager of the human resource department and GM assistant of the Company.
Office taking in shareholder companies
√ Applicable□ Inapplicable
|||||||
|-|-|-|-|-|-|
||||||Does he/she|
|||Titles||||
||||||receive|
|Names of the||engaged in||||
||||Starting date|Expiry date of|remuneration or|
|persons in|Names of the Shareholders|the||||
||||of office term|office term|allowance from the|
|office||shareholder||||
||||||shareholder?|
|||s||||
||||February 29,|||
|Lai Weixuan|CATIC International Holdings Limited|Deputy GM|||No|
||||2012|||
|Wang||Vice Chief|November 3,|||
||CATIC International Holdings Limited||||No|
|Mingchuan||Accountant|2010|||
|Wang||Chief|September|||
||CATIC Shenzhen Company Limited||||Yes|
|Mingchuan||Accountant|13, 2010|||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
|||||||
|-|-|-|-|-|-|
|Huang||Secretary of||||
||AVIC International Holdings Limited||July 20, 2012|June 18, 2015|Yes|
|Yongfeng||the Board||||
|Wang||Manager of|March 1,|January 1,||
||CATIC Shenzhen Company Limited||||Yes|
|Xiaohua||HR Dept.|2009|2014||
||||September|||
|Sui Yong|CATIC Shenzhen Company Limited|Deputy GM|||Yes|
||||13, 2010|||
|Explanation to||||||
|the office||||||
|taking in|Nil|||||
|shareholder||||||
|companies||||||

Offices Taken in Other Organizations
√ Applicable□ Inapplicable
|||||||
|-|-|-|-|-|-|
|||Titles|||Does he/she|
|Names of the||engaged in|||receive|
||||Starting date|Expiry date of||
|persons in|Names of Other Organizations|the other|||remuneration or|
||||of office term|office term||
|office||organization|||allowance from|
|||s|||other organization?|
|Zhang||Vice|January 1,|January 1,||
||China Timepieces Association||||Yes|
|Hongguang||chairman|2010|2015||
|Zhang|Lixin Certified Public Accountants||January 1,|||
|||Partner||-|Yes|
|Shunwen|(Special Ordinary Partnership)||2011|||
||Intellectual Property Academy of South|Full-time|August 1,|||
|Wang Yan||||-|Yes|
||China University of Technology|professor|2010|||
|Explanation to||||||
|the office||||||
|taking in other|Nil.|||||
|organizations||||||

III. Remuneration to Directors, Supervisors and Senior Executives
Decision-making procedures, basis for determination and actual payment of the remuneration to directors, supervisors and senior executives
1. Decision-making procedures of the remuneration to directors, supervisors and senior executives: Remuneration to directors and supervisors was reviewed and approved by theCompany‟s General Meeting and remuneration to senior executives was reviewed and approved by the Board of Directors.
2. Basis for determining the remuneration to directors, supervisors and senior executives:
(1) Basis for Determining Remuneration to Directors: Remuneration to the directors appointed by the controlling
FIYTA Holdings Ltd. 2013 Annual Report, Full Text shareholder is determined and distributed by the controlling shareholder. Allowance to independent directors is subject to the proposal prepared by the Board of Directors and reviewed and approved by the General Meeting and disclosed in theCompany‟s annual report. Except the aforesaid allowance, independent directors received no extra and undisclosed benefit from the Company, theCompany‟s principal shareholders or other organization or personnel with stakeholding. (2) Basis for Determining Remuneration to Supervisors: Remuneration to the supervisors appointed by the controlling shareholder is determined and distributed by the controlling shareholder. Remuneration to the staff representative supervisor is determined by the Company based on the specific job he/she is engaged in.
(3) Basis for Determining Remuneration to senior executives: The Company brought into full play and mobilized the seniorexecutives‟ work enthusiasm and creativeness based on theCompany‟s operating results and with reference to the average remuneration level in the trade, better improved theCompany‟s operating ability and result and ensured realization of theCompany‟s strategic targets. The Company worked out the Measures for Administration of Remuneration to the Senior Executives in 2009, insisted on the principle of distribution according to work and combination of power, responsibility and benefit. The major orientation was “market based”, “full amount based” and “broadband based”. Commencing from 2007 on, the Company has introduced Balance Scorecard Strategic Management Structure, based on the establishment of the incentive and restriction mechanism adaptable to the modern enterprise system, improved the corporate governance structure, decomposed theCompany‟s strategy to every department and post through the balance scorecard to determine seniorexecutives‟ performance indicators and action plan on this basis, conducted regular strategic review, work report and assessment on quarterly basis, and decided their total remuneration and renewal of engagement according to the assessment results and fulfillment of performances.
3. Actual payment of the remuneration to directors, supervisors and senior executives:
The Company practiced the annual salary system for its senior executives. The annual salary structure consists of the basic annual salary and performance based annual salary. The annual salary assessment for the GM was carried out according to the assessment methods worked out by the shareholder. The assessment basis is mainly in accordance with a series of indicators systems prepared based on the balance scorecard. The assessment for other senior executives was conducted based on the indicators in the balance scorecard prepared at year beginning and the work report at year end. Remuneration to directors, supervisors and senior executives in the reporting period
In CNY10,000
|||||||||
|-|-|-|-|-|-|-|-|
||||||||Remuneration|
|||||||Total||
||||||Total||actually|
|||||||remuneration||
||||||remuneration||received at|
|Names|Positions|Gender|Age|Office Status||received from||
||||||received from||the end of the|
|||||||the||
||||||the Company||reporting|
|||||||shareholder||
||||||||period|
|Lai Weixuan|Chairman|male|50|In office|0|0|0|
|Xu|Managing|||||||
|||male|48|In office|178.1|0|178.1|
|Dongsheng|Director|||||||
|Wang||||||||
||Director|male|48|In office|0|0|0|
|Mingchuan||||||||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
|||||||||
|-|-|-|-|-|-|-|-|
|Huang||||||||
||Director|male|40|In office|0|0|0|
|Yongfeng||||||||
|Wu Xiaohua|Director|male|44|In office|0|0|0|
|Wang||||||||
||Director|female|43|In office|0|0|0|
|Xiaohua||||||||
|Zhang|Independent|||||||
|||male|58|In office|9|0|9|
|Hongguang|director|||||||
|Zhang|Independent|||||||
|||male|48|In office|9|0|9|
|Shunwen|director|||||||
||Independent|||||||
|Wang Yan||male|57|In office|9|0|9|
||director|||||||
||Chairman of|||||||
|Sui Yong|Supervisory|male|56|In office|0|0|0|
||Committee|||||||
|Tang Boxue|Supervisor|male|53|In office|76.2|0|76.2|
|Chen Zhuo|Supervisor|male|38|In office|79.8|0|79.8|
||Deputy GM&|||||||
|Chen Libin|Secretary of|male|50|In office|132.6|0|132.6|
||the Board|||||||
|Lu Bingqiang|Deputy GM|male|53|In office|147.2|0|147.2|
||Deputy GM &|||||||
|Li Dehua|Chief|male|54|In office|159.2|0|159.2|
||Accountant|||||||
|Li Bei|Deputy GM|male|59|In office|135.7|0|135.7|
|Fang Juan|Deputy GM|female|55|In office|169.2|0|169.2|
|Total|--|--|--|--|1,105|0|1,105|

 Incentive equity to directors, supervisors or/and senior executives in the reporting period
Inapplicable
IV. Change in Directors, Supervisors and Senior Executives
||||||
|-|-|-|-|-|
|Names|Titles|Types|Date|Causes|
||||September 30,|Mr. Wu applied for resignation of director of the|
|Wu Xiaohua|Director|Retired|||
||||2013|Company due to job change.|

V. Change of the Core Team of Technology or Key Technical Personnel (other than
director, supervisor or senior executive) in the Reporting Period
Inapplicable
FIYTA Holdings Ltd. 2013 Annual Report, Full Text VI. About Staff
Ended the reporting period, there were altogether 5,112 employees in the Company. The composition of their education background, age structure and job structure are indicated as follows:
1. Age Structure
|||||
|-|-|-|-|
|Age Composition|Below 30|30 - 40|over 40|
|Number of persons|3,528|1,117|467|
|Proportion %|69.01%|21.85%|9.14%|

2. Education Background
||||||
|-|-|-|-|-|
|Education backgroundcomposition|Master‟s degree orhigher|Universitygraduation|Junior collegegraduation|below junior college|
|Number of persons|48|744|1,341|2,979|
|Proportion%|0.95%|14.55%|26.23%|58.27%|

3. Job Structure
||||||
|-|-|-|-|-|
|Job composition|Management|Operation|Financial|Production|

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
||||||
|-|-|-|-|-|
|Number|411|4,256|145|300|
|Proportion|8.04%|83.26%|2.84%|5.86%|

4. Remuneration Policy for Staff
TheCompany‟s remuneration policy is based on strategy, market, performances and job value. The Company has established a remuneration and benefit system with external competitiveness and internal fairness according to theCompany‟s strategic target, ensuring the attractiveness to high quality talents of the industry, retaining the core and key talents of the Company, activating the human resource, mobilizingstaff‟s enthusiasm and improving theCompany‟s core competitiveness.
5. Training Program
The Company is concentrated on watch industry, insists on the principle of guiding various businesses with the brand strategy, takes a broad view of the world and has established its vision of “moulding an international brand and becoming a globalized enterprise”. While speeding up development, the Company firmly believes that “to build brand is to integrate the brand work and life style”, the core speciality of the organization and staff and the qualification of the staff as brand personnel are the key elements determining the future development. For the purpose of creating the core competitiveness based on “brand building”, meeting the strategy challenge, promoting realization of the long and short term plan, the Company determined the talent standard and qualification model based on the brand strategy by means of strategy analysis, internal and external environment analysis, talent supply analysis andemployees‟ ability gap analysis, kept building a training system integrated with talent development model, improved comprehensive, multi-level, targeted and comprehensive accomplishment bearing, promoted overall and quick growth of employees and senior officers and enhanced theCompany‟s core competitiveness.
6. Ended December 31, 2013, there were no retired staff whose pension or expenses needed to be borne by the Company. The Company shows loving care for the retired staff by means of paying respective visits and extending its regards.
FIYTA Holdings Ltd. 2013 Annual Report, Full Text Section 8 Corporate Governance
I. General
In the year 2013, the Company kept improving theCompany‟s corporate governance structure strictly according to the PRC Company Law, the PRC Securities Law and the regulations of China Securities Regulatory Commission concerning governance of listed companies, and tried to enhance construction of modern enterprise system, upgraded the level of regulatory operation of the Company. As a result, there was no discrepancy between the situation of theCompany‟s corporate governance and the regulatory documents of China Securities Regulatory Commission concerning governance of listed companies.
The Company established and improved relatively standardized corporate governance structure and rules of procedures strictly according to law, rules and regulations, including the PRC Company Law, and the Articles of Association of the Company, formed a decision-making and operation management system with theShareholders‟ Meeting, the Board of Directors, the Supervisory Committee and the management of the Company as the principal structure. They implemented their respective duties according to the PRC Company Law and the Articles of Association.
The General Meeting is theCompany‟s supreme organ and has the power of deciding theCompany‟s operation policy and investment plan, reviewing and approving theCompany‟s annual fincial budget scheme, settlement scheme, profit distribution plan, loss make-up plan, change of the application of the proceeds raised through issuing, etc., makes resolution on increase and decrease of theCompany‟s registered capital, issuing bond, etc., election and replacement of directors, non-staff supervisors and decision on their remuneration and way of payment.
The Board of Directors is theCompany‟s decision-making organ, takes charge of implementing the decisions made by theShareholders‟ General Meeting, assumes responsibility to theShareholders‟ General Meeting and reports the work to it; within the authorization from the General Meeting, decides theCompany‟s external investment, acquisition and sales of assets, assets pledgement, external guarantee, related transactions, etc., decides establishment of theCompany‟s internal management organs, engagement and disengagement of theCompany‟s general manager, the Board secretary and other senior executives, etc. The Board of Directors consists of nine directors, including three independent directors. The Board of Directors has established three subordinate special committees, namely the Strategy Committee, the Audit Committee and Nomination, Emolument and Assessment Committee.
The Supervisory Committee is theCompany‟s supervisory organ in charge of supervising the directors, managers and other senior executives in performaning duties according to the law and proposes dismissal of any director or senior executive who breaches the law, the administrative rules and regulations, the Articles of Association or the GeneralMeeting‟s resolutions. The Supervisory Committee consists of three supervisors including two staff supervisors. The management assumes responsibility to the Board of Directors and the General Manager takes full responsibility for theCompany‟s routine operation and management and development under the leadership of the Board of Directors, supervises the work of every functional department, assesses the work result of each functional department and
coordinate the relationship of all departments.
FIYTA Holdings Ltd. 2013 Annual Report, Full Text Does there exist any difference in compliance with the corporate governance, the PRC Company Law and the relevant provisions of CSRC.
□ Yes√ No
There exist no difference in compliance with the corporate governance, the PRC Company Law and the relevant provisions of CSRC.
Implementation of the Campaign of Corporate Governance and Preparation and Implementation of the Registration Management System for Insiders
1. Campaign of Corporate Governance
With a view to implementing the Basic Regulations of Internal Control of the Enterprises and the relevant supplementary guiding work and in accordance with the requirements of China Securities Regulatory Commission and Shenzhen Securities Regulatory Bureau, the Company formally started the basic rule-compliance project of internal control of the enterprise (hereinafter referred to as the “Internal Control Project”). The Statement of the Implementation Progress of the 54 Experimental Companies for the Rules for Enterprise Internal Control in the Jurisdiction of Shenzhen with reference to the Work Guides for the Key Experimental Companies in the Jurisdiction of Shenzhen in Implementing the Rules for Enterprise Internal Control. In addition, the Company engaged Ruihua Certified Public Accountants (Special Ordinary Partnership) to make independent audit of theCompany‟s internal control. In the reporting period, the Company established the internal control on the business and matters which have been put in the assessment range, which has been effectively implemented and has reached the target of theCompany‟s internal conrol. There exists no material defect. No significant change has taken place in the internal control resulting in substantial affect upon the assessment conclusion during the period from the base date of the internal control assessment report to the date of issuing the internal control assessment report.
In the reporting period, the Company participated in the Working Conference on Prevention and Control of Insider Trading among Listed Companies in Shenzhen organized by China Securities Regulatory Commission Shenzhen Office (CSRC Shenzhen Office) on March 19, 2013, learned the law, regulations and the relevant cases concerning insider trading, understood well the specific requirements on prevention and control of the insider trading; the Company also participated in the training program of basic finance and accounting of listed companies organized by CSRC Shenzhen Office on June 3, 2013 and had better understanding of thetreasurer‟s duties in standardizing theCompany‟s fundamental financial and accounting work and ensuring the financial information substantially authentic, complete and accurate.
2. Preparation and Implementation of the System for Administration of the Information Insiders
In order to further regulate theCompany‟s inside information and theinsiders‟ activity of trading of theCompany‟s shares, the Company reviewed and approved the System for Administration of the Inside Information and Insiders at the 6th meeting of the Sixth Board of Directors dated October 26, 2009 according to the Company Law, the Securities Law and the Share Listing Rules of Shenzhen Stock Exchange. In the reporting period, the Company has strictly implemented the System for Administration of the Inside Information and Insiders in different activities.
FIYTA Holdings Ltd. 2013 Annual Report, Full Text II. Annual General Meeting and ExtraordinaryShareholders’ Meetings in the Reporting Period
1. Annual General Meeting
|||||||
|-|-|-|-|-|-|
|||Description of||||
|Sessions|Meeting Date||Resolution|Disclosure date|Disclosure index|
|||Proposals||||
|||2012 Annual||||
|||Report and||||
|||Summary, 2012||||
|||Work Report of the||||
|||Board of Directors,||||
|||2012 Work Report||||
|||of the Supervisory||||
|||Committee, 2012||||
|||Financial||||
|||Settlement Report,||||
|||2012 Profit||||
|||Distribution||||
|||Proposal, Proposal||||
|||on Implementation||||
|||of Regular Related||||
|||Transactions in||||
||||||Announcement on|
|||2012 and||||
|||Prediction of|||Resolutions of|
|||Regular Related|||2012 Annual|
|2012 Annual|||reviewed and|||
||June 21, 2013|Transactions in||June 21, 2013|General Meeting|
|General Meeting|||approved|||
|||2013, Proposal on|||2013-018|
|||Payment of Audit|||www.cninfo.com.c|
|||Fee for the Year|||n|
|||2012 and||||
|||Engagement of the||||
|||Company‟s Auditor||||
|||for the Year 2013,||||
|||Proposal on||||
|||Application for||||
|||Total Bank Credit||||
|||Line in 2013,||||
|||Proposal on||||
|||Application for the||||
|||Guarantee Amount||||
|||to Subsidiaries in||||
|||2013, Special||||
|||Report on Deposit||||
|||and Application of||||
|||the Raised Capital||||

FIYTA Holdings Ltd. 2013 Annual Report, Full Text
||
|-|
|in 2012 and 2012|
|Work Report of|
|Independent|
|Directors|

2. ExtraordinaryShareholders’ Meetings
|||||||
|-|-|-|-|-|-|
|||Description of||||
|Sessions|Meeting Date||Resolution|Disclosure date|Disclosure index|
|||Proposals||||
||||||Announcement on|
|||Resolution on the|||Resolutions of|
|2013 1st||Financial Service|||2013 1st|
|Extraordinary||Agreement|reviewed and||Extraordinary|
||August 21, 2013|||August 21, 2013||
|Shareholders‟||concluded with|approved||Shareholders‟|
|Meeting||AVIC Finance Co.,|||Meeting 2013-026|
|||Ltd.|||www.cninfo.com.c|
||||||n|

III. Duty Performance of Independent Directors
1. Attendance of Board Meetings and General Meetings
||||||||
|-|-|-|-|-|-|-|
|Independent Directors‟ Attendance at Board Meetings|||||||
|||||||Failure to|
||Number of||||||
||||Number of|||personally|
||Board meetings|||Number of|||
|Independent||Number of Spot|Meetings||Number of|attend board|
||necessary to be|||attendances by|||
|directors||Attendances|Attended by||Absence|meetings|
||attended in the|||representative|||
||||Communication|||successively|
||reporting period||||||
|||||||twice (Yes/No)|
|Zhang Hongguang|5|2|3|0|0|否|
|Zhang Shunwen|5|2|3|0|0|否|
|Wang Yan|5|2|3|0|0|否|
|Number of general meetings|||||||
|attended by independent directors||2|||||
|as non-voting delegates|||||||

Notes to Failure to Personally Attend Board Meetings Successively Twice
Inapplicable
2. Objection of independent directors on some relevant issues
Inapplicable
FIYTA Holdings Ltd. 2013 Annual Report, Full Text 3. Other Note to Duty Performance of Independent Directors
Inapplicable
IV Duty Performance of Special Committees under the Board of Directors in the Reporting Period
Summary Report on Performances of the Audit Committee of the Board of Directors
In accordance with China Securities Regulatory Commission, Contents and Formats for Information Disclosure by Companies that Offer Securities to the Public Guideline (No. 2): Contents and Format of Annual Reports (Revision 2012), Shenzhen Stock Exchange: Circular on Doing a Good Job in 2013 Annual Report and the Relevant Work in Listed Companies, Basic Regulations on Enterprise Internal Control, Memorandum of Information Disclosure No. 21– Information to be Disclosed in the Annual Report and theCompany‟s Rules for the Work of the Audit Committee, the Audit Committee of the Company conducted overall review of theCompany‟s audit work in 2013. The following is the summary of the performances of the Audit Committee and the work of Ruihua Certified Public Accounts (Special Ordinary Partnership) (hereinafter referred to as the “CPAs”).
1. Collecting General Information of the Company in the Report Period and Reviewing the Financial Statements Prepared by the Company and Progress of Internal Control Implementation
On January 24, 2014, the Audit Committee themanagement‟s overall report on the production and operation and progress of significant events during the reporting period and reviewed 2013 Financial and Accounting Statements prepared by the Company and heard the progress of implementation of theCompany‟s internal control. In its opinion, the data in the financial and accounting statements prepared by the Company basically reflected the financial position and operation results of the Company as ended at December 31, 2013, and approved to carry out the audit work for the year 2012 with the financial statements as the base and issued auditing opinion in writing. The internal control implementation work carried out by the Company has been duly carried forward according to the Basic Standards for Enterprise Internal Control and other relevant laws and regulations. It has basically reflected theCompany‟s internal control construction work ended December 31, 2013 and approved to prepare the Self-Assessment Report on the Internal Control on this basis and carry out the internal control audit work in 2013.
2. Decision on Overall Audit Plan
Before the CPAs started auditing, the audit committee, after consultation with the CPAs, decided the time schedule of the audit work in 2013.
3. Supervision of the Audit Work
On January 24, 2014, the CPAs formally started the audit work. During the auditing, the Audit Committee issued three Letters of Urging Audit respectively on January 24, February 11 and February 20, 2014, demanding the CPAs to complete the audit work according to the time schedule of audit for three times in succession and ensure timely disclosure of theCompany‟s annual report and relevant documents.
4. PreliminaryAuditor‟s Opinion after Reviewing the Financial and Accounting Statements
On February 21, 2014, the CPAs issued a preliminaryauditor‟s opinions on the financial and accounting statements and internal control assessment, and the Audit Committee once again reviewed theCompany‟s financial and accounting
FIYTA Holdings Ltd. 2013 Annual Report, Full Text statements and internal control assessment report as preliminarily audited by the CPAs. In the opinion of the Audit Committee, these financial statements truly, accurately and completely reflected the financial position and operation result of the Company ended December 31, 2013 and approved 2013 Annual Report and Summary prepared on the basis of these statements. The said internal control assessment report has truly, accurately and entirely reflected theCompany‟s achievement in internal control construction ended December 31, 2013 and approved to complete the internal control assessment report and internal control audit report based on said report. Meanwhile, the audit committee demanded the CPAs to complete the audit work according to the plan as soon as possible so as to ensure the Company to disclose 2013 Annual Report as scheduled.
5. Summary Work after the Formal Report
On February 27, 2014, the CPAs completed the auditing procedures as scheduled and issued a standard unqualifiedauditor‟s report and other relevant documents to the Audit Committee. The Audit Committee held 2014
1st
Meeting of the Audit Committee on the very day and concluded a resolution and submitted it to the Board of Directors for review and at the same submitted the Summary Report on the Performances of the Audit Committee and the Audit Work of the Certified Public Accountants in 2013. In the opinion of the Audit Committee, RSM China CPAs, the domestic and international auditor engaged by the Company honestly performed the duties in process of offering audit performances according to the professional principle of independence, objectiveness and fairness and did a good job in auditing 2013 Annual Accounting Statements and the internal control auditing.
6.CPAs‟ Performance of Basic Principle of the Professional Ethics
(1) Independence
None of the staff from the CPAs worked for the Company; the CPAs received neither cash nor economic interest in any other form from the Company other than the statutory audit fee. There existed neither direct or indirect mutual investment between the CPAs and the Company nor close operation relationship; there existed no self-assessment on theCompany‟s audit work and there existed no related relation between the member of the auditing team and theCompany‟s decision makers; the CPAs and the auditing staff kept independence both in form and substance in the auditing work and complied with the requirement on keeping independence as specified in the basic principle of the professional ethics.
(2) Professional Competence
All the members of the auditing team possessed the professional knowledge and relevant professional qualification certificates necessary for the auditing work, were competent for the auditing work and at the same time maintained necessary attention and professional cautiousness.
Summary Report on Performances of the Committees of Nomination, Remuneration and Assessment of the Board of Directors
In the reporting period, the Committees of Nomination, Remuneration and Assessment of the Board of Directors performed its functions strictly according to the law and regulations, the Articles of Association, the Rules for Implementation of the Committees of Nomination, Remuneration and Assessment of the Board of Directors and conducted verification of the emoluments to directors, supervisors and senior executives in the year 2013 at its first meeting of 2014. The verification comments are as follows: The decision-making procedures of emolument to directors, supervisors and senior executives complied with the regulations; the payment criteria of the emolument to directors, supervisors and senior executives complied with the emolument system; the emolument to directors, supervisors and
FIYTA Holdings Ltd. 2013 Annual Report, Full Text senior executives as disclosed in 2013 Annual Report is true and accurate.
V. Work of the Supervisory Committee
Did the Supervisory Committee find any risk existing in performing the supervision activities in the reporting period□ Yes√No
The Supervisory Committee has no objection against any matters under supervision in the reporting period.
VI. Independence and Completeness in business, personnel, assets, organization and finance
The Company is independent in business, personnel, assets, organization and finance from its controlling shareholder. The Company has complete and independent business and the ability of autonomous operation.
Business. The Company is mainly engaged in timepiece businesses and has independent production, auxiliary production system and complementary facilities, and possesses its own procurement and sales systems. There exists no competition in the same sector between the Company and its controlling shareholder.
Personnel: The Company is completely independent in organization and has sound systems in labor, personnel and salaries management. Except Mr. Lai Weixuan, the Chairman, Mr. Wang Mingchuan, Mr. Huang Yongfeng, Mr. Wu Xiaohua and Madam Wang Xiaohua, the four directors, and Mr. Sui Yong, the chairman of the Supervisory Committee, none of other senior executives takes any concurrent office in the shareholders and none of the financial staff works concurrently for any related parties.
Assets: The assets of the Company and its controlling shareholder are highly distinct. The Company enjoys the corporate ownership over its assets and the assets are completely independent from its controlling shareholder. In addition, the Company enjoys sole ownership of the Trademark FIYTA.
Organization: The Company has established its own intra-company organizations independent from the controlling shareholder. The Board, the Supervisory Committee and the other internal departments and offices work independently. There exist neither subordinate relations between the controlling shareholder/its functional departments nor doing joint office work. The controlling shareholder enjoys its rights and undertakes the corresponding obligations according to the law and has never been involved in any action which directly or indirectly interferes theCompany‟s business activities surpassing the authority of the General Meeting.
Finance: The Company has established independent financial department, worked out sound and independent financial and accounting system and financial management system and independently opened bank accounts. The controlling shareholder has never interfered the Company in its financial and accounting activities.
VII. Horizontal Competitions
There exists no horizontal competitino among the controlling shareholder, actual controller and the Company.
FIYTA Holdings Ltd. 2013 Annual Report, Full Text VIII. Assessment and Incentive Mechanism for Senior Executives
The Company brought into full play and mobilized the seniorexecutives‟ work enthusiasm and creativeness based on theCompany‟s operating results and with reference to the average remuneration level in the trade, better improved theCompany‟s operating ability and result and ensured realization of theCompany‟s strategic targets. The Company worked out the Measures for Administration of Remuneration to the Senior Executives in 2009, insisted on the principle of distribution according to work and combination of power, responsibility and benefit. The major orientation was “market based”, “full amount based” and “broadband based”. Since 2007, the Company has introduced the balance scorecard as the strategic management instrument. Based on the establishment of the incentive and binding mechanism corresponding to the modern enterprise system and improvement of the corporate governance structure, the Company disintegrated theCompany‟s strategy to various departments and posts by means of the balance scorecard so as to determine seniorexecutives‟ performance targets and plan of action, and regularly conducted strategic review and work report assessment on quarterly basis, and decided the total remuneration and office renewal based on the assessment results and performances. The remuneration to theCompany‟s senior executives is the annual salary system. The annual salary structure consists of the basic annual salary and performance based annual salary. The annual salary assessment for the GM was carried out according to the assessment methods worked out by the shareholder. The assessment basis is mainly based on a series of indicators systems prepared based on the balance scorecard, in which the performance indicators of the surplus revenue rate were the main indicators. The assessment for other senior executives was conducted based on the indicators in the balance scorecard prepared at year beginning and the work report and assessment were carried out at year end.
Section 9 Internal Control
I. Internal Control Construction
The Company has prepared its internal control implementation work plan according to the Circular of China Securities Regulatory Commission on the Relevant Issues Concerning Properly Handling the Pilot Work of Internal Control Regulations of Listed Companies (SHANG SHI BU HAN[2011] No. 031) and the Circular of Shenzhen Securities Regulatory Office on the Relevant Issues Concerning Properly Handling the Pilot Work of International Control Regulations of the Listed Companies in the Jurisdiction of Shenzhen([2011] No. 31). The Company appointed the General Manager as the first responsible person in implementation of internal control, established an internal control implementation leading group with the GM as the group leader. The leading group consists of the working team and business module team. The working team and module team consisted of the carefully selected professional staff familiar with the conditions of the Company with high professional competence. They worked together to carry out the internal control construction work in the organization.
The audit department, as the leading department of the internal control regulations, was the organ in charge of carrying out the work and coordination.
Based on the internal control construction in 2012 with combination of the change of the organization structure in 2013, it also took charge of revision of the regulations and rectification of the problems concerning internal control, and carrying out work of overall assessment of the internal control.
In 2013, the Company appointed Ruihua Certified Public Accountants (Special Ordinary Partnership) to offer internal control consulting services for theCompany‟s internal control.
II. Statement of the Board of Directors on the Responsibility of Internal Control The Board of Directors and directors hereby individually and collectively accept responsibility for the correctness, accuracy and completeness of the contents of this report and confirm that there are no material omissions or errors which would render any statement misleading.
To establish, implement and effectively implement the internal control is the responsibility of the Board of Directors; the Supervisory Company conducts supervision over the Board of Directors in establishment and implementation of the internal control; the management is in charge of organizing and leading daily operation of theCompany‟s internal control.
The objective of theCompany‟s internal control is: to reasonably ensure the operation in compliance with the law, safety of the assets and authenticity and completeness of the financial report and relevant information, to improve operation efficiency and result and to promote realization of the development strategy. As there exits inherent limitation in internal control, it therefore can only provide reasonable assurance for realization of the aforesaid objective.
III. Basis for Establishment of Internal Control of the Financial Report
This assessment report aims at making assessment of the effectiveness of the internal control design and operation
ended December 31, 2013 in accordance with the Basic Regulatoins for Enterprise Internal Control (“the Basic Regulations”), the Guide on Application of the Enterprise Internal Control (“the Application Guide”), the Guide on Assessment of Enterprise Internal Control (“the Assessment Guide”) jointly promulgated by the five ministries and commissions of the P.R. China including the Minisry of Finance and the Guide of Shenzhen Stock Exchange for Standardized Operation of Companies Listed on the Main Board (SZSE Standardization Guide) with reference to theCompany‟s internal control system, internal control manual and assessment method based on the daily supervision and specialized supervision of the international control.
IV. Self-assessment Report of the Internal Control
|||
|-|-|
|About the Significant Defects of the Internal Control Found in the Internal Control Self-assessment Report in the||
|Reporting Period||
|No significant defect of internal control was found in the reporting period.||
|Date of disclosing the internal||
|control self-assessment report,|March 1, 2014|
|full text||
|Disclosure reference of the full||
|text of the internal control|www.cninfo.com.cn|
|assessment report||

V. Internal Control Audit Report,
√ Applicable□ Inapplicable
|||
|-|-|
|Review Opinions in the Internal Control Audit Report||
|In our opinion, FIYTA Holdings Ltd. has maintained effective financial report internal control in all material aspects||
|according to the Basic Standards for Enterprise Internal Control and relevant regulations ended December 31, 2013.||
|Date of disclosing the internal||
||March 1, 2014|
|control audit report in full text||
|Disclosure reference of the full||
|text of the internal control|www.cninfo.com.cn|
|assessment report||

Has the CPAs issued a qualifiedauditor‟s report of internal control.
□ Yes√No
Does the internal control audit report issued by the CPAs agree with the self-assessment report of the Board of Directors
√Yes□ No
VI. Establishment and Implementation of the Responsibility Investigation System for Serious Errors in the Annual Report
In order to further improve the corporate governance and standardize theCompany‟s systems, the
7th
meeting of the Sixth Board of Directors in the report period worked out the System for Looking into the Responsibility for Serious Mistakes in Information Disclosure and the system has been strictly implemented.
In the reporting period, no serious error has been found in disclosure of the annual report information.
Section 10 Financial Report (Attached Hereinafter)
Chapter 11 Documents Available for Inspection
I. Accounting Statements signed by and under the seal of the legal representative, chief accountant and accounting supervisor
II. Original of theAuditors’ Report under the seal of the accounting firm and signed by and under the seals of certified public accountants.
III. Originals of all documents and manuscripts of announcements of the Company disclosed in Securities Times and Hong Kong Commercial Daily as designated by China Securities Regulatory Commission.
FIYTA Holdings Ltd.
Auditors’ Report
Rui Hua Shen Zi (2014) No. 48350001 CONTENTS
I.Auditors’ report 1
II. Audited financial statements
1. Consolidated balance sheet 3
2. Consolidated income statement 5
3. Consolidated cash flow statement 6
4. Consolidated statement of changes inshareholders’ equity 7
5. Balance sheet 8
6. Income statement 10
7. Cash flow statement 11
8. Statement of changes inshareholders’ equity 12
9. Notes to the financial statements 13
通讯地址：北京市东城区永定门西滨河路8号院7号楼中海地产广场西塔5-11层
Postal Address:5-11/F,West Tower of China Overseas Property Plaza, Building 7,NO.8,Yongdingmen
Xibinhe Road, Dongcheng District,Beijing邮政编码（PostCode）： 100077
电话（Tel）：+86(10)88095588传真（Fax）：+86(10)88091199
AUDITORS’ REPORT
Rui Hua Shen Zi (2014) No.
48350001 To the shareholders of FIYTA HoldingsLtd.：
We have audited the accompanying financial statements of FIYTA Holdings Ltd. (the “Company”) and its subsidiaries, which comprise the consolidated and theCompany‟s balance sheet as at 31 December 2013, the consolidated and theCompany‟s income statement, the consolidated and theCompany‟s cash flow statement for the year then ended and consolidated and theCompany‟s statement of change inshareholders‟ equity, and notes to the financial statements.
I.
Management’s Responsibility for the Financial Statements
TheCompany‟s management is responsible for the preparation and fair presentation of these financial statements. This responsibility includes: (1) preparing and fairly presenting financial statements in accordance with Accounting Standards for Business Enterprises; (2) designing, implementing and maintaining necessary internal control in order that financial statements are free from material misstatement, whether due to fraud or error.
II.Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with China Standards on Auditing. Those standards require that we comply with Chinese Certified PublicAccountants‟ ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on theauditor‟s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to theentity‟s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of theentity‟s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the financialstatements。
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III. Opinion
In our opinion, the financial statements give a true and fair view of the consolidated financial position of FIYTA Holdings Ltd. and its subsidiaries as at 31 December 2013, and of their consolidated financial performance and their consolidated cash flows for the year then ended and, of the financial position of FIYTA Holdings Ltd. as at 31 December 2013, and of its financial performance and its cash flows for the year then ended in all material aspects in accordance with Accounting Standards for Business Enterprises.
Ruihua Certified Public Accountants Chinese Certified Public Accountant:
LIAO shiguo
Beijing, China Chinese Certified Public Accountant:
XING xiangzong
March 2014
Consolidated Balance Sheet
as at 31 December 2013
Prepared by: FIYTA Holdings Ltd. Monetary Unit: RMB Yuan
|||||
|-|-|-|-|
||Note|Closing Balance|Opening Balance|
|Current assets||||
|Cash and bank balances|VII. 1|107,663,110.74|140,420,994.71|
|Notes receivable|VII. 2|7,100,000.00|2,000,000.00|
|Accounts receivable|VII. 3|324,457,339.19|309,117,274.31|
|Prepayments|VII. 4|43,487,613.07|75,418,566.40|
|Other receivables|VII. 5|40,436,640.10|33,353,606.26|
|Inventory|VII. 6|2,123,342,820.93|1,883,265,248.76|
|Other current assets|VII. 7|30,811,991.07|51,043,401.97|
|Total current assets||2,677,299,515.10|2,494,619,092.41|
|Non-current asset||||
|Long-term equity investments|VII. 8|43,322,940.12|41,733,741.79|
|Investment properties|VII. 9|235,235,684.76|244,379,430.63|
|Fixed assets|VII. 10|306,888,964.31|317,801,267.87|
|Construction in progress|VII. 11|6,608,187.55|3,866,365.79|
|Intangible assets|VII. 12|36,168,611.72|36,749,627.18|
|Goodwill|VII. 13|-|-|
|Long-term deferred expenses|VII. 14|146,542,685.58|126,274,611.58|
|Deferred income tax assets|VII. 15|74,159,134.29|61,339,687.61|
|Other non-current assets|VII. 17|32,476,867.85|-|
|Total non-current assets||881,403,076.18|832,144,732.45|
|Total assets||3,558,702,591.28|3,326,763,824.86|

Consolidated Balance Sheet (continued)
as at 31 December 2013
Prepared by: FIYTA Holdings Ltd. Monetary Unit: RMB Yuan
|||||
|-|-|-|-|
||Note|Closing Balance|Opening Balance|
|Current liabilities||||
|Short-term loans|VII. 19|1,023,000,000.00|1,409,800,000.00|
|Accounts payable|VII. 20|222,347,620.47|211,297,566.43|
|Advances from customers|VII. 21|9,667,278.30|12,131,032.89|
|Employee remuneration payable|VII. 22|31,173,812.15|28,090,979.22|
|Taxes payable|VII. 23|57,628,175.26|55,705,075.23|
|Interest payable|VII. 24|19,422,859.82|7,376,397.56|
|Other payables|VII. 25|38,454,934.30|37,453,414.11|
|Non-current liabilities due within one year|VII. 26|39,310,000.00|55,846,683.00|
|Other current liabilities|VII. 27|4,924,394.22|10,088,432.90|
|Total current liabilities||1,445,929,074.52|1,827,789,581.34|
|Non-current liabilities||||
|Long-term loan|VII. 28|173,274,950.01|48,383,020.45|
|Bonds payable|VII. 29|397,728,975.00|-|
|Other non-current liabilities|VII 30|2,950,000.00|1,506,000.00|
|Total non-current liabilities||573,953,925.01|49,889,020.45|
|Total liabilities||2,019,882,999.53|1,877,678,601.79|
|Shareholders’ equity||||
|Share capital|VII. 31|392,767,870.00|392,767,870.00|
|Capital reserves|VII. 32|525,506,952.78|525,506,952.78|
|Surplus reserves|VII. 33|156,714,094.20|148,587,680.61|
|Undistributed profit|VII. 34|469,706,600.67|386,984,676.78|
|Foreign currency translation difference||(8,260,833.09)|(7,169,555.04)|
|Total shareholders’ equity attributable toshareholders of the parent company||1,536,434,684.56|1,446,677,625.13|
|Minority shareholders’ interests||2,384,907.19|2,407,597.94|
|Total shareholders’ equity||1,538,819,591.75|1,449,085,223.07|
|Total liabilities and shareholders’equity||3,558,702,591.28|3,326,763,824.86|

Legal Representative:Lai Weixuan Chief Financial Officer: Li Dehua
Financial Manager:Hu Xinglong
Consolidated Income Statement
for the Year Ended 31 December 2013
Prepared by: FIYTA Holdings Ltd. Monetary Unit: RMB Yuan
|||||
|-|-|-|-|
|Item|Note|2013|2012|
|1. Total Revenue||3,103,496,962.22|3,023,962,527.25|
|Incl. Operating income|VII. 35|3,103,496,962.22|3,023,962,527.25|
|2. Total Cost||2,957,455,108.25|2,895,536,885.38|
|Incl. Operating cost|VII. 35|1,990,125,145.74|1,982,326,103.21|
|Business tax and surcharges|VII. 36|22,745,047.53|18,574,813.44|
|Distribution expenses|VII. 37|649,297,842.92|575,687,442.96|
|Administrative expenses|VII. 38|186,296,159.43|193,404,713.40|
|Financial expenses|VII. 39|100,268,241.55|118,655,716.47|
|Asset impairment loss|VII. 40|8,722,671.08|6,888,095.90|
|Plus: Investment gain|VII. 41|1,589,198.33|1,518,669.03|
|Incl. gain from investment in associates andjointly controlled enterprises||1,589,198.33|1,518,669.03|
|3. Operating profit||147,631,052.30|129,944,310.90|
|Plus: Non-operating income|VII. 42|4,854,127.40|7,101,695.36|
|Less: Non-operating expenses|VII. 43|1,008,482.22|559,169.77|
|Incl. losses from disposal of non-current assets||76,660.91|26,173.80|
|4. Profit before income tax||151,476,697.48|136,486,836.49|
|Less: Income tax|VII. 44|21,351,677.67|20,826,970.66|
|5. Net profit||130,125,019.81|115,659,865.83|
|Net profit attributable to shareholders of the parentcompany||130,125,124.48|116,003,746.03|
|Profit attributable to minority shareholders||(104.67)|（343,880.20)|
|6. Earnings per share||||
|(1) Basic earnings per share|VII. 45|0.331|0.295|
|(2) Diluted earnings per share|VII. 45|0.331|0.295|
|7. Other comprehensive income|VII. 46|(1,113,864.13)|186,202.13|
|8. Total comprehensive income||129,011,155.68|115,846,067.96|
|Total comprehensive income attributable toshareholders of the parent company||129,033,846.43|116,189,719.68|
|Total comprehensive income attributable tominority shareholders||(22,690.75)|(343,651.72)|

Legal Representative:Lai Weixuan Chief Financial Officer: Li Dehua
Financial Manager:Hu Xinglong
Consolidated Cash Flow Statement
for the Year Ended 31 December 2013
Prepared by: FIYTA Holdings Ltd. Monetary Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item||Note|2013|2012|
|1. Cash flows from operating activities:|||||
|Cash received from sales of goods and rendering of services|||3,469,499,424.20|3,395,584,259.20|
|Other cash received relating to operating activities||VII. 47|32,329,681.39|37,270,821.76|
|Subtotal of cash inflows from operating activities|||3,501,829,105.59|3,432,855,080.96|
|Cash paid for purchasing goods and services|||2,510,572,073.55|2,522,610,527.49|
|Cash paid to and for employees|||397,723,297.50|374,296,863.42|
|Cash paid for taxes and surcharges|||169,245,745.69|185,361,542.88|
|Other cash paid relating to operating activities||VII. 47|345,240,497.93|304,739,487.41|
|Subtotal of cash outflows in operating activities|||3,422,781,614.67|3,387,008,421.20|
|Net cash flows from operating activities||VII. 48|79,047,490.92|45,846,659.76|
|2. Cash flows from investing activities|||||
|Cash received from returns on investments||||683,750.00|
|Net cash received from disposal of fixed assets, intangible assetsand other long-term assets|||681,892.51|84,721.62|
|Subtotal of cash inflows from investing activities|||681,892.51|768,471.62|
|Cash paid to acquire fixed assets, intangible assets and otherlong-term assets|||118,964,925.94|116,308,133.52|
|Subtotal of cash outflows in investing activities|||118,964,925.94|116,308,133.52|
|Net cash flows in investing activities|||(118,283,033.43)|(115,539,661.90)|
|3. Cash flows from financing activities：|||||
|Cash received from borrowings|||1,791,109,369.63|2,409,134,250.00|
|Other cash received relating to financing activities||VII. 47|-|125,000,000.00|
|Subtotal of cash inflows from financing activities|||1,791,109,369.63|2,534,134,250.00|
|Cash repayments of borrowings|||1,669,312,002.72|2,200,889,810.68|
|Cash paid for dividends, profits distribution or interest|||113,063,856.58|146,366,890.14|
|Other cash payments relating to financing activities||VII. 47|1,702,986.00|156,982,772.60|
|Subtotal of cash outflows in financing activities|||1,784,078,845.30|2,504,239,473.42|
|Net cash flows from financing activities|||7,030,524.33|29,894,776.58|
|4. Effect of foreign exchange rate changes on cash and cashequivalents|||(552,865.79)|246,790.25|
|5. Net increase in cash and cash equivalents||VII. 48|(32,757,883.97)|(39,551,435.31)|
|Plus: cash and cash equivalents at the beginning of the year||VII. 48|140,420,994.71|179,972,430.02|
||6. Cash and cash equivalents at the end of the year|VII. 48|107,663,110.74|140,420,994.71|

||
|-|
|Legal Representative:Lai Weixuan Chief Financial Officer: Li Dehua|
|Financial Manager:Hu Xinglong|

Consolidated Statement of Changes inShareholders’ Equity
for the Year Ended 31 December 2013
||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|2013|||||||2012|||||||
||Total shareholders’ equity attributable to shareholders of the parent company|||||Minorityinterest|Totalshareholders’equity|Total shareholders’ equity attributable to shareholders of the parent company|||||Minorityinterest|Totalshareholders’equity|
||Share capital|Capital reserve|Surplus reserve|Undistributedprofits|Others|||Share capital|Capital reserve|Surplus reserve|Undistributedprofits|Others|||
|I. Balance at the end of prior|392,767,870.00|525,506,952.78|148,587,680.61|386,984,676.78|(7,169,555.04)|2,407,597.94|1,449,085,223.07|392,767,870.00|581,606,952.78|131,323,437.78|327,521,960.58|(7,355,528.69)|2,751,249.66|1,428,615,942.11|
|yPeluasr: Amounts affected by|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|cChoarnregcetiso nof o afc pcroiourn ptienrgio pdosl iecirerosr s|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Adjustments due to business|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|combination involving entitiesII. Balance at the beginning of|392,767,870.00|525,506,952.78|148,587,680.61|386,984,676.78|(7,169,555.04)|2,407,597.94|1,449,085,223.07|392,767,870.00|581,606,952.78|131,323,437.78|327,521,960.58|(7,355,528.69)|2,751,249.66|1,428,615,942.11|
|under common controlcIIIu. rMreonvte ymeeanr ts in current year|-|-|8,126,413.59|82,721,923.89|(1,091,278.05)|(22,690.75)|89,734,368.68|-|(56,100,000.00)|17,264,242.83|59,462,716.20|185,973.65|(343,651.72)|20,469,280.96|
|1. Net profit|-|-|-|130,125,124.48|-|(104.67)|130,125,019.81|-|-|-|116,003,746.03|-|(343,880.20)|115,659,865.83|
|2. Other comprehensive|-|-|-|-|(1,091,278.05)|(22,586.08)|(1,113,864.13)|-|-|-|-|185,973.65|228.48|186,202.13|
|incomeSubtotal of item 1 and 2|-|-|-|130,125,124.48|(1,091,278.05)|(22,690.75)|129,011,155.68|-|-|-|116,003,746.03|185,973.65|(343,651.72)|115,846,067.96|
|3. Capital contribution or|-|-|-|-|-|-|-|-|(56,100,000.00)|-|-|-|-|(56,100,000.00)|
|withdrawn(1) Increase in capital|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|contribution by shareholders(2) Others|-|-|-|-|-|-|-|-|(56,100,000.00)|-|-|-|-|(56,100,000.00)|
|4. Profit distribution|-|-|8,126,413.59|(47,403,200.59)|-|-|(39,276,787.00)|-|-|17,264,242.83|(56,541,029.83)|-|-|(39,276,787.00)|
|(1) Appropriation of surplus|-|-|8,126,413.59|(8,126,413.59)|-|-|-|-|-|17,264,242.83|(17,264,242.83)|-|-|-|
|reserve(2) distribution to shareholders|-|-|-|(39,276,787.00)|-|-|(39,276,787.00)|-|-|-|(39,276,787.00)|-|-|(39,276,787.00)|
|(3) others|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|IV. Balance at the end of|392,767,870.00|525,506,952.78|156,714,094.20|469,706,600.67|(8,260,833.09)|2,384,907.19|1,538,819,591.75|392,767,870.00|525,506,952.78|148,587,680.61|386,984,676.78|(7,169,555.04)|2,407,597.94|1,449,085,223.07|

 currePnt ryeeapr
ared by: FIYTA Holdings Ltd. Monetary Unit: RMB Yuan Legal Representative:Lai Weixuan Chief Financial Officer: Li Dehua Financial Manager:Hu Xinglong
Balance Sheet
as at 31 December 2013
Prepared by: FIYTA Holdings Ltd. Monetary Unit: RMB Yuan
|||||
|-|-|-|-|
|Item|Note|Closing Balance|Opening Balance|
|Current assets||||
|Cash and bank balances||27,929,968.24|51,372,778.02|
|Accounts receivable|XIII.1|239,193,039.81|240,591,979.60|
|Prepayments||-|7,400,499.96|
|Dividends receivable||-|15,960,140.05|
|Other receivables|XIII.2|1,337,631,334.01|879,008,377.75|
|Inventory||-|326,238.78|
|Other current assets||308,119.88|45,265.96|
|Total current assets||1,605,062,461.94|1,194,705,280.12|
|Non-current assets||||
|Long-term equity investments|XIII.3|775,522,660.12|773,933,461.79|
|Investment property||235,235,684.76|244,379,430.63|
|Fixed assets||108,094,045.84|113,532,673.59|
|Construction-in-progress||6,608,187.55|3,866,365.79|
|Intangible assets||29,820,750.12|30,390,445.62|
|Long-term deferred expenses||5,679,969.47|9,959,330.37|
|Deferred income tax assets||775,806.46|424,050.46|
|Other non-current assets||10,976,867.85|-|
|Total non-current assets||1,172,713,972.17|1,176,485,758.25|
|Total assets||2,777,776,434.11|2,371,191,038.37|

Balance Sheet (continued)
as at 31 December 2013
Prepared by: FIYTA Holdings Ltd. Monetary Unit: RMB Yuan
|||||
|-|-|-|-|
|Item|Note|Closing Balance|Opening Balance|
|Current liabilities||||
|Short-term loan||823,000,000.00|949,800,000.00|
|Accounts payable||1,273,442.81|6,871,761.93|
|Advances from customers||1,368,593.44|1,393,704.45|
|Employee remuneration payable||5,700,000.00|4,130,000.00|
|Taxes payable||2,909,411.40|7,275,698.17|
|Interest payable||18,444,077.78|6,207,032.78|
|Other payables||15,261,230.72|14,215,414.94|
|Total current liabilities||867,956,756.15|989,893,612.27|
|Non-current liability||||
|Long-term loan||87,361,928.00|-|
|Bonds payable||397,728,975.00|-|
|Other non-current liabilities||2,950,000.00|1,506,000.00|
|Total non-current liabilities||488,040,903.00|1,506,000.00|
|Total liabilities||1,355,997,659.15|991,399,612.27|
|Shareholders’ equity||||
|Share capital||392,767,870.00|392,767,870.00|
|Capital reserve||531,162,493.88|531,162,493.88|
|Surplus reserve||156,714,094.20|148,587,680.61|
|Undistributed profits||341,134,316.88|307,273,381.61|
|Total shareholders’ equity||1,421,778,774.96|1,379,791,426.10|
|Total liabilities and shareholders’ equity||2,777,776,434.11|2,371,191,038.37|

 Legal Representative:Lai Weixuan Chief Financial Officer: Li Dehua
Financial Manager:Hu Xinglong
Income Statement
for the Year Ended 31 December 2013
Prepared by: FIYTA Holdings Ltd. Monetary Unit: RMB Yuan
|||||
|-|-|-|-|
|Item|Note|2013|2012|
|1. Revenue|XIII. 4|95,787,415.95|171,077,075.86|
|Less: operating cost|XIII. 4|21,182,291.58|87,018,153.40|
|Business taxes and surcharges||5,473,152.56|7,047,921.79|
|Distribution expenses||7,679,098.14|13,037,527.92|
|Administrative expenses||48,128,405.06|43,261,721.27|
|Financial expenses||10,501,425.01|23,914,924.88|
|Impairment loss||490,176.65|(220,345.50 )|
|Plus: Investment income|XIII. 5|76,560,676.47|173,720,753.91|
|Incl. income from investment inassociates and jointly controlledenterprises||1,589,198.33|1,518,669.03|
|2. Operating profit||78,893,543.42|170,737,926.01|
|Plus: Non-operating income||3,367,443.23|4,841,663.32|
|Less: Non-operating expenses||828,606.79|353,482.48|
|Incl. losses from disposal ofnon-current assets||-|872.93|
|3. Profit before income tax||81,432,379.86|175,226,106.85|
|Less: Income tax||168,244.00|2,583,678.56|
|4. Net profit||81,264,135.86|172,642,428.29|
|5. Other comprehensive income||-|-|
|6. Total comprehensive income||81,264,135.86|172,642,428.29|

 Legal Representative:Lai Weixuan Chief Financial Officer: Li Dehua
Financial Manager:Hu Xinglong
Cash Flow Statement
for the Year Ended 31 December 2013
Prepared by: FIYTA Holdings Ltd. Monetary Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|Item||Note||2013|2012|
|1. Cash flows from operating activities:||||||
|Cash received from sales of goods and rendering of services||||90,204,327.75|98,950,704.21|
|Other cash received relating to operating activities||||7,092,745.39|156,513,037.61|
|Subtotal of cash inflows from operating activities||||97,297,073.14|255,463,741.82|
|Cash paid for purchasing goods and services||||5,318,017.56|9,351,306.97|
|Cash paid to and for employees||||39,146,743.47|37,549,377.26|
|Cash paid for taxes and surcharges||||14,202,747.08|36,446,081.66|
|Other cash paid relating to operating activities||||407,582,031.08|53,854,596.02|
|Subtotal of cash outflows in operating activities||||466,249,539.19|137,201,361.91|
|Net cash flows from operating activities|||XIII. 6|(368,952,466.05)|118,262,379.91|
|2. Cash flows from investing activities||||||
|Cash received from returns on investments||||90,931,618.19|191,533,579.03|
|Net cash received from disposal of fixed assets, intangibleassets and other long-term assets||||672,000.00|58,000.00|
|Subtotal of cash inflows from investing activities||||91,603,618.19|191,591,579.03|
|Cash paid to acquire fixed assets, intangible assets and otherlong-term assets||||10,293,325.95|14,039,338.43|
|Subtotal of cash outflows in investing activities||||10,293,325.95|14,039,338.43|
|Net cash flows in investing activities||||81,310,292.24|177,552,240.60|
|3. Cash flows from financing activities:||||||
|Cash received from borrowings||||1,447,261,928.00|1,801,800,000.00|
|Subtotal of cash inflows from financing activities||||1,447,261,928.00|1,801,800,000.00|
|Cash repayments of borrowings||||1,089,800,000.00|1,976,100,000.00|
|Cash paid for dividends, profits distribution and interest||||91,559,577.97|115,536,231.01|
|Other cash payments relating to financing activities||||1,702,986.00|3,932,772.60|
|Subtotal of cash outflows in financing activities||||1,183,062,563.97|2,095,569,003.61|
|Net cash flows from financing activities||||264,199,364.03|(293,769,003.61)|
|4. Effect of foreign exchange rate changes on cash andcash equivalents||||-|-|
|5. Net increase in cash and cash equivalents||XIII. 6||(23,442,809.78)|2,045,616.90|
|Plus: cash and cash equivalents at the beginning of the year||XIII. 6||51,372,778.02|49,327,161.12|
||6. Cash and cash equivalents at the end of the year|XIII. 6||27,929,968.24|51,372,778.02|
||Legal Representative:Lai Weixuan Chief Financial Officer: Li Dehua|||||
||Financial Manager:Hu Xinglong|||||

Statement of Changes inShareholders’ Equity
for the Year Ended 31 December 2013
Prepared by: FIYTA Holdings Ltd. Monetary Unit: RMB Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Item|2013|||||2012|||||
||Share capital|Capital reserve|Surplus reserve|Undistributedprofits|Totalshareholders’equity|Share capital|Capital reserve|Surplus reserve|Undistributedprofits|Totalshareholders’equity|
|I. Balance at the end of prioryear|392,767,870.00|531,162,493.88|148,587,680.61|307,273,381.61|1,379,791,426.10|392,767,870.00|531,162,493.88|131,323,437.78|191,171,983.15|1,246,425,784.81|
|Add: Amounts affected by changesof accounting policies|-|-|-|-|-|-|-|-|-|-|
|Correction of prior periods errors|-|-|-|-|-|-|-|-|-|-|
|II. Balance at the beginning ofcurrent year|392,767,870.00|531,162,493.88|148,587,680.61|307,273,381.61|1,379,791,426.10|392,767,870.00|531,162,493.88|131,323,437.78|191,171,983.15|1,246,425,784.81|
|III. Movements in current year|-|-|8,126,413.59|33,860,935.27|41,987,348.86|-|-|17,264,242.83|116,101,398.46|133,365,641.29|
|1. Net profit|-|-|-|81,264,135.86|81,264,135.86|-|-|-|172,642,428.29|172,642,428.29|
|2. Other comprehensiveincome|-|-|-|-||-|-|-|-|-|
|Subtotal of item 1 and 2|-|-|-|81,264,135.86|81,264,135.86|-|-|-|172,642,428.29|172,642,428.29|
|3. Capital contribution orwithdrawn|-|-|-|-|-|-|-|-|-|-|
|(1) Increase in contribution byshareholders|-|-|-|-|-|-|-|-|-|-|
|(2) Others|-|-|-|-|-|-|-|-|-|-|
|4. profit distribution|-|-|8,126,413.59|(47,403,200.59)|(39,276,787.00)|-|-|17,264,242.83|(56,541,029.83)|(39,276,787.00)|

(1) Appropriation of surplus
- - 8,126,413.59 (8,126,413.59) - - 17,264,242.83 (17,264,242.83) - reserve
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|(2) Distribution to shareholders|-|-|-|(39,276,787.00)|(39,276,787.00)|-|-|-|(39,276,787.00)|(39,276,787.00)|
|IV. Balance at the end of currentyear|392,767,870.00|531,162,493.88|156,714,094.20|341,134,316.88|1,421,778,774.96|392,767,870.00|531,162,493.88|148,587,680.61|307,273,381.61|1,379,791,426.10|

Legal Representative:Lai Weixuan Chief Financial Officer: Li Dehua Financial Manager:Hu Xinglong
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 FIYTA Holdings Ltd.
Notes to the Financial Statements
for the Year Ended 31 December 2013
(Expressed in RMB Yuan unless otherwise indicated)
I. Company status
FIYTA Holdings Ltd. (the “Company”) was founded, under the approval of Shen Fu Ban Fu (1992) 1259 issued by the General Office of Shenzhen Municipal Government, through the restructuring of former Shenzhen FIYTA Time Industrial Company by the promoter of China National Aero-Technology Import and Export Shenzhen Industry& Trade Center (name changed to “China National Aero-Technology Shenzhen Co., Ltd” lately) on 25 December 1992, and the name changed to “Shenzhen FIYTA Holdings Limited”.
Pursuant to the approval of Shen Ren Yin Fu Zi (1993) 070 issued by thePeople‟s Bank of China Shenzhen Special Economic Zone Branch, the Company issued Renminbi ordinary shares (A shares) and Renminbi special shares (B shares) publicly on 10 March 1993. On 3 June 1993, both theCompany‟s A shares and B shares were listed and traded on Shenzhen Stock Exchange pursuant to the approval of Shen Zheng BanFu[1993]20 issued by Shenzhen Securities Regulatory Office and Shen Zheng Shi Zi (1993)16 issued by Shenzhen Stock Exchange. On 30 January 1997, the company name changed to Shenzhen FIYTA Holdings Limited with the approval of Shenzhen Municipal Administration for Industry and Commerce.
On 4 July 1997, China National Aero-Technology Shenzhen Co., Ltd. ("CATIC Shenzhen Company") transferred 72,360,000 corporate shares (accounting for52.24% of the Company's total share capital) to Shenzhen China Aviation Group Company Limited (previously known as "Shenzhen China Aviation Industry Company Limited", hereinafter referred to as "China National Aviation Group") according to share transfer agreement signed by both parties. As a result, theCompany‟s controlling shareholder changed from CATIC Shenzhen Company to China National Aviation Group.
On 26 October 2007, the Company implemented split-share reform. Under the premise of maintaining the Company's total of 249,317,999 shares unchanged, the Company's shareholders of non-tradable shares paid 3.1 shares per 10 tradable shares to all the tradable share shareholders registered on option registration date designated by the split-share reform program. At that point, after the reform, the shares held by China National Aviation Group reduced to44.69% from52.24%.
On 29 February 2008, due to expanding the scope of business, theCompany‟s corporate business license was altered from Shen Si Zi No. 4403011001583 to No. 440301103196089 with the approval of Shenzhen Municipal Administration for Industry and Commerce.
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 With the approval of “Reply of China Securities Regulatory Commission (CSRC) to the Approval of Private Placement of Shenzhen FIYTA Holdings Limited” (Zheng Jian XuKe[2010]1703) and “Reply of State-owned Assets Supervision and Administration Commission of the State Council (SASAC) on Issues in Private Placement of Shenzhen FIYTA Holdings Limited” (SASAC(2010)430) in 2010, the Company is approved to issue not more than 50,000,000 ordinary shares (A shares) by private placement. After the completion of the placement on 9 December 2010, theCompany‟s registered capital increased to RMB280,548,479.00 and the equity capital of the Company held by China National Aviation Group reduced to41.49%.
On 8 April 2011, the Company increased its share capital by 4 shares for every 10 shares by capitalizing the capital reserves on the basis of total shares of 280,548,479 as at 31 December 2010. Total shares of the Company changed to 392,767,870 shares after the increase.
As at 31 December 2013, the Company has accumulatively issued 392,767,870 shares in total (refer to Notes VII. 31 for details).
The business scope of the Company and its subsidiaries (collectively referred to as the “Group”) mainly includes: producing and selling of analogue quartz watches and its movements, components, various timing devices, processing and wholesaling karat gold jewellery watches (production sites are to be declared separately); domestic commercial and material supply and distributing business (excluding goods under exclusive operational rights, special control and exclusive sales); property management and leasing; import and export business of self-design, construction; import and export business (according to Shen Mao Guan Deng Zheng Zi No.2007-072).The legal representative of the Company is Wu Guangquan. The residence of the Company is FIYTA Hi-Tech Building located at Gao Xin Nan Yi Dao, Nanshan District, Shenzhen.
TheCompany‟s parent company is China National Aviation Group and the ultimate parent company is Aviation Industry Corporation of China (AVIC).
Corporate governance institutions that are established by the Company include general meeting of shareholders, board of directors, board of supervisors, audit committee, strategy committee and nomination, remuneration and evaluation committee. The Company has administration, human resources, finance, audit, general office of board of directors, property,R&D, innovative design, strategy and information department and other functional departments.
The financial statements have been approved and authorised for issue the Board of Directors of the Company on 27 February 2014.
II. Basis of preparation
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 The financial statements of the Group have been prepared based on going concern assumption and based on actual transactions and events occurred. It is prepared in accordance with the requirements of “Accounting Standards for Business Enterprises - Basic Standard” and 38 Specific Standards issued by the Ministry of Finance on 15 February 2006, and application guidance, illustrations to the standards and related pronouncements (collectively known as “Accounting Standards for Business Enterprises” or “CAS”). These financial statements also comply with the disclosure requirements of “Regulation on the Preparation of Information Disclosures of Companies Issuing Public Shares, No. 15: General Requirements for Financial Reports” (revised in 2010) issued by China Securities Regulatory Commission (CSRC).
According to Accounting Standards for Business Enterprises, the accrual basis is adopted for theGroup‟s accounting activity. Except for some financial instruments, the financial statements are measured using historical cost. In case of impairment occurred on assets, provisions for impairment are provided for in accordance with related rules.
III. Statement of compliance
The financial statements have been prepared in accordance with the requirements of Accounting Standards for Business Enterprises. These financial statements present truly and completely the financial position as at 31 December 2013, the results of operations and the cash flows for the year then ended of the Company and the Group. In addition, the financial statements of the Company and the Group comply with, in all material respects, the disclosure requirements for financial statements and notes to the financial statements under “Regulation on the Preparation of Information Disclosures of Companies Issuing Public Shares, No. 15: General Requirements for Financial Reports” as revised by CSRC in 2010.
IV. Accounting policies and estimates
1. Accounting period
The accounting period of the Group includes accounting year and interim accounting period. An interim period refers to a reporting period which is shorter than a full accounting year. The accounting year of the Group is the calendar year, i.e. from 1 January to 31 December of each year.
2. Recording currency
Renminbi (RMB) is the functional currency of the main economic environment in which the Company and its domestic subsidiaries operate. The Company and its domestic subsidiaries adopt Renminbi as the recording currency.
Except for the Swiss-based subsidiary Montres Chouriet SA (the “Swiss Company”) , which is a subsidiary of FIYTA (Hong Kong) Limited (FIYTA Hong Kong), uses Swiss Franc as the recording currency according to the
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 main economic environment where the Swiss Company operated, all other subsidiaries outside the mainland China, including HARMONY World Watches International Limited (World Watches International), a subsidiary of Shenzhen HARMONY World Watches Center Co., Ltd (HARMONY Company), FIYTA Hong Kong and its subsidiary Station 68 Limited (Station 68) as well as Nature Art Limited and ProTop Limited, which are special purpose vehicles controlled by Station 68, use Hong Kong Dollar (HKD) as the recording currency.
The currency used in preparing theGroup‟s financial statements is Renminbi.
3. Accounting treatment for business combinations
Business combination refers to transactions or events that combine two or more separate enterprises and form one reporting entity. Business combinations are classified into business combinations involving enterprises under common control and business combinations involving enterprises not under common control.
(1) Business combination involving entities under common control
If the enterprises involved in a combination are subject to control of the same party or parties both before and after the combination, and that control is not temporary in nature, it is business combination under common control. The party who obtains control over other participating enterprises on the combination date is the combining party, and the other participating enterprises are combined parties in a business combination under common control. Combination date means the date on which the combining party actually obtains control over the combined parties.
Assets and liabilities that the combining party obtained are measured using book value of the combinedparty‟s accounts on combination date. Difference between book value of net assets the combining party obtained and book value of combination consideration paid (or the aggregate nominal amount of shares issued) is recognized in capital reserve (share premium). If the capital reserve (share premium) is insufficient to offset, retained earnings will be adjusted accordingly.
All direct expenses incurred by the acquirer in relation to the combination are included in the current profit or loss at the time such expenses incurred.
(2) Business combinations involving entities not under common control
If the enterprises involved in a combination are not subject to control of the same party or parties both before and after the combination, it is the business combination involving entities not under common control. The party who obtains control over the other participating enterprises on acquisition date is the acquirer, and the other participating enterprises are the acquiree in a business combination not under common control. The acquisition date is the date on which the acquirer actually obtains the control over the acquirees.
As for business combinations involving enterprises not under common control, combination cost includes assets paid, liabilities incurred or assumed, and the fair value of equity securities issued by the acquirer to obtain control over the acquiree on the acquisition date. Fees for auditing, legal service, evaluation and consultation, and other
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 administrative expenses incurred for the combination are recognized in profit or loss in the period in which such expenses incurred. Transaction costs incurred by the acquirer for issuing equity securities or debt securities as combination consideration are recognized in initial recognition amount of equity securities or debt securities. Contingent consideration, if any, is included in acquisition cost at its fair value on the acquisition date. If, within 12 months, new or further evidence revealed regarding conditions that already existed on acquisition date, the contingent consideration required to be adjusted, adjusting the goodwill arising from the acquisition accordingly. For acquisition that realized step by step through multiple transfer transactions, the equity of the acquiree held by the acquirer before the acquisition date are re-measured using fair value on the acquisition date. Any difference between the fair value and its carrying amount is recognized as investment income and transfer other comprehensive income related to this part of equity to investment gain in the period where the acquisition date falls. The acquisition cost is the aggregate of fair value ofacquiree‟s equity held by the acquirer before the acquisition date and fair value of additional equity acquired on the acquisition date.
Acquisition cost incurred by the acquirer and identifiable net assets acquired in the acquisition are measured at fair value on the acquisition date. If the acquisition cost is greater than the fair value of the part of identifiable net assets acquired on the acquisition date, the difference is recognized as goodwill. If the acquisition cost is lesser than the fair value of the part of identifiable net assets acquired on the acquisition date, review the fair value of each identifiable asset, liability and contingent liability that acquired and the calculation of acquisition cost. If, after the review, the acquisition cost is still lesser than the fair value of the part of identifiable net assets acquired, the difference is recognized in profit or loss in corresponding period.
Deductible temporary differences that the acquirer obtained from the acquiree, which are not recognized on acquisition date due to the conditions of recognition as deferred tax assets are not fulfilled, are recognized as deferred tax assets and correspondingly deduct goodwill if new or further evidence shows, within 12 months after the acquisition date, that relevant conditions exist on the acquisition date and it is probable that the economic benefit arising from the deductible temporary differences on acquisition date can be realized. If the goodwill is insufficient to the deduction, the excess part is recognized in profit or loss in corresponding period. Deferred tax assets recognized in relation to acquisition that other than the circumstances mentioned above are recognized in profit or loss in corresponding period.
4. Method of preparing consolidated financial statements
(1) Principles in determining the scope of the consolidation
The scope of consolidation is determined on the basis of control. Control refers to the right that the Company is able to make decision on financial and operational policies of the invested company, and receiving benefits from the business activities conducted by the invested company. The scope of the consolidation includes the Company and all its subsidiaries. Subsidiary means enterprise or entity that is controlled by the Company.
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 (2) Method of preparing consolidated financial statements
The Group begins to include a subsidiary in the scope of consolidation from the date that the Company acquires the net assets and effective control over the operation and business decisions of the subsidiary. A subsidiary is excluded out of the scope of theGroup‟s consolidation from the date the Company losses effective control over it. For subsidiary that is disposed, the operating performance and cash flows before the disposal date are properly included in the consolidated income statement and consolidated cash flow statement. The opening balance of the consolidated balance sheet is not adjusted if the disposal occurs in the same period. The business performance and cash flows of the addition of subsidiary through combination involving entities not under common control after the acquisition date have been properly included in the consolidated income statement and consolidated cash flow statement, and no adjustments are made to the opening balance and comparative figures of the consolidated financial statements. For addition of subsidiary through combination involving entities under common control, the business performance and cash flows from the beginning of the period to the combination date are properly included in the consolidated income statement and consolidated cash flow statement, and the opening and comparative figures of the consolidated financial statements are adjusted at the same time.
If the accounting policies or accounting period adopted by the subsidiary are not in line with the Company, necessary adjustments are made to the financial statements of the subsidiary according to theCompany‟s accounting policies and period when preparing consolidated financial statements. If the subsidiary is acquired through combinations involving entities not under common control, the adjustments are made based on the fair value of its identifiable net assets on the acquisition date.
All material intra-group current account balances, transactions and unrealized profits are offset when preparing the consolidated financial statements.
The part of subsidiaryshareholders‟ equity and current period net profit or loss that do not attribute to the Company are presented separately undershareholders‟ equity and net profit in consolidated financial statements as minorityshareholders‟ equity and minorityshareholders‟ profit or loss respectively. Portion ofsubsidiaries‟ current net profit or loss attributable to minorityshareholder‟s equity are presented under the title of “minorityshareholders‟ profit or loss” under net profit in consolidated income statement. Ifsubsidiary‟s losses that attributable to minority shareholders exceed the openingowners‟ equity attributable to minority shareholders, minorityshareholders‟ equity is deducted.
If the Company losses control over a subsidiary due to partial disposal of equity investment or other reasons, the remaining equity is measured at fair value on the date when the control lost. The difference between the sum of consideration received for disposal of equity interest and the fair value of remaining equity interest less the net assets attributable to the Company calculated continuously since the purchase date based on shareholding percentage before disposal are recognized in investment gain in the period when the control lost. Other comprehensive income related to equity investment in the subsidiary is transferred to investment gain at the time
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 control lost. The remaining equity interests are measured subsequently according to “CAS No. 2– Long-term Equity Investment” or “CAS No. 22– Recognition and measurement of Financial Instrument”. See Note IV. 7 Financial instrument or Note IV. 10 Long-term equity investment for details.
5. Determination of cash and cash equivalents
The Group's cash and cash equivalents include cash on hand, deposit that can be used for immediate payment, andGroup‟s investments that are with characteristics of short term (generally matures in three months from the date of purchase), highly liquid, readily convertible to known amount of cash, and with insignificant risks of changes in value.
6. Foreign currency transactions and financial statements translation
(1) Translation of foreign currency transactions
Initial recognition of foreign currency transactions incurred by the Group are translated to recording currency using the spot exchange rate at the trading date (usually refers to middle rate of foreign exchange rate on that day published by the People's Bank of China). For foreign currency exchange transactions and transactions related to foreign currency exchange, they are translated into recording currency using actual exchange rate.
(2) Translation of monetary items and non-monetary items denominated in foreign currencies
At the balance sheet date, monetary items denominated in foreign currencies are translated using the spot rate at the balance sheet date. Translation differences arising from the translation are recognized in current profit or loss except for capitalized exchange difference attributable to assets purchased or constructed, which can be capitalized, using foreign currency specified loan and amortized cost of available for sale monetary items denominated in foreign currency. The exchange difference arose from the two scenario mentioned above shall be treated under the principal of capitalizing of borrowing cost and charged to other comprehensive income respectively.
Non-monetary items denominated in foreign currencies that are measured using historical costs are still measured using recording currency translated at the spot rate at transaction date. Non-monetary items denominated in foreign currency which are measured using fair value are translated at spot rate of the day the fair value is determined. The differences between amount of recording currency after the translation and the original amount of recording currency are treated as changes in fair value (including exchange rate change) and are recognized in current profit or loss or recognized in capital reserves as other comprehensive income.
(3) Translation of financial statements prepared in foreign currencies
In preparing of the consolidated financial statements involving overseas operations, if there is any foreign-currency monetary item constituting substantially net investment in overseas operation, the exchange difference arising from exchange rate variation is listed in recognized as “translation difference” underowners‟ equity in balance sheet. In case of disposal of overseas operation, it is charged to the profit and loss of the period.
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Financial statements of foreign businesses that denominated in foreign currencies are translated to financial statements in RMB using following rules: asset and liability items in balance sheet are translated using the spot rate on balance sheet date; except for “undistributed profit”, all other items inowners‟ equity are translated using the spot rate on the date the corresponding transactions occurred. Revenue and expenses items in income statement are translated using the average rate on the transaction date. The undistributed profit at the beginning of the year is the year end balance translated at the prior year. The undistributed profit at the year end is presented using translated items in profit distribution. Difference between the translated assets and sum of liabilities andowners‟ equity is recognized in other comprehensive income as translation differences and is presented separately underowners‟ equity in balance sheet. When disposing overseas operations and losing controls over the operations, relevant translation differences which are originally presented underowners‟ equity are charged to profit or loss entirely or proportionately according to percentage of disposal.
Cash flows denominated in foreign currency and cash flows of subsidiaries outside Mainland China are translated using the average exchange rate on the date when cash flows occur. The amount of cash changes due to exchange rate variations are recognized as adjustment item and presented in the cash flow statement separately. The balance at the beginning of the year and amount actually incurred prior year are presented using figures in prioryear‟s translated financial statements.
7. Financial instruments
(1) Determination of fair values for financial assets and financial liabilities
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in anarm‟s length transaction. If there is an active market for a financial instrument, the quoted price in the active market shall be used to establish the fair value of the financial instruments. Quoted prices from an active market are prices that are readily and regularly available from an exchange, broker, industry association or pricing service agencyetc… and represent prices used in actual market transactions on anarm‟s length basis. If no active market exists for a financial instrument, the Group establishes fair values by using valuation techniques. Valuation techniques include using the prices quoted in latest market transactions between knowledgeable, willing parties for reference, referencing to the current fair value of another instrument that is substantially the same in nature, discounted cash flow method and option pricing model, etc...
(2) Classification, recognition and measurement of financial assets
Financial assets which are traded in conventional manner are recognized or derecognized on the transaction date. On initial recognition, financial assets are classified into fair value through profit or loss financial assets, held-to-maturity financial assets, loans and receivables, and available-for-sale financial assets. The financial assets are initially measured at fair value. For fair value through profit or loss financial assets, the transaction costs are directly recognized into current profit or loss. For financial assets under other categories, relevant transaction costs are included in their initial recognition amounts. Financial assets of the Group are mainly
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 receivables.
Receivables refer to non-derivative financial assets with no quoted price in active markets and with fixed or determinable recoverable amounts. Financial assets that are classified as receivables by the Group include accounts receivable and other receivables.
Receivable are measured subsequently at the amortized cost by using the effective interest rate method. Gain or losses incurred at the time of de-recognition, impairment or amortization are charged to current profit or loss. (3) Impairment of Finance Assets
The Group examines the book value of other financial assets at each balance sheet date, and if there are any objective evidences indicating impairment of financial assets, impairment provision is provided.
For impairment provision of receivables, please refer to Notes IV. 8.
(4) Recognition and measurement of transfer of financial assets
Financial asset is derecognized if one of the following conditions is satisfied: (a) the contractual rights of receiving cash flows from the financial asset is terminated; (b) financial asset has been transferred, and substantially all risks and reward associated with the ownership of the financial asset have been transferred to transferee; (c) the financial asset has been transferred. The enterprise neither transfers nor retains substantially all the risks and rewards associated with the ownership of the financial asset, but it has not retained control over the financial asset.
If the enterprise neither transfers nor retains substantially all the risks and rewards associated with the ownership of a financial asset, and it retains control over the financial asset, it recognizes the financial asset to the extent of its continuing involvement in the transferred financial asset and recognizing associated liability. The extent of continuing involvement in the transferred asset is the extent to which the enterprise is exposed to risks of changes in the value of the transferred asset.
For an entire transfer of a financial asset that satisfies the de-recognition criteria, the difference between the carrying amount of the financial asset transferred and the sum of the consideration received from the transfer and any cumulative gain or loss that had been recognized in other comprehensive income is recognized in current profit or loss.
If a part of the transferred financial asset qualifies for de-recognition, the carrying amount of the transferred financial asset in its entirety shall be allocated between the part that is derecognized and the remaining portion proportionately based on the relative fair value of each part. The difference between the carrying amount allocated to the part derecognized and the sum of the consideration received for the part derecognized and any cumulative gain or loss attributable to it that had been recognized in other comprehensive income is recognized in current profit or loss.
(5) Classification and measurement of financial liabilities
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 On initial recognition, financial liabilities are classified in financial liabilities at fair value through profit or loss and other financial liabilities. A financial liability is initially recognized at fair value. Transaction costs for financial liability at fair value through profit or loss are charged to current profit or loss. Transaction costs for other financial liabilities are included in their initial recognition amounts. TheGroup‟s financial liabilities are mainly other financial liabilities and financial guarantee contracts.
(a) Other financial liabilities
Other financial liabilities are measured subsequently at amortized cost using effective interest rate method. Gain or losses arising from derecognizing or amortization are charged to current profit or loss.
(b) Financial guarantee contracts
These contracts are not classified as financial liabilities at fair value through profit or loss. It is initially measured at fair value and subsequently measured at the higher of the amount determined according to “CAS No. 13– Contingent Events” and the initial amount less accumulated amortization recognized according to “CAS No. 14– Revenue”.
(6) De-recognition of financial liabilities
A financial liability (or part of it) can only be derecognized only when the present obligations are fully (or partly) discharged. If an agreement between the Group (the debtor) and creditor indicates that the present financial liability are to be replaced with a new financial liability which has substantially different terms compare with the present financial liability, the present financial liability is derecognized and the new financial liability is recognized. When a financial liability is entirely or partly derecognized, the difference between the carrying amount of the derecognized financial liability and the consideration paid (including any non-cash assets transferred or new financial liabilities undertook) is charged to current profit or loss.
(7) Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities can be presented in the balance sheet using net figure after offsetting only when the Group has the legal rights to offset the financial assets and liabilities that are already recognized and plans to execute such rights, and the Group intends to settle corresponding financial assets and liabilities on net basis or to realize the financial asset and settle the financial liability simultaneously. Other than situations mentioned above, financial assets and liabilities are presented separately in balance sheet and cannot be offset. (8) Equity Instrument
An equity instrument is a contract that evidences any residual interest in the assets of the Group after deducting all of its liabilities. The equity instrument will increase theowners‟ equity by deducting transaction costs from consideration received for the issuance of the equity instrument.
All kinds of distributions to the owners of equity instrument (excluding stock dividends) decrease theowners‟ equity. The Group does not recognize fair value changes for equity instrument.
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 8. Receivables
Receivables include accounts receivable and other receivables.
(1) Recognition principle for bad debts provision
The Group examines, at the balance sheet date, the carrying amounts of receivables and impairment provision is recognized if following objective evidences that indicating impairment to receivables occurs: (a) severe financial difficulties of the debtor; (b) a breach of contract by the debtor (such as a default or breach of contract in interest or principle repayments); (c) it is probable that the debtor will be bankrupted or conduct other financial reorganization; and (d) other objective evidences indicating there is an impairment of the receivables.
(2) Method of recognizing bad debt provision
(a) Determination and providing bad debt provision for receivables which are individually significant in amount and provided for bad debt individually
The Group identifies single accounts receivable item that above RMB800,000.00 and single other receivable item that above RMB500,000.00 as receivables that individually significant in amount.
The Group conducts impairment test on individually significant receivables separately. Financial assets that are not impaired after standalone impairment tests will be tested again by including it in a portfolio of financial assets with similar credit risk characteristics. Receivables that have been impaired in standalone test will not be tested again by including it in a portfolio of financial assets with similar credit risk characteristics.
(b) Determination of receivables that recognize bad debt provision under credit risk portfolio and bad debt provision recognition.
i. Basis of determining portfolio with similar credit risk characteristics
Receivables that are not individually significant in amount and receivables that are individually significant in amount but not impaired after individual impairment test are grouped into different asset portfolios based on similarity and correlation of the credit risk characteristics. These credit risk characteristics reflect the ability of the debtor to repay all amounts due according to terms of contracts related to the assets under test and are in connection with estimation of future cash flows expected to be generated by these assets.
Basis of portfolio determination
Item Basis of portfolio determination
Portfolio of aging Based on aging of receivables
Receivables from petty cash advanced to employees, from subsidiaries Portfolio of specific accounts of the Company and sales revenue between the last settlement date with the department store and the balance sheet date
ii. Recognizing bad debt provision based on credit risk portfolio
If the impairment test is carried out for a portfolio of assets, the amount of bad debt provision is recognized based on the structure of the portfolio and similar credit risk characteristics (the ability of repayment by the debtor
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 according to contract terms) by assessing historical experience on assets impairment with similar credit risk characteristics, current economic condition, and losses that are already exist in the portfolio.
Method of recognizing bad debt provision for different portfolios
Item Method
Portfolio of aging Analyzing the aging of receivables
No bad debt provision is recognized as the risk of impairment does not Portfolio of specific accounts
exist according to its credit risk characteristics
i) Recognizing bad debt provision based on aging analysis method within the portfolio
Percentage of provision Percentage of provision Aging recognized for accounts recognized for other receivable(%) receivables(%)
Within 1 year (inclusive) 5 5
1-2 years (inclusive) 10 10
2-3 years (inclusive) 30 30
Above 3 years 50 50
ii) Recognizing bad debt provision using other method within the portfolio
Percentage of provision Percentage of provision Name of portfolio
recognized for accounts recognized for other receivable(%) receivables(%) Portfolio of specific accounts - - Based on historical experience, theGroup‟s receivables from petty cash advanced to employees, from subsidiaries of the Company and sales revenue between the last settlement date of the same department store and the balance sheet date are with high recoverability and low possibility of incurring bad debt, as a result, no bad debt provisions are provided for such receivables.
(c) Receivables that are insignificant in amount individually but recognize bad debt provision individually The Group conducts impairment test to receivables that insignificant in amount individually but with the following characteristics: receivables that involving dispute or legal case, arbitration with the other party; obvious indicators show that it is probable that the debtor is unable to fulfil the repayment obligation. Standalone impairment test is carried out for this kind of receivables. If any objective evidence indicate that the receivables impaired, impairment losses are recognized based on the difference between the carrying amount and the present value of estimated future cash flows. Bad debt provision is recognized accordingly.
(3) Reversal of bad debt provision
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 If, subsequent to the recognition of an impairment loss on a receivable, there are objective evidences of a recovery in value of the receivable and the recovery is related objectively to events occurred after the impairment was recognized, the impairment loss recognized previously is reversed and recognized in profit or loss. The carrying amount after the reversal shall not exceed the amortized cost of the receivable on the reversal date as if there is no impairment previously.
9. Inventory
(1) Classification of inventory
Inventory mainly includes raw material, work-in-process and stored goods.
(2) Costing method of acquiring and delivering of inventory
The inventory is valued using actual cost when it is acquired. The cost of inventory includes cost of purchase, manufacturing cost and other costs. Costing methods used for inventory usage and shipment include: weighted average costing (for stored goods of watches with FIYTA brand name), specific identification method (for stored goods of branded watches), and first-in-first-out method (for raw material for FIYTA watches).
(3) Determination of net realizable value of the inventory and method of recognizing impairment provision
Net realizable value (NRV) equals to estimated selling price less estimated costs of completion, estimated selling costs and related taxes in the ordinary course of business. The determination of net realizable value of the inventory is based on reliable evidence and taking into consideration of the intents of holding the inventory and impacts of events after the balances sheet date. In particular: (a) the NRV of inventories that are available for sale such as finished goods and materials held for trading are determined using the estimated selling price less estimated selling expenses and related taxes if the business is in the ordinary course of operation; (b) the NRV of materials that need to be processed are determined using estimated selling price of finished goods which is manufactured from the material less estimated cost of completion, estimated selling expenses and related taxes if the business is in the ordinary course of operation.
The Company recognizes inventory impairment provision for FIYTA brand watches based on models.
Impairment provisions for branded watches are recognized by specific item.
Impairment provisions for raw materials of FIYTA watches are recognized by categories based on terminal selling status of FIYTA finished watches taking into considerations of the exchangeability of the spare parts and the special usage of materials.
On balance sheet date, inventory is measured at lower of cost and NRV. If the NRV is lower than cost, impairment provision is recognized.
If, after the impairment provision is recognized, the influence conditions are no longer exist and as a result, the NRV of the inventory is higher than its carrying amount, the impairment provision recognized previously can be
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 reversed. The amount reversed is to be recognized in current profit or loss.
(4) The inventory system is perpetual inventory system
(5) Amortization of low-value consumables and packaging material
The low-value consumables and packaging material are amortized using one-off method at the time it is used. 10. Long-term equity investment
(1) Determination of investment cost
If the long-term equity investment was originated from business combination involving entities under common control, the initial investment cost is the acquired portion of the carrying amount of the combinedparty‟s owner equity on the combination date. If the long-term equity investment was originated from business combination involving entities not under common control, the acquisition cost is the aggregate of assets paid, liabilities incurred or undertook and fair value of equity securities issued by the acquirer. Agent fees incurred by the acquirer for the acquisition such as audit, legal service, and valuation and consultation fees, and other related administration expenses are charged to current profit or loss at the time such expenses incurred. Transaction cost incurred for issuing equity securities or debt securities, which are used as considerations for the combination, are included in the initial recognition amount of the equity securities or debt securities.
Equity investments that other than the kind originated from business combinations are measured at cost initially. The investment cost differs based on ways of acquiring the long-term equity investment. It can be determined based on cash consideration actually paid by the Group, fair value of equity securities issued by the Group, value stimulated in investment contract or agreement reached, fair value or carrying amount of assets that is exchanged in a non-monetary asset transfer transaction, or the fair value of the long-term equity investment itself. Expenses that directly related to the acquisition of the long-term equity investment, taxes and other necessary expenditure are included in the investment cost.
(2) Subsequent measurement and recognition of gain or losses
Cost method is used for measurement of long-term equity investment if there is no common control with or significant influence to the invested entity, and there is no quotation in an active market and the fair value cannot be measured reliable. Equity method is used for measurement of long-term equity investment if there is common control with or significant influence to the invested entity. If a long-term equity investment that does not involving control or joint control or significant influence to the invested entity and its fair value can be measured reliably, it is treated as available for sale financial assets.
Besides, the Company adopts cost method to measure long-term equity investment if it can implement control over the invested entity in its financial statements.
(a) Long-term equity investments that are measured using cost method
Under cost method, long-term equity investment is measured at initial investment cost. Current period investment
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 gain or losses are recognized according to the cash dividend or profit distribution that is announced by the invested entity, except for cash dividend or profit distribution that is already announced but not distributed which is included in the consideration that actually paid.
(b) Long-term equity investments that are measured using equity method
If the initial investment cost of a long-term equity investment, which is measured using equity method, is greater than the portion of fair value of the identifiable net assets of the invested entity attributable to the Company, the initial investment cost of the long-term equity investment is not adjusted. Otherwise, the difference is charged to current profit or loss, and the cost of long-term equity investment is adjusted accordingly.
Under equity method measurement, current period investment gain or losses are the net profit or losses, which are realized by the invested entity in the same year, that attributable to the Company. The portion of net profit or loss that attributable to the Company is determined based on the fair value of the identifiable assets of the invested entity and after adjusting investedentity‟s net profit according to the accounting policies and accounting period of the Group. For unrealized gain or losses from internal transactions between the Group and its associated enterprises and joint invested enterprises, the part attributable to the Group, calculated based on percentage of shareholding, is offset and, on this basis, the investment gain or losses are calculated. However, for unrealized internal transaction losses between the Group and invested entities, the impairment loss attributable to assets transfer is not offset according to “CAS No. 8– Asset Impairment”. For other comprehensive income of invested entity, the Company will adjust carrying amount of long-term equity investment and recognizing other comprehensive income in capital reserves accordingly.
The investedentity‟s net loss attributable to the Group reduces the carrying amount of long-term equity investment and other long-term equities that in nature of net investment to the invested entity to the extent of zero. If the Group undertakes obligations of the investedentity‟s extra losses, provision is to be recognized according to liabilities estimated, and charge to investment loss in current period. Net profit of the invested entity that is realized in subsequent period, the Group offset the unrealized losses using the profit attributable to the Group. After all losses are offset, resume recognizing gains attributable to the Group.
(c) Purchasing minority equity
When preparing consolidated financial statements, the difference, resulted from addition of long-term equity investment and shares of net assets calculated continuously since acquisition date (or combination date) according to new shareholding, is adjusted to capital reserve. If the capital reserve is insufficient to offset, adjusting retained earnings.
(d) Disposal of long-term equity investment
In consolidated financial statements, the parent company can dispose part of the long-term equity investment to a subsidiary given that the parent does not lose control over the subsidiary. The difference between consideration received for the disposal and the part of net assets disposed attributable to the parent is recognized inowners‟
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 equity. If the parent company losses control over a subsidiary because of long-term equity investment disposal, the accounting treatment shall refer to accounting policies stated in Note IV. 4 (2)– “Preparing consolidated financial statements”.
For long-term equity investment disposal other than situations mentioned above, the difference of carrying amount of disposed equity and the consideration actually received is charged to current profit or loss. If the long-term equity investment is measured using equity method, the comprehensive income that originally recognized inowners‟ equity shall be charged to current profit or loss proportionately at the disposal. Residual equity is recognized as long-term equity investment or other related financial assets at its carrying amount, and subsequent measurement follows accounting policies of long-term equity investment or financial assets stated in the notes. If the measurement of residual equity changes from cost method to equity method, retrospective adjustment is needed according to related rules.
(3) Basis of determining joint control over or significant influence to the invested entity
Control means a company has the ability to establish anenterprise‟s financial and business policies, and can obtain benefit from the operation of the enterprise. Joint control means jointly control of a certain business activity according to the agreement of contract. It exists only when the agreement on important accounting and business policies that needs to be reached between investors who share the control rights. Significant influence means participation in decision making to acompany‟s finance and business policies, but could not control or jointly control with other parties to the policy making. In determining whether the Company can control or implement significant influence on invested entity, potential voting factors, such as convertible debt and options and warrants that can be converted or executed in current period held by investors and other parties, have been taking into consideration.
(4) Impairment test and recognizing impairment provision
The Group checks whether there is any indicators of impairment to the long-term equity investment on each balance sheet date. If it indicates impairment to the assets, recoverable amount will be estimated. If the recoverable amount of the assets is lower than its carrying amount, impairment provision is recognized based on the difference and charged to current profit or loss.
Impairment loss of long-term equity investment is not allowed to reverse in subsequent accounting period. 11. Investment property
Investment property is property held to earn rentals or for capital appreciation or both. It includes buildings that are already leased out.
An investment property is measured initially at cost. If it is probable that the benefit related to subsequent expenditures incurred for an investment property will flow into the Company and that the cost can be measured reliably, the expenditure is included in the cost of investment property. Other subsequent expenditures are
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 charged to profit or loss in the period in which they are incurred.
The Group adopts cost method for subsequent measurement to investment property. Depreciation or amortization policy for investment properties are the same as the one for plants and buildings or land use rights.
Please refer to Note IV. 17 “Impairment of non-current non-financial assets” for details of impairment test and impairment provision recognition for investment property.
When the usage of the property changed from investment property to self-use property, the property is transferred from investment property to fixed asset or intangible asset on the changing date. If the usage of the property changes from self-use to earn rental or capital appreciation, the property is switched to investment property from fixed asset or intangible asset. If it switched to investment property that measured using cost method, it is recognized using the carrying amount before the switch. If it switched to investment property that measured using fair value method, it is recognized using the fair value on the switching date.
The investment property is derecognized when it is disposed or ceased usage permanently and it is estimated that no benefit can be obtained from the disposal. Disposal income arising from selling, transfer, disposing and damaging the investment property, less its carrying amount and taxes related to the disposal, is recognized in profit or loss.
12. Fixed asset
(1) Recognition principles
Fixed assets refer to tangible assets that are held for the purpose of goods production, providing services, lease, or for administrative purposes with useful life of more than one accounting year.
(2) Depreciation method
Fixed asset is recognized initially at cost taking into consideration of estimated disposal expenses. The fixed asset is depreciated on straight-line basis over its estimated useful life from the next month after it reached estimated useful condition. The useful lives, estimated residual ratios and annual depreciation rates for each category of fixed assets are as follows:
Estimated net Annual Estimated useful lives
Categories
residual value ratios depreciation rates (year)
(%) (%)
Plants and buildings 20-35 5 2.7-4.8 Machinery equipment 10 5-10 9-9.5 Transportation vehicles 5 5 19
Electronics devices 5 5 19
Other equipment 5 5 19
Estimated net residual value of a fixed asset is the estimated amount that the Group would currently obtain from
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 disposal of the asset, after deducting the estimated costs of disposal, if theasset‟s useful life is passed and in the condition expected at the end of its useful life.
(3) Impairment test and impairment provision recognition for fixed asset
For impairment test and impairment provision recognition for fixed asset, please refer to Note IV. 17 “Impairment of non-current non-financial asset”.
(4) Others
Subsequent expenditure in relation to fixed asset is recognized in the cost of the fixed asset and derecognizing the carrying amount of the part replaced if it is probable that the economic benefit related to the fixed asset will flow in the entity and the cost can be measured reliably. Subsequent expenditures other than this are charged to current profit or loss.
When a fixed asset is sold, transferred, retired or damaged, the disposal proceed net of the carrying amount and related taxes is charged in profit or loss for the current period.
The Group conduct reviews to the useful life, estimated net residual rate and depreciation method at least at each end of the accounting year. Any changes will be treated as changes in accounting estimates.
13. Construction in progress
Construction in progress is measured at actual project expenditure which includes construction expenditures, capitalized borrowing costs before the project reaches estimated useful condition and other related expenses. Construction in progress is transferred to fixed asset when the asset reaches its estimated useful condition. For impairment test and impairment provision recognition for construction in progress, please refer to Note IV. 17 “Impairment of non-current non-financial asset”.
14. Borrowing cost
Borrowing cost includes loan interest, associated expenses incurred in connection with the arrangement of borrowings and exchange difference arising from foreign currency loans. Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset can be capitalized starting from the time the necessary acquisition or production for bringing the asset to its estimated useful or sellable condition started, and given that the capital expenditure and borrowing cost have been incurred. The capitalization stops when the asset reaches its estimated useful or sellable conditions. Other borrowing costs are charged to profit or loss at the time they are incurred.
The interest expenses actually incurred current-period special borrowing less unused borrowing funds in bank interest earned or investment income on the temporary investment of those funds, the above mentioned amount shall be capitalized. The weighted average asset disbursement of general borrowing multiplies the capitalization rate to determine the amount of capitalization based on the accumulative asset disbursements of special loans. The capitalization rate is the weighted average interest rate of the general borrowing.
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 During the capitalization period, exchange differences on foreign currency borrowings are all capitalized; Exchange differences on foreign currency borrowings are generally included into current profit or loss.
The assets which have qualified condition of capitalization is the assets necessarily take a substantial period of time after the acquisition, construction or production activities in order to achieve their intended use or sale of fixed assets, investment property, inventories and other assets.
If the process of acquiring, constructing or producing of the assets that are capable for capitalization is interrupted abnormally and the interruption lasts more than three months, the capitalization of borrowing costs shall be suspended until the acquisition, construction or production resumes.
15. Intangible assets
(1) Intangible assets
An Intangible asset is the identifiable non-monetary asset without physical substances that is owned or controlled by the Group.
An intangible asset is initially measured at its cost. Expenditures related to the intangible asset are included in its cost if it is probable that the related economic benefit will flow into the Group and the cost can be measured reliably. Other expenditures apart from this will be charged to profit or loss in corresponding period at the time it incurred.
Land use right is generally accounted for as intangible asset. When the plants or buildings are constructed by the Group, expenditures on the land use right and on the buildings shall be recognized as the intangible asset and the fixed asset respectively. When the plants or buildings are purchased, the consideration paid shall be allocated between the land use right and the buildings. If it can be allocated reasonably, recognize entirely as fixed assets. An intangible asset with a finite useful life shall be amortized by using the straight-line method over its estimated useful life when it is available for use. The depreciable amount of an intangible asset is its cost less estimated residual value and impairment provision. An intangible asset with an indefinite useful life is not amortized.
For an intangible asset with a finite useful life, its useful life and amortize method are reviewed at the end of each accounting period. Any changes will be treated under changes in accounting estimates. Besides, the useful life of the intangible assets with indefinite useful life will be reviewed at the end of each accounting period. If there is evidence indicating that it is foreseeable that the period during which the economic benefit associated with the asset would flow into the entity, its useful life will be estimated and the asset will be amortized in accordance to the amortization policies applicable for an intangible asset with finite useful life.
(2) Research and development expenditure
TheGroup‟s expenditure on internal research and development projects are classified into expenditure on the research phase and expenditure on the development phase.
Expenditure on the research phase is recognized in profit or loss in the period in which it is incurred.
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Expenditure on the development phase is capitalized and recognized as intangible asset only when all of the following conditions are satisfied:
(a) the technical feasibility of completing the intangible asset so that it will be available for use or sale;
(b) the intention to complete the intangible asset and use or sell it;
(c) the intangible asset will generate economic benefits. Among other things, the Company can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset;
(d) the availability of adequate technical, financial and other resources to complete the development and the ability to use or sell the intangible asset; and
(e) the expenditure attributable to the intangible asset during its development phase can be measured reliably. Expenditures on the development phase, failing to meet the above conditions, are recognized in profit or loss in the period it is incurred.
Expenditures which cannot be divided into expenditures on research phase and expenditures on development phase are charged entirely in current profit or loss.
(3) Impairment test and impairment provision recognition for intangible assets
For impairment test and impairment provision recognition for intangible asset, please refer to Note IV. 17 “Impairment of non-current non-financial asset”.
16. Long-term deferred expenses
Long-term deferred expenses refer to expenditures which are incurred but shall be expensed over the beneficiary period of more than one year. Long-term deferred expenses shall be amortized on straight-line basis over its beneficiary period.
17. Impairment of non-current non-financial assets
The Group assesses, on balance sheet date, whether there are indicators for impairment to fixed assets, construction in process, intangible assets with finite useful life, investment property measured at cost, and long-term equity investment to subsidiaries, joint ventured companies and associated companies. If there are any indictors of impairment, recoverable amount is estimated and impairment test is conducted. Impairment tests are conducted each year to goodwill, intangible assets that with indefinite useful life and intangible assets that have not reached its useful condition despite whether there is indicators of impairment.
If the recoverable amount of an asset is less than its carrying amount in the impairment test, provision for impairment shall be made for the difference and recognized as an impairment loss. The recoverable amount of an asset is the higher of its fair value less costs to sell and the present value of the future cash flows expected to be derived from the asset. The fair value of an asset is determined according to the price in a sale agreement in anarm‟s length transaction. If there is no sale agreement but an active market for the asset, the fair value shall be
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 determined according to the current bid price. If there is no sale agreement or active market for the asset, the fair value shall be based on the best information available. Costs of disposal include legal costs related to the disposal of the asset, related taxes, cost of removing the asset and direct cost to bring the asset into its condition of sale. The present value of expected future cash flows of an asset shall be determined by estimating the future cash flows to be derived from continuing use of the asset and from its ultimate disposal and applying the appropriate discount rate to those future cash flows. Provision for impairment shall be made and recognized on an individual basis. If it is not possible to estimate the recoverable amount of the individual asset, the Company shall determine the recoverable amount of the asset group to which the asset belongs. An asset group is the minimum group of assets which can generate cash flows independently.
When conducting impairment test on goodwill, which is presented separately in balance sheet, the carrying amount of goodwill will be allocated to asset group or combination of asset group which are expected to enjoy benefit from the synergy effect in a business combination. If the test results indicate that the recoverable amount of the asset group or combination of asset group, which consist goodwill allocated, is lower than its carrying amount, impairment loss is recognized accordingly. The impairment loss reduces the carrying amount of goodwill that allocated to the asset group or combination of asset group. If the goodwill is insufficient to deduct, then offsetting other assets within the asset group or combination of asset group proportionately based on the weight of the carrying amount of assets other than goodwill in the asset group or combination of group.
Once an impairment loss is recognized, it shall not be reversed in subsequent periods.
18. Provisions
A provision is recognized when obligation related to contingencies satisfies following condition: (1) the obligation is a present obligation of the Group; (2) it is probable that an outflow of economic benefits will be required to settle the obligation; and (3) and the amount of the obligation can be measured reliably.
At the balance sheet date, a provision shall be initially measured at the best estimate of the expenditure required to settle the related present obligation, taking the risks, uncertainties and time value of money that related to the contingencies into consideration.
When all or part of the expenditure that needed for settling a provision is expected to be reimbursed by a third party, the reimbursement shall be recognized as an asset separately only when it is virtually certain that reimbursement will be received. The amount recognized for the reimbursement shall not exceed the carrying amount of the provision.
19. Revenue
(1) Revenue from sale of goods
Revenue from the sale of goods shall be recognized only when all of the following conditions are satisfied: (a) significant risk and rewards of ownership of the goods have been transferred to the buyer; (b) the seller retains
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; (c)the amount of revenue can be measured reliably; (d) it is probable that the associated economic benefits will flow to the seller, and (e) the associated costs incurred or to be incurred can be measured reliably.
(2) Revenue from rendering of service
When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction are recognized using the percentage of completion method on balance sheet date. The percentage of completion is calculated based on the proportion of services performed to date to the total volume of services to be performed.
The outcome of a transaction involving the rendering of services can be estimated reliably when all of the following conditions are satisfied: (a) the amount of revenue can be measured reliably; (b) it is probable that the associated economic benefits will flow to the entity: (c) the percentage of completion can be measured reliably; and (d) the costs incurred and to be incurred for the transaction can be measured reliably.
When the outcome of a transaction involving the rendering of services cannot be estimated reliably, revenue shall be recognized to the extent of costs incurred and expected to be recovered. Costs of service provided are charged to the current profit or loss as service costs. If the costs incurred are not expected to be recoverable, no revenue is recognized.
(3) Revenue from rendering usage rights
The revenue is recognized on accrual basis and based on related contracts or agreements.
(4) Interest income
The interest income shall be calculated based on the tenure of theGroup‟s monetary funds used by others and the actual interest rates used.
(5) Revenue from property leasing
The amount of revenue from property leasing are recognized when the rentals are collected or evidence of receipt of payments are obtained in accordance with the tenure (consider rental-free period, if any) and rental stated in the leasing contract or agreement.
20. Government grants
Government grants are monetary assets or non-monetary assets obtained by the Group from the government free of charge. It does not include capital contributions from the government as an owner. Government grants are classified into government grants related to assets and government grants related to income. If a government grant is in form of monetary asset, it is measured at the amount received or receivable. If a government grant is in the form of non-monetary asset, is measured at fair value. If the fair value cannot be measured reliably, it is measured at a nominal amount and recognize directly in the current profit or loss.
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 A government grant related to asset is recognized as deferred income, and evenly amortized and charged to profit or loss over its useful life. If a government grant related to income is used to compensate related expenses and losses in subsequent periods, it is recognized as deferred income. If it is used to compensate related expenses and losses that are already incurred, it is charged to current profit or loss directly.
If a government grant already recognized needs to be repaid, the carrying amount of related deferred income, if any, is to be reduced. Any excess are charged to current profit or loss. If there is no deferred income, the repayment is charged to current profit or loss directly.
21. Deferred tax asset / deferred tax liability
(1) Current period corporate income tax
At the balance sheet date, current income tax liabilities (or assets) for the current period and prior periods shall be measured at the amount expected to be paid (refunded) according to the requirement of taxation laws. The taxable income used to calculate current period income tax expenses is calculated by making corresponding adjustments to current period profit before tax in accordance with relevant taxation regulations.
(2) Deferred tax asset and deferred tax liability
Temporary differences can be recognized as deferred tax asset and deferred tax liability using balance sheet liability method. Temporary differences arise from: the difference between the carrying amount and tax base of certain assets and liabilities; the difference between the carrying amount and the tax base of an item which are not recognized as assets and liabilities but its tax base can be determined according to relevant taxation laws. A deferred tax liability shall not be recognized for the taxable temporary differences arising from the following events: (a) the initial recognition of goodwill; (b) the initial recognition of an asset or liability in a transaction which contains both of the following characteristics: (i) the transaction is not a business combination; (ii) at the time of the transaction, it affects neither accounting profit nor taxable profit (or deductible loss). For taxable temporary differences associated with investment in subsidiaries, associates and interests in jointly controlled enterprises, a deferred tax liability shall not be recognized if both of the following conditions are satisfied: (a) the Group is able to control the timing of the reversal of the temporary differences; and (b) it is probable that the temporary difference will not reverse in the foreseeable future. Except for exceptions mentioned above, the Group recognizes all other taxable temporary difference as deferred tax liability.
A deferred tax asset shall not be recognized for the deductible temporary differences associated with the initial recognition of an asset or liability in a transaction which contains both of the following characteristics: (a) the transaction is not a business combination; (b) at the time of the transaction, it affects neither accounting profit nor taxable profit (or deductible loss). For deductible temporary differences associated with investment in subsidiaries, associates and interests in jointly controlled enterprises, a deferred tax asset shall not be recognized if one of the following conditions is satisfied: (a) it is probable that the temporary difference will not reverse in the foreseeable future; and (b) taxable profits will not be available in the future, against which the temporary difference can be
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 utilized. Except for exceptions mentioned above, the Group recognizes deductible temporary difference as deferred tax asset to the extent of the future taxable profit which is probably achieved by the Group.
A deferred tax asset shall be recognized for the carry forward of unused deductible losses and tax credits to the extent that it is probable that future taxable profit will be available against which the deductible losses and tax credits can be utilized.
At the balance sheet date, deferred tax assets and deferred tax liabilities shall be measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, according to the requirement of tax laws.
At the balance sheet date, the carrying amount of a deferred tax asset shall be reviewed. The Company shall reduce the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient taxable profit will be available in future periods to allow the benefit of the deferred tax asset to be utilized. Any such reduction in amount shall be reversed to the extent that it becomes probable that sufficient taxable profit will be available.
(3) Corporate income tax
The corporate income tax includes current period income tax and deferred income tax.
The current income tax and deferred income tax shall be recognized in the current profit or loss except for: (a) the income tax arising from events or transactions which are recognized in the comprehensive income orowners‟ equity are recognized in the comprehensive income orowners‟ equity accordingly; and (b) the income tax arising from business combinations which are adjusted to the carrying amount of goodwill.
(4) Offsetting of income tax
When legal right to netting settlement is owned, net settlement or intent to acquire the assets and settle the liabilities happen simultaneously, the Group had net current tax assets against current tax liabilities are netting presentation after offset.
When the legal right to offset current tax assets against current tax liabilities is owned and the deferred tax assets and deferred tax liabilities relate to the same taxation authority on the same taxable income levied by or related to different taxable entities, but within the reverse period of significant amounts of deferred tax assets and liabilities in each future period, and the tax payer's intention to offset current tax assets and liabilities or both to obtain assets or repay debts, the deferred income tax and deferred tax assets and liabilities of the Group to netting presentation after offset.
22. Leasing
A finance lease is a lease that transfers substantially all the risks and rewards associated with the ownership of an asset. Title of the asset may or may not eventually be transferred. An operating lease is a lease other than a finance lease. TheGroup‟s lease is operating lease.
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 (1) Accounting treatment for the Group as lessee under operating leases
Lease payments under an operating lease are recognized as cost of relevant assets or charged to profit or loss for the current period on straight-line basis over the lease term. Initial direct costs incurred are charged to profit or loss for the current period directly. Contingent rentals are charged to profit or loss in the period in which they are actually incurred.
(2) Accounting treatment for the Group as lessor under operating leases
Lease receipts under an operating lease are recognized by the in the current profit or loss on a straight-line basis over the lease term. Significant initial direct costs are capitalized when they are incurred, and are recognized in profit or loss over the lease term on the basis on which the lease income is recognized. Insignificant initial direct costs shall be charged to the current profit or loss directly. Contingent rentals are charged to profit or loss in the period in which they are actually incurred.
23. Employee remuneration
In the accounting period in which an employee has rendered service to the Group, the Group recognizes the employee benefits payable as a liability.
Expenditures paid by the Group for the social security system set up the government, such as basic pension insurance, medical insurance, housing funds and others, are recognized in the costs of related assets or the current profit or loss.
When the Group terminates the employment relationship with employees before the end of the employment contracts or provides compensation as an offer to encourage employees to accept voluntary redundancy, a provision shall be recognized for the compensation arising from termination of employment relationship with employees, with a corresponding charge to the profit or loss for the current accounting period, when both of the following conditions are satisfied: (a) the Group has a formal plan for termination of employment relationship or has made an offer for voluntary redundancy, which will be implemented immediately; (b) the Group cannot unilaterally withdraw from the termination plan or the redundancy offer.
The earlier retirement plan shall be accounted for in accordance with the accounting principles for compensation for termination of employment. The salaries or wages and the social contributions to be paid for the employees who retire before schedule from the date on which the employees stop rendering services to the Company to the scheduled retirement date, shall be recognized (as compensation for termination of employment) in the current profit or loss if the recognition principles for provisions are satisfied.
24. Significant accounting judgments and estimates
When adopting the accounting policies, the Group needs to make judgments, estimates and assumptions for the carrying amount of items which are presented in financial statements and cannot be measured accurately due to internal uncertainties of business. The judgments, estimates and assumptions that are made according to
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 historical experience of the management and with consideration of other relevant factors will have effects on the reported amounts of revenue, expenses, assets as well as liabilities and the disclosure of contingent liabilities at the balance sheet date. The uncertainties of these estimates will probably result in significant adjustments on the carrying amounts of assets or liabilities which will be affected by those judgments, estimates and assumptions in future accounting periods.
The judgments, estimates and assumptions are reviewed by the Group periodically on going concern basis. If the changes in accounting estimates affect current period only, the amounts affected are recognized in current period. If the change affects both current and future periods, the amounts affected are recognized in the current accounting period as well as subsequent accounting periods.
At the balance sheet date, significant areas that require the Group to make judgments, estimates and assumptions to the amounts of financial statements items are as follows:
(1) Bad debt provision recognition
The allowance method is adopted by the Group to account for losses on bad debts in accordance with the accounting policies for receivables. Impairment of accounts receivable is made based on estimation of its recoverability, which requires the management to make judgments and estimates. The difference between the actual outcome and the estimates will have effects on the carrying amounts of accounts receivable and on provision or reversal of the provision for bad debts of the accounting period in which the estimates will be changed.
(2) Recognition of inventory impairment provision for branded watches
For the brand watches in distribution with stock aging of over 3 years, theGroup‟s management believes it is with an up going trend for its price and the sales of branded watches is promising in the future. TheGroup‟s management checked the branded watches for its NRV at the end of the accounting period, and believed that the full amount of value of branded watches can be recovered even in the case that the stock aging of the branded watches increase. If there is any evidence indicated that the NRV is lower than its carrying amount, adjustments will be made in the period when such indicators appear. Impairment to branded watches requires the management to make judgements and estimation on the basis of obtaining reliable evidences and taking consideration of the intention of holding the branded watches and events after the balance sheet date. The difference between actual outcome and the previous estimation will affect the carrying amount of the inventory and recognizing or reversal of inventory impairment provision.
TheGroup‟s management believes the method of recognizing and reviewing impairment provision for branded watches is appropriate.
(3) Impairment provision for non-current non-financial assets
At the balance sheet date, the Group judges whether there are indicators of impairment for non-current assets
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 other than financial assets. For an intangible asset with an indefinite useful life except for annually impairment test, an impairment test will be conducted if there are any indicators of impairment occur. For non-current assets other than financial assets, an impairment test shall be made if there are evidences indicating the carrying amounts cannot be recovered in full amount.
An asset or asset group is impaired when its carrying amount is higher than its recoverable amount (i.e. the higher of its fair value less the disposal expenses and the present value of the estimated future cash flows).
The net amount of fair value less the disposal expenses are determined with reference to the quoted price of similar assets in a sales agreement in anarm‟s length transaction or an observable market price less incremental costs directly attributable to disposal of the asset.
When estimating the present value of future cash flows, significant judgments are involved to the production output, selling price, relevant business costs of the asset (or asset group) and the discount rate adopted in calculating the present value. In estimating the recoverable amount, the Group will adopt all information available, such as forecasts for the production output, the selling price and relevant business costs, which are made according to reasonable and supportive assumptions.
The Group conducts impairment test to goodwill at least once a year. This requires estimating the present value of future cash flows of asset group or combination of asset group to which goodwill has been allocated. In estimating the present value of future cash flows, the Group needs estimate future cash flows generated from the asset group or the combination of asset groups and choose appropriate discount rates.
(4) Depreciation and amortization
Taking the residual value into consideration, an investment property, fixed asset and intangible asset are depreciated or amortized on a straight-line basis over its useful life. The Group reviews the useful life periodically to determine the amount of depreciation or amortization which shall be recognized in each accounting period. The useful life is determined according to historical experience of similar assets and technological renovation estimated. The amount of depreciation or amortization shall be adjusted in future accounting periods if there are material changes in estimates made before.
(5) Deferred income tax asset
A deferred tax asset shall be recognized for the unused deductible losses to the extent that it is probable that future taxable profit will be available against which the deductible losses can be utilized. Taking the taxation planning into consideration, the management of the Group is required to make significant amount of judgments to estimate the time and the amount of future taxable profit in order to determine the amount of deferred income tax assets to be recognized.
(6) Corporate income tax
For some transactions in theGroup‟s ordinary course of business, uncertainties exist in their tax treatment and
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 calculation. An approval from the tax authority is needed to determine whether an item is deductible before tax. If the final confirmation from the tax authority differs with the original estimation, the difference will have effects on the current income tax and deferred income tax of the period in which the final confirmation is made by the tax authority.
(7) After-sale quality warranty
The Group has the obligation to provide warrant to the quality of goods sold, and is responsible for damages arising from the repair and replacement due to defective goods. The Group estimates and draws related provision on its after-sale quality warranty commitment to customers with respect to the goods sold. In the case that the contingent event becomes a current obligation and performance of the current obligation may be very likely to cause economic benefit flow out of the Group, the Group recognizes provision based on the best estimates to be spent for fulfilling the related current obligation. Otherwise, if the event does not become a current obligation, no predictions needed. In the course of judgment, the Group needs to consider the recent maintenance data which may not be likely to reflect the future maintenance situations. Any increase or reduction of the provision may possibly affect the profit or loss in the future year.
V. Taxation
1. Value-added tax
The Company and its domestic subsidiaries are general taxpayers of value-added tax (VAT). The taxable amount for VAT is the remaining of the current output tax offset by deductible input tax. The output tax rate of VAT is17%. 2. Business tax
It is levied at5% to the Company and its domestic subsidiaries on the revenues from property leasing, rendering of services, and transferring assets usage right.
3. Consumption tax
The amount of consumption tax is calculated at20% on the taxable base for import or manufacturing luxury watches by the Company and its domestic subsidiaries.
4. Urban maintenance and construction tax, educational surcharge and local educational surcharge
The Company and its domestic subsidiaries pay urban maintenance and construction tax at7% on the turnover tax actually paid.
The Company and its domestic subsidiaries pay educational surcharge at3% on turnover tax actually paid. The Company and its subsidiaries located in Shenzhen pay local educational surcharges at2% on turnover tax actually paid starting from 1 January 2011 pursuant to Shen Fu Ban (2011) No.60 “Notice of Publishing the Interim Administrative Measures on Imposing Shenzhen Municipal Local Educational Surcharge” issued by the General
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Office of Shenzhen Municipal Government.
5. Corporate income tax
Applicable tax rate in Applicable tax rate in Name of the Company and its subsidiaries
current year prior year The Company (Note①,② and③) 25% 25% HARMONY Company (Note① and②) 25% 25% Shenzhen FIYTA Precision Timer Manufacturing Co., Ltd. (Manufacturing
15% 15% Company (Note③ and④)
Shenzhen World Famous Watch Center Co., Ltd (Watch Center) (Note①) 25% 25% FIYTA Hong Kong (Note⑤) 16.5% 16.5% Station 68 (Note⑤) 16.5% 16.5% Nature Art Limited (Note⑤) 16.5% 16.5% Protop Limited (Note⑤) 16.5% 16.5% World Watches International (Note⑤) 16.5% 16.5% Shenzhen FIYTA Technology Development Co., Ltd (Technology Company) (Note
25% 25%③ and⑥)
Shenzhen Xiangji Commercial& Trade Co., Ltd (Trading Company) (Note⑥) 25% 25% Beijing Henglianda Watch Center Co., Ltd (Henglianda Company) (Note⑥) 25% 25% Kunming Lishan Department Store Co., Ltd. (Lishan Department Store) (Note⑥) 25% 25% Harbin Harmony World Watches Distribution Co., Ltd. (Harbin Company) (Note
25% 25%⑥)
Shenzhen Harmony Culture Communication Co., Ltd (Culture Company) (Note
25% 25%⑥)
Emile Choureit Timing (Shenzhen) Ltd. (Emile Choureit Shenzhen Company)
25% 25% (Note⑥)
FIYTA Sales Co., Ltd (Sales Company) (Note② and⑥) 25% 25% Liaoning Hengdarui Commercial& Trade Co., Ltd (Hengdarui Company) (Note
25% 25%⑥)
Swiss Company (Note⑦) 30% 30% Note①: According to “State Council Notice on Implementing Transitional Preferential Policies to Corporate Income Tax” (Guo Fa[2007] No. 39 issued by State Administration of Taxation, the preferential tax rates enjoyed by enterprises will be phased to legal tax rate in 5 years step by step since 1 January 2008. As a result, the income tax rate for 2013 is25% for companies registered in Shenzhen.
Note②: According to the regulations stated in Guo Shui Fa (2008) No. 28, “Interim Administration Method for Levy of Corporate Income Tax to Enterprise that Operates Cross-regionally”, the head office of the Company and its branch offices, the head office of HARMONY Company and its branch offices, and the head office of Sales Company and its branch offices adopt tax submission method of “unified calculation, managing by classes, pre-paid in its registered place, settlement in total, and adjustment by finance authorities” starting from 1 January
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 2008. Branch offices mentioned above share50% of the enterprise income tax and prepay locally; and50% will be prepaid by the head offices mentioned above.
Note③: According to Notice of “Pre-tax Deduction of Enterprise Research and Development Expenses (Interim)”, Guo Shui FA (2008) No. 116 issued by State Administration of Taxation on 10 Dec. 2008, research and development expenses, which are charged to profit or loss instead of being capitalized as intangible assets, that incurred by the Company and the Manufacture Company for developing new technology, new product and new technique can be deducted by50% extra on top of actual expensed charged in profit or loss.
Note④: According to “Notice of Tax Affair”, Shen Di Shui Nan Bei Zi (2012) No. 786 issued by Shenzhen Nanshan Local Taxation Bureau, the company applied for “Reduction and Exemption in Corporate Income Tax Rate for High and New Technology Enterprises that Require Key Support from the State” on 9 April 2012. The Reduction and Exemption period is from January 1, 2012 to December 31, 2014.
Note⑤: These companies are registered in Hong Kong and the income tax rate of Hong Kong applicable is16.50% this year
Note⑥: According to the People's Republic of China Enterprise Income Tax Law, the income tax rate is25% for residential enterprises since 1 January 2008.
Note⑦: The tax rate of30% is applicable for Swiss Company as it registered in Switzerland.
6. Property tax
In accordance with Article 5 of “Notice to Publish “Reply to Issues Related to Property Tax and Vehicle and Vessel Usage Tax””, Shen Di Shui Fa (1999) No.374 issued by Shenzhen Local Taxation Bureau, property leased out by manufacturing or business entity are taxed at1.2% on the bases of70% of the original cost of the property. Properties of the Group that situated in Shenzhen are taxed according to this notice. Properties situated in other cities are taxed according to local regulations.
VI. Business combination and consolidated financial statements
1. Details of subsidiaries
(1) Subsidiaries that are acquired through incorporation or investment
Monetary Unit: in ten thousands Yuan(„0000) Balance of Actual other item Register Type of amount of that are Type of Place of Nature of Organization
Name of Subsidiary ed Business Scope business Legal Rep. investment substantially Subsidiary registration Business Code
Capital formation at the end form net of the year investment to subsidiary
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Purchase, sales
HARMONY 60,000 and maintenance Limited Xu 60,130.72
Hold Shenzhen commerce 279313935
- Company (RMB) of watch, clock and liability Dongsheng (RMB)
related spare parts
Manufacturing and
maintenance of
Manufacturing 1,000 watch and its Limited Xu 1,000
Hold Shenzhen manufacture 715210802
- Company (RMB) movements, spare liability Dongsheng (RMB)
parts, and precise
timing devices
Sales of luxury
watch and clock,
glasses,
Watch Center 280 Limited 140
Hold Shenzhen commerce accessories, gifts, Fang Juan 192236228
- (Note) (RMB) liability (RMB)
art craft (excluding
gold and silver
jewelry)
6,506 Commerce and Limited 6,506
FIYTA Hong Kong Hold Hong Kong commerce - 37954781
- (HKD) investment liability (HKD)
780 Sales ofwatches， Limited 468
Station 68 Hold Hong Kong commerce - 50994724
(HKD) domestic trading liability (HKD)
- Purchase and sale
50 and maintenance Limited Song 50
Harbin Company Hold Harbin commerce 127592103
- (RMB) of clock, watch and liability Yongkang (RMB)
accessory
Henglianda 3,000 Sales of watches Limited 3,130
Hold Beijing commerce Fang Juan 775466877
- Company (RMB) and maintenance liability (RMB)
R&D, manufacture,
sales of watches,
Technology 1,000 high-tech Limited Xu 1,000
Hold Shenzhen manufacture 69396758X
- Company (RMB) components liability Dongsheng (RMB)
production and
processing
Watches and gifts
sales and other
500 Limited Xu 500
Trading Company Hold Shenzhen commerce related consultancy 697108950
- (RMB) liability Dongsheng (RMB)
service, other
domestic trading
Conduct cultural
50 related activities, Limited 50
Culture Company Hold Shenzhen commerce Fang Juan 562782024
- (RMB) advertisement liability (RMB)
business
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Wholesale, import
&export and related
Emile Choureit
500 business of Limited 500
Shenzhen Hold Shenzhen commerce Lu Bingqiang 550312818
- (HKD) timepieces, parts, liability (HKD)
Company
accessories; watch
aftersales service
Sales and 53289178-000
World Watches 1000 Limited 1000
Hold Hong Kong commerce maintenance - - - International （HKD） liability （HKD）
service
11-10-4
Design,R&D, sales
of all kinds of clock
and watch, timing
5000 devices and related Limited Xu 5000
Sales Company Hold Shenzhen commerce 57476869-2
-（RMB） accessories; liability Dongsheng （RMB）
jewelry sales and
import, export
business
(continued)
Owners' equity of parent company In the scope Minority Amount in minority after deducting the excess of
Percentage of Percentage of of shareholders’ shareholder interest used Minority's attributable share of
Name of Subsidiary Note Shareholding(%) voting power(%) consolidation interest to offset minority losses in current period over its
(Yes/No) (RMB) shareholder loss share of opening balance of
subsidiary's owners' equity
HARMONY Company 100.00 100.00 Yes - - - - Manufacturing
100.00 100.00 Yes - - - - Company
Watch Center (Note) 50.00 50.00 Yes 140.00 - - - FIYTA Hong Kong 100.00 100.00 Yes - - - - Station 68 60.00 60.00 Yes 98.48 - - - Harbin Company 100.00 100.00 Yes - - - - Henglianda Company 100.00 100.00 Yes - - - - Technology Company 100.00 100.00 Yes - - - - Trading Company 100.00 100.00 Yes - - - - Culture Company 100.00 100.00 Yes - - - - Emile Choureit
100.00 100.00 Yes - - - - Shenzhen Company
World Watches
100.00 100.00 Yes - - - - International
Sales Company 100.00 100.00 Yes - - - -
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Note: Watch Center used to be a joint venture of the Group. According to the agreement signed between the Company and another shareholder of Water Center, Shenzhen Airlines Electronic Machinery Co., Ltd. (Shenzhen Airline Electronic), the latter is entitled to a fixed yield since 2003, but does not participate in WatchCenter‟s operation. The Company actually controlled the Watch Center's financial and operational management since then. Therefore, Watch Center was included in theCompany‟s the consolidation scope. Watch Center was closed down due to the removal of premise in 2008.
(2) Subsidiaries acquired through business combinations involving entities under common control Monetary Unit: in ten thousands Yuan(„0000) Balance of Type of Actual amount other item that Name of Type of Place of Nature of Registered business Legal Organization of investment are substantially Business Scope
Subsidiary Subsidiary registration Business Capital formatio Rep. Code at the end of form net n the year investment to subsidiary Sales of electronics
products,
tele-communication
equipment, instrument,
office equipment,
Hengdarui Limited Lu
Hold Shenyang Commerce 5,100 groceries, art craft, toys, 56755181-5 5,600.10
- Company Liability Wanjun
metal material;
conference services,
real-estate
management, house
leasing
(continued)
Owners' equity of parent company
Amount in minority after deducting the excess of
Percentage of Percentage of In the scope of Minority
shareholder interest used Minority's attributable share of
Name of Subsidiary Shareholding voting power consolidationshareholders’ Note to offset minority losses in current period over its
(%) (%) (Yes/No) interest
shareholder loss share of opening balance of
subsidiary's owners' equity
Hengdarui Company 100.00 100.00 Yes - - - - (3) Subsidiaries acquired through business combinations involving entities not under common control Monetary Unit: in ten thousands Yuan(„0000) Type of Actual amount of Balance of other item that are Name of Type of Place of Nature of Registered Business Legal Organization
business investment at the substantially form net Subsidiary Subsidiary registration Business Capital Scope Representative Code
formation end of the year investment to subsidiary
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Domestic
Lishan trading,
500 Limited Lu
120
Department materials
Hold Kunming Commerce
(RMB) Liability Wanjun
77552086-1 --
Store supply and
(RMB)
distributing
Manufacture
Swiss
500
and sales of Limited 4,841.54
Company
Hold Switzerland Commerce
Emile brand Liability
- --
(HKD)
--
(CHF)
watch
(continued)
Owners' equity of parent company Amount in minority
after deducting the excess of
Percentage of Percentage of In the scope of Minority shareholder interest
Minority's attributable share of Name of Subsidiary Shareholding voting power consolidationshareholders’ used to offset Note losses in current period over its(%) (%) (Yes/No) interest minority shareholder
share of opening balance of
loss
subsidiary's owners' equity
Lishan Department
100.00 100.00 Yes - - - - Store
Swiss Company
100.00 100.00 Yes - - - - 2. Special purpose vehicles (SPV) or business entity that is controlled through consigned operating or leasing
Based on the equity trust agreement signed by Station 68, the subsidiary of FIYTA Hong Kong, and the trustee of Nature Art Ltd and ProTop Ltd on 10 December 2009, Station 68 as the trustor owns the right of earnings from shareholding and other related right of Nature Art Ltd and ProTop Ltd. It was agreed that the trustee agrees to transfer its rights from time to time based ontrustor‟s instructions. Since then Station 68 owned the control rights over Nature Art Ltd and ProTop Ltd, and the two entities were included in the scope of consolidation by Station 68. Nature Art Ltd and ProTop Ltd are the suppliers of fashion brand watches to the Group. Major transactions that are included in the scope of consolidation between the SPVs of Nature Art Ltd and ProTop Ltd and the Company, and major asset and liability items and corresponding year end balances of Nature Art Ltd and ProTop Ltd that are recognized in consolidated financial statements are presented as follows:
Major assets, liabilities items recognized in the Item Major transactions with the Company
consolidated statements and its year-end balances At the end of 2013:
Nature Art Limited Purchase fashion brand watches
Current asset 1,132,954.37 Current liability 1,279,550.17
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Net asset （146,595.80) At the end of 2012
Nature Art Limited Purchase fashion brand watches
Current asset
1,436,354.57 Current liability
1,492,278.89 Net asset
(55,924.32) Major assets, liabilities items recognized in the Item Major transactions with the Company
consolidated statements and its year-end balances At the end of 2013:
ProTop Limited Purchase fashion brand watches
Current asset
52,193.22 Current liability
6,289.60 Net asset
45,903.62 At the end of 2012
ProTop Limited Purchase fashion brand watches
Current asset
373,267.37 Current liability
317,889.35 Net asset
55,378.02 3. Translation exchange rate used for main items in financial statements of overseas entities
Asset and liabilities items
Entities
31 December 2013 1 January 2013
FIYTA Hong Kong 1HKD= 0.7862 RMB 1HKD= 0.8109 RMB
World Watches International 1HKD= 0.7862 RMB 1HKD= 0.8109 RMB
Swiss Company 1CHF= 6.8336 RMB 1CHF= 6.8219 RMB
Income, expense and cash flow items
Entities
Year 2013 Year 2012
FIYTA Hong Kong 1HKD= 0.79855 RMB 1HKD= 0.8108RMB
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 World Watches International 1HKD= 0.79855 RMB 1HKD= 0.8108 RMB
Swiss Company 1CHF= 6.8278 RMB 1CHF=6.7652 RMB
Station 68 is a subsidiary of FIYTA Hong Kong. ProTop Ltd and Nature Art Ltd are business entities controlled by FIYTA Hong Kong. The way of foreign currency translation of these entities and the exchange rate used are the same as FIYTA Hong Kong.
VII. Notes to main items of the consolidated financial statements
Unless otherwise specified, the beginning of the year refers to 1 January 2013 and the end of the year refers to 31 December 2013. Prior year refers to year 2012 and current year refers to year 2013.
1. Cash and bank balances
Closing balance Opening balance
Item
Amount in Exchange Amount in
Amount in RMB Exchange rate Amount in RMB foreign currency rate foreign currency
Cash on hand: 487,926.67 538,810.69 -RMB - - 422,048.31 - - 521,336.94 -USD 598.00 6.0969 3,645.95 598.00 6.2855 3,758.73 -HKD 4,697.33 0.7862 3,693.04 2,919.83 0.8109 2,367.69 -EUR 5,587.20 8.4189 47,038.08 14.45 8.3176 120.19 -CHF 1,683.05 6.8336 11,501.29 1,645.75 6.8219 11,227.14 Bank deposit: 107,168,563.21 139,868,866.49 -RMB - - 95,824,234.81 - - 112,614,731.00 -USD 213,460.48 6.0969 1,301,410.16 213,763.50 6.2855 1,343,610.48 -HKD 9,135,662.45 0.7862 7,182,542.68 27,740,445.49 0.8109 22,494,727.25 -CHF 418,575.21 6.8336 2,860,375.56 500,742.38 6.8219 3,415,797.76 Other monetary funds: 6,620.86 13,317.53 -RMB - - 6,620.86 - - 13,317.53 Total 107,663,110.74 140,420,994.71 2. Notes receivable
Types Closing balance Opening balance
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Types Closing balance Opening balance
Banker's acceptance bill 100,000.00 2,000,000.00 Commercial acceptance bill 7,000,000.00 - Total 7,100,000.00 2,000,000.00 3. Accounts receivable
(1)
Accounts receivables presented by types
Closing balance
Types Carrying amount Bad debt provision
Amount Percentage(%) Amount Percentage(%) Receivables that are individually significant in
- - - - amount and provided for bad debt separately
Receivables provided for bad debt by portfolio:
Portfolio based on aging of receivables 143,086,026.61 43.09 7,193,141.49 5.03 Specific receivables 188,564,454.07 56.79 - - Subtotal 331,650,480.68 99.88 7,193,141.49 2.17 Receivables that are individually insignificant in
401,267.10 0.12 401,267.10 100.00 amount but provided for bad debt separately
Total 332,051,747.78 100.00 7,594,408.59 2.29 (continued)
Opening balance
Types Carrying amount Bad debt provision
Amount Percentage(%) Amount Percentage(%) Receivables that are individually significant in
- - - - amount and provided for bad debt separately
Receivables provided for bad debt by portfolio:
Portfolio based on aging of receivables 122,711,131.95 38.85 6,337,338.86 5.16 Specific receivables 192,743,481.22 61.02 - - Subtotal 315,454,613.17 99.87 6,337,338.86 2.01 Receivables that are individually insignificant 401,267.10 0.13 401,267.10 100.00
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 in amount but provided for bad debt separately
Total 315,855,880.27 100.00 6,738,605.96 2.13 (2) Receivables presented by aging
Closing balance Opening balance
Aging
Amount Percentage(%) Amount Percentage(%) Within 1 year 329,237,358.47 99.15 309,695,385.44 98.06 1 to 2 years 2,413,122.21 0.73 5,379,992.68 1.70 2 to 3 years 98,348.01 0.03 327,400.75 0.10 Over 3 years 302,919.09 0.09 453,101.40 0.14 Total 332,051,747.78 100.00 315,855,880.27 100.00 (3) Bad debt provision
① Accounts receivable that are provided for bad debt based on portfolio
A. among the portfolio, accounts receivable that are provided for bad debt based on aging analysis
Closing balance Opening balance
Carrying amount
Carrying amount
Aging
Bad debt Bad debt provision
Percentage
provision Amount Percentage(%) Amount
(%)
Within 1 year 140,672,904.40 98.31 6,951,829.27 121,208,736.20 98.77 6,054,073.20 1 to 2 years 2,413,122.21 1.69 241,312.22 1,024,812.69 0.84 102,481.27 2 to 3 years - - - 327,400.75 0.27 98,220.23 Over 3 years - - - 150,182.31 0.12 82,564.16 Total 143,086,026.61 100.00 7,193,141.49 122,711,131.95 100.00 6,337,338.86 B. among the portfolio, accounts receivable that are provided for bad debt using other method
Name of portfolio Carrying amount Accrual Percentage(%) Bad debt provision Portfolio of specific accounts 188,564,454.07 - -
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013②Receivables that are individually insignificant in amount but provided for bad debt separately
Percentage of bad debt
Types of receivables Carrying amount
Bad debt provision
Reason provision
Bad debt 401,267.10 100 401,267.10 Unable to recover The amount of individual receivable account with obvious evidence indicating that the customers cannot perform the payment obligations is less than RMB 800,000.00. The Group believes that there are significant risks of recovering these receivables, therefore, recognize bad debt provision by100% of such receivables.
(4) During the reporting period, there are no receivables from any shareholders held over5% (inclusive) voting shares of the Company.
(5) Top 5 receivable accounts
Relationship with the Percentage of total Name of accounts Amount Aging
Company accounts receivable(%) Shennan Circuit Co., Ltd
Related party 10,884,289.63 Within 1 year 3.28 Beijing Heshengxi Commerce&
Non-related party 6,066,361.50 Within 1 year 1.83 Trading Co., Ltd
China Resources Sun Hung Kai
Non-related party 5,278,724.00 Within 1 year 1.59Properties（Hangzhou）Limited
Fuzhou Dayang General
Non-related party 4,580,441.26 Within 1 year 1.38 Department Co., Ltd
China Resources (Shenzhen) Co.,
Non-related party 4,474,066.99 Within 1 year 1.35 Ltd
Total 31,283,883.38 9.43 (6) Receivables from related parties
For details, see Note VIII.6 Receivables from and payables to related parties.
(7) Amounts of receivables denominated in foreign currencies and exchange rate are as follows:
Closing balance Opening balance
Item Amount in foreign Amount in foreign Exchange
Exchange rate RMB equivalent RMB equivalent currency currency rate
HKD 5,574,572.74 0.7862 4,382,729.09 17,357,136.90 0.8109 14,074,902.31 CHF 46,153.29 6.8336 315,393.12 24,435.33 6.8219 166,695.38 4. Prepayments
(1) Prepayments presented by aging
Account aging Closing balance Opening balance
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Amount Percentage(%) Amount Percentage(%) within 1 year 39,385,528.82 90.57 50,392,708.30 66.821~2 years 3,501,516.25 8.05 23,964,370.10 31.782~3 years 143,958.00 0.33 726,788.00 0.96 over 3 years 456,610.00 1.05 334,700.00 0.44 Total 43,487,613.07 100.00 75,418,566.40 100.00 (2) Top 5 prepayment accounts
Relationship with the
Name of entity Amount Aging Reason for unsettlement Group
Sensheng Industrial Co., Ltd
Non-related party 11,223,468.21 Within 1 years Prepaid for purchasing Yitian (Guangzhou) Design
Non-related party 5,752,053.55 Within 2 year Prepaid for project Co., Ltd
Beat Blattmann Marketing
Non-related party 3,974,285.09 Within 1 year Prepaid for purchasing Shenzhen C.S.J Watch
Non-related party 3,509,638.19 Within 1 year Prepaid for purchasing Promotion Ltd.
Prepaid for decoration Liberty Time Center Gm BH
Non-related party 2,214,086.40 Within 1 year
project Total 26,673,531.44
(3) During the reporting period, there is no prepayment to any shareholder with5% (inclusive) of total voting shares of the Company.
(4) The amount of prepayments in foreign currency and exchange rates are as follows
Closing balance Opening balance
Item
Amount in foreign Exchange Amount in foreign Exchange
RMB equivalent RMB equivalent currency rate currency rate
HKD
14,333,541.18 0.7862 11,269,030.08 7,631,490.39 0.8109 6,188,375.56 CHF
1,571,861.72 6.8336 10,741,474.25 1,279,873.85 6.8219 8,731,171.42 5. Other receivables
(1) Other receivables presented by types
Closing balance
Types Carrying amount Bad debt provision
Amount Percentage(%) Amount Percentage(%)
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Other receivables that individually significant in
- - - - amount and provided for bad debt separately
Other receivables provided for bad debt by
portfolio
Portfolio of aging 29,759,918.66 70.09 2,023,735.67 6.80 Portfolio of specific accounts 12,700,457.11 29.91 - - Subtotal of portfolio 42,460,375.77 100.00 2,023,735.67 4.77 Other receivables that individually insignificant
- - - - in amount but provided for bad debt separately
Total 42,460,375.77 100.00 2,023,735.67 4.77 (continued)
Opening balance
Types Carrying amount Bad debt provision
Amount Percentage(%) Amount Percentage(%) Other receivables that individually significant in
- - - - amount and provided for bad debt separately
Other receivables provided for bad debt by
portfolio
Portfolio of aging 23,869,560.85 68.69 1,395,054.21 5.84 Portfolio of specific accounts 10,879,099.62 31.31 - - Subtotal of portfolio 34,748,660.47 100.00 1,395,054.21 4.01 Other receivables that individually insignificant
- - - - in amount but provided for bad debt separately
Total 34,748,660.47 100.00 1,395,054.21 4.01 (2) Other receivables presented by aging
Closing balance Opening balance
Aging
Amount Percentage(%) Amount Percentage(%) Within 1 year 37,298,344.72 87.84 29,965,969.12 86.23 1 to 2 years 2,560,158.10 6.03 4,106,149.46 11.82 2 to 3 years 2,249,227.99 5.30 342,907.78 0.99 Over 3 years 352,644.96 0.83 333,634.11 0.96
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Total 42,460,375.77 100.00 34,748,660.47 100.00 (3) Bad debt provision
Other receivable that are provided for bad debt based on portfolio
A. among the portfolio, other receivables that are provided for bad debt based on aging analysis
Closing balance Opening balance
Aging Carrying amount
Bad debt
Carrying amount
Bad debt Amount Percentage(%)
provision
Amount Percentage(%)
provision Within 1 year 26,494,988.82 89.03 1,335,820.98 20,659,513.93 86.55 1,017,165.01 1 to 2 years 1,445,878.69 4.86 144,587.87 3,008,908.59 12.61 299,369.04 2 to 3 years 1,725,872.82 5.80 517,762.65 110,245.00 0.46 33,073.50 Over 3 years 93,178.33 0.31 25,564.17 90,893.33 0.38 45,446.66 Total 29,759,918.66 100.00 2,023,735.67 23,869,560.85 100.00 1,395,054.21 B. among the portfolio, other receivables that are provided for bad debt using other method
Name of portfolio Carrying amount Bad debt provision
Portfolio of specific accounts 12,700,457.11 - (4) During the reporting period, there were no other receivables from any shareholders held over5% (inclusive) voting shares of the Company.
(5) Top 5 other receivable accounts
Relationship with the Percentage of total other Name of accounts Amount Aging
Company receivables(%) China Resources (Shenzhen)
Non-related party 3,076,860.62 Within 1 year 7.25 Co., Ltd
SkytelXi’an Hotel Co., Ltd Related party 1,750,000.00 Within 1 year 4.12 China Resources Sun Hung Kai
Non-related party 1,716,228.00 Within 1 year 4.04Properties（Hangzhou）Limited
Shenzhen Yitian Holiday World
Non-related party 1,090,523.00 Within 1 year 2.57 Property Development Co., Ltd
Shenzhen Airport Co., Ltd Non-related party 963,505.70 Within 1 year 2.27 Total 8,597,117.32 20.25 (6) Receivables from related parties
For details, see Note VIII.6 Receivables from and payables to related parties.
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 (7) Presentation of other receivables denominated in foreign currency and the exchange rates used
Closing balance Opening balance
Item
Amount in foreign Exchange Amount in foreign
RMB equivalent Exchange rate RMB equivalent currency rate currency
CHF 304,648.23 6.8336 2,081,844.14 182,433.18 6.8219 1,244,540.91 HKD 249,811.75 0.7862 196,402.00 418,026.40 0.8109 338,977.61 USD - - - 1,200.00 6.2855 7,542.60 EUR 3,000.00 8.4189 25,256.70 3,000.00 8.3176 24,952.80 6. Inventory
(1) Inventory classification
Closing balance
Item
Carrying amount Provision for obsolete stock Book value
Raw materials 122,362,922.04 4,886,794.86 117,476,127.18 Work-in-process 19,607,611.43 - 19,607,611.43 Goods in stock 2,012,241,510.56 25,982,428.24 1,986,259,082.32 Total 2,154,212,044.03 30,869,223.10 2,123,342,820.93 (continued)
Opening balance
Item
Carrying amount Provision for obsolete stock Book value
Raw materials
110,918,957.01 4,886,794.86 106,032,162.15 Work-in-process
5,034,098.24 - 5,034,098.24 Goods in stock
1,791,715,764.69 19,516,776.32 1,772,198,988.37 Total
1,907,668,819.94 24,403,571.18 1,883,265,248.76 Note: at the year end, the balance of theGroup‟s inventory of branded watches with aging over 3 years is RMB148,409,033.32, accounts for8.82% of the closing balance of all branded watches. The opening balance of the branded watches of theGroup‟s inventory with aging over 3 years is RMB109,032,580.69, about7.01% of the opening balance of the branded watches.
(2) Changes in obsolete inventory provision
Item Opening balance Increase Decrease Closing balance
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Reversed Written-off
4,886,794.86 4,886,794.86 Raw materials
19,516,776.32 6,465,651.92 25,982,428.24 Goods in stock
24,403,571.18 6,465,651.92 30,869,223.10 Total
(3) Reasons for recognizing and reversing of inventory impairment provision
Percentage of reversed Reason for reversal of provision amount accounts for closing Item Basis for recognizing provision
this year balance of this type of inventory(%) Net realizable value lower than
Raw materials N/A - related cost
Net realizable value lower than
Goods in stock N/A - related cost
7. Other current assets
Item Nature（orcontent） Closing balance Opening balance Deductible input tax ofVAT（Note） Input tax 23,781,515.54 43,674,175.80 Housing rental Store rental 3,759,382.17 6,037,338.76 Others Advertisement fee 3,271,093.36 1,331,887.41 Total 30,811,991.07 51,043,401.97 Note: it is the input tax of VAT balance of the Group that has not been offset against output tax at the end of year 2013.
8. Long-term equity investment
(1) Classification of the long-term equity investment
Item
Opening balance Increase Decrease Closing balance Investment in associated companies 41,648,741.79 1,589,198.33 - 43,237,940.12 Other equity investment 385,000.00 - - 385,000.00 Less: impairment provision for the long-term equity
300,000.00 - - 300,000.00 investment
Total 41,733,741.79 1,589,198.33 43,322,940.12
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 (2) Details of long-term equity investment
Accounting
Investee Investment cost Opening balance Increase / decrease Closing balance method
Xi’an Tangcheng Limited Cost 85,000.00 85,000.00 - 85,000.00 Shenzhen Zhonghang Culture Co.
Cost 300,000.00 300,000.00 - 300,000.00 Ltd
Shanghai Watch Industry Co., Ltd
Equity 39,916,500.00 41,648,741.79 1,589,198.33 43,237,940.12 (Shanghai Watch)
Total 42,033,741.79 1,589,198.33 43,622,940.12 (continued)
Explanation on inconsistency
Voting power Provision
Shareholding in between the shareholding Provision for Cash dividend Investee
enjoyed in recognized in
investee(%) percentage and voting impairment in current year investee(%) current year
percentage in investee
Xi’an Tangcheng
0.10 0.10 N/A
- - - Limited
Shenzhen
Zhonghang Culture 15.00 15.00 N/A
300,000.00 - - Co. Ltd
Shanghai Watch
25.00 25.00
N/A
- - - Total 300,000.00 - - (3) Investment in associate companies
Share Voting Registered percentage percentage of Investee Type of entity Legal representative Business nature Reg. capital
place held by the the Group in Group(%) investee(%) Limited produce and
Shanghai Watch Shanghai Dong Guozhang 15,350,000 25.00 25.00 Liability sale watches
(continued)
Total assets at Total liabilities at Total net assets Total revenue Net profit for Organization Investee Relation
the year end the year end at the year end during the year the year code Shanghai Watch 96,176,699.34 14,710,516.78 81,466,182.56 72,493,931.14 6,356,793.32 Associate. 134657657 (4) Detail of impairment provision for the long-term equity investment
Item Opening balance Increase Decrease Closing balance Shenzhen Zhonghang Culture Co. Ltd
300,000.00 - - 300,000.00
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 9. Investment property
(1) Details of investment property
Item Opening balance Increase Decrease Closing balance the investment property that
subsequently measured using cost 244,379,430.63
-
9,143,745.87 235,235,684.76 method
Less: impairment provision
-
- - - Total
244,379,430.63
-
9,143,745.87 235,235,684.76 (2) The investment property measured using cost method
Item Opening balance Increase Decrease Closing balance I. Total original cost 340,029,020.44 - - 340,029,020.44 Property and buildings 340,029,020.44 - - 340,029,020.44 II. Total accumulated depreciation 95,649,589.81 9,143,745.87 - 104,793,335.68 Property and buildings 95,649,589.81 9,143,745.87 - 104,793,335.68 III. Total impairment provision - - - - Property and buildings - - - - IV. Total book value 244,379,430.63 235,235,684.76 Property and buildings 244,379,430.63 235,235,684.76 Note: The depreciation and amortization charged in 2013 is RMB 9,143,745.87.
10. Fixed assets
(1) Details of fixed assets
Item Opening balance Increase Decrease Closing balance I. Total original cost 422,423,727.03 10,346,844.53 1,943,624.15 430,826,947.41 Incl. property and buildings 306,333,695.09 1,367,668.61 440,190.71 307,261,172.99 Machinery 41,992,755.98 3,158,626.78 340,546.54 44,810,836.22 Transport vehicles 13,805,058.95 847,215.52 343,466.00 14,308,808.47 Electronic devices 24,919,765.50 3,216,114.82 451,434.30 27,684,446.02 Other equipment 35,372,451.51 1,757,218.80 367,986.60 36,761,683.71 II. Total accumulated depreciation 104,622,459.16 20,749,861.52 1,434,337.58 123,937,983.10
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Item Opening balance Increase Decrease Closing balance Incl. property and buildings 33,708,825.54 10,149,700.00 128,308.04 43,730,217.50 Machinery 17,131,790.81 4,133,534.79 236,657.04 21,028,668.56 Transport vehicles 8,221,111.90 1,627,527.59 314,655.20 9,533,984.29 Electronic devices 16,653,120.95 3,183,933.77 406,215.49 19,430,839.23 Other equipment 28,907,609.96 1,655,165.37 348,501.81 30,214,273.52 III. Total carrying amount 317,801,267.87 306,888,964.31 Incl. property and buildings 272,624,869.55 263,530,955.49 Machinery 24,860,965.17 23,782,167.66 Transport vehicles 5,583,947.05 4,774,824.18 Electronic devices 8,266,644.55 8,253,606.79 Other equipment 6,464,841.55 6,547,410.19 - - - - IV. Total impairment provision
Incl. property and buildings - - - - Machinery - - - - Transport vehicles - - - - Electronic devices - - - - Other equipment - - - - V. Total book value 317,801,267.87 306,888,964.31 Incl. property and buildings 272,624,869.55 263,530,955.49 Machinery 24,860,965.17 23,782,167.66 Transport vehicles 5,583,947.05 4,774,824.18 Electronic devices 8,266,644.55 8,253,606.79 Other equipment 6,464,841.55 6,547,410.19 Note: Depreciation charged in 2013 was RMB
20,749,861.52.
(2) Fixed assets with restricted ownership
As at 31 December 2013, the property with the original cost of RMB
26,441,545.26,
carrying amount of RMB 23,469,717.54
was mortgaged for long-term loan of RMB
7,293,022.01.
(3) Fixed assets that do not have certificate for property right
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Reason for not having Predicted date for receiving the
Item Book value certificate for property rights certificate
Office rooms for Harbin Branch Defective in property right Unknown
351,765.60 (4) Cost of theGroup‟s assets that are fully depreciated but still in use amounts to RMB 51,958,797.93 at the end of year 2013.
11. Construction in progress
(1) Details of construction in progress
Closing balance Opening balance
Item
Impairment Carrying Impairment
Carrying amount Book value Book value provision amount provision
Clock& Watch base in Guangming
6,608,187.55 - 6,608,187.55 1,523,855.00 - 1,523,855.00 New District
FIYTA tech. Building 20F office
- - - 2,165,064.12 - 2,165,064.12 decoration project
FIYTA tech. Building 19F west area
- - - 177,446.67 - 177,446.67 decoration project
6,608,187.55 - 6,608,187.55 3,866,365.79 - 3,866,365.79 Total
(2) Changes for material construction in progress projects
Transferred to
Opening Other
Project name Budget Increase
fixed asset in
Closing balance balance current year decrease
Clock& Watch base in
300,000,000.00 1,523,855.00 5,084,332.55 - - 6,608,187.55 Guangming New District
(continued)
Total Rate of Percentage of
Incl. capitalized Source of Project name capitalized capitalization in investment to Progress
in current year funding interest current year budget(%)
Clock& Watch base in
- - - 2.20 Preliminary Other Guangming New District
12. intangible assets
Item Opening balance Increase Decrease Closing balance I. Total original cost 48,781,266.42 835,757.14 - 49,617,023.56
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Item Opening balance Increase Decrease Closing balance Land-use right 34,854,239.40 - - 34,854,239.40 Software system 3,562,205.50 835,757.14 - 4,397,962.64 Right to use trademarks 10,364,821.52 - - 10,364,821.52 II. total accumulated amortization 12,031,639.24 1,416,772.60 - 13,448,411.84 Land-use right 6,225,134.84 719,946.36 - 6,945,081.20 Software system 1,859,114.59 638,906.32 - 2,498,020.91 Right to use trademarks 3,947,389.81 57,919.92 - 4,005,309.73 III. total impairment provision - - - - Land-use right - - - - Software system - - - - Right to use trademarks - - - - IV. Total book value 36,749,627.18 36,168,611.72 Land-use right 28,629,104.56
27,909,158.20 Software system 1,703,090.91
1,899,941.73 Right to use trademarks 6,417,431.71
6,359,511.79 Note: Amortization charged in 2013 is RMB
1,416,772.60.
13. Goodwill
(1) Details of goodwill
Name of investee or events that Opening Closing Impairment provision at Increase Decrease
constitutes goodwill balance balance the year end Lishan Department Store 1,735,756.48 - - 1,735,756.48 1,735,756.48 (2) Methods of impairment test to goodwill and provision recognition
HARMONY Company, a subsidiary of the Company, acquired100% shares of Lishan Department Store on 31 March 2008 with consideration of RMB1,200,000.00. On the date of acquisition, the fair value of identifiable net assets of Lishan Department Store was RMB-535,756.48. HARMONY Company recorded the difference of RMB1,735,756.48 as goodwill in the consolidated financial statements. At the end of 2008, it carried out the impairment test for the goodwill. As the recoverable amount was lower than its book value, HARMONY Company charged the goodwill impairment losses of RMB1,735,756.48 to the profit or loss in year 2008.
14. Long-term deferred expenses
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Reason for Item Opening balance Increase Amortization Other decrease Closing balance
other decrease Counter
fabrication 43,797,298.00 41,796,328.58 38,854,087.51 - 46,739,539.07 - expenses
Renovation
58,899,718.13 51,509,724.29 - 82,497,957.56 - 75,107,963.72
expenses
Fee for
15,295,637.91 6,769,273.68 - 15,295,637.91 - 6,769,273.68
representation
Others 600,076.18 2,632,291.86 1,222,817.00 - 2,009,551.04 - Total 126,274,611.58 118,623,976.48 98,355,902.48 - 146,542,685.58 - 15. Deferred income tax assets
(1) Deferred income tax asset that is already recognized
Closing balance Opening balance
Deductible temporary Deductible temporary Item
Deferred income tax Deferred income tax
difference& deductible difference& deductible assets assets
losses losses Asset impairment provision 9,618,849.12 40,487,367.36 7,603,452.98 32,537,231.35 Offset internal unrealized profit 60,608,908.97 246,128,085.69 47,528,528.65 193,473,413.38 Deferred income 737,500.00 2,950,000.00 201,500.00 906,000.00 Deductible loss 3,193,876.20 14,143,969.77 2,930,736.04 13,095,609.63 Others - - 3,075,469.94 12,301,879.76 Total 74,159,134.29 303,709,422.82 61,339,687.61 252,314,134.12 (2) Details of unrecognized deferred income tax asset
Item Closing balance Opening balance
Asset impairment provision 2,035,756.48 2,035,756.48 Deferred income - 600,000.00 Total 2,035,756.48 2,635,756.48 Note: the Group did not recognize above deductible temporary difference mainly because there would be uncertainty on whether sufficient taxable income can be obtained in future.
16. Details of asset impairment provision
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Opening
Provided for in
decreased this year
Item Closing balance balance current year
Reversed Written-off
Bad debt provision 8,133,660.17 2,247,636.75 - 763,152.66 9,618,144.26 Provision for obsolete stocks 24,403,571.18 6,465,651.92 - - 30,869,223.10 Impairment provision for long-term equity
300,000.00
- - - 300,000.00 investment
Impairment provision for goodwill 1,735,756.48
- - -
1,735,756.48 Total 34,572,987.83 8,713,288.67 - 763,152.66 42,523,123.84 17. Other non-current assets
Item Details Closing balance Opening balance China Tenth Metallurgy Group Limited
Project decoration fund 10,976,867.85
Corporation
Kuntai Real Estate Development Group
House building fund 21,500,000.00
Co., Ltd
Total 32,476,867.85
18. Assets with restricted ownership or use right
Item Closing balance Reason for restriction
Book value of the assets used for guarantee 23,469,717.54 For guaranteed loan
Book value of assets with restricted ownership or use right for
351,765.60 Defective in property rights other reasons:
Total 23,821,483.14
19. Short-term loans
Item Closing balance Opening balance
Guaranteed loan 710,000,000.00 1,409,800,000.00 Credit Loan 313,000,000.00 - Total 1,023,000,000.00 1,409,800,000.00
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Note: theCompany‟s loan of RMB 390,000,000.00 is guaranteed by China National Aviation Group. TheCompany‟s loan of RMB 120,000,000.00 is guaranteed by HARMONY Company. HARMONYCompany‟s loan of RMB 200,000,000.00 is guaranteed by the Company.
20. Accounts payables
(1) Details of accounts payables
Item Closing balance Opening balance
Trade payables 210,748,187.96 181,379,333.93 Payables for material purchased 11,388,092.75 29,706,892.74 Payables for project warranty 211,339.76 211,339.76 Total 222,347,620.47 211,297,566.43 (2) During the report period, there are no payables to any shareholder or related party with5% (inclusive) of total voting shares of the Group. For details, see Note VIII.6 Receivables from and payables to related parties. (3) Payables in significant amount with aging over 1 year
Settled after the balance Creditor Amount Reasons for not settled
sheet date (Yes/No) Shenzhen Tianjiuxing Industrial Co., Ltd 773,252.30 Invoice not issued No
Foshan Shunde Daliang Weiye Watch Co., Ltd. 519,571.54 Invoice not issued No
Shenzhen Peishi Watch Co., Ltd 316,709.55 Invoice not issued No
Total 1,609,533.39
(4) Presentation of payables denominated in foreign currencies:
Closing balance Opening balance
Item
Amount in foreign
RMB
Amount in foreign
RMB currency Exchange rate equivalent currency Exchange rate equivalent HKD 2,752,017.46 0.7862 2,163,636.13 2,163,491.00 0.8109 1,754,374.85 CHF 382,955.21 6.8336 2,616,962.72 1,244,638.99 6.8219 8,490,802.73 21. Advance from customers
(1) Details of the advances
Item Closing balance Opening balance
Advances for trade 9,667,278.30 12,131,032.89 (2) During the reporting period, there is no advance payment from any shareholder with5% (inclusive) of
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 voting shares of the Company.
(3) Advances received from related parties
For details, see Note VIII.6 Receivables from and payables to related parties.
(4) Advances that are denominated in foreign currencies are as follows:
Closing balance Opening balance
Item
Amount in foreign Exchange Amount in foreign Exchange
RMB equivalent RMB equivalent currency rate currency rate
78,226.33 0.7862 61,501.54 17,278.10 0.8109 14,010.81 HKD
22. Employee remuneration payable
Item Opening balance Increase Decrease Closing balance I. Wages, bonuses and allowances 27,778,001.08 329,844,164.52 326,719,220.09 30,902,945.51 II. Employee Welfare - 7,939,322.60 7,939,322.60 - III. Social insurance - 42,890,066.74 42,890,066.74 - Incl. 1.medical insurance - 11,101,237.35 11,101,237.35 - 2.endowment insurance - 27,941,685.32 27,941,685.32 - 3.unemployment insurance - 2,126,759.56 2,126,759.56 - 4.work-related injury insurance - 771,014.19 771,014.19 - 5.reproduction insurance - 949,370.32 949,370.32 - IV. Housing funds - 12,709,025.17 12,709,025.17 - V. Expenditure for labor union and
312,978.14 6,361,938.69 6,404,050.19 270,866.64 employee training
VI. Compensation for termination of labor
- 273,975.00 273,975.00 - contract
VII. Others - 787,637.71 787,637.71 - Total 28,090,979.22 400,806,130.43 397,723,297.50 31,173,812.15 Note: The employee remuneration accrued at year end by the Group will be distributed in the coming accounting year.
23. Taxes payable
Item Closing balance Opening balance
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Item Closing balance Opening balance
Value added tax 23,538,538.96 29,641,692.34 Consumption tax 161,657.78 32,555.56 Business tax 701,932.65 669,050.42 Corporate income tax 30,923,761.70 22,388,435.03 Individual income tax 698,803.51 1,230,752.82 City maintenance& construction tax 389,481.45 392,294.10 Property tax 257,112.75 40,390.99 Educational surcharges 207,011.67 174,743.58 Stamp duty 293,628.46 709,908.93 Embankment protection fee 34,037.50 55,574.92 Others 422,208.83 369,676.54 Total 57,628,175.26 55,705,075.23 24. Interest payable
Item Closing balance Opening balance Interest payable to bank 2,622,859.82 7,376,397.56 Interest payable for bond issued 16,800,000.00 -合计 19,422,859.82 7,376,397.56 25. Other payables
(1) Details of other payables
Item Closing balance Opening balance
within 1 year
20,229,108.51 26,922,292.711~2 years
8,749,189.38 1,128,478.982~3 years 694,894.09 1,480,662.36 over 3 years
8,781,742.32 7,921,980.06 Total 38,454,934.30 37,453,414.11
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 (2) During the reporting period there is no other payable to any shareholder with5% (inclusive) of total voting shares of the Company.
(3) Payables to related parties
For details, see Note VIII.6 Receivables from and payables to related parties.
(4) Other payables in significant amount and with aging over 1 year
Settled after the balance Creditor Amount Reasons for unpaid
sheet date (Yes/No) Shenzhen Tencent Computer System Co., Ltd. 5,142,001.36 within lease term No
Sun Dai Wai 1,143,134.80 Not yet been return No
OracleR&D Center (Shenzhen) Limited 681,900.00 within lease term No
CHEN CHAO CHUNG 786,200.00 Not yet been return No
Zhu Jin 500,000.00 Meal card guarantee No
VIA Technologies (Shenzhen) Co., Ltd. 482,965.70 within lease term No
Shenzhen AVIC Real Estate Co., Ltd 424,800.00 within lease term No
Shenzhen Good Family Sports-Ware Chain Limited 414,630.00 within lease term No
Central Iron& Steel Research Institute 400,000.00 within lease term No
Bravo Tech (Shenzhen) Co., Ltd. 375,432.24 within lease term No
China Merchants Bank Shenzhen Sci-tech Park Branch 349,692.00 within lease term No
Shenzhen Uni-phone Self-service Kara-Ok Entertainment
334,880.00 within lease term No
Supermarket Limited
Shenzhen Oriental Boiler Control Co., Ltd 318,491.60 within lease term No
Shenzhen Yongantang Chain Pharmacy Limited 301,644.00 within lease term No
241,827.38
Shenzhen Honestar Electronic Limited within lease term No
Shenzhen Avic Changtai Investment Development. Co.,
221,712.00 within lease term No
Ltd
Total 12,119,311.08
(5) Other payables in significant amount
Creditor Closing balance Nature or content Shenzhen Tencent Computer System Limited 5,142,001.36 Lease guarantee
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Sun Dai Wai 1,143,134.80 Temporary borrowing OracleR&D Center (Shenzhen) Limited 811,590.00 Lease guarantee CHEN CHAO CHUNG 786,200.00 Lease guarantee Shenzhen Yitianxun Technology Co., Ltd 613,657.80 Lease guarantee Zhu Jin 500,000.00 Meal card guarantee VIA Electronics (Shenzhen) Co., Ltd. 482,965.70 Lease guarantee Shenzhen Avic Real Estate Co., Ltd 424,800.00 Lease guarantee Shenzhen Good Family Sports-Ware Chain Limited 414,630.00 Lease guarantee Central Iron& Steel Research Institute 400,000.00 Lease guarantee Bravo Tech (Shenzhen) Co., Ltd. 375,432.24 Lease guarantee Shenzhen Honestar Electronic Limited 375,144.00 Lease guarantee China Merchants Bank Shenzhen Sci-tech Park
349,692.00 Lease guarantee Branch
Shenzhen Uni-phone Self-service Kara-Ok
334,880.00 Lease guarantee Entertainment Supermarket Limited
Shenzhen Oriental Boiler Control Co., Ltd 318,491.60 Lease guarantee BILLION GENESIS ENTERPRISES LTD 306,618.00 Promotion expenses Shenzhen Yongantang Chain Pharmacy Limited 301,644.00 Lease guarantee Shenzhen Hengchangrong Investment Co., Ltd
240,000.00 Lease guarantee Shenzhen Avic Changtai Investment Development.
221,712.00 Lease guarantee Co., Ltd
Shenzhen Hangjian Engineering Cost Consultation
208,304.00 Lease guarantee Co., Ltd
Total 13,750,897.50
(6) Presentation of other payables denominated in foreign currencies:
Closing balance Opening balance
Item
Amount in foreign Amount in foreign
currency Exchange rate RMB equivalent currency Exchange rate RMB equivalent 3,416,640.64 0.7862 2,686,162.87 2,772,237.60 0.8109 2,248,007.47 HKD
3,613.12 6.0969 22,028.83 3,613.12 6.2855 22,710.27 USD
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 73,242.38 6.8336 500,509.11 335,699.41 6.8219 2,290,107.81 CHF
26. Non-cu rrent liabilities due within one year
(1) Details of non-current liability due within one year
Item Closing balance Opening balance Long-term loan due within one year (note VII. 28) 39,310,000.00 55,846,683.00 (2) Long-term loan that is due within one year
① Details of Long-term loan that is due within one year
Item Closing balance Opening balance
Guaranteed loan 39,310,000.00 55,846,683.00② Top five Long-term loans that will due within one year
Closing balance Opening balance Starting Ending Interest
Lender Currency
Amount in Amount in Amount in Amount in date daterate（%）
foreign currency RMB foreign currency RMB Bank of
China
2012-11-9 2014-11-8 3.2472
HKD
30,000,000.00 23,586,000.00
-
(Hongkong)
Bank of
China
2012-10-5 2014-10-4 3.2510
HKD
20,000,000.00 15,724,000.00
-
(Hongkong)
China
Construction
2011-8-18 2013-8-18
Floating HKD - - 34,435,000.00 27,923,341.50 Bank (Asia)
Corp. Ltd.
China
Construction
2011-9-23 2013-9-23
Floating HKD - - 34,435,000.00 27,923,341.50 Bank (Asia)
Corp. Ltd.
Total - 39,310,000.00 - 55,846,683.00 27. Other current liabilities
Item Content Closing balance Opening balance Accrued expense for shopping
Accrued expense 4,924,394.22 10,088,432.90 centers
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 28. Long-term loans
(1) Classification of long-term loans
Item Closing balance Opening balance Guaranteed loan (Note①) 118,291,928.00 96,391,683.00 Credit loan 87,000,000.00 - Mortgage loan (Note②) 7,293,022.01 7,838,020.45 Less: Long-term loan due within one year (note VII.
39,310,000.00 55,846,683.00 26)
Total 173,274,950.01 48,383,020.45 Note①: FIYTA HongKong‟ loan of
RMB117,930,000.00 is
guaranteed by the Company, and theCompany‟s loan of
RMB361,928.00 is guaranteed by China National Aviation Group.
Note②: As described in Note VII.10, the loan is mortgaged by property and buildings with original cost of RMB26,441,545.26
and book value of
RMB23,469,717.54.
② Top five long-term loans
Closing balance Opening balance Interest
Lender Starting date Ending date Currency
Amount in foreign Amount in foreign
rate（%）
Amount in RMB Amount in RMB currency currency
Bank of
China,
2013-11-8 2018-11-7 6.4000 RMB - 87,000,000.00 - - Shenzhen
Branch
Bank of China
2013-8-5 2016-8-4 3.0000 HKD 50,000,000.00 39,310,000.00 - - (Hongkong)
Bank of China
2013-7-11 2016-7-10 3.0000 HKD 50,000,000.00 39,310,000.00 - - (Hongkong)
Dettes
bancairesà
2012-10-31 2022-10-31 3.0000 CHF 950,000.00 6,491,920.00 1,000,000.00 6,821,900.00 long terme
China
Construction
2011-11-30 2017-11-30 4.2500 HKD 1,018,954.48 801,102.01 1,253,077.38 1,016,120.45 Bank (Asia)
Corp. Ltd.
Bank of China
2012-11-9 2014-11-8 3.2472 HKD - - 30,000,000.00 24,327,000.00 (Hongkong)
Bank of China
2012-10-5 2014-10-4 3.2510 HKD - - 20,000,000.00 16,218,000.00 (Hongkong)
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Closing balance Opening balance Interest
Lender Starting date Ending date Currency
Amount in foreign Amount in foreign
rate（%）
Amount in RMB Amount in RMB currency currency
Total 172,913,022.01 48,383,020.45 29. Bonds payable
Name of Issued Opening
Par value Date of issue Maturity Increase Decrease Closing balance Bond amount balance
12 FIYTA
400,000,000.00 27 Feb. 20133+2 years 400,000,000.00 - 3 9 7 ,728,975.00 - 397,728,975.00 Debt
Note: Increase in current year including bond issue income of 400,000,000.00 deducting issuing fee of 3,100,000.00 and bond interest adjustment of 828,975.00.
30. Other non-current liabilities
Item Content Closing balance Opening balance Deferred income Government subsidy 2,950,000.00 1,506,000.00 Details of the deferred income:
Charged to
Asset / Opening Newly acquired non-operating Other
Item Closing balance income balance in current year income in current Changes
related year
Fund to finance establishing of the Income 600,000.00 -
600,000.00
- -
technology center related Special funds of provincial
Income cooperation by production, study and 236,000.00 -
236,000.00
- -
related research
Income The 13th Bonus for Patent Award 350,000.00 - 350,000.00 - -
related Special fund for Shenzhen strategic
Income and new industry development (note 320,000.00 - - - 320,000.00
related①)
Technical study for civil aviation Income - 1,200,000.00 - - 1,200,000.00
airborne cockpit clock (note②) related Special fund for cultural and creative
Income - 780,000.00 - - 780,000.00
industries development (note③) related The 14th Bonus for Patent Award Income - 600,000.00 - 250,000.00 350,000.00
(note④) related
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 2012 integration project of
production, teaching and research Income - 300,000.00 - - 300,000.00
related (note⑤)
Total 1,506,000.00 2,880,000.00 1,186,000.00 250,000.00 2,950,000.00
Note①: Special fund for Shenzhen strategic and new industry development was obtained according to the Notice to Circulate the Plan of the 4th Batch of Shenzhen Specific Fund for Strategic and New Industry Development Shen Fa Gai (2012) No.1241 which is jointly issued by Development and Reform Commission of Shenzhen Municipality, Economy, Trade and Information Commission of Shenzhen Municipality, Technological Innovation Commission of Shenzhen Municipality and Finance Commission of Shenzhen Municipality,
Note②: Special fund was obtained from the First Special Fund for Technology Innovation Scheming Technological Development Project (Advanced Equipment Manufacturing) of 2013 Municipal Technology Research and Development Fund by Technological Innovation Commission of Shenzhen Municipality and Finance Commission of Shenzhen Municipality according to Administrative Measures for Shenzhen Technology Research and Development and Administrative Measures for Shenzhen Technology Scheming Project.
Note③: Special Fund for FIYTA Cameraman Series Wristwatch project of the company was obtained from Shenzhen Municipal Bureau of Culture Sport and Tourism according to Administrative Measures for Shenzhen Municipal Cultural Innovation Industry Development Special fund.
Note④: Special fund was obtained according to Notice about Payment of Bonus for the 13th Chinese Patent Award Yue Zhi Gui (2013) No.165 issued by Intellectual Property Right Bureau of Guangdong Province.
Note⑤: Special Fund for Nickelless Stainless Steel Technology and Its Application of Production in Contact with Human Skin of 2012 Guidance Integration Project Fund by Production, Study and Research was obtained according to Yue Cai Jiao (2012) No.393 Special funds of provincial cooperation by production, study and research.
31. Share capital
Opening balance Increase or decrease in current year Closing balance Shares
New
Item Percentage Bonus increased by Percentage Amount shares Others Subtotal Amount
(%) shares reserves (%) issued
capitalization
I. Share capital with
sales restrictions
1.State-owned holdings
162,977,327.00 41.49 - - - (162,977,327.00) (162,977,327.00) - - 2. Other domestic
49,733.00 0.01 - - - - - 49,733.00 0.01
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Opening balance Increase or decrease in current year Closing balance Shares
New
Item Percentage Bonus increased by Percentage Amount shares Others Subtotal Amount
(%) shares reserves (%) issued
capitalization
holdings
Incl. Domestic legal
person holdings
- - - - - - - - - Domestic natural
person holdings
49,733.00 0.01 - - - - - 49,733.00 0.01 Total share capital with
sale restriction
163,027,060.00 41.50 - - - (162,977,327.00) (162,977,327.00) 49,733.00 0.01 II. Shares capital without
sales restriction
1. Ordinary Shares in
RMB
148,092,810.00 37.71 - - - 162,977,327.00 162,977,327.00 311,070,137.00 79.20 2. Domestic Listed
Foreign Shares
81,648,000.00 20.79 - - - - - 81,648,000.00 20.79 Total share capital with
no sales restriction
229,740,810.00 58.50 - - - 162,977,327.00 162,977,327.00 392,718,137.00 99.99 III. Total share capital
392,767,870.00 100.00 - - - - - 392,767,870.00 100.00 Note: The share capital has been verified with the capital verification report of Zhongrui Yuehua Yan Zi (2011) No. 093, which is issued by RSM China CPAs.
32. Capital reserve
Item Opening balance Increase Decrease Closing balance Share premium 511,014,504.13 - - 511,014,504.13 Other capital reserves 14,492,448.65 - - 14,492,448.65 Total 525,506,952.78 - - 525,506,952.78 33. Surplus reserve
Item Opening balance Increase Decrease Closing balance Statutory surplus reserve
86,602,786.61 8,126,413.59 - 94,729,200.20 Discretionary surplus reserve
61,984,894.00 - - 61,984,894.00 Total 148,587,680.61 8,126,413.59 - 156,714,094.20 Note: according to the Company Law and Articles of Association, the Group draws statutory surplus reserve at10% of net profit. If the statutory surplus reserve is over50% of theCompany‟s registered capital, drawing of
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 statutory surplus reserve can be stopped.
34. Undistributed profit
(1) Changes in undistributed profit
Item 2013 2012
Percentage for drawing or distribution Undistributed profit at the end of prior year
386,984,676.78 327,521,960.58
before adjustments
Adjustments to undistributed profit at the
- -
beginning of the year
Undistributed profit at the beginning of the
386,984,676.78 327,521,960.58
year after adjustment
Plus: Net profit attributable to the owner of
130,125,124.48 116,003,746.03
the parent company for the year
Less: statutory surplus reserve drawn 8,126,413.59 17,264,242.83 10.00%
Dividends payable to ordinary shares 39,276,787.00 39,276,787.00
Undistributed profit at the end of the year 469,706,600.67 386,984,676.78
(2) Description on distribution of dividend
Pursuant to the “Disclosure of Equity Distribution for Year 2012” approved at the 2012 Annual General Meeting held on 21 June 2013, the Company distributed to all shareholders cash bonus of RMB1.00 (tax inclusive) for every 10 shares held based on total shares of 392,767,870 as at 31 December 2012. Total cash dividend distributed was RMB39,276,787.00.
(3) Information onsubsidiary‟s surplus reserve in the reporting period
In 2013, HARMONY Company, a subsidiary of the Company, drew surplus reserve of RMB
2,498,675.52, of which RMB
2,498,675.52
is attributable to the parent company. In 2013, Technology Company, a subsidiary of the Company, drew surplus reserve of RMB
1,091,078.81,
of which RMB
1,091,078.81
is attributable to the parent company.
35. Operating revenue and operating cost
(1) Operating revenue and operating cost
Item 2013 2012
Revenue from main businesses 3,065,746,163.46 2,991,864,757.79 Revenue from other businesses 37,750,798.76 32,097,769.46 Total operating revenue 3,103,496,962.22 3,023,962,527.25 Cost for main businesses 1,971,723,379.05 1,968,893,588.06
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Item 2013 2012
Cost for other businesses 18,401,766.69 13,432,515.15 Total operating cost 1,990,125,145.74 1,982,326,103.21 (2) Main businesses presented by industry sectors
2013 2012
Industry sector
Operating revenue Operating cost Operating revenue Operating cost Watches 2,984,547,987.19 1,957,755,888.80 2,921,298,013.87 1,947,898,460.61 Leasing 87,163,386.27 13,967,490.25 74,475,743.92 20,995,127.45 Subtotal 3,071,711,373.46 1,971,723,379.05 2,995,773,757.79 1,968,893,588.06 Less: the amount offset internally 5,965,210.00 - 3,909,000.00 - Total 3,065,746,163.46 1,971,723,379.05 2,991,864,757.79 1,968,893,588.06 (3) Main businesses presented by product
2013 2012
Product
Operating revenue Operating cost Operating revenue Operating cost Branded watches 2,301,861,216.97 1 ,733,324,366.47 2 ,3 4 0 ,606,349.27 1,743,211,337.42 FIYTA watch 682,686,770.22 224,431,522.33 580,691,664.60 204,687,123.19 Property leasing 87,163,386.27 13,967,490.25 74,475,743.92 20,995,127.45 Subtotal 3,071,711,373.46 1,971,723,379.05 2,995,773,757.79 1,968,893,588.06 Less: the amount offset internally 5,965,210.00 - 3,909,000.00 - Total 3,065,746,163.46 1,971,723,379.05 2,991,864,757.79 1,968,893,588.06 (4) Main businesses presented by region
2013 2012
Region
Operating revenue Operating cost Operating revenue Operating cost Southern China 976,738,481.63 607,835,407.97 895,648,801.46 571,148,231.58 Northwest China 558,311,345.16 363,009,177.34 659,330,623.07 438,260,186.50 Northern China 493,280,745.22 322,405,824.15 479,248,802.83 320,336,861.27 Eastern China 432,760,214.07 281,143,805.58 404,175,793.35 267,559,919.58 Northeast China 282,672,877.95 184,819,369.04 284,318,407.81 190,070,745.97
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 2013 2012
Region
Operating revenue Operating cost Operating revenue Operating cost Southwest China 321,982,499.43 212,509,794.97 269,142,329.27 181,517,643.16 Subtotal 3,065,746,163.46 1,971,723,379.05 2,991,864,757.79 1,968,893,588.06 Less: the amount offset internally - - - - Total 3,065,746,163.46 1,971,723,379.05 2,991,864,757.79 1,968,893,588.06 (5) Operating revenue from top five customers
Total revenue from top five Percentage to total revenue in the Period
customers same period(%)
2013 364,634,780.38 11.75 2012 365,528,090.62 12.09 36. Business tax and surcharges
Item 2013 2012
Consumption tax 2,074,363.64 600,967.05 Business tax 5,226,316.17 4,679,351.01 Urban maintenance and construction tax 8,328,827.60 7,505,581.49 Educational surcharge 3,279,324.36 3,193,879.88 Local educational surcharge 1,698,249.94 1,497,358.60 Others 2,137,965.82 1,097,675.41 Total 22,745,047.53 18,574,813.44 Note: please refer to Note V. Taxes for rate of related taxes.
37. Distribution expenses
Item 2013 2012
Salary 198,561,735.42 185,072,205.82 Amortization of long-term deferred expense 83,050,098.35 58,206,131.80 Market promotion expense 74,637,103.44 53,488,467.59 Rental 73,519,504.95 71,224,267.12 Advertising expense 48,099,428.53 45,516,513.86 Department store expense 44,324,424.71 37,404,820.33
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Endowment insurance 30,506,204.96 27,296,736.05 Utilities 12,240,139.39 12,209,618.08 Packing expense 12,230,148.26 13,730,837.99 Exhibition expenditures 10,981,402.90 8,000,061.58 Others 61,147,652.01 63,537,782.74 Total 649,297,842.92 575,687,442.96 38. Administrative expenses
Item 2013 2012
Salary 93,537,918.74 87,408,793.22R&D expenses 28,586,506.35 24,145,086.19 Social insurance 9,171,484.22 10,072,463.28 Depreciation 7,611,997.08 5,590,166.06 Travel expenses 7,087,469.93 6,424,413.84 Office expenses 4,039,583.59 3,202,393.92 Labor union fund 3,978,802.49 3,994,997.72 Entertainment expenses 3,511,587.34 3,442,251.90 Employee walfere 3,040,177.19 2,643,170.24 Conference expenses 2,844,205.05 3,361,813.62 Others 22,886,427.45 43,119,163.41 Total 186,296,159.43 193,404,713.40 39. Financial expenses
Item 2013 2012
Interest expense
88,455,766.03 99,748,784.32 Less: interest income
1,292,200.79 1,648,908.98 Gain or loss in foreign exchange
(997,317.84) 691,321.89 Bank charges
12,060,882.69 16,556,090.61
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Plus: fee for loan guarantee
1,200,000.00 2,720,000.00 Others
841,111.46 588,428.63 Total 100,268,241.55 118,655,716.47 40. Asset impairment loss
Item
2013 2012
Bad debt loss 2,257,019.16 2,335,008.46 Inventory impairment loss 6,465,651.92 4,553,087.44 Total 8,722,671.08 6,888,095.90 41. Investment income
(1) Details of investment income
Item 2013 2012
Investment income from the long-term equity investment measured by
1,589,198.33 1,732,241.79 equity method
Investment income from disposal of long-term equity investment - (213,572.76) Total 1,589,198.33 1,518,669.03 (2) Investment income from the long-term equity investment measured by equity method
Reason for Investee 2013 2012
increase/decrease Variation in profit from the Shanghai Watches 1,589,198.33 1,732,241.79
investee
42. Non-operating income
Amount included in this Item 2013 2012
year’s non-recurring profit or loss Total gain on disposal of the non-current assets
465,627.90 3,442.36 465,627.90 Including: gain on disposal of fixed assets
465,627.90 3,442.36 465,627.90 Clearing of payables that cannot be paid
169,783.51 - 169,783.51 Breach penalty
286,572.72 718,870.37 286,572.72 Government subsidy (see the table below: details of
3,610,593.36
5,176,129.77 3,610,593.36 government subsidies)
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Amount included in this Item 2013 2012
year’s non-recurring profit or loss Others
321,549.91 1,203,252.86 321,549.91 Total
4,854,127.40 7,101,695.36 4,854,127.40 Details of government subsidies:
Item 2013 2012
Asset / income related 2011-2013 Government Subsidy for FIYTA
990,000.00 - Income related Brand DevelopmentProject（note①）
Fund to finance establishment of technical 600,000.00
- Income relatedcenter（note②）
Government subsidy from Shenzhen watch
and clock Association for 2011 Basel Exhibition 435,204.83 - Income related（note③）
Shenzhen municipal reward fund for backbone
370,000.00 - Income relatedenterprise（note④）
Award of the 13th Chinese Patent Award (note
350,000.00
- Income related⑤)
2012 Shenzhen Municipal Prize for Progress in
Science and Technology (Standard Prize) by
300,000.00 - Income related Market Supervision and Administration Bureau
of ShenzhenMunicipality（note⑥）
Special funds of provincial cooperation by
236,000.00 - Income related production, study andresearch（note⑦）
2012 Prize for Progress in Science and
Technology by Technology Innovation
200,000.00 - Income related Commission of ShenzhenMunicipality（note
⑧）
Government subsidy for standardization 112,500.00
- Income relatedproject（note⑨）
Subsidy for Exhibition Expenditures 16,888.53 - Income related
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Item 2013 2012
Asset / income related Award of the 12th Chinese Patent Award - 1,650,000.00 Income related Fund for implementing standardize strategic - 1,096,884.97 Income related Shenzhen Special Subsidy for High-tech
- 1,070,699.00 Income related Sector
Fund to finance establishment of technical
- 600,000.00 Income related center
Subsidies for booths at 2011 Basel Exhibition - 248,599.80 Income related Subsidy fund for “A Kind of Watch and the Way
- 150,000.00 Income related of Manufacturing” project
Specific subsidy fund for self-innovation
- 177,000.00 Income related industry development of Nanshan District
2010 Guangdong Provincial Science and
- 100,000.00 Income related Technology Award
Subsidy for patent application - 50,000.00 Income related Subsidy specifically for development of
Shenzhen-based private and small, medium - 32,946.00 Income related sized enterprises
Total 3,610,593.36 5,176,129.77
Note①: It was obtained according to Shen Fu (2008) No. 149 “ Notice of Several Measures to Optimize Government Service and Promote Industry Development issued by Shenzhen Municipality.
Note②: It was the construction subsidy of RMB3,000,000.00 obtained as the Company Technology Center was designated as Shenzhen Municipal Enterprises Technology Center according to Shen Jing Mao Fa (2002) No. 93 jointly issued by Economy and Trade Bureau of Shenzhen Municipality, Finance Bureau of Shenzhen Municipality, National Tax Bureau of Shenzhen Municipality and Regional Tax Bureau of Shenzhen Municipality. The project was finished at the beginning of 2009. The amortization in current year is RMB600,000.00; total amortization is RMB3,000,000.00.
Note③: It was the Government subsidy from Shenzhen watch and clock Association for 2011 Basel Exhibition that obtained by the Company.
Note④: The fund was allocated for the Company by Economy, Trade and Information Commission of Shenzhen
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Municipality according to “2011 Shenzhen Municipal Governmental Reward Fund Scheme for Supporting Backbone Enterprises in Development Acceleration”.
Note⑤: It was the specific prize awarded according to Yue Zhi Gui (2012) No.157 “Notice about Payment of Bonus for the 12th Chinese Patent Award” issued by Intellectual Property Right Bureau of Guangdong Province. Note⑥: It was prize awarded by Standardization Office, Market Supervision and Administration Bureau of Shenzhen Municipality according to “Shenzhen Municipality Notice of 2012 Shenzhen Municipal Science and Technology Reward.
Note⑦: It was Special Funds of Provincial cooperation by production, study and research obtained according to Yue Cai Jiao (2009) No. 138.
Note⑧: It was 2012 Shenzhen Municipal Prize for Progress in Science and Technology that obtained by the Company.
Note⑨: It was the Standardization Fund obtained by Technology Company, a subsidiary company of the Company.
43. Non-operating expenses
Amount included in Item 2013 2012
non-recurring profit or loss this year Loss on non-current assets disposal 76,660.91 26,173.80 76,660.91 Incl. loss on fixed assets disposal 76,660.91 26,173.80 76,660.91 Overdue payment - 100,013.94 - Donation expense 680,000.00 100,000.00 680,000.00 Others 251,821.31 332,982.03 251,821.31 Total 1,008,482.22 559,169.77 1,008,482.22 44. Income tax expense
Item 2013 2012
Current period income tax measured according to the tax law and related
34,171,124.35 36,044,135.03 regulations
Deferred income tax adjustment (12,819,446.68) (15,217,164.37) Total 21,351,677.67 20,826,970.66
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 45. Basic EPS and Diluted EPS
(1) Basic EPS and diluted EPS are presented as follows:
2013 2012
Profit during the reporting period
Basic EPS Diluted EPS Basic EPS Diluted EPS Net profit attributable to theCompany’s
0.331 0.331 0.295 0.295 ordinary shareholders
Net profit attributable to the Company's
ordinary shareholders after deducting 0.324 0.324 0.288 0.288 non-recurring profits and losses
(2) The process to calculate EPS and diluted EPS
In the reporting period, there are no potential dilutive ordinary shares, therefore, diluted EPS equals to basic EPS.① In calculating basic EPS, net profit for each period attributable to ordinary share shareholders is:
Item 2013 2012
theperiod’s net profit attributable to ordinary share shareholders 130,125,124.48 116,003,746.03 Including: net profit attributable to continued operations 130,125,124.48 116,003,746.03 Net profit attributable to theCompany’s ordinary share
127,158,503.02 113,231,625.62 shareholders after deducting non-recurring profit or loss
Including: net profit attributable to continued operations 127,158,503.02 113,231,625.62② In calculation of the basic EPS, the denominator is the weighted average number of outstanding ordinary shares. The calculation process is as follows:
Item 2013 2012
Number of outstanding ordinary shares at the beginning of the year 392,767,870.00 392,767,870.00 Plus: the weighted average number of the ordinary shares issued
- - during the year
Less: the weighted average number of the ordinary shares
- - brought back during the year
The weighted number of outstanding ordinary shares at the end of
392,767,870.00 392,767,870.00 the year
46. Other comprehensive income
Item 2013 2012
Translation differences of financial statements denominated in foreign currencies (1,113,864.13) 186,202.13
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 47. Notes to cash flow statement
(1) Other cash received related to operating activities
Item 2013 2012
Product promotion fee
20,237,279.49 19,718,427.13 Security deposit
3,116,164.07 5,402,954.06 Government grant
5,304,593.36 4,582,129.77 Interest income
1,292,200.79 1,648,908.98 Petty cash
19,612.78 256,321.97 Others
2,359,830.90 5,662,079.85 Total 32,329,681.39 37,270,821.76 (2) Other cash paid related to operating activities
Item 2013 2012
Rental 68,825,385.00 68,466,150.08 Marketing and promotion fee 72,337,103.48 50,990,247.50 Advertising fee 63,543,116.36 41,897,425.85 Department store expenses 28,831,716.21 19,589,105.85 Travel expenses 13,105,233.11 11,875,570.38R&D expenses 11,828,678.97 8,696,080.85 Exhibition expenses 10,981,402.89 6,483,995.58 Office expenses 10,597,505.13 10,194,122.89 Entertainment expenses 7,757,673.11 7,262,012.20 Transportation expenses 7,385,888.70 7,209,754.45 Utility 5,791,708.37 12,262,224.15 Posting and telecommunication expenses 3,816,213.36 4,932,949.23 Insurance premium 3,185,695.46 2,200,857.13 Fees for agent services 2,507,014.01 3,291,029.51 Vehicle expenses 2,341,293.91 2,909,415.22 Packing expenses 2,290,982.21 37,890.18 Tranining expenses 1,630,544.86 2,575,086.69 Maintenance expenses 1,541,915.02 1,163,387.33 Consultation expenses 268,443.80 444,233.66 Others 26,672,983.97 42,257,948.68
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Item 2013 2012
Total 345,240,497.93 304,739,487.41 (3) Other cash received related to financing activities
Item 2013 2012
Banker’s acceptance bill finance
-
125,000,000.00 (4) Other cash paid related to financing activities
Item 2013 2012
Guarantee expense 1,200,000.00 3,320,000.00Banker’s acceptance bill finance - 125,000,000.00 Bank charges forbanker’s acceptance bill - 31,250.90 Fee for bond issuing 502,986.00 581,521.70 Consideration paid for equity transfer under business combination involving
- 28,050,000.00 entities under common control
Total 1,702,986.00 156,982,772.60 48. Supplementary information to cash flow statement
(1) Reconciliation from net profit to operating cash flows
Item 2013 2012
1. Reconciliation from net profit to operating cash flows
Net profit 130,125,019.81 115,659,865.83 Plus: asset impairment provision 7,950,136.01 (57,729,058.90) Depreciation of fixed asset and amortization of investment property 29,893,607.39 31,949,154.81 Amortization of intangible asset 1,416,772.60 1,355,809.78 Amortization of long-term deferred expense 98,355,902.48 78,288,070.83 Loss (gain) on disposal of fixed assets, intangible assets and other
(388,966.99) 22,731.44 long-term assets
Financial expense 90,158,752.03 103,057,212.95 Investment loss (income) (1,589,198.33) (1,518,669.03) Decrease (increase) of the deferred income tax assets (12,819,446.68) (15,088,771.18) Increase (decrease) of deferred income tax liabilities - (128,393.19)
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Item 2013 2012
Decrease (increase) of inventory (246,543,224.09) (229,205,152.15) Decrease (increase) of operating receivables (26,941,577.23) (20,626,766.59) Increase (decrease) of operating payables 9,429,713.92 39,810,625.16 Net cash flows from operating activities 79,047,490.92 45,846,659.76 2. Significant investment and financing activities not involving cash
transactions:
3. Net changes in cash and cash equivalents:
Cash at the end of the year 107,663,110.74 140,420,994.71 Less: cash at the beginning of the year 140,420,994.71 179,972,430.02 Plus: cash equivalents at the end of the year - - Less: cash equivalents at the beginning of the year - - Net increase in cash and cash equivalents (32,757,883.97) (39,551,435.31) (2) Composition of cash and cash equivalents
Item 2013 2012
① Cash 107,663,110.74 140,420,994.71 Incl. Cash on hand 487,926.67 538,810.69 Bank deposit available for immediate payment 107,168,563.21 139,868,866.49 Other monetary funds available for immediate payment 6,620.86 13,317.53② Cash equivalents - - Cash and cash equivalent at the end of year 107,663,110.74 140,420,994.71 VIII. Related party relationship and transactions
1. Details of the parent company of the Company
Name Relationship Type of enterprise Registered place Legal representative Name of business investment in industries, China National
Parent company Limited by shares Shenzhen Wu Guangquan
domestic trade, material Aviation Group
supply and distribution (continued)
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Voting percentage
Percentage of the Ultimate
owned by parent
Name Registered capital Company shares held controller of the Organization code company in the
by parent company(%) Company
Company(%)
China National
1,110,631,996.00 41.49 41.49 27935122-9 Aviation Group AVIC
Note: CATIC Shenzhen Company holds35.63% shareholding of China National Aviation Group. CATIC Shenzhen Company is a wholly owned subsidiary of China Aero Space International Holdings Limited (CASI), and China Aviation Industry Corporation (AVIC) directly holds62.52% of the equity of CASI. Therefore, the ultimate controlling party of the Company is AVIC.
2. Subsidiaries of the Company
See Note VI.1 Details of subsidiaries.
3. Jointly controlled and associate company of the Group
See Note VII.8 Long-term equity investment (3) for details.
4. Other related parties of the Group
Name of other related parties Relationship with the Company Organization code Shenzhen CATIC Property Management Limited ( CATIC
Controlled by the same party 19219400-5 Property Management)
Shenzhen CATIC Building Equipment Co., Ltd. ( CATIC
Controlled by the same party 743201073 Building Company)
Rainbow Department Store Co., Ltd. (Rainbow Department
Controlled by the same party 618842912 Store )
Shennan Circuits Co., Ltd. ( Shennan Circuits ) Controlled by the same party 192195761 CATIC Real Estate Company Controlled by the same party 279340845 Shenzhen Maiwei Cable TV Equipment Limited ( Maiwei
Controlled by the same party 618810902 Company )
AVIC Securities Co., Ltd. ( AVIC Securities Company) Controlled by the same party 741986153Xi’an Skytel Hotel Co., Ltd. (Skytel Hotel) Controlled by the same party 76197033-5 Shenzhen AVIC Nanguang Elevator Co., Ltd. ( AVIC
Controlled by the same party 192350741 Nanguang Company)
Shenzhen CATIC City Real Estate Development Co., Ltd.
Controlled by the same party 676667833 ( CATIC City Real Estate Company)
Shenzhen CATIC City Development Co., Ltd. ( CATIC City
Controlled by the same party 192194005 Development Company)
CATIC Guanlan Property Development Co., Ltd.（CATIC
Controlled by the same party 763495945 GuanlanProperty）
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 CATIC Changtai Investment Development Co., Ltd. (CATIC
Controlled by the same party 732047808 Changtai Company )
Shenzhen CATIC Jiufang Asset Management Limited
Controlled by the same party 580064616 (CATIC Jiufang Asset Mgmt Company)
CATIC Trust Company Controlled by the same party 158265930 Ganzhou CATIC Real Estate Development Co., Ltd.
Controlled by the same party 664794739（Ganzhou CATIC Real EstateCompany）
Shenzhen CATIC City Investment Co., Ltd (CATIC City
Controlled by the same party 279340845 Investment)
Chengdu CATIC Property Development Co., Ltd (Chengdu
Controlled by the same party 66047931X CATIC Property Company)
Chengdu CATIC Sunshine Real-estate Co., Ltd (Chengdu
Controlled by the same party 202384639 CATIC Sunshine Company)
Zhonghang Electronic Measuring Instruments Co., Ltd
Controlled by the same party 745016111 (Zhonghang Electronic Company)
Shenzhen CATIC Theme Real-estate Co., Ltd (CATIC
Controlled by the same party 618811913 Theme Company)
AVIC Training Center - - 5. Related party transactions
(1) Receiving services from related parties
Related
2013 2012
transaction
Type of pricing
Percentage of the Percentage of the Related party
transaction principle and
Amount
same category
Amount
same category decision-maki
transactions(%) transactions(%) ng procedure
Zhonghang Electronic Processing Negotiated
38,931.11 0.32 - - Company Charges price
CATIC Property Property Negotiated
1,781,754.76 100.00 1,605,837.42 100.00 Management management price
Ganzhou CATIC Real Estate Negotiated
Rental 949,918.91 1.30 808,000.60 1.13 Company price
Chengdu CATIC Property Negotiated
Rental 546,919.23 0.75 75,758.92 0.11 Company price
Negotiated
AVIC Training center Training 281,013.20 17.18 46,600.00 1.81 price
Department
Negotiated
Rainbow Department Store store 2,393,915.69 5.64 2,939,606.14 7.86 price
expenses
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 (2) Sales of goods and rendering of services to related parties
Related
2013 2012
transaction
Type of pricing principle
Percentage of
Percentage of the Related party
transaction and
the same
Amount Amount
same category decision-making
category
transactions(%) procedure
transactions(%)
product sales
Rainbow Department
and rendering of Negotiated price 80,900,993.83 2.71 73,447,892.06 2.60 Store
service
AVIC product sales Negotiated price 1,906,205.98 0.06 11,013,948.55 0.39 Shennan Circuits Material sales Negotiated price 24,274,127.74 75.51 4,008,042.15 20.44 Zhonghang Electronic
Material sales Negotiated price 168,714.53 0.52 - - Company
Chengdu CATIC
product sales Negotiated price
- - 36,244.44 - Sunshine Company
CATIC Trust Company product sales Negotiated price
- - 36,196.58 - CATIC Property
product sales Negotiated price
- - 7,852.99 - Management
(3) Related party leasing
Recognized rental Type of Basis for determination
Lessor Lessee Start date End date
income in current
leased assets of lease income
year
CATIC Real
The Company property 2012-5-16 2015-5-15 Negotiated price 1,508,832.00 Estate Company
The Company Maiwei Company property 2012-2-1 2013-5-30 Negotiated price 233,285.00 CATIC Property
The Company property 2012-10-1 2015-9-30 Negotiated price 2,660,544.00 Management
AVIC Securities
2012-9-16 2013-9-15
The Company property Negotiated price 1,037,310.00 Company
2013-9-16 2014-9-16
CATIC City Real
The Company property 2012-5-16 2015-5-15 Negotiated price 22,320.00 Estate Company
CATIC City
The Company Development property 2012-5-16 2015-5-15 Negotiated price 22,320.00 Company
CATIC Guanlan
The Company property 2012-5-16 2015-5-15 Negotiated price 89,280.00 Property
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 CATIC Changtai
The Company property 2012-5-16 2015-5-15 Negotiated price 1,285,632.00 Company
The Company Skytel Hotel property 2012-8-1 2013-12-31 Negotiated price 3,500,000.00 Rainbow
2010-5-1 2013-4-30
The Company property Negotiated price 667,105.82 Department Store
2013-5-1 2016-4-30
CATIC Jiufang 2011-7-19 2013-6-30
The Company Asset Mgmt property Negotiated price 378,066.00 2013-7-1 2016-6-30
Company
CATIC City
The Company Investment property 2012-5-16 2015-5-15 Negotiated price 90,024.00 Company
CATIC Theme
The Company Real-estate Co., property 2012-5-16 2015-5-15 Negotiated price 945,624.00 Ltd
(4) Related party guarantees
If the guarantee finished Guarantor Guarantee Amount guaranteed Effective date Expiring date
(Yes/No) The Company HARMONY Company 50,000,000.00 2013-7-3 2014-7-2 No The Company HARMONY Company 50,000,000.00 2013-7-18 2014-7-17 No The Company HARMONY Company 20,000,000.00 2013-7-23 2014-7-22 No The Company HARMONY Company 50,000,000.00 2013-7-26 2014-7-25 No The Company HARMONY Company 30,000,000.00 2013-7-30 2014-7-29 No The Company HARMONY Company 100,000,000.00 2013-12-30 2014-12-29 No The Company FIYTA Hong Kong 39,310,000.00 2013-7-11 2016-7-10 No The Company FIYTA Hong Kong 39,310,000.00 2013-8-5 2016-8-4 No The Company FIYTA Hong Kong 15,724,000.00 2012-10-5 2014-10-4 No The Company FIYTA Hong Kong 23,586,000.00 2012-11-9 2014-11-8 No China National Aviation
The Company 50,000,000.00 2013-6-4 2014-6-3 No Group
HARMONY Company The Company 50,000,000.00 2013-9-24 2014-9-23 No HARMONY Company The Company 70,000,000.00 2013-10-8 2014-10-7 No China National Aviation
The Company 60,000,000.00 2013-8-7 2014-2-6 No Group
China National Aviation
The Company 130,000,000.00 2013-9-3 2014-3-3 No Group
China National Aviation
The Company 150,000,000.00 2013-8-23 2014-2-21 No Group
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 China National Aviation
The Company 361,928.00 2013-12-24 2023-12-23 No Group
China National Aviation
The Company 400,000,000.00 2013-2-27 2016-2-26 No Group
(5) Remuneration for key management members
Annual remuneration levels 2013 2012
Total amount of Remuneration (in ten thousands Yuan)
1,105 1,056 Incl: (number of persons fall in corresponding remuneration level)
Below 10 3 5 Between 10 and 100 2 3 Between 100 and 200 6 5 Over 200 - 1 (6) The Group paid China National Aviation Group fees for guarantee amounting to RMB 2,080,000.00 in current year.
(7) The Group borrowed funds from China National Aviation Group amounting to RMB100,000,000.00 in current year and the principal has been repaid with interest of RMB 205,833.33.
6. Receivables from and payables to related parties
(1) Receivables from and prepayments to related parties
Closing balance Opening balance
Item
Bad debt
Carrying amount Carrying amount Bad debt provision provision
Accounts receivable:
Rainbow Department Store 2,154,095.08 107,704.75 799,263.70 39,963.19 AVIC 644,059.00 32,202.95 676,811.00 33,840.55 Shennan Circuits 10,884,289.63 544,214.48 1,831,638.46 91,581.92 Zhonghang Electronic Company 197,396.00 9,869.80 - - Chengdu CATIC Sunshine Company - - 4,060.00 203.00 AVIC Training Center - - 1,764.00 176.40 Total 13,879,839.71 693,991.98 3,313,537.16 165,765.06
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Closing balance Opening balance
Item
Bad debt
Carrying amount Carrying amount Bad debt provision provision
Notes receivable:
Shennan Circuits 7,000,000.00 - 2,000,000.00 - Zhonghang Electronic Company 100,000.00 - - - Total 7,100,000.00 - 2,000,000.00 - Other receivables:
CATIC Property Management 6,700.00 335.00 - - Skytel Hotel
1,750,000.00 87,500.00 - - Ganzhou CATIC Real Estate Company 122,665.60 6,133.28 122,665.60 6,133.28 Rainbow Department Store 167,856.60 8,392.83 119,401.60 5,970.08 AVIC Training Center 11,424.70 571.24 150,000.00 7,500.00 Chengdu CATIC Property Company 115,616.40 5,780.82 100,536.00 5,026.80 Total 2,174,263.30 108,713.17 492,603.20 24,630.16 (2) Payables to and advances from related parties
Item Closing balance Opening balance Accounts payable:
Zhonghang Electronic Company 45,549.40 - Advances received:
AVIC
15,469.00 - Other payables:
CATIC Building Company
8,227.10 8,227.10 AVIC Nanguang Company
3,354.90 3,354.90 CATIC City Investment Company
37,700.00 37,700.00 AVIC Securities Company
178,920.00 170,400.00 Maiwei Company
- 64,602.00 CATIC Real Estate Company
424,800.00 424,800.00
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Rainbow Department Store
60,000.00 60,000.00 CATIC Changtai Company
221,712.00 221,712.00 CATIC Jiufang Asset Mgmt Company
60,606.00 - Chengdu CATIC Real Estate Company
4,364.60 - Total 999,684.60 990,796.00 IX. Contingencies
As of 31 December 2013, the Group does not have any significant contingent events need to be disclosed. X. Commitments
1. Significant Commitments
(1) Capital commitment
RMB Yuan Item End of 2013 Beginning of 2013 Contract signed but not yet recognized in the financial
statements
Long-term assets purchase and construction commitment
7,117,817.60 - (2) Operating lease commitment
As of the balance sheet date, the irrevocable operating lease contracts signed by the Group are as follows: RMB Yuan Item End of 2013 Beginning of 2013 The minimum lease payment for irrevocable operating lease:
The 1st year after the balance sheet day 39,333,248.01 43,799,887.75 The 2nd year after the balance sheet day 25,091,639.54 29,299,270.75 The 3rd year after the balance sheet day 10,776,187.77 19,141,295.67 Years afterwards 6,241,600.00 15,032,033.33 Total 81,442,675.32 107,272,487.50 XI. Events after the balance sheet date
1. The proposal of 2013 profit distribution plan to be recommended to the GeneralShareholders‟ Meeting has been approved on the
8th
Board Meeting of the
7th
Board of Directors on 27 February 2014. It
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 proposed to distribute cash dividend of RMB 1.00 (tax inclusive) for every 10 shares held by shareholders based on the total 392,767,870 shares as at 31 December 2013. Cash dividends that need to be distributed amount to RMB39,276,787.00. The proposal is subject to the approval from Annual GeneralShareholders‟ Meeting. 2. Pursuant to the resolution passed in the
8th
Board Meeting of the
7th
Board of Directors on 27 February 2014, the Company plans to apply credit facility from banks using guaranteed loan, mortgage loan and other means of no more than RMB1,800,000,000.00 in 2014. The proposal of credit facility application is subject to approval from Annual GeneralShareholders‟ Meeting.
3. Pursuant to the resolution passed in the
8th
Board Meeting of the
7th
Board of Directors on 27 February 2014, the Company plans to apply credit facility of no more than RMB 1,000,000,000.00 from banks in form of guaranteed loan for HARMONY Company, Sales Company, Manufacturing Company, Technology Company, FIYTA Hong Kong, and Trading Company in 2014. The credit facility is included in the total bank facility of RMB1,800,000,000.00 to be applied by the Company in 2014. The proposal of credit facility application is subject to approval from Annual GeneralShareholders‟ Meeting.
XII. Notes to other significant events
1. Watch Center de-registered its registration with the State Tax Bureau of Futian District, Shenzhen Municipality on 3 December 2013 and de-registration of the commerce and industry information is still in processing.
2. The Company is authorized to publicly issue company bond with no more than RMB 400,000,000.00 in par value pursuant to the “Approval of Public Issuing of Company Bond by FIYTA Holdings Ltd” (Zheng Jian Xu Ke (2012) No.1209) issued by SASAC on 9 September 2012. On 26 February 2013, the coupon rate of the bond was determined to be5.04%. The Company will issue the bond to the public investors over the internet using this coupon rate starting from 27 February 2013 (the code for internet issuing is “101699”, and the name is “12 FIYTA Debt”), and will issue the bond to institutional investors offline from 27 February 2013 to 1 March 2013. Current period bond issued is amounting to RMB400,000,000.00 and the net fund of RMB396,900,000.00 raised after deduction of issuing expenses has been remitted to the bank account designated by the Company on 5 March 2013. The interest is counted starting from 27 February 2013.
XIII. Notes to main items of theCompany’s financial statements
1. Accounts receivable
(1) Receivables presented by types
Closing balance
Types
Carrying amount Bad debt provision
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Amount Percentage(%) Amount Percentage(%) Receivables that are individually significant in
amount and provided for bad debt - - - - separately
Receivables provided for bad debt by portfolio: - - - - Portfolio of aging - - - - Portfolio of specific accounts 239,193,039.81 100.00 - - Subtotal of portfolios 239,193,039.81 100.00 - - Receivables that are individually insignificant
- - - - in amount but provided for bad debt separately
Total 239,193,039.81 100.00 - - (continued)
Opening balance
Types Carrying amount Carrying amount
Amount Percentage(%) Amount Percentage(%) Receivables that are individually significant in
amount and provided for bad debt - - - - separately
Receivables provided for bad debt by portfolio: - - - - Portfolio of aging 1,491,713.44 0.62 286,124.69 19.18 Portfolio of specific accounts 239,386,390.85 99.38 -
Subtotal of portfolios 240,878,104.29 100.00 286,124.69 0.12 Receivables that are individually insignificant
- - - - in amount but provided for bad debt separately
Total 240,878,104.29 100.00 286,124.69 0.12 (2) Receivables presented by aging
Closing balance Opening balance
Aging
Amount Percentage(%) Amount Percentage(%) Within 1 year - - 138,269,259.91 57.40 1 to 2 years 138,082,739.18 57.73 102,187,976.32 42.43 2 to 3 years 101,110,300.63 42.27 270,685.75 0.11
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Closing balance Opening balance
Aging
Amount Percentage(%) Amount Percentage(%) Over 3 years - - 150,182.31 0.06 Total 239,193,039.81 100.00 240,878,104.29 100.00 (3) Bad debt provision
Accounts receivable that are provided for bad debt based on portfolio
A. among the portfolio, accounts receivable that are provided for bad debt based on aging analysis
Closing balance Opening balance
Aging Carrying amount
Bad debt
Carrying amount
Bad debt Amount Percentage(%)
provision
Amount Percentage(%)
provision Within 1 year - - - 64,884.69 4.35 3,244.23 1 to 2 years - - - 1,020,960.69 68.44 102,096.07 2 to 3 years - - - 377,394.06 25.30 152,310.39 Over 3 years - - - 28,474.00 1.91 28,474.00 Total - - - 1,491,713.44 100.00 286,124.69 B. among the portfolio, accounts receivable that are provided for bad debt using other method
Name of portfolio Carrying amount Bad debt provision
Portfolio of specific accounts 239,193,039.81 - (4) During the reporting period, there are no receivables from any shareholders held over5% (inclusive) voting shares of the Company.
(5) Top 5 receivable accounts
Percentage of Relationship with the
Name of accounts Amount Aging total accounts Company
receivable(%) Sales Company Consolidated
239,193,039.81
1 to 3 years 100.00 (6) Accounts receivable from related parties
Relationship with the Percentage of total accounts Name of accounts Amount
Company receivable(%) Sales Company Consolidated 239,193,039.81 100.00 2. Other receivables
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 (1) Other receivables presented by types
Closing balance
Types Carrying amount Bad debt provision
Amount Percentage(%) Amount Percentage(%) Other receivables that individually significant in
- - - - amount and provided for bad debt separately
Other receivables provided for bad debt by
- - - - portfolio
Portfolio of aging 2,511,372.60 0.19 153,225.81 6.10 Portfolio of specific accounts 1,335,273,187.22 99.81 - - Subtotal of portfolio 1,337,784,559.82 100.00 153,225.81 0.01 Other receivables that individually insignificant
- - - - in amount but provided for bad debt separately
Total 1,337,784,559.82 100.00 153,225.81 0.01 (continued)
Opening balance
Types Carrying amount Bad debt provision
Amount Percentage(%) Amount Percentage(%) Other receivables that individually significant in
- - - - amount and provided for bad debt separately
Other receivables provided for bad debt by
- - - - portfolio
Portfolio of aging 1,167,527.00 0.13 140,077.13 12.00 Portfolio of specific accounts 877,980,927.88 99.87 - - Subtotal of portfolio 879,148,454.88 100.00 140,077.13 0.02 Other receivables that individually insignificant
- - - - in amount but provided for bad debt separately
Total 879,148,454.88 100.00 140,077.13 0.02 (2) Other receivables presented by aging
Closing balance Opening balance
Aging
Amount Percentage(%) Amount Percentage(%)
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Closing balance Opening balance
Aging
Amount Percentage(%) Amount Percentage(%) Within 1 year 1,233,791,918.34 92.22 821,755,722.88 93.47 1 to 2 years 49,442,905.29 3.70 53,350,816.59 6.07 2 to 3 years 52,827,112.88 3.95 3,958,067.08 0.45 Over 3 years 1,722,623.31 0.13 83,848.33 0.01 Total 1,337,784,559.82 100.00 879,148,454.88 100.00 (3) Bad debt provision
Other receivable that are provided for bad debt based on portfolio
A. among the portfolio, other receivables that are provided for bad debt based on aging analysis
Closing balance Opening balance
Aging Carrying amount
Bad debt
Carrying amount
Bad debt Amount Percentage(%)
provision
Amount Percentage(%)
provision Within 1 year 2,296,287.70 91.44 116,816.88 528,550.00 45.27 26,427.50 1 to 2 years 110,000.07 4.38 11,000.01 459,474.67 39.36 45,947.47 2 to 3 years 35,542.50 1.41 10,662.75 110,245.00 9.44 33,073.50 Over 3 years 69,542.33 2.77 14,746.17 69,257.33 5.93 34,628.66 Total 2,511,372.60 100.00 153,225.81 1,167,527.00 100.00 140,077.13 B. among the portfolio, other receivables that are provided for bad debt using other method
Name of portfolio Carrying amount Bad debt provision
Portfolio of specific accounts 1,335,273,187.22 - (4) During the reporting period, there are no receivables from any shareholders held over5% (inclusive) voting shares of the Company.
(5) Top 5 other receivable accounts
Relationship with the Percentage of total other Name of company Amount Aging
Company receivables(%) HARMONY Company Subsidiary 1,072,381,174.81
Within 1 year 80.16 Sales Company Subsidiary 140,678,139.08
Within 1 year 10.52
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 6,868,950.46
Within 1 year 0.51 Emile Choureit Shenzhen
Subsidiary 9,687,626.49
1– 2 years 0.72 Company
28,237,373.51
2– 3 years 2.11 5,259,145.98
Within 1 year 0.39 Manufacturing Company Subsidiary
28,860,178.13
1– 2 years 2.16 3,348,343.48
Within 1 year 0.25 8,903,769.33
1– 2 years 0.67 Trading Company Subsidiary
13,849,315.39
2– 3 years 1.04 1,630,978.28
Over 3 years 0.12 Total 1,319,704,994.94 98.65 (6) Receivables from related parties
Percentage of total other Name of company
Relationship with the Company
Amount
receivables(%) 1,072,381,174.81 80.16 HARMONY Company Subsidiary
140,678,139.08 10.52 Sales Company Subsidiary
44,793,950.46 3.35 Emile Choureit Shenzhen Company Subsidiary
34,119,324.11 2.55 Manufacturing Company Subsidiary
27,732,406.48 2.07 Trading Company Subsidiary
13,977,525.38 1.04 Technology Company Subsidiary
1,750,000.00 0.13 Skytel Hotel Related party
1,147,471.00 0.09 FIYTA Hong Kong Subsidiary
11,424.70 - AVIC Training Center Related party
1,336,591,416.02 99.91 Total
(7) Presentation of other receivables denominated in foreign currency and the exchange rates used
Closing balance Opening balance
Item
Amount in foreign Amount in foreign
Exchange rate RMB equivalent Exchange rate RMB equivalent currency currency
USD - - - 1,200.00 6.2855 7,542.60 CHF 5,000.00 6.8336 34,168.00 2,000.00 6.8219 13,643.80 EURO 3,000.00 8.4189 25,256.70 3,000.00 8.3176 24,952.80 Total 59,424.70 46,139.20
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 3. Long-term equity investment
(1) Classification of the long-term equity investment
Classification Opening balance Increase Decrease Closing balance 732,199,720.0 Investment in subsidiaries 732,199,720.00 - -
0 Investment in associated companies 41,648,741.79 1,589,198.33 - 43,237,940.12 Other equity investment 385,000.00 - - 385,000.00 Less: impairment provision for long-term equity investment 300,000.00 - - 300,000.00 775,522,660.1 Total 773,933,461.79 1,589,198.33 -
2 (2) Details of long-term equity investment
Accounting
Investee
Cost of investment Opening balance Movement in the year
Closing balance method
HARMONY Company Cost
601,307,200.00 601,307,200.00 - 601,307,200.00 Watch Center Cost
1,400,000.00 1,400,000.00 - 1,400,000.00 Harbin Company Cost
125,000.00 125,000.00 - 125,000.00 Manufacturing Company Cost
9,000,000.00 9,000,000.00 - 9,000,000.00 Shanghai Watch Equity
39,916,500.00 41,648,741.79 1,589,198.33 43,237,940.12 Technology Company Cost
10,000,000.00 10,000,000.00 - 10,000,000.00 FIYTA Hong Kong Cost
55,367,520.00 55,367,520.00 - 55,367,520.00 Trading Company Cost
5,000,000.00 5,000,000.00 - 5,000,000.00Xi’an Tangcheng Limited Cost
85,000.00 85,000.00 - 85,000.00 Shenzhen Zhonghang Culture
Cost
300,000.00 300,000.00 - 300,000.00 Co. Ltd
Sales Company Cost
50,000,000.00 50,000,000.00 - 50,000,000.00 Total 774,233,461.79 1,589,198.33 775,822,660.12 (continued)
Explanation on inconsistency
Voting power Provision
Shareholding between the shareholding Provision for Cash dividend in Investee
enjoyed in investee recognized in
in investee(%) percentage and voting impairment current year(%) current year
percentage in investee
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 HARMONY
100.00 100.00 N/A - - - Company
Another shareholder enjoys
Watch Center 50.00 50.00 fixed income with no - - - involvement in operation
Harbin Company 100.00 100.00 N/A - - - Manufacturing
100.00 100.00 N/A - - 64,933,629.27 Company
Shanghai Watch 25.00 25.00 N/A - - - Technology
100.00 100.00 N/A - - 10,037,848.87 Company
FIYTA Hong Kong 100.00 100.00 N/A - - - Trading Company 100.00 100.00 N/A - - -Xi’an Tangcheng
0.10 0.10 N/A - - - Limited
Shenzhen
Zhonghang 15.00 15.00 N/A 300,000.00 - - Culture Co. Ltd
Sales Company 100.00 100.00 N/A - - - Total 100.00 100.00 300,000.00 - 74,971,478.14 (3) Details of impairment provision for long-term equity investment
Item Opening balance Increase Decrease Closing balance Other equity investment
Shenzhen Zhonghang Culture Co. Ltd 300,000.00 - - 300,000.00 4. Operating revenue and operating cost
(1) Operating revenue and operating cost
Item 2013 2012
Revenue from main businesses 95,787,415.95 165,379,500.98 Revenue from other businesses - 5,697,574.88 Total operating revenue 95,787,415.95 171,077,075.86 Cost for main businesses 21,182,291.58 81,780,106.40 Cost for other businesses - 5,238,047.00
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Item 2013 2012
Total operating cost 21,182,291.58 87,018,153.40 (2) Main businesses presented by industry sectors
2013 2012
Industry sector
Operating revenue Operating cost Operating revenue Operating cost FIYTA watch 7,245,239.68 7,214,801.33 94,812,757.06 60,784,978.95 Property lease 88,542,176.27 13,967,490.25 70,566,743.92 20,995,127.45 Total 95,787,415.95 21,182,291.58 165,379,500.98 81,780,106.40 (3) Main businesses presented by regions
2013 2012
Regions
Operating revenue Operating cost Operating revenue Operating cost Southern China 95,787,415.95 21,182,291.58 165,379,500.98 81,780,106.40 (4) Operating revenue from top 5 clients
Percentage of total revenue in the same Period Total revenue from top five clients
period(%)
2013 48,856,316.56 51.00 2012 158,790,508.61 92.82 5. Investment income
(1) Details of investment income
Investee 2013 2012 Investment income from long-term equity investment measured by cost method 74,971,478.14 172,202,084.88 Investment income from long-term equity investment measured by equity method 1,589,198.33 1,732,241.79 Investment income arising from disposal of the long-term equity investment - (213,572.76) Total 76,560,676.47 173,720,753.91 (2) Investment income from long-term equity investment measured by cost method
Investee 2013 2012
HARMONY Company - 96,241,944.83 Manufacturing Company 64,933,629.27 75,960,140.05
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Investee 2013 2012
Technology Company 10,037,848.87 - Total 74,971,478.14 172,202,084.88 (3) Investment income from long-term equity investment measured by equity method
Investee 2013 2012 Reasons for changes Shanghai Watch 1,589,198.33 1,732,241.79 Profit change of investee 6. Supplementary information to the cash flow statement
Item 2013 2012
1. Reconciliation from net profit to operating cash flows
Net profit 81,264,135.86 172,642,428.29 Plus: asset impairment provision (272,976.01) (59,905,417.75) Depreciation of fixed asset and amortization of investment property 14,904,510.45 18,815,815.63 amortization of intangible asset 1,405,452.64 1,344,489.92 Amortization of long-term deferred expense 8,547,838.09 13,329,423.61 Loss (gain) on disposal of fixed assets, intangible assets and other
(465,627.90) 872.93 long-term assets
Financial expense 10,916,896.42 24,217,153.74 Investment loss (income) (76,560,676.47) (173,720,753.91) Decrease (increase) of the deferred income tax assets (351,756.00) 3,217,976.39 Increase (decrease) of deferred income tax liabilities - (128,393.19) Decrease (increase) of inventory 326,238.78 72,713,728.39 Decrease (increase) of operating receivables (402,736,600.79) 87,876,595.00 Increase (decrease) of operating payables (5,929,901.12) (42,141,539.14) Net cash flows from operating activities (368,952,466.05) 118,262,379.91 2. Significant investment and financing activities not involving cash
- - transactions:
3. Net changes in cash and cash equivalents:
Cash and bank balances at the end of the year 27,929,968.24 51,372,778.02
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 Item 2013 2012
Less: cash and bank balances at the beginning of the year 51,372,778.02 49,327,161.12 Plus: cash equivalents at the end of the year
- - Less: cash equivalents at the beginning of the year
- - Net increase in cash and cash equivalents (23,442,809.78) 2,045,616.90
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 XIV. Supplementary Information to the Notes of the Financial Statements
1. Details of non-recurring profit or loss
Item 2013 2012 Gain or losses from disposal of non-current assets 388,966.99 (236,304.20) Government grants included in current profit or loss (except for the fixed or quantitative
government grants, enjoyed in a consecutive way, which closely related to the enterprise 3,610,593.36 5,176,129.77 businesses and according to certain state policies and or on a nation-wide unified standard)
Net profit or loss between the beginning of the year to the combination date from the subsidiaries
- (2,130,265.54) acquired through business combinations involving entities under common control
Other non-operating income and expenses besides the items above (153,915.17) 1,389,127.26 Subtotal 3,845,645.18 4,198,687.29 Income tax effect 873,382.95 1,425,666.23 Effect of minorityshareholders’ interest (after tax) 5,640.77 900.65 Total 2,966,621.46 2,772,120.41 The Group recognized the non-recurring profit or loss items in accordance with “Explanatory Public Notice on Information Disclosure of Companies Having Publicly Issued Securities No.1– Non-recurring Profit or Loss” (Zheng Jian Hui Gong Gao (2008) No. 43)
2. Return on Equity (ROE) and EPS
EPS (Yuan per Share)
Profit of the reporting period Weighted average ROE
Basic EPS Diluted EPS
Net profit attributable to ordinary
8.69% 0.331 0.331 shareholders of the Company
Net profit attributable to ordinary
shareholders of the Company after
8.49% 0.324 0.324 deducting non-recurring profit or
loss
Note: (1) the weighted average ROE= “net profit attributable to the Company's ordinary shareholders”†[“opening net assets attributable to the Company's ordinary shareholders”+ “net profit attributable to the Company's ordinary shareholders”† 2– (“net asset decreased by cash dividends during reporting period, attributable to the Company's ordinary shareholders”* “cumulative number of months from the next month of net asset attributable to theCompany‟s ordinary shareholders decrease to the end of the reporting period”† “number of months in the reporting period”) - (“net assets changes arising from foreign currency financial statement translation”* “cumulative number of months from the next month of net asset changes due to other matters to the end of the reporting period”† “number of months in the
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 reportingperiod”)]=
130,125,124.48÷[1,446,677,625.13+130,125,124.48÷2-39,276,787.00*4÷12-1,091,278.05*6÷12]=8.69%
The weighted average ROE after deducting non-recurring profit or loss= “net profit attributable to the Company's ordinary shareholders after deducting non-recurring profit and losses”†[“opening net assets attributable to the Company's ordinary shareholders”+ “net profit attributable to the Company's ordinary shareholders”† 2– (“net asset decreased by cash dividends during reporting period, attributable to the Company's ordinary shareholders”* “cumulative number of months from the next month of net asset attributable to theCompany‟s ordinary shareholders decrease to the end of the reporting period”† “number of months in the reporting period”) - (“net assets changes arising from foreign currency financial statement translation”* “cumulative number of months from the next month of net asset changes due to other matters to the end of the reporting period”† “number of months in the reporting period”)]=
127,158,503.02÷[1,446,677,625.13+130,125,124.48÷2-39,276,787.00*4÷12-1,091,278.05*6÷12]=8.49% (2) For the calculation of basic EPS and diluted EPS, see Note VII. 45.
3. Abnormal Items in theGroup’s consolidated financial statements and explanation (1) Balance sheet items
Main balance sheet items with changes over RMB 5,000,000.00 or over15% by comparing the closing balance and the opening balance are analyzed as follows:
A. The closing balance of cash and bank balances is RMB
107,663,110.74,
which is23.33% less than its opening balance. The main reasons for the decrease are:
a) Cash paid for purchasing fixed assets, intangible assets and other long-term assets amounting to RMB 118,960,000.00 ;
b) Net cash inflow from newly acquired bank loans and company bond issued up to RMB121,800,000.00 ; c) Cash paid for loan interest and dividend amounting to RMB113,060,000.00; and
d) Operating cash inflow amounting to RMB79,050,000.00;
B. The closing balance of notes receivable is RMB7,100,000.00, increased255.00% compared to the opening balance. The main reason for the increase is trade receivable from customers of Technology Company, a subsidiary of the Company, increased the usage of notes receivable for accounts settlement;
C. The closing balance of accounts receivable is RMB324,457,339.19, increased4.96% compared to the opening balance. The main reasons for the increase are: it is peak season for luxury watch and FIYTA watch at the year end; the timing of ordinary settlement term with the department stores is lacking behind; and the overall increase in scale of sales; D. The closing balance of advance payment is 43,487,613.07, decreased42.34% compared to the opening balance. The main reason for the decrease is advances prepaid to Kuntai Real Estate Company and China Tenth Metallurgy Group Limited Corporation was reclassified to other non-current assets according to its nature;
E. The closing balance of other accounts receivable-other is 40,436,640.10, increased21.24%. The main reason for the
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 increase is security deposit increased;
F. The closing balance of inventory is RMB2,123,342,820.93, increased12.75% compared to the opening balance. The main reasons for the increase are new models of FIYTA brand watches increased, the amount of consignment strengthened and the inventory increased accordingly;
G. The closing balance of other current assets is RMB30,811,991.07, decreased39.64% compared to the opening balance. The main reason for the decrease is that the amount of input tax of value-added-tax of the Group to be deducted decreased towards the year end of 2013;
H. The closing balance of long-term deferred expenses is RMB146,542,685.58, increased16.05% compared to the opening balance. The increase is caused by newly-added representative cost, decoration cost of sales agent and so on; I. The closing balance of deferred tax asset is RMB74,159,134.29, increased20.90% compared to the opening balance. This is mainly due to increase in unrealized profit of inter-company sales;
J. The closing balance of other non-current assets is RMB32,476,867.85, which is transferred from advances for construction prepaid to Kuntai Real Estate Company and China Tenth Metallurgy Group Limited Corporation in current year;
K. The closing balance of short-term loan is RMB1,023,000,000.00, which is27.44% lower than the opening balance. The decrease is mainly due to part of loan was repaid by the Company using fund raised from bond issuing;
L. The closing balance of accounts payable is RMB222,347,620.47, increased5.23% compared to the opening balance. The main reason for the increase is that inventory purchasing increased;
M. The closing balance of interest payable is RMB19,422,859.82, increased163.31% compared to the opening balance. The increase is mainly due to accrual of interest of company bond;
N. The closing balance of non-current liabilities due within one year is RMB39,310,000.00, decreased29.61% compared to the opening balance. The decrease is due to long-term loan due within one year at the end of 2013 decreased compared to the end of 2012;
O. The closing balance of long-term loan is RMB173.274.950.01, increased258.13% compared to the opening balance. The main reason for the increase is that the short-term loan had been repaid at its maturity and most newly acquired loans are long-term loans; and
P. The closing balance of bond payable is RMB397,728,975.00 because the Company issued bond in 2013.
(2) Income statement items
Analysis of main items in 2013 that are with changes over15% or RMB5,000,000.00 in amount compared with 2012 figure are as follows:
A. Operating revenue realized for 2013 was RMB3,103,496,962,22, which was2.63% higher than 2012. The increase is mainly due to the increase in the sales of FIYTA brand watches and property rental income compared to the same period
FIYTA Holdings Ltd. Notes to the Financial Statements for the Year Ended 31 December 2013 of 2012;
B. Operating cost incurred in 2013 was RMB1,990,125,145.74, increased0.39% compared to 2012. Main reason for the increase is that sales increased. The percentage of increase in operating cost is 2.24 percentage points higher than the operating revenue. The main reason for this difference is variation of products mix;
C. The distribution expenses incurred in 2013 was RMB649,297,842.92, which is12.79% higher than 2012 figure. The main reasons for the increase include:
a) the amortization of long-term deferred expenses (shop decorationetc…) increased about RMB 24,840,000.00 as a result of new shops opened;
b) expenses for FIYTAbrand‟s marketing, promotion and advertising increased about RMB23,730,000.00; c) the employee remuneration increased about RMB13,490,000.00 as a result of expansion of operating scale; and d) expenses for department store and rental increased about RMB9,210,000.00 as a result of new shops opened; D. The financial expense incurred in 2013 was RMB100,268,241.55, which is15.50% lower on 2012 figure. This is mainly because interest expense decreased as a result of the comparative low interest rate of the company bond issued by FIYTA in 2013.