Annual Report 2022
FOSHAN ELECTRICAL AND LIGHTING CO., LTD.
ANNUAL REPORT 2022
【April 2023】
Annual Report 2022
ANNUAL REPORT 2022Part I Important Notes, Table of Contents and DefinitionsThe Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,supervisors and senior management of Foshan Electrical and Lighting Co., Ltd. (hereinafterreferred to as the “Company”) hereby guarantee the factuality, accuracy and completeness ofthe contents of this Report and its summary, and shall be jointly and severally liable for anymisrepresentations, misleading statements or material omissions therein.Wu Shenghui, the Company’s legal representative, Tang Qionglan, the Company’s ChiefFinancial Officer (CFO), and Liang Yuefei, the person-in-charge of the Company’s accountingorgan (equivalent to accounting manager) hereby guarantee that the Financial Statementscarried in this Report are factual, accurate and complete.All the Company’s directors have attended the Board meeting for the review of this Reportand its summary.The future plans and other forward-looking statements, as well as the cautionary statementsmentioned in this Report shall NOT be considered as virtual promises of the Company toinvestors. And investors are kindly reminded to be well aware of possible risks.The Company has described in detail in this Report the risk of macro-economic fluctuationsand intensified market competition, the risk of rising raw material prices, the risk of exchangerate fluctuations, the risk of the recoverability of accounts receivable. Please refer to thesection headed “Potential Risks” in Item XI of Part III of this Report.The Board has approved a final dividend plan as follows:based on the share capital of1,348,994,647 shares (the total share capital of 1,361,994,647 shares minus the remaining13,000,000 A-shares repurchased in the share repurchase account at the disclosure date of the2022 Annual Report, a cash dividend of RMB1 (tax inclusive) per 10 shares is to bedistributed to the shareholders, with no bonus issue from either profit or capital reserves.Where any change occurs to the total shares entitled to the final dividend due to any new issue,grant of equity incentives, etc. when the final dividend plan is implemented, the dividend pershare shall remain the same while the total payout amount shall be adjusted accordingly.This Report has been prepared in both Chinese and English. Should there be anydiscrepancies or misunderstandings between the two versions, the Chinese version shallprevail.
Annual Report 2022
Table of Contents
Part I Important Notes, Table of Contents and Definitions ...... 2
Part II Corporate Information and Key Financial Information ...... 6
Part III Management Discussion and Analysis ...... 13
Part IV Corporate Governance ...... 52
Part V Environmental and Social Responsibility ...... 80
Part VI Significant Events ...... 100
Part VII Share Changes and Shareholder Information ...... 149
Part VIII Preferred Shares ...... 161
Part IX Corporate Bonds ...... 162
Part X Financial Statements ...... 163
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Documents Available for Reference
Investors and interested parties can get access to the following materials in the Board Secretary’sOffice in the Company’s office building:
1. The financial statements signed and stamped by the Company’s legal representative, ChiefFinancial Officer, and the person-in-charge of the Company’s accounting organ.
2. The original copy of the Independent Auditor’s Report signed and stamped by the certified publicaccountants and stamped by the CPA firm.
3. The originals of all the Company’s announcements and documents disclosed to the public duringthe Reporting Period on the media designated by the CSRC for information disclosure.
Annual Report 2022
Definitions
| Term | Definition |
| The “Company”, “listed company”, “FSL” or “we” | Foshan Electrical and Lighting Co., Ltd. and its consolidated subsidiaries, except where the context otherwise requires |
| Rising Group | Guangdong Rising Holdings Group Co., Ltd. |
| Electronics Group | Guangdong Electronics Information Industry Group Ltd. |
| Hong Kong Rising Investment | Rising Investment Development Limited |
| Hongkong Wah Shing | Hongkong Wah Shing Holding Company Limited |
| Rising Capital | Guangdong Rising Capital Investment Co., Ltd. (formerly known as “Guangdong Rising Finance Holding Co., Ltd.”) |
| Shenzhen Rising Investment | Shenzhen Rising Investment Development Co., Ltd. |
| NationStar Optoelectronics | Foshan NationStar Optoelectronics Co., Ltd. |
| NationStar Semiconductor | Foshan NationStar Semiconductor Technology Co., Ltd. |
| Sigma | Foshan Sigma Venture Capital Co., Ltd. |
| Nanning Liaowang | Nanning Liaowang Auto Lamp Co., Ltd. |
| Fenghua Semiconductor | Guangdong Fenghua Semiconductor Technology Co., Ltd. (formerly known as “Guangdong Yuejing High-tech Co., Ltd.”) |
| CSRC | China Securities Regulatory Commission |
| SZSE | Shenzhen Stock Exchange |
| General meeting | General meeting of Foshan Electrical and Lighting Co., Ltd. |
| Board of Directors | The board of directors of Foshan Electrical and Lighting Co., Ltd. |
| Supervisory Committee | The supervisory committee of Foshan Electrical and Lighting Co., Ltd. |
| RMB, RMB’0,000, RMB’00,000,000 | Expressed in the Chinese currency of Renminbi, expressed in tens of thousands of Renminbi, expressed in hundreds of millions of Renminbi |
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Part II Corporate Information and Key Financial InformationI Corporate Information
| Stock name | FSL, FSL-B | Stock code | 000541/200541 |
| Stock exchange for listing | Shenzhen Stock Exchange | ||
| Company name in Chinese | 佛山电器照明股份有限公司 | ||
| Abbr. | 佛山照明 | ||
| Company name in English (if any) | FOSHAN ELECTRICAL AND LIGHTING CO.,LTD | ||
| Abbr. (if any) | FSL | ||
| Legal representative | Wu Shenghui | ||
| Registered address | No. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, P.R.China | ||
| Zip code | 528000 | ||
| Changes of registered address | N/A | ||
| Office address | No. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, P.R.China | ||
| Zip code | 528000 | ||
| Company website | www.chinafsl.com | ||
| Email address | gzfsligh@pub.foshan.gd.cn | ||
II Contact Information
| Board Secretary | Securities Representative | |
| Name | Huang Zhenhuan | Huang Yufen |
| Address | No. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, P.R.China | No. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, P.R.China |
| Tel. | （0757）82810239 | （0757）82966028 |
| Fax | （0757）82816276 | （0757）82816276 |
| Email address | fsldsh@chinafsl.com | fslhyf@163.com |
III Media for Information Disclosure and Place where this Report Is Lodged
| Stock exchange website where this Report is disclosed | http://www.cninfo.com.cn |
| Media and website where this Report is disclosed | China Securities Journal, Securities Times, Ta Kung Pao (HK), and http://www.cninfo.com.cn |
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| Place where this Report is lodged | Board Office, FSL Office Building, No. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, P.R.China |
IV Change to Company Registered Information
| Unified social credit code | 91440000190352575W |
| Change to principal activity of the Company since going public (if any) | Unchanged |
| Every change of controlling shareholder since incorporation (if any) | In April 2006, the State-owned Assets Supervision and Administration Commission (SASAC) of Foshan Municipal People's Government, the former controlling shareholder of the Company, transferred 13.47% of shares it held in the Company to OSRAM Prosperity Holding Company Limited (later renamed as "OSRAM Holding Company Limited"), and at the same time, SASAC of Foshan Municipal People's Government transferred 10.50% of shares it held in the Company to Prosperity Lamps & Components Limited. Upon completion of such transfer, the biggest shareholder of the Company was OSRAM Prosperity Holding Company Limited, and the Company had no any controlling shareholder or actual controller. In December 2015, OSRAM of Germany transferred 100% equity it held in OSRAM Holding Company Limited (OSRAM Holding Company Limited held 13.47% of shares of the Company, being the biggest shareholder of the Company and later renamed as "Hongkong Wah Shing Holding Company Limited") to Electronics Group. In addition, Electronics Group and its parties acting in concert (Rising Capital, Shenzhen Rising Investment and Hong Kong Rising Investment), held 23.144% of the shares of the Company through increasing their shareholding of the Company. Electronics Group and its parties acting in concert became the controlling shareholder of the Company and Electronics Group is a wholly-owned subsidiary of Rising Holdings Group. In December 2021, wholly-owned subsidiaries of Rising Holdings Group, Rising Capital and Shenzhen Rising Investment transferred 5.94% of shares they held in the Company to Rising Holdings Group through transfer by agreement for no compensation. Therefore, Rising Holdings Group and its parties acting in concert held 30% of shares in the Company. As of the date of this Report, due to the retirement of certain shares repurchased by the Company, Rising Holdings Group and its parties acting in concert hold 30.82% of shares in the Company. |
V Other InformationThe independent audit firm hired by the Company:
| Name | WUYIGE Certified Public Accountants LLP |
| Office address | Room 2206, 22/F, 1 Zhichun Road, Haidian District, Beijing |
| Accountants writing signatures | He Xiaojuan, and Xia Ling |
The independent sponsor hired by the Company to exercise constant supervision over the Company in theReporting Period:
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□ Applicable ? Not applicable
The independent financial advisor hired by the Company to exercise constant supervision over the Company inthe Reporting Period:
? Applicable □ Not applicable
| Name of financial advisor | Office address | Name of representative | Period of supervision |
| China Industrial Securities Co., Ltd. | 52/F, T2 Office Building, Shenye Shangcheng (South Zone), 5001 Huanggang Road, Futian District, Shenzhen | Qiu Kaijuan, and Du Qian | 23 February 2022 - 31 December 2023 |
VI Key Financial InformationIndicate by tick mark whether there is any retrospectively restated datum in the table below.? Yes □ NoReason for retrospective restatement:
Business combination involving entities under common control.
| 2022 | 2021 | 2022-over-2021 change (%) | 2020 | |||
| Before | Restated | Restated | Before | Restated | ||
| Operating revenue (RMB) | 8,759,965,275.96 | 4,772,690,469.14 | 8,726,241,053.50 | 0.39% | 3,744,914,452.72 | 7,139,915,681.88 |
| Net profit attributable to the listed company’s shareholders (RMB) | 230,394,235.91 | 250,091,965.87 | 299,614,354.88 | -23.10% | 316,914,185.34 | 344,497,448.15 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | 221,545,061.10 | 150,010,381.60 | 149,573,177.56 | 48.12% | 276,795,046.07 | 278,242,315.69 |
| Net cash generated from/used in operating | 1,064,888,320.69 | -277,025,085.26 | 433,473,948.34 | 145.66% | 394,828,331.90 | 855,384,683.02 |
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| activities (RMB) | ||||||
| Basic earnings per share (RMB/share) | 0.1708 | 0.1854 | 0.2221 | -23.10% | 0.2349 | 0.2554 |
| Diluted earnings per share (RMB/share) | 0.1692 | 0.1836 | 0.2200 | -23.09% | 0.2327 | 0.2529 |
| Weighted average return on equity (%) | 4.13% | 4.23% | 4.20% | -0.07% | 5.82% | 5.02% |
| 31 December 2022 | 31 December 2021 | Change of 31 December 2022 over 31 December 2021 (%) | 31 December 2020 | |||
| Before | Restated | Restated | Before | Restated | ||
| Total assets (RMB) | 15,287,061,119.70 | 9,699,592,528.61 | 16,599,918,628.35 | -7.91% | 8,519,336,914.11 | 14,899,056,752.81 |
| Equity attributable to the listed company’s shareholders (RMB) | 5,173,066,095.76 | 5,800,558,588.34 | 7,036,108,772.54 | -26.48% | 6,263,921,304.54 | 7,460,895,476.60 |
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders beforeand after exceptional gains and losses was negative for the last three accounting years, and the latestindependent auditor’s report indicated that there was uncertainty about the Company’s ability to continue as agoing concern.
□ Yes ? No
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders beforeand after exceptional gains and losses was negative.
□ Yes ? No
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VII Accounting Data Differences under China’s Accounting Standards for BusinessEnterprises (CAS) and International Financial Reporting Standards (IFRS) and ForeignAccounting Standards
1. Net Profit and Equity under CAS and IFRS
□ Applicable ? Not applicable
No difference for the Reporting Period.
2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable ? Not applicable
No difference for the Reporting Period.
VIII Key Financial Information by Quarter
Unit: RMB
| Q1 | Q2 | Q3 | Q4 | |
| Operating revenue | 2,049,503,975.00 | 2,425,694,272.57 | 2,176,919,528.17 | 2,107,847,500.22 |
| Net profit attributable to the listed company’s shareholders | 62,312,239.55 | 100,812,332.99 | 62,972,847.87 | 4,296,815.50 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses | 55,625,535.40 | 105,236,988.78 | 64,167,908.29 | -3,616,634.91 |
| Net cash generated from/used in operating activities | -54,833,636.58 | 244,076,020.91 | 425,242,415.99 | 450,403,520.37 |
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differsmaterially from what have been disclosed in the Company’s quarterly or interim reports.
□ Yes ? No
IX Exceptional Gains and Losses? Applicable □ Not applicable
Unit: RMB
| Item | 2022 | 2021 | 2020 | Note |
| Gain or loss on disposal of non-current assets (inclusive of | -8,216,871.49 | 82,233,742.26 | 7,466,798.65 |
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| impairment allowance write-offs) | ||||
| Government subsidies charged to current profit or loss (exclusive of government subsidies consistently given in the Company’s ordinary course of business at fixed quotas or amounts as per government policies or standards) | 68,903,156.89 | 15,971,903.24 | 25,372,941.13 | |
| Capital occupation charges on non-financial enterprises that are recognized in profit or loss | 339,583.00 | 881,704.19 | 1,337,410.12 | |
| Current profit or loss on subsidiaries obtained in business combinations involving entities under common control from the period-beginning to combination dates, net | 22,504,245.08 | 233,275,576.92 | 102,415,815.56 | |
| Gain or loss on fair-value changes on held-for-trading financial assets and liabilities & income from disposal of held-for-trading financial assets and liabilities and available-for-sale financial assets (exclusive of the effective portion of hedges that arise in the Company’s ordinary course of business) | -19,057,137.27 | 10,663,119.44 | 8,463,850.00 | |
| Reversed portions of impairment allowances for receivables which | 1,203,963.23 | 9,156,396.52 |
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| are tested individually for impairment | ||||
| Non-operating income and expense other than the above | 10,557,819.17 | 10,640,975.11 | -123,367.66 | |
| Less: Income tax effects | 4,465,855.78 | 17,224,178.81 | 5,643,715.91 | |
| Non-controlling interests effects (net of tax) | 62,919,728.02 | 186,401,665.03 | 82,190,995.95 | |
| Total | 8,849,174.81 | 150,041,177.32 | 66,255,132.46 | -- |
Details of other items that meet the definition of exceptional gain/loss:
□ Applicable ? Not applicable
No such cases for the Reporting Period.Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item listed in theExplanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Exceptional Gain/Loss Items:
□ Applicable ? Not applicable
No such cases for the Reporting Period.
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Part III Management Discussion and AnalysisI Industry Overview for the Reporting Period
During 2022, a variety of unfavorable factors such as the slower recovery of the global economy and high rawmaterial costs led to less room for profit for companies in the lighting industry. Moreover, the industry reshufflewas still in progress. Enterprises with advantages in technology, fund and brand were gradually expanding theirmarket shares, and high-quality resources were being channeled to leading players. With the national policy of"Carbon Emission Peak and Carbon Neutrality", major enterprises accelerated the development of high energy-saving and intelligent products with better light quality. To this end, they carried out cross-field integration byfocusing on healthy and intelligent lighting and made arrangements for the development of the ecosystem in theindustry, thereby achieving transformation and upgrading. Concurrently, with the continuously upgradedtechnologies and policy encouragement, the lighting application scenarios got increasingly diversified.Moreover, segmentations such as intelligent lighting, healthy lighting, animal and plant lighting would usher inmore development opportunities, injecting new impetus into the industry development.As automotive lights are core parts of an automobile, the automotive light industry development is closelylinked to the development of the automotive industry. In accordance with the statistics released by the ChinaAssociation of Automobile Manufacturers (CAAM), the automobile output and sales in China for 2022 reached
27.021 million and 26.864 million, up by 3.4% and 2.1% year on year, respectively. The new energy vehicleindustry achieved ongoing explosive growth. Statistically, the output and sales of new energy vehicles for 2022reached 7.058 million and 6.887 million, up by 96.9% and 93.4% year on year, respectively. Additionally, themarket share of new energy vehicles rose to 25.6%. The growth in automobile output and sales boosted thedemand in the automotive light market. As the R&D capabilities of the upstream, midstream and downstreamenterprises along the domestic automotive-light industrial chain have improved in the last few years, Chineseauto parts enterprises have gradually been incorporated by vehicle companies into their supply chain systems.This has contributed to the continuously accelerated replacement with domestic products and given moreopportunities to Chinese automotive light enterprises. At the same time, with the development of automotiveindustry technologies, the increasingly electronic and intelligent automotive light-related technologies haveenabled automotive lights to carry more functions in addition to traditional lighting, which has not only broughtusers more environmental, safe, recreational, and intelligent driving experience but also injected new growthimpetus into the industry.Affected by the sluggish downstream demand, the development of the packaging industry will be affected to acertain extent in 2022.Still, with the upgraded technologies, new application sub-markets will be constantlyexpanded. Meanwhile, the emerging application fields, such as new Mini/Micro LED displays, plant lighting,and intelligent lighting, are going to enter a critical phase of rapid development, bringing new developmentopportunities for the LED packaging industry. Additionally, as relevant industry policies are introduced, thetransformation toward high energy-saving, highly reliable, and intelligent LED semiconductors with better lightquality will be expedited, which has set a stricter requirement for enterprises' innovation capability. Top playersin the industry will have more say.
II Principal Activity of the Company in the Reporting Period
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(I) Principal businessThe Company has been committed to the R&D, production and sale of high-quality and energy-efficientlighting products in order to provide integrated lighting solutions for customers. It is the controlling shareholderof Nanning Liaowang Auto Lamp Co., Ltd. ("Nanning Liaowang") and Foshan NationStar Optoelectronics Co.,Ltd. ("NationStar Optoelectronics") through acquisition programs starting from 2021. At present, the principalbusiness of the Company mainly includes the R&D, production and sale of general lighting products, electricalproducts, automotive lighting products, and LED packaging products.The general lighting business of the Company mainly covers LED light sources, LED luminaries, traditionallighting products and comprehensive lighting solutions for home lighting, commercial lighting, industriallighting, municipal road lighting and landscape lighting. Over recent years, the Company has been exploringnew fields, including smart lighting, healthy lighting, marine lighting, and animal and plant lighting.Electrical products mainly include switches, sockets, smart control panels, and smart door locks.Based on its own automotive light sources and modules, the Company, relying on its majority-owned subsidiaryNanning Liaowang, has expanded the automotive lighting business into the automotive light assembly sector,involving basically all the lights that an automobile requires, such as headlights, rear light combos, fog lights,backup lights, interior lights, and license plate lights. The main clients of Nanning Liaowang include SAIC-GM-Wuling Automobile, Chongqing Changan Automobile, Bestune, SAIC Maxus Automotive, DongfengLiuzhou Motor, Dongfeng Sokon, SERES and other whole-automobile manufacturers.The Company conducts LED packaging business mainly by relying on its majority-owned subsidiaryNationStar Optoelectronics (stock code: 002449). The LED packaging business mainly involves components(including components for display, lighting, and optoelectronics), modules (including display and backlightmodules as well as mini backlight modules), and LED epitaxial wafers and chips (including blue and greendisplay / digital indication / automotive high power flip-flop / Mini LED chip products), electronic components,integrated circuit products and accessories (including MOS/Si/IC products), and third generation semiconductorproducts (including silicon carbide discrete devices/power modules, gallium nitride series device products),which are widely used for consumer electronics, home appliances, computers, communications, display andlighting products, general lighting, automotive lighting, sterilization and purification, plant lighting, and otherfields.(II) Business models
1. Procurement model
The Company's procurement department should ensure that the procured materials and products meet theprescribed requirements and that procurement activities are under control. Besides, it should consider the needsof each department and the reasonable stock quantity before carrying out any procurement, determine suppliersby means of bidding, price negotiation, and price comparison, and follow up on the procurement orders. Thereshould be several backup suppliers of each principal raw material to ensure fair procurement price, timelymaterial supply, and high quality.
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2. Production model
For routine products, the production plan for the next month is prepared based on the analysis of the sales ofeach month and changes in the future market demand and the safe stock benchmark. Each productiondepartment produces products as planned so as to control the stock and meet the sales demand. For customizedproducts, the make-to-order strategy is implemented to effectively control the stock quantity of raw materials,reduce the funds that are tied up, and improve the Company's operational efficiency.
3. Sales model
In the general lighting business, for domestic sales, the Company adopts the model of agency distribution anddirect supply to engineering projects. The Company boasts hardware distribution, home, engineering, industriallighting, commercial distribution, and e-commerce & retail sale channels. For foreign sales, the Companyadopts the models of OEM and independent brands. The sale of products of independent brands abroad iscarried out mainly via agencies.In the automotive lighting business, in the factory-installed market, the model of supplying automotive lightproducts directly to OEMs is mainly adopted; in the aftermarket, products are mainly sold by agencies.In the LED packaging business, the direct sale model is mainly adopted, in which products are sold throughdirect communication with clients.(III) Main driving forces for growthThe Company upholds the overall idea of "stabilizing the fundamentals and expanding new businesses", andcontinuously strengthens the innovation driver and refines the business portfolio. Additionally, it promotes thechange of the marketing model, intensifies management improvement, and vigorously explores marketsegments. Since 2021, the Company has acquired Nanning Liaowang and NationStar Optoelectronics, whichhas provided strong support for the Company to rapidly enter the OEM market and make the automobile vehiclelamp business of the Company stronger and bigger, as well as to strengthen integration upstream anddownstream of the industrial chain of LED. Meanwhile, with the evolution of the industrial competition model,consumers are getting increasingly concerned with product quality and brand. As a result, companies with weakcompetitiveness will be gradually elbowed out of the market while large enterprises or enterprises with corecompetitiveness will have more market opportunities. By virtue of its advantages in technology, brand, channeland scale, the Company has continued to promote the technical upgrading of main products, improve productquality, beef up market expansion and optimize the business portfolio through sustained spending on R&D andtechnical innovation. Meanwhile, it has gained an advantageous position in the process of enhancing marketconcentration by increasing the level of production automation, effectively controlling purchase costs andramping up production efficiency.
III Core Competitiveness AnalysisDuring the Reporting Period, through continued accumulation, the Company’s core competitiveness has beenfurther enhanced, which is mainly reflected in the following aspects:
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Channel advantageThe Company has been sticking to the market strategy of deeply cultivating and refining channels. Over yearsof development and experience, the Company has been equipped with six major sales channels in domesticmarket (hardware distribution, home, engineering, industrial lighting, commercial distribution, and e-commerce& retail sales channels), forming a marketing network covering the whole country; in foreign market, theCompany has made active steps to develop international market business, sold products to more than 120countries and regions in North America, Europe, Southeast Asia, Africa and Oceania, and kept improvingoverseas sales channel. By virtue of its powerful and comprehensive sales channels, the Company has enabledits products to enter market rapidly, substantially enhancing its market development abilities andcompetitiveness. Nanning Liaowang is a major manufacturer in the Chinese automotive light industry. It hasaccumulated stable whole-automobile manufacturing clients and has been developing new clients. Its cliententities are increasingly diverse, and the market share of its micro automotive lights ranks first in China.NationStar Optoelectronics has an excellent client structure. It has established a long-term cooperativerelationship with industry-leading display manufacturers and internationally famous home appliance enterprises,has successfully showcased its products in many large events and high-end venues at home and abroad, and iswidely recognized by end clients and the market.Brand advantageThe Company has accumulated more than 60 years' experience in the lighting industry and enjoyedcontinuously increasing influence and brand value for its "FSL". For 17 consecutive years, the Company hasbeen included in the list of "China's 500 Most Valuable Brands". In 2022, the value of FSL brand reachedRMB26.529 billion. In recent years, with the enhancement of its development positioning, product design anduser experience, the Company has initiated the strategy of brand upgrading and carried out promotion bycentering around the new "Professional, Healthy, Fashionable and Intelligent". In addition, it has acceleratedbrand building through high-end mainstream media platform, Internet emerging media and offline terminaladvertising respectively, maximized the brand and product communication effect, formed a comprehensive anddiversified publicity position, and driven the transition of “FSL” from an industrial brand to a popular brand tomaintain the brand vitality and competitiveness. The brand "FSL" has become one of the most influential andpopular industrial brands in China, and the powerful brand influence has played a key role in driving thesustained growth of the Company’s sales. Nanning Liaowang strictly abides by the national industry standardswhen producing automotive lights of the "Liaowang" brand. It has been hailed as a high-quality supplier of carmanufacturers for quite a few times. NationStar Optoelectronics has been awarded honors such as "NationalHigh-tech Enterprise Certification", "Brand Power", "Top 10 LED Packaging Brands", “GG Golden GlobeAward”, and “Company of the Year 2022”, which constantly enhances its image of professionalism and brandadvantages.R&D technical advantageThe Company values the R&D of new products and the development of innovation and R&D teams, and hasestablished a scientific and independent science and technology innovation system, and a team of well-structured, collaborative and efficient talents. It has further increased spending on technology and independentproduct innovation and introduced first-class R&D equipment and facilities from home and abroad to providehigh-quality conditions for scientific and technological innovation. The Company is a national high-tech
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company, and its testing center has the CNAS-approved qualification. In addition, the Company has builtinnovative platforms such as "Guangdong Engineering Technology Development Center", "GuangdongIndustrial Design Center", "Guangdong Enterprise Technology Center", and "Lighting Research Institute".Besides, the Company has won the title of "National IP Demonstration Enterprise". Established"PostdoctoralResearch Station (Substation)", a "Guangdong Science and Technology Expert Workstation" to explore andintensify efforts in the cutting-edge technology of LEDs, and address key issues and common technology issuesin the industry. It has formed technical barriers with proprietary intellectual property rights in lighting,spectroscopic, electrical, IoT, AI and many other fields. Cumulatively, the company and its holding subsidiarieshave been granted more than 1,900 valid patents. Also, they have led or participated in the formulation orrevision of 160 standards at all levels, which have been issued. The Company actively integrates internal andexternal resources and collaborates with Tsinghua University, Fudan University, Sun Yat-sen University, SouthChina University of Technology, Institute of Deep-Sea Science and Engineering of CAS, Dalian OceanUniversity and other scientific research institutes to establish in-depth industrial and research cooperation, so asto promote key technological breakthroughs and transformation of scientific and technological achievements.Meanwhile, the Company has formed a smooth R&D talent cultivation channel to provide a strong guaranteefor the Company to maintain technological leadership and continuous product innovation. Nanning Liaowangboasts a provincial enterprise technology center, a provincial R&D center, and a Guangxi automotive lightingparts engineering technology research center; , established the Automotive Lighting Research Institute; Inrecent years, Nanning Liaowang has increased investment in R&D, accelerate investment in various lensmodules and interactive signal lamp technologies, and continuously enhanced its R&D strength. NationStarOptoelectronics has created 16 R&D platforms, including the Postdoctoral Research Station, and the National-and local-joint Engineering Laboratory for Semiconductor Lighting Materials and Components. It hasundertaken near 30 national research projects such as the national "863" program and the key national R&Dprogram, in addition to more than 100 provincial and ministerial research projects. Besides, it has won honorssuch as "National Intellectual Property Demonstration Enterprise", "China Award for Excellent Patents","Guangdong Science and Technology Progress Award (first/second prize)", as well as Advanced TechnologyGolden Globe Award "2022 Company of the Year” and “2022 Innovative Technology". Moreover, it hasconstantly made breakthroughs and surmounted technological challenges in emerging areas such as Mini/MicroLED, the third generation of semiconductor, smart wear, automotive components, and new optoelectroniccomponents.Scale advantageAs one of the enterprises to first step into the industry of producing and selling lighting products, the Companyforms a capability of mass manufacturing by years of experience accumulation. After years of continuousinvestment, the Company has greatly improved its production automation level. The large-scale and centralizedproduction brings obvious economic benefits to the Company, which not only shows in manufacture cost ofproducts, but also shows in aspects such as raw material procurement and price negotiation. Withmanufacturing bases in Nanning, Liuzhou, Chongqing, Qingdao, and Indonesia, Nanning Liaowang has anannual production capacity of more than five million sets of automotive lights. NationStar Optoelectronicsbegan engaging in LED packaging in 1976. It is included in the first batch of enterprises that have producedLED products and the first Chinese enterprise to go public with LED packaging as its principal business.Besides, it is one of the largest LED manufacturers in China.Advantage of a vertical and integrated LED industrial chain
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By controlling NationStar Optoelectronics, whose business covers the entire LED industry chain, includingupstream LED chip manufacturing, midstream LED packaging, and downstream LED application products, theCompany has optimized the industry chain and enhanced its competitiveness and visibility in the industry.
IV Core Business Analysis
1. Overview
In the Reporting Period, the Company persisted in prioritizing stable growth by implementing decisions andarrangements in this regard. It withstood the pressure and rose to various challenges head-on. By focusing onoptimizing the business structure, expanding markets, advancing technological innovation, deepening reform,and strengthening internal control and management, quality and efficiency were improved, and the productionand operation were stable overall. During the Reporting Period, the Company recorded operating revenue ofRMB 8.760 billion, up by 0.39% year-on-year (YoY); a net profit attributable to its shareholders of RMB 230million, down by 23.10% YoY; and a net profit attributable to its shareholders before exceptional gains andlosses of RMB 222 million, up by 48.12% YoY.During the Reporting Period, the Company mainly focused on the following tasks:
1. Using all means to expand markets
The Company adopted a target-oriented approach to expand markets. First, channel construction was furtheradvanced. The Company deepened the construction of the provincial service centre, expedited thetransformation of distributors to service providers, and optimized the mode of control over distributors. Withthese efforts, channel efficiency was boosted. Additionally, the coverage of the end-consumer market wasexpanded, with more than 30,000 new outlets set up, vigorously tapping the existing market resources.Moreover, cooperation between the Company and its major customers overseas was solidified. To this end, theCompany unlocked the full potential for cooperation with these major customers in order to strengthencustomer stickiness. Concurrently, the Company made vigorous efforts to expand overseas markets, achieving100-plus new overseas customers. Furthermore, efforts were redoubled to promote overseas independent brands,resulting in a stable increase in the proportion of sales of these brands. Second, the marketing modetransformation was furthered. The Company carried out high-level marketing and set up special teams tocomplete the large projects of major customers. Meanwhile, several big project orders were secured.Additionally, sales breakthrough teams were set up to beef up weak markets, such as landscape lighting,intelligent lampposts, and beautiful village construction, and thus achieve diversified sales. By concentrating onthe fore-end planning and design of projects, technological innovation and application and business cooperation,the Company signed an agreement on strategic cooperation with several units, which expanded project sourcesand adjusted its customer structure. Third, the Company expanded and strengthened its automotive lightbusiness. The Company developed several new original equipment manufacturers (OEMs) while stabilizing theexisting customers. Concurrently, regional sales teams were set up in southern, southwestern, and northeasternChina to expand into local auto lamp segment markets of new energy vehicles. Additionally, the Companyundertook 33 projects during the Reporting Period, more than half of which were about automotive lights ofnew energy vehicles. These new high-quality projects provided vigorous support for the future development ofNanning Liaowang. Fourth, the segmentation layout was accelerated. The Company vigorously pushed aheadwith the distribution of sales channels of marine lighting products. It established 24 sales outlets in China's
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coastal provinces and the Southeast Asian markets, and six experiencing zones (halls). With intelligent home asthe focus, the Company constantly expanded into intelligent lampposts, intelligent hotels, and other intelligentapplication fields. Moreover, considering the increasing demand for high-quality light in educational, office,home, and medical & elderly care scenarios, more healthy lighting products were launched.
2. A variety of measures were adopted to minimize costs
Adhering to the "tighten the belt" philosophy, the Company launched the cost reduction campaign to dig formore cost reduction space from multiple perspectives. First, the procurement cost was reduced. Based on theresearch and judgment of the trend of the raw material price, the Company took such measures as pricenegotiation, supplier optimization and adjustment, new material replacement, and public bidding to reduce theprocurement cost. Second, the manufacturing cost was reduced. The "robot assembly line" strategy waspromoted on an ongoing basis by transforming and upgrading assembly lines with automation equipment.Additionally, measures such as automated production, optimizing processes and procedures, and setting quotason material consumption were employed to reduce the manufacturing cost. Third, expenditures were reduced.The hard constraint of budget management was strengthened by controlling three expenditures in accordancewith the budget progress, ensuring that no expenditures would be incurred without budgets, that expenditureswould be incurred within budget, and that no unnecessary expenditures would be incurred.
3. Unswerving and strong innovationThe Company invested RMB504 million in R&D in 2022 to strengthen thearrangements for and breakthroughs in core technologies and self-developed technologies, thereby injectingconstant impetus into the Company's development through technological innovation. First, efforts wereredoubled at technology R&D. The Company strengthened its cooperation with higher education institutes,research institutes, and relevant enterprises. Statistically, it conducted 118 high-tech R&D projects, researched38 core technologies, and launched 25 industry-university-research cooperation projects. Additionally, coretechnology libraries of lighting, heat, machine, electricity, joint control, and industrial design technologies werebuilt. It has been granted 390 new patents, and has won the "National Demonstration Enterprise in IntellectualProperty Rights" title. Second, efforts were redoubled at platform construction. More than 20 R&D platformshave been established by the Company, including the "postdoctoral research workstation", the "GuangdongProvincial Science and Technology Experts Workstation", the "postdoctoral research workstation sub-station",and the National- and local-joint Engineering Laboratory for Semiconductor Lighting Materials andComponents. Additionally, a strategic cooperation agreement was concluded between the Company and Ji HuaLaboratory to build a healthy lighting lab through joint efforts. Moreover, the Research Institute for AutomotiveLights was founded to conduct forward-looking research into automotive light technologies, therebycontributing to the expansion of the Company's products into the mid- and high-end markets. By pushing aheadwith the platform construction, the Company gathered innovation resources and talent, improved its researchmanagement capability, and boosted the core competitiveness of its technological innovations. Third, effortswere redoubled at product iteration. The application of scientific and technological achievements was expeditedto promote the integrated development of the innovation chain and industrial chain. As a result, more than 600products were developed. In the field of new tracks, it has launched a series of health lighting products withinnovative technologies such as photocatalysts and circadian rhythms, intelligent products integrated intomainstream system ecosystems at home and abroad and intelligent solutions for multiple application scenarios,lamps and intelligent control systems suitable for poultry breeding and plant planting, and marine lightingproducts and solutions to meet the different needs of deep-sea, shallow-sea, and aquaculture. In terms of thepackaging field, multiple product series were unveiled, including Mini/Micro LED, the third-generation
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semiconductor, intelligent wear, automotive components, and new optoelectronic components, therebycultivating new development drivers.
4.Solid steps were taken to improve internal strength
First, production and operation monitoring and scheduling were strengthened. The Company checked progressagainst major annual business indicators and phased goals and strengthened production and operationmonitoring as well as analysis, research, and judgment. It promptly addressed difficulties and bottlenecks inoperation by urging each unit to fulfill its own responsibilities. Second, the "three refinements in management"scheme was advanced on all fronts. To establish a lean and efficient organizational system, a cost-leadingproduction management system, and an efficiency-prioritized operational system, the Company developed andimplemented the "three refinements in management" scheme with "five optimizations, six decreases, and sevenreductions" at the core, boosting the production efficiency, reducing the operational costs, and optimizing themanagement efficiency. Third, compliance management and risk control management were enhanced. To"strengthen internal control, promote compliance, and avert risks", the law-based development was furthered.Specifically, the Company issued the Compliance Management Measures and optimized the ComplianceManagement Manual. It also conducted self-assessments of compliance risk in major events and key fields andremedied issues identified in the assessments. By doing so, compliance management was solidified anddelivered better effects. Major risk events were monitored dynamically, and measures were developed toprevent and control major risk events, thereby guarding against the worst-scenario case of major risks.Moreover, the Company fully advanced the "abolishment, revision, and establishment" of regulations andpolicies of the Company in order to form a "1+N" policy system framework led by the Articles of Associationand supported by various special policies. As a result, tasks were performed in a more policy-based andstandardized manner. Fourth, digital transformation was advanced on an ongoing basis. Based on the previousinformation-based development, the Company continued to refine digital management. Specifically, it built aPLM R&D life-cycle management system and a CRM customer relationship management system. Additionally,it developed and optimized the application of the SRM supply chain management system and integratedbusiness information management systems with the SAP system at the core. By doing so, the Companyachieved real-time data connectivity and optimized supply-demand matching. Moreover, the Companyconstantly pushed ahead with the construction of the intelligent manufacturing plant for bulb lamps. It also tookcircuit board and LED automotive light plants as a pilot to build a digital demonstration plant, therebyvisualizing the data for production records.
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
| 2022 | 2021 | Change (%) | |||
| Operating revenue | As % of total operating revenue (%) | Operating revenue | As % of total operating revenue (%) | ||
| Total | 8,759,965,275.96 | 100% | 8,726,241,053.50 | 100% | 0.39% |
| By operating division | |||||
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| Lighting products and luminaries | 5,037,643,901.48 | 57.51% | 4,568,104,109.84 | 52.35% | 10.28% |
| Electronic component manufacturing | 2,821,927,649.97 | 32.21% | 3,389,557,799.61 | 38.84% | -16.75% |
| Export trade and other | 900,393,724.51 | 10.28% | 768,579,144.05 | 8.81% | 17.15% |
| By product category | |||||
| General lighting products | 3,136,174,210.72 | 35.80% | 3,546,404,363.28 | 40.64% | -11.57% |
| LED packaging and components | 2,562,831,923.06 | 29.26% | 3,033,553,358.28 | 34.76% | -15.52% |
| Auto lamps | 1,729,839,032.11 | 19.75% | 899,064,914.20 | 10.30% | 92.40% |
| Trade and other | 1,331,120,110.07 | 15.20% | 1,247,218,417.74 | 14.29% | 6.73% |
| By operating segment | |||||
| Domestic | 6,625,258,201.57 | 75.63% | 6,514,993,928.57 | 74.66% | 1.69% |
| Overseas | 2,134,707,074.39 | 24.37% | 2,211,247,124.93 | 25.34% | -3.46% |
| By sales model | |||||
| Direct sales | 51,977,666.74 | 0.59% | 43,652,588.73 | 0.50% | 19.07% |
| Distribution | 8,442,797,638.60 | 96.38% | 8,289,485,561.64 | 94.99% | 1.85% |
| other | 265,189,970.62 | 3.03% | 393,102,903.13 | 4.50% | -32.54% |
(2) Operating Division, Product Category, Operating Segment and Distribution Model Contributing over10% of Operating Revenue or Operating Profit? Applicable □ Not applicable
Unit: RMB
| Operating revenue | Cost of sales | Gross profit margin | YoY change in operating revenue (%) | YoY change in cost of sales (%) | YoY change in gross profit margin (%) | |
| By operating division | ||||||
| Lighting products and luminaries | 5,037,643,901.48 | 4,015,400,704.94 | 20.29% | 10.28% | 5.75% | 3.41% |
| Electronic component manufacturing | 2,821,927,649.97 | 2,393,967,106.31 | 15.17% | -16.75% | -12.21% | -4.38% |
| Export trade and other | 900,393,724.51 | 814,603,690.28 | 9.53% | 17.15% | 13.33% | 3.05% |
| By product category | ||||||
| General lighting products | 3,136,174,210.72 | 2,441,098,540.83 | 22.16% | -11.57% | -17.53% | 5.62% |
| LED packaging | 2,562,831,923. | 2,134,875,566. | 16.70% | -15.52% | -11.16% | -4.09% |
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| and components | 06 | 37 | ||||
| Auto lamps | 1,729,839,032.11 | 1,441,470,468.21 | 16.67% | 92.40% | 92.88% | -0.21% |
| Trade and other | 1,331,120,110.07 | 1,206,526,926.12 | 9.36% | 6.73% | 6.55% | 0.15% |
| By operating segment | ||||||
| Domestic | 6,625,258,201.57 | 5,357,472,546.68 | 19.14% | 1.69% | 1.33% | 0.30% |
| Overseas | 2,134,707,074.39 | 1,866,498,954.85 | 12.56% | -3.46% | -4.54% | 0.98% |
| By sales model | ||||||
| Direct sales | 51,977,666.74 | 33,122,166.35 | 36.28% | 19.07% | 11.79% | 4.15% |
| Distribution | 8,442,797,638.60 | 7,007,083,844.01 | 17.01% | 1.85% | 1.15% | 0.58% |
| other | 265,189,970.62 | 183,765,491.17 | 30.70% | -32.54% | -35.68% | 3.38% |
Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:
□ Applicable ? Not applicable
(3) Whether Revenue from Physical Sales Is Higher than Service Revenue
? Yes □ No
| Operating division | Item | Unit | 2022 | 2021 | Change (%) |
| Lighting products and luminaries | Unit sales | Piece | 744,109,776 | 673,457,301 | 10.49% |
| Output | Piece | 740,109,114 | 687,092,615 | 7.72% | |
| Inventory | Piece | 108,959,461 | 112,960,123 | -3.54% | |
| Electronic component manufacturing | Unit sales | 0,000 pieces | 21,582,719 | 19,141,234 | 12.76% |
| Output | 0,000 pieces | 20,960,964 | 20,949,449 | 0.05% | |
| Inventory | 0,000 pieces | 2,908,800 | 3,530,555 | -17.61% |
Any over 30% YoY movements in the data above and why:
□ Applicable ? Not applicable
(4) Execution Progress of Major Signed Sales and Purchase Contracts in the Reporting Period
□ Applicable ? Not applicable
(5) Breakdown of Cost of Sales
By operating division and product category
Unit: RMB
| Operating division | Item | 2022 | 2021 | Change (%) | ||
| Cost of sales | As % of total | Cost of sales | As % of total | |||
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| cost of sales (%) | cost of sales (%) | |||||
| Lighting products and luminaries | Raw materials | 3,223,139,894.67 | 44.62% | 2,961,934,059.06 | 40.90% | 8.82% |
| Lighting products and luminaries | Labor cost | 440,097,973.97 | 6.09% | 476,659,230.59 | 6.58% | -7.67% |
| Lighting products and luminaries | Depreciation and other | 348,261,748.35 | 4.82% | 358,494,737.12 | 4.95% | -2.85% |
| Electronic component manufacturing | Raw materials | 1,746,279,785.14 | 24.17% | 1,958,089,448.68 | 27.04% | -10.82% |
| Electronic component manufacturing | Labor cost | 163,881,020.62 | 2.27% | 201,859,706.45 | 2.79% | -18.81% |
| Electronic component manufacturing | Manufacturing costs | 487,707,388.50 | 6.75% | 565,864,082.26 | 7.81% | -13.81% |
| Trade | Other | 630,838,199.11 | 8.73% | 536,965,389.05 | 7.41% | 17.48% |
| Other | Other | 183,765,491.17 | 2.54% | 182,792,408.54 | 2.52% | 0.53% |
| Total | 7,223,971,501.53 | 100.00% | 7,242,659,061.75 | 100.00% | -0.26% |
Unit: RMB
| Product category | Item | 2022 | 2021 | Change (%) | ||
| Cost of sales | As % of total cost of sales (%) | Cost of sales | As % of total cost of sales (%) | |||
| General lighting products | Raw materials | 1,935,461,260.59 | 26.79% | 2,354,705,116.87 | 32.51% | -17.80% |
| General lighting products | Labor cost | 300,220,823.12 | 4.16% | 376,835,910.92 | 5.20% | -20.33% |
| General lighting products | Depreciation and other | 205,416,457.12 | 2.84% | 228,443,021.32 | 3.15% | -10.08% |
| General lighting products | Subtotal | 2,441,098,540.83 | 33.79% | 2,959,984,049.11 | 40.87% | -17.53% |
| Auto lamps | Raw materials | 1,171,866,396.73 | 16.22% | 535,110,159.03 | 7.39% | 119.00% |
| Auto lamps | Labor cost | 133,268,897.37 | 1.84% | 89,481,090.61 | 1.24% | 48.94% |
| Auto lamps | Depreciation | 136,335,174.11 | 1.89% | 122,740,090.34 | 1.69% | 11.08% |
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| and other | ||||||
| Auto lamps | Subtotal | 1,441,470,468.21 | 19.95% | 747,331,339.98 | 10.32% | 92.88% |
| LED packaging and components | Raw materials | 1,576,705,592.88 | 21.83% | 1,811,842,718.22 | 25.02% | -12.98% |
| LED packaging and components | Labor cost | 142,881,340.98 | 1.98% | 155,870,636.12 | 2.15% | -8.33% |
| LED packaging and components | Depreciation and other | 415,288,632.51 | 5.75% | 435,276,111.72 | 6.01% | -4.59% |
| LED packaging and components | Subtotal | 2,134,875,566.37 | 29.55% | 2,402,989,466.06 | 33.18% | -11.16% |
| Trade and other | Raw materials | 896,164,035.05 | 12.41% | 755,330,902.67 | 10.43% | 18.65% |
| Trade and other | Labor cost | 32,061,365.70 | 0.44% | 56,331,299.39 | 0.78% | -43.08% |
| Trade and other | Depreciation and other | 94,536,034.21 | 1.31% | 137,899,596.00 | 1.90% | -31.45% |
| Trade and other | Subtotal | 1,022,761,434.95 | 14.16% | 949,561,798.06 | 13.11% | 7.71% |
| Other | Other | 183,765,491.17 | 2.54% | 182,792,408.54 | 2.52% | 0.53% |
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period? Yes □ NoFor details, see “VII YoY Changes to the Scope of the Consolidated Financial Statements” in Part VI of thisReport.
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable ? Not applicable
(8) Major Customers and Suppliers
Major customers:
| Total sales to top five customers (RMB) | 1,531,594,832.77 |
| Total sales to top five customers as % of total sales of the Reporting Period (%) | 17.49% |
| Total sales to related parties among top five customers as % of total sales of the Reporting Period (%) | 0.00% |
Information about top five customers:
| No. | Customer | Sales revenue contributed for | As % of total sales revenue |
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| the Reporting Period (RMB) | (%) | ||
| 1 | Customer A | 577,095,135.27 | 6.59% |
| 2 | Customer B | 317,020,019.20 | 3.62% |
| 3 | Customer C | 220,094,919.60 | 2.51% |
| 4 | Customer D | 213,427,842.49 | 2.44% |
| 5 | Customer E | 203,956,916.21 | 2.33% |
| Total | -- | 1,531,594,832.77 | 17.49% |
Other information about major customers:
? Applicable □ Not applicableNone of the top five customers is a related party of the Company.Major suppliers:
| Total purchases from top five suppliers (RMB) | 949,954,242.78 |
| Total purchases from top five suppliers as % of total purchases of the Reporting Period (%) | 14.81% |
| Total purchases from related parties among top five suppliers as % of total purchases of the Reporting Period (%) | 0.00% |
Information about top five suppliers:
| No. | Supplier | Purchase in the Reporting Period (RMB) | As % of total purchases (%) |
| 1 | Supplier A | 250,474,909.73 | 3.91% |
| 2 | Supplier B | 247,115,891.74 | 3.85% |
| 3 | Supplier C | 233,309,775.33 | 3.64% |
| 4 | Supplier D | 109,951,913.96 | 1.71% |
| 5 | Supplier E | 109,101,752.02 | 1.70% |
| Total | -- | 949,954,242.78 | 14.81% |
Other information about major suppliers:
? Applicable □ Not applicableNone of the top five suppliers is a related party of the Company.
3. Expense
Unit: RMB
| 2022 | 2021 | Change (%) | Main reason for any significant change | |
| Selling expense | 256,820,593.82 | 235,995,457.89 | 8.82% | |
| Administrative expense | 408,119,409.22 | 351,939,272.35 | 15.96% | |
| Finance costs | -31,478,088.43 | -405,696.07 | -7,659.03% | Currency fluctuations |
| R&D expense | 440,787,934.06 | 374,974,941.64 | 17.55% |
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4. R&D Investments
? Applicable □ Not applicable
| Names of main R&D projects | Project objectives | Project progress | Objectives to be achieved | Expected impact on the future development of the Company |
| Research on the High-power LED Photothermal Module | This project was designed to conduct systematic heat dissipation research and technology development, thereby addressing the heat dissipation issue in the high-power LED photothermal module. By doing so, heat dissipation methods could be matched to photothermal products with different high powers based on their heat dissipation needs, thereby supporting product R&D. | Completed | The project was intended to develop three heat dissipation technical programmes and two luminary prototypes. | The three innovative heat dissipation technologies for high-power LED luminaries would substantially increase the feasibility of high-value product development and provide effective and feasible technical programmes, thereby contributing to the rapid development of high-power outdoor lighting products and marine lighting products. |
| Development of the Intelligent Control System and Application of Intelligent Luminaries | Intelligent classroom lighting products should meet the requirements for teaching usability, visuality and comfort, guiding students' attention to the teaching presentation area, energy conservation, automatic adjustment of illuminance, intelligent switch control, and capability to adapt to different scenarios. | In progress | Parameters such as the illuminance, illuminance uniformity, and unified glare rating meet the national standards, and the illuminance can be adjusted based on needs. Additionally, luminaries can be turned on or off both manually and automatically, and scenario modes can be switched based on needs. | The need for intelligent classroom lighting can be met by using sensitive sensors for intelligent monitoring, thereby dynamically judging the illumination in real time, controlling classroom lighting intelligently, and thus saving energy. |
| Research on the Mechanism of the Influence of Intelligent Dynamic Light Environment on Visual and Non-visual Effects, the Assessment System, and Industrialization | The project is designed to explore and research through a range of relevant experiments, designing activities, and applications in the dimensions of visual efficacy, rhythm regulation, and emotional intervention, and vigorously promote the "healthy light" concept and the integrated and innovative application of LED lighting. The project also aims to explore an experimental research method that is suitable for light and health. Based on the characteristics and needs of different groups of people, the project conducts a comprehensive application study in educational, office, home, and medical & elderly care scenarios, thereby achieving healthy and dynamic lighting through the integration of intelligent lighting technologies and developing Fozhao's "secret lighting" technology. | In progress | To complete four sub-projects: (1) Key Technologies and Product Programme for Fresh Food Lights with High Colour Quality. (2) Study on the Influence of Full-spectrum LED Lighting on the Health Rhythm and Sleep of Humans. (3) Key Technologies and Product Programmes for Elderly-friendly and Medical & Elderly Care Lighting. (4) Establishment of the Dynamic Lighting Environment Laboratory. | The project will provide a rigorous and rich lighting indicator technology library and assessment model for human-centric lighting and commercial colour-rendering lighting and conduct on-site debugging presentations through the laboratory and prototype room. The project will contribute to the development of multiple healthy lighting and commercial colour-rendering lighting products, thereby vigorously supporting the Company in growing into the industry leader in the healthy lighting field. |
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| 24-Pixel intelligent ADB high beam module | Develop an intelligent high beam module, which can effectively use the high beam mode by switching the high beam mode under different driving modes, and improve the driving safety of automobiles. Make driving more comfortable. | In progress | Improve the intelligent development ability of the Company through the design and development regarding electronic software, system and optics. | Improve the technical ability of the Company to equip intelligent ADB high beam in the middle and high-end models, and enable the Company to better occupy the middle and high-end market. |
| Application of Information Security Technologies | The project is designed to study the application of various information security technologies to automotive lights in order to ensure that products operate reliably and that data is secure. | In progress | To design and develop electronic software and systems to improve the Company's technological capability in protecting automotive information security. | Considering that the intelligent and networked development of automobiles has resulted in a rapid increase in the information security need, the project will boost the Company's product competitiveness. |
| Headlight Module | The project is designed to strengthen the competitiveness of the module product series in the market. | In progress | The project is intended to form a module series, thereby satisfying the need of mainstream customers in the market. | The project will develop module products that can meet the market and customer demands and enhance the product competitiveness of the Company. |
| Electronic Controllers for Automotive Lights | The project is designed to develop special electronic controllers to control each feature of high-performance modules. | In progress | The project is intended to achieve platform-based modules through the standardisation of software modules. | The project will boost the Company's competitiveness in the electronic field. |
| The Research and Application of Epitaxial Wafers, Chips, and Packaging of Near-ultraviolet Silica-based AlGaN Vertical LEDs with High Power | The development of third-generation semiconductor technology based on silica is a hot topic at home and abroad. Based on the research into the whole industrial chain, including epitaxial wafers, chips, packaging, and application, of near-ultraviolet silica-based AlGaN vertical LEDs with high power, the project aims to develop chips, devices, and modules for near-ultraviolet LEDs with high power and achieve the large-scale production, thereby boosting the development of third-generation semiconductor technology of Guangdong Province and even China. | In progress | The project is designed to develop chips, devices, and modules for near-ultraviolet LEDs with high power and achieve large-scale production. | The project will improve product quality and market share. |
| The Technology Research on Colour Micro-LED Displays and Ultra-high Brightness Micro Displays | The global LED industry is in the phase of steady development, with the entire LED market maintaining rapid growth. As a result, the application demand for LED displays keeps increasing. Under this circumstance, Micro | In progress | To conduct R&D from the perspectives of Micro-LED integration and transmission system, master the transmission and micro-packaging technologies for Micro-LED devices, remove the restrictions arising from | Technological reserves. |
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| LED technology might become the next blue ocean. The project will help the Company make vigorous arrangements for the Micro LED technology and drive the industry toward the P0.X era faster. | size miniaturisation and the bottlenecks in colourisation, improve the screen quality and brightness of the displays, and make fully colourised Micro-LED display devices, thereby ensuring technological reserves for future development of the display industry. | |||
| The Research and Industrialization of New and High-performance Display Components | Guangdong Province takes the lead in promoting the development of the ultra high-definition (UHD) video industry on a pilot basis. To this end, it supports the connection of upstream to downstream enterprises along the industrial chain, thereby strengthening the development of the 4K and 8K UHD television industry based on domestic core chips and basic software and contributing to the emergence of a group of internationally-influential leading enterprises. By contrast, traditional display technologies can no longer meet the need for UHD televisions. Through the project, the Company will grasp the key packaging process of ultra-thin integration and short-distance light mixing, break through the large-size array precision packaging and millimetre-level regional HDR dynamic control technology, and research and develop ultra-thin integrated microdisplay devices and application products that enable uniform short-distance light mixing and ultra-high brightness. This will speed up the development of the new display industry of Foshan and Guangdong Province, fill the technological gap in this regard in China, and enhance the competitiveness of microdisplay devices in the international market. | In progress | The project is intended to research and develop ultra-thin integrated microdisplay devices and application products that enable uniform short-distance light mixing and ultra-high brightness and industrialize them. | The project will improve product quality and market share. |
| The Research and Application regarding the Key Technology of High-lumen Compound Reflex LED Chips for Automobiles and High-density Matrix Packaging | China is the world's largest automobile market at present. The explosive growth of the automotive market has driven the upgrading of automotive lighting parts. However, the automotive LED market has been monopolized by two giants: Philips from the Netherlands and Osram from Germany, which has greatly restricted the development of China's LED industry. The project is designed to research and develop the technology of | In progress | The project is intended only for the LED packaging area and to research and develop matrix packaging devices featuring high density and high reliability. By doing so, the Company will develop a new product with independent intellectual property. | The project will improve product quality and market share. |
Annual Report 2022
| high-lumen compound reflex LED chips for automobiles and high-density matrix packaging, which will substantially boost the development of China's semiconductor lighting industry and drive the upgrading of the LED industry. As a result, the domestically leading position of the LED industry in Foshan and even Guangdong Province will be further consolidated. | ||||
| The Technology Research and Industrialization of the Micro Display Module Based on Highly Efficient Colour Conversion | It is imperative for Foshan, the leader in China's display packaging industry, to research and develop key microdisplay manufacturing technology, thereby capturing market share. The project will build a microdisplay key technology research platform by giving full play to the advantage of industry-university-research integration of the partnering institutions. It will start with the architecture and key materials of the microdisplay packaging and research and develop micro spacing display devices featuring liquid crystal-level resolution. Additionally, the project will remove the bottlenecks in microdisplay manufacturing, fill the gap in this regard in China, and promote the upgrading of Foshan's LED industry. Moreover, the leading position of China in the field of LED semiconductor technology application will be further consolidated, and China's independent R&D strength in semiconductor microdisplay manufacturing technology will be improved. | In progress | The project will research the "technology and industrialization of the microdisplay module based on highly efficient colour conversion" with a focus on the backward development of domestic microdisplay technology and deficient research on chip manufacturing and module device packaging. It will start with the architecture and key materials of the microdisplay packaging and develop the technology of microdisplay module precision integration and planar moulded packaging, thereby achieving efficient large-scale manufacturing of display modules featuring high precision and a high contrast ratio. | The project will improve product quality and market share. |
| The Research on the Key Technology and Innovative Application of Deep Ultraviolet Solid-state Light Sources | Guangdong Province is among the top three mercury-vapour lamp producers and consumers in China, thus enjoying a high market share in the deep ultraviolet application industries related to mercury-vapour lamps, such as water/air/surface disinfection. Therefore, it is imperative for Guangdong Province to develop a new environmental light source that can substitute for mercury-vapour lamps. The project is designed to promote the industrial upgrading of Guangdong Province, a major mercury-vapour lamp producer and consumer, by developing the whole industrial chain technology with independent | In progress | With the self-developed technology roadmap, the project focuses on breaking through the key technology of deep ultraviolet solid-state light source packaging and developing deep ultraviolet LED devices with a long service life. | The project will improve product quality and market share. |
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| intellectual property rights for the deep ultraviolet solid-state light sources, thereby developing the third-generation semiconductor material and device industry into a pivot of the "innovation-driven development strategy" of Guangdong Province and even the Guangdong-Hong Kong-Macao Greater Bay Area. | ||||
| Guangdong Provincial Key Laboratory of Semiconductor Microdisplay Enterprises | China's new display industry has recorded substantial progress in recent years, topping the world in terms of panel capacity. However, core microdisplay patents are mainly controlled by the US, Japan, South Korea, and Taiwan, China, placing the domestic microdisplay industry under a technological blockade and hindering the breakthrough in the key technology of microdisplay manufacturing. The China-US and South Korea-Japan trade frictions are a wake-up call for the development of a semiconductor microdisplay lab. The Guangdong Provincial Key Laboratory of Semiconductor Microdisplay Enterprises will research the common technology in the semiconductor microdisplay industry through resource integration and optimization, thereby fully boosting the innovation capability and strength of Guangdong Province's microdisplay industry, promoting the development of relevant industries, catalysing the boom in the whole province's microdisplay industry, and helping the microdisplay industry earn the right to speak in the international market. | In progress | The lab focuses on tackling common technological difficulties in the industry and designing and researching the packaging architecture and key packaging process of UHD semiconductor microdisplays based on the special requirements of such microdisplays. Additionally, the lab will also assess the reliability of the microdisplay devices that it has developed and develop semiconductor microdisplay devices and module repair technology, thereby achieving the industrialization and demonstrative application of relevant technologies. | As an important platform to improve enterprises' self-innovation capability, the lab will carry out long-term and stable industry-university-research cooperation with universities & research institutes, facilitate basic application study as well as result promotion and industrialization, and provide vigorous support for improving the Company's core competitiveness and developing the Company into an innovation-based enterprise. |
| The R&D and Industrialization of Quantum Dot Light-emitting Materials and Components with Low Environmental Pollution | The quantum dot materials in the quantum dot backlight technology in the industry are mainly in line with the CdSe system, and the cadmium content in the CdSe quantum dot backlight display products is above the RoHS standards of the European Union. Additionally, China has introduced a similar standard for low cadmium. The project is designed to lower the content of cadmium in the quantum dot backlight diaphragm to within the RoHS standard through the research of the low-cadmium quantum dot backlight | In progress | Through the project and based on the requirement for quantum dot light emission with low environmental disruption, the business's advantages in the LED industry will be fully leveraged to research the backlight technology applicable to quantum dots with low environmental pollution and build a pilot scale assembly line for backlight modules for the quantum dot technology with low environmental pollution. | The project will improve product quality and market share. |
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| technology and integrate the industrial chain from the quantum dot materials to quantum dot backlight machine to boost the development of the quantum dot backlight and display industry. | ||||
| The Guangdong-Hong Kong-Macao Joint Lab of Intelligent Micro-nano Photoelectric Technology | Intelligent micro/nano optoelectronic technology, which integrates photonics, nanotechnology, and artificial intelligence, is a key scientific technology in the field of national advanced manufacturing and artificial intelligence. This laboratory is oriented towards major national needs and economic innovation and development in the Greater Bay Area of Guangdong, Hong Kong, and Macao. It gathers the advantages of four parties to carry out research on new photoelectric materials and micro/nano device technology, semiconductor photoelectric chip micro/nano intelligent manufacturing, and semiconductor micro/nano intelligent display, addressing forward-looking international scientific issues and industry common technical issues. The establishment of the laboratory will promote the construction of the International Science and Technology Innovation Center in the Greater Bay Area, and is of great significance for achieving high-quality development of the photoelectric industry in the Greater Bay Area of Guangdong, Hong Kong, and Macao. | In progress | With the geographical and resource advantages of the Guangdong-Hong Kong-Macao Greater Bay Area, the lab focuses on the "photoelectric materials-micro-nano devices-micro-nano manufacturing-micro-nano display" chain and researches the technology roadmap of the Micro-LED micro-nano display, thereby addressing forward-looking scientific issues and common technical issues in the industry. | Through the innovative cooperation mechanism and the complementation of the advantages of Guangdong Province and Macao, the common technical issues in the industry can be resolved, thereby advancing the high-quality development of the Company. |
| Research on the Third-generation Semiconductor Power Device and Module Packaging Technology | The third-generation semiconductor is pivotal to the innovative development as well as transformation and upgrading of industries such as military equipment for national defence, 5G communications, new energy vehicles, and rail transit. It is becoming the technological high ground competed by countries around the world. However, China still falls behind in the development of third-generation semiconductor power and electronic devices, with little research on chip manufacturing and module device packaging in this regard. This has restricted China's semiconductor industry. Therefore, research on third-generation semiconductor | In progress | For the backward third-generation semiconductor power and electronic devices in China and little research on chip manufacturing and module device packaging, the project will "research third-generation semiconductor power devices and module packaging technology" and then propose the innovative packaging technology applicable to the third-generation semiconductor, especially the double-sided packaging technology. This enables the Company to develop the SiC high-power module with independent intellectual property. Moreover, the SiC high- | The project will expedite the distribution of the third-generation semiconductor, facilitate the development of high-quality third-generation semiconductors, and provide customized technological solutions for customers, thereby helping the Company increase market share. |
Annual Report 2022
| devices must be conducted as soon as possible. Considering that the packaging module plays a pivotal role in the device and system, the project will help the Company develop the third-generation half-power module with independent intellectual property, thereby facilitating the replacement using domestic products. | power module can withstand ultra-high power density, has extremely high reliability, and has huge potential for being used in such fields as new energy vehicles, energy grids, and industrial electric machines. | |||
| The Research on the Packaging Technology for High-Reliability Digital Module CHIP LED | The future of the market for smart home devices presents intriguing prospects, with opportunities in home security and protection, appliances, entertainment, lighting, healthcare and kitchen applications. Technological advances are facilitating the growth of the global smart home market. Digital modules make smart home appliances “visible” to consumers in different application scenarios. The CHIP LED digital module plays a significant role to be reckoned with and shows a bright market prospect in the field of home appliance display. Through the implementation of this project, the CHIP LED digital display module will be developed to meet the requirements for application in complicated environments. | In progress | Through the implementation of this project, we will further strengthen our independent R&D capability within the Company, promote the key technology development and reliability research process of the CHIP LED devices, give full play to the size advantage of the CHIP LED devices, optimize the performance such as waterproofing, anti-static properties, cold / thermal shock resistance of home appliance digital modules from the device level, and develop high-reliability CHIP LED devices with independent intellectual property rights, so as to bring into play their huge application potential in the field of home appliance display. | Through the implementation of this project, we will enrich CHIP LED products and reinforce the development of customized digital modules for high-end home appliances, making it a new profit growth point for the Company. |
| The Research on Full-color and Integrated Packaging of Micro-LED Display with High Brightness and Contrast | With the advantages of high efficiency, energy conservation, active luminescence and ultra-high resolution, Micro-LED stands out from an array of novel display technologies and has become a focus in novel technology competitions. This project aims to satisfy the major demand for large-screen 4K/8K UHD display from national policies and social development. In combination with the main development trend of full-color Micro-LED display at home and abroad, we will overcome the core technology bottleneck of the industry such as full-color packaging technology, and develop high-brightness and high-contrast Micro-LED display devices and modules that meet the market demand for | In progress | This project aims to satisfy the major demand for large-screen 4K/8K UHD display from national policies and social development. In combination with the main development trend of full-color Micro-LED display at home and abroad, we will overcome the core technology bottleneck of the industry such as full-color packaging technology, and develop high-brightness and high-contrast Micro-LED display devices and modules that meet the market demand for better interactivity and display performance. By doing so, the development of upstream and downstream industries of the industry chain will be boosted, and | The project is of vital importance in terms of promoting the localization of China’s LED display industry chain. |
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| better interactivity and display performance. | China’s dominant position in display applications will be further consolidated. | |||
| The Research on the Key Technology of 4K/8K Full-color Micro-LED Displays with Ultra High Definition (UHD) | The core technology of UHD display represented by Micro/Mini-LED devices is still monopolized by Samsung of South Korea, Apple of the US, Sony of Japan and other international giants. Manufacturers in the province need to pay high royalties to engage in the business, which seriously constrains the strategic transformation of the LED industry in Guangdong Province. Therefore, to vigorously develop the UHD video display industry, the key solutions are to break through the bottleneck of Micro/Mini-LED device technology and motivate the transformation and upgrading of UHD display in the LED industry, so as to secure the internationally advanced technology status of the province’s LED display. | In progress | In this project, we will develop high performance Mini/Micro-LED display devices and display modules by researching technical problems such as high density IMD Mini/Micro-LED integrated packaging technology, high compatibility pixel cutout manufacturing technology of Mini/Micro-LED display devices, and mass transfer technology of Micro-LED chips. Related technology will be developed to remove the blockade of international giants, fill the gap of local high-end applications, and achieve the efficient and rapid 4K/8K development for the HD display. | The Company’s dominant position in display applications will be consolidated. |
Details about R&D personnel:
| 2022 | 2021 | Change (%) | |
| Number of R&D personnel | 1,920 | 1,717 | 11.82% |
| R&D personnel as % of total employees | 14.89% | 13.27% | 1.62% |
| Educational background | |||
| Bachelor’s degree | 999 | 929 | 7.53% |
| Master’s degree | 105 | 113 | -7.08% |
| Doctoral degree and above | 18 | 14 | 28.57% |
| Junior college and below | 798 | 661 | 20.73% |
| Age structure | |||
| Below 30 | 793 | 788 | 0.63% |
| 30~40 | 772 | 632 | 22.15% |
| Over 40 | 355 | 297 | 19.53% |
Details about R&D investments:
| 2022 | 2021 | Change (%) | |
| R&D investments (RMB) | 503,728,194.02 | 489,324,165.24 | 2.94% |
| R&D investments as % of operating revenue | 5.75% | 5.61% | 0.14% |
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| Capitalized R&D investments (RMB) | 43,625,369.92 | 85,322,870.74 | -48.87% |
| Capitalized R&D investments as % of total R&D investments | 8.66% | 17.44% | -8.78% |
Reason for any significant change to the composition of R&D personnel and impact:
□ Applicable ? Not applicable
Reasons for any significant YoY change in the percentage of R&D investments in operating revenue:
□ Applicable ? Not applicable
Reason for any sharp variation in the percentage of capitalized R&D investments and rationale:
□ Applicable ? Not applicable
5. Cash Flows
Unit: RMB
| Item | 2022 | 2021 | Change (%) |
| Subtotal of cash generated from operating activities | 8,658,886,730.27 | 8,755,037,589.47 | -1.10% |
| Subtotal of cash used in operating activities | 7,593,998,409.58 | 8,321,563,641.13 | -8.74% |
| Net cash generated from/used in operating activities | 1,064,888,320.69 | 433,473,948.34 | 145.66% |
| Subtotal of cash generated from investing activities | 378,208,504.00 | 2,039,628,965.81 | -81.46% |
| Subtotal of cash used in investing activities | 724,926,218.64 | 901,973,947.77 | -19.63% |
| Net cash generated from/used in investing activities | -346,717,714.64 | 1,137,655,018.04 | -130.48% |
| Subtotal of cash generated from financing activities | 1,156,078,320.59 | 127,386,000.00 | 807.54% |
| Subtotal of cash used in financing activities | 1,901,637,286.67 | 1,119,845,047.03 | 69.81% |
| Net cash generated from/used in financing activities | -745,558,966.08 | -992,459,047.03 | 24.88% |
| Net increase in cash and cash equivalents | 5,762,254.34 | 570,889,827.84 | -98.99% |
Explanation of why any of the data above varies significantly:
? Applicable □ Not applicable
1. Net cash generated from operating activities increased by 145.66% year on year, mainly due to the Companyas the parent strengthening inventory control.
Annual Report 2022
2. Net cash generated from investing activities decreased by 130.48% year on year, mainly due to more cashreceived from disinvestment as a result of the sale of certain shareholdings last year.
3. Net cash generated from financing activities increased by 24.88% year on year, mainly due to the increasedborrowings received in the current period.Explanation of why net cash generated from/used in operatingactivities varies significantly from net profit for the Reporting Period:
? Applicable □ Not applicableThere is a gap of RMB714,044,964.97 between net cash generated from operating activities ofRMB1,064,888,320.69 and net profit of RMB350,843,355.72 in the year, mainly because cash received fromsale of goods was higher than cash paid for raw materials, in addition to high non-cash costs, in the currentperiod.V Analysis of Non-Core Businesses? Applicable □ Not applicable
Unit: RMB
| Amount | As % of profit before tax | Source/Reason | Recurrent or not | |
| Return on investment | 10,633,954.02 | 2.79% | Dividend income from other equity investments held during the period, and gains on forward forex settlement contracts | Not |
| Gain/loss on changes in fair value | -9,518,428.58 | -2.49% | Gain/loss on changes in fair value of financial instruments | Not |
| Asset impairments | -91,517,378.38 | -23.98% | Inventory valuation allowances | Not |
| Non-operating income | 18,757,057.63 | 4.91% | Receipt of compensation, sale of retired equipment, and carryforwards of payables that require no payment | Not |
| Non-operating expense | 16,812,534.08 | 4.40% | Loss on retirement of non-current assets | Not |
| Other income | 84,894,793.92 | 22.24% | Receipt of continuing government grants | Not |
| Credit impairment loss | -15,404,763.61 | -4.04% | Allowances for doubtful accounts | Not |
Annual Report 2022
| Asset disposal income | 968,273.19 | 0.25% | Gains or losses on the disposal of non-current assets | Not |
VI Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
| 31 December 2022 | 1 January 2022 | Change in percentage (%) | Reason for any significant change | |||
| Amount | As % of total assets | Amount | As % of total assets | |||
| Monetary assets | 2,484,508,907.43 | 16.25% | 2,435,226,244.90 | 14.67% | 1.58% | |
| Accounts receivable | 1,920,770,941.76 | 12.56% | 2,018,106,424.43 | 12.16% | 0.40% | |
| Contract assets | 5,466,875.07 | 0.04% | 8,561,303.10 | 0.05% | -0.01% | |
| Inventory | 2,031,637,401.87 | 13.29% | 1,989,531,479.77 | 11.99% | 1.30% | |
| Investment property | 44,611,882.44 | 0.29% | 47,102,214.34 | 0.28% | 0.01% | |
| Long-term equity investments | 181,931,792.66 | 1.19% | 181,545,123.09 | 1.09% | 0.10% | |
| Fixed assets | 3,508,094,282.41 | 22.95% | 3,514,723,653.20 | 21.17% | 1.78% | |
| Construction in progress | 1,282,780,335.14 | 8.39% | 1,087,564,087.47 | 6.55% | 1.84% | |
| Right-of-use assets | 13,047,727.73 | 0.09% | 14,126,206.08 | 0.09% | 0.00% | |
| Short-term borrowings | 157,715,359.35 | 1.03% | 226,779,997.01 | 1.37% | -0.34% | |
| Contract liabilities | 125,143,161.61 | 0.82% | 141,336,712.44 | 0.85% | -0.03% | |
| Long-term borrowings | 747,931,023.71 | 4.89% | 0.00 | 0.00% | 4.89% | New bank loan received in the current period |
| Lease liabilities | 7,055,542.18 | 0.05% | 8,065,560.58 | 0.05% | 0.00% | |
| Notes receivable | 821,537,774.07 | 5.37% | 1,688,000,575.74 | 10.17% | -4.80% | Reclassification of notes in the current period |
| Receivables financing | 569,868,831.79 | 3.73% | 10,660,409.19 | 0.06% | 3.67% | Reclassification of received bank acceptance notes with high credit status and low credit risk in the |
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| current period | ||||||
| Other current liabilities | 100,192,681.00 | 0.66% | 10,716,009.78 | 0.06% | 0.60% |
Indicate by tick mark whether overseas assets account for a high proportion of total assets.
□ Applicable ? Not applicable
2. Assets and Liabilities at Fair Value
? Applicable □ Not applicable
Unit: RMB
| Item | Beginning amount | Gain/loss on fair-value changes in the Reporting Period | Cumulative fair-value changes charged to equity | Impairment allowance for the Reporting Period | Purchased in the Reporting Period | Sold in the Reporting Period | Other changes | Ending amount |
| Financial assets | ||||||||
| 1. Held-for-trading financial assets (exclusive of derivative financial assets) | 20,000,000.00 | 4,849.31 | 90,000,000.00 | 50,000,000.00 | 60,004,849.31 | |||
| 2. Derivative financial assets | 5,825,678.18 | -4,853,645.26 | 972,032.92 | |||||
| 4. Investments in other equity instruments | 1,504,980,024.07 | -450,756,937.01 | 586,659,393.52 | 190,031,740.66 | 864,191,346.40 | |||
| Subtotal of financial assets | 1,530,805,702.25 | -455,605,732.96 | 586,659,393.52 | 90,000,000.00 | 240,031,740.66 | 925,168,228.63 | ||
| Total of the above | 1,530,805,702.25 | -455,605,732.96 | 586,659,393.52 | 90,000,000.00 | 240,031,740.66 | 925,168,228.63 | ||
| Financial liabilities | 9,367.37 | 4,669,632.63 | 4,679,000.00 | |||||
Details about other changes:
Annual Report 2022
Note: Gain/loss on fair-value changes recorded in equity in the current period was inclusive of value-addedtaxes payable arising from the sale of shares of the stocks including Gotion High-tech, Xiamen Bank, etc.Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes ? No
3. Restricted Asset Rights as at the Period-End
Unit: RMB
| Item | Ending carrying value | Reason for restriction |
| Monetary assets | 534,826,528.99 | Security deposits for notes, performance bonds, payments by buyers for pre-sale of properties |
| Notes receivable | 751,280,639.50 | In pledge for notes pool and notes receivable that are endorsed and undue |
| Fixed assets | 149,146,773.04 | As mortgage and guarantee for related party, see XIV (III) “Guarantees” in Part X |
| Intangible assets | 10,963,743.21 | |
| Total | 1,446,217,684.74 | — — |
VII Investments Made
1. Total Investment Amount
? Applicable □ Not applicable
| Investment amount in the Reporting Period (RMB) | Investment amount in the same period of last year (RMB) | Change (%) |
| 1,656,670,405.07 | 1,279,177,652.50 | 29.51% |
2. Major Equity Investments Made in the Reporting Period
? Applicable □ Not applicable
Unit: RMB
| Name of investee enterprise | Main businesses | Investment methods | Invested amount | Shareholding percentage | Funding Resources | Partners | Investment Duration | Product type | Status as on the date of the balance sheet | Predicted return | Investment return in the current period | Whether involved in any legal actions | Date of disclosure (if any) | Disclosure index (if any) |
| Fosh | Deve | Acqu | 1,517 | 21.48 | Self- | None | Long | Majo | Own | 19,76 | 19,76 | No | 26 | Anno |
Annual Report 2022
| an NationStar Optoelectronics Co., Ltd. | lopment, production and marketing of LED and components | ired | ,098,116.62 | % | funded | -term | rity-owned subsidiary | ership transferred, together with related creditor’s rights and liabilities | 5,750.04 | 5,750.04 | February 2022 | uncement No. 2022-014 on Completion of Transfers of Assets in Major Asset Acquisitions disclosed on http://www.cninfo.com.cn | ||
| Foshan Sigma Venture Capital Co., Ltd. | Project investment and related planning, consulting and management services | Acquired | 100.00% | Self-funded | None | Long-term | Wholly-owned subsidiary | Ownership transferred, together with related creditor’s rights and liabilities | No | 26 February 2022 | Announcement No. 2022-014 on Completion of Transfers of Assets in Major Asset Acquisitions disclosed on http://www.cninfo.com.c |
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| n | ||||||||||||||
| Guangdong Fenghua Semiconductor Technology Co., Ltd. | R&D, manufacture and sale of electronic components and integrated circuit products | Acquired | 268,819,271.98 | 21.45% | Self-funded | None | Long-term | Wholly-owned subsidiary | Ownership transferred, together with related creditor’s rights and liabilities | No | 13 August 2022 | Announcement No. 2022-048 on Majority-owned Subsidiary’s Acquisition of Equity Interests in Guangdong Fenghua Semiconductor Technology Co., Ltd. & Related-party Transaction on http://www.cninfo.com.cn | ||
| Total | -- | -- | 1,785,917,388.60 | -- | -- | -- | -- | -- | -- | 19,765,750.04 | 19,765,750.04 | -- | -- | -- |
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable ? Not applicable
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4. Financial Investments
(1) Securities Investments
? Applicable □ Not applicable
Unit: RMB
| Security type | Security code | Security name | Initial investment cost | Measurement method | Beginning carrying value | Gain/Loss on fair-value changes in the Reporting Period | Accumulated fair-value changes recorder in equity | Purchased in Reporting Period | Sold in Reporting Period | Gain/loss in Reporting Period | Ending carrying value | Accounting title | Funding source |
| Domestically/Overseas listed stock | 002074 | Gotion High-tech | 83,014,485.13 | Fair value method | 887,464,218.75 | -384,152,737.28 | 410,952,709.40 | 9,344,286.94 | 1,715,644.18 | 493,967,194.53 | Investments in other equity instruments | Self-funded | |
| Domestically/Overseas listed stock | 601187 | Xiamen Bank | 152,957,606.83 | Fair value method | 575,955,944.40 | -66,604,199.73 | 175,706,684.12 | 180,687,453.72 | 14,339,628.75 | 328,664,290.95 | Investments in other equity instruments | Self-funded | |
| Domestically/Overseas listed stock | N/A | Foshan branch of Guangdong Development Bank | 500,000.00 | Fair value method | 500,000.00 | 500,000.00 | Investments in other equity instruments | Self-funded | |||||
| Domestically/Ove | 601777 | Lifan Technology | 1,176,008.74 | Fair value metho | 1,558,778.18 | -586,745.26 | 972,032.92 | Held-for-tradin | Other |
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| rseas listed stock | d | g financial assets | ||||||||||
| Total | 237,648,100.70 | -- | 1,465,478,941.33 | -451,343,682.27 | 586,659,393.52 | 0.00 | 190,031,740.66 | 16,055,272.93 | 824,103,518.40 | -- | -- | |
(2) Investments in Derivative Financial Instruments
? Applicable □ Not applicable
1) Derivative Investments for Hedging Purposes in the Reporting Period
? Applicable □ Not applicable
Unit: USD’0,000
| Type of derivative | Initial investment amount | Gain/Loss on fair-value changes in the Reporting Period | Accumulated fair-value changes recorded in equity | Purchased in the Reporting Period | Sold in the Reporting Period | Ending investment amount | Ending investment amount as % of the Company’s ending equity |
| General forward | 180 | 7.1 | 0 | 0 | 180 | 0 | 0.00% |
| General forward | 280 | 12.09 | 0 | 0 | 280 | 0 | 0.00% |
| General forward | 350 | 11.28 | 0 | 0 | 350 | 0 | 0.00% |
| General forward | 360 | 11.54 | 0 | 0 | 360 | 0 | 0.00% |
| General forward | 700 | -16.18 | 0 | 0 | 700 | 0 | 0.00% |
| General forward | 260 | -6.02 | 0 | 0 | 260 | 0 | 0.00% |
| General forward | 1,000 | -34.07 | 0 | 0 | 1,000 | 0 | 0.00% |
| Forward options | 1,000 | 5.37 | 0 | 1,000 | 1,000 | 0 | 0.00% |
| General forward | 1,000 | -22.49 | 0 | 1,000 | 1,000 | 0 | 0.00% |
| General forward | 1,000 | -41.3 | 0 | 1,000 | 1,000 | 0 | 0.00% |
| General forward | 1,000 | -69.75 | 0 | 1,000 | 1,000 | 0 | 0.00% |
| General forward | 1,000 | 0 | 0 | 1,000 | 0 | 1,000 | 0.12% |
| General forward | 0.05 | 0 | 0 | 0.05 | 0.05 | 0 | 0.00% |
| General forward | 500 | -0.76 | 0 | 500 | 500 | 0 | 0.00% |
Annual Report 2022
| General forward | 400 | 2.09 | 0 | 400 | 400 | 0 | 0.00% |
| General forward | 1,000 | 0 | 0 | 1,000 | 0 | 1,000 | 0.12% |
| General forward | 1,000 | 0 | 0 | 1,000 | 0 | 1,000 | 0.12% |
| General forward | 429.05 | 4.38 | 0.00 | 129.88 | 299.17 | 0.00 | 0.00% |
| Total | 11,459.10 | -136.72 | 0.00 | 8,029.93 | 8,329.22 | 3,000.00 | 0.36% |
| Major changes in accounting policies and specific accounting principles adopted for hedges in the Reporting Period compared to the last reporting period | No | ||||||
| Actual gain/loss in the Reporting Period | The actual loss stood at USD-1.3672 million in the Reporting Period. | ||||||
| Effectiveness of hedging | The Company carries out foreign exchange hedging business appropriately according to specific situations, which can effectively reduce the foreign exchange market risk, lock in industrial profit of export business and avoid exchange rate risk. | ||||||
| Funding source | Self-funded | ||||||
| Analysis of risks and control measures associated with derivative investments held in Reporting Period (including but not limited to | Risk analysis of the forward foreign exchange settlement: 1. Market risk: Given the unpredictability of economic changes at home and abroad, the foreign exchange hedging business faces market risk, to some extent. 2. Foreign currency risk: When the foreign currency trend greatly deviates from the Company's judgment of such trend, the expenses after locking the exchange rate might exceed that before doing so, resulting in losses to the Company. 3. Internal control risk: Imperfect internal control policies probably triggers risks to the foreign exchange hedging business, as it is highly professional and complex. 4. Trading default risk: If the counterparty of foreign exchange hedging defaults by failing to pay hedging earnings to the Company as agreed, the actual exchange loss of the Company will not be offset. 5. Collection forecast risk: Marketing departments forecast collection based on the actual and expected orders of customers. In practice, customers may adjust such orders. As a result, the Company's collection forecast will not be accurate, leading to delivery risks. Adopted risk control measures: 1. The Company will strengthen the research and analysis of the exchange rate. When the exchange rate fluctuates greatly, it will adjust the business strategy in a timely manner to stabilize the export business and avoid exchange losses to the utmost. 2. The Company has established the Management System for Foreign Exchange Hedging and majority-owned subsidiary NationStar Optoelectronics has also | ||||||
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| market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) | formulated the Management System for Forward Forex Settlement and Sale and Forex Option Transactions, clearly defining the operating principles, approval authority, responsible department and responsible person, internal operation procedures, information isolation measures, internal risk reporting system, risk management procedures, and information disclosure related to the foreign exchange hedging business. 3. In order to prevent any delay in the foreign exchange hedging, the Company will strengthen the management of accounts receivable, actively collect receivables, and avoid any overdue receivables. In the meantime, the Company plans to increase the export purchases and purchase corresponding credit insurance so as to reduce the risk of default and customer default. 4. The Company’s foreign exchange hedges must be strictly based on the Company’s foreign exchange earnings prediction. Besides, the Company shall strictly control the scale of its foreign exchange hedges, and manage all risks that the Company may face within a controllable range. 5. The internal audit department of the Company shall check the actual signing and execution situation of all trading contracts on a regular or irregular basis. |
| Changes in market prices or fair value of derivative investments in Reporting Period (fair value analysis should include measurement method and related assumptions and parameters) | The Company carries out recognition and measurement in accordance with the Accounting Standard for Business Enterprises No. 22—Recognition and Measurement of Financial Instruments, the Accounting Standard for Business Enterprises No. 24—Hedges, the Accounting Standard for Business Enterprises No. 37—Presentation of Financial Instrument and other applicable regulations. Fair value is arrived at based on the price provided by pricing service providers such as banks or the price obtained. Fair value measurement and recognition are carried out on a monthly basis. Changes in the fair value of forward exchange settlement contracts entered into by the Company are mainly attributable to difference arising from exchange rate fluctuations. |
| Legal matters involved (if applicable) | N/A |
| Disclosure date of announcement on board’s approving derivative investment (if any) | 13 August 2022 |
| Opinion of independent directors on derivative | The independent directors are of the opinion that: The foreign exchange hedging transactions conducted by the Company are based on normal production and operation, are supported by specific businesses, aim to avoid and prevent foreign exchange risks associated with export businesses, do not involve speculative operations and are consistent with the needs of the Company's operation and development. The Company has established relevant |
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| investments and risk control | business management policies and risk control and prevention measures. The risk is controllable. The proposal was passed following a lawful, valid decision-making procedure, has no negative impact on the Company's normal operation and business development and does not undermine the interest of the Company and its shareholders. Therefore, the Company's conducting foreign exchange hedging transactions is approved. |
2) Derivative Investments for Speculative Purposes in the Reporting Period
□ Applicable ? Not applicable
No such cases in the Reporting Period.
5. Use of Funds Raised
□ Applicable ? Not applicable
No such cases in the Reporting Period.
VIII Sale of Major Assets and Equity Investments
1. Sale of Major Assets
□ Applicable ? Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Investments
□ Applicable ? Not applicable
IX Major Subsidiaries? Applicable □ Not applicableMajor fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on theCompany’s net profit:
Unit: RMB
| Name | Relationship with the Company | Principal activity | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Foshan NationStar Optoelectronics Co., Ltd. | Subsidiary | Manufacturing | 618,477,169.00 | 6,579,814,806.63 | 3,753,544,060.63 | 3,579,885,727.44 | 123,162,599.21 | 121,273,711.19 |
| Nanning Liaowang Auto Lamp Co., Ltd. | Subsidiary | Manufacturing | 35,055,700.00 | 2,452,478,410.10 | 875,516,367.24 | 1,559,021,639.99 | 37,931,281.46 | 44,172,944.70 |
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| FSL Zhida Electric Technology Co., Ltd. | Subsidiary | Manufacturing | 50,000,000.00 | 157,927,247.59 | 72,606,821.80 | 211,155,180.35 | 11,356,073.00 | 10,014,442.47 |
| FSL Chanchang Optoelectronics Co., Ltd. | Subsidiary | Manufacturing | 72,782,944.00 | 641,941,438.30 | 229,279,691.30 | 581,707,827.94 | 72,005,624.31 | 61,997,036.97 |
Subsidiaries obtained or disposed in the Reporting Period:
?Applicable □ Not applicable
| Name | How the subsidiary was obtained or disposed of in the Reporting Period | Impact on overall operations and performance |
| Foshan NationStar Optoelectronics Co., Ltd. | Acquired | These two subsidiaries combined increased the Company’s operating revenue and net profit attributable to the Company as the parent by RMB3,520 million and RMB19.7658 million , respectively. |
| Foshan Sigma Venture Capital Co., Ltd. | Acquired |
Information about major majority- and minority-owned subsidiaries:
—In a major asset restructuring in February 2022, the Company acquired a 21.32% interest in Foshan NationStarOptoelectronics Co., Ltd. (NationStar) from Rising Group and its acting-in-concert party. Upon the conclusion ofthe transaction, the Company eventually holds a 21.48% interest in NationStar, and NationStar has become amajority-owned subsidiary of the Company. The Company has included NationStar in its consolidated financialstatements since Q1 2022.—Nanning Liaowang Auto Lamp Co., Ltd. signed an equity agreement with its existing shareholders in July 2021,and acquired Nanning Liaowang through equity acquisition and capital increase and share expansion. Upon theconclusion of the transaction, the Company eventually holds a 53.79% interest in Nanning Liaowang, andNanning Liaowang has become a majority-owned subsidiary of the Company. The Company has includedNanning Liaowang in its consolidated financial statements from the date when the Company obtained actualcontrol of it.—FSL Zhida Electric Technology Co., Ltd. (FSL Zhida) was incorporated by the Company, Foshan ZhibidaEnterprise Management Co., Ltd. and Dongguan Baida Semiconductor Material Co., Ltd. on a joint investmentbasis. FSL Zhida obtained its business license on 21 October 2016. Holding a stake of 51% in it, the Company hasincluded FSL Zhida in its consolidated financial statements since the date of FSL Zhida’s incorporation.
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—FSL Chanchang Optoelectronics Co., Ltd. (renamed on 19 June 2018 from “Foshan Chanchang ElectricAppliances (Gaoming) Co., Ltd.”), which is a Sino-foreign joint venture invested and established by the Companyand Prosperity Lamps and Components Ltd, had obtained license for business corporation on 23 August 2005through approval by Foreign Trade and Economic Cooperation Bureau of Gaoming District, Foshan withdocument “MWJMY Zi [2005] No. 79”. The Company holds 70% equities of the said company; therefore the saidsubsidiary was included into the scope of the consolidated financial statements since the date of foundation.On 23 August 2016, the Company and Prosperity Lamps and Components Ltd signed the equity transferagreement. The Company purchased 30% equity of Foshan Chanchang Electric Appliances (Gaoming) Co., Ltd.held by Prosperity Lamps and Components Ltd. After the purchasing, the Company held 100% equity of FSLChanchang Optoelectronics Co., Ltd.X Structured Bodies Controlled by the Company
□ Applicable ? Not applicable
XI Prospects(I) The Company's development strategiesThe Company will continue to take technology and services as two top-priority fronts, focus on brand and valueand center its efforts on upgrading to medium- to high-end smart manufacturing, transitioning to a provider ofproducts and integrated solutions and transcending to "smart, healthy, green and human-oriented lighting”. In themeantime, the Company will step up efforts on the application end, further exploit the Internet-of-Things (IoT)ecosphere and niche markets, develop more new application scenarios and products, continuously improve ourcore competitiveness and accelerate the new round of development.(II) Operational plan for 2023
In 2023, the Company will take “digital transformation” as the core engine, vigorously implement the four-driverdevelopment measures of “internal management, market expansion, innovation-driven growth, and M&Asupport”, constantly strengthen business quality, and keep improving its business benefits, competitiveness, andrisk resistance.
1. Focus on tapping potential and enhancing efficiency and develop new profit growth points
(1) The industrial layout will be constantly optimized. In combination of the development trends of the lighting
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industry, the Company will exert more efforts for the industrial layout in the market segments with big consumerdemand, endeavour to lead the industry in terms of product R&D, channel development, and market promotion,and create new benefits.
(2) The Company will continue to change its marketing model. Both the To B and TO C businesses will bepursued in parallel to expand the market and strengthen its own brands. In the To B business, while consolidatingthe traditional channel dealers, the Company will take the "project-based system and specialisation" as the tractionto break through large projects in various segments and expand the market from the source. In the TO C business,it will set up a dedicated team to focus on expanding the business of home improvement and decorationcompanies across the country and accelerate the expansion of the TO C business.
(3) Difficulties in the new energy vehicle (NEV) lamp market will be continuously tackled. The Company willexpedite the construction of the "One Institute and Three Centres" of Nanning Liaowang and integrate itsadvantages in the upstream and downstream industrial chains to push forward the mid-to-high-end upgrade ofauto lamp products. Concurrently, it will consolidate and expand Nanning Liaowang's market share of auto lampsin southwestern China, earnestly expand customers in other regions, and spare no pains to raise its market share ofNEV lamps.
2. Focus on innovation-driven development and strengthen technological support
(1) The Lighting Research Institute will be established to accelerate technological upgrade. The Company willintroduce a high-end scientific research team, centre on common long-term technologies as well as research andindustrialization of forward-looking technologies, and develop future-oriented technological strengthen.
(2) Platforms will be utilized to drive deep industry-university-research integration. Tackling technologicalchallenges and cultivating innovative talent will be carried out based on the Company’s existing technologyplatforms. The creation of innovative consortia with enterprises, universities, and scientific research institutes willbe pushed forward to lead innovation in the industrial chain synergy and industry-university-research integration
(3) Market demand should be precisely identified to create "top-selling" products. Products and solutionscommensurate with market demand in intelligent lighting, health lighting, marine lighting, and animal and plantlighting will be launched to create industrial clusters with market competitiveness.
3. Focus on strengthening management and promote further improvement in operations
(1) Constant efforts were made for the "three refinements in management" scheme. In terms of main indicators,the Company will continuously align with benchmark enterprises, improve the weak links of management,
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consolidate the management foundation, and constantly input time and energy into operation and managementimprovement.
(2) Costs and expenditures will be reduced. Effective cost control measures, such as cost reduction through thesynergy among R&D, purchase, and production, will continue to be implemented to earnestly reduce managementand general expenditures. The organization of quality control will be perfected. A whole-chain system for qualitymanagement will be built to cover design, purchase, production, and marketing, forming closed-loop managementfor product quality.
(3) Intelligent and digital upgrades will be strengthened. The Company will continue to raise its input, perform thetechnological transformation of its production workshop to enhance the automatic production and intelligentlogistics of its production workshop, promote the building of platforms for marketing, supply chain, R&D, andfinance, optimize business procedures, and improve management and operational efficiency.(III) Potential risks facing the Company and countermeasures
1. Risks of macro economic fluctuations and fiercer market competition
At present, economic uncertainties remain at home and abroad. If economic growth continues to slow down, itmay have an adverse impact on the development of the industry. Meanwhile, the lighting industry is a fullycompetitive industry. And as market demand slows down in growth, the Company could be facing fiercercompetition.Countermeasures: The Company will adhere to the set strategies, spend greater effort in developing new products,constantly refine the business portfolio, and actively explore segment markets such as intelligent lighting, healthylighting, ocean lighting, animal and plant lighting. It will also accelerate the introduction of new manufacturingprocesses, technologies and products to the market for new competitive edges. At the same time, by optimizingmarketing network and strengthening the business focus and expansion on domestic and foreign major customers,the Company will improve service quality, strengthen internal management, and increase core competitivecapacity constantly.
2. Risk of raw material price fluctuations
The main raw materials of the Company and its subsidiaries include chips, lamp beads, electronic components,aluminum substrates, plastic parts, metal materials, etc., and the price fluctuations of main raw materials will havean impact on the Company's production costs. If the price of raw materials continues to rise in the future, it mayadversely affect the Company's production and operation.
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Countermeasures: The Company will pay attention to market dynamics, collect information, analyze and pre-judge supply of main raw materials and price trends, so as to make excellent sourcing plans. By enhancingnegotiation, refining suppliers, perfecting supply chain management, and promoting alternative materials, theCompany is able to decrease procurement costs.
3. Risk of exchange rate fluctuations
Overseas sales account for around 25% of the Company’s total sales, which are mainly settled in USD. If RMBexperiences significant appreciation, the price competitiveness of overseas sales could be undermined andexchange losses may increase, which will produce adverse impacts on the Company’s net profit.Countermeasures: By keeping abreast of and analyzing exchange rate policies and fluctuation trend of settlementcurrencies in time, intensifying settlement currency management, ,and carrying out foreign exchange hedgingbusiness when the timing is right, the Company can relatively lock in exchange rates and minimize the risksbrought by exchange rate fluctuations.
4. Risk associated with the recoverability of accounts receivable
Receivables grow along with the Company's business. Customers who fail to repay loans timely or becomeinsolvent, due to changes in macroeconomic trends, market environments, and their business, will place theCompany at the risk of non-performing receivables.Countermeasures: In order to reduce the receivable collection risk, the Company can constantly optimize thereceivable risk management system, regularly assess customers' credit profiles, and enhance customer riskassessment. Meanwhile, it can reinforce contract approval and management, double its effort to collect receivables,and incorporate the collection of receivables into the performance assessment system for business departments.
XII Communications with the Investment Community such as Researches, Inquiries andInterviews? Applicable □ Not applicable
| Date | Place | Way of communication | Type of visitor | Visitor | Main discussions and materials provided | Index to communication information |
| 1-4 July 2022 | The Company | Online meeting | Institution | China Galaxy Securities, and Guosen Securities | See Investor Relations Activities Log Sheet No. 2022-01 | www.cninfo.com.cn |
| 12-20 July | The Company | One-on-one meeting and | Institution | China Merchants | See Investor Relations | www.cninfo.com.cn |
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| 2022 | online meeting | Securities, Guotai Junan, and CICC | Activities Log Sheet No. 2022-02 | |||
| 24 July-3 August 2022 | The Company | One-on-one meeting and online meeting | Institution | 31 institutional investors including CITIC Securities | See Investor Relations Activities Log Sheet No. 2022-03 | www.cninfo.com.cn |
| 8 September 2022 | www.p5w.net | Online meeting | Institution | 68 institutional investors including Guotai Junan | See Investor Relations Activities Log Sheet No. 2022-04 | www.cninfo.com.cn |
| 23 September 2022 | Chongqing Guinuo Lighting Technology Co., Ltd. | One-on-one meeting | Institution | 30 institutional investors including Tebon Fund | See Investor Relations Activities Log Sheet No. 2022-05 | www.cninfo.com.cn |
| 29 October-3 November 2022 | The Company | Online meeting | Institution | 87 institutional investors including China Securities | See Investor Relations Activities Log Sheet No. 2022-06 | www.cninfo.com.cn |
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Part IV Corporate GovernanceI General Information of Corporate GovernanceDuring the Reporting Period, in strict accordance with relevant requirements of Company Law, Securities Law,Code of Corporate Governance of Listed Companies and Rules of Stock Listing of Shenzhen Stock Exchange aswell as other relevant laws, rules and regulations, the Company continuously perfected the corporate governancestructure and set up an effective corporate governance system. At present, the Company has set up governancestructure of responsible Shareholders’ General Meeting, the Board of Directors, the Supervisory Committee andmanagers, who performed right of decision-making, execution and supervision respectively according to theirduties; besides, the Company set up special committees of the Board of Directors and system for independentdirectors. The Company strengthened information disclosure of principal shareholders and persons acting-in-concert, forbidden shareholders of the Company to misapply their rights. The Company separated from theprincipal shareholder in personnel, assets, business, financial affairs and organizational, and was absolutelyimpendent. The Company timely revised and perfected various systems in accordance with the latest issued laws& rules and relevant regulations of CSRC and Shenzhen Stock Exchange. And the corporate governance isbasically in line with the requirements of relevant laws, regulations and regulatory documents.
Indicate by tick market whether there is any material incompliance with the applicable laws, regulations, or rulesissued by the CSRC governing the governance of listed companies.
□ Yes ? No
No such cases in the Reporting Period.
II The Company’s Independence from Its Controlling Shareholder and Actual Controller inAsset, Personnel, Financial Affairs, Organization and Business
The Company is completely separated from its controlling shareholder in aspects such as business, personnel,assets, institutions and finance and possesses independent and complete business and self-dependent operatingability.
1. As for the business, the Company is independent of the controlling shareholders and the subordinate enterprises
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and owns the independent business departments and management system as well as possesses of impendent andentire business and self-dependent operating ability.
2. As for the personnel, the Company formulates the independent management system such as the labor, personneland the salary, possesses the independent personnel department and the operating management team. The SeniorExecutives of the Company are serving at the Company in full time and receiving the salary from the Company.
3. As for the assets, the assets of the Company are independent and entire with clear ownership, and possesses theindependent production system, BOP system and the supporting facilities, as well as possesses the legalownership of the land, factories, equipments related to the production and operating and the assets such as thetrademark, patent and the non-patent technology, and possesses the entire control and govern power of all theassets of the Company without any behavior such as any controlling shareholder occupies the assets of theCompany.
4. As for the institutions, the Company set up the independent and entire organizations and institutions, and theconstruction as well as the operating of the corporate governance institutions is executed strictly executedaccording to the Articles of Association, and the production and operating as well as the offices are entirelyindependent from the controlling shareholders with any situation of working under one roof with the controllingshareholders.。
5. As for the finance, the Company set up the independent finance department and builds up the independent andnormative accounting and financial control system according to the requirements of the ASBE, set up theindependent bank account and pays the taxes legally and independently and the Company could make thefinancial decisions independently without any situation of the shareholding intervenes the capital usage.III Horizontal Competition
□ Applicable ? Not applicable
IV Annual and Special General Meetings Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
| Meeting | Type | Investor participation ratio | Convened date | Disclosure date | Resolutions of the meeting |
| The 1st | Extraordinary | 43.49% | 18 January 2022 | 19 January 2022 | Resolutions of the |
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| Extraordinary General Meeting of 2022 | General Meeting | 1st Extraordinary General Meeting of 2022 | |||
| The 2021 Annual General Meeting | Annual General Meeting | 43.20% | 26 April 2022 | 27 April 2022 | Resolutions of the 2021 Annual General Meeting |
| The 2nd Extraordinary General Meeting of 2022 | Extraordinary General Meeting | 42.99% | 30 June 2022 | 1 July 2022 | Resolutions of the 2nd Extraordinary General Meeting of 2022 |
| The 3rd Extraordinary General Meeting of 2022 | Extraordinary General Meeting | 41.07% | 29 August 2022 | 30 August 2022 | Resolutions of the 3rd Extraordinary General Meeting of 2022 |
| The 4th Extraordinary General Meeting of 2022 | Extraordinary General Meeting | 43.15% | 30 November 2022 | 1 December 2022 | Resolutions of the 4th Extraordinary General Meeting of 2022 |
2. Special General Meetings Convened at the Request of Preferred Shareholders with Resumed VotingRights
□ Applicable ? Not applicable
V Directors, Supervisors and Senior Management
1. General Information
| Name | Office title | Incumbent/Former | Gender | Age | Start of tenure | End of tenure | Beginning shareholding (share) | Increase in the Reporting Period (share) | Decrease in the Reporting Period (share) | Other increase/decrease (share) | Ending shareholding (share) | Reason for share changes |
| Wu Shenghui | Board Chairman | Incumbent | Male | 52 | 24 August 2020 | 23 August 2023 | 0 | 0 | 0 | 0 | 0 | |
| Zhuang Jianyi | Vice Board Chairman | Incumbent | Male | 71 | 24 August 2020 | 23 August 2023 | 11,903,509 | 0 | 0 | 0 | 11,903,509 | |
| Lei Zihe | Director & | Incumbent | Male | 55 | 24 August | 23 August | 0 | 0 | 0 | 0 | 0 |
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| GM | 2020 | 2023 | ||||||||||
| Zhang Xianfeng | Director | Incumbent | Male | 52 | 24 August 2020 | 23 August 2023 | 0 | 0 | 0 | 0 | 0 | |
| Hu Fengcai | Director | Incumbent | Male | 57 | 30 June 2022 | 23 August 2023 | 0 | 0 | 0 | 0 | 0 | |
| Huang Zhiyong | Director | Incumbent | Male | 53 | 24 August 2020 | 23 August 2023 | 0 | 0 | 0 | 0 | 0 | |
| Dou Linping | Independent Director | Incumbent | Male | 63 | 24 August 2020 | 23 August 2023 | 0 | 0 | 0 | 0 | 0 | |
| Li Xiyuan | Independent Director | Incumbent | Male | 61 | 24 August 2020 | 23 August 2023 | 0 | 0 | 0 | 0 | 0 | |
| Zhang Renshou | Independent Director | Incumbent | Male | 57 | 24 August 2020 | 23 August 2023 | 0 | 0 | 0 | 0 | 0 | |
| Li Jingwei | Chairman of the Supervisory Committee | Incumbent | Male | 46 | 18 January 2022 | 23 August 2023 | 0 | 0 | 0 | 0 | 0 | |
| Li Yizhi | Supervisor | Incumbent | Male | 35 | 24 August 2020 | 23 August 2023 | 0 | 0 | 0 | 0 | 0 | |
| Zhuang Junjie | Supervisor | Incumbent | Male | 37 | 24 August 2020 | 23 August 2023 | 0 | 0 | 0 | 0 | 0 | |
| Ye Zhenghong | Supervisor | Incumbent | Male | 49 | 24 August 2020 | 23 August 2023 | 77,561 | 0 | 0 | 0 | 77,561 | |
| Lin Qing | Supervisor | Incumbent | Male | 53 | 24 August 2020 | 23 August 2023 | 22,583 | 0 | 0 | 0 | 22,583 | |
| Zhang Xuequan | Executive Vice GM | Incumbent | Male | 45 | 24 August 2020 | 23 August 2023 | 73,052 | 0 | 0 | 0 | 73,052 | |
| Zhang | Vice | Incum | Male | 48 | 24 | 23 | 77,596 | 0 | 0 | 0 | 77,596 |
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| Yong | GM | bent | August 2020 | August 2023 | ||||||||
| Wei Bin | Vice GM | Incumbent | Male | 53 | 24 August 2020 | 23 August 2023 | 105,226 | 0 | 0 | 0 | 105,226 | |
| Chen Yu | Vice GM | Incumbent | Male | 50 | 24 August 2020 | 23 August 2023 | 66,066 | 0 | 0 | 0 | 66,066 | |
| Tang Qionglan | CFO | Incumbent | Female | 52 | 24 August 2020 | 23 August 2023 | 75,940 | 0 | 0 | 0 | 75,940 | |
| Jiao Zhigang | Vice GM | Incumbent | Male | 50 | 24 August 2020 | 23 August 2023 | 90,399 | 0 | 0 | 0 | 90,399 | |
| Huang Zhenhuan | Board Secretary | Incumbent | Male | 35 | 19 May 2021 | 23 August 2023 | 0 | 0 | 0 | 0 | 0 | |
| Cheng Ke | Director | Former | Male | 48 | 24 August 2020 | 7 June 2022 | 11,550 | 0 | 0 | 0 | 11,550 | |
| Xu Xiaoping | Vice GM | Former | Male | 52 | 24 August 2020 | 12 May 2022 | 37,270 | 0 | 0 | 0 | 37,270 | |
| Total | -- | -- | -- | -- | -- | -- | 12,540,752 | 0 | 0 | 0 | 12,540,752 | -- |
Indicate by tick mark whether any director, supervisor or senior management resigned during the ReportingPeriod.? Yes □ NoIn May 2022, Mr. Xu Xiaoping resigned as Vice GM for job change; and in June 2022, Mr. Cheng Ke resignedas Director and members of the Audit and Risk Management Committee and the Remuneration and AppraisalCommittee for job change.Change of directors, supervisors and senior management:
? Applicable □ Not applicable
| Name | Office title | Type of change | Date of change | Reason for change |
| Li Jingwei | Chairman of the Supervisory Committee | Elected | 18 January 2022 | Elected as Supervisor at a general meeting and as Chairman of the Supervisory Committee by the Supervisory |
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| Committee on 18 January 2022 | ||||
| Hu Fengcai | Director | Elected | 30 June 2022 | Elected as Director at a general meeting |
| Cheng Ke | Director | Former | 7 June 2022 | Resigned for job change |
| Xu Xiaoping | Vice GM | Former | 12 May 2022 | Resigned for job change |
2. Biographical Information
Professional backgrounds, major work experience and current duties in the Company of the incumbent directors,supervisors and senior management:
1. Working Experience of the Directors
Mr. Wu Shenghui: Han nationality, was born in July 1970. He is a member of the CPC and has no right ofpermanent residence in a foreign country. He finished a part-time postgraduate program. Previously, he has servedas Senior Staff Member and then Principal Staff Member of Guuangdong Provincial Commission for DisciplineInspection, Assistant Manager and then Manager of the Human Resources Department and then Manager of theDepartment of Party and Mass Work and Personnel of Guangdong Rising Holdings Group Co., Ltd., and CPCCommittee Secretary, then Full-Time Deputy Secretary and then Director of Shenzhen Zhongjin LingnanNonfemet Company Limited. He became CPC Committee Member and Secretary of the Company in April 2020and became President of the Board of Directors of the Company in May 2020.Mr. Zhuang Jianyi: born in 1951, with a bachelor’s degree and MBA. He now acts as the Chairman of HongKong Youchang Lighting Equipment, and has been engaged in the electric light source equipment production aswell as the trading business for about 40 years. From 1995 to 2010, he acted as the Directors, the Vice Chairmanand the Chairman of the Company. And he serves as a vice chairman of the Company since December 2015.Mr. Lei Zihe: Han nationality, was born in August 1967. He is a member of the CPC and has no right ofpermanent residence in a foreign country. He finished a postgraduate program and bears a professional title ofSenior Engineer. Previously, he has served as Assistant Manager of the Quality Management Department, thenManager of the Technical Department, then Director of the No. 1 Device Factory, and then Manager of the SecondMarketing Department of Foshan Optoelectronic Devices Company, Assistant to the General Manager and thenSecretary of the Board of Directors of Foshan NationStar Optoelectronic Technology Co., Ltd., CPC CommitteeMember, then Vice General Manager and General Manager of the RGB Device Division, then Director, and thenExecutive General Manager of Foshan NationStar Optoelectronics Co., Ltd., and President of the Board of
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Directors of Foshan NationStar Semiconductor Technology Co., Ltd.. He became CPC Committee Member andDeputy Secretary of the Company in April 2020 and became Director and General Manager of the Company inMay 2020.Mr. Zhang Xianfeng: Han nationality, was born in July 1970. He is a member of the CPC and has no right ofpermanent residence in a foreign country. He finished a MBA program at Renmin University of China and bearsprofessional titles of Senior Political Mentor and Economist. Previously, he has served as Assistant DepartmentalManager and then Departmental Manager of China Guangdong International Economic and TechnologicalCooperation (Group) Company, Assistant Director and then Director of the General Office of GuangdongXinguang International Group Co., Ltd., Assistant Manager of the Human Resources Department, then AssistantManager of the Department of Party and Mass Work and Personnel, then Assistant Director of the CPCCommittee's General Office, and then Manager of the Department of Party and Mass Work of Guangdong RisingHoldings Group Co., Ltd.. He became CPC Committee Member and Deputy Secretary of the Company in June2020, became Chairman of the Labor Union of the Company in July 2020, and became Director of the Companyin August 2020.Mr. Hu Fengcai: born in September 1965, member of the Communist Party of China, graduated from the PartySchool of the Guangdong Provincial Committee of CPC, majoring in Modern Economic Management. He is asenior accountant. He worked as Deputy Manager of the Finance Department and Deputy Manager and Managerof the Financial Audit Department of Guangdong Metallurgical Industry Corporation, member of the PartyCommittee and Deputy General Manager of Guangdong Guangye Metallurgical Limited Corporation,Independent Director of SGIS Songshan Co., Ltd., director, member of the Party Committee, and Deputy GeneralManager of Guangdong Rising Metallurgical Co., Ltd., Chairman of the Supervisory Committee of the ThirdWorking Group of the Supervisory Committee, Chairman of the Supervisory Committee of the WorkingDepartment of the Board of Audit Supervisors, and deputy head of the Operation Management Department ofGuangdong Rising Assets Management Co., Ltd. (GRAM), and deputy head of the Operation ManagementDepartment of Guangdong Rising Holdings Group Co., Ltd. (Rising Group). Now he serves as a full-time directorassigned to the listed company of Rising Group. He has been a director of the Company since June 2022.Mr. Huang Zhiyong: Han nationality, born in August 1969, a member of the Communist Party of China and anengineer. He graduated from Xidian University with a bachelor’s degree of Electronic Devices Structures. Heonce acted as the Vice GM of Shenzhen Primatronix (Nanho) Electronics Ltd., the Minister of Enterprise
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Development Department, the GM Assistant and Vice GM in Guangdong Electronics Information Industry GroupLtd. He now acts as Director, a member of the CPC Committee, Deputy Secretary of the CPC Committee andChairman of Labor Union in Guangdong Electronics Information Industry Group Ltd. And he serves as a Directorof the Company since December 2015.Mr. Li Xiyuan: Born in March 1961, member of the Communist Party of China, no permanent residence abroad,doctoral degree, professor-level senior engineer. He has served as deputy director of the ConstructionManagement Office of the Northern Section of Beijing-Zhuhai Expressway in Guangdong Province, DeputyDirector of Infrastructure Management Department of Guangdong Provincial Communication Group Co., Ltd.,General Manager of Guangdong Gaintop Highway Engineering Construction Group Co., Ltd., General Managerand Chairman of Guangdong Provincial Expressway Development Co., Ltd., Chairman of Guangdong Road andBridge Construction Development Co., Ltd., Director of Guangdong Construction Engineering Group Co., Ltd.,Guangdong Province Navigation Group Co., Ltd., Guangdong Namyue Group Co., Ltd. and GuangdongProvincial Railway Construction Investment Group Co., Ltd. He is currently an external director of GuangzhouPort Group Co., Ltd. and an independent director of Dongguan Development (Holdings) Co., Ltd. and ShenzhenTagen Group Co., Ltd. He has been an independent director of the Company since September 2021.Mr. Zhang Renshou: Born in May 1965, Ph.D., professor, postdoctoral co-supervisor, doctoral supervisor, nopermanent residence abroad, doctoral degree. He has served as lecturer and associate professor of GuangzhouForeign Language Training Center of Ministry of Petroleum Industry and China University of Petroleum(Guangzhou branch, removed), Editor of Development Research Center of People's Government of GuangdongProvince, Professor of Accounting Department of School of Management of Guangzhou University andindependent director of Jiangmen Rural Commercial Bank Company Limited. He also serves as: Member of theExpert Group of the Budget Committee of Guangzhou Municipal People's Congress, Member of the Expert Groupof the Economic Committee of Guangzhou Municipal People's Congress, Member of the 8th Committee ofGuangdong Social Sciences Association, Member of the Academic Committee of Research Center for GuangdongLocal Public Finance, Professional Advisory Committee Member of Guangdong Statistics Bureau, Member of theAcademic Committee of Guangdong Coastal Economic Belt Development Research Center, President ofGuangdong South China Economic Development Research Association, Major Administrative DecisionDemonstration Expert and Innovation and Entrepreneurship Development Expert of Shaoguan Municipal People'sGovernment of Guangdong Province, and Special Researcher of Guangzhou Taxation Bureau of State Taxation
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Administration of the People's Republic of China. He has been an independent director of the Company sinceSeptember 2021.Mr. Dou Linping: Han nationality, was born in August 1959. He is of Chinese nationality and has no right ofpermanent residence in a foreign country. He received a bachelor's degree and bears a professional title of SeniorEngineer. Previously, he has served as Deputy Chief of the Design Section of Beijing Luminaries Factory,Director of the Office of Design Standards and then Vice Director of Beijing Luminaries Research Institution,Deputy Secretary-General and Managing Director of China Association of Lighting Industry, and ManagingDirector and Secretary-General of China Illuminating Engineering Society. At present, he serves as Vice Director-General of China Solid State Lighting Alliance, Director of the Urban, Cultural and Tourism Lighting ProfessionalCommittee of CSA, and Independent Director of Hengdian Group TOSPO Lighting Co., Ltd. and Beijing NewSpace Technology Co., Ltd.. He serves as an independent director of the Company since August 2020.
2. Working Experience of the Supervisors
Mr. Li Jingwei: born in November 1976, member of the Communist Party of China, holds a master's degree andis an economist and Senior Labour Relations Coordinator. He worked as head, direct, Deputy Secretary of theParty Committee, Secretary of the Committee for Discipline Inspection, and Chairman of the Labour Union of theComprehensive Management Department of Guangdong Changsheng Enterprise Group Co., Ltd., director,Deputy Secretary of the Party Committee, Secretary of the Committee for Discipline Inspection, Chairman of theLabour Union of Guangdong Rising Real Estate Group Co., Ltd., member of the Party Committee, Secretary ofthe Committee for Discipline Inspection, and Chairman of the Supervisory Committee of Foshan NationStarOptoelectronics Co., Ltd. (NationStar), and Deputy Director of Office of Discipline Inspection and Supervision ofGuangdong Rising Assets Management Co., Ltd. (GRAM). He was elected member of the Party Committee andSecretary of the Committee for Discipline Inspection of the Company in December 2021 and became theChairman of the Supervisory Committee of the Company in January 2022.Mr. Li Yizhi: Han nationality, was born in March 1987. He is a member of the CPC. He received a bachelor'sdegree ，intermediate accountant and is an Association of Chartered Certified Accountants (ACCA) certifiedaccountant. Previously, he has worked at the Guangzhou Office of WUYIGE Certified Public Accountants LLP(special general partnership) as an Audit Assistant, at the Guandong Office of Pan-China Certified PublicAccountants LLP (special general partnership) as a Project Manager, at the Shenzhen Office of
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PricewaterhouseCoopers Zhong Tian LLP (special general partnership) as an auditor, and at the GuangdongOffice of China Central Public Accounting Firm (special general partnership) as a Project Manager. At present, heserves as Supervisor of the Finance Department (Settlement Center) of Guangdong Rising Holdings Group Co.,Ltd.. He serves as a supervisor of the Company since August 2020.Mr. Zhuang Junjie: Born in September 1985, a Hong Kong permanent resident. He graduated with a bachelor’sdegree and once acted as the Consultant Manager of Accenture Software and now acts as the Director of HongKong Prosperity Lighting Equipment Co., Ltd. And he serves as a supervisor of the Company since December2015.Mr. Ye Zhenghong: Born in June 1973, a member of the Communist Party of China with a college degree. Hejoined the Company from July 1995; worked in the Machine Repair Shop from July 1995 to June 1997; worked inthe Mechanical Power Department from July 1997 to January 2001; acted as Equipment Management Director inT8 Fluorescent Lamp Factory from February 2001 to January 2005; acted as Director of Machine RepairWorkshop from May 2005 to January 2007; acted as Chief Officer of Machinery Dynamic Department from May2006 to December 2007; and acted as factory director of T8 Fluorescent Lamp Factory from January 2008 toFebruary 2016; and acted as Chief Officer of Production Department from March 2016 to March 2019; and actedas the director of E-Commerce Business Department from April 2019 to June 2020; and acted as the vice GM ofFSL Zhida Electric Technology Co., Ltd. from November 2016 to February 2020, and acted as the GM of FSLZhida Electric Technology Co., Ltd. from March 2020 to March 2021; and has acted as the Chairman of the Boardof FSL Zhida Electric Technology Co., Ltd. since April 2021; the Chairman of the 5
thSupervisory Committee andthe Employee Supervisor of the 6
th
, 7th, 8th and 9thSupervisory Committee.Mr. Lin Qing: born in September 1969, member of the Communist Party of China, undergraduate degree, SeniorEngineer in Electrical and Mechanical Engineering; has been working in the company since August 1991; workedas mercury lamp workshop technician and workshop director from June 1996 to February 2002; as the workshopdirector and factory director of the fluorescent lamp factory from March 2002 to September 2009; as the directorof Technology Department from October 2009 to September 2020 ; as the Technical Director of the R&DDepartment from October 2020 to January 2022; as the Safety Director of the Company since February 2022; inJuly 2015, elected as a discipline committee member of the company’s CPC committee. And he serves as anEmployee Supervisor of the Company since September 2016.
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3. Working experience of the Senior Management Staff
Mr. Lei Zihe: Han nationality, was born in August 1967. He is a member of the CPC and has no right ofpermanent residence in a foreign country. He finished a postgraduate program and bears a professional title ofSenior Engineer. Previously, he has served as Assistant Manager of the Quality Management Department, thenManager of the Technical Department, then Director of the No. 1 Device Factory, and then Manager of theSecond Marketing Department of Foshan Optoelectronic Devices Company, Assistant to the General Managerand then Secretary of the Board of Directors of Foshan NationStar Optoelectronic Technology Co., Ltd., CPCCommittee Member, then Vice General Manager and General Manager of the RGB Device Division, thenDirector, and then Executive General Manager of Foshan NationStar Optoelectronics Co., Ltd., and President ofthe Board of Directors of Foshan NationStar Semiconductor Technology Co., Ltd.. He became CPC CommitteeMember and Deputy Secretary of the Company in April 2020 and became Director and General Manager of theCompany in May 2020.Mr. Zhang Xuequan: Born in December 1977, a member of the Communist Party of China, MBA of LingnanCollege of Sun Yat-Sen University. He joined the Company in 1996. He worked in the former Iodine-tungstenLamp Workshop from October to December 1996; worked in the Technology Department and then the QualityControl Department from January 1997 to August 2002; acted as the Workshop Manager of Lamp Workshop fromSeptember 2002 to May 2008; acted as the Department Director of the Business Management Department of theCompany from June 2008 to August 2016. He has concurrently acted as the Office Director from February 2016to December 2018. He has been the Party Branch Secretary for the Administrative Office of the Company fromJuly 2010 to June 2017, and a member of the party committee of the Company since July 2015. He was asupervisor of the Company from May 2013 to August 2016 and has been a vice GM of the Company since August2016; Act as the Deputy General Manager of the Company since March 2020. He has also served as Director ofNationStar Optoelectronics since August 2022.Mr. Zhang Yong: Born in June 1974, a member of the Communist Party of China and a senior engineer with abachelor degree. He joined in the Company in July 1997. and successively acted as Deputy Director and Directorof Lamp Filament Appliance Workshop from October 1999 to June 2008; acted as Factory Director of GaomingFluorescent Lamp Factory and Factory Director of Gaoming Branch Factory from July 2008 to December 2008;respectively acted as Department Director of Product Department, OEM Department, Mechanical DynamicsDepartment and Infrastructure Department from January 2009 to December 2012; acted as General Manager
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Assistant from March 2013 to August 2016. He was a supervisor and the Chairman of the Board of Supervisors ofthe Company from September 2013 to August 2016; served as the chairman of the Labor Union of the Companyfrom September 2013 to May 2019; acted as the Deputy Party Secretary from July 2015 to 27 December 2021;and has been a vice GM of the Company since August 2016.Mr. Wei Bin: Born in May 1969, a member of the Communist Party of China and a Senior engineer of electronicengineering technology with a Master’s degree. He joined in the Company in 1991, and responsible for theproduct development of the graduate school of the Company from March 1992 to December 1996, acted asWorkshop Manager of Energy Saving Lamp Workshop from January 1997 to December 2004, acted as WorkshopManager of HID Workshop from January to December 2005, acted as Workshop Manager of T5 Workshop fromJanuary 2006 to November 2008, acted as the Department Director of the Technology Department fromNovember 2008 to August 2009 and acted as Vice GM of the Company from September 2009.Mr. Chen Yu: Born in December 1972, a member of the Communist Party of China and an engineer with abachelor’s degree. He entered the Company in 1994. And acted as workshop manager of parabolic reflector,coating film, energy saving lamp, factory director of the branch factory of Gaoming and workshop manager ofgeneral bulbs from January 1997 to December 2012, acted as Director of Production Department, OEMDepartment and Mechanical Dynamics Department from January to August 2013, acted as Director of ProductionDepartment and OEM Department from September 2013 to May 2014 as well as acted as Vice GM of theCompany from May 2014. He has also served as Chairman of the Board of Nanning Liaowang since July 2021.Ms. Tang Qionglan: born in March 1970, member of the Communist Party of China, bachelor degree, ChinaCertified Public Accountant, served as audit manager of BDO China Shu Lun Pan Certified Public AccountantsLLP Foshan Branch; as Deputy Manager of the Finance Department, Manager, Chief Financial Officer, DeputyGeneral Manager and Chief Financial Officer of Foshan NationStar Optoelectronics Co., Ltd.. and serves as theChief Financial Officer of the Company since January 2016.Mr. Jiao Zhigang: Born in May 1972, a member of the Communist Party of China with a bachelor’s degree. Heentered the Company in 1994. He acted as Warehouse Director of the Company from August 1995 to September2013, acted as Department Director of Human Resources Department from May 2010 to September 2013; actedas Supervisor from March 2007 to September 2013, and as Chairman of the Supervisory of the Company fromMay 2010 to September 2013. He acted as Vice GM of the Company in September 2013.Mr. Huang Zhenhuan: Born in December 1987, he holds a master's degree in finance, is a financial economist,
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and has obtained the qualification certificate of Secretary of the Board of Directors issued by Shenzhen StockExchange. He used to be the sponsor of Assets Department, Assistant General Manager of Investment Departmentand General Manager of Finance Department of Guangzhou Guangyong State-owned Asset Sales Co., Ltd.,General Manager of Guangzhou Guangyong Equity Investment Fund Management Co., Ltd., General Manager ofCorporate Finance Department III (Industry Center) of Minsheng Bank Guangzhou Branch, Investment Directorof Guangdong Rising Financial Holding Co., Ltd., and Senior Director of Capital Operation Department ofGuangdong Rising Holdings Group Co., Ltd. He has served as Board Secretary of the Company since May 2021.
Offices held concurrently in shareholding entities:
? Applicable □ Not applicable
| Name | Shareholding entity | Office held in the shareholding entity | Start of tenure | End of tenure | Remuneration or allowance from the shareholding entity |
| Hu Fengcai | Guangdong Rising Holdings Group Co., Ltd. | Full-time director accredited to the listed company by capital operation department | Yes | ||
| Huang Zhiyong | Guangdong Electronics Information Industry Group Ltd. | Director, Deputy Secretary of the CPC Committee, Chairman of the Labor Union | Yes | ||
| Li Yizhi | Guangdong Rising Holdings Group Co., Ltd. | Head of the Financial Department (Settlement Center) | Yes | ||
| Zhuang Jianyi | Prosperity Lamps & Components Limited | Chairman of the Board | Yes | ||
| Zhuang Junjie | Prosperity Lamps & Components Limited | Director | Yes |
Offices held concurrently in other entities:
? Applicable □ Not applicable
| Name | Other entity | Office held in the | Start of tenure | End of tenure | Remuneration or |
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| entity | allowance from the entity | ||||
| Zhuang Jianyi | Thinkon Semiconductor Jinzhou Corp. | Director | No | ||
| Li Xiyuan | Guangzhou Port Group Co., Ltd. | Director | Yes | ||
| Li Xiyuan | Dongguan Development (Holdings) Co., Ltd. | Independent Director | Yes | ||
| Li Xiyuan | Shenzhen Tagen Group Co., Ltd. | Independent Director | Yes | ||
| Zhang Renshou | Guangzhou University | Accounting Professor | Yes | ||
| Zhang Renshou | Guangdong Knoya Home Furnishing Co., Ltd. | Independent Director | Yes | ||
| Zhang Renshou | Jiangmen Rural Commercial Bank Company Limited | Independent Director | Yes | ||
| Dou Linping | China Solid State Lighting Alliance | Vice Chairman | No | ||
| Dou Linping | Hengdian Group Tospo Lighting Co., Ltd. | Independent Director | Yes | ||
| Dou Linping | Beijing New Space Technology Co., Ltd. | Independent Director | Yes | ||
| Dou Linping | LongT Lighting Group, Inc | Independent Director | Yes |
Punishments imposed in the recent three years by the securities regulator on the incumbent directors,supervisors and senior management as well as those who left in the Reporting Period:
□ Applicable ? Not applicable
3. Remuneration of Directors, Supervisors and Senior Management
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisorsand senior management:
The Remuneration & Appraisal Committee under the Board of Directors decided the 2021 remunerations for the
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leadership team members in accordance with the Measures for Managing the Remuneration of the LeadershipTeam Members, the particulars on completing current main financial indexes & operating goals, as well as thefulfillment of job responsibilities by them, before submitting the remuneration plan to the Board of Directors forapproval.The total remuneration (before tax) actually paid to the directors, supervisors and senior management staff for2022 were RMB12.6796 million.
Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RMB'0,000
| Name | Office title | Gender | Age | Incumbent/Former | Total before-tax remuneration from the Company | Any remuneration from related party |
| Wu Shenghui | Board Chairman | Male | 52 | Incumbent | 128.44 | No |
| Zhuang Jianyi | Vice Board Chairman | Male | 71 | Incumbent | Yes | |
| Lei Zihe | Director & GM | Male | 55 | Incumbent | 121.55 | No |
| Zhang Xianfeng | Director | Male | 52 | Incumbent | 107.80 | No |
| Hu Fengcai | Director | Male | 57 | Incumbent | Yes | |
| Huang Zhiyong | Director | Male | 53 | Incumbent | Yes | |
| Li Xiyuan | Independent Director | Male | 61 | Incumbent | 18 | No |
| Zhang Renshou | Independent Director | Male | 57 | Incumbent | 18 | No |
| Dou Linping | Independent Director | Male | 63 | Incumbent | 18 | No |
| Li Jingwei | Chairman of the Supervisory Committee | Male | 46 | Incumbent | 77.80 | No |
| Li Yizhi | Supervisor | Male | 35 | Incumbent | Yes | |
| Zhuang Junjie | Supervisor | Male | 37 | Incumbent | Yes | |
| Ye Zhenghong | Supervisor | Male | 49 | Incumbent | 43.58 | No |
| Lin Qing | Supervisor | Male | 53 | Incumbent | 40.64 | No |
| Zhang Xuequan | Executive Vice GM | Male | 45 | Incumbent | 102.22 | No |
| Zhang Yong | Vice GM | Male | 48 | Incumbent | 99.37 | No |
| Wei Bin | Vice GM | Male | 53 | Incumbent | 99.25 | No |
| Chen Yu | Vice GM | Male | 50 | Incumbent | 101.06 | No |
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| Tang Qionglan | CFO | Female | 52 | Incumbent | 98.24 | No |
| Jiao Zhigang | Vice GM | Male | 50 | Incumbent | 96.67 | No |
| Huang Zhenhuan | Board Secretary | Male | 35 | Incumbent | 48.31 | No |
| Cheng Ke | Director | Male | 48 | Former | Yes | |
| Xu Xiaoping | Vice GM | Male | 52 | Former | 49.03 | Yes |
| Total | -- | -- | -- | -- | 1267.96 | -- |
VI Performance of Duty by Directors in the Reporting Period
1. Board Meetings Convened during the Reporting Period
| Meeting | Convened date | Disclosure date | Resolution |
| The 26th Meeting of the 9th Board of Directors | 14 January 2022 | 15 January 2022 | Announcement on Resolutions of the 26th Meeting of the 9th Board of Directors |
| The 27th Meeting of the 9th Board of Directors | 18 January 2022 | 19 January 2022 | Announcement on Resolutions of the 27th Meeting of the 9th Board of Directors |
| The 28th Meeting of the 9th Board of Directors | 22 March 2022 | 24 March 2022 | Announcement on Resolutions of the 28th Meeting of the 9th Board of Directors |
| The 29th Meeting of the 9th Board of Directors | 30 March 2022 | 1 April 2022 | Announcement on Resolutions of the 29th Meeting of the 9th Board of Directors |
| The 30th Meeting of the 9th Board of Directors | 22 April 2022 | 23 April 2022 | Announcement on Resolutions of the 30th Meeting of the 9th Board of Directors |
| The 31st Meeting of the 9th Board of Directors | 29 April 2022 | 30 April 2022 | Announcement on Resolutions of the 31st Meeting of the 9th Board of Directors |
| The 32nd Meeting of the 9th Board of Directors | 14 June 2022 | 15 June 2022 | Announcement on Resolutions of the 32nd Meeting of the 9th Board of Directors |
| The 33rd Meeting of the 9th Board of Directors | 12 August 2022 | 13 August 2022 | Announcement on Resolutions of the 33rd Meeting of the 9th Board of |
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| Directors | |||
| The 34th Meeting of the 9th Board of Directors | 30 August 2022 | 31 August 2022 | Announcement on Resolutions of the 34th Meeting of the 9th Board of Directors |
| The 35th Meeting of the 9th Board of Directors | 10 October 2022 | 11 October 2022 | Announcement on Resolutions of the 35th Meeting of the 9th Board of Directors |
| The 36th Meeting of the 9th Board of Directors | 27 October 2022 | 28 October 2022 | Announcement on Resolutions of the 36th Meeting of the 9th Board of Directors |
| The 37th Meeting of the 9th Board of Directors | 14 November 2022 | 15 November 2022 | Announcement on Resolutions of the 37th Meeting of the 9th Board of Directors |
2. Attendance of Directors at Board Meetings and General Meetings
| Attendance of directors at board meetings and general meetings | |||||||
| Director | Total number of board meetings the director was eligible to attend | Board meetings attended on site | Board meetings attended by way of telecommunication | Board meetings attended through a proxy | Board meetings the director failed to attend | The director failed to attend two consecutive board meetings (yes/no) | General meetings attended |
| Wu Shenghui | 12 | 2 | 10 | 0 | 0 | No | 4 |
| Zhuang Jianyi | 12 | 0 | 12 | 0 | 0 | No | 5 |
| Lei Zihe | 12 | 2 | 10 | 0 | 0 | No | 5 |
| Zhang Xianfeng | 12 | 2 | 10 | 0 | 0 | No | 4 |
| Hu Fengcai | 5 | 1 | 4 | 0 | 0 | No | 2 |
| Huang Zhiyong | 12 | 0 | 12 | 0 | 0 | No | 4 |
| Dou Linping | 12 | 1 | 11 | 0 | 0 | No | 5 |
| Li Xiyuan | 12 | 1 | 11 | 0 | 0 | No | 5 |
| Zhang Renshou | 12 | 1 | 11 | 0 | 0 | No | 5 |
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3. Objections Raised by Directors on Matters of the Company
Indicate by tick mark whether any directors raised any objections on any matter of the Company.
□ Yes ? No
No such cases in the Reporting Period.
4. Other Information about the Performance of Duty by Directors
Indicate by tick mark whether any suggestions from directors were adopted by the Company.? Yes □ NoSuggestions from directors adopted or not adopted by the Company:
During the Reporting Period, the directors of the Company worked to fulfill their functions and duties, activelyattended Board of Directors meetings and Shareholders’ General Meetings, offered advices and suggestions andperformed their rights, functions, duties, and obligations as defined in the Company Law, the Securities Law andthe Articles of Association. They fulfilled their role as a director, upheld the legitimate rights and interests of theCompany and its shareholders, promoted further improvement in corporate governance and effectivelyfacilitated regulatory compliance of the Company's operation. During the Reporting Period, the directors of theCompany actively performed their functions and duties, made full use of their professional knowledge, workeddiligently to fulfill their duties and offered many invaluable advices and suggestions on the Company'smanagement decision-making and major matters based on their in-depth understanding of the Company'soperations. They played their due role in improving the Company's supervision mechanism, promotingimprovement in the Company's risk control capacity and upholding the legitimate rights and interests of theCompany and its shareholders.VII Performance of Duty by Specialized Committees under the Board in the ReportingPeriod
| Committee | Members | Meetings convened | Convened date | Contents reviewed | Opinion and advice | Other activities | Objection (if any) |
| The Audit and Risk Management Committee | Zhang Renshou, Li Xiyuan, Dou Linping, Hu Fengcai, and | 5 | 24 March 2022 | 2021 Financial Audit and Internal Control Audit Report; 2022 | Approved |
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| Huang Zhiyong | Financial Budget Report; and 2021 Annual Work Report and 2022 Work Plan of the Audit Department; Proposal on Change of Accounting Estimate of Majority-owned Subsidiary; and Proposal on Amendment to the Rules of Procedure for the Audit Committee | ||||||
| The Audit and Risk Management Committee | Zhang Renshou, Li Xiyuan, Dou Linping, Hu Fengcai, and Huang Zhiyong | 27 May 2022 | Audit Summary for Q1 2022 | Approved | |||
| The Audit and Risk Management Committee | Zhang Renshou, Li Xiyuan, Dou Linping, Hu Fengcai, and Huang Zhiyong | 18 August 2022 | Proposal on Establishment of the Management Methods for Compliance; Proposal on Establishment of the Internal Control Methods; Proposal on Establishment of the Methods for Comprehensive Risk Management; and Work Report of the Audit Department for H1 2022 | Approved | |||
| The Audit | Zhang | 27 October | Audit | Approved |
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| and Risk Management Committee | Renshou, Li Xiyuan, Dou Linping, Hu Fengcai, and Huang Zhiyong | 2022 | Summary for Q1-Q3 2022 | ||||
| The Audit and Risk Management Committee | Zhang Renshou, Li Xiyuan, Dou Linping, Hu Fengcai, and Huang Zhiyong | 8 November 2022 | Proposal on Change of CPA Firm | Approved | |||
| The Remuneration and Appraisal Committee | Zhang Renshou, Li Xiyuan, Dou Linping, Zhang Xianfeng, and Hu Fengcai | 1 | 27 September 2022 | Proposal on Appraisal Plan for 2021 Remunerations for Leadership Team Members | Approved | ||
| The Nomination Committee | Li Xiyuan, Zhang Renshou, Dou Linping, Lei Zihe, and Zhang Xianfeng | 1 | 9 June 2022 | Proposal on the Nomination of Non-independent Director Candidate | Approved | ||
| The Strategy Committee | Wu Shenghui, Zhuang Jianyi, Lei Zihe, Zhang Xianfeng, and Li Xiyuan | 1 | 30 December 2022 | Development Strategy Planning for the Period of the “14th Five-year Plan” | Approved |
VIII Performance of Duty by the Supervisory Committee
Indicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervisionin the Reporting Period.
□ Yes ? No
The Supervisory Committee raised no objections in the Reporting Period.
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IX Employees
1. Number, Functions and Educational Backgrounds of Employees
| Number of in-service employees of the Company at the period-end | 4,608 |
| Number of in-service employees of main subsidiaries at the period-end | 8,283 |
| Total number of in-service employees at the period-end | 12,891 |
| Total number of employees with remuneration in this Reporting Period | 12,891 |
| Number of retirees to whom the Company or its main subsidiaries need to pay retirement pension | 242 |
| Functions | |
| Function | Number of employees |
| Production | 9,280 |
| Sales | 817 |
| Technical | 1,730 |
| Financial | 163 |
| Administrative | 901 |
| Total | 12,891 |
| Educational backgrounds | |
| Educational background | Number of employees |
| Master’s degree and above | 186 |
| Bachelor’s degree | 2,018 |
| Junior college | 1,826 |
| Technical secondary school and high school | 2,125 |
| Below high school | 6,736 |
| Total | 12,891 |
Note: “Number of retirees to whom the Company or its main subsidiaries need to pay retirement pension” in thetable above refer to retirees of subsidiary Nanning Liaowang, and the payments to them mainly comprise livingallowances, festival allowances, etc. The amount paid by Nanning Liaowang stands at RMB645,900 per year.This is a historical issue coming from before the Company’s acquisition of Nanning Liaowang. Starting from 1January 2021, the number of the retirees and the annually paid amount have ceased to increase.
2. Employee Remuneration Policy
Adhering to the principle of "giving priority to efficiency, giving consideration to fairness, creating and sharingtogether", the Company takes value creation as the guide, constructs four sets of salary systems of management,R&D, sales and production, determines salary grades according to different positions and their characteristics, and
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inclines salary distribution to core talents and key positions, so as to maximize the enthusiasm of employees.
3. Employee Training Plans
The Company pays attention to personnel training and employee career development and has established theStarlight Lecture Hall. In light of the Company's development needs and post nature, the Company has built up acomplete training plan, and carried out a series of trainings such as R&D, marketing, production and managementby combining offline and offline learning platforms. Also, it organized training camps for internal lecturers, andestablished a training system with multiple levels, channels, fields and ways to promote employees' skillsupgrading, ability advancement and quality improvement.
4. Labor Outsourcing
□ Applicable ? Not applicable
X Profit Distributions to Shareholders (in the Form of Cash and/or Stock)How the profit distribution policy, especially the cash dividend policy, for ordinary shareholders was formulated,executed or revised in the Reporting Period:
? Applicable □ Not applicableAccording to the CSRC Notice on Further Implementing Matters Related to Cash Dividend Distribution of ListedCompanies (Zheng-Jian-Fa [2012] No. 37) and the Guangdong CSRC Notice on Further ImplementingRegulations Related to Dividend Distribution of Listed Companies (Guang-Dong-Zheng-Jian [2012] No. 91), inorder to further standardize the dividend mechanism, promote a scientific, sustained and stable dividendmechanism and protect legal rights and interests of investors, in 2012, the Company convened a general meetingto revise the dividend-related contents in its Articles of Association and specify the dividend conditions, thelowest dividend ratio, the decision-making procedure, etc.. Meanwhile, it formulated the Management Rules forProfit Distribution and the Return for Shareholder Plan for the Coming Three Years (2021-2023), specifying thearrangements and forms of dividends, the cash dividend planning and the distribution intervals, which furtherimproved the decision-making and supervision procedures for dividend distribution. According to the Company’sArticles of Association, the profit distributed in cash shall not be less than 30% of the distributable profit achievedin the year.
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| In compliance with the Company’s Articles of Association and resolution of general meeting | Yes |
| Specific and clear dividend standard and ratio | Yes |
| Complete decision-making procedure and mechanism | Yes |
| Independent directors faithfully performed their duties and played their due role | Yes |
| Non-controlling interests are able to fully express their opinion and desire and their legal rights and interests are fully protected | Yes |
| In case of adjusting or changing the cash dividend policy, the conditions and procedures involved are in compliance with applicable regulations and transparent | Yes |
Indicate by tick mark whether the Company fails to put forward a cash dividend proposal for shareholdersdespite the facts that the Company has made profits in the Reporting Period and the profits of the Company asthe parent distributable to shareholders are positive.
□ Applicable ? Not applicable
Final dividend plan for the Reporting Period:
?Applicable □ Not applicable
| Bonus shares for every 10 shares (share) | 0 |
| Dividend for every 10 shares (RMB) (tax inclusive) | 1 |
| Additional shares to be converted from capital reserve for every 10 shares (share) | 0 |
| Total shares as the basis for the profit distribution proposal (share) | 1,348,994,647 |
| Cash dividends (RMB) (tax inclusive) | 134,899,464.70 |
| Cash dividends in other forms (such as share repurchase) (RMB) | 0.00 |
| Total cash dividends (including those in other forms) (RMB) | 134,899,464.70 |
| Distributable profit (RMB) | 2,810,316,233.41 |
| Total cash dividends (including those in other forms) as % of total profit distribution | 100% |
| Cash dividend policy | |
| Where it is difficult to determine the development stage of the Company but it has plans for considerable spending, in profit distribution, cash dividends shall reach at least 20% in the total profit to be distributed. | |
| Details about the proposal for profit distribution and converting capital reserve into share capital | |
| As audited by WUYIGE Certified Public Accountants LLP, the after-tax net profits of RMB117,854,967.39 of the Company as the parent for 2022, plus the beginning retained profits of RMB2,738,229,003.27, minus the distributed profits of RMB134,899,464.70 for 2021, plus the cumulative fair-value changes of RMB100,917,224.19 of shares held by the Company in other listed companies that were sold in the current period (previously recorded in other comprehensive income and transferred to retained profits in the current period), and minus RMB11,785,496.74 set aside as surplus reserve, equal the ending profits distributable to shareholders of RMB2,810,316,233.41 for 2022. The Board of Directors has proposed a final dividend plan for 2022 as follows: based on the share capital of 1,348,994,647 shares (the total share capital of 1,361,994,647 shares minus the | |
Annual Report 2022
remaining 13,000,000 A-shares repurchased in the share repurchase account at the disclosure date of the 2022 Annual Report, acash dividend of RMB1 (tax inclusive) per 10 shares is to be distributed to the shareholders, with no bonus issue from either profitor capital reserves. Where any change occurs to the total shares entitled to the final dividend due to any new issue, grant of equityincentives, etc. when the final dividend plan is implemented, the dividend per share shall remain the same while the total payoutamount shall be adjusted accordingly.
XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measuresfor Employees
□ Applicable ? Not applicable
No such cases in the Reporting Period.XII Formulation and Implementation of Internal Control System during the ReportingPeriod
1. Internal control formulation and implementation
During the Reporting Period, the Company, in accordance with the Basic Standards for Internal Control and itssupporting guidelines, as well as the actual situation, further revised and improved the relevant internal controlsystems, and established a relatively effective internal control system, so as to effectively prevent and discoverrisks in the process of operation and management in time, and provide guarantee for the legal compliance andasset safety of operation and management.The Board of Directors of the Company has an Audit and Risk Management Committee, which is responsible forreviewing the internal control of the Company, supervising the effective implementation of internal control andself-evaluation of internal control, and cooperating with internal control audit and other related matters. Theinternal audit department of the Company is responsible for the internal audit supervision of the Company,including supervising and inspecting the implementation of the internal control system of the Company, regularlyor irregularly conducting routine audits or special audits on finance, internal control, major projects and theirbusinesses, and putting forward suggestions for improving internal control to control and prevent risks. If theAudit Department finds major defects in internal control in the process of supervision and inspection, it has theright to report directly to the Audit and Risk Management Committee of the Board of Directors and the Board ofSupervisors.According to the identification of major defects in the Company's internal control, there were no major defects inthe internal control of financial reports and non-financial reports in 2022.
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2. Material Internal Control Weaknesses Identified for the Reporting Period
□ Yes ? No
XIII Management and Control of Subsidiaries by the Company during the ReportingPeriod
| Name of company | Integration plan | Integration progress | Problems encountered in integration | Solutions taken | Settlement progress | Follow-up settlement plan |
| NationStar Optoelectronics | Relevant personnel of NationStar Optoelectronics were adjusted, in accordance with the relevant regulations of the China Securities Regulatory Commission (CSRC) and the Shenzhen Stock Exchange (SZSE) and the Articles of Association. Meanwhile, NationStar Optoelectronics ' technological advantages in the LED packaging industry and the Company's sales advantages in the terminal market were given full play to so as to stimulate both parties to expedite the launch of innovative and competitive products. | The Company incorporated NationStar Optoelectronics into its consolidated financial statements, completed the re-election and engagement of directors, supervisors, and senior management personnel, and promoted the close cooperation between both parties in R&D and market expansion. | None | None | None | None |
XIV Self-Evaluation Report or Independent Auditor’s Report on Internal Control
1. Internal Control Self-Evaluation Report
| Disclosure date of the internal control self-evaluation report | 10 April 2023 |
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| Index to the disclosed internal control self-evaluation report | See www.cninfo.com.cn for the Internal Control Self-Evaluation Report 2022 | |
| Evaluated entities’ combined assets as % of consolidated total assets | 100.00% | |
| Evaluated entities’ combined operating revenue as % of consolidated operating revenue | 100.00% | |
| Identification standards for internal control weaknesses | ||
| Type | Weaknesses in internal control over financial reporting | Weaknesses in internal control not related to financial reporting |
| Nature standard | Defect with one of the following characteristics should be recognized as a serious defect: 1. the defect involved with the malpractices of the Directors, the Supervisors and the Senior Executives; 2. the controlled environment is invalid; 3. the CPA discovered any significant misstatement from the current financial report while the internal control could not discover the mistake during the operating process; 4. the supervision from the Corporate Audit Committee and the internal audit institution on the internal control. If there met with one of the situation of the following, should be recognized as an important defect: 1. the recognized important defect is not solved during the reasonable period; 2. corrects the published financial report; 3. the function of the internal audit of the Company is invalid; 4. the control of whether execute the selection and the application of the accounting policies according to the Generally Accepted Accounting Principles is invalid. | Defect with one of the following characteristics should be recognized as a serious defect: 1. being punished for seriously violating the national laws, the administrative laws and regulations and the normative documents; 2. the Company suffers a serious economic loss due to any serious errors made in decision-making caused by serious lack of decision-making procedures on significant events or unfair decision-making; 3. the Company’s reputation has been unrepairably damaged by any conduct in violation of laws and regulations which produces a far-reaching negative impact and draws the public’s attention widely; 4. the major business involved with the production and operating of the Company lack of the system control or the system control is invalid; 5. the results of the internal control assessment turn out to include any serious defects and such defects fail to be rectified effectively within 12 months. Defects with the following characteristics should be recognized as important defects: 1. owing to partly lack of the decision-making process on significant events and the undemocratic decision-making process which caused the decision-making mistake that led the Company face with certain economic losses; 2. the negative influences owning to the unlawful acts and the irregularities h involve with wide range and cause public concern among the partial |
Annual Report 2022
| regions which bring certain harms to the reputation of the Company; 3. the system of the major business involved with the production and operating of the Company is incomplete or partially invalid; 4. the results of the internal control assessment turn out to include any serious defects and such defects fail to be rectified effectively within 6 months. | ||
| Quantitative standard | Based on the data of the 2021 consolidated statements, the quantitative criterion of confirming the important degree of the misstatement (including the false negatives) from of the consolidated statements of the listed companies is as follows: serious defect: misstatement ≥1.0% of the total assets amount; important defects: 0.5% of the total assets amount ≤misstatement＜1.0% of the total assets amount; common defects: misstatement＜0.5% of the total assets amount. | According to the quantitative criterion of the internal control defects of the financial report, the quantitative criterion of the internal control defects assessment of the non-financial report confirmed by the Company is as follows: serious defect: misstatement ≥1.0% of the total assets amount; important defects: 0.5% of the total assets amount ≤misstatement＜1.0% of the total assets amount; common defects: misstatement＜0.5% of the total assets amount. |
| Number of material weaknesses in internal control over financial reporting | 0 | |
| Number of material weaknesses in internal control not related to financial reporting | 0 | |
| Number of serious weaknesses in internal control over financial reporting | 0 | |
| Number of serious weaknesses in internal control not related to financial reporting | 0 | |
2. Independent Auditor’s Report on Internal Control
? Applicable □ Not applicable
| Opinion paragraph in the independent auditor’s report on internal control | |
| WUYIGE Certified Public Accountants LLP considered that: Foshan Electrical and Lighting Co., Ltd. maintained effective internal control of the financial report in all significant aspects according to the Basic Standards for Internal Control and relevant regulations. | |
| Independent auditor’s report on internal control disclosed or not | Disclosed |
Annual Report 2022
| Disclosure date | 10 April 2023 |
| Index to such report disclosed | See www.cninfo.com.cn for the Auditor’s Report on Internal Control |
| Type of the auditor’s opinion | Unmodified unqualified opinion |
| Material weaknesses in internal control not related to financial reporting | None |
Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s report on theCompany’s internal control.
□ Yes ? No
Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is consistentwith the internal control self-evaluation report issued by the Company’s Board.? Yes □ NoXV Rectifications of Problems Identified by Self-inspection in the Special Action for ListedCompany Governance
None.
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Part V Environmental and Social ResponsibilityI Major Environmental IssuesIndicate by tick mark whether the Company or any of its subsidiaries is identified as a major polluter by theenvironmental protection authorities.? Yes □ NoEnvironmental policies and standards:
During production and operations, the Company conscientiously implemented guidelines and policies forenvironmental protection at all levels and strictly observed relevant laws and regulations for environmentalprotection, such as Law of the People's Republic of China on Environmental Protection, Law of the People'sRepublic of China on Prevention and Control of Air Pollution, Law of the People's Republic of China onPrevention and Control of Water Pollution, Law of the People's Republic of China on Prevention and Control ofEnvironmental Pollution by Solid Waste, and Law of the People's Republic of China on Prevention and Controlof Noise Pollution. Meanwhile, it has put in place facilities for pollution prevention and control, and ensures thestable operation of facilities. Additionally, the Company regularly commissions third parties to carry outmonitoring work in accordance with the requirements of the Environmental Monitoring Management Measuresto ensure that all pollutants are discharged in accordance with the standards.
Environment-related administrative permits:
| No. | Document name of administrative license of environmental protection | Approver | Date of approval | Approval No. |
| 1 | Approval for Environmental Impact Report on New Project of Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | Environmental Protection Bureau of Gaoming District, Foshan City | 3 November 2004 | / |
| 2 | Environmental Protection Acceptance Opinions on Phase I of Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | Environmental Protection Bureau of Gaoming District, Foshan City | 28 August 2008 | MHY [2008] No. 26 |
| 3 | Acceptance Opinions on Flue Gas Emission Continuous Monitoring System of Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | Environmental Protection Bureau of Gaoming District, Foshan City | 22 February 2010 | MHY [2010] No. 8 |
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| 4 | Approval for Environmental Impact Report on Energy-saving Lamp Expansion Project of Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | Environmental Protection Bureau of Gaoming District, Foshan City | 30 August 2013 | MHGYB [2013] No. 030 |
| 5 | Letter of Environmental Protection Acceptance Opinions on Energy-saving Lamp Expansion Project of Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | Environmental Transport and Urban Management Bureau of Gaoming District (Environmental Protection) | 19 February 2014 | MGY [2014] No. 2 |
| 6 | Approval from Environmental Protection Bureau of Gaoming District, Foshan City, of Environmental Impact Report on Expansion Project of Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | Environmental Protection Bureau of Gaoming District, Foshan City | 13 February 2015 | MHS [2015] No. 14 |
| 7 |
Approval from EnvironmentalProtection Bureau of GaomingDistrict, Foshan City, of KilnExpansion and Flue Gas Controland Remediation Project of FoshanElectrical and Lighting Co., Ltd.Gaoming Branch
| Environmental Protection Bureau of Gaoming District, Foshan City | 26 November 2015 | MHS [2015] No. 157 | ||
| 8 | Letter from Environmental Protection Bureau of Gaoming District, Foshan City of Environmental Protection Acceptance Opinions on Kiln Expansion and Flue Gas Control and Remediation Project of Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | Environmental Protection Bureau of Gaoming District, Foshan City | 24 December 2015 | MHY [2015] No. 83 |
| 9 | Approval from Environmental Protection Bureau of Gaoming District, Foshan City, of Environmental Impact Report on New LED Luminaries R&D Production Base Construction Project of Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | Environmental Protection Bureau of Gaoming District, Foshan City | 30 September 2017 | MHS [2017] No. 138 |
| 10 | Approval from Environmental Protection Bureau of Gaoming | Environmental Protection Bureau of | 14 January 2019 | MHS [2019] No. 11 |
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| District, Foshan City, of Environmental Impact Report on Glass Kiln (Change) Construction Project of Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | Gaoming District, Foshan City | |||
| 11 | Letter from Foshan Municipal Ecology and Environment Bureau of Environmental Protection Acceptance Opinions on Solid Waste Pollution Prevention and Control Facility for New LED Luminaries R&D Production Base Construction Project (Phase I) of Foshan Electrical and Lighting Co., Ltd. | Ecology and Environment Bureau of Foshan City | 12 September 2019 | FMHY [2019] No. 126 |
| 12 | Sewage Discharge License | Ecology and Environment Bureau of Foshan City | 1 June 2020 | 91440600784850061B001U |
| 13 | Reply on the Environmental Impact Report of Liuzhou Guige Lighting Technology Co., Ltd. with an Annual Output of 1.35 Million Sets of Auto Parts (Motor Vehicle Lamps) | Liuzhou Environmental Protection Bureau | 25 September 2015 | LHS Zi [2015] No. 134 |
| 14 | Reply on Completion Acceptance of Environmental Protection Facilities of Liuzhou Guige Lighting Technology Co., Ltd. with an Annual Output of 1.35 Million Sets of Auto Parts (Motor Vehicle Lamps) (Solid Waste) | Liuzhou Liudong New Area Administrative Examination and Approval Bureau | 28 October 2019 | LDSPHB Zi [2019] No. 70 |
| 15 | Sewage Discharge License | Liuzhou Liudong New Area Administrative Examination and Approval Bureau | 18 July 2020 | 914502000836092085001V |
| 16 | Approval for the Report on the Environmental Influence of the New Semiconductor Light-emitting Device Construction Project | Environmental Protection Bureau of Chancheng District, Foshan City | 12 April 2005 | B2005-0132 |
| 17 | Application for the Completion-based Environmental Protection Inspection and Acceptance of the | Environmental Protection Bureau of Chancheng District, | 10 October 2007 | C.H.Y. [2007] No. 161 |
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| New Semiconductor Light-emitting Device Construction Project | Foshan City | |||
| 18 | Registration Form of the Environmental Influence of the New Semiconductor Light-emitting Device Construction Project | Environmental Protection Bureau of Chancheng District, Foshan City | 20 December 2005 | D2006-0034 |
| 19 | Approval for the Report on the Environmental Influence of the Upgrading of the Surface-mount Semiconductor Light-emitting Device Industry of Foshan NationStar Optoelectronic Technology Co., Ltd. | Foshan Environmental Protection Bureau | 22 March 2006 | FBC2006-02 |
| 20 | Application for the Completion-based Environmental Protection Inspection and Acceptance of the Upgrading Project of the Surface-mount Semiconductor Light-emitting Device Industry | Environmental Protection Bureau of Chancheng District, Foshan City | 10 October 2007 | H.Y. [2007] No. 163 |
| 21 | Approval for the Report on the Environmental Influence of the Relocation Project of Foshan NationStar Optoelectronics Co., Ltd. | Environmental Protection Bureau of Chancheng District, Foshan City | 29 July 2009 | CB2009-0083 |
| 22 | Application for the Completion-based Environmental Protection Inspection and Acceptance of the Relocation Project of Foshan NationStar Optoelectronics Co., Ltd. | Environmental Protection Bureau of Chancheng District, Foshan City | 7 May 2010 | C.H.Y. [2010] No. 35 |
| 23 | Approval for the Report on the Environmental Influence of the Project of the National- and Local-Joint Engineering Laboratory for Semiconductor Lighting Materials and Devices | Environmental Protection and Urban Management Bureau Zhangcha Sub-bureau of Chancheng District, Foshan City | 8 November 2011 | ZCB2011-020 |
| 24 | Application for the Completion-based Environmental Protection Inspection and Acceptance of the Project of the National- and Local-Joint Engineering Laboratory for Semiconductor Lighting Materials and Devices | Environmental Protection Bureau of Chancheng District, Foshan City | 24 June 2015 | C.H.Y.B [2015] No. 35 |
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| 25 | Approval for the Report on the Environmental Influence of the Project of Key Technology for Semiconductor Lighting Lamps and Industrialization of Foshan NationStar Optoelectronics Co., Ltd. | Foshan Environmental Protection Bureau | 21 January 2008 | F2008-8 |
| 26 | Letter of Opinions from Foshan Environmental Protection Bureau on the Completion-based Environmental Protection Inspection and Acceptance of the Project of Key Technology for Semiconductor Lighting Lamps and Industrialization of Foshan NationStar Optoelectronics Co., Ltd. | Foshan Environmental Protection Bureau | 16 May 2016 | F.H.H. [2016] No. 456 |
| 27 | Approval for the Report on the Environmental Influence of the LED Backlight Technology Improvement Project of Foshan NationStar Optoelectronics Co., Ltd. | Foshan Environmental Protection Bureau | 21 January 2008 | F2008-9 |
| 28 | Letter of Opinions from Foshan Environmental Protection Bureau on the Completion-based Environmental Protection Inspection and Acceptance of the LED Backlight Technology Improvement Project of Foshan NationStar Optoelectronics Co., Ltd. | Foshan Environmental Protection Bureau | 16 May 2016 | F.H.H. [2016] No. 455 |
| 29 | Approval for the Report on the Environmental Influence of the Technological Improvement Project for Power-based LED and LED Luminary Module of Foshan NationStar Optoelectronics Co., Ltd. | Foshan Environmental Protection Bureau | 21 January 2008 | F2008-10 |
| 30 | Letter of Opinions from Foshan Environmental Protection Bureau on the Completion-based Environmental Protection Inspection and Acceptance of the | Foshan Environmental Protection Bureau | 16 May 2016 | F.H.H. [2016] No. 457 |
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| Technological Improvement Project for Power-based LED and LED Luminary Module of Foshan NationStar Optoelectronics Co., Ltd. | ||||
| 31 | Approval for the Report on the Environmental Influence of the Technological Improvement Project for New Surface-mount Light-emitting Diodes of Foshan NationStar Optoelectronics Co., Ltd. | Foshan Environmental Protection Bureau | 21 January 2008 | F2008-11 |
| 32 | Letter of Opinions from Foshan Environmental Protection Bureau on the Completion-based Environmental Protection Inspection and Acceptance of the Technological Improvement Project for New Surface-mount Light-emitting Diodes of Foshan NationStar Optoelectronics Co., Ltd. | Foshan Environmental Protection Bureau | 16 May 2016 | F.H.H. [2016] No. 458 |
| 33 | Approval for the Report on the Environmental Influence of the New Top LED Manufacturing Technology and Industrialization Project | Environmental Protection Bureau of Chancheng District, Foshan City | 29 November 2010 | CB2010-0135 |
| 34 | Application for the Completion-based Environmental Protection Inspection and Acceptance of the New Top LED Manufacturing Technology and Industrialization Project | Environmental Protection and Urban Management Bureau of Chancheng District, Foshan City | 29 December 2014 | C.H.Y.B [2014] No. 47 |
| 35 | Approval of the Environmental Protection and Urban Management Bureau of Chancheng District to the Report on the Environmental Influence of the Expansion Project of Foshan NationStar Optoelectronics Co., Ltd. | Environmental Protection and Urban Management Bureau of Chancheng District, Foshan City | 5 September 2014 | C.B. [2014] No. 0036 |
| 36 | Application for the Completion-based Environmental Protection Inspection and Acceptance of the Expansion Project of Foshan | Environmental Protection and Urban Management Bureau of Chancheng District, | 29 December 2014 | C.H.Y.B [2014] No. 46 |
Annual Report 2022
| NationStar Optoelectronics Co., Ltd. | Foshan City |
| 37 | Approval of the Environmental Protection and Urban Management Bureau of Chancheng District to the Report on the Environmental Influence of the Expansion Project for Small Spacing and Outdoor Surface-mount LED Display Components | Environmental Protection and Urban Management Bureau of Chancheng District, Foshan City | 19 December 2014 | C.B. [2014] No. 0073 |
| 38 | Opinions of the Environmental Protection and Urban Management Bureau of Chancheng District, Foshan City, on the Completion-based Environmental Protection Inspection and Acceptance of the Expansion Project for Small Spacing and Outdoor Surface-mount LED Display Components | Environmental Protection Bureau of Chancheng District, Foshan City | 20 May 2016 | C.H.Y.B. 2016-4-032 |
| 39 | Approval of the Environmental Protection Bureau of Chancheng District, Foshan City, to the Report on the Environmental Influence of the Project of the Innovation in Packaging Technology and Technological Transformation of Key Packaging Equipment of LEDs with High Color Rendering Index for Illumination | Environmental Protection Bureau of Chancheng District, Foshan City | 1 November 2016 | C.B. 2016-4-205 |
| 40 | Opinions of the Environmental Protection Bureau of Chancheng District, Foshan City, on the Completion-based Environmental Protection Inspection and Acceptance of the Project of the Innovation in Packaging Technology and Technological Transformation of Key Packaging Equipment of LEDs with High Color Rendering Index for Illumination | Environmental Protection Bureau of Chancheng District, Foshan City | 11 April 2017 | C.H.Y.B. 2017-4-110 |
| 41 | Approval of the Environmental Protection Bureau of Chancheng District, Foshan City, to the Report | Environmental Protection Bureau of Chancheng District, | 1 November 2016 | C.B. 2016-4-206 |
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| on the Environmental Influence of the Project of the Innovation in Packaging Technology and Technological Transformation of Key Packaging Equipment of LEDs with Small Spacing for Display | Foshan City | |||
| 42 | Opinions of the Environmental Protection Bureau of Chancheng District, Foshan City, on the Completion-based Environmental Protection Inspection and Acceptance of the Project of the Innovation in Packaging Technology and Technological Transformation of Key Packaging Equipment of LEDs with Small Spacing for Display | Environmental Protection Bureau of Chancheng District, Foshan City | 11 April 2017 | C.H.Y.B. 2017-4-111 |
| 43 | Approval of the Environmental Protection Bureau of Chancheng District, Foshan City, to the Report on the Environmental Influence of the Project of the Innovation in Packaging Technology and Technological Transformation of Key Packaging Equipment of LEDs with High Color Rendering Index for Illumination (Phase II) | Environmental Protection Bureau of Chancheng District, Foshan City | 8 December 2017 | C.B. 2017-4-065 |
| 44 | Approval of the Environmental Protection Bureau of Chancheng District, Foshan City, to the Report on the Environmental Influence of the Project of the Innovation in Packaging Technology and Technological Transformation of Key Packaging Equipment of LEDs with Small Spacing for Display (Phase II) | Environmental Protection Bureau of Chancheng District, Foshan City | 8 December 2017 | C.B. 2017-4-064 |
| 45 | Registration Receipt for the Discharge of Fixed Pollution Sources | Foshan Municipal Ecology and Environment Bureau | 19 January 2020 | 914406001935264036001X |
| 46 | Sewage Discharge Permit | Foshan Municipal Ecology and Environment Bureau | 21 November 2022 | 91440600570160743B001Q |
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| 47 | Inspection Opinions on the Report on the Environmental Influence of the First Phase of Project of Guangdong Yuejing High-tech Co., Ltd. | Environmental Protection Bureau of Guangzhou Economic and Technological Development Zone | 12 February 2004 | S.K.H.Y.Z [2004] No. 15 |
| 48 | Approval for the Completion-based Environmental Protection Inspection and Acceptance of the First Phase of Project of Guangdong Yuejing High-tech Co., Ltd. | Environmental Protection Bureau of Guangzhou Economic and Technological Development Zone | 15 December 2006 | S.K.H.B.Y.Z [2006] No. 153 |
| 49 | Approval for the Report on the Environmental Influence of the New Employee Canteen and Standby Generator Project of Guangdong Yuejing High-tech Co., Ltd. | Environmental Protection Bureau of Guangzhou Economic and Technological Development Zone | 2 February 2007 | S.K.H.B.Y.Z [2007] No. 17 |
| 50 | Approval for the Completion-based Environmental Protection Inspection and Acceptance of the New Employee Canteen and Standby Generator Project of Guangdong Yuejing High-tech Co., Ltd. | Environmental Protection Bureau of Guangzhou Economic and Technological Development Zone | 19 November 2007 | S.K.H.B.Y.Z [2007] No. 166 |
| 51 | Approval for the Report on the Environmental Influence of the New Triode Tin Deposition Assembly Line Project of Guangdong Yuejing High-tech Co., Ltd. | Environmental Protection Bureau of Guangzhou Economic and Technological Development Zone | 6 November 2006 | S.K.H.B.Y.Z [2006] No. 242 |
| 52 | Approval for the Completion-based Environmental Protection Inspection and Acceptance of the New Triode Tin Deposition Assembly Line Project of Guangdong Yuejing High-tech Co., Ltd. | Environmental Protection Bureau of Guangzhou Economic and Technological Development Zone | 11 December 2007 | S.K.H.B.Y.Z [2007] No. 168 |
| 53 | Approval for the Report on the Environmental Influence of the Plant Expansion II of Guangdong Yuejing High-tech Co., Ltd. | Environmental Protection Bureau of Guangzhou Economic and Technological Development Zone | 23 February 2008 | S.K.H.B.Y.Z [2008] No. 25 |
| 54 | Approval for the Report on the | Construction and | 17 August 2011 | S.K.H.J.Y.Z [2011] No. 272 |
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| Environmental Influence of the Third Phase of the Project with an Annual Packaging Output of Two Billion New Semiconductor Devices of Guangdong Yuejing High-tech Co., Ltd. | Environmental Protection Bureau of Guangzhou Economic and Technological Development Zone | |||
| 55 | Approval for the Completion-based Environmental Protection Inspection and Acceptance of the Third Phase of the Project with an Annual Packaging Output of Two Billion New Semiconductor Devices of Guangdong Yuejing High-tech Co., Ltd. | Environmental Protection and Urban Management Bureau of Guangzhou Economic and Technological Development Zone | 19 March 2015 | S.K.H.Y.Z [2015] No. 44 |
| 56 | Approval of the Report on the Environmental Influence of the Technological Improvement Project for the Production of SOP-SOT Chip Semiconductor Devices | Environmental Protection and Urban Management Bureau of Guangzhou Economic and Technological Development Zone | 4 July 2014 | S.K.H.Y.Z [2014] No. 130 |
| 57 | Approval for the Completion-based Environmental Protection Inspection and Acceptance of the Technological Improvement Project for the Production of SOP-SOT Chip Semiconductors of Guangdong Fenghua Semiconductor Technology Co., Ltd. | Construction and Environmental Protection Bureau of Guangzhou Economic and Technological Development Zone | 11 January 2017 | S.K.J.H.B.Y.Z [2017] No. 6 |
| 58 | Approval for the Completion-based Environmental Protection Inspection and Acceptance of the Plant Expansion II of Guangdong Fenghua Semiconductor Technology Co., Ltd. (Formerly Known as Guangdong Yuejing High-tech Co., Ltd.) | Construction and Environmental Protection Bureau of Guangzhou Economic and Technological Development Zone | 14 June 2017 | S.K.H.Y.Z [2017] No. 151 |
| 59 | Registration Receipt for the Discharge of Fixed Pollution Sources | Guangzhou Municipal Ecological Environment Bureau | 27 February 2020 | 91440000725451562J001Y |
Discharge standards and pullutants discharged in production and operation activities:
| Name of | Type of | Name of | Discharge | Outlet | Outlet | Discharge | Pollutant | Total | Total | Excessive |
Annual Report 2022
| Company or Subsidiary Company | Major and Characteristic Pollutants | Major and Characteristic Pollutants | Method | Quantity | Distribution | Concentration /intensity | Discharge Standards | Actual Discharge | Discharge Approved | Discharge |
| Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | Exhaust gas | SO2 | Discharged in an organized manner | 1 | In the plant | SO2: 289 mg/m3 | Emission Standards for Air Pollutants in Glass Industry (DB44/2159-2019) | 6.264 | SO2: 39.937 t/y | None |
| Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | Exhaust gas | Oxynitride | Discharged in an organized manner | 1 | In the plant | Oxynitride: 550mg/m3 | Emission Standards for Air Pollutants in Glass Industry (DB44/2159-2019) | 57.236 | Oxynitride: 83.549 t/y | None |
| Liuzhou Guige Lighting Technology Co., Ltd. | Exhaust gas | Xylene, SO2, nitrogen oxide, benzene, toluene, particulate matter, volatile organic matter | Discharged in an organized manner | 1 | In the plant | Discharged upon reaching applicable standards | Integrated Emission Standards of Air Pollutants (GB16297-1996) | / | / | None |
| Liuzhou Guige Lighting Technology Co., Ltd. | Exhaust gas | Volatile organic compounds | Discharged in an un-organized manner | 2 | In the plant | Discharged upon reaching applicable standards | Integrated Emission Standards of Air Pollutants (GB16297-1996) | / | / | None |
| Foshan NationStar Optoelectronics Co., Ltd. | Wastewater | Chemical oxygen demand ("COD") and ammonia nitrogen | Discharged by standards after treatment | 1 | Wastewater treatment station | COD: 14 mg/L; Ammonia nitrogen: 0.076 mg/L | Discharge Limits of Water Pollutants (DB44/26-2001) of Guangdong | COD:0.84 t/a Ammonia nitrogen:0.00456t/a | COD:2.4 t/a Ammonia nitrogen:0.3t/a | None |
Annual Report 2022
| Province: Standard Class II for Time Period II. | ||||||||||
| Foshan NationStar Optoelectronics Co., Ltd. | Exhaust gas | Total volatile organic compounds ("VOCs"), benzene, toluene, xylene, and particulate matters | Discharged by standards after treatment | 2 | Rooftop of East Tower and West Tower | Total VOCs: 1.03725mg/m? Benzene: 0.002875mg/m? Toluene and xylene: 0.1025mg/m? Particulate matters: 20mg/m? | Emission Standard of Volatile Organic Compounds for Furniture Manufacturing (DB44/814-2010) of Guangdong Province: Discharge limits for VOCs through exhaust funnels for Time Period II. | Total VOCs:0.212616 t/a | Total VOCs: 1.8 t/a | None |
| Foshan NationStar Optoelectronics Co., Ltd. | Noise | Noise | Discharged by standards | / | / | Daytime: 60; nighttime: 50, Unit: dB (A) | Emission Standard for Noise of Industrial Enterprises at Boundary (GB12348-2008): Standard Class II | / | / | None |
| Foshan NationStar Semiconductor Technology Co., Ltd | Wastewater | COD, ammonia nitrogen, suspended solids, and fluoride | Discharged by standards after treatment | 1 | Wastewater station | PH: Six to nine COD: 90 mg/L BOD5: 20 mg/L Suspended solids: 60 mg/L Ammonia nitrogen: 10 mg/L Fluoride: 10 mg/L | Discharge Limits of Water Pollutants (DB44/26-2001) of Guangdong Province: Standard Class I for Time Period II. | COD:1.08562t/a Ammonia nitrogen：0.183358t/a | COD：3.129t/a Ammonia nitrogen：0.201t/a | None |
| Foshan NationStar Semiconductor | Exhaust gas | Sulfur dioxide, nitrogen oxide, | Discharged by standards after | 6 | Rooftop | Sulfur dioxide: 500 mg/m?; | Emission Limits of Air Pollutants | SO2:0.234t/a; NOX: 10.11 t/a | SO2:0.25t/a; NOX:11.96t/a | None |
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| Technology Co., Ltd. | particulate matter, ammonia, ozone concentration, hydrogen chloride, fluoride, chlorine gas, sulphuric acid mist, stupid, toluene and xylene, total VOCs | treatment | nitrogen oxide: 120 mg/m? particulate matters: 120 mg/m?; ammonia gas: 20 mg/m?; odor concentration: 6000 mg/m?; hydrogen chloride: 100 mg/m?; fluoride: 9 mg/m?; chlorine: 65 mg/m?; sulfuric acid mist: 35 mg/m?; benzene: 1 mg/m?; toluene and xylene: 20 mg/m?; total VOCs: 30 mg/m? | (DB44/247-2001) of Guangdong Province: Standard Class II for Time Period II. Emission Standard of Volatile Organic Compounds for Furniture Manufacturing (DB44/814-2010) of Guangdong Province: Discharge limits for VOCs through exhaust funnels for Time Period II. | Total VOCs：1.3435t/a | Total VOCs：2.45t/a | ||||
| Foshan NationStar Semiconductor Technology Co., Ltd. | Noise | Noise | Discharged by standards | / | / | Daytime: 60; nighttime: 50, Unit: dB (A) | Emission Standard for Noise of Industrial Enterprises at Boundary (GB12348-2008): Standard Class II | / | / | None |
| Guangdong Fenghua Semiconductor Technology Co., Ltd. | Wastewater | Wastewater：PH, COD, and copper | Discharged by standards after treatment | 1 | Total outlet near the north duty room | PH(6-9); COD(500mg/L); Copper (≤2.0mg/L); | Discharge Limits of Water Pollutants (DB44/26-2001) of Guangdong Province: Standard Class III for Time | COD:0.219t/a | / | None |
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| Period II. | ||||||||||
| Guangdong Fenghua Semiconductor Technology Co., Ltd. | Exhaust gas | Exhaust gas ：Particulate matter, total VOCs, sulphuric acid mist, hydrogen chloride mist | Discharged by standards after treatment | 7 | Rooftop of Phase I plant | Particulate matter：120mg/m? hydrogen chloride mist：100mg/m? sulphuric acid mist：35mg/m? oil fumes：2.0mg/m? | Guangdong StandardDB44/27-2001, Discharge Limites for Class II for Time Period II; | Particulate matter：0.018t/a； Total VOCs:0.127t/a | / | None |
| Guangdong Fenghua Semiconductor Technology Co., Ltd. | Noise | Noise | Discharged by standards | / | / | Daytime: 65 Nighttime: 55 Unit：dB(A) | Emission Standard for Noise of Industrial Enterprises at Boundary (GB12348-2008): Standard Class III | / | / | None |
Pollutant treatment:
Emission and treatment of the Company's main pollutants:
(1) Exhaust gas:
FSL: The flue gas of glass kilns and the high-temperature melting of glass raw materials generated airpollutants, such as sulphur dioxide, nitric oxide, and smoke, during the manufacturing of semi-products, such asglass bulb shells and lamp tubes. Such flue gas was treated with semi-dry desulfurization, electric precipitation,and SCR denitration. Upon treatment, the standard limits for glass kilns in the Emission Standards for AirPollutants in Glass Industry (DB44/2159-2019): Table 1 Emission Limits of Air Pollutants were met.Nanning Liaowang: Exhaust gases like volatile organic compounds (VOCs), were mainly generated during themanufacturing of auto luminary, which were treated through Regenerative Thermal Oxidizer (RTO) catalyticcombustion and UV activated carbon adsorption. Upon treatment, the discharge limits and requirementsstipulated in Comprehensive Discharge Standards for Air Pollution (GB16297-1996) were met.NationStar Optoelectronics: The manufacturing of LED components mainly caused exhaust gas, such asVOCs, benzene, toluene, xylene, and particulate matters, which was treated through UV photolysis and plasmapurification. Upon treatment, the Emission Standard of Volatile Organic Compounds for FurnitureManufacturing (DB44/814-2010) of Guangdong Province was met.
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NationStar Semiconductor: a) Exhaust gas, such as ammonia gas, was mainly generated during themanufacturing of LED epitaxial wafers. Upon treatment through Edwards combustion, the Emission Limits ofAir Pollutants (DB44/27-2001): Standard Class II for Time Period II and Emission Standards for OdourPollutants (GB14554-93): Table 2 30-meter High Exhaust Pipes for Ammonia were met. b) The manufacturingof LED chips mainly caused exhaust gas, such as sulfuric acid mist, hydrochloric acid mist, chlorine, hydrogenchloride, fluorides, and particulate matters. Upon treatment through Scrubber combustion-based washing andspraying equipment and scrubbing towers for acid and alkali exhaust gas, the Emission Limits of Air Pollutants(DB44/27-2001) of Guangdong Province: Standard Class II for Time Period II were met. c) Wastes, such asacetone, isopropyl alcohol, esters, ethers, and amines, were mainly caused during the manufacturing of LEDchips. Upon treated through UV photolysis and activated carbon adsorption, the discharge limits andrequirements stipulated in the Emission Standard of Volatile Organic Compounds for Furniture Manufacturing(DB44/814-2010) of Guangdong Province: Discharge limits for VOCs through exhaust funnels for Time PeriodII were met.Fenghua Semiconductor: The sealing test of electronic components mainly generated exhaust gas, such asdust and particulate matters, organic exhaust gas, sulfuric acid mist, and hydrogen chloride mist. Through filtervats and activated carbon adsorption, and spraying alkali liquor for neutralization, the Emission Limits of AirPollutants (DB44/27-2001) of Guangdong Province: Standard Class II for Time Period II were met.
(2) Wastewater:
FSL: The Company's wastewater mainly came from offices and living. Domestic wastewater was treated with atertiary septic tank. Oily sewage from the canteen was pre-treated with an oil and residue separation system, andthen transferred to wastewater treatment stations for centralized treatment. Upon treatment, the discharge limitsand requirements stipulated in the Discharge Limits of Water Pollutants (DB44/26-2001) of GuangdongProvince: Standard Class III for Time Period II were met.Nanning Liaowang: The manufacturing of auto luminary did not generate industrial wastewater and mainlycaused wastes, such as domestic wastewater. Upon treatment through physicochemical and biochemical, thedischarge limits and requirements stipulated in the Level 1 standards of the Integrated Wastewater DischargeStandard (GB 8978-1996) were met.NationStar Optoelectronics: wastewater, such as COD and ammonia nitrogen, was mainly generated duringthe manufacturing of LED components. Upon treatment through coagulation, sedimentation, and frame filtering,
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the discharge limits and requirements stipulated in the Discharge Limits of Water Pollutants (DB44/26-2001) ofGuangdong Province: Standard Class II for Time Period II were met.NationStar Semiconductor: The manufacturing of LED chips mainly generated wastes, such as COD,ammonia nitrogen, SS, and fluorides. Upon treatment through physicochemical and biochemical, the dischargelimits and requirements stipulated in the Discharge Limits of Water Pollutants (DB44/26-2001) of GuangdongProvince: Standard Class III for Time Period II were met.Fenghua Semiconductor: Pollutants, such as COD, ammonia nitrogen, and heavy metals, were mainlygenerated during the sealing test of electronic components. Through physicochemical and biochemicaltreatment, MBR films, and reverse osmosis (RO) membranes, the discharge limits and requirements stipulatedin the Discharge Limits of Water Pollutants (DB44/26-2001) of Guangdong Province: Standard Class III forTime Period II.
(3) Noises:
FSL: Noises mainly came from the operation of production machinery. Specifically, water pumps and fans thatwould cause loud noises were placed in a soundproof room or covered with a noise enclosure. Hush pipes wereattached to exhaust gas exhaust pipes that would cause loud noises.Nanning Liaowang: Noises mainly came from the operation of production machinery. Specifically, basicdamping, soundproof rooms, and soundproof cottons were applied to injection moulding and friction weldingthat would cause loud noises. The Emission Standard for Noise of Industrial Enterprises at Boundary(GB12348-2008): Standard Class III were met.NationStar Optoelectronics: Noises mainly included mechanical and aerodynamic noises. Specifically,production and process equipment were placed in a closed workshop. Soundproof rooms, vibration dampers,and noise enclosures were adopted for Equipment, such as air compressors, water pumps, and fans, that wouldcause loud noises. Hush pipes were attached to exhaust gas exhaust pipes that would cause loud noises.NationStar Semiconductor: Noises mainly included mechanical and aerodynamic noises. Production andprocess equipment was placed in a closed workshop. Soundproof rooms, vibration dampers, and noiseenclosures were adopted for equipment, such as air compressors, water pumps, and fans, that would cause loudnoises. Hush pipes were attached to exhaust gas exhaust pipes that would cause loud noises.
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Fenghua Semiconductor: Noises mainly came from the operation of production machinery. Specifically, waterpumps and fans that would cause loud noises were placed in a soundproof room or covered with a noiseenclosure. Hush pipes were attached to exhaust gas exhaust pipes that would cause loud noises.
Environmental self-monitoring plan:
Foshan Electrical and Lighting Co., Ltd. Gaoming Branch developed an environmental self-monitoring plan,numbered: FSLFMF001. It entrusted a third-party environmental testing agency, Guangdong Spectrum TestingTechnology Co., Ltd., to perform the annual inspection of the exhaust outlet. All the inspection results werelower than the standard limits. Meanwhile, it accepted the annual supervision and monitoring by localenvironmental protection departments. All the monitoring results were lower than the standard limits.Liuzhou Guige Lighting Technology Co., Ltd. has put in place the Self-monitoring Plan of Liuzhou GuigeLighting Technology Co., Ltd. It entrusted a third-party environmental testing agency, Guangxi HuaqiangEnvironmental Monitoring Co., Ltd., to perform the annual inspection of the exhaust outlet. All the inspectionresults were lower than the standard limits. Meanwhile, it accepted the annual supervision and monitoring bylocal environmental protection departments. All the monitoring results were lower than the standard limits.NationStar Optoelectronics, following the self-monitoring plan, entrusted a qualified third-party environmentaltesting agency to perform inspection of various pollutants every half a year. All the inspection results werelower than the standard limits. Meanwhile, it accepted the quarterly supervision and monitoring by localenvironmental protection departments. All the monitoring results were lower than the standard limits.Foshan NationStar Semiconductor Technology Co., Ltd. abided by its environmental self-monitoring plan. Itentrusted a third-party environmental testing agency, Guangdong Zhonghui Mobile Laboratory TestingTechnology Co., Ltd., to perform the quarterly inspection of the wastewater and exhaust gas outlet. All theinspection results were lower than the standard limits. Meanwhile, it accepted the annual supervision andmonitoring by local environmental protection departments. All the monitoring results were lower than thestandard limits.Guangdong Fenghua Semiconductor Technology Co., Ltd. formulated its environmental self-monitoring plan atthe beginning of the year, according to which it entrusted a third-party environmental testing agency, TongChuang Wei Ye (Guangdong) Testing Technology Co., Ltd., to perform the annual inspection of the wastewaterand exhaust gas outlet. All the inspection results were lower than the standard limits. Meanwhile, it accepted the
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24-hour online monitoring of its wastewater outlets and the annual inspection of its exhaust gas outlets by localenvironmental protection departments. All the monitoring results were lower than the standard limits.
Contingency plan for environmental emergencies:
The Company formulated the Contingency Plan for Environmental Emergencies of Foshan Electrical andLighting Co., Ltd. Gaoming Branch (Including Risk Assessment Report and Material Survey of EnvironmentalEmergencies in August 2017, had it reviewed by experts on 13 September 2017, and had it filed with the FoshanMunicipal Ecology and Environment Bureau Gaoming Sub-bureau (Filing No.: 440608-2017-094-L) on 24October 2017.This document was revised in August 2020, reviewed by experts again on 7 September 2020, and filed with theFoshan Municipal Ecology and Environment Bureau Gaoming Sub-bureau (Filing No.: 440608-2020-056-M) on25 September 2020.In June 2018, Liuzhou Guige Lighting Technology Co., Ltd. completed the preparation of the Emergency Plan forEnvironmental Emergencies of Liuzhou Guige Lighting Technology Co., Ltd. (including the Risk AssessmentReport for Environmental Emergencies and the Investigation Report for Emergency Resources for EnvironmentalEmergencies), which was reviewed by experts and released, and filed with Liudong Branch of LiuzhouEnvironmental Protection Bureau on 29 August 2018 (No. 450203-2018-022-1). In August 2021, the EmergencyPlan for Environmental Emergencies of Liuzhou Guige Lighting Technology Co., Ltd. (including the RiskAssessment Report for Environmental Emergencies and the Investigation Report for Emergency Resources forEnvironmental Emergencies) was updated and compiled, passed the expert review and released, and on 27December 2021, the Emergency Plan was filed with the Ecological Environment Bureau of Liudong New Area,Liuzhou City (No. 450203-2021-0019-L).NationStar Optoelectronics formulated the Contingency Plan for Environmental Emergencies of NationStarOptoelectronics (Including Risk Assessment Report and Material Survey of Environmental Emergencies)according to the requirements of the Management Methods for Environmental Emergencies, and had it filed withthe Foshan Municipal Ecology and Environment Bureau Chancheng Sub-bureau (Filing No.: 440604-2020-032-L)on 2 April 2020.NationStar Semiconductor formulated the Contingency Plan for Environmental Emergencies of NationStarSemiconductor (including Risk Assessment Report and Material Survey of Environmental Emergencies) in May
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2020, had it reviewed by experts on 1 July 2020, and had it filed with the Foshan Municipal Ecology andEnvironment Bureau (Filing No.: 440600-2020-047-M) on 12 August 2020.Fenghua Semiconductor issued the Contingency Plan for Environmental Emergencies of Guangdong FenghuaSemiconductor Technology Co., Ltd. (including Risk Assessment Report and Material Survey of EnvironmentalEmergencies) on 31 December 2021, and had it filed with the Guangzhou Municipal Ecology and EnvironmentBureau (Filing No.: 440112-2022-032-L) on 3 March 2022.
Input in environmental governance and protection and the payment of environmental protection-related taxes:
During the Reporting Period, the input of the Company and its subsidiaries in the construction of environmentalprotection facilities, the development of environmental protection standards, the treatment of exhaust gas,wastewater, and waste residue, and routine detection totaled RMB10.7941 million, and their environmentalprotection-related taxes paid amounted to RMB152.7 thousand.Measures taken during the Reporting Period to reduce carbon emissions and the impact:
? Applicable □ Not applicableDuring the Reporting Period, the Company reduced electricity consumption under the same output value byselecting high-efficiency and energy-saving equipment. The Company insists on constantly publicizingenvironmental protection knowledge to employees, improving their awareness of environmental protection, andrealizing the sustainable development goal of harmonious coexistence between enterprises and the environmentthrough the joint efforts of all employees.
Administrative punishments received with respect to environmental issues in the Reporting Period:
| The Company/subsidiary | Reason for punishment | Incompliance | Punishment | Impact on the Company’s operations | Rectification |
| N/A | N/A | N/A | N/A | N/A | N/A |
Other environment-related information that should be disclosed:
None.Other relevant information:
None.
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II Social ResponsibilityIn order to further the Company's transparency in the fulfillment of corporate social responsibilities and help itsinvestors better understand it, the Company has disclosed an environmental, social, and governance (ESG)report .For details, please refer to the Environmental, Social, and Governance (ESG) Report 2022 disclosed bythe Company on www.cninfo.com.cn on 10 April 2023.III Efforts in Poverty Alleviation and Rural RevitalizationThe Company actively responds to the call to consolidate the achievements of poverty alleviation and revitalizethe countryside, and carries out the work of helping farmers with consumption to facilitate rural revitalization.During the Reporting Period, the Company actively purchased characteristic agricultural products worth overRMB200,000 from Wuhua County, Meizhou City. The Company donated quality luminary worth RMB100,000to the trunk roads of Jinjiang Village, Wuhua County to create a safer environment for locals to travel in theevening.
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Part VI Significant Events
I Fulfillment of Commitments
1. Commitments of the Company’s Actual Controller, Shareholders, Related Parties and Acquirers, aswell as the Company Itself and other Entities Fulfilled in the Reporting Period or Ongoing at the Period-end? Applicable □ Not applicable
| Commitment | Promisor | Type of commitment | Details of commitment | Date of commitment making | Term of commitment | Fulfillment |
| Commitments made in acquisition documents or shareholding alteration documents | Electronics Group and Hong Kong Rising Investment | About avoidance of horizontal competition | Electronics Group and Hong Kong Rising Investment have made commitments as follows to avoid horizontal competition with the Company: 1. They shall conduct supervision and restraint on the production and operation activities of themselves and their relevant enterprises so that besides the enterprise above that is in horizontal competition with the Company for now, if the products or business of them or their relevant enterprises become the same with or similar to those of the Company or its subsidiaries in the future, they shall take the following measures: (1) If the Company thinks necessary, they and their relevant enterprises shall reduce and wholly transfer their relevant assets and business; and (2) If the Company thinks necessary, it is given the priority to acquire first, by proper means, the relevant assets and business of them and their relevant enterprises. 2. All the commitments made by them to eliminate or avoid horizontal competition with the Company are also applicable to their directly or indirectly controlled subsidiaries. They are obliged to urge and make sure that other subsidiaries execute what’s prescribed in the relevant document and faithfully honor all the relevant commitments. 3. If they or their directly or indirectly controlled subsidiaries break the aforesaid commitments and thus cause a loss for the Company, they shall compensate the | 4 December 2015 | Long-term | Ongoing |
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| Company on a rational basis. | |||||
| Rising Group | 1. Rising Group will take active measures to avoid any business or activity that competes or may compete with the principal business of the Company and its auxiliary enterprises, and urge the Promisor to control enterprises to avoid any business or activity that competes or may compete with the principal business of the Company and its auxiliary enterprises. 2. If Rising Group and its controlled enterprises are given the opportunity to engage in new business that constitutes or may constitute horizontal competition with the principal businesses of the Company and its auxiliary enterprises, Rising Group will make every effort to make the business opportunity first available to the Company or its auxiliary enterprises on reasonable and fair terms and conditions on the premise that conditions permit and in the interest of the listed company. | 4 November 2021 | Long-term | Ongoing | |
| Electronics Group and Hong Kong Rising Investment | About reduction and regulation of related-party transactions | Electronics Group and Hong Kong Rising Investment have made a commitment that during their direct or indirect holding of the Company’s shares, they shall 1. strictly abide by the regulatory documents of the CSRC and the SZSE, the Company’s Articles of Association, etc. and not harm the interests of the Company or other shareholders of the Company in their production and operation activities by taking advantage of their position as the controlling shareholder and actual controller; 2. make sure that they or their other controlled subsidiaries, branch offices, jointly-run or associated companies (the "Relevant Enterprises" for short) will try their best to avoid or reduce related-party transactions with the Company or the Company’s subsidiaries; 3. strictly follow the market principle of justness, fairness and equal value exchange for necessary and unavoidable related-party transactions between them and their Relevant Enterprises and the Company, and withdraw from voting when a related-party transaction with them or their Relevant Enterprises is being voted on at a | 4 December 2015 | Long-term | Ongoing |
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| general meeting or a board meeting, and execute the relevant approval procedure and information disclosure duties pursuant to the applicable laws, regulations and regulatory documents. Where the aforesaid commitments are broken and a loss is thus caused for the Company, its subsidiaries or the Company’s other shareholders, they shall be obliged to compensate. | ||||||
| Commitments made in acquisition documents or shareholding alteration documents | Rising Group | 1. strictly abide by the regulatory documents of the CSRC and the SZSE, the Company’s Articles of Association, etc. and not harm the interests of the Company or other shareholders of the Company in their production and operation activities by taking advantage of their position as the controlling shareholder and actual controller; 2. make sure that they or their other controlled subsidiaries, branch offices, jointly-run or associated companies (the "Relevant Enterprises" for short) will try their best to avoid or reduce related-party transactions with the Company or the Company’s subsidiaries; 3. strictly follow the market principle of justness, fairness and equal value exchange for necessary and unavoidable related-party transactions between them and their Relevant Enterprises and the Company, and withdraw from voting when a related-party transaction with them or their Relevant Enterprises is being voted on at a general meeting or a board meeting, and execute the relevant approval procedure and information disclosure duties pursuant to the applicable laws, regulations and regulatory documents. | 4 November 2021 | Long-term | Ongoing | |
| Electronics Group and Hong Kong Rising Investment | About independence | In order to ensure the independence of the Company in business, personnel, asset, organization and finance, Electronics Group and Hong Kong Rising Investment have made the following commitments: 1. They will ensure the independence of the Company in business: (1) They promise that the Company will have the assets, personnel, qualifications and capabilities for it to operate independently as well as the ability of independent, | 4 December 2015 | Long-term | Ongoing |
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| raw materials and the sale of its products. (2) They promise that the Company will have independent and complete assets all under the Company’s control and independently owned and operated by the Company. And (3) They promise that they and their other controlled subsidiaries will not illegally occupy the Company’s funds and assets in any way, or use the Company’s assets to provide guarantees for the debts of themselves or their other controlled subsidiaries with. 4. They will ensure the independence of the Company in organization: (1) They promise that the Company has a sound corporate governance structure as a joint-stock company with an independent and complete organization structure. And (2) They promise that the operational and management organs within the Company will independently execute their functions according to laws, regulations and the Company’s Articles of Association. And 5. They will ensure the independence of the Company in finance: (1) They promise that the Company will have an independent financial department and financial accounting system with normative, independent financial accounting rules. (2) They promise that the Company will have independent bank accounts and not share bank accounts with its related parties. (3) They promise that the Company’s financial personnel do not hold concurrent positions in its related parties. (4) They promise that the Company will independently pay its tax according to law. And (5) They promise that the Company can make financial decisions independently and that they will not illegally intervene in the Company’s use of its funds. | ||||||
| Commitments made in acquisition documents or shareholding alteration documents | Rising Group | To maintain the independence of the Company, Rising Group has made the following commitments: 1. It will ensure the personnel independence of the Company. It promises to ensure personnel independence with the Company, and GM, deputy GMs, CFO, Company Secretary and other senior management personnel of the Company will | 4 November 2021 | Long-term | Ongoing |
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| that the Company will have the assets, personnel, qualifications and capabilities for it to operate independently as well as the ability of independent, sustainable operation in the market. | ||||||
| Commitments made in shareholding alteration documents | FSL | About avoidance of horizontal competition | 1. They shall conduct supervision and restraint on the production and operation activities of themselves and their relevant enterprises so that besides the enterprise above that is in horizontal competition with NATIONSTAR OPTOELECTRONICS for now, if the products or business of them or their relevant enterprises become the same with or similar to those of NATIONSTAR OPTOELECTRONICS or its subsidiaries in the future, they shall take the following measures: (1) If NATIONSTAR OPTOELECTRONICS thinks necessary, they and their relevant enterprises shall reduce and wholly transfer their relevant assets and business; and (2) If NATIONSTAR OPTOELECTRONICS thinks necessary, it is given the priority to acquire first, by proper means, the relevant assets and business of them and their relevant enterprises. 2. All the commitments made by them to eliminate or avoid horizontal competition with FSL are also applicable to their directly or indirectly controlled subsidiaries. They are obliged to urge and make sure that other subsidiaries execute what’s prescribed in the relevant document and faithfully honor all the relevant commitments. 3. If they or their directly or indirectly controlled subsidiaries break the aforesaid commitments and thus cause a loss for NATIONSTAR OPTOELECTRONICS, they shall compensate NATIONSTAR OPTOELECTRONICS on a rational basis. | 7 October 2021 | Long-term | Ongoing |
| Commitments made in shareholding alteration documents | FSL | About reduction and regulation of related-party transactio | 1. FSL and enterprises under its control (except NATIONSTAR OPTOELECTRONICS and its subsidiaries) will reduce and standardize related transactions with NATIONSTAR OPTOELECTRONICS and its subsidiaries. 2. In case of any inevitable or reasonably justified related party transactions, FSL and enterprises under its control (exceFpt | 7 October 2021 | Long-term | Ongoing |
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| ns | NATIONSTAR OPTOELECTRONICS and its subsidiaries) will strictly abide by the market principles, conduct related party transactions with NATIONSTAR OPTOELECTRONICS fairly and reasonably based on the general principles of equality, mutual benefit, equal value and compensation, and perform legal procedures in accordance with laws, regulations, normative documents and relevant regulations of NATIONSTAR OPTOELECTRONICS. | |||||
| Commitments made in shareholding alteration documents | FSL | About maintaining independence of the listed company | In order to promote the standardized management of NATIONSTAR OPTOELECTRONICS, legally and compliantly exercise shareholders' rights and fulfill corresponding obligations, and take practical and effective measures to ensure the independence of NATIONSTAR OPTOELECTRONICS in personnel, assets, finance, institutions and business, the Promisor promises: (I) It will ensure the independence of NATIONSTAR OPTOELECTRONICS in personnel 1. FSL promises that GM, deputy GMs, CFO, Company Secretary and other senior management personnel of NATIONSTAR OPTOELECTRONICS will not hold any positions in FSL and other enterprises under its control (except NATIONSTAR OPTOELECTRONICS and its controlled enterprises, the same below) other than director and supervisor, and not receive salaries from in FSL and other enterprises under its control; 2. It will ensure NATIONSTAR OPTOELECTRONICS’s absolute independence from FSL and enterprises under its control in labor, human resource and salary management. (II) It will ensure the independence of NATIONSTAR OPTOELECTRONICS in asset 1. FSL promises that NATIONSTAR OPTOELECTRONICS will have independent and complete operating assets related to operation; 2. FSL promises that the funds, assets and other resources of NATIONSTAR OPTOELECTRONICS will not be illegally occupied. (III) It will ensure the independence of NATIONSTAR OPTOELECTRONICS in finance 1. It promises that NATIONSTAR OPTOELECTRONICS will have an independent financial department, and | 7 October 2021 | Long-term | Ongoing |
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| independent financial accounting system and financial accounting rules. 2. It promises that NATIONSTAR OPTOELECTRONICS will have independent bank accounts and not share bank accounts with FSL and other enterprises under its control; 3. It promises that the financial personnel of NATIONSTAR OPTOELECTRONICS do not work part-time and receive salaries in FSL and other enterprises under its control; 4. It promises that NATIONSTAR OPTOELECTRONICS will independently pay its tax according to law; And (5) It promises that NATIONSTAR OPTOELECTRONICS can make financial decisions independently and that it will not illegally intervene in NATIONSTAR OPTOELECTRONICS’s use of its funds. (IV) It will ensure the independence of NATIONSTAR OPTOELECTRONICS in organization It promises that the listed company has a sound corporate governance structure as a joint-stock company with an independent and complete organization structure. (V) It will ensure the independence of NATIONSTAR OPTOELECTRONICS in business It promise that NATIONSTAR OPTOELECTRONICS remains independent in procurement, production, sales and intellectual property rights, and that NATIONSTAR OPTOELECTRONICS will have the assets, personnel, qualifications and capabilities for it to operate independently as well as the ability of independent, sustainable operation in the market. | ||||||
| Commitments made during asset restructuring | FSL | About absence of insider trading | 1. FSL does not disclose the relevant insider information of this trading or make use of the insider information for insider trading; 2. As of the issuance date of the Report on Major Asset Purchase and Related Party Trading of Foshan Electrical and Lighting Co., Ltd. (Draft), FSL has not been placed on file for investigation or criminal investigation due to suspected insider trading related to this trading, and has not been subject to administrative punishment by the CSRC or criminal responsibility investigated by judicial organs according to law for insider trading related to any major asset restructuring, and has not been prohibited from engaging in any major asset restructuring of listed | 27 October 2021 | From the time when the Company plans the major asset restructuring to the date when the major asset restructuring is completed | Expired |
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| companies according to Article 13 of the Interim Provisions on Strengthening the Supervision of Abnormal Stock Trading Related to Major Asset Restructuring of Listed Companies in the last 36 months. | ||||||
| Commitments made during asset restructuring | FSL | About compliance with Several Provisions on the Reduction of Shares by Shareholders, Directors and Supervisors of Listed Companies | 1. FSL is not subject to any securities and futures crimes as stipulated in Article 6 of Several Provisions on the Reduction of Shares by Shareholders, Directors and Supervisors of Listed Companies. During the period when the CSRC or the judicial organ filed a case for investigation, and less than six months after the administrative penalty decision and criminal judgment were made, there was no situation that the shares of NATIONSTAR OPTOELECTRONICS could not be reduced due to violation of the rules of stock exchanges and public censure by stock exchanges for less than three months. 2. If the commitment maker still holds shares in NATIONSTAR OPTOELECTRONICS after this transaction, the commitment maker shall be subject to the following regulations: (1) Within the six months following the completion of this transaction, if the commitment maker intends to reduce by way of centralized bidding at the stock exchange the shares obtained in this transaction, the commitment maker shall report to the stock exchange and disclose the shareholding reduction plan (which will be kept for record by the stock exchange) 15 trading days before the first sale. (2) Within the six months following the completion of this transaction, if the commitment maker intends to reduce by way of centralized bidding at the stock exchange within three months the shares obtained in this transaction, the total shares reduced shall not exceed 1% of NATIONSTAR OPTOELECTRONICS’s total shares. | 27 October 2021 | To 6 months after the completion of major asset restructuring | Expired |
| FSL | About the truthfulness, | 1. FSL has provided relevant information and documents (including but not limited to original written materials, duplicate materials or oral | 27 October 2021 | Long-term | Ongoing |
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| accuracy and completeness of the information provided during this major asset restructuring | testimony, etc.) related to this trading to the intermediaries providing professional services of auditing, valuation, legal and financial consultancy for this trading. FSL promises that the copies or photocopies of the documents and materials provided are consistent with the originals, and that the signatures and seals of the documents and materials are authentic, and the signatories of the documents have been legally authorized and effectively signed the documents; that the provided information and documents are authentic, accurate and complete and that there are no false records, misleading statements or material omissions. FSL also promises to bear individual and joint and several liability. 2. The commitment maker promises that the information provided is true, accurate and complete. Where any investor suffers a loss as a result of any misrepresentation, misleading statement or material omission in the information provided, the commitment maker shall be liable for compensation according to law. | ||||
| Director and senior management office of FSL | About measures to fill up returns for risks arising from diluting immediate return in major asset restructuring | 1. They promise not to transfer benefits to other units or individuals free of charge or under unfair conditions, and not to harm the interests of the Company in any other ways; 2. They promise to restrain position-related consumption behavior; 3. They promise not to use the Company's assets to engage in investment and consumption activities unrelated to the performance of duties; 4. They promise that the future remuneration system formulated by the Board of Directors or the Remuneration and Assessment Committee will be linked to the implementation of the Company's measures to fill up returns; 5. If the Company formulates an equity incentive plan in the future, they will actively promote the exercise conditions of the future equity incentive plan to be linked with the implementation of the Company's measures to fill up returns; 6. From the date of issuance of these commitments to the completion of this | 27 October 2021 | Long-term | Ongoing |
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| major asset restructuring of the Company, if the CSRC makes other new regulatory provisions on measures to fill up returns and the relevant commitments, and these commitments cannot meet these provisions of the CSRC, they promise to issue supplementary commitments in accordance with the latest regulations of the CSRC at that time. 7. They promise to earnestly fulfill the compensation measures formulated by the Company and any commitments it made. If they violate any of these commitments and cause losses to the Company or investors, they are willing to bear corresponding legal responsibilities to the Company or investors according to law. | ||||||
| Commitments made during asset restructuring | Director and senior management office of FSL | About non-reduction of FSL shares during major asset restructuring | 1. They promise that there will be no share reduction plan from the date of issuance of this Letter of Commitments to the completion of this trading, and they will not reduce its FSL shares (if any) in any other way. 2. If FSL implements ex-rights behaviors such as share conversion, share offering and share allotment from the date of issuance of this Letter of Commitments to the completion of this trading, the newly added shares obtained by them will also be subject to the above commitments related to not reducing share holdings. 3. Where FSL or any other investor suffers a loss as a result of my violation of the aforesaid commitment, I shall be liable for compensation to FSL and investors according to law. They promise that they have the right to enter into this Letter of Commitments, and once this Letter of Commitments is entered into by them, it will constitute an effective, legal and binding responsibility upon them, and this Letter of Commitments will remain valid and irrevocable. They promise to strictly fulfill all commitments in this Letter of Commitments. In case of violation of this Letter of Commitments, they will bear relevant legal responsibilities. | 28 September 2021 | Until this trading is completed | Expired |
| Commitments made during asset | Director and | About absence of | 1. They do not disclose the relevant insider information of this trading or make use of the | 27 October | From the time when the | Expired |
Annual Report 2022
| restructuring | senior management of FSL | insider trading | insider information for insider trading; 2. They have not been placed on file for investigation or criminal investigation due to suspected insider trading related to this trading, and have not been subject to administrative punishment by the CSRC or criminal responsibility investigated by judicial organs according to law for insider trading related to major asset restructuring, and has not been prohibited from engaging in any major asset restructuring of listed companies according to Article 13 of the Interim Provisions on Strengthening the Supervision of Abnormal Stock Trading Related to Major Asset Restructuring of Listed Companies in the last 36 months. 3. In case of violation of the above commitments, they will bear all losses caused to the listed company and its shareholders. | 2021 | Company plans the major asset restructuring to the date when the major asset restructuring is completed | |
| Commitments made during asset restructuring | Directors and senior management of FSL | About the truthfulness, accuracy and completeness of the information provided during this major asset restructuring | 1. They have provided relevant information and documents (including but not limited to original written materials, duplicate materials or oral testimony, etc.) related to this trading to the intermediaries providing professional services of auditing, assessment, legal and financial consultancy for this trading. They promise that the copies or photocopies of the documents and materials provided are consistent with the originals, and that the signatures and seals of the documents and materials are authentic, and the signatories of the documents have been legally authorized and effectively signed the documents; that the provided information and documents are authentic, accurate and complete and that there are no false records, misleading statements or material omissions. They also promise to bear individual and joint and several liability. 2. They promise that the information provided is true, accurate and complete. In case of any losses caused to investors due to any false presentations, misleading statements or material omissions in the information provided, they will be liable for compensation according to law. 3. Where the information provided or disclosed by them in this trading is suspected of | 27 October 2021 | Long-term | Ongoing |
Annual Report 2022
| false records, misleading statements or material omissions, and they are filed for investigation by the judicial organ or by the CSRC, the shares with interests in the listed company will not be transferred until the investigation conclusion is formed. | ||||||
| Commitments made during asset restructuring | Rising Group, Rising Capital, Electronics Group, Hongkong Wah Shing, Hong Kong Rising Investment and Shenzhen Rising Investment | About effective performance of measures to fill up returns | 1. They promise not to interfere in the operation and management activities of the listed company beyond their authority and not to encroach on the interests of the listed company. 2. From the date of issuance of these commitments to the completion of this trading of the listed company, if the CSRC makes new regulatory requirements on measures to fill up returns and commitments of relevant personnel, and the above commitments cannot meet these new regulatory requirements of the CSRC, they promise to issue supplementary commitments according to the latest regulations of the CSRC at that time. 3. They promise to earnestly fulfill the measures to fill up returns formulated by the listed company and any commitments made by them. If they violate these commitments and causes losses to the listed company or investors, they are willing to bear the compensation responsibility for the listed company or investors according to law. As one of the subjects responsible for the measures to fill up returns, if they violate the above commitments or refuses to fulfill the above commitments, they agree that the securities regulatory agencies such as the CSRC and the SZSE will punish them or take relevant regulatory measures in accordance with the relevant regulations and rules they formulated or issued. | 27 October 2021 | Long-term | Ongoing |
| Commitments made during asset restructuring | Rising Group, Rising Capital, Electronics Group, Hongko | About non-reduction of FSL shares during major asset | 1. They promise that there will be no share reduction plan from the date of issuance of this Letter of Commitments to the completion of this trading, and they will not reduce its FSL shares in any other way (except the transfer or transfer between Rising Group and its wholly-owned subsidiaries). 2. If FSL implements ex-rights behaviors such as share conversion, share | 28 September 2021 | Until this trading is completed | Expired |
Annual Report 2022
| ng Wah Shing, Hong Kong Rising Investment and Shenzhen Rising Investment | restructuring | offering and share allotment from the date of issuance of this Letter of Commitments to the completion of this trading, the newly added shares obtained by them will also be subject to the above commitments related to not reducing share holdings. 3. Where FSL or any other investor suffers a loss as a result of our violation of the aforesaid commitment, we shall be liable for compensation to FSL and investors according to law. | ||||
| Commitments made during asset restructuring | Rising Group, Rising Capital, and Hongkong Wah Shing | About avoidance of horizontal competition | 1. They shall conduct supervision and restraint on the production and operation activities of themselves and their relevant enterprises so that besides the enterprise above that is in horizontal competition with FSL for now, if the products or business of them or their relevant enterprises become the same with or similar to those of FSL or its subsidiaries in the future, they shall take the following measures: (1) If FSL thinks necessary, they and their relevant enterprises shall reduce and wholly transfer their relevant assets and business; and (2) If FSL thinks necessary, it is given the priority to acquire first, by proper means, the relevant assets and business of them and their relevant enterprises. 2. All the commitments made by them to eliminate or avoid horizontal competition with FSL are also applicable to their directly or indirectly controlled subsidiaries. They are obliged to urge and make sure that other subsidiaries execute what’s prescribed in the relevant document and faithfully honor all the relevant commitments. 3. If they or their directly or indirectly controlled subsidiaries break the aforesaid commitments and thus cause a loss for FSL, they shall compensate FSL on a rational basis. | 27 October 2021 | Long-term | Ongoing |
| Commitments made during asset restructuring | Rising Group, Rising Capital, and Hongko | About regulation and reduction of related-party | They have made a commitment that during their direct or indirect holding of FSL’s shares, they shall 1. strictly abide by the regulatory documents of the CSRC and the SZSE, FSL’s Articles of Association, etc. and not harm the interests of the Company or other shareholders | 27 October 2021 | Long-term | Ongoing |
Annual Report 2022
| ng Wah Shing | transactions | of FSL in their production and operation activities by taking advantage of their position as the controlling shareholder and actual controller; 2. make sure that they or their other controlled subsidiaries, branch offices, jointly-run or associated companies (the "Relevant Enterprises" for short) will try their best to avoid or reduce related-party transactions with FSL or FSL’s subsidiaries; 3. strictly follow the market principle of justness, fairness and equal value exchange for necessary and unavoidable related-party transactions between them and their Relevant Enterprises and FSL, and withdraw from voting when a related-party transaction with them or their Relevant Enterprises is being voted on at a general meeting or a board meeting, and execute the relevant approval procedure and information disclosure duties pursuant to the applicable laws, regulations and regulatory documents. Where the aforesaid commitments are broken and a loss is thus caused for FSL, its subsidiaries or FSL’s other shareholders, they shall be obliged to compensate. | ||||
| Commitments made during asset restructuring | Rising Group, Electronics Group, and Rising Capital | About compensation for possible violations of laws and regulations by NATIONSTAR OPTOELECTRONICS | If NATIONSTAR OPTOELECTRONICS is subject to administrative penalties such as accountability and fines by relevant competent departments after the completion of this trading due to the illegal acts of NATIONSTAR OPTOELECTRONICS before the completion of this acquisition, they promise to fully bear the losses of NATIONSTAR OPTOELECTRONICS or FSL, as well as the expenses and fees under punishment or recourse, to ensure that NATIONSTAR OPTOELECTRONICS or FSL will not suffer any economic losses. | 27 October 2021 | Long-term | Ongoing |
| Rising Group, Electronics Group, and | About explanation of confidentiality measures | 1. During the preliminary negotiation between the listed company and the counterparty on this trading, necessary and sufficient confidentiality measures were taken to limit the scope of knowledge of relevant sensitive information. According to the requirements of the SZSE, the | 27 October 2021 | Until this trading is completed | Expired |
Annual Report 2022
| Rising Capital | and confidentiality system adopted for this trading | listed company has completed the submission and online reporting of the memorandum of trading process, relevant materials of insider information insiders. The listed company has hired independent financial advisers, legal advisers, audit institutions, valuation institutions and other intermediaries, and signed confidentiality agreements or appointment agreements with confidentiality clauses with the above intermediaries, clearly stipulating the scope of confidential information and the confidentiality responsibilities of each intermediary. 2. In communicating with the transaction counterparties, the listed company made clear to them that they shall be strictly confidential about the relevant information, shall not leak the information to others, and shall not trading in shares of the listed company with the information. 3. When discussing the problems, solutions, suggestions, ideas and solutions with respect to the transaction, the transaction counterparties did not leak the restructuring information to any other irrelevant entities or individuals. 4. Before the listed company discloses information in relation to the transaction, the transaction counterparties strictly abided by the confidentiality obligation and did not conduct any insider trading using the information. | |||
| Rising Group, Electronics Group, and Rising Capital | About the truthfulness, accuracy and completeness of the information provided during this major asset restructuring | 1. They promise that the information provided is true, accurate and complete, and there are no false records, misleading statements or material omissions. 2. They have provided relevant information and documents (including but not limited to original written materials, duplicate materials or oral testimony, etc.) related to this trading to the intermediaries. They promise that the copies or photocopies of the documents and materials provided are consistent with the originals, and that the signatures and seals of the documents and materials are authentic, and the signatories of the documents have been legally authorized and effectively signed the | 27 October 2021 | Long-term | Ongoing |
Annual Report 2022
| documents; that there are no false records, misleading statements or material omissions. 3. They promise that the explanations and confirmations issued by them are true, accurate and complete, and there are no false records, misleading statements or material omissions. 4. During this trading, they will disclose the information about this trading in a timely manner in accordance with relevant laws and regulations, the CSRC and the SZSE, and ensure the authenticity, accuracy and completeness of such information. 5. They shall bear legal responsibility for the authenticity, accuracy and completeness of the information, documents, materials, explanations and confirmations provided. In case of any violation or losses caused to the listed company, investors, parties to the trading and intermediaries participating in this trading, they will be liable for compensation according to law. 6. Where the information provided or disclosed by them in this trading is suspected of false records, misleading statements or material omissions, and they are filed for investigation by the judicial organ or by the CSRC, the shares with interests in the listed company will not be transferred until the investigation conclusion is formed. | ||||||
| Commitments made during asset restructuring | Electronics Group | About the clarity of the underlying assets of this major asset restructuring | Electronics Group promises that the 100% equity of Sigma it held is clear in ownership and is not subject to any dispute or potential dispute, and there is no situation affecting its legal existence; the above shares are not subject to any other pledges, guarantees or third-party interests or restrictions and there is no pending or potential litigation, arbitration and any other administrative or judicial procedure that may lead to the seizure, freezing, expropriation or restriction of transfer of the above-mentioned equity by the relevant judicial or administrative organs. There is no entrusted shareholding or trust shareholding, restriction or prohibition of transfer of the above-mentioned equity controlled by Electronics Group. | 27 October 2021 | Long-term | Ongoing |
Annual Report 2022
| Rising Group and Rising Capital | About the clarity of the underlying assets of this major asset restructuring | Rising Group promises that the shares of NATIONSTAR OPTOELECTRONICS it held is clear in ownership and is not subject to any dispute or potential dispute, and there is no situation affecting its legal existence; the above shares are not subject to any other pledges, guarantees or third-party interests or restrictions and there is no pending or potential litigation, arbitration and any other administrative or judicial procedure that may lead to the seizure, freezing, expropriation or restriction of transfer of the above-mentioned equity by the relevant judicial or administrative organs There is no entrusted shareholding or trust shareholding, restriction or prohibition of transfer of the above-mentioned equity controlled by Rising Group. | 27 October 2021 | Long-term | Ongoing |
| Rising Group and Rising Capital | About compliance of this major asset restructuring with Several Provisions on the Reduction of Shares by Shareholders, Directors and Supervisors of Listed Companies | They are not subject to any securities and futures crimes as stipulated in Article 6 of Several Provisions on the Reduction of Shares by Shareholders, Directors and Supervisors of Listed Companies. During the period when the CSRC or the judicial organ filed a case for investigation, and less than six months after the administrative penalty decision and criminal judgment were made, there was no situation that the shares of NATIONSTAR OPTOELECTRONICS could not be reduced due to violation of the rules of stock exchanges and public censure by stock exchanges for less than three months. 2. In case of any violation or losses caused to NATIONSTAR OPTOELECTRONICS, investors, parties to the trading and intermediaries participating in this trading, they will be liable for compensation according to law. | 27 October 2021 | Until this trading is completed | Expired |
| Electronics Group | About the release of credit guarantee | 1. As of the date of issuance of the Letter of Commitments, Sigma has signed the Maximum Guarantee Contract (Contract No.: XYYBZ (BY) No. 201906280001-1) and the Maximum Pledge Contract for Stocks of Listed | 27 October 2021 | Until this trading is completed | Expired |
Annual Report 2022
| Companies (Contract No.: XXYZZ (BY) No. 201906280001-2) with Guangzhou Branch of Industrial Bank Co., Ltd. Sigma will provide the maximum guarantee and pledge guarantee for the debt of Electronics Group, with the guarantee amount of RMB400 million (in words: RMB Four Hundred Million), and the guarantee will be valid from June 28, 2019 to June 27, 2022. Electronics Group promises that on the date of issuance of this Letter of Commitment, all the loans involved in the Maximum Guarantee Contract and the Maximum Pledge Contract for Stocks of Listed Companies have been repaid, there is no debt based on the guarantee under the above contracts, and 39,876,500 shares of NATIONSTAR OPTOELECTRONICS held by Sigma have been released from pledge. At the same time, Electronics Group further makes an irrevocable commitment that it will not add any new loans to Guangzhou Branch of Industrial Bank Co., Ltd. as a borrower before the expiration date of the Maximum Guarantee Contract and the Maximum Pledge Contract for Stocks of Listed Companies, so as to ensure that Sigma will not actually assume any guarantee responsibilities due to the above guarantee contracts. 2. Electronics Group promises that it will not arrange for Sigma to add any form of guarantee before the completion of the delivery of Sigma's equity in this trading. 3. In case of any violations of the above commitments, Electronics Group shall solve and eliminate the above situation within ten days, and bear corresponding legal responsibilities to Sigma and FSL. | ||||||
| Commitments made during asset restructuring | Key management personnel of Rising Group, Electron | About absence of insider trading | They promise that they will not disclose the relevant insider information of this trading or make use of the insider information for insider trading; 2. As of the issuance date of the Report on Major Asset Purchase and Related Party Trading of Foshan Electrical and Lighting Co., Ltd. (Draft), they have not been placed on file for investigation or criminal investigation due | 27 October 2021 | From the date of the issuance of the letter of commitment until the completion of this trading | Expired |
Annual Report 2022
| ics Group, and Rising Capital | to suspected insider trading related to this trading, and have not been subject to administrative punishment by the CSRC or criminal responsibility investigated by judicial organs according to law for insider trading related to any major asset restructuring, and have not been prohibited from engaging in any major asset restructuring of listed companies according to Article 13 of the Interim Provisions on Strengthening the Supervision of Abnormal Stock Trading Related to Major Asset Restructuring of Listed Companies in the last 36 months; 3. In case of violation of the above commitments, they will bear all losses caused to the listed company and its shareholders. | ||||
| NATIONSTAR OPTOELECTRONICS | About statement and commitment of truthfulness, accuracy and completeness of information provided | NATIONSTAR OPTOELECTRONICS has provided the necessary, true, accurate, complete and effective documents, materials or oral statements and explanations for this trading at this stage, and there is no concealment, falsehood or material omission. The copies or photocopies of the documents provided are consistent with the original materials or originals. The signatures and seals on the documents and materials provided are authentic, and NATIONSTAR OPTOELECTRONICS has fulfilled the legal procedures required for such signatures and seals and obtained legal authorization. All the facts stated and explained are consistent with the facts that happened. As this transaction proceeds, the Company shall provide needed information and documents as required by applicable laws, regulations, rules and requirements of CSRC and the stock exchange, and continue to guarantee the truthfulness, accuracy, completeness and validity of the information and documents provided. The Company promises and guarantees the truthfulness, accuracy and completeness of the information provided or disclosed with respect to this transaction. It guarantees that there are no misrepresentations, misleading statements or material omissions. And it shall be individually | 27 October 2021 | Long-term | Ongoing |
Annual Report 2022
| and jointly liable for that. | ||||||
| Sigma | About the clarity of the ownership of the underlying assets of this major asset restructuring | Among 79,753,050 shares of tradable shares with unlimited selling conditions of NATIONSTAR OPTOELECTRONICS held by Sigma, 39,876, 500 shares were pledged for Guangdong Electronics Information Industry Group Ltd. As of the date of issuance of this commitment, the pledge of the above shares has been released. However, the Maximum Pledge Contract for Stocks of Listed Companies (No.: XXYZZ (BY) No. 201906280001-2) signed by Sigma and Guangzhou Branch of Industrial Bank Co., Ltd. has not been dissolved. Guangdong Electronics Information Industry Group Ltd. has promised that it will not add any new loans to Guangzhou Branch of Industrial Bank Co., Ltd. as a borrower during the validity period of the guarantee, and that it will not substantially assume any guarantee responsibility due to the Maximum Pledge Contract for Stocks of Listed Companies. Except as aforesaid, the asset ownership of Sigma is clear, there is no dispute or potential dispute, and there is no situation affecting the legal existence. There is no entrusted shareholding or trust shareholding, restriction or prohibition of transfer of the above-mentioned equity controlled by Rising Group. | 27 October 2021 | Long-term | Ongoing | |
| Commitments made during asset restructuring | Sigma | About no ownership dispute in equity | 1. Sigma promises that all its registered capital has been paid in. 2. Sigma promises that all existing shareholders contribute their own funds to hold shares, there is no situation such as holding shares on behalf of them, and there is no dispute or potential dispute between shareholders over their shares. | 27 October 2021 | Long-term | Ongoing |
| Sigma | About statement and commitment of truthfulness, accuracy and | 1. Sigma has provided relevant information and documents (including but not limited to original written materials, duplicate materials or oral testimony, etc.) related to this trading to the intermediaries providing professional services of auditing, valuation, legal and financial consultancy for this trading. Sigma promises that the copies or photocopies of the documents and materials provided are consistent with the originals, and that the signatures and seals of the documents and materials are authentic, and the signatories of the documents have been | 27 October 2021 | Long-term | Ongoing |
Annual Report 2022
| completeness of information provided | legally authorized and effectively signed the documents; that the provided information and documents are authentic, accurate and complete and that there are no false records, misleading statements or material omissions. Sigma also promises to bear individual and joint and several liability. 2. Sigma promises that the information provided is true, accurate and complete. In case of any losses caused to investors due to any false presentations, misleading statements or material omissions in the information provided, Sigma will be liable for compensation according to law. | |||||
| Commitments made to minority shareholders of the Company | FSL | About cash dividends | FSL’s profit distributed in cash shall not be less than 30% of the distributable profit realized in the year. | 27 May 2009 | Long-term | Ongoing |
| Whether the commitments were timely performed | Yes | |||||
2. Where there had been an earnings forecast for an asset or project and the Reporting Period was stillwithin the forecast period, explain why the forecast has been reached for the Reporting Period.
□ Applicable ? Not applicable
II Occupation of the Company’s Capital by the Controlling Shareholder or Its RelatedParties for Non-Operating Purposes
□ Applicable ? Not applicable
No such cases in the Reporting Period.
III Irregularities in the Provision of Guarantees
□ Applicable ? Not applicable
No such cases in the Reporting Period.
IV Explanations Given by the Board of Directors Regarding the Independent Auditor's“Modified Opinion” on the Financial Statements of the Latest Period
□ Applicable ? Not applicable
Annual Report 2022
V Explanations Given by the Board of Directors, the Supervisory Board and theIndependent Directors (if any) Regarding the Independent Auditor's “Modified Opinion” onthe Financial Statements of the Reporting Period
□ Applicable ? Not applicable
VI YoY Changes to Accounting Policies, Estimates and Correction of Material AccountingErrors? Applicable □ Not applicableRefer to Part X Financial Statements-V Important Accounting Policies and Estimations-44. Changes in MainAccounting Policies and Estimates for details.VII YoY Changes to the Scope of the Consolidated Financial Statements? Applicable □ Not applicableCompared with the previous period, the consolidated scope of financial statements in this period is increased,including two subsidiaries of Foshan NationStar Optoelectronics Co., Ltd. and Foshan Sigma Venture CapitalCo., Ltd., as well as six sub-subsidiaries of Foshan Guoxing Electronic Manufacture Co., Ltd., FoshanNationStar Semiconductor Co., Ltd., Nanyang Baoli Vanadium Industry Co., Ltd., Guangdong New ElectronicsInformation Ltd. and NationStar Optoelectronics (Germany) Co., Ltd. For details, see note VIII "change ofconsolidation scope" and note IX "equity in other entities".VIII Engagement and Disengagement of Independent AuditorCurrent independent auditor:
| Name of the domestic independent auditor | WUYIGE Certified Public Accountants LLP |
| The Company’s payment to the domestic independent auditor (RMB’0,000) | 100 |
| How many consecutive years the domestic independent auditor has provided audit service for the Company | 1 |
| Names of the certified public accountants from the domestic independent auditor writing signatures on the auditor’s report | He Xiaojuan, Xialing |
| How many consecutive years the certified public accountants from the domestic independent auditor have provided audit service for the Company | 1 |
Indicate by tick mark whether the independent auditor was changed for the Reporting Period.
Annual Report 2022
?Yes □ NoWhether the independent auditor was replaced during the audit period.
□Yes ? No
Whether the replacement of the independent auditor has fulfilled the review and approval procedures.?Yes □ NoDetailed explanations on the replacement and change of the independent auditor.(I) Review situationThe Company held the 37th Meeting of the 9th Board of Directors and the 4th Extraordinary Shareholders’General Meeting of 2022 on 14 November 2022 and 30 November 2022, respectively, reviewing and passingthe Proposal on Proposed Change of Accounting Firm and agreeing WUYIGE Certified Public AccountantsLLP to be appointed as the Company's financial audit department and internal control audit department in2022, with a term of one year.(II) The situation of the previous accounting firm and the audit opinion of the previous yearZhongzheng Tiantong Certified Public Accountants LLP which was originally appointed by the Company, hasprovided audit services for the Company for six consecutive years and issued a standard unqualified audit reportfor the Company for the year 2021. Zhongzheng Tiantong Certified Public Accountants LLP has effectivelyperformed its due duties as the audit department, successfully completed the audit work of the Company andsafeguarded the legitimate equity and interests of the Company and its shareholders from a professionalperspective during employment. There is no case that the Company has appointed the former accounting firm tocarry out part of the audit work and then terminated the appointment of the former accounting firm. TheCompany has communicated with the former accounting firm regarding the change of accounting firm and hasnot received any objection from the former accounting firm regarding the change.(III) Reasons for the proposed change of the independent auditorIn view of the expiration of the audit service contract between the Company and Zhongzheng TiantongCertified Public Accountants LLP, and in view of the business development needs of the Company, theCompany changed the audit department for the year 2022 to WUYIGE Certified Public Accountants LLP afterfulfilling the procurement bidding procedures of the Company, and the review and approval of board meetingand shareholders’ meeting.Independent auditor, financial advisor or sponsor engaged for the audit of internal controls:
? Applicable □ Not applicable
Annual Report 2022
In the Reporting Period, the Company engaged WUYIGE Certified Public Accountants LLP as its internalcontrol auditor with the total audit fees of RMB200,000.IX Possibility of Delisting after Disclosure of this Report
□ Applicable ? Not applicable
X Insolvency and Reorganization
□ Applicable ? Not applicable
No such cases in the Reporting Period.
XI Major Legal Matters
? Applicable □ Not applicable
| Basic information on lawsuit (arbitration) | Amount involved (RMB’0,000) | Whether there are accrued liabilities | Lawsuit (arbitration) progress | Lawsuit (arbitration) results and influences | Execution of lawsuit (arbitration) judgment | Date of disclosure | Disclosure index |
| 52 other litigation matters that did not meet litigation standards | 4653.46 | No | 30 cases have been closed; 22cases is not closed. | No significant influence on the Company | N/A | N/A | N/A |
XII Punishments and Rectifications
□ Applicable ? Not applicable
No such cases in the Reporting Period.XIII Credit Quality of the Company as well as Its Controlling Shareholder and ActualController? Applicable □ Not applicableIn the Reporting Period, the Company and its controlling shareholder and actual controller were not involved inany unsatisfied court judgments, large-amount overdue liabilities or the like.
Annual Report 2022
XIV Major Related-Party Transactions
1. Continuing Related-Party Transactions
? Applicable □ Not applicable
| Related party | Relationship with the Company | Type of transaction | Specific transaction | Pricing principle | Transaction price(RMB’0,000) | Total value (RMB’0,000) | As % of total value of all same-type transactions | Approved transaction line (RMB’0,000) | Over the approved line or not | Method of settlement | Obtainable market price for same-type transactions (RMB’0,000) | Disclosure date | Index to disclosed information |
| Guangdong Fenghua Advanced Technology Holding Co., Ltd. | Under same actual controller | Purchasing products and receiving labor service from related party | Purchase of materials | Market price | 569.58 | 569.58 | 0.10% | 1,550.00 | Not | Bank transfers or bank acceptance notes | 569.58 | 2021-12-30 | www.cninfo.com.cn |
| Prosperity Lamps & Components Limited | Controlled by related natural person | Purchasing products and receiving labor service from related | Purchase of materials | Market price | 77.35 | 77.35 | 0.01% | 600.00 | Not | Bank transfers or bank acceptance notes | 77.35 | 2021-12-30 | www.cninfo.com.cn |
Annual Report 2022
| party | |||||||||||||
| Hangzhou Times Lighting and Electrical Co., Ltd. | Controlled by related natural person | Purchasing products and receiving labor service from related party | Purchase of materials | Market price | 22.23 | 22.23 | 0.00% | Bank transfers or bank acceptance notes | 22.23 | N/A | |||
| Shenzhen Yuepeng Construction Co., Ltd. | Under same actual controller | Purchasing products and receiving labor service from related party | Receiving labor service | Market price | 338.62 | 338.62 | 0.55% | Bank transfers or bank acceptance notes | 338.62 | N/A | |||
| Guangdong Electronic Technology Research Institute | Under same actual controller | Purchasing products and receiving labor service from related party | Receiving labor service | Market price | 82.30 | 82.30 | 0.38% | 97.00 | Not | Bank transfers or bank acceptance notes | 82.30 | 2021-12-30 | www.cninfo.com.cn |
| Foshan Fulong Environme | Under same actual contro | Purchasing products | Receiving labor servic | Market price | 58.44 | 58.44 | 0.43% | Bank transfers or bank acceptance | 58.44 | N/A |
Annual Report 2022
| ntal Technology Co., Ltd. | ller | and receiving labor service from related party | e | notes | |||||||||
| Jiangmen Dongjiang Environmental Technology Co, Ltd. | Under same actual controller | Purchasing products and receiving labor service from related party | Receiving labor service | Market price | 53.46 | 53.46 | 0.40% | 300.00 | Not | Bank transfers or bank acceptance notes | 53.46 | 2021-12-30 | www.cninfo.com.cn |
| Dongguan Hengjian Environmental Protection Technology Co., Ltd. | Under same actual controller | Purchasing products and receiving labor service from related party | Receiving labor service | Market price | 41.11 | 41.11 | 0.30% | Bank transfers or bank acceptance notes | 41.11 | N/A | |||
| Shenzhen Longgang Dongjiang Industrial | Under same actual controller | Purchasing products and receiv | Receiving labor service | Market price | 24.34 | 24.34 | 0.18% | Bank transfers or bank acceptance notes | 24.34 | N/A |
Annual Report 2022
| Waste Treatment Co., Ltd. | ing labor service from related party | ||||||||||||
| Zhuhai Doumen District Yongxingsheng Environmental Industry Waste Recovery and Comprehensive Treatment Co., Ltd. | Under same actual controller | Purchasing products and receiving labor service from related party | Receiving labor service | Market price | 19.40 | 19.40 | 0.14% | Bank transfers or bank acceptance notes | 19.40 | N/A | |||
| Guangdong The Great Wall Building Co., Ltd. | Under same actual controller | Purchasing products and receiving labor service from related party | Receiving labor service | Market price | 6.86 | 6.86 | 0.05% | Bank transfers or bank acceptance notes | 6.86 | N/A | |||
| Prosperity Lamp | Controlled by | Selling products | Selling produ | Market price | 2,196.65 | 2,196.65 | 0.25% | Bank transfers or bank | 2,196.65 | 2021-12-30 | www.cninfo.com.cn |
Annual Report 2022
| s & Components Limited | related natural person | and providing labor service to related party | cts | acceptance notes | |||||||||
| Guangdong Fenghua Advanced Technology Holding Co., Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 1,462.98 | 1,462.98 | 0.17% | Bank transfers or bank acceptance notes | 1,462.98 | N/A | |||
| Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 132.56 | 132.56 | 0.02% | 1,550.00 | Not | Bank transfers or bank acceptance notes | 132.56 | 2021-12-30 | www.cninfo.com.cn |
| Guangzhou Wanshun Investment Management Co., Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 53.82 | 53.82 | 0.01% | Bank transfers or bank acceptance notes | 53.82 | N/A | |||
| Guangdong Yixin Changcheng Construction Group | Under same actual controller | Selling products and providing labor service to | Selling products | Market price | 44.12 | 44.12 | 0.01% | 1,000.00 | Not | Bank transfers or bank acceptance notes | 44.12 | 2021-12-30 | www.cninfo.com.cn |
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| related party | |||||||||||||
| Guangzhou Shengdu Investment Development Co., Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 28.19 | 28.19 | 0.00% | Bank transfers or bank acceptance notes | 28.19 | N/A | |||
| Guangdong Rising South Construction Co., Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 17.41 | 17.41 | 0.00% | 600.00 | Not | Bank transfers or bank acceptance notes | 17.41 | 2021-12-30 | www.cninfo.com.cn |
| Guangdong Zhongjin Lingnan Equipment Technology Co., Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 12.29 | 12.29 | 0.00% | 1,500.00 | Not | Bank transfers or bank acceptance notes | 12.29 | 2021-12-30 | www.cninfo.com.cn |
| Guangdong Zhongjin Lingnan Engineering Technology Co., Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 10.33 | 10.33 | 0.00% | Not | Bank transfers or bank acceptance notes | 10.33 | N/A | ||
| Prosperity Electr | Under control of | Selling produ | Selling | Market price | 6.63 | 6.63 | 0.00% | Bank transfers or | 6.63 | N/A |
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| ical (China) Co., Ltd. | related natural person | cts and providing labor service to related party | products | bank acceptance notes | |||||||||
| Guangdong Zhongnan Construction Co., Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 4.44 | 4.44 | 0.00% | 12,000.00 | Not | Bank transfers or bank acceptance notes | 4.44 | 2021-12-30 | www.cninfo.com.cn |
| Guangdong Electronics Information Industry Group Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 2.78 | 2.78 | 0.00% | Bank transfers or bank acceptance notes | 2.78 | N/A | |||
| Guangdong Zhongjin Lingnan Junpeng Intelligent Equipment Co., Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 2.37 | 2.37 | 0.00% | Bank transfers or bank acceptance notes | 2.37 | N/A | |||
| Guangdong Electronic Technology Research | Under same actual controller | Selling products and providing labor | Selling products | Market price | 0.88 | 0.88 | 0.00% | Bank transfers or bank acceptance notes | 0.88 | N/A |
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| Institute | service to related party | ||||||||||||
| Total | -- | -- | 5,269.14 | -- | 19,197.00 | -- | -- | -- | -- | -- | |||
| Large-amount sales return in detail | N/A | ||||||||||||
| Give the actual situation in the Reporting Period (if any) where an estimate had been made for the total value of continuing related-party transactions by type to occur in the Reporting Period | In December 2022, the Company estimated the total value of its continuing transactions with related parties Guangdong Fenghua Advanced Technology Holding Co., Ltd., Prosperity Lamps & Components Limited and its majority-owned subsidiaries, Guangdong Rising Investment Group and its majority-owned subsidiaries, Guangdong Huajian Enterprise Group Co., Ltd. and its majority-owned subsidiaries, Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd. and its majority-owned subsidiaries, Guangdong Construction Engineering Group Co., Ltd. and its majority-owned subsidiaries, Guangzhou Rising Non-ferrous Metal Group Co., Ltd. and its majority-owned subsidiaries, Guangdong Rising Real Estate Group Co., Ltd. and its majority-owned subsidiaries, Guangdong Electronic Technology Research Institute, Guangdong Rising Property Group Co., Ltd. and its majority-owned subsidiaries. Concerning the purchases from related parties, the actual amount in 2022 was RMB12.9367 million, accounting for 22.67% of the estimate for 2022. As for the sales to related parties, the actual amount in 2022 was RMB39.7541 million, accounting for 17.17% of the estimate for 2022. | ||||||||||||
| Reason for any significant difference between the transaction price and the market reference price (if applicable) | N/A | ||||||||||||
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests? Applicable □ Not applicable
| Related party | Related relationship | Related party name | Content of related party transaction | Pricing policy | Book value of the transferred assets (RMB’0,000) | Estimated value of the transferred assets (RMB’0,000) | Transaction price (RMB’0,000) | Settlement method | Transaction gains and losses (RMB’0,000) | Date of disclosure | Disclosure index |
| Guangdong Rising Holdings Group Co., Ltd. | Rising Group is the actual controller of the Company | Equity acquisition | The Company acquired 46,260,021 shares of Nation | Refer to the valuation in the Valuation Report on the Valuation | 27,824.28 | 50,099.60-55,974.63 | 53,245.28 | Cash | 1,976.58 | 26 February 2022 | Announcement on Completion of Transfer of Assets in a Major Asset Acquisition |
Annual Report 2022
| Star Optoelectronics held by Rising Group | Project in which Foshan Electrical and Lighting Co., Ltd. Plans to Purchase 52,051,945 Shares of Foshan NationStar Optoelectronics Co., Ltd. Held by Guangdong Rising Holdings Group Co., Ltd. and Guangdong Rising Finance Holding Co., Ltd. issued by China United | disclosed on http://www.cninfo.com.cn/ |
Annual Report 2022
| International Appraisal Consulting Co., Ltd., and shall be determined by both parties through negotiation | |||||||||||
| Guangdong Rising Capital Investment Co., Ltd. | Rising Capital is a majority-owned subsidiary of Rising Group | Equity acquisition | The Company acquired 5,791,924 shares of NationStar Optoelectronics held by Rising Capital | Refer to the valuation in the Valuation Report on the Valuation Project in which Foshan Electrical and Lighting Co., Ltd. Plans to Purchase 52,051,945 Shares of Foshan Nation | 3,483.7 | 6,272.65-7,008.23 | 6,666.5 | Cash | 26 February 2022 | Announcement on Completion of Transfer of Assets in a Major Asset Acquisition disclosed on http://www.cninfo.com.cn/ |
Annual Report 2022
| Star Optoelectronics Co., Ltd. Held by Guangdong Rising Holdings Group Co., Ltd. and Guangdong Rising Finance Holding Co., Ltd. issued by China United International Appraisal Consulting Co., Ltd., and shall be determined by both parties through negotiation | |||||||||||
| Guangdong | Electronics | Equity acquisit | The Compa | Value of | 47,969.53 | 86,372.55-96,501. | 91,798.02 | Cash | 26 February 2022 | Announcement on |
Annual Report 2022
| Electronics Information Industry Group Ltd. | Group is a majority-owned subsidiary of Rising Group | ion | ny acquired 100% of equity of Sigma (holding 79,753,050 shares of NationStar Optoelectronics) held by Electronics Group | shares of NationStar Optoelectronics held by Sigma | 19 | Completion of Transfer of Assets in a Major Asset Acquisition disclosed on http://www.cninfo.com.cn/ | |||||
| Guangdong Fenghua Advanced Technology Holding Co., Ltd. | Guangdong Fenghua Advanced Technology Holding Co., Ltd. is a majority-owned subsidiary of Rising Group | Equity acquisition | The Company’s majority-owned subsidiary NationStar Optoelectronics acquired 99.87695% of equity of Guangdong Fenghua Semiconductor Technology Co., Ltd. held by | Based on the evaluative value | 18,762.51 | 26,881.93 | 26,881.93 | Cash | 13 August 2022 | Announcement on Acquisition of Equity of Guangdong Fenghua Semiconductor Technology Co., Ltd. by a Majority-owned Subsidiary and Related-party Transactions disclose |
Annual Report 2022
| Guangdong Fenghua Advanced Technology Holding Co., Ltd. | d on http://www.cninfo.com.cn/ | ||
| Reasons for considerable differences between the transaction price and the book value or estimated value (if any) | None | ||
| Impact on the Company's operating results and financial conditions | Upon the acquisition, the Company and its wholly-owned subsidiary combined holds a total of 132,819,895 shares in NationStar Optoelectronics, accounting for 21.48% of NationStar Optoelectronics’s total share capital, and indirectly holds 21.45% of Fenghua Semiconductor’ shares. As such, the Company has become the controlling shareholder of NationStar Optoelectronics, Sigma and Fenghua Semiconductor, which have been included in the Company’s consolidated financial statements. During the Reporting Period, NationStar Optoelectronics and Sigma combined increased the Company’s operating revenue, net profit attributable to the Company as the parent, total assets and equity attributable to the Company as the parent by RMB3.52 billion, RMB19,765,800, RMB5.713 billion and RMB2.925 billion respectively. | ||
| The actual performance during the Reporting Period if the related-party transaction is conditioned on the performance. | N/A | ||
3. Related Transactions Regarding Joint Investments in Third Parties
□ Applicable ? Not applicable
No such cases in the Reporting Period.
4. Amounts Due to and from Related Parties
? Applicable □ Not applicableNon-operating amounts due to and from related parties or not
□ Yes ? No
No such cases in the Reporting Period.
5. Transactions with Related Finance Companies
? Applicable □ Not applicableDeposit business:
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| Related party | Relationship | Daily maximum limits (RMB’0,000) | Interest rate range | Beginning balance (RMB’0,000) | Actual amount | Ending balance (RMB’0,000) | |
| Total deposited in (RMB’0,000) | Total withdrawn (RMB’0,000) | ||||||
| Guangdong Rising Finance Co., Ltd. | Controlled by the same controlling shareholder | 120,000 | 0.35%-3.30% | 88,649.09 | 485,214.90 | 454,691.71 | 119,172.28 |
Credit or other financial business:
| Related party | Relationship | Type of business | Total amount (RMB’0,000) | Actual amount (RMB’0,000) |
| Guangdong Rising Finance Co., Ltd. | Controlled by the same actual controller | Credit granting | 150,000 | 2,018 |
6. Transactions with Related Parties by Finance Company Controlled by the Company
□ Applicable ? Not applicable
No finance company controlled by the Company was involved in making deposits, borrowing, credit granting orany other financial business with any related party.
7. Other Major Related-Party Transactions
? Applicable □ Not applicable
1. List of major infrastructure related-party transactions:
| Related party | Relationship with the Company | Type of transaction | Specific transaction | Pricing principle | Transaction amount (RMB’0,000) | Method of settlement | Disclosure date | Disclosure website |
| Guangdong Zhongnan Construction Co., Ltd. | Under same actual controller | Purchasing products and receiving labor service from related party | Receiving labor service | Market price | 10,367.72 | Bank transfers or bank acceptance notes | 9 July 2021, 17 August 2021, and 12 March 2022 | www.cninfo.com.cn |
| Guangdong Yixin Changcheng Construction Group | Under same actual controlle | Purchasing products and | Receiving labor service | Market price | 11,147.53 | Bank transfers or bank | 6 May 2021 | www.cninfo.com.cn |
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| r | receiving labor service from related party | acceptance notes | ||||||
| Guangdong Zhongren Group Construction Co., Ltd. | Under same actual controller | Purchasing products and receiving labor service from related party | Receiving labor service | Market price | 28,993.09 | Bank transfers or bank acceptance notes | 1 December 2020 | www.cninfo.com.cn (announcement of subsidiary NationStar Optoelectronics) |
2. The Company put out to tender the EPC project for the smart LED plants 1~3 at the Gaoming productionbase in November 2021. Upon bidding, review, and announcement, the consortium composed of GuangdongYixin Changcheng Construction Group Co., Ltd. (primary) and Guangdong Architectural Design & ResearchInstitute Co., Ltd. (member) won the project at RMB129,991,380. Guangdong Yixin Changcheng ConstructionGroup Co., Ltd. is a tier-2 wholly owned subsidiary of Guangdong Rising Holdings Group Co., Ltd. which isthe controlling shareholder of the Company. The Company had a related-party transaction regarding the "EPCproject for the smart LED plants 1~3 at the Gaoming production base of Foshan Electrical and Lighting Co.,Ltd." won by the consortium of Guangdong Yixin Changcheng Construction Group Co., Ltd., in accordancewith relevant regulations.
3. The Company put out to tender the EPC project for the plant and ancillary facilities at Mei’an High-techZone, Hainan Province of Fozhao (Hainan) Technology Co., Ltd. in January 2022. Upon bidding, review, andannouncement, the consortium composed of Guangdong Zhongnan Construction Co., Ltd. (primary) andGuangdong Architectural Design & Research Institute Co., Ltd. (member) won the project at the offer ofRMB179,051,600. Guangdong Zhongnan Construction Co., Ltd. is a tier-2 wholly owned subsidiary ofGuangdong Rising Holdings Group Co., Ltd. which is the controlling shareholder of the Company. TheCompany had a related-party transaction regarding the "EPC project for the plant and ancillary facilities atMei’an High-tech Zone, Hainan Province of Fozhao (Hainan) Technology Co., Ltd." won by the consortium ofGuangdong Zhongnan Construction Co., Ltd., in accordance with relevant regulations.
4. In August 2022, Foshan Kelian issued the Bidding Announcement for Operation and Investment Attractionand Property Management Services of Kelian Building, and conducted public bidding for the operation andinvestment attraction and property management services of Kelian Building. After the correspondingprocedures of qualification inspection, accreditation and publicity, the winning bidder was determined to beGuangdong Huajian Enterprise Group Co. Ltd. (hereinafter referred to as "Huajian Group"). Huajian Group is awholly-owned subsidiary of Guangdong Rising Holdings Group Co., Ltd., the controlling shareholder of theCompany. Huajian Group is a related party of the Company, and the bid for operation and investment attraction
Annual Report 2022
and property management services of Kelian Building constitutes a related transaction according to the relevantregulations. The average guaranteed rental income paid by Huajian Group to Foshan Kelian is not less thanRMB30 million per year, and the guaranteed rental income paid by Huajian Group to Foshan Kelian during theinvestment attraction period is not less than RMB300 million. If the total income during the operation andinvestment attraction period exceeds the guaranteed total income, Huajian Group shall commit to give FoshanKelian a share of not less than 30%.Index to the current announcement about the said related-party transaction disclosed:
| Title of announcement | Disclosure date | Disclosure website |
| Announcement on a Related-Party Transaction Due to a Call for Public Bids | 28 January 2022 | www.cninfo.com.cn |
| Announcement on a Related-Party Transaction Due to a Call for Public Bids | 12 March 2022 | www.cninfo.com.cn |
| Announcement on a Related-Party Transaction Due to a Call for Public Bids | 11 October 2022 | www.cninfo.com.cn |
XV Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable ? Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable ? Not applicable
No such cases in the Reporting Period.
(3) Leases
? Applicable □ Not applicableNo such cases in the Reporting Period.Lease items with a greater-than-10% impact on the Company’s gross profit during the Reporting Period:
□ Applicable ? Not applicable
No such cases in the Reporting Period.
2. Major guarantees
? Applicable □ Not applicable
Unit: RMB'0,000
Annual Report 2022
| Obligor | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date | Actual guarantee amount | Type of guarantee | Collateral (if any) | Counter guarantee (if any) | Term of guarantee | Having expired or not | Guarantee for a related party or not |
| Total approved line for such guarantees at the end of the Reporting Period (A3) | Total actual balance of such guarantees at the end of the Reporting Period (A4) | 0 | ||||||||
| Guarantees provided by the Company as the parent for its subsidiaries | ||||||||||
| Obligor | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date | Actual guarantee amount | Type of guarantee | Collateral (if any) | Counter guarantee (if any) | Term of guarantee | Having expired or not | Guarantee for a related party or not |
| Total approved line for such guarantees at the end of the Reporting Period (B3) | Total actual balance of such guarantees at the end of the Reporting Period (B4) | 0 | ||||||||
| Guarantees provided between subsidiaries | ||||||||||
| Obligor | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date | Actual guarantee amount | Type of guarantee | Collateral (if any) | Counter guarantee (if any) | Term of guarantee | Having expired or not | Guarantee for a related party or not |
| Foshan NationStar Semiconductor Technology Co., Ltd. | 20 September 2017 | 30,000 | 12 June 2018 | 10,000 | Joint-liability | None | None | 12 June 2018-27 May 2022 | Yes | No |
| Nanning Liaowang Auto Lamp Co., Ltd. | 24 June 2021 | 20,000 | 1 February 2021 | 4,770 | Joint-liability | None | None | 30 December 2019-1 February | Yes | No |
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| 2022 | ||||||||||
| Liuzhou Guige Lighting Technology Co., Ltd. | 24 June 2021 | 15,000 | 26 January 2021 | 1,000 | Joint-liability | None | None | 30 December 2019-26 January 2022 | Yes | No |
| Liuzhou Guige Lighting Technology Co., Ltd. | 24 June 2021 | 21 April 2021 | 2,000 | Joint-liability | None | None | 30 December 2019-21 April 2022 | Yes | No | |
| Liuzhou Guige Lighting Technology Co., Ltd. | 24 June 2021 | 22 April 2021 | 2,000 | Joint-liability | None | None | 30 December 2019-22 April 2022 | Yes | No | |
| Nanning Liaowang Auto Lamp Co., Ltd., Liuzhou Guige Foreshine Technology Co., Ltd., Liuzhou Guige Lighting Technology Co., Ltd. | 24 June 2021, 19 January 2022 | 4,500 | 11 February 2022 | 4,500 | Secured | Yes | None | 23 June 2020-24 April 2022, 25 April 2022-31 December 2025 | No | No |
| Nanning Liaowang Auto Lamp Co., Ltd., Chongqing Guinuo Lighting Technology Co., Ltd. | 24 June 2021 | 8,100 | 11 February 2022 | 6,510.64 | Secured | Yes | None | 15 June 2020-15 June 2023 | No | No |
| Nanning Liaowang Auto Lamp | 24 June 2021, 19 January 2022 | 9,100 | 7 May 2022 | 9,100 | Secured | Yes | None | 30 December 2019- | No | No |
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| Co., Ltd., Liuzhou Guige Foreshine Technology Co., Ltd., Liuzhou Guige Lighting Technology Co., Ltd. | 23 April 2022, 24 April 2022-31 December 2025 | |||||
| Total approved line for such guarantees in the Reporting Period (C1) | 15,000 | Total actual amount of such guarantees in the Reporting Period (C2) | 39,880.64 | |||
| Total approved line for such guarantees at the end of the Reporting Period (C3) | 15,000 | Total actual balance of such guarantees at the end of the Reporting Period (C4) | 20,110.64 | |||
| Total guarantee amount (total of the three kinds of guarantees above) | ||||||
| Total guarantee line approved in the Reporting Period (A1+B1+C1) | 15,000 | Total actual guarantee amount in the Reporting Period (A2+B2+C2) | 39,880.64 | |||
| Total approved guarantee line at the end of the Reporting Period (A3+B3+C3) | 15,000 | Total actual guarantee balance at the end of the Reporting Period (A4+B4+C4) | 20,110.64 | |||
| Total actual guarantee amount (A4+B4+C4) as % of the Company’s net assets | 3.89% | |||||
| Of which: | ||||||
Notes:
1. Chongqing Guinuo Lighting Technology Co., Ltd. (referred to as “Chongqing Guinuo”), Qingdao GuigeLighting Technology Co., Ltd. (referred to as “Qingdao Lighting”), Liuzhou Guige Foreshine Technology Co.,Ltd. (referred to as “Liuzhou Foreshine”), and Liuzhou Guige Lighting Technology Co., Ltd. (referred to as“Liuzhou Lighting”) are all wholly-owned subsidiaries of Nanning Liaowang Auto Lamp Co., Ltd. (referred toas “Nanning Liaowang”). Foshan NationStar Semiconductor Co., Ltd. (“NationStar Semiconductor”) is awholly-owned subsidiary of Foshan NationStar Optoelectronics Co., Ltd. (“NationStar Optoelectronics”). As of31 December 2022, guarantees between Nanning Liaowang and its subsidiaries, as well as between NationStarOptoelectronics and its subsidiaries, and collaterals are set out in “3. Other” under “XIV Commitments andContingencies” in Part X of this Report.
Annual Report 2022
2. The balance of the guarantee amount at the end of the Reporting Period was RMB201,106,400, of whichRMB65,106,400 was the guarantee amount approved before the acquisition.
3. Cash Entrusted to Other Entities for Management
(1) Cash Entrusted for Wealth Management
? Applicable □ Not applicableOverview of cash entrusted for wealth management during the Reporting Period
Unit: RMB'0,000
| Type | Funding source | Amount | Undue amount | Unrecovered overdue amount | Provision for impairment on unrecovered overdue amount |
| Bank financial products | Self-owned funds | 79,191 | 26,000 | 0 | 0 |
| Total | 79,191 | 26,000 | 0 | 0 | |
High-risk wealth management transactions with a significant single amount, or with low security and low liquidity:
? Applicable □ Not applicable
Unit: RMB'0,000
| rustee | Type of trustee | Type of wealth management product | Principal | Source of principal | Beginning date | Ending date | Use of principal | Determination of yield | Annualized yield rate for reference | Expected yield (if any) | Actual gain/loss in Reporting Period | Receipt/payment of such gain/loss | Allowance for impairment (if any) | Prescribed procedure executed or not | Plan for more transaction or not | Index to transaction summary and other information (if any) |
| Industrial and Commercial Ban | Bank | Break-even floating yield | 20,000 | Self-funded | 1 December 2022 | 3 March 2023 | Other | Repayment of principal with yiel | 3.30% | 166.36 | To be recovered | 0 | Yes | Yes |
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| k of China | d upon maturity | |||||||||||||||
| Bank of China | Bank | Break-even floating yield | 4,000 | Self-funded | 30 December 2022 | 4 July 2023 | Other | Repayment of principal with yield upon maturity | 2.98% | 60.74 | To be recovered | Yes | Yes | |||
| Ping An Bank | Bank | Break-even floating yield | 2,000 | Self-funded | 30 December 2022 | 30 March 2023 | Other | Repayment of principal with yield upon maturity | 2.89% | 14.25 | To be recovered | Yes | Yes | |||
| Total | 26,000 | -- | -- | -- | -- | -- | -- | 241.35 | 0 | -- | 0 | -- | -- | -- | ||
Situation where the principal is expectedly irrecoverable or an impairment may be incurred:
□ Applicable ? Not applicable
(2) Entrusted Loans
□ Applicable ? Not applicable
No such cases in the Reporting Period.
4. Other Significant Contracts
□ Applicable ? Not applicable
No such cases in the Reporting Period.
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XVI Other Significant Events? Applicable □ Not applicableRetirement of shares:
The Company held the 26th Meeting of the Ninth Board of Directors on 14 January 2022, where the Proposalon Retirement of Some Shares in the Company's Repurchase Special Securities Account was deliberated andapproved. The Board of Directors agreed to use the repurchased 13 million A shares for the equity incentiveplan. After deducting the 13 million A shares used for the equity incentive plan, the remaining 18,952,995repurchased A shares and 18,398,512 repurchased B shares would be retired, totalling 37,351,507 shares. On 8February 2022, the above-mentioned shares were retired, and the total share capital of the Company waschanged from 1,399,346,154 shares to 1,361,994,647 shares.XVII Significant Events of Subsidiaries
? Applicable □ Not applicable
1. Expropriation of land and above-ground housing of Nanjing Fozhao
The Company held the 24th Meeting of the Ninth Board of Directors on 15 December 2021, where the Proposalon Expropriation of Land and Above-ground Housing of the Wholly-owned Subsidiary Nanjing Fozhao LightingEquipment Manufacturing Co., Ltd., was deliberated and adopted. The Board of Directors agreed that NanjingLishui District People's Government expropriates the land use rights and above-land housing of Nanjing FozhaoLighting Equipment Manufacturing Co., Ltd. (hereinafter referred to as "Nanjing Fozhao"), a wholly-ownedsubsidiary of the Company, at a compensation amount of RMB183,855,895, and Nanjing Fozhao signed anexpropriation and compensation agreement with Lishui County House Dismantling, Moving & ResettlingDevelopment Co., Ltd., the implementing unit of the housing expropriation. As of 31 December 2022, NanjingFozhao has received 30% of the compensation, that is, RMB55,160,000.00, and the land use right certificate andhouse ownership certificate of the assets involved have been cancelled. As of the date of this report, the sitehandover is still in progress.
2. Cancellation of FSL LIGHTING GmbH
On 22 October 2021, FSL held an office meeting of the general manager, where the proposal for cancellation of itswholly-owned subsidiary FSL LIGHTING GmbH was deliberated and adopted. As of the end of the reportingperiod, the Company is handling the relevant procedures for liquidation and cancellation.
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3. Acquisition of NationStar Optoelectronics and Sigma
The Company has completed in February 2022 the major asset restructuring involving the acquisition of a 21.32%stake held by Rising Group and its acting-in-concert parties in NationStar Optoelectronics. Upon the acquisition,the Company eventually holds a 21.48% interest in NationStar Optoelectronics. NationStar Optoelectronics andSigma have become majority-owned subsidiaries of the Company. For further information, see “2. Businesscombinations involving entities under common control” under Note VIII to the financial statements.
4. The acquisition of 99.87695% equity of Guangdong Fenghua Semiconductor Technology Co., Ltd. by thesubsidiary NationStar Optoelectronics under the same controlIn August 2022, NationStar Optoelectronics, the Company’s majority-owned subsidiary, acquire 99.87695%equity of Guangdong Fenghua Semiconductor Technology Co., Ltd. held by Guangdong Fenghua AdvancedTechnology Holding Co., Ltd. with RMB268.8193 million. On 25 November 2022, the transfer of the subjectassets involved in the transaction was completed, and 50% of the purchase price was paid. The Companyindirectly holds 21.45% of shares in Fenghua Semiconductor which will be included in the Company’sconsolidated financial statements. For details, please refer to Note VIII-2. Business Combination under the SameControl.
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Part VII Share Changes and Shareholder Information
I Share Changes
1. Share Changes
Unit: share
| Before | Increase/decrease in the Reporting Period (+/-) | After | |||||||
| Shares | Percentage (%) | New issues | Shares as dividend converted from profit | Shares as dividend converted from capital reserves | Other | Subtotal | Shares | Percentage (%) | |
| 1. Restricted shares | 13,169,196 | 0.94% | -2,415,538 | -2,415,538 | 10,753,658 | 0.79% | |||
| 1.1 Shares held by state | |||||||||
| 1.2 Shares held by state-owned legal persons | 2,415,539 | 0.17% | -2,415,538 | -2,415,538 | 1 | 0.00% | |||
| 1.3 Shares held by other domestic investors | 1,826,025 | 0.13% | 1,826,025 | 0.13% | |||||
| Among which: Shares held by domestic legal persons | 1,338,434 | 0.10% | 1,338,434 | 0.10% | |||||
| Shares held | 487,591 | 0.03% | 487,591 | 0.04% | |||||
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| by domestic natural persons | |||||||||
| 1.4 Shares held by foreign investors | 8,927,632 | 0.64% | 8,927,632 | 0.66% | |||||
| Among which: Shares held by foreign legal persons | |||||||||
| Shares held by foreign natural persons | 8,927,632 | 0.64% | 8,927,632 | 0.66% | |||||
| 2. Unrestricted shares | 1,386,176,958 | 99.06% | -34,935,969 | -34,935,969 | 1,351,240,989 | 99.21% | |||
| 2.1 RMB-denominated ordinary shares | 1,073,038,507 | 76.68% | -16,537,457 | -16,537,457 | 1,056,501,050 | 77.57% | |||
| 2.2 Domestically listed foreign shares | 313,138,451 | 22.38% | -18,398,512 | -18,398,512 | 294,739,939 | 21.64% | |||
| 2.3 Overseas listed foreign shares | |||||||||
| 2.4 Other | |||||||||
| 3. Total shares | 1,399,346,154 | 100.00% | -37,351,507 | -37,351,507 | 1,361,994,647 | 100.00% |
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Reasons for share changes:
? Applicable □ Not applicable
1. During the Reporting Period, the Company has deregistered a total of 37,351,507 shares, including therepurchased A shares of 18,952,995 and the repurchased B shares of 18,398,512, resulting in the decrease intotal share capital of the Company of 37,351,507 shares.
2. 2,415,538 shares, restricted due to the reform of shareholder structure, were lifted into non-restricted duringthe Reporting Period.Approval of share changes:
? Applicable □ Not applicable
1. The Company held the 26
th Meeting of the 9
thBoard of Directors on 14 January 2022, where the Proposal onCancelling Some Shares of the Company's Repurchase Special Securities Account was deliberated and adopted.Meanwhile, the Board of Directors agreed to deregister a total of 37,351,507 shares, including the repurchasedA shares of 18,952,995 and the repurchased B shares of 18,398,512. On 8 February 2022, the above-mentionedshares for cancellation were canceled, and the total share capital of the Company was changed from1,399,346,154 shares to 1,361,994,647 shares.
2. The lifting of 2,415,538 shares, restricted due to the reform of shareholder structure, into non-restrictedduring the Reporting Period was approved by Shenzhen Stock Exchange and CSDC.Transfer of share ownership:
□Applicable ? Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to theCompany’s ordinary shareholders and other financial indicators of the prior year and the prior accounting period,respectively:
□Applicable? Not applicable
Other information that the Company considers necessary or is required by the securities regulator to bedisclosed:
Annual Report 2022
□Applicable ? Not applicable
2. Changes in Restricted Shares
? Applicable □ Not applicable
Unit: share
| Name of the shareholders | Restricted shares amount at the period-begin | Restricted shares increased of the period | Restricted shares relieved of the period | Restricted shares amount at the period-end | Restricted reasons | Restricted shares relieved date |
| Foshan Branch of ABC | 2,415,538 | 2,415,538 | 0 | 0 | Pre-IPO restricted shares | 26 April 2022 |
| Total | 2,415,538 | 2,415,538 | 0 | 0 | -- | -- |
II. Issuance and Listing of Securities
1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period
□Applicable ? Not applicable
2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures? Applicable □ Not applicableDuring the Reporting Period, the Company has deregistered a total of 37,351,507 shares, including therepurchased A shares of 18,952,995 and the repurchased B shares of 18,398,512, resulting in the change of totalshare capital of the Company from 1,399,346,154 shares to 1,361,994,647 shares.
3. Existing Staff-Held Shares
□Applicable ? Not applicable
III Shareholders and Actual Controller
1. Shareholders and Their Shareholdings at the Period-End
Unit: share
| Number of ordinary shareholders | 68,126 | Number of ordinary shareholders at the month-end | 68,995 | Number of preferred shareholders with resumed | 0 | Number of preferred shareholders with resumed voting rights at the month-end prior to the disclosure of this Report | 0 |
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| prior to the disclosure of this Report | voting rights (if any) (see note 8) | (if any) (see note 8) | ||||||
| 5% or greater shareholders or top 10 shareholders | ||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Total shares held at the period-end | Increase/decrease in the Reporting Period | Restricted shares held | Unrestricted shares held | Shares in pledge, marked or frozen | |
| Status | Shares | |||||||
| Hongkong Wah Shing Holding Company Limited | Foreign legal person | 13.84% | 188,496,430 | 0 | 0 | In pledge | 92,363,251 | |
| Prosperity Lamps & Components Limited | Foreign legal person | 10.79% | 146,934,857 | 0 | 0 | |||
| Guangdong Electronics Information Industry Group Ltd. | State-owned legal person | 9.01% | 122,694,246 | 0 | 0 | In pledge | 32,532,815 | |
| Guangdong Rising Holdings Group Co., Ltd. | State-owned legal person | 6.10% | 83,130,898 | 0 | 0 | |||
| Essence International Securities (Hong Kong) Co., Ltd. | Foreign legal person | 2.65% | 36,138,459 | 552,422 | 0 | 0 | ||
| Central Huijin Asset Management Co., Ltd. | State-owned legal person | 2.43% | 33,161,800 | 0 | 0 | |||
| Rising Investment Development Limited | Foreign legal person | 1.87% | 25,482,252 | 0 | 0 | |||
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| China Merchants Securities (Hong Kong) Co., Ltd | Foreign legal person | 0.96% | 13,139,602 | -1,308,705 | 0 | 0 | ||||
| Zhuang Jianyi | Foreign natural person | 0.87% | 11,903,509 | 8,927,632 | 0 | |||||
| Zhang Shaowu | Domestic natural person | 0.79% | 10,700,050 | 1,400,000 | 0 | 0 | ||||
| Strategic investors or general corporations becoming top-ten shareholders due to placing of new shares (if any) (see note 3) | Naught | |||||||||
| Related or acting-in-concert parties among the shareholders above | Among the top 10 shareholders, Hongkong Wah Shing Holding Company Limited, Guangdong Rising Holdings Group Co., Ltd., Guangdong Electronics Information Industry Group Ltd. and Rising Investment Development Limited are acting-in-concert parties; and Prosperity Lamps & Components Limited and Zhuang Jianyi are acting-in-concert parties. Apart from that, it is unknown whether there is among the top 10 shareholders any other related parties or acting-in-concert parties as defined in the Administrative Measures for the Acquisition of Listed Companies. | |||||||||
| Above shareholders involved in entrusting/being entrusted with voting rights and giving up voting rights | Naught | |||||||||
| Special account for share repurchases (if any) among the top 10 shareholders (see note 10) | As of the period-end, the Company had 13,000,000 A-shares of it in its special account for share repurchases, accounting for 0.95% of the Company’s total share capital. | |||||||||
| Top 10 unrestricted shareholders | ||||||||||
| Name of shareholder | Unrestricted shares at the Period-end | Type of shares | ||||||||
| Type | Shares | |||||||||
| Hongkong Wah Shing Holding Company Limited | 188,496,430 | RMB-denominated ordinary stock | 188,496,430 | |||||||
| Prosperity Lamps & Components Limited | 146,934,857 | RMB-denominated ordinary stock | 146,934,857 | |||||||
| Guangdong Electronics Information Industry Group Ltd. | 122,694,246 | RMB-denominated ordinary stock | 122,694,246 | |||||||
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| Guangdong Rising Holdings Group Co., Ltd. | 83,130,898 | RMB-denominated ordinary stock | 83,130,898 |
| Essence International Securities (Hong Kong) Co., Ltd. | 36,138,459 | Domestically listed foreign stock | 36,138,459 |
| Central Huijin Asset Management Co., Ltd. | 33,161,800 | RMB-denominated ordinary stock | 33,161,800 |
| Rising Investment Development Limited | 25,482,252 | Domestically listed foreign stock | 25,482,252 |
| China Merchants Securities (Hong Kong) Co., Ltd | 13,139,602 | Domestically listed foreign stock | 13,139,602 |
| Zhang Shaowu | 10,700,050 | RMB-denominated ordinary stock | 10,700,050 |
| Zhao Xiyi | 7,319,073 | RMB-denominated ordinary stock | 7,319,073 |
| Related or acting-in-concert parties among the top 10 unrestricted ordinary shareholders, as well as between the top 10 unrestricted ordinary shareholders and the top 10 ordinary shareholders | Among the top 10 unrestricted ordinary shareholders, Hong Kong Wah Shing Holding Company Limited, Guangdong Rising Holdings Group Co., Ltd., Guangdong Electronics Information Industry Group Ltd., and Rising Investment Development Limited are acting-in-concert parties; Apart from that, it is unknown whether there is among the top 10 shareholders any other related parties or acting-in-concert parties as defined in the Administrative Measures for the Acquisition of Listed Companies. | ||
| Top 10 ordinary shareholders involved in securities margin trading (if any) (see note 4) | None | ||
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinaryshareholders of the Company conducted any promissory repo during the Reporting Period.
□Yes ? No
No such cases in the Reporting Period.
2. Controlling Shareholder
Nature of the controlling shareholder: Controlled by a local state-owned legal person
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Type of the controlling shareholder: legal person
| Name of controlling shareholder | Legal representative/person in charge | Date of establishment | Unified social credit code | Principal activity |
| Guangdong Rising Holdings Group Co., Ltd. | Liu Weidong | 23 December 1992 | 91440000719283849E | Asset management and operation, equity management and operation, investment operation, and management and re-investment of investment earnings; other business authorized by the state-owned assets administration of the Guangdong Province; contractor service for overseas projects and domestic projects calling for international bids, contractor service for survey, consulting, design and supervision of the aforesaid overseas projects, export of equipment and materials for the aforesaid overseas projects, and dispatch of contract workers for the aforesaid overseas projects; property rental service; and exploitation, sale and deep processing of rare earth (operated by the branches with the relevant licenses). |
| Guangdong Electronics Information Industry Group Ltd. | Liu Ke | 19 October 2000 | 91440000725458764N | Development, production and sale of electronics, IT products and electrical |
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| appliances, operation of electronic information networks and computers, electronic computer technology service, and equipment and venue rental service; sale of electronic computers and fittings, electronic components, electron devices, and electrical machinery and equipment; wholesale of coal; energy performance contracting service, development and consulting service of energy-saving technology, and manufacture and installation of energy-saving equipment; parking lot operation (188 Yueken Road, Tianhe District, Guangzhou, Guangdong Province, P.R.China); import and export of goods; and training of professional and technical personnel (Limited to branch operation); .technical services. | ||||
| Rising Investment Development Limited | Yao Shu | 11 July 2001 | 764105 | Investment and asset management |
| Shareholdings of controlling shareholder in other listed companies at home or abroad in reporting period | At the end of the Reporting Period, Guangdong Rising Holdings Group Co., Ltd. and its parties acting in concert. directly or indirectly held the following stakes in other listed companies at home or abroad: 1. a 40.52% stake of 136,318,684 shares in Rising Nonferrous (stock code: 600259); 2. a 35.72% stake of 1,335,060,698 shares in Zhongjin Lingnan Nonfemet (stock code: 000060); 3. a 23.19% stake of 268,311,117 shares in Fenghua Advanced (stock code: 000636); 4. a 25.72% stake of 226,147,494 A shares and H shares in Dongjiang Environment (stock code: 002672); 5. a 6.14% stake of 5,614,082,653 shares in China Telecom (stock code: 601728). | |||
Annual Report 2022
Change of the controlling shareholder in the Reporting Period:
□Applicable ? Not applicable
No such cases in the Reporting Period.
3. Actual Controller and Its Acting-in-Concert Parties
Nature of the actual controller: Local institution for state-owned assets managementType of the actual controller: legal person
| Name of actual controller | Legal representative/person in charge | Date of establishment | Unified social credit code | Principal activity |
| Guangdong Rising Holdings Group Co., Ltd. | Liu Weidong | 23 December 1999 | 91440000719283849E | Asset management and operation, equity management and operation, investment operation, and management and re-investment of investment earnings; other business authorized by the state-owned assets administration of the Guangdong Province; contractor service for overseas projects and domestic projects calling for international bids, contractor service for survey, consulting, design and supervision of the aforesaid overseas projects, export of equipment and materials for the aforesaid overseas projects, and dispatch of contract workers for the aforesaid overseas projects; property rental service; and exploitation, sale and deep processing of rare earth (operated by the branches with the relevant licenses). |
| Shareholdings of the actual controller in other listed companies | At the end of the Reporting Period, Guangdong Rising Holdings Group Co., Ltd. and its parties acting in concert. directly or indirectly held the following stakes in other listed companies at home or abroad: 1. a 40.52% stake of 136,318,684 shares in Rising Nonferrous (stock code: 600259); 2. a 35.72% stake of 1,335,060,698 shares in Zhongjin Lingnan Nonfemet (stock code: 000060); | |||
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| at home or abroad in this Reporting Period | 3. a 23.19% stake of 268,311,117 shares in Fenghua Advanced (stock code: 000636); 4. a 25.72% stake of 226,147,494 A shares and H shares in Dongjiang Environment (stock code: 002672); 5. a 6.14% stake of 5,614,082,653 shares in China Telecom (stock code: 601728). |
Change of the actual controller during the Reporting Period:
□Applicable ? Not applicable
No such cases in the Reporting Period.Ownership and control relations between the actual controller and the Company:
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of assetmanagement.
□Applicable ? Not applicable
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4. Number of Accumulative Pledged Shares held by the Company’s Controlling Shareholder or theLargest Shareholder as well as Its Acting-in-Concert Parties Accounts for 80% of all shares of theCompany held by Them
□Applicable ? Not applicable
5. Other 10% or Greater Corporate Shareholders
? Applicable □ Not applicable
| Name of corporate shareholder | Legal representative / company principal | Date of establishment | Registered capital | Business scope |
| Prosperity Lamps & Components Limited | Zhuang Jianyi | 28 April 1978 | HKD2 million | Import and export of electronics, electric lighting products, lamps, electric lighting equipment, etc., and design, installation and after-sales service of lighting solutions |
6. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller,Reorganizer and Other Commitment Makers
□Applicable ? Not applicable
IV Specific Implementation of Share Repurchases in the Reporting PeriodProgress on any share repurchases
□Applicable ? Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□Applicable ? Not applicable
Annual Report 2022
Part VIII Preference Shares
□Applicable ? Not applicable
No preference shares in the Reporting Period.
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Part IX Bonds
□Applicable ? Not applicable
Annual Report 2022
Part X Financial StatementsI Auditor’s Report
| Type of the independent auditor’s opinion | Unmodified unqualified opinion |
| Date of signing this report | 6 April 2023 |
| Name of the independent auditor | WUYIGE Certified Public Accountants LLP |
| No. of independent auditor’s report | WUYIGE Auditor’s Report [2023] No. 2-00020 |
| Names of certified public accountants | He Xiaojuan, Xia Ling |
Independent Auditor’s ReportTo the Shareholders of Foshan Electrical and Lighting Co., Ltd.I OpinionWe have audited the financial statements of Foshan Electrical and Lighting Co., Ltd. (the “Company”), whichcomprise the consolidated balance sheets and balance sheet of the Company as the parent as of 31 December 2022,the consolidated income statement and income statement of the Company as the parent, consolidated cash flowstatement and cash flow statement of the Company as the parent and consolidated statement of changes in owners’equity and statement of changes in owners’ equity of the Company as the parent for the year then ended, as well asthe notes to the financial statements.In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidatedand parent company financial position of the Company at 31 December 2022, and the consolidated and thecompany as the parent operating results and cash flows for the year then ended, in conformity with the ChineseAccounting Standards (CAS).II Basis for OpinionWe conducted our audits in accordance with the Audit Standards for Chinese Registered Accountants. Ourresponsibilities under those standards are further described in the Auditor’s Responsibilities for Audit of FinancialStatements section of our report. We are independent of the Company in accordance with the China Code ofEthics for Certified Public Accountants, and we have fulfilled our other ethical responsibilities in accordance withthe said Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.III Key Audit Matters(I) Revenue recognitionKey audit matters are those matters that, in our professional judgment, were of most significance in our audit ofthe financial statements of the current period. These matters were addressed in the context of our audit of thefinancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinionon these matters.
1. Description
Annual Report 2022
As stated in “VII, 61. Operating Revenue and Cost of Sales” in the notes to the financial statements, theCompany’s operating revenue was RMB8,759,965,275.96 during 2022, with the main business revenue beingRMB8,494,775,305.34, accounting for 96.97% of the total operating revenue. The amount of main businessrevenue is significant and is a key performance indicator, so there is inherent risk that management willmanipulate the timing of revenue recognition in order to meet specific targets or expectations. Therefore, wedetermined that revenue is recognized as a key audit item.
2. Response to auditing
The countermeasures for revenue recognition are as follows:
(1) Understanding and evaluating the design of internal control related to revenue recognition, and testing theeffectiveness of relevant internal control;
(2) Checking whether the revenue recognition policy is in line with the requirements of the Accounting Standardsfor Business Enterprises and is consistently applied;
(3) Selecting the revenue transactions recorded of this year to check invoices, sales contracts, outbound orders andcustomer receipt records, and assess whether the relevant revenue recognition conforms to the accounting policiesof the Company for revenue recognition;
(4) Selecting the revenue transactions recorded of this year to carry out independent confirmation procedures andconfirm the authenticity of revenue;
(5) Inquiring about the industrial and commercial registration information of major customers through publicchannels, so as to ensure that major customers operate normally and their business scope conforms to the nature ofthe Company's downstream customers;
(6) Implementing analysis procedures for operating revenue, including analysing the annual and monthly revenueof major products, changes in major customers, changes in sales prices and gross profit margins of major products,and judging the rationality of changes in annual revenue and gross profit margins of this year;
(7) Selecting the revenue transactions recorded around the balance sheet date, checking the outbound order,customer receipt records and other supporting documents to assess whether the revenue is recorded in theappropriate accounting period.(II) Provision for bad debt of accounts receivable
1. Description
As at 31 December 2022, the carrying amount of accounts receivable in the Company’s consolidated financialstatements was RMB2,044,253,865.62 and the balance of provision for bad debts was RMB123,482,923.86. TheCompany recognises provision for bad debts on the basis of the recoverability of accounts receivable, and whenobjective evidence of impairment exists, management provides a separate provision for impairment based on thedifference between the present value of estimated future cash flows and the carrying amount. For receivables forwhich no objective evidence of impairment exists, management evaluates them into certain groups based on theircredit risk characteristics and determines the bad debt provision that should be made based on the actual loss rateand aging analysis of prior years' groups of receivables with similar credit risk characteristics, taking into accountcurrent circumstances. We consider this to be a key audit matter based on the materiality of the carrying value ofaccounts receivable, which involves inherent uncertainties in the application of significant accounting estimatesand judgments by management. See Note VII.5 for the carrying amount of accounts receivable and the provisionfor bad debts.
Annual Report 2022
2. Audit Response
(1) Evaluated and tested the design and operating effectiveness of internal controls related to credit policies andreceivables management;
(2) An analysis of the reasonableness of the accounting estimates for the provision for bad debts in respect ofaccounts receivable, including the basis for determining the group of accounts receivable, the judgment ofmateriality of amounts, the separate provision for bad debts, and the judgment of expected credit loss rates;
(3) Analysed and calculated the ratio between the amount of provision for bad debts and the balance of accountsreceivable at the balance sheet date, compared the provision for bad debts with the actual amount incurred in priorperiods, and analysed the adequacy of the provision for bad debts for accounts receivable;
(4) Obtained the table of the provisions for bad debts and checked whether the provision making method isimplemented in accordance with the bad debts policy and whether the recalculation of the amount of provision forbad debts is accurate;
(5) Evaluated the reasonableness of the provision for bad debts for accounts receivable by analysing the aging ofthe accounts receivable and the creditworthiness of the customers, and by performing correspondence proceduresfor accounts receivable and checking the post-period recovery.(III) Goodwill impairment tests
1. Description
On 28 February 2022, the Company acquired 21.48% equity interest in Foshan NationStar Optoelectronics Co.,Ltd. (NationStar Optoelectronics), resulting in goodwill of RMB406 million. We have identified the identificationof goodwill impairment as a key audit matter as the impact of NationStar Optoelectronics's goodwill on thefinancial statements is significant and the goodwill impairment test involves significant judgment on importantparameters such as revenue growth rate, gross margin, discount rate, etc.
2. Audit Response
(1) Understanding, evaluating and testing the Company's key internal controls related to goodwill impairmenttesting.
(2) For goodwill arising from a business combination, understanding the achievement of performance forecastsfor the acquired company.
(3) Discussing with the management the methodology of goodwill impairment testing, including the asset groupor combination of asset groups related to goodwill, the reasonableness of assumptions such as future earningsprojections and discounted cash flow rates for each asset group or combination of asset groups and the judgmentand assessment of the profitability of each asset group or combination of asset groups.
(4) Evaluating the competency, professional quality and objectivity of the external valuation experts engaged bymanagement.
(5) Discussing with the external valuation experts engaged by the management to understand the reasonablenessof key assumptions used in the impairment test.
(6) Evaluating the reasonableness of the types of values, valuation methods and valuation parameters such asdiscount rates of the asset valuation reports issued by the external valuation experts with the assistance of theinternal valuation experts.
Annual Report 2022
IV Other InformationThe Company’s management is responsible for the other information. The other information comprises all of theinformation included in the Company’s 201X Annual Report other than the financial statements and our auditor’sreport thereon.Our opinion on the financial statements does not cover the other information and we do not express any form ofassurance conclusion thereon.In connection with our audit of the financial statements, our responsibility is to read the other information and, indoing so, consider whether the other information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we haveperformed, we conclude that there is a material misstatement of this other information, we are required to reportthat fact. We have nothing to report in this regard.V Responsibilities of Management and Those Charged with Governance for Financial StatementsThe Company’s management is responsible for the preparation of the financial statements that give a fair view inaccordance with CAS, and for designing, implementing and maintaining such internal control as the managementdetermines is necessary to enable the preparation of financial statements that are free from material misstatement,whether due to fraud or error.In preparing the financial statements, the management is responsible for assessing the Company’s ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern and using the goingconcern basis of accounting unless the management either intends to liquidate the Company or to cease operations,or have no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financial reporting process.VI Auditor’s Responsibilities for Audit of Financial StatementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordancewith CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or errorand are considered material if, individually or in the aggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with CAS, we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.
(2) Understand the internal controls relevant to the audit in order to design appropriate audit procedures.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern basis of accounting and, basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Company’s ability to continue as a going concern. If we conclude that a materialuncertainty exists, we are required by CAS to draw users’ attention in our auditor’s report to the related
Annual Report 2022
disclosures in the financial statements or, if such disclosures are inadequate, we should express modified opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, futureevents or conditions may cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,and whether the financial statements represent the underlying transactions and events in a manner that achievesfair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Company to express an opinion on the financial statements. We are responsible for thedirection, supervision and performance of the Company audit. We remain solely responsible for our audit opinion.We also provide those charged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence, and communicate with them all relationships and other matters that mayreasonably be thought to bear on our independence, and where applicable, related safeguards.From the matters communicated with those charged with governance, we determine those matters that were ofmost significance in the audit of the financial statements of the current period and are therefore the key auditmatters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosureabout the matter or when, in extremely rare circumstances, we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
WUYIGE Certified Public Accountants LLP Chinese CPA: He Xiaojuan
(Engagement Partner)
Beijing · China Chinese CPA: ,Xia Ling
6 April 2023
Annual Report 2022
II Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Foshan Electrical and Lighting Co., Ltd.
31 December 2022
Unit: RMB
| Item | 31 December 2022 | 1 January 2022 |
| Current assets: | ||
| Monetary assets | 2,484,508,907.43 | 2,435,226,244.90 |
| Settlement reserve | ||
| Interbank loans granted | ||
| Held-for-trading financial assets | 261,541,896.45 | 348,248,125.61 |
| Derivative financial assets | ||
| Notes receivable | 821,537,774.07 | 1,688,000,575.74 |
| Accounts receivable | 1,920,770,941.76 | 2,018,106,424.43 |
| Accounts receivable financing | 569,868,831.79 | 10,660,409.19 |
| Prepayments | 45,526,548.93 | 34,005,648.75 |
| Premiums receivable | ||
| Reinsurance receivables | ||
| Receivable reinsurance contract reserve | ||
| Other receivables | 32,902,865.98 | 37,605,156.73 |
| Including: Interest receivable | 0.00 | 0.00 |
| Dividends receivable | 0.00 | 0.00 |
| Financial assets purchased under resale agreements | ||
| Inventories | 2,031,637,401.87 | 1,989,531,479.77 |
| Contract assets | 5,466,875.07 | 8,561,303.10 |
| Assets held for sale | 17,147,339.84 | 23,831,992.10 |
| Current portion of non-current assets | 0.00 | 0.00 |
| Other current assets | 79,438,576.89 | 125,717,434.52 |
| Total current assets | 8,270,347,960.08 | 8,719,494,794.84 |
| Non-current assets: | ||
| Loans and advances to customers | ||
| Investments in debt obligations | ||
| Investments in other debt obligations | ||
| Long-term receivables | ||
| Long-term equity investments | 181,931,792.66 | 181,545,123.09 |
| Investments in other equity instruments | 864,191,346.40 | 1,504,980,024.07 |
| Other non-current financial assets |
Annual Report 2022
| Investment property | 44,611,882.44 | 47,102,214.34 |
| Fixed assets | 3,508,094,282.41 | 3,514,723,653.20 |
| Construction in progress | 1,282,780,335.14 | 1,087,564,087.47 |
| Productive living assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 13,047,727.73 | 14,126,206.08 |
| Intangible assets | 340,166,852.37 | 373,822,769.14 |
| Development costs | 0.00 | 0.00 |
| Goodwill | 421,831,593.46 | 421,831,593.46 |
| Long-term prepaid expense | 190,126,627.91 | 152,726,512.56 |
| Deferred income tax assets | 88,387,206.25 | 82,261,788.58 |
| Other non-current assets | 81,543,512.85 | 499,739,861.52 |
| Total non-current assets | 7,016,713,159.62 | 7,880,423,833.51 |
| Total assets | 15,287,061,119.70 | 16,599,918,628.35 |
| Current liabilities: | ||
| Short-term borrowings | 157,715,359.35 | 226,779,997.01 |
| Borrowings from the central bank | ||
| Interbank loans obtained | ||
| Held-for-trading financial liabilities | 4,679,000.00 | 9,367.37 |
| Derivative financial liabilities | ||
| Notes payable | 1,975,743,568.71 | 2,067,479,953.98 |
| Accounts payable | 2,513,177,458.14 | 2,455,934,273.28 |
| Advances from customers | 2,532,442.44 | 8,106,923.79 |
| Contract liabilities | 125,143,161.61 | 141,336,712.44 |
| Financial assets sold under repurchase agreements | ||
| Customer deposits and interbank deposits | ||
| Payables for acting trading of securities | ||
| Payables for underwriting of securities | ||
| Employee benefits payable | 173,034,152.18 | 182,455,565.41 |
| Taxes payable | 64,295,552.10 | 91,596,891.51 |
| Other payables | 440,230,081.05 | 376,069,180.74 |
| Including: Interest payable | 0.00 | 0.00 |
| Dividends payable | 15,646.07 | 15,646.07 |
| Handling charges and commissions payable | ||
| Reinsurance payables | ||
| Liabilities directly associated with assets held for sale | ||
| Current portion of non-current liabilities | 65,540,510.67 | 27,600,186.15 |
| Other current liabilities | 100,192,681.00 | 10,716,009.78 |
Annual Report 2022
| Total current liabilities | 5,622,283,967.25 | 5,588,085,061.46 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term borrowings | 747,931,023.71 | 0.00 |
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 7,055,542.18 | 8,065,560.58 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | 9,587,043.31 | 17,418,343.01 |
| Deferred income | 97,078,233.43 | 126,304,272.50 |
| Deferred income tax liabilities | 202,469,697.60 | 280,172,789.59 |
| Other non-current liabilities | 308,780.61 | 22,653.46 |
| Total non-current liabilities | 1,064,430,320.84 | 431,983,619.14 |
| Total liabilities | 6,686,714,288.09 | 6,020,068,680.60 |
| Owners’ equity: | ||
| Share capital | 1,361,994,647.00 | 1,399,346,154.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 7,245,971.54 | 1,051,158,614.18 |
| Less: Treasury stock | 82,165,144.15 | 250,600,874.54 |
| Other comprehensive income | 498,141,018.70 | 982,987,454.08 |
| Specific reserve | ||
| Surplus reserves | 91,359,027.15 | 741,353,347.96 |
| General reserve | ||
| Retained earnings | 3,296,490,575.52 | 3,111,864,076.86 |
| Total equity attributable to owners of the Company as the parent | 5,173,066,095.76 | 7,036,108,772.54 |
| Non-controlling interests | 3,427,280,735.85 | 3,543,741,175.21 |
| Total owners’ equity | 8,600,346,831.61 | 10,579,849,947.75 |
| Total liabilities and owners’ equity | 15,287,061,119.70 | 16,599,918,628.35 |
Legal representative: Wu ShenghuiChief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Liang Yuefei
2. Balance Sheet of the Company as the Parent
Unit: RMB
| Item | 31 December 2022 | 1 January 2022 |
| Current assets: | ||
| Monetary assets | 616,301,656.56 | 1,017,365,290.91 |
Annual Report 2022
| Held-for-trading financial assets | 200,565,014.22 | 304,385,804.11 |
| Derivative financial assets | ||
| Notes receivable | 130,473,889.36 | 72,114,026.44 |
| Accounts receivable | 914,875,676.00 | 1,058,935,664.33 |
| Accounts receivable financing | 14,127,710.41 | |
| Prepayments | 13,129,004.94 | 9,292,256.82 |
| Other receivables | 511,036,345.72 | 511,056,231.24 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Inventories | 475,047,674.61 | 617,905,747.50 |
| Contract assets | 5,466,875.07 | 8,561,303.10 |
| Assets held for sale | ||
| Current portion of non-current assets | ||
| Other current assets | 9,844,377.83 | 36,097,001.14 |
| Total current assets | 2,890,868,224.72 | 3,635,713,325.59 |
| Non-current assets: | ||
| Investments in debt obligations | ||
| Investments in other debt obligations | ||
| Long-term receivables | ||
| Long-term equity investments | 2,505,563,031.07 | 1,243,081,889.11 |
| Investments in other equity instruments | 823,131,485.48 | 1,474,860,785.15 |
| Other non-current financial assets | ||
| Investment property | 40,982,686.40 | 43,347,824.34 |
| Fixed assets | 548,743,031.51 | 576,386,630.08 |
| Construction in progress | 187,318,584.50 | 120,514,314.18 |
| Productive living assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 6,963,639.23 | 9,827,757.94 |
| Intangible assets | 94,698,330.35 | 123,089,721.51 |
| Development costs | ||
| Goodwill | ||
| Long-term prepaid expense | 37,118,287.24 | 31,897,595.21 |
| Deferred income tax assets | 30,158,303.04 | 31,373,123.07 |
| Other non-current assets | 48,873,160.34 | 460,618,564.04 |
| Total non-current assets | 4,323,550,539.16 | 4,114,998,204.63 |
| Total assets | 7,214,418,763.88 | 7,750,711,530.22 |
| Current liabilities: | ||
| Short-term borrowings | 127,596,999.82 | |
| Held-for-trading financial liabilities | 4,679,000.00 | |
| Derivative financial liabilities | ||
| Notes payable | 826,037,810.34 | 445,480,718.92 |
| Accounts payable | 788,288,700.08 | 949,520,447.82 |
| Advances from customers | 2,285,714.30 | 6,857,142.86 |
Annual Report 2022
| Contract liabilities | 47,498,783.11 | 64,120,388.15 |
| Employee benefits payable | 49,182,531.44 | 51,520,068.31 |
| Taxes payable | 9,700,312.91 | 57,207,865.54 |
| Other payables | 202,509,326.09 | 223,535,108.76 |
| Including: Interest payable | 0.00 | |
| Dividends payable | 0.00 | |
| Liabilities directly associated with assets held for sale | ||
| Current portion of non-current liabilities | 1,881,117.79 | 2,800,876.97 |
| Other current liabilities | 88,215,663.53 | 5,920,593.62 |
| Total current liabilities | 2,020,278,959.59 | 1,934,560,210.77 |
| Non-current liabilities: | ||
| Long-term borrowings | 182,912,120.75 | |
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 5,082,521.44 | 7,026,880.97 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | ||
| Deferred income tax liabilities | 87,121,409.04 | 173,532,376.03 |
| Other non-current liabilities | ||
| Total non-current liabilities | 275,116,051.23 | 180,559,257.00 |
| Total liabilities | 2,295,395,010.82 | 2,115,119,467.77 |
| Owners’ equity: | ||
| Share capital | 1,361,994,647.00 | 1,399,346,154.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 7,426,635.62 | 22,568,665.93 |
| Less: Treasury stock | 82,165,144.15 | 250,600,874.54 |
| Other comprehensive income | 498,788,284.79 | 984,695,765.83 |
| Specific reserve | ||
| Surplus reserves | 322,663,096.39 | 741,353,347.96 |
| Retained earnings | 2,810,316,233.41 | 2,738,229,003.27 |
| Total owners’ equity | 4,919,023,753.06 | 5,635,592,062.45 |
| Total liabilities and owners’ equity | 7,214,418,763.88 | 7,750,711,530.22 |
Legal representative: Wu ShenghuiChief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Liang Yuefei
Annual Report 2022
3. Consolidated Income Statement
Unit: RMB
| Item | 2022 | 2021 |
| 1. Revenue | 8,759,965,275.96 | 8,726,241,053.50 |
| Including: Operating revenue | 8,759,965,275.96 | 8,726,241,053.50 |
| Interest revenue | ||
| Insurance premium income | ||
| Handling charge and commission income | ||
| 2. Costs and expenses | 8,360,248,566.32 | 8,273,302,440.05 |
| Including: Cost of sales | 7,223,971,501.53 | 7,242,659,061.75 |
| Interest costs | ||
| Handling charge and commission expense | ||
| Surrenders | ||
| Net insurance claims paid | ||
| Net amount provided as insurance contract reserve | ||
| Expenditure on policy dividends | ||
| Reinsurance premium expense | ||
| Taxes and surcharges | 62,027,216.12 | 68,139,402.49 |
| Selling expense | 256,820,593.82 | 235,995,457.89 |
| Administrative expense | 408,119,409.22 | 351,939,272.35 |
| R&D expense | 440,787,934.06 | 374,974,941.64 |
| Finance costs | -31,478,088.43 | -405,696.07 |
| Including: Interest expense | 22,311,206.70 | 11,811,659.37 |
| Interest income | 29,169,641.75 | 30,522,913.04 |
| Add: Other income | 84,894,793.92 | 73,941,657.49 |
| Return on investment (“-” for loss) | 10,633,954.02 | 33,313,980.81 |
| Including: Share of profit or loss of joint ventures and associates | 2,467,060.07 | 2,260,497.27 |
| Income from the derecognition of financial assets at amortized cost (“-” for loss) | ||
| Exchange gain (“-” for loss) | ||
| Net gain on exposure hedges (“-” for loss) | ||
| Gain on changes in fair value (“-” for loss) | -9,518,428.58 | 4,495,539.89 |
Annual Report 2022
| Credit impairment loss (“-” for loss) | -15,404,763.61 | -8,752,883.56 |
| Asset impairment loss (“-” for loss) | -91,517,378.38 | -94,093,604.99 |
| Asset disposal income (“-” for loss) | 968,273.19 | 77,714,217.87 |
| 3. Operating profit (“-” for loss) | 379,773,160.20 | 539,557,520.96 |
| Add: Non-operating income | 18,757,057.63 | 24,880,499.82 |
| Less: Non-operating expense | 16,812,534.08 | 6,324,738.00 |
| 4. Profit before tax (“-” for loss) | 381,717,683.75 | 558,113,282.78 |
| Less: Income tax expense | 30,874,328.03 | 58,361,715.94 |
| 5. Net profit (“-” for net loss) | 350,843,355.72 | 499,751,566.84 |
| 5.1 By operating continuity | ||
| 5.1.1 Net profit from continuing operations (“-” for net loss) | 350,843,355.72 | 499,751,566.84 |
| 5.1.2 Net profit from discontinued operations (“-” for net loss) | ||
| 5.2 By ownership | ||
| 5.2.1 Net profit attributable to owners of the Company as the parent | 230,394,235.91 | 299,614,354.88 |
| 5.2.1 Net profit attributable to non-controlling interests | 120,449,119.81 | 200,137,211.96 |
| 6. Other comprehensive income, net of tax | -383,701,554.10 | -325,243,687.14 |
| Attributable to owners of the Company as the parent | -383,929,211.19 | -325,251,118.67 |
| 6.1 Items that will not be reclassified to profit or loss | -383,579,545.85 | -325,189,154.60 |
| 6.1.1 Changes caused by remeasurements on defined benefit schemes | ||
| 6.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method | ||
| 6.1.3 Changes in the fair value of investments in other equity instruments | -383,579,545.85 | -325,189,154.60 |
| 6.1.4 Changes in the fair value arising from changes in own credit risk | ||
| 6.1.5 Other | 0.00 | 0.00 |
| 6.2 Items that will be reclassified to profit or loss | -349,665.34 | -61,964.07 |
| 6.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method |
Annual Report 2022
| 6.2.2 Changes in the fair value of investments in other debt obligations | ||
| 6.2.3 Other comprehensive income arising from the reclassification of financial assets | ||
| 6.2.4 Credit impairment allowance for investments in other debt obligations | ||
| 6.2.5 Reserve for cash flow hedges | ||
| 6.2.6 Differences arising from the translation of foreign currency-denominated financial statements | -349,665.34 | -61,964.07 |
| 6.2.7 Other | ||
| Attributable to non-controlling interests | 227,657.09 | 7,431.53 |
| 7. Total comprehensive income | -32,858,198.38 | 174,507,879.70 |
| Attributable to owners of the Company as the parent | -153,534,975.28 | -25,636,763.79 |
| Attributable to non-controlling interests | 120,676,776.90 | 200,144,643.49 |
| 8. Earnings per share | ||
| 8.1 Basic earnings per share | 0.1708 | 0.2221 |
| 8.2 Diluted earnings per share | 0.1692 | 0.2200 |
Where business combinations under common control occurred in the current period, the net profit achieved by the acquirees beforethe combinations was RMB9,568,639.83, with the amount for last year being RMB233,275,576.92.Legal representative: Wu ShenghuiChief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Liang Yuefei
4. Income Statement of the Company as the Parent
Unit: RMB
| Item | 2022 | 2021 |
| 1. Operating revenue | 3,314,037,139.28 | 3,718,308,372.46 |
| Less: Cost of sales | 2,684,105,565.79 | 3,154,039,179.53 |
| Taxes and surcharges | 22,878,262.76 | 33,093,843.08 |
| Selling expense | 148,184,632.71 | 147,260,099.98 |
| Administrative expense | 156,902,439.16 | 148,755,543.99 |
| R&D expense | 148,634,853.78 | 141,658,884.16 |
| Finance costs | -4,648,251.30 | -176,513.65 |
| Including: Interest costs | 11,637,904.69 | 1,265,956.56 |
| Interest revenue | 6,836,685.73 | 15,062,071.87 |
Annual Report 2022
| Add: Other income | 10,475,710.63 | 9,664,951.38 |
| Return on investment (“-” for loss) | 19,058,287.08 | 78,883,660.55 |
| Including: Share of profit or loss of joint ventures and associates | 2,467,060.07 | 2,260,497.27 |
| Income from the derecognition of financial assets at amortized cost (“-” for loss) | ||
| Net gain on exposure hedges (“-” for loss) | ||
| Gain on changes in fair value (“-” for loss) | -8,945,900.00 | 4,266,900.00 |
| Credit impairment loss (“-” for loss) | -16,035,761.65 | -5,389,224.73 |
| Asset impairment loss (“-” for loss) | -25,904,176.29 | -13,439,357.01 |
| Asset disposal income (“-” for loss) | -84,087.53 | 76,410,098.79 |
| 2. Operating profit (“-” for loss) | 136,543,708.62 | 244,074,364.35 |
| Add: Non-operating income | 7,433,114.60 | 11,385,484.38 |
| Less: Non-operating expense | 12,232,901.96 | 552,333.59 |
| 3. Profit before tax (“-” for loss) | 131,743,921.26 | 254,907,515.14 |
| Less: Income tax expense | 13,888,953.87 | 13,758,825.78 |
| 4. Net profit (“-” for net loss) | 117,854,967.39 | 241,148,689.36 |
| 4.1 Net profit from continuing operations (“-” for net loss) | 117,854,967.39 | 241,148,689.36 |
| 4.2 Net profit from discontinued operations (“-” for net loss) | ||
| 5. Other comprehensive income, net of tax | -384,990,256.85 | -323,650,643.28 |
| 5.1 Items that will not be reclassified to profit or loss | -384,990,256.85 | -323,650,643.28 |
| 5.1.1 Changes caused by remeasurements on defined benefit schemes | ||
| 5.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method | ||
| 5.1.3 Changes in the fair value of investments in other equity instruments | -384,990,256.85 | -323,650,643.28 |
| 5.1.4 Changes in the fair value arising from changes in own credit risk | ||
| 5.1.5 Other | ||
| 5.2 Items that will be reclassified to profit or loss |
Annual Report 2022
| 5.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method | ||
| 5.2.2 Changes in the fair value of investments in other debt obligations | ||
| 5.2.3 Other comprehensive income arising from the reclassification of financial assets | ||
| 5.2.4 Credit impairment allowance for investments in other debt obligations | ||
| 5.2.5 Reserve for cash flow hedges | ||
| 5.2.6 Differences arising from the translation of foreign currency-denominated financial statements | ||
| 5.2.7 Other | ||
| 6. Total comprehensive income | -267,135,289.46 | -82,501,953.92 |
| 7. Earnings per share | ||
| 7.1 Basic earnings per share | ||
| 7.2 Diluted earnings per share |
Legal representative: Wu ShenghuiChief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Liang Yuefei
5. Consolidated Cash Flow Statement
Unit: RMB
| Item | 2022 | 2021 |
| 1. Cash flows from operating activities: | ||
| Proceeds from sale of commodities and rendering of services | 8,205,869,081.25 | 8,359,256,408.94 |
| Net increase in customer deposits and interbank deposits | ||
| Net increase in borrowings from the central bank | ||
| Net increase in loans from other financial institutions | ||
| Premiums received on original insurance contracts | ||
| Net proceeds from reinsurance | ||
| Net increase in deposits and investments of policy holders | ||
| Interest, handling charges and commissions received |
Annual Report 2022
| Net increase in interbank loans obtained | ||
| Net increase in proceeds from repurchase transactions | ||
| Net proceeds from acting trading of securities | ||
| Tax rebates | 228,641,448.24 | 146,840,329.47 |
| Cash generated from other operating activities | 224,376,200.78 | 248,940,851.06 |
| Subtotal of cash generated from operating activities | 8,658,886,730.27 | 8,755,037,589.47 |
| Payments for commodities and services | 5,492,158,956.70 | 6,186,563,079.83 |
| Net increase in loans and advances to customers | ||
| Net increase in deposits in the central bank and in interbank loans granted | ||
| Payments for claims on original insurance contracts | ||
| Net increase in interbank loans granted | ||
| Interest, handling charges and commissions paid | ||
| Policy dividends paid | ||
| Cash paid to and for employees | 1,398,058,450.95 | 1,335,333,353.02 |
| Taxes paid | 337,132,030.63 | 477,172,576.63 |
| Cash used in other operating activities | 366,648,971.30 | 322,494,631.65 |
| Subtotal of cash used in operating activities | 7,593,998,409.58 | 8,321,563,641.13 |
| Net cash generated from/used in operating activities | 1,064,888,320.69 | 433,473,948.34 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disinvestment | 364,902,240.66 | 1,813,239,683.85 |
| Return on investment | 10,965,289.74 | 45,553,497.73 |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets | 2,340,973.60 | 125,845,737.23 |
| Net proceeds from the disposal of subsidiaries and other business units | ||
| Cash generated from other investing activities | 54,990,047.00 | |
| Subtotal of cash generated from investing activities | 378,208,504.00 | 2,039,628,965.81 |
| Payments for the acquisition of fixed assets, intangible assets and other long- | 593,230,455.33 | 640,625,303.50 |
Annual Report 2022
| lived assets | ||
| Payments for investments | 131,695,763.31 | 130,000,000.00 |
| Net increase in pledged loans granted | ||
| Net payments for the acquisition of subsidiaries and other business units | 0.00 | 131,348,644.27 |
| Cash used in other investing activities | 0.00 | |
| Subtotal of cash used in investing activities | 724,926,218.64 | 901,973,947.77 |
| Net cash generated from/used in investing activities | -346,717,714.64 | 1,137,655,018.04 |
| 3. Cash flows from financing activities: | ||
| Capital contributions received | 0.00 | 0.00 |
| Including: Capital contributions by non-controlling interests to subsidiaries | ||
| Borrowings raised | 1,136,936,000.00 | 127,386,000.00 |
| Cash generated from other financing activities | 19,142,320.59 | 0.00 |
| Subtotal of cash generated from financing activities | 1,156,078,320.59 | 127,386,000.00 |
| Repayment of borrowings | 526,743,238.15 | 147,278,730.91 |
| Interest and dividends paid | 174,723,549.79 | 181,634,371.44 |
| Including: Dividends paid by subsidiaries to non-controlling interests | 26,131,133.89 | 0.00 |
| Cash used in other financing activities | 1,200,170,498.73 | 790,931,944.68 |
| Subtotal of cash used in financing activities | 1,901,637,286.67 | 1,119,845,047.03 |
| Net cash generated from/used in financing activities | -745,558,966.08 | -992,459,047.03 |
| 4. Effect of foreign exchange rates changes on cash and cash equivalents | 33,150,614.37 | -7,780,091.51 |
| 5. Net increase in cash and cash equivalents | 5,762,254.34 | 570,889,827.84 |
| Add: Cash and cash equivalents, beginning of the period | 1,940,209,052.92 | 1,369,319,225.08 |
| 6. Cash and cash equivalents, end of the period | 1,945,971,307.26 | 1,940,209,052.92 |
Legal representative: Wu ShenghuiChief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Liang Yuefei
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Annual Report 2022
| Item | 2022 | 2021 |
| 1. Cash flows from operating activities: | ||
| Proceeds from sale of commodities and rendering of services | 3,237,208,695.89 | 3,675,366,946.16 |
| Tax rebates | 120,903,979.22 | 87,497,039.45 |
| Cash generated from other operating activities | 86,562,699.07 | 90,141,698.38 |
| Subtotal of cash generated from operating activities | 3,444,675,374.18 | 3,853,005,683.99 |
| Payments for commodities and services | 1,933,543,212.27 | 3,127,675,269.69 |
| Cash paid to and for employees | 517,926,952.08 | 598,949,378.79 |
| Taxes paid | 157,918,324.75 | 264,570,561.48 |
| Cash used in other operating activities | 139,013,449.48 | 158,324,765.43 |
| Subtotal of cash used in operating activities | 2,748,401,938.58 | 4,149,519,975.39 |
| Net cash generated from/used in operating activities | 696,273,435.60 | -296,514,291.40 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disinvestment | 292,992,240.66 | 1,700,278,266.95 |
| Return on investment | 18,264,046.87 | 45,162,968.14 |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets | 42,771.45 | 114,426,514.66 |
| Net proceeds from the disposal of subsidiaries and other business units | 0.00 | |
| Cash generated from other investing activities | 0.00 | |
| Subtotal of cash generated from investing activities | 311,299,058.98 | 1,859,867,749.75 |
| Payments for the acquisition of fixed assets, intangible assets and other long-lived assets | 106,842,452.24 | 116,516,470.65 |
| Payments for investments | 1,193,664,444.95 | 1,123,715,946.11 |
| Net payments for the acquisition of subsidiaries and other business units | 0.00 | |
| Cash used in other investing activities | 0.00 | |
| Subtotal of cash used in investing activities | 1,300,506,897.19 | 1,240,232,416.76 |
| Net cash generated from/used in investing activities | -989,207,838.21 | 619,635,332.99 |
| 3. Cash flows from financing activities: | ||
| Capital contributions received | 0.00 | |
| Borrowings raised | 382,336,000.00 | 127,386,000.00 |
Annual Report 2022
| Cash generated from other financing activities | 0.00 | |
| Subtotal of cash generated from financing activities | 382,336,000.00 | 127,386,000.00 |
| Repayment of borrowings | 367,956,000.00 | |
| Interest and dividends paid | 141,558,638.42 | 135,847,668.70 |
| Cash used in other financing activities | 2,716,690.66 | 250,814,566.13 |
| Subtotal of cash used in financing activities | 512,231,329.08 | 386,662,234.83 |
| Net cash generated from/used in financing activities | -129,895,329.08 | -259,276,234.83 |
| 4. Effect of foreign exchange rates changes on cash and cash equivalents | 22,065,861.60 | -5,283,585.19 |
| 5. Net increase in cash and cash equivalents | -400,763,870.09 | 58,561,221.57 |
| Add: Cash and cash equivalents, beginning of the period | 861,826,014.29 | 803,264,792.72 |
| 6. Cash and cash equivalents, end of the period | 461,062,144.20 | 861,826,014.29 |
Legal representative: Wu ShenghuiChief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Liang Yuefei
7. Consolidated Statements of Changes in Owners’ Equity
2022
Unit: RMB
| Item | 2022 | ||||||||||||||
| Equity attributable to owners of the Company as the parent | Non-controlling interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | General reserve | Retained earnings | Other | Subtotal | |||||
| Preferred shares | Perpetual bonds | Other | |||||||||||||
| 1. Balance as at the end | 1,399,346,154.00 | 1,051,158,614.18 | 250,600,874.54 | 982,987,454.08 | 741,353,347.96 | 3,111,864,076.86 | 7,036,108,772.54 | 3,543,741,175.21 | 10,579,849,947.75 | ||||||
Annual Report 2022
| of the prior year | |||||||||||||||
| Add: Adjustment for change in accounting policy | |||||||||||||||
| Adjustment for correction of previous error | |||||||||||||||
| Adjustment for business combination under common control | |||||||||||||||
Annual Report 2022
| Other | |||||||||||||||
| 2. Balance as at the beginning of the year | 1,399,346,154.00 | 1,051,158,614.18 | 250,600,874.54 | 982,987,454.08 | 741,353,347.96 | 3,111,864,076.86 | 7,036,108,772.54 | 3,543,741,175.21 | 10,579,849,947.75 | ||||||
| 3. Increase/ decrease in the period (“-” for decrease) | -37,351,507.00 | -1,043,912,642.64 | -168,435,730.39 | -484,846,435.38 | -649,994,320.81 | 184,626,498.66 | -1,863,042,676.78 | -116,460,439.36 | -1,979,503,116.14 | ||||||
| 3.1 Total comprehensive income | -383,929,211.19 | 230,394,235.91 | -153,534,975.28 | 120,676,776.90 | -32,858,198.38 | ||||||||||
| 3.2 Capital increased and reduced by owners | -37,351,507.00 | -1,043,912,642.64 | -168,435,730.39 | -661,779,817.55 | -1,574,608,236.80 | -211,006,082.37 | -1,785,614,319.17 | ||||||||
| 3 | -37,3 | -4,82 | -168, | -126, |
Annual Report 2022
| .2.1 Ordinary shares increased by owners | 51,507.00 | 5,948.60 | 435,730.39 | 258,274.79 | |||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | |||||||||||||||
| 3.2.3 Share-based payments included in owners’ equity | |||||||||||||||
| 3.2.4 | -1,039,08 | -535,521, | -1,574,60 | -211,006, | -1,785,61 |
Annual Report 2022
| Other | 6,694.04 | 542.76 | 8,236.80 | 082.37 | 4,319.17 | ||||||||||
| 3.3 Profit distribution | 11,785,496.74 | -146,684,961.44 | -134,899,464.70 | -26,131,133.89 | -161,030,598.59 | ||||||||||
| 3.3.1 Appropriation to surplus reserves | 11,785,496.74 | -11,785,496.74 | |||||||||||||
| 3.3.2 Appropriation to general reserve | |||||||||||||||
| 3.3.3 Appropriation to owners (or shareholders) | -134,899,464.70 | -134,899,464.70 | -26,131,133.89 | -161,030,598.59 | |||||||||||
| 3.3.4 Other |
Annual Report 2022
| 3.4 Transfers within owners’ equity | -100,917,224.19 | 100,917,224.19 | |||||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | |||||||||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves | |||||||||||||||
| 3.4.3 Loss offset by |
Annual Report 2022
| surplus reserves | |||||||||||||||
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | |||||||||||||||
| 3.4.5 Other comprehensive income transferred to retained earnings | -100,917,224.19 | 100,917,224.19 | |||||||||||||
| 3.4.6 Other | |||||||||||||||
| 3. |
Annual Report 2022
| 5 Specific reserve | |||||||||||||||
| 3.5.1 Increase in the period | |||||||||||||||
| 3.5.2 Used in the period | |||||||||||||||
| 3.6 Other | |||||||||||||||
| 4. Balance as at the end of the period | 1,361,994,647.00 | 7,245,971.54 | 82,165,144.15 | 498,141,018.70 | 91,359,027.15 | 3,296,490,575.52 | 5,173,066,095.76 | 3,427,280,735.85 | 8,600,346,831.61 |
2021
Unit: RMB
| Item | 2021 | ||||||||||||||
| Equity attributable to owners of the Company as the parent | Non-controlling interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensiv | Specific reserve | Surplus reserves | General reserve | Retained earnings | Other | Subtotal | |||||
| Preferred share | Perpetual bond | Other | |||||||||||||
Annual Report 2022
| s | s | e income | |||||||||||||
| 1. Balance as at the end of the prior year | 1,399,346,154.00 | 15,157,514.90 | 2,349,388,533.61 | 741,567,039.55 | 1,758,462,062.48 | 6,263,921,304.54 | 48,258,834.53 | 6,312,180,139.07 | |||||||
| Add: Adjustment for change in accounting policy | |||||||||||||||
| Adjustment for correction of previous error | |||||||||||||||
| Adjustment for business com | 1,048,488,804.72 | -106,711.74 | 148,592,079.08 | 1,196,974,172.06 | 2,927,993,688.55 | 4,124,967,860.61 |
Annual Report 2022
| bination under common control | |||||||||||||||
| Other adjustments | |||||||||||||||
| 2. Balance as at the beginning of the year | 1,399,346,154.00 | 1,063,646,319.62 | 2,349,281,821.87 | 741,567,039.55 | 1,907,054,141.56 | 7,460,895,476.60 | 2,976,252,523.08 | 10,437,147,999.68 | |||||||
| 3. Increase/ decrease in the period (“-” for decrease) | -12,487,705.44 | 250,600,874.54 | -1,366,294,367.79 | -213,691.59 | 1,204,809,935.30 | -424,786,704.06 | 567,488,652.13 | 142,701,948.07 | |||||||
| 3.1 Total comprehensive income | -325,251,118.67 | 299,614,354.88 | -25,636,763.79 | 200,144,643.49 | 174,507,879.70 |
Annual Report 2022
| 3.2 Capital increased and reduced by owners | -12,487,705.44 | 250,600,874.54 | -213,691.59 | -263,302,271.57 | 410,356,392.39 | 147,054,120.82 | |||||||||
| 3.2.1 Ordinary shares increased by owners | 250,600,874.54 | 250,600,874.54 | 250,600,874.54 | ||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | |||||||||||||||
| 3.2.3 Share-based |
Annual Report 2022
| payments included in owners’ equity | |||||||||||||||
| 3.2.4 Other | -12,487,705.44 | -213,691.59 | -12,701,397.03 | 410,356,392.39 | 397,654,995.36 | ||||||||||
| 3.3 Profit distribution | -135,847,668.70 | -135,847,668.70 | -43,012,383.75 | -178,860,052.45 | |||||||||||
| 3.3.1 Appropriation to surplus reserves | |||||||||||||||
| 3.3.2 Appropriation to general reserve | |||||||||||||||
| 3.3.3 Appropria | -135,847,668.70 | -135,847,668.70 | -70,393,447.14 | -206,241,115.84 |
Annual Report 2022
| tion to owners (or shareholders) | |||||||||||||||
| 3.3.4 Other | 27,381,063.39 | 27,381,063.39 | |||||||||||||
| 3.4 Transfers within owners’ equity | -1,041,043,249.12 | 1,041,043,249.12 | |||||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | |||||||||||||||
| 3.4.2 Increase in capital (or share |
Annual Report 2022
| capital) from surplus reserves | |||||||||||||||
| 3.4.3 Loss offset by surplus reserves | |||||||||||||||
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | |||||||||||||||
| 3.4.5 Other comprehensive income | -1,041,043,249.12 | 1,041,043,249.12 |
Annual Report 2022
| transferred to retained earnings | |||||||||||||||
| 3.4.6 Other | |||||||||||||||
| 3.5 Specific reserve | |||||||||||||||
| 3.5.1 Increase in the period | |||||||||||||||
| 3.5.2 Used in the period | |||||||||||||||
| 3.6 Other | |||||||||||||||
| 4. Balance as at the end of the | 1,399,346,154.00 | 1,051,158,614.18 | 250,600,874.54 | 982,987,454.08 | 741,353,347.96 | 3,111,864,076.86 | 7,036,108,772.54 | 3,543,741,175.21 | 10,579,849,947.75 |
Annual Report 2022
period
Legal representative: Wu ShenghuiChief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Liang Yuefei
8. Statements of Changes in Owners’ Equity of the Company as the Parent
2022
Unit: RMB
| Item | 2022 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | Retained earnings | Other | Total owners’ equity | |||
| Preferred shares | Perpetual bonds | Other | ||||||||||
| 1. Balance as at the end of the prior year | 1,399,346,154.00 | 22,568,665.93 | 250,600,874.54 | 984,695,765.83 | 741,353,347.96 | 2,738,229,003.27 | 5,635,592,062.45 | |||||
| Add: Adjustment for change in accounting policy | ||||||||||||
| Adjustment for correction of previous error | ||||||||||||
Annual Report 2022
| Other adjustments | ||||||||||||
| 2. Balance as at the beginning of the year | 1,399,346,154.00 | 22,568,665.93 | 250,600,874.54 | 984,695,765.83 | 741,353,347.96 | 2,738,229,003.27 | 5,635,592,062.45 | |||||
| 3. Increase/ decrease in the period (“-” for decrease) | -37,351,507.00 | -15,142,030.31 | -168,435,730.39 | -485,907,481.04 | -418,690,251.57 | 72,087,230.14 | -716,568,309.39 | |||||
| 3.1 Total comprehensive income | -384,990,256.85 | 117,854,967.39 | -267,135,289.46 | |||||||||
| 3.2 Capital increased and reduced by owners | -37,351,507.00 | -15,142,030.31 | -168,435,730.39 | -430,475,748.31 | -314,533,555.23 | |||||||
| 3.2.1 Ordinary shares increased by owners | -37,351,507.00 | -4,825,948.60 | -168,435,730.39 | -126,258,274.79 | 0.00 |
Annual Report 2022
| 3.2.2 Capital increased by holders of other equity instruments | ||||||||||||
| 3.2.3 Share-based payments included in owners’ equity | ||||||||||||
| 3.2.4 Other | -10,316,081.71 | -304,217,473.52 | -314,533,555.23 | |||||||||
| 3.3 Profit distribution | 11,785,496.74 | -146,684,961.44 | -134,899,464.70 | |||||||||
| 3.3.1 Appropriation to surplus reserves | 11,785,496.74 | -11,785,496.74 | ||||||||||
| 3.3.2 Appropriation to owners (or | -134,899,464.70 | -134,899,464.70 |
Annual Report 2022
| shareholders) | ||||||||||||
| 3.3.3 Other | ||||||||||||
| 3.4 Transfers within owners’ equity | -100,917,224.19 | 100,917,224.19 | 0.00 | |||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | ||||||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves | ||||||||||||
| 3.4.3 Loss offset by surplus reserves |
Annual Report 2022
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | ||||||||||||
| 3.4.5 Other comprehensive income transferred to retained earnings | -100,917,224.19 | 100,917,224.19 | 0.00 | |||||||||
| 3.4.6 Other | ||||||||||||
| 3.5 Specific reserve | ||||||||||||
| 3.5.1 Increase in the period | ||||||||||||
| 3.5.2 |
Annual Report 2022
| Used in the period | ||||||||||||
| 3.6 Other | ||||||||||||
| 4. Balance as at the end of the period | 1,361,994,647.00 | 17,742,717.33 | 82,165,144.15 | 498,788,284.79 | 312,347,014.68 | 2,810,316,233.41 | 4,919,023,753.06 |
2021
Unit: RMB
| Item | 2021 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | Retained earnings | Other | Total owners’ equity | |||
| Preferred shares | Perpetual bonds | Other | ||||||||||
| 1. Balance as at the end of the prior year | 1,399,346,154.00 | 7,426,635.62 | 2,349,389,658.23 | 741,567,039.55 | 1,591,884,733.49 | 6,089,614,220.89 | ||||||
| Add: Adjustment for change in accounting policy | ||||||||||||
| Adjustment for correction of previo | ||||||||||||
Annual Report 2022
| us error | ||||||||||||
| Other | ||||||||||||
| 2. Balance as at the beginning of the year | 1,399,346,154.00 | 7,426,635.62 | 2,349,389,658.23 | 741,567,039.55 | 1,591,884,733.49 | 6,089,614,220.89 | ||||||
| 3. Increase/ decrease in the period (“-” for decrease) | 15,142,030.31 | 250,600,874.54 | -1,364,693,892.40 | -213,691.59 | 1,146,344,269.78 | -454,022,158.44 | ||||||
| 3.1 Total comprehensive income | -323,650,643.28 | 241,148,689.36 | -82,501,953.92 | |||||||||
| 3.2 Capital increased and reduced by owners | 15,142,030.31 | 250,600,874.54 | -213,691.59 | -235,672,535.82 | ||||||||
| 3.2.1 Ordinary shares increased by | 250,600,874.54 | -250,600,874.54 |
Annual Report 2022
| owners | ||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | ||||||||||||
| 3.2.3 Share-based payments included in owners’ equity | ||||||||||||
| 3.2.4 Other | 15,142,030.31 | -213,691.59 | 14,928,338.72 | |||||||||
| 3.3 Profit distribution | -135,847,668.70 | -135,847,668.70 | ||||||||||
| 3.3.1 Appropriation to surplus reserves | ||||||||||||
| 3.3.2 Appropriation to owners | -135,847,668.70 | -135,847,668.70 |
Annual Report 2022
| (or shareholders) | ||||||||||||
| 3.3.3 Other | ||||||||||||
| 3.4 Transfers within owners’ equity | -1,041,043,249.12 | 1,041,043,249.12 | ||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | ||||||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves | ||||||||||||
| 3.4.3 Loss offset by surplus reserve |
Annual Report 2022
| s | ||||||||||||
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | ||||||||||||
| 3.4.5 Other comprehensive income transferred to retained earnings | -1,041,043,249.12 | 1,041,043,249.12 | ||||||||||
| 3.4.6 Other | ||||||||||||
| 3.5 Specific reserve | ||||||||||||
| 3.5.1 Increase in the period | ||||||||||||
Annual Report 2022
| 3.5.2 Used in the period | ||||||||||||
| 3.6 Other | ||||||||||||
| 4. Balance as at the end of the period | 1,399,346,154.00 | 22,568,665.93 | 250,600,874.54 | 984,695,765.83 | 741,353,347.96 | 2,738,229,003.27 | 5,635,592,062.45 |
Legal representative: Wu ShenghuiChief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Liang Yuefei
III Company profile
(I) Basic informationFoshan Electrical and Lighting Co., Ltd. (hereinafter referred to as “the Company”), a joint-stock limitedcompany jointly founded by Foshan Electrical and Lighting Company, Nanhai Wuzhuang Color Glazed BrickField, and Foshan Poyang Printing Industrial Co. on 20 October 1992 by raising funds under the approval ofYGS (1992) No. 63 Document issued by the Joint Examination Group for Experimental Enterprises in StockSystem of Guangdong Province and the Economic System Reform Commission of Guangdong Province, is anenterprise with its shares held by both the corporate and the natural persons. As approved by China SecuritiesRegulatory Commission with Document (1993) No. 33, the Company publicly issued 19.3 million shares ofsocial public shares (A shares) to the public in October 1993, and was listed in Shenzhen Stock Exchange fortrade on 23 November 1993. The Company was approved to issue 50,000,000 B shares on 23 July 1995. And,as approved to change into a foreign-invested stock limited company on 26 August 1996 by (1996) WJMZEHZNo. 466 Document issued by the Ministry of Foreign Trade and Economic Cooperation of the People’sRepublic of China. On 11 December 2000, as approved by China Securities Regulatory Commission with ZJGSZi [2000] No. 175 Document, the Company additionally issued 55,000,000 A shares. At approved by theShareholders’ General Meeting 2006, 2007, 2008, 2014 and 2017 the Company implemented the plan ofcapitalization of capital reserve, after the transfer, the registered capital of the Company has increased toRMB1,399,346,154.00. The Company held the 26
th Meeting of the 9
thBoard of Directors on 14 January 2022,where the Proposal on Cancelling Some Shares of the Company's Repurchase Special Securities Account wasdeliberated and adopted. The repurchased 13 million A shares were used for the equity incentive plan. Theremaining 18,952,995 A shares and the repurchased 18,398,512 B shares, totaling 37,351,507 shares, were allderegistered. On 8 February 2022, it was confirmed by Shenzhen Branch of CSDC that the number ofrepurchased public shares canceled this time was 37,351,507, accounting for 2.67% of the total share capital ofthe Company before the cancellation, including 18,952,995 A shares and 18,398,512 B shares. Upon thecancellation of the shares, the total share capital of the Company was changed from 1,399,346,154 shares to1,361,994,647 shares. The Company's registered capital was changed to RMB1,361,994,647.00.
Annual Report 2022
Credibility code of the Company: 91440000190352575W.Legal representative: Mr. Wu ShenghuiAddress: No. 64, Fenjiang North Road, Foshan, Guangdong ProvinceMain business of the company and its subsidiaries (hereinafter referred to as “the Company”): lighting products,electro technical products, vehicle lamp products, epitaxy and chip products, LED packaging and componentproducts, trade and application products.The business term of the Company is long-term, which was calculated from the date of issuance of License ofBusiness Corporation.The Financial Report was approved and authorized for issue by the Board of Directors on 6 April 2023.(II) Consolidation scope of financial statementsThe consolidation scope of the financial statement during the Reporting Period including the Company and FSLChanchang Optoelectronics Co., Ltd. ( referred to as “Chanchang Company”), Foshan Taimei Times Lamps andLanterns Co., Ltd. ( referred to as “Taimei Company”), Nanjing Fozhao Lighting Components Co., Ltd.( referred to as “Nanjing Fozhao”), FSL (Xinxiang) Lighting Co., Ltd. ( referred to as “Xinxiang Company”),Foshan Fozhao Zhicheng Technology Co., Ltd. ( referred to as “Zhicheng Technology Company”), FSL ZhidaElectric Technology Co., Ltd ( referred to as “Zhida Company”), FSL LIGHTING GMBH (referred to as “FSLEurope Company”), Foshan Hortilite Optoelectronics Co.,Ltd. (referred to as “Hortilite Company”), Fozhao(Hainan) Technology Co., Ltd. (referred to as “Hainan Technology”), Foshan Kelian New Energy TechnologyCo., Ltd. (referred to as “Foshan Kelian”), Nanning Liaowang Auto Lamp Co., Ltd. (referred to as “NanningLiaowang”), Foshan NationStar Optoelectronics Co., Ltd. (referred to as “NationStar Optoelectronics”) andFoshan Sigma Venture Capital Co., Ltd. (referred to as “Sigma”) in total 13 subsidiaries and Liuzhou GuigeLighting Technology Co., Ltd. (referred to as “Liuzhou Lighting”), Liuzhou Guige Foreshine Technology Co.,Ltd. (referred to as “Liuzhou Foreshine”), Chongqing Guinuo Lighting Technology Co., Ltd. (referred to as“Chongqing Guinuo”), Qingdao Guige Lighting Technology Co., Ltd. (referred to as “Qingdao Lighting”),Indonesia Liaowang Auto Lamp Co., Ltd. (referred to as “Indonesia Liaowang”), Foshan NationStar ElectronicManufacturing Co., Ltd. (referred to as “Guoxing Electronic”), Foshan NationStar Semiconductor Co., Ltd.(referred to as “NationStar Semiconductor”), Nanyang Baoli Vanadium Industry Co., Ltd. (referred to as“Baoli Vanadium Industry”), Guangdong New Electronic Information Ltd. (referred to as “New Electronic”),NationStar Optoelectronics (Germany) Co., Ltd. (referred to as “Germany NationStar”) and GuangdongFenghua Semiconductor Technology Co., Ltd. (referred to as “Fenghua Semiconductor”)in total 11 sub-subsidiary.Given that Nanyang Baoli Vanadium Industry Co., Ltd., a subsidiary of NationStar Optoelectronics, is in a stateof non-continuous operations, the Annual Report 2022 of Baoli Vanadium Industry for the current period wasformulated at fair value or costs whichever was lower.Compared with the previous period, the consolidated scope of financial statements in this period is increased,including two subsidiaries of Foshan NationStar Optoelectronics Co., Ltd. and Foshan Sigma Venture CapitalCo., Ltd., as well as six sub-subsidiaries of Foshan Guoxing Electronic Manufacture Co., Ltd., FoshanNationStar Semiconductor Co., Ltd., Nanyang Baoli Vanadium Industry Co., Ltd., Guangdong New ElectronicsInformation Ltd., NationStar Optoelectronics (Germany) Co., Ltd. and Fenghua Semiconductor. For details, seenote VIII "change of consolidation scope" and note IX "equity in other entities".
Annual Report 2022
IV Basis for Preparation of Financial Statements
1. Preparation Basis
The financial statements of the Company have been prepared in accordance with the "Accounting Standards forBusiness Enterprises - Basic Standards" and various specific accounting standards, guidelines for theapplication of accounting standards for business enterprises, interpretations of accounting standards for businessenterprises and other relevant regulations (hereinafter collectively referred to as "Accounting Standards forBusiness Enterprises") issued by the Ministry of Finance, as well as the relevant provisions of "No. 15 of theRules Governing the Preparation of Information Disclosures by Companies Offering Securities to the Public -General Provisions on Financial Reporting" of the China Securities Regulatory Commission.
2. Going Concern
The Company has the ability to continue as a going concern for at least 12 months from the end of theReporting Period and there are no material matters affecting its ability to continue as a going concern.
V Important Accounting Policies and Estimations
Reminders of the specific accounting policies and accounting estimations:
The following significant accounting policies and accounting estimates of the Company have been formulatedin accordance with ASBEs. Operations not mentioned are treated in accordance with the relevant accountingpolicies in the ASBE.
1. Statement of Compliance with the Accounting Standards for Business EnterprisesThe financial statements prepared by the Company are in compliance with the Accounting Standards forBusiness Enterprises, which factually and completely present the Company’s and the consolidated financialpositions on 31 December 2022, business results and cash flows, as well as other relevant information for 2022.
2. Fiscal Year
A fiscal year starts on January 1
st and ends on December 31
st
according to the Gregorian calendar.
3. Operating Cycle
An operating cycle for the Company is 12 months, which is also the classification criterion for the liquidity ofits assets and liabilities.
4. Recording Currency
Renminbi is the recording currency for the statements of the Company, and the financial statements are listedand presented by Renminbi.
Annual Report 2022
5. Accounting Methods for Business Combination Involving Enterprises under and not under the SameControl
1. Business combination under the same control
In case of a long-term equity investment resulting from a business combination under the same control, if theacquirer pays cash, transfers non-cash assets, assumes debts as merger consideration, the share of the Company'sequity of the acquiree obtained on combination date in the carrying value of the financial statements of theultimate controlling party is deemed as an initial investment cost of long-term equity investments. If the acquirerissues equity instruments as consideration for a combination, the total par value of the shares issued is treated asequity. The difference between the initial investment cost of a long-term equity investment and the carryingamount of the consideration for consolidation (or the total nominal value of shares issued) shall be adjusted tocapital surplus; if capital surplus is not sufficient to offset the difference, retained earnings shall be adjusted.
2. Business combination not involving entities under the same control
The Company measured the paid assets as the consideration of business combination and liabilities happened orundertaken by fair value. The difference between fair value and its book value shall be included into the currentlosses and gains. The Company distributed combined cost on the purchasing date.The difference of the combination cost greater than the fair value of the identifiable net assets of the acquireeacquired is recognized as goodwill; the difference of the combination cost less than the fair value of theidentifiable net assets of the acquiree acquired is included into current losses and gains.As for the assets other than intangible assets acquired from the acquiree in a business combination (not limited tothe assets which have been recognized by the acquiree), if the economic benefits brought by them are likely toflow into the Company and their fair values can be measured reliably, they shall be separately recognized andmeasured in light of their fair values; intangible asset whose fair value can be measured reliably shall beseparately recognized as an intangible asset and shall be measured in light of its fair value; As for the liabilitiesother than contingent liabilities acquired from the acquiree, if the performance of the relevant obligations is likelyto result in any out-flow of economic benefits from the Company, and their fair values can be measured reliably,they shall be separately recognized and measured in light of their fair values; As for the contingent liabilities ofthe acquiree, if their fair values can be measured reliably, they shall separately recognized as liabilities and shallbe measured in light of their fair values.
6. Preparation Methods for Consolidated Financial Statements
1. Scope of consolidated financial statements
The Company includes all subsidiaries (including separate entities controlled by the Company) in the scope of theconsolidated financial statements, including enterprises controlled by the Company, divisible portions of investeesand structured entities.
2. Unification of accounting policies, balance sheet dates and accounting periods of parent and subsidiarycompaniesIf the accounting policies and accounting period adopted by the subsidiaries are inconsistent with those of theCompany, necessary adjustments are made in accordance with the accounting policies and accounting period ofthe Company when preparing the consolidated financial statements.
3. Offsetting items in the consolidated financial statements
The consolidated financial statements are based on the financial statements of the Company and its subsidiariesand have been offset by internal transactions that occurred between the Company and its subsidiaries and betweensubsidiaries. The share of owners' equity of subsidiaries that do not belong to the Company is presented asminority interests in the consolidated balance sheet under the item of shareholders' equity as "minority interests".Long-term equity investments held by subsidiaries are deemed as the Company's treasury stock and presented as adeduction from shareholders' equity in the consolidated balance sheet under the item "Less: treasury stock".
4. Accounting treatment of the acquisition of subsidiaries through consolidation
For subsidiaries acquired through a business combination under common control, the assets, liabilities, operatingresults, and cash flows are included in the consolidated financial statements from the beginning of the period of
Annual Report 2022
consolidation as if the business combination had occurred at the time the ultimate controlling party began toexercise control; for subsidiaries acquired through a business combination, not under the same control, the fairvalue of the identifiable net assets on the acquisition date is used as the basis for preparing the consolidatedfinancial statements. The financial statements are adjusted based on the fair value of the identifiable net assets onthe acquisition date.
5. Accounting treatment of disposal of subsidiaries
If a long-term equity investment in a subsidiary is partially disposed of without loss of control, the differencebetween the disposal price and the share of the net assets of the subsidiary corresponding to the disposal of thelong-term equity investment calculated on an ongoing basis from the acquisition date or the consolidation date isadjusted to capital surplus (capital surplus or share premium) in the consolidated financial statements, and retainedearnings is adjusted if the capital surplus is not sufficient to cover the reduction.If the control over the investee is lost due to the disposal of part of equity investments, the residual equity are re-measured at fair value on the date of loss of control. The aggregate of the consideration obtained by disposing ofthe equity and the fair value of the remaining equity less the portion of the net assets of the subsidiary that hasbeen measured, as calculated at the original shareholding proportion, from the acquisition date or combinationdate is recognized in profit and loss of the current period on investments in which the control is lost, and goodwillshall be offset. Other comprehensive income related to the equity investments in the former subsidiary shall beincluded in the return on investment for the current period when the Company lost the control.
7. Classification of Joint Operation Arrangements and Accounting Methods for Joint Operations
1. Classification of joint arrangements
Joint arrangements are divided into joint operations and joint ventures. The joint arrangements not reachedthrough separate entities are classified as joint operations. Separate entities refer to entities with separateidentifiable financial structures, including separate legal entities and entities that do not have legal entity status butare recognized by law. The joint arrangements reaching through separate entities are usually classified as jointventures. Where changes in relevant facts and circumstances result in changes in the rights and obligations of thejoint venture parties in the joint venture arrangement, the joint venture parties shall reassess the classification ofthe joint venture arrangement.
2. Accounting treatment of joint operations
As a participant in a joint operation, the Company recognizes the following items related to its share of interest inthe joint operations. It accounts for them following the relevant Accounting Standards for Business Enterprises:
Recognition of assets or liabilities held separately, and recognition of assets or liabilities held jointly on a sharebasis; recognition of revenue from the sale of the share of output from the joint operation to which it is entitled;recognition of revenue from the joint operation arising from the sale of output on a share basis; and recognition ofexpenses incurred separately, and recognition of expenses incurred in the joint operation on a share basis.If the Company is a participant in a joint operation that does not enjoy joint control, and it owns the underlyingassets of the joint operation and assumes the liabilities related to the joint operation, the accounting treatment ofthe joint operation partner shall be referred to; otherwise, the accounting treatment shall be carried out inaccordance with the relevant enterprise accounting standards.
3. Accounting treatment of joint ventures
If the Company is a joint venture partner, it shall account for its investment in joint ventures following theprovisions of Accounting Standards for Business Enterprises No. 2-Long-term Equity Investments; if theCompany is a non-joint venture partner, it shall account for its investment in such joint ventures based on theextent of its influence on such joint ventures.
8. Recognition Criteria of Cash and Cash Equivalents
Cash, as determined by the Company in preparing the statement of cash flows, represents the Company's cash onhand and deposits that are readily available for disbursement. Cash equivalents identified in the preparation of thestatement of cash flows are investments that are held for a short period of time, are highly liquid, are readilyconvertible to known amounts of cash and are subject to an insignificant risk of change in value.
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9. Translation of Transactions and Financial Statements Denominated in Foreign Currencies
1. Conversion of foreign currency business
Foreign currency shall be recognized by employing systematic and reasonable methods, and shall be translatedinto the amount in the functional currency at the exchange rate which is approximate to the spot exchange rate ofthe transaction date. On the balance sheet date, the monetary items in foreign currencies are translated at the spotexchange rate. Exchange differences arising from the difference between the spot rate on that date and the spotrate at initial recognition or on the previous balance sheet date are recognized in profit or loss, except forexchange differences on special borrowings in foreign currencies that qualify for capitalization, which arecapitalized in the period in which they are capitalized and charged to the cost of the related assets. Non-monetaryitems measured at historical costs in foreign currencies are still translated at the spot exchange rate on thetransaction date with the amount of standard currency for accounting unchanged. Non-monetary items measuredat fair value in foreign currencies are translated at the spot exchange rate on the date when the fair value isdetermined. The difference between the amount of standard currency for accounting after translation and theoriginal amount shall be treated as a change in fair value (including exchange rate changes) and recognized incurrent profit or loss or in other comprehensive income.
2. Conversion of foreign currency financial statements
If the Company's subsidiaries, joint ventures, and affiliated business use a different bookkeeping base currencyfrom the Company's, they need to convert their foreign currency financial statements before conductingaccounting and preparing consolidated financial statements. The assets and liabilities in the balance sheet shall betranslated at the spot rate on the balance sheet date. All items of owners' equity, except for "undistributed profit",shall be translated at the spot exchange rate at the time of occurrence. Items under revenue and expenses in theincome statement are translated at the spot exchange rate on the transaction date. The exchange difference intranslating foreign operations arising from the translation are shown under other comprehensive income in theowner's equity line in the balance sheet. Cash flows in foreign currencies shall be translated at the spot exchangerate on the date of occurrence of the cash flows. The impact of exchange rate changes on cash is presentedseparately in the cash flow statement. When an overseas operation is disposed of, the foreign currency statementtranslation difference related to the overseas operation is transferred to the current profit and loss of the disposal infull or in proportion to the disposal of the overseas operation.
10. Financial Instruments
1. Classification and reclassification of financial instruments
Financial instruments refer to contracts that form the financial assets of a party and form financial liabilities orequity instruments of other parties.
(1) Financial assets
The Company classifies financial assets as financial assets measured at amortized cost if they meet both of thefollowing conditions: a) The Company's business model of managing financial assets aims at obtainingcontractual cash flows; b) and, as stipulated by term contract of the financial assets, the cash flows generated on aspecific date are merely for the payment of principal or the interest from the unpaid principal.The Company classifies financial assets as financial assets at fair value through other comprehensive income ifthey meet both of the following conditions: a) The Company's business model of managing the financial assetsaims at obtaining contractual cash flows as well as selling financial assets; b) and, as stipulated by contract clausesof the financial assets, the cash flows generated on a specific date are merely for the payment of principal orinterest from the unpaid principal.For instruments in non-business equity instruments, the Company may irrevocably assign such investments asfinancial assets (equity instruments) measured at fair value through other comprehensive income at initialrecognition. The assignment is made based on investments by item, and the relevant investments meet thedefinition of an equity instrument from the issuer's perspective.The financial assets measured at amortized cost and financial assets other than those measured at fair valuethrough other comprehensive income are classified by the Company as financial assets measured at fair valuethrough profit and loss for the current period. At initial recognition, if the accounting mismatch can be eliminated
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or reduced, the Company shall designate the financial assets as financial assets measured at fair value through theprofit or loss for the current period.When the Company changes its business model for managing financial assets, it will reclassify all affectedrelevant financial assets as of the first day of the first reporting period following the change in business model,and the prospective application shall be adopted for accounting treatment. The previously recognized profits,losses (inclusive of impairment losses or profits), or interest shall not be traced and adjusted.
(2) Financial liabilities
Financial liabilities are classified into the following four categories when they are initially recognized: Financialliabilities at fair value through current profit or loss; financial liabilities arising from the transfer of financial assetnot meeting the derecognition criteria or from the continuing involvement in the transferred asset; financialguarantee contracts that do not fall within the categories above; financial liabilities measured at amortized cost.All financial liabilities are not reclassified.
2. Measurement of financial instruments
The Company's financial instruments are measured at fair value upon initial recognition. For financial assets orliabilities measured at fair value through profit or loss, relevant transaction expenses are directly included in theprofit or loss of the current period; for other categories of financial assets or liabilities, relevant transactionexpenses are included in the initial recognition amount. For notes receivable and accounts receivable arising fromsales of goods or provision of service which do not include or consider the compositions of major assets, theCompany takes the consideration expected to be received as the initial recognition amount. The follow-upmeasurement of financial instruments depends on their categories:
(1) Financial assets
a) Financial assets are measured at the amortized cost. After initial recognition, the effective interest methodmeasures such financial assets at amortized cost. Gains or losses arising from a financial asset measured atamortized cost which does not form any hedging relationship are recorded in current profit or loss at the time ofderecognition, reclassification, amortization according to the effective interest method or recognition ofimpairment.b) Financial assets are measured at fair value through profit and loss for the current period. After initialrecognition, such financial assets (except for a portion of financial assets that are part of a hedging relationship)are subsequently measured at fair value. The resulting gains or losses (including interest and dividend revenue)are included in the profit or loss for the period.c) Investments in debt instruments are measured at fair value through other comprehensive income. After initialrecognition, the financial assets are subsequently measured at fair value for this category. Interest, impairment lossor gain and exchange gain/loss calculated using the effective interest method are recorded in current profit or loss,other gains or losses are recorded in other comprehensive income. The accumulative gains or losses which arepreviously included in other comprehensive income are transferred out from other comprehensive income andincluded in current profit or loss upon derecognition.d) Investments in non-business equity instruments are designated as fair value through other comprehensiveincome. After initial recognition, the financial assets are subsequently measured at fair value for this category.Except for dividends received (except for the portion which forms part of investment cost recovered), which arerecognized in profit or loss, all other related gains and losses are recognized in other comprehensive income andare not subsequently transferred to current profit or loss.
(2) Financial liabilities
a) Financial liabilities measured at fair value through profit and loss for the current period. These financialliabilities include trading financial liabilities (including the derivative instruments belonging to financial liabilities)and financial liabilities designated to be measured by the fair value and their changes are recorded in the currentprofit or loss. After initial recognition, such financial liabilities are subsequently measured at fair value, and gainsor losses resulting from changes in the fair value of the financial liabilities held for trading (including interestexpense) are recognized in profit or loss, except for a portion of financial assets that are part of a hedgingrelationship. For financial liabilities designated as measured at fair value through profit or loss, changes in fairvalue arising from the change of the company's credit risk shall be included in other comprehensive income, and
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other changes in fair value are included in profit or loss for the current period. If the treatment made for the impactof the changes in the financial liability's credit risk may cause or expand the accounting mismatch in profit or loss,the Company shall include all gains or losses of such financial liabilities in profit and loss for the current period.b) Financial liabilities measured at amortized cost. After initial recognition, such financial liabilities are measuredat amortized cost using the effective interest method.
3. The Company's method for recognizing the fair value of financial instrumentsFor a financial instrument with an active market, its fair value is determined by its quoted price in the activemarket; for a financial instrument without an active market, its fair value is determined by valuation techniques.Valuation techniques mainly include the market approach, the income approach and the cost approach. Underlimited circumstances, if the information used to determine fair value is insufficient, or if the range of possibleestimates of fair value is wide and the cost represents the best estimate of fair value within that range, the costmay represent its appropriate estimate of fair value within that range of distribution. The Company uses allinformation available after the initial recognition date about the investee's performance and operations todetermine whether the cost represents fair value.
4. Determination basis and measuring methods for transfer of financial assets and financial liabilities
(1) Financial assets
The Company's financial assets shall be derecognized when meeting any of the following conditions: a) Thecontractual right to charge the cash flow of the financial assets is terminated; b) The financial assets have beentransferred and the Company has transferred almost all risks and remuneration of the financial assets ownership tothe transferee; and c) The financial assets have been transferred and the Company does neither transfer nor retainalmost all remuneration of the financial assets ownership but retain the control over the financial assets.The Company does neither transfer nor retain almost all remuneration of the financial assets ownership but retainthe control over the financial assets, the relevant financial assets shall be continuously recognized according to theextent of involving in the financial assets transferred and relevant liabilities shall be recognized accordingly.If the overall transfer of financial assets meets the conditions for derecognition, the difference between thefollowing two amounts shall be recorded in profit and loss of the current period: a) The carrying value of thetransferred financial asset as of the date of derecognition; b) Sum of the consideration received for the transfer ofthe financial asset, and the portion of the cumulative amount of fair value changes previously recorded in othercomprehensive income that corresponds with the portion of the asset de-recognized (the transferred financial assetis an investment in debt instruments at fair value through other comprehensive income).If a portion of the financial asset has been transferred and the transferred portion as a whole satisfies thederecognition criteria, the carrying value of the financial asset as a whole prior to its transfer is allocated betweenthe portion of the asset derecognized and the portion that remains recognized, according to their relative fair valueas of the transfer date, and the difference between the two amounts mentioned below is recorded in current profitor loss: a) The carrying value of the derecognized portion; b) Sum of the consideration received for thederecognition portion, and the portion of the cumulative amount of fair value changes previously recorded in othercomprehensive income, which corresponds with the derecognized portion (the transferred financial asset is aninvestment in debt instruments at fair value through other comprehensive income).When the Company's investments in non-trading equity instruments designated as at fair value through othercomprehensive income are derecognized, the accumulative gain or loss previously included in othercomprehensive income shall be transferred from other comprehensive income to retained earnings uponderecognition.
(2) Financial liabilities
If current obligations of the financial liability (or part of the liability) have been released, the Company shallderecognize the financial liability (or the part of the liability).If a financial liability (or a portion thereof) is derecognized, the Company includes the difference between thebook value and the consideration paid (inclusive of the transferred non-cash assets or the liabilities assumed) inthe profit or loss of the current period.
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11. Notes Receivable
The determination methods and accounting methods of notes receivable are detailed in Note 12, AccountsReceivable, under this note.
12. Accounts Receivable
The Company's financial assets subject to impairment loss recognition are financial assets measured at amortizedcost, investments in debt instruments measured at fair value through other comprehensive income, and leasereceivables, which mainly include notes receivable, accounts receivable, receivables financing, other receivables,debt investments, other debt investments, and long-term receivables. In addition, provision for impairment andrecognition of credit impairment losses should also be made for contract assets and certain financial guaranteecontracts in accordance with the accounting policies described in this section.
1. Determination and accounting methods of the expected credit losses of contract assetsThe Company provides for impairment and recognises credit impairment losses for each of the above items on thebasis of expected credit losses in accordance with its applicable expected credit loss measurement method.Credit loss refers to the difference between all contractual cash flow receivable by the Company under contractswhich are discounted according to the original effective interest rate, and all the cash flow expected to be received,namely, the present value of all cash short. In particular, for financial assets purchased or originated by theCompany that are credit impaired, they should be discounted at the credit-adjusted effective interest rate of thefinancial assets.The general approach to measuring expected credit losses is that the Company assesses at each balance sheet datewhether the credit risk of a financial asset (including other applicable items such as contract assets, etc., the samebelow) has increased significantly since initial recognition, and if the credit risk has increased significantly sinceinitial recognition, the Company measures the allowance for losses at an amount equal to the expected creditlosses over the entire life of the asset; if the credit risk has not increased significantly since initial recognition, theCompany measures the allowance for losses at an amount equal to the expected credit losses over the next 12months. The Company considers all reasonable and substantiated information, including forward-lookinginformation, in assessing expected credit losses.For financial instruments with low credit risk at the balance sheet date, the Company assumes that the credit riskhas not increased significantly since initial recognition and elects to measure the allowance for losses at anamount equal to the expected credit losses over the next 12 months.
2. Criteria for determining whether there has been a significant increase in credit risk since initial recognitionThe credit risk of a financial asset increases significantly if the probability of default over the expected life of thefinancial asset as at the balance sheet date is significantly higher than the probability of default over the expectedlife of the financial asset as at initial recognition. Except in exceptional circumstances, the Company uses thechange in the risk of default occurring within the next 12 months as a reasonable estimate of the change in the riskof default occurring over the entire duration to determine whether there has been a significant increase in creditrisk since initial recognition.
3. Portfolio approach to assessing expected credit risk on a portfolio basis
The Company evaluates credit risk for individual items of notes receivable, accounts receivable and otherreceivables that have significantly different credit risks with the following characteristics. For example,receivables from related parties; receivables that are in dispute with the other party or involved in litigation orarbitration; and notes and accounts receivable for which there are clear indications that the debtor is likely to failto meet its repayment obligations.In addition to financial assets for which credit risk is assessed individually, the Company classifies financial assetsinto different groups based on common risk characteristics and assesses credit risk on a portfolio basis.
4. Accounting method for impairment of financial assets
To reflect changes in the credit risk of a financial instrument since the initial recognition, the Companyremeasures the expected credit losses on each balance sheet date. The resulting increase or reversal of theprovision for losses shall be recognized as an impairment loss or gain in profit or loss and, depending on the type
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of financial instrument, offset against the carrying amount of the financial asset presented in the balance sheet orrecorded as provisions (loan commitments or financial guarantee contracts) or recorded in other comprehensiveincome (investments in debt obligations measured at fair value through other comprehensive income).
5. Recognition method for credit losses on financial assets
The Company accounts for financial assets measured at amortized cost (including receivables), financial assetsclassified as at fair value through other comprehensive income (including receivables financing), and leasereceivables based on expected credit losses, and recognizes impairment accounting and provision for losses.The Company assesses whether the credit risk of the relevant financial instruments has increased significantlysince the initial recognition on each balance sheet date, divides the process of credit impairment of financialinstruments into three stages, and applies different accounting treatments to the impairment of financialinstruments at different stages: (1) in the first stage, if the credit risk of a financial instrument has not increasedsignificantly since the initial recognition, the Company will measure the loss reserves according to the amountequivalent to the expected credit losses in the next 12 months, and calculate the interest revenue according to thebook balance (i.e., before deducting the provision for impairment) and the actual interest rate; (2) In the secondstage, if the credit risk of a financial instrument has increased significantly since the initial recognition but nocredit impairment has occurred, the Company will measure the loss reserves based on the expected credit lossover the entire life of the financial instrument and calculates interest revenue based on the carrying amount of thefinancial instrument and the effective interest rate; (3) In the third stage, if credit impairment occurs after theinitial recognition, the Company will measure the loss reserves based on the expected credit loss over the life ofthe financial instrument and calculates interest revenue based on the amortized cost (carrying amount lessprovision for impairment) and the effective interest rate.
(1) Method of the provision for losses on the measurement of financial instruments with lower credit riskFor financial instruments with lower credit risk on the balance sheet date, the Company makes a direct assumptionthat the credit risk of the instrument has not increased significantly since the initial recognition without comparingit with the credit risk at the time of its initial recognition.If the financial instruments have low default risk, the debtor's ability to meet its contractual cash flow obligationsin the short term is strong, and even if adverse changes in economic conditions and business environment in thelonger term don't necessarily reduce the borrower's ability to meet its contractual cash flow obligations, thefinancial instruments are considered to have low credit risk.
(2) Receivables and contract assets with no significant financing component
For receivables or contract assets arising from transactions governed by Accounting Standard for BusinessEnterprises No. 14 - Revenue that do not have a significant financing component, the Company uses a simplifiedapproach whereby the allowance for losses is always measured on the basis of expected credit losses throughouttheir lives.Depending on the nature of the financial instrument, the Company assesses whether there is a significant increasein credit risk on an individual financial asset or a portfolio of financial assets basis. The Company classifies notesreceivable and accounts receivable into certain portfolios based on credit risk characteristics, and calculatesexpected credit losses on a portfolio basis, which is determined on the following basis:
a) Accounts Receivable with a Single Significant Amount and a Separate Provision for Expected Credit Losses
| Judgment basis or amount criteria for significant individual amounts | Accrual method of expected credit losses that are individually significant and accrued |
| Accrual method of expected credit losses that are individually significant and accrued | The impairment tests are conducted separately for accounts receivable with individually significant amounts. If there is objective evidence of impairment, an impairment loss is recognized based on the difference between the present value of future cash flows and their carrying amount, and an expected credit loss is recorded |
b) Accounts Receivable with Expected Credit Losses Provision Based on Credit Risk Portfolio
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| Portfolio name | Determination method of expected credit losses |
| General business portfolio | Aging analysis |
| Internal business portfolio | Other methods |
Accounts Receivable for which the Expected Credit Loss is Withdrawn by Credit Risk Characteristics
| Portfolio name | Basis for portfolio recognition | Determination method of expected credit losses |
| Portfolio 1 | Bank acceptance bill | Low credit risk with no provision for bad debts |
| Portfolio 2 | Trade acceptance | Aging analysis |
The aging analyses are based on their date of entry into the accounts.Among portfolios, expected credit losses accrued by aging analysis:
| Aging | Accrual rate of expected credit losses |
| Within 1 year (including 1 year) | 2-3% (Note) |
| 1 to 2 years | 10% |
| 2 to 3 years | 30% |
3 to 4 years
| 3 to 4 years | 50% |
| 4 to 5 years | 80% |
| Over 5 years | 100% |
Note: NationStar, a subsidiary of the Company, is a subsidiary formed in a business combination under the samecontrol during the period. The accrual rate for expected credit losses for NationStar within one year (including oneyear) is 2%.c) Accounts Receivable with an Insignificant Single Amount but for which the Expected Credit Loss is MadeIndependently
| Reasons for a separate provision for expected credit losses | Conclusive evidence of significant differences in recoverability |
| Determination method of expected credit losses | An impairment loss is recognized for expected credit losses based on the difference between the present value of expected future cash flows and their carrying amount |
(3) Method of measuring loss provision for other financial assets
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For financial assets other than those mentioned above, such as debt investments, other debt investments, otherreceivables and long-term receivables other than lease receivables, the Company measures the allowance forlosses in accordance with the general method, i.e. the "three-stage" model.The Company considers the following factors in assessing whether there has been a significant increase in creditrisk when measuring credit impairment on financial instruments:
The Company divides other receivables into certain combinations based on the nature of the amounts. It calculatesexpected credit losses based on the combinations, and the basis for determining the combinations is as below:
Other receivables portfolio 1: Deposit, antecedent moneyOther receivables portfolio 2: Related party moneyOther receivables portfolio 3: Advance moneyOf this, the expected credit loss rate for the ageing portfolio is:
| Aging | Accrual rate of expected credit losses |
| Within 1 year (including 1 year) | 2-3% (Note) |
| 1 to 2 years | 10% |
2 to 3 years
| 2 to 3 years | 30% |
| 3 to 4 years | 50% |
| 4 to 5 years | 80% |
| Over 5 years | 100% |
Note: NationStar, a subsidiary of the Company, is a subsidiary formed in a business combination under the samecontrol during the period. The accrual rate for expected credit losses for NationStar within one year (including oneyear) is 2%.
13. Accounts Receivable Financing
The determination methods and accounting methods of receivables financing are detailed in Note 12, AccountsReceivable, under this note.
14. Other Receivables
Determination methods and accounting methods of expected credit losses on other receivablesThe determination methods and accounting methods of expected credit losses of other receivables is the same asthat of accounts receivable, as detailed in Note 12, Accounts Receivable, in this note.
15. Inventory
1. Classification of inventories
Inventories refer to the Company's finished goods or commodities for sale held in daily activities, unfinishedgoods in manufacturing process, and materials and supplies consumed in process of manufacturing products orproviding services, etc. Inventories mainly include raw materials, goods in process, materials in transit, finishedgoods, commodities, turnover materials, materials commissioned for processing, etc. Turnover materials includelow-value consumables and packaging materials.
2. Pricing method of issuing inventories
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Inventories are valuated at the actual cost of the acquisition, and the inventory costs include procurement costsand processing costs. Inventories are valuated using the weighted average method when being issued.
3. Accrual method of provision for decline in value of inventories
Net realizable value refers to the amount after deducting the cost estimated until completion, estimated sellingexpenses, and relevant taxes from the estimated selling price of the inventory. The Company determines the netrealizable value of inventories based on solid evidence obtained and after taking into consideration the purpose forwhich the inventory is held, and the impact of post-balance sheet events.The net realizable value of finished goods, materials for sale, and other merchandise inventories used directly forsale is determined in the normal course of production and operation as the estimated selling price of suchinventories, less estimated selling expenses, and related taxes.The net realizable value of material inventories subject to processing is determined in the normal course ofproduction operations as the estimated selling price of the finished goods produced, less the estimated costs to beincurred to completion, estimated selling expenses, and related taxes.
4. Inventory system of inventories
The perpetual inventory system is adopted for the inventories of the Company.
5. Amortization of low-value consumables and packing materials
The one-off charge-off method is used for low-value consumables and packaging materials.
16. Contract Assets
The Company presents the right to receive consideration for goods or services that have been transferred to thecustomer (and which is dependent on factors other than time-lapse) as a contract asset. Provision for impairmentof contract assets is made with reference to the expected credit loss method for financial instruments. For contractassets that do not contain significant financing components, the Company uses a simplified measurement methodto measure the loss reserves. For contract assets containing significant financing components, the Company uses ageneral measurement method to measure the loss reserves.When an impairment loss is incurred on a contract asset, the amount to be written down is debited to "impairmentlosses on assets" and credited to provision for impairment of contract assets; the reverse entry is made when theprovision for impairment is reversed.
17. Contract Costs
not applicable
18. Assets Held for Sale
The Company classifies non-current assets or disposal groups that meet both of the following conditions as assetsheld for sale: First, the assets or disposal groups can be sold immediately under current conditions based on thepractice of selling such assets or disposal groups in similar transactions; and second, the sales are highly likely tooccur, that is, the Company has already made a resolution on a sale plan and obtained a certain purchasecommitment, and the sale is expected to be completed within one year. The relevant regulations require theapproval of the relevant or regulatory authority of the enterprise before the sale shall have been approved.When the Company initially measures or remeasures non-current assets or disposal groups held for sale on thebalance sheet date, if the carrying value is higher than the fair value minus the net amount of the sale costs, thecarrying value will be written down to the net amount of fair value minus the sale costs. The amount written downwill be recognized as asset impairment loss and included in current profit and loss, and provision for impairmentof assets held for sale will be made.Assets in the balance sheet in the non-current assets held for sale or disposal groups held for sale are presented asassets held for sale, and liabilities in the disposal groups held for sale are presented as liabilities held for sale.A discontinued operation is a separately distinguishable component meeting one of the following conditions andwhich has been disposed of by the Company or is classified by the Company as held for sale:
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1. The component represents a separate primary business or a separate primary operating area;
2. The component is part of an associated plan for the proposed disposal of a separate primary business or aseparate major operating area;
3. The component is a subsidiary acquired exclusively for resale.
19. Investment in Debt Obligations
Not applicable
20. Other Investment in Debt Obligations
Not applicable
21. Long-term Receivables
Not applicable
22. Long-term Equity Investments
1. Determination of initial investment cost
For long-term equity investments acquired through a business combination, in the case of a business combinationunder the same control, the initial investment cost of the long-term equity investment shall be the share of theowners' equity of the party being combined in the consolidated financial statements of the ultimate controllingparty on the combination date; in the case of a business combination not under the same control, the initialinvestment cost of the long-term equity investment shall be the cost of combination determined on the acquisitiondate; for long-term equity investments acquired by paying cash, the initial investment cost is the actual purchaseprice paid; for long-term equity investments acquired by issuing equity securities, the initial investment cost is thefair value of the equity securities issued; for long-term equity investments acquired through debt restructuring, theinitial investment cost is determined in accordance with the relevant provisions of Accounting Standards forBusiness Enterprises No. 12-Debt Restructuring; for long-term equity investments acquired through exchange ofnon-monetary assets, the initial investment cost is determined in accordance with the relevant provisions ofAccounting Standards for Business Enterprises No. 7-Exchange of Non-monetary Assets.
2. Method of subsequent measurement and recognition of profit or loss
Long-term equity investments in which the Company can exercise control over the investees are accounted for bythe cost method, and long-term equity investments in associates and joint ventures are accounted for by the equitymethod. If a portion of the Company's equity investments in affiliates is held indirectly through venture capitalinstitutions, mutual funds, trust companies, or similar entities, including investment-linked funds, regardless ofwhether the above entities have significant influence over this portion of the investment, the Company treats it inaccordance with the relevant provisions of Accounting Standards for Business Enterprises No. 22-Recognitionand Measurement of Financial Instruments and accounts for the remaining portion with the equity method.
3. Determination basis of the same control and significant influence on the investeeHaving the same control over an investee refers to that the activities that significantly affect the return on anarrangement can only be decided with the unanimous consent of the participants sharing control, including salesand purchases of goods or services, management of financial assets, acquisitions and disposals of assets, researchand development activities, and financing activities; having significant influence over an investee refers to havinga considerable impact when more than 20% to 50% of the investee's voting capital is held. Or, although less than20%, having a considerable impact when one of the following conditions is met: Representation on the board ofdirectors or similar authority of the investee; participation in the policy-making process of the investee;assignment of management personnel to the investee; reliance of the investee on the technology or technicalinformation of the investee; and major transactions with the investee.
23. Investment Properties
Measurement model of investment propertyMeasurement of cost method
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Depreciation or amortization methodThe Company's investment property include leased land use rights, leased buildings, and land use rights held andready to be transferred after appreciation. Investment property is initially measured according to cost, and thenmeasured by cost model.The Company uses the composite life depreciation method for buildings leased out of investment properties, andthe specific accounting policies are the same as those for fixed assets. Land use rights leased out of investmentproperties and land use rights held and intended to be transferred after appreciation are amortized through thestraight-line method with the same accounting policies as those for the intangible assets segment.
24. Fixed Assets
(1) Recognition conditions
The fixed assets refer to tangible assets held for production of goods, provision of labour services, lease orbusiness with a service life of over a fiscal year. Recognition is made when the following conditions are met: Theeconomic benefits associated with the fixed-asset will probably flow to the enterprise; the cost of the fixed-assetcan be measured reliably.
(2) Depreciation method
| Category | Depreciation method | Depreciable life | Residual value rate | Annual depreciation rate |
| Houses and buildings | Straight-line depreciation method | 3-30 years | 1%-5% | 31.67%-3.17% |
| Machinery equipment | Straight-line depreciation method | 2-10 years | 1%-5% | 47.50%-9.50% |
| Transportation equipment | Straight-line depreciation method | 5-10 years | 1%-5% | 19.00%-9.50% |
| Electronic equipment | Straight-line depreciation method | 2-8 years | 1%-5% | 47.50%-11.88% |
(3) Impairment testing methods for fixed assets and provision for impairmentFor details, see Note 31 “Impairment of long-term assets”.
(4) Disposal of fixed assets
Fixed assets are derecognised when they are disposed of, or when no economic benefits are expected to arise fromtheir use or disposal. Proceeds from the disposal of fixed assets on sale, transfer, retirement or destruction, net oftheir carrying amount and related taxes, are recorded in current profit or loss.
25. Construction in Progress
The cost of construction in progress is determined on the basis of actual construction expenditure, including allconstruction expenditure incurred during the period of construction, borrowing costs capitalised before theconstruction reaches its intended useable state and other related costs.Construction in progress is transferred to fixed assets when it reaches its intended useable state and depreciationcommences from the following month. If the construction in progress has reached its intended useable state buthas not yet been finalised, it is transferred to fixed assets at its estimated value from the date it reaches its intended
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useable state, based on the project budget, cost or actual cost of the project, and is depreciated in accordance withthe Company's policy on depreciation of fixed assets, and the original provisional estimated value is adjusted tothe actual cost after the finalisation of the project.See Note 31, "Impairment of long-term assets" for details of the impairment testing method and provision forimpairment for construction in progress.
26. Borrowing Costs
1. Recognition principles for the capitalization of borrowing costs
If the borrowing costs incurred by the Company can be directly attributable to the acquisition, construction orproduction of assets that meet the capitalization conditions, they shall be capitalized and included in the costs ofthe underlying assets; other borrowing costs recognized as costs according to the amount incurred shall beincluded in the profit and loss for the current period. Assets eligible for capitalization refer to assets, such as fixedassets, investment properties, and inventories that require a long period for their acquisition or productionactivities to reach the expected usable or saleable status.
2. Calculation of capitalization amount
The capitalization period refers to the period from when the capitalization of borrowing costs starts to when thecapitalization stops. The period during which capitalization of borrowing costs is suspended is not included.Capitalization of borrowing costs shall be suspended if there is an abnormal interruption in the course ofacquisition or production and the interruption lasts for more than three consecutive months.Borrowing of special borrowings is determined by the interest expense incurred in the period of the specialborrowings, less the interest revenue expenditure earned by depositing the unused borrowed funds in banks or theinvestment income earned by making temporary investments; the appropriation of general borrowings isdetermined by multiplying the weighted average amount of asset expenses over the portion of special borrowingsby the capitalization rate of the general borrowings appropriated, which is the weighted average interest rate ofgeneral borrowings; if there is a discount or premium on borrowings, the amount of discount or premium to beamortized in each accounting period is determined by the effective interest rate method. The amount of interest isadjusted for each period.The effective interest rate method is a method of calculating the amortized discount or premium or interestexpense on a borrowing based on its effective interest rate. The effective interest rate method calculates theamortized discount or premium or interest expense on a borrowing based on its effective interest rate.
27. Living Assets
Not applicable
28. Oil and Gas Assets
Not applicable
29. Right-of-use Assets
The determination methods and accounting methods of right-of-use assets are detailed in Note 42, Leases, underthis note.
30. Intangible Assets
(1) Pricing method, useful life and impairment test
1. Recognition criteria of intangible assets
Intangible assets are identifiable non-monetary assets that are owned or controlled by the Company withoutphysical form. The intangible assets are recognized when all the following conditions are met: (1) Conform to thedefinition of intangible assets; (2) Expected future economic benefits related to the assets are likely to flow intothe Company; (3) The costs of the assets can be measured reliably.
2. Initial measurement of intangible assets
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Intangible assets are initially measured at cost. Actual costs are determined by the following principles:
(1) The cost of the acquisition of intangible assets, including the purchase price, relevant taxes and other expensesdirectly attributable to the intended use of the asset. If the amount paid for the purchase of intangible assetswitnesses postponed payment due to that the normal credit conditions are exceeded and is actually financing innature, the costs of such intangible assets shall be determined on the basis of the present value of the purchaseprice. The difference between the actual payment price and the present value of the purchase price shall berecorded into the current profits and losses in the credit period except that can be capitalized in accordance withthe Accounting Standard for Business Enterprises No. 17 - Borrowing Cost.
(2) The cost of investing in intangible assets shall be recognized according to the value agreed upon in theinvestment contract or agreement, except that the value of the contract or agreement is unfair.
3. Subsequent measurement of intangible assets
The Company shall determine the useful life when it obtains intangible assets. The useful life of intangible assetsis limited, and the years of the useful life or output that constitutes the useful life or similar measurement unitsshall be estimated. The intangible assets are regarded as intangible assets with uncertain useful life if the term thatbrings economic benefits to the Company is unforeseeableIntangible assets with limited useful life shall be amortized by straight line method from the time when theintangible assets are available until can’t be recognized as intangible assets; intangible assets with uncertain usefullife shall not be amortized. The Company reviews the estimated useful life and amortization method of intangibleassets with limited useful life at the end of each year, and reviews the estimated useful life of intangible assetswith uncertain useful life in each accounting period. For intangible assets that evidence shows the useful life islimited, the useful life shall be estimated and the intangible assets shall be amortized in the estimated useful life.
4. Recognition criteria and withdrawal method of intangible asset impairment provisionThe impairment test method and withdrawal method for impairment provision of intangible assets are detailed inNote 3, (20): “Long-term asset impairment”.
(2) Accounting policy for internal research and development expenditures
The expenditures in internal research and development projects of the Company are classified into expenditures inresearch stage and expenditures in development stage. The expenditures in research stage are included in thecurrent profits and losses when incurred. The expenditures in development stage are recognized as intangibleassets when meeting the following conditions:
(1) The completion of the intangible assets makes it technically feasible for using or selling;
(2) Having the intention to complete and use or sell the intangible assets;
(3) The way in which an intangible asset generates economic benefits, including the proof that the productsproduced with the intangible assets can be sold in a market or the proof of its usefulness if the intangible assetscan be sold in a market and will be used internally;
(4) Having sufficient technical, financial resources and other resources to support the development of theintangible assets and the ability to use or sell the intangible assets;
(5) Expenditure attributable to the development stage of intangible assets can be measured reliably.The cost of self-developed intangible assets includes the total expenditure incurred after meeting intangible assetsrecognition criterion and before reaching intended use. Expenditures that have been expensed in previous periodsare no longer adjusted.The cost of intangible assets acquired by non-monetary assets exchange, debt restructuring, government subsidiesand business combination are recognized according to relevant provisions of Accounting Standards for BusinessEnterprises No. 7 - Non-monetary Assets Exchange, Accounting Standards for Business Enterprises No. 12 - DebtRestructuring, Accounting Standards for Business Enterprises No. 16 - Government Subsidies, AccountingStandards for Business Enterprises No. 20 - Business Combination respectively.
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31. Impairment of Long-term Assets
For long-term assets having the indication of impairment on balance sheet date such as long-term equityinvestments, investment property measured in cost mode, fixed assets, construction in progress, productive livingassets measured in cost mode, oil and gas assets, and intangible assets, the Company shall test the impairment. Ifthe impairment test results indicate that the recoverable amount of the asset is lower than its book value, theimpairment provision shall be made at the difference and included in the impairment loss.The recoverable amount is the higher of the fair value of the asset minus the disposal cost and the present value ofthe expected future cash flow of the asset. The provision for impairment of assets is calculated and recognized onthe basis of individual assets. If it is difficult to estimate the recoverable amount of individual assets, therecoverable amount of the asset group shall be recognized by the asset group to which the asset belongs. The assetgroup is the smallest portfolio of assets that can generate cash inflows independently.Goodwill presented separately in the financial statements shall be tested for impairment every year, whether or notthere is any indication of impairment. The book value of the goodwill shall be apportioned to the asset group orportfolio of asset groups that is expected to benefit from the synergies of the business combination when theimpairment test is conducted. The corresponding impairment loss is recognized if the test results indicate that therecoverable amount of the asset group or portfolio of asset groups containing the apportioned goodwill is lowerthan its book value. The amount of the impairment loss shall offset the book value of the goodwill apportioned tothe asset group or portfolio of asset groups, and offset the book value of other assets in proportion according to theproportion of the book value of other assets except the goodwill in the asset group or portfolio of asset groups.Once the impairment loss of the above asset is recognized, the portion that the value is restored will not be writtenback in subsequent periods.
32. Long-term Prepaid Expense
Long-term prepaid expense refers to general expenses with the apportioned period over one year (excluding oneyear) that have occurred but are attributable to the current and future periods. Long-term prepaid expense shall beamortized averagely within benefit period. In case of no benefit in the future accounting period, the amortizedvalue of such item that fails to be amortized shall be transferred into the current profits and losses.
33. Contract Liabilities
The Company presents the obligation of transferring goods to or providing services for customers forconsideration received or receivable as a contract liability.The Company presents contract asset and contract liability under the same contract on a net basis.
34. Payroll
Employee benefits refer to all forms of remuneration or compensation given by the Company for servicesrendered by employees or for the termination of employment relationships. Employee benefits mainly includeshort-term benefits, post-employment benefits, termination benefits and other long-term employee benefits.
(1) Accounting treatments for short-term benefits The short-term compensation actually happened during theaccounting period when the active staff offering the service for the Company should be recognized as liabilitiesand is included in the current profits and losses except for those required or allowed to be included in the assetscost by the Accounting Standards for Business Enterprises. The employee services benefits actually happened inthe Company shall be included in the current profits and losses or relevant assets cost according to the actualamount. Of which the non-monetary benefits should be measured according to the fair value. During theaccounting term in which employees provide service, the Company calculates and determines the correspondingpayroll amount in accordance with the withdrawal basis and withdrawal proportion specified in regulations withthe social insurance premiums such as medical insurance premiums, industrial injury insurance premium and birthinsurance premium, housing fund, and the labour union budget and employee education budget withdrawn inregulations, and then recognizes it as liabilities that are included in the current profits and losses or relevant assetscost.
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(2) Accounting treatment of the welfare after demission
The payable and deposit amount calculated according to the defined contribution plan during the accountingperiod when the active staff offering the service for the Company is recognized as liabilities and is included in thecurrent profits and losses or relevant assets cost. The benefit obligations arising from the defined benefit plan shallbe attributable to the period in which the employees provide services based on the formula determined byexpected cumulative welfare unit method and included in current profits and losses or cost of relevant asset.
(3) Accounting treatment of the demission welfare
When offering the demission welfare, the Company shall recognize the payroll liabilities incurred from thedemission welfare on the earlier of the date when the Company could not unilaterally withdraw the demissionwelfare offered by the plan or layoff proposal owing to termination of the labour relationship or the date when theCompany recognizes the cost related to the reorganization of the payment of the demission welfare, and includethe payroll liabilities into the current profits and losses:
(4) Accounting treatment of the welfare of other long-term staffs
The other long-term welfare that the Company offers to the staff, if met with the setting drawing plan, shall bedisposed of according to the relevant setting drawing plan; except for that, net liabilities or net assets of thewelfare of other long-term staff shall be recognized and measured according to the setting drawing plan.
35. Lease Liabilities
The determination methods and accounting methods of leases are detailed in Note 42, Leases, under this note.
36. Provisions
The obligation pertinent to contingencies shall be recognized as provisions when that obligation is a currentobligation of the Company, and it is likely to cause any economic benefit to flow out of the enterprise as a resultof performance of the obligation, while the amount of the obligation can be measured in a reliable way. TheCompany conducts the initial measurement in accordance with the best estimate of the necessary expenses for theperformance of the current obligation. If there is a sequent range for the necessary expenses and if all theoutcomes within this range are equally likely to occur, the best estimate shall be determined in accordance withthe midpoint estimate within the range; if the contingencies concern two or more items, the best estimate shall becalculated and determined in accordance with all possible outcomes and the relevant probabilities.Review of the book value of provisions shall be conducted on the balance sheet date. The book value shall beadjusted in accordance with the current best estimate when there is definite evidence indicating that the bookvalue cannot reflect the current best estimate in faithfulness.
37. Share-based Payment
Not applicable
38. Other Financial Instruments such as Preferred Shares and Perpetual BondsNot applicable
39. Revenue
The Accounting Policy Adopted for Recognition and Measurement of RevenueThe Company recognizes revenue when it has satisfied its performance obligations under the contract, i.e., whenthe customer has obtained control of relevant goods or services. Obtaining control of relevant goods or servicesmeans being able to direct the use of them and obtain substantially all benefits from them.Where the contract contains two or more performance obligations, the Company, at the inception date of thecontract, allocates the transaction price to each performance obligation in accordance with the relative proportionof the stand-alone selling price of the goods or services promised by each performance obligation. The Companymeasures revenue on the basis of the transaction price allocated to each performance obligation.Transaction price is the amount of consideration to which the Company expects to be entitled in exchange fortransferring goods or services to a customer, excluding amounts collected on behalf of third parties and amounts
Annual Report 2022
expected to be returned to the customer. The Company determines the transaction price in accordance with theterms of the contract, with past business practices taken into account. When determining the transaction price, itconsiders the impact of variable consideration, the existence of a significant financing component in the contract,non-cash consideration, consideration payable to a customer and other factors. The transaction price is recognizedonly to the extent that it is highly probable that a significant reversal in the amount of cumulative revenuerecognized will not occur when the relevant uncertainty is resolved. Where a contract contains a significantfinancing component, the Company determines the transaction price on the basis of the amount presumablypayable in cash when the customer obtains control of the goods or services, and uses the actual interest method toamortize the difference between the transaction price and the contract consideration during the contract period.A performance obligation is satisfied over time if one of the following conditions is met; otherwise, it is treated assatisfied at a point in time:
(1) The customer simultaneously receives and consumes the benefits provided by the Company's performance asthe Company performs.
(2) The customer can control the goods as they are created during the Company's performance.
(3) The goods produced by the Company's performance have no alternative use, and the Company has the right tocollect payment for performance completed to date during the entire contract period.Where a performance obligation is to be satisfied over time, the Company recognizes revenue in accordance withthe progress of performance during the period, except when the progress cannot be reasonably determined. Indetermining the progress of performance, the Company takes into account the nature of the goods or services andadopts the output methods or the input methods.Where the performance progress cannot be reasonably determined, and the costs incurred are expected to berecovered, the Company recognizes revenue according to the amount of the costs incurred until the progress canbe reasonably determined.Where the performance obligation is to be satisfied at a certain point in time, the Company recognizes revenue atthe point when the customer obtains control of the relevant goods or services. When judging whether the customerhas obtained control of goods or services, the Company considers the following indicators:
(1) The Company has a present right to receive payment for the goods or services, i.e., the customer has a presentobligation to pay for the goods or services.
(2) The Company has transferred the legal ownership of the goods to the customer, i.e., the customer has obtainedthe legal ownership of the goods.
(3) The Company has transferred physical possession of the goods to the customer, i.e., the customer has takenphysical possession of the goods.
(4) The Company has transferred significant risks and rewards of ownership of the goods to the customer, i.e., thecustomer has obtained significant risks and rewards of ownership of the goods.
(5) The customer has accepted the goods or services.
2. Specific methods
(1) Recognition of domestic sales revenue: Under the conventional settlement mode, the Company has deliveredgoods that have passed inspection to the purchaser as required by the purchaser; the amount of revenue has beendetermined, a sales invoice has been issued and the payment has been received or is expected to be recovered;under the consignment sales settlement mode, the Company recognizes sales revenue when the product is issuedand the settlement notice is issued after the customer inspection is qualified.
(2) Recognition of export sales revenue: The Company has produced goods according to the requirementsstipulated in the sales contract, and completed the export declaration procedures after the goods have passedinspection; the freight company has shipped the goods, the amount of revenue has been determined, an exportsales invoice has been issued, and the payment has been received or is expected to be recovered.Differences in accounting policies for the recognition of revenue caused by different business models for the sametype of business
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40. Government Subsidies
1. Category of and accounting treatment for government subsidies
Government subsidies refer to the monetary assets or non-monetary assets obtained by the Company from thegovernment (excluding the capital invested by the government as an equity holder). If a government subsidy is amonetary asset, it shall be measured according to the amount received or receivable. If a government subsidy is anon-monetary asset, it shall be measured at its fair value, and shall be measured at a nominal amount when the fairvalue cannot be obtained reliably.Government subsidies related to the daily activities are included in other income in accordance with the nature ofeconomic business. Government subsidies unrelated to the daily activities are included in non-operating revenue.Government subsidies are recognized as asset-related subsidies when stipulated by government documents to beused for acquisition, construction or otherwise formation long-term assets. Government subsidies without subsidyobject specified by the government document, able to form a long-lived asset, and corresponding to the assetvalue are asset-related government subsidies, while the rest are government subsidies related to income. Forgovernment subsidies containing both part related to asset and part related to income, the Company shall conductthe accounting treatment respectively to the different part; if the part is difficult to distinguish, it shall be classifiedas government subsidy related to income; government subsidies related to assets are recognized as deferredincome. The amount recognized as deferred income is included in the current profits and losses in accordancewith reasonable and systematic method in the useful life of relevant assets.Government subsidies other than asset-related government subsidies are recognized as government subsidiesrelated to income. Government subsidies related to income used to compensate the relevant costs, expenses orlosses of the Company in the subsequent period shall be recognized as deferred income, and shall be included inthe current profit and loss during the period of confirming the relevant cost, expenses or losses; subsidies used tocompensate the relevant costs, expenses or losses incurred by the Company shall be directly included in thecurrent profits and losses (subsidies related to the daily activities of the Company are included in other income;while subsidies unrelated to the daily activities of the Company are included in non-operating revenue).In the case that the Company obtains a policy favourable loan interest subsidy, and the fiscal system allocates thefund of interest subsidy to the lending bank, who provides loans to the Company at a policy favourable interestrate, the actual loan amount received is recognized as the recorded value of the loan, and the relevant borrowingcosts are calculated based on the loan principal and the policy favourable interest rate; if the fiscal systemallocates the fund of interest subsidy to the Company directly, the Company reduces the corresponding interestsubsidy against relevant borrowing costs.
2. Recognition time of government subsidies
Government subsidies shall be recognized when the Company satisfies the conditions attached to the governmentsubsidies and is able to receive them. Government subsidies measured according to the receivable amount shall berecognized when there is positive evidence at the end of the period that they can meet the relevant conditionsstipulated by the financial support policies and are expected to receive financial support funds. Other governmentsubsidies other than government subsidies measured by amount receivable are recognized when the Companyactually receives the subsidies.
41. Deferred Income Tax Assets/Deferred Income Tax Liabilities
1. The Company recognizes the deferred income tax assets or deferred income tax liabilities in accordance withthe applicable tax rate during the estimated period of recapturing the assets or paying the liabilities for thedifferent amount between the book value of assets or liabilities and its tax base (for items not recognized as assetsand liabilities, if its tax basis can be determined according to the tax law, the tax basis is recognized as thedifferent amount).
2. The recognition of deferred income tax assets is subject to the amount of taxable income obtained to offset thedeductible temporary differences. On the balance sheet date, deferred income tax assets without recognitionduring the former accounting period shall be recognized if there are definite indications representing that it isprobable to have sufficient taxable income to offset the deductible temporary differences during the future period.If it is likely that sufficient taxable income will not be available to offset the benefit of the deferred income taxassets in the future period, the book value of the deferred income tax assets will be written down.
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3. For taxable temporary differences related to the investment in subsidiaries and associated enterprises, thedeferred income tax liabilities are recognized unless the time of temporary differences reversal can be controlledby the Company and are probably not to be reversed in foreseeable future. For deductible temporary differencesrelated to the investment in subsidiaries and associated enterprises, the deferred income tax assets are recognizedif the temporary differences are probably to be reversed in foreseeable future and it is likely to have taxableincome to offset the deductible temporary differences.
42. Lease
(1) Accounting treatment of operating lease
1. Accounting treatment of leased assets
On the start date of the lease term, the Company deems the right-of-use assets and lease liabilities of all theoperating leases except for the short-term leases and low-value leases, and recognizes the depreciation expenseand interest expense respectively within the lease term.In each period in lease term, the Company includes the lease payment of short-term leases and low-value leases inthe current expense with the straight-line method.
(1) Right-of-use assets
Right-of-use assets refer to the right of the lessees to use the leasehold property in the lease term. At the start dateof the lease term. The Company initially measures the right-of-use assets at cost. The cost includes: a) The initialmeasurement amount of the lease liabilities; b) the lease payment paid on or before the start date of the lease term.If there is a lease incentive, the amount related to the lease incentive taken should be deducted; c) the initial directcost incurred by the lessee; d) the estimated cost that the lessee will use to pull down and remove the leaseholdproperty, and restore the site of the leasehold property or restore the leasehold property to the state agreed in thelease clauses.The Company depreciates the right-of-use assets with the straight-line method. If it is reasonably certain that theownership of the leasehold property will be obtained at the end of the lease term, the Company will depreciate theleasehold property over its estimated remaining service life. If it is not reasonably certain that the ownership of theleasehold property will be obtained at the end of the lease term, the Company will depreciate the leased assetsover the lease term or the remaining service life, whichever is shorter.The Company will determine the impairment of right-of-use assets and conduct accounting treatment inaccordance with relevant provisions of the Accounting Standards for Business Enterprises No.8 - AssetImpairment.
(2) Lease liabilities
The Company initially measures the lease liabilities at the current value of the lease payments outstanding at thestart date of the lease term. Lease payments include: a) fixed payment (including substantial fixed payment), andthe relevant amount after deducting the lease incentive if any; b) variable lease payments depending on index orratio; c) estimated payments due to the guaranteed residual value provided by the lessee; d) exercise price of thepurchased option, provided that the lessee reasonably determines that the option will be exercised; and e) theamount to be paid for the exercise of the lease termination options, provided that the lease term reflects that thelessee will exercise the options to terminate the lease.The Company uses the interest rate implicit in lease as the rate of discount. If the interest rate implicit in leasecannot be reasonably determined, the Company's incremental borrowing rate is used as the rate of discount. TheCompany calculates the interest expenses of the lease liabilities during each period of the lease term at a fixedperiodic interest rate, and includes them in financial expenses. The periodic interest rate refers to the rate ofdiscount employed by the Company or the rate of discount after revision.Variable lease payments that are not covered in the measurement of the lease liabilities are included in currentprofit or loss when actually incurred.When there is a change in the Company's evaluation results of lease renewal options, lease termination options orpurchase options, the Company will re-measure the lease liabilities utilizing the present value of the changed leasepayment and the revised rate of discount, and adjust the book value of right-of-use assets accordingly. Where
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there is a change in substantial lease payment, estimated payments due to the guaranteed residual value, orvariable lease payments depending on index or ratio, the Company will re-measure the lease liabilities leveragingthe present value of the changed lease payment and the original rate of discount, and adjust the book value ofright-of-use assets accordingly.
2. Accounting treatment of lease assets
(1) Accounting treatment of operating leases
The lease receivable of the operating lease in each period in the lease term is deemed as a rental on a straight-linebasis. The Company capitalizes the initial direct cost related to the operating finance, amortizes and includes it inthe current profits on the basis same as the recognition of rentals in the lease term.
(2) Accounting treatment method of financial lease
On the start date of lease, the difference between the sum of finance lease receivable and unguaranteed residualvalue and its present value is recognized as unrealised lease income by the Company, which is recognized as leaseincome in each period when the rent is received in the future. The initial direct cost incurred related to leasebusiness is included in the initial recorded value of financial lease receivable.
43. Other Significant Accounting Policies and Estimates
1. In December 2021, the Ministry of Finance (MOF) issued Accounting Standard for Business EnterprisesInterpretation No. 15 (C.K. [2021] No. 35) ("Interpretation No. 15"), in which "Accounting for the sale ofproducts or by-products produced by an enterprise before the fixed assets reach their intended useable state or inthe course of research and development" and "Judgment on loss-making contracts" shall be effective on 1 January2022. The Company implemented the policies above, and the change in accounting policy has no impact on theCompany's financial statements.
2. In November 2022, the Ministry of Finance ("MOF") issued Accounting Standard for Business EnterprisesInterpretation No. 16 (C.K. [2022] No. 31) ("Interpretation No. 16"), in which "Accounting method of the incometax effects of dividends on financial instruments classified as equity instruments by the issuer" and "Accountingmethod of the revision of share-based payment settled in cash to share-based payment settled in equity by anenterprise" shall be effective on the date of publication. The Company implemented the policies above, and thechange in accounting policy has no impact on the Company's financial statements.
44. Changes in Main Accounting Policies and Estimates
(1) Change in accounting policies
□Applicable ?Not applicable
(2) Changes in accounting estimates
□Applicable ?Not applicable
45. Other
NoneVI. Taxes
1. Main Taxes and Tax Rates
| Category of taxes | Tax basis | Tax rate |
| VAT | Sales volume from goods selling or taxable service | 3%, 6%, 9%, 13% |
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| Urban maintenance and construction tax | Turnover tax payable | 7%, 5% |
| Enterprise income tax | Taxable income | 10%, 15%, 25% |
| Education surcharge | Turnover tax payable | 3% |
| Local educational surtax | Turnover tax payable | 2% |
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
| Name | Income tax rate |
| The Company, Zhida Company, Chanchang Company, Haolaite, Nanning Liaowang, Chongqing Guinuo, Liuzhou Lighting, Liuzhou Foreshine, Qingdao Guige, Headquarters of NationStar Optoelectronics, NationStar Semiconductor, Germany NationStar, Fenghua Semiconductor | 15% |
| FSL Lighting GmbH | 15% |
| Indonesia Liaowang | 10% |
| Other subsidiaries | 25% |
2. Tax Preference
1. The Company passed the re-examination for High-tech Enterprises in 2020, as well as won the “Certificate ofHigh-tech Enterprise” after approval by Department of Science and Technology of Guangdong Province,Department of Finance of Guangdong Province, Guangdong Provincial Bureau of State Taxation and GuangdongProvincial Bureau of Local Taxation. In accordance with relevant provisions in Corporate Income Tax Law of thePeople’s Republic of China and the Administration Measures for Identification of High-tech Enterprisespromulgated in 2007, the Company paid the corporate income tax based on a tax rate of 15% within three yearssince 1 January 2020.
2. Zhida Company and Chanchang Company passed the examination for High-tech Enterprises respectively inDecember 2019 and December 2021, and thus Zhida Company and Chanchang Company paid the corporateincome tax based on a tax rate of 15% within three years respectively since 1 January 2019 and 1 January 2021 inaccordance with relevant provisions in Corporate Income Tax Law of the People’s Republic of China and theAdministration Measures for Identification of High-tech Enterprises promulgated in 2007.
3. According to the Decision on Tax Matters approved by the Local Taxation Bureau of Nanning High-techIndustrial Development Zone (NGDSSB [2015] No. 1), Nanning Liaowang will enjoy the preferential taxreduction and exemption of enterprise income tax in the western development from 1 January 2015, and theenterprise income tax will be levied at a reduced rate of 15%.
4. After being examined and filed by the competent tax authorities, Chongqing Guinuo will enjoy the preferentialtax reduction and exemption of enterprise income tax in the western development from 1 January 2019, and theenterprise income tax will be levied at a reduced rate of 15%.
5. According to the third batch of high-tech enterprises identified by the relevant authorities of Guangxi ZhuangAutonomous Region in 2022 publicized on 19 December 2022, Liuzhou Optoelectronics has been certified as ahigh-tech enterprise (certificate number: GR202245001221) for 2022 to 2024, with a high-tech enterprisepreferential income tax rate of 15%.
6. According to the letter "Gui Ke Gao Han [2021] No. 237" issued jointly by the Department of Science andTechnology of Guangxi Zhuang Autonomous Region, the Department of Finance and the Taxation Bureau of
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Guangxi Zhuang Autonomous Region of the State Administration of Taxation on 30 November 2021, LiuzhouFuxuan has been certified as a high-tech enterprise (certificate number: GR202145001045) for 2021 to 2023, witha high-tech enterprise preferential income tax rate of 15%.
7. Subsidiary NationStar Optoelectronics was recognized as a high-tech enterprise on 16 December 2008 withcertificate number GR200844000097. In 2020, the company was re-certified as a high-tech enterprise withcertificate number GR202044006337, issued on 9 December 2020, and the corporate income tax rate of thecompany is 15% for the years 2020 - 2022.
8. Foshan NationStar Semiconductor Co., Ltd., a wholly-owned subsidiary of subsidiary NationStarOptoelectronics, was recognized as a high-tech enterprise with certificate number GR201544001238 on 10October 10 2015; NationStar Semiconductor was re-certified as a high-tech enterprise with certificate numberGR202144008779 in 2021, issued on 20 December 2021, and the corporate income tax rate of the company is 15%for the years 2021-2023.
9. The subsidiary, Haolaite, passed the certification of high-tech enterprise in 2022 and obtained the certificate ofhigh-tech enterprise (Certificate No. GR202244003711) approved by the Department of Science and Technologyof Guangdong Province, the Department of Finance of Guangdong Province, the State Taxation Bureau ofGuangdong Province and the Local Taxation Bureau of Guangdong Province. In accordance with the relevantprovisions of the Enterprise Income Tax Law of the People's Republic of China promulgated in 2007 and theAdministrative Measures for the Recognition of High-tech Enterprises, the Company is entitled to a reducedcorporate income tax rate of 15% for three years commencing from 1 January 2022.
10. On 14 December 2022, Qingdao Guige Lighting Technology Co., Ltd. was recognized as a high-techenterprise and subject to the preferential tax rate of 15% for high-tech enterprise income tax in accordance withthe relevant provisions of the Administrative Measures for the Recognition of High-tech Enterprises (Guo Ke FaHuo [2016] No. 32) and the Administrative Guidelines for the Recognition of High-tech Enterprises (Guo Ke FaHuo [2016] No. 195).
11. Fenghua Semiconductor, a majority-owned subsidiary of subsidiary NationStar Optoelectronics, wasrecognized as a high-tech enterprise on 31 December 2021 with certificate number GR202144008851, which isvalid for three years and the applicable corporate income tax rate is 15% from 2022 to 2024.
12. The subsidiary, Zhicheng, is a small and micro enterprise. From 1 January 2022 to 31 December 2024, thepeople's governments of provinces, autonomous regions and municipalities directly under the CentralGovernment shall determine, in accordance with the actual situation in the region and the needs ofmacroeconomic regulation and control, that resource tax, urban maintenance and construction tax, property tax,urban land use tax, stamp duty (excluding stamp duty on securities transactions), arable land occupation tax andeducation surcharge and local education surcharge may be reduced within a tax range of 50% for small andmicro enterprises.
3. Other
Pay in accordance with the relevant provisions of the tax lawVII. Notes to Main Items of Consolidated Financial Statements
1. Monetary Assets
Unit: RMB
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| Item | Ending balance | Beginning balance |
| Cash on hand | 52,093.54 | 24,635.14 |
| Bank deposits | 1,957,903,758.15 | 1,854,162,196.17 |
| Other monetary assets (note 1) | 522,361,684.92 | 578,256,164.30 |
| To-be-received interest (note 2) | 4,191,370.82 | 2,783,249.29 |
| Total | 2,484,508,907.43 | 2,435,226,244.90 |
| Of which: Total amount deposited overseas | 34,169,227.46 | 27,310,928.58 |
| Total amount with restrictions on use due to mortgage, pledge or freeze | 534,826,528.99 | 493,000,085.20 |
Other notesNote 1: Other monetary assets were security deposits for notes and performance bonds, as well as investmentsplaced with security firm and the balance with e-commerce platforms, of which the security deposits for notesand performance bonds were restricted assets (see “81. Assets with Restricted Ownership or Right of Use” inNote “VII Notes to Consolidated Financial Statements”).Note 2: To-be-received interest was interest receivable on undue bank deposits and term deposits as of the endof the Reporting Period, which is not recognized as cash and cash equivalents.
2. Trading Financial Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Financial assets at fair value through profit or loss | 261,541,896.45 | 348,248,125.61 |
| Including: | ||
| Wealth management products | 260,569,863.53 | 342,422,447.43 |
| Equity instrument investments | 972,032.92 | 1,558,778.18 |
| Others | 4,266,900.00 | |
| Including: | ||
| Total | 261,541,896.45 | 348,248,125.61 |
3. Derivative Financial Assets
Naught
4. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
| Item | Ending balance | Beginning balance |
| Bank acceptance bill | 786,244,513.66 | 1,657,197,186.66 |
| Commercial acceptance bill | 35,293,260.41 | 30,803,389.08 |
Annual Report 2022
| Total | 821,537,774.07 | 1,688,000,575.74 |
Unit: RMB
| Category | Ending balance | Beginning balance | ||||||||
| Carrying amount | Bad debt provision | Carrying value | Carrying amount | Bad debt provision | Carrying value | |||||
| Amount | Proportion | Amount | Withdrawal proportion | Amount | Proportion | Amount | Withdrawal proportion | |||
| Of which: | ||||||||||
| Notes receivable withdrawn bad debt provision by group | 822,258,044.69 | 100.00% | 720,270.62 | 100.00% | 821,537,774.07 | 1,688,629,216.33 | 100.00% | 628,640.59 | 100.00% | 1,688,000,575.74 |
| Of which: | ||||||||||
| Bank acceptance bill | 786,244,513.66 | 95.62% | 0.00 | 0.00% | 786,244,513.66 | 1,657,197,186.66 | 98.14% | 0.00 | 0.00% | 1,657,197,186.66 |
| Commercial acceptance bill | 36,013,531.03 | 4.38% | 720,270.62 | 100.00% | 35,293,260.41 | 31,432,029.67 | 1.86% | 628,640.59 | 100.00% | 30,803,389.08 |
| Total | 822,258,044.69 | 100.00% | 720,270.62 | 100.00% | 821,537,774.07 | 1,688,629,216.33 | 100.00% | 628,640.59 | 100.00% | 1,688,000,575.74 |
Withdrawal of bad debt provision by group: 720,270.62
Unit: RMB
| Name | Ending balance | ||
| Carrying amount | Bad debt provision | Withdrawal proportion | |
| Within 1 year | 36,013,531.03 | 720,270.62 | 2.00% |
| Total | 36,013,531.03 | 720,270.62 | |
Note:
Please refer to the relevant information of disclosure of bad debt provision of other receivables if adopting thegeneral mode of expected credit loss to withdraw bad debt provision of notes receivable:
□Applicable ? Not applicable
(2) Bad Debt Provision Withdrawn, Reversed or Collected during the Reporting PeriodWithdrawal of bad debt provision:
Unit: RMB
Annual Report 2022
| Category | Beginning balance | Increase/decrease | Ending balance | |||
| Withdrawn | Reversed or collected | Verified | Other | |||
| Notes receivable withdrawn bad debt provision by group | 628,640.59 | 91,630.03 | 720,270.62 | |||
| Total | 628,640.59 | 91,630.03 | 720,270.62 | |||
Of which, bad debt provision collected or reversed with significant amount:
□Applicable ? Not applicable
(3) Notes Receivable Pledged by the Company at the Period-end
Unit: RMB
| Item | Amount pledged at the period-end |
| Bank acceptance bill | 665,593,722.65 |
| Total | 665,593,722.65 |
(4) Notes Receivable which Had Endorsed by the Company or Had Discounted and Had not Due on theBalance Sheet Date at the Period-end
Unit: RMB
| Item | Amount of recognition termination at the period-end | Amount of not recognition termination at the period-end |
| Bank acceptance bill | 780,866,698.44 | 85,686,916.85 |
| Total | 780,866,698.44 | 85,686,916.85 |
(5) Notes Transferred to Accounts Receivable because Drawer of the Notes Fails to Executed the Contractor AgreementNaught
(6) Notes Receivable with Actual Verification for the Reporting Period
Naught
5. Accounts Receivable
(1) Accounts Receivable Disclosed by Category
Unit: RMB
| Category | Ending balance | Beginning balance | ||||||||
| Carrying amount | Bad debt provision | Carrying value | Carrying amount | Bad debt provision | Carrying value | |||||
| Amount | Proportion | Amount | Withdrawal proporti | Amount | Proportion | Amount | Withdrawal proporti | |||
Annual Report 2022
| on | on | |||||||||
| Accounts receivable withdrawn bad debt provision separately | 25,123,263.57 | 1.23% | 25,123,263.57 | 100.00% | 0.00 | 33,870,795.83 | 1.59% | 31,481,638.85 | 92.95% | 2,389,156.98 |
| Of which: | ||||||||||
| Accounts receivable withdrawn bad debt provision by group | 2,019,130,602.05 | 98.77% | 98,359,660.29 | 4.87% | 1,920,770,941.76 | 2,101,999,881.13 | 98.41% | 86,282,613.68 | 4.10% | 2,015,717,267.45 |
| Of which: | ||||||||||
| (1) General business portfolio | 2,019,130,602.05 | 98.77% | 98,359,660.29 | 4.87% | 1,920,770,941.76 | 2,101,999,881.13 | 98.41% | 86,282,613.68 | 4.10% | 2,015,717,267.45 |
| Total | 2,044,253,865.62 | 100.00% | 123,482,923.86 | 6.04% | 1,920,770,941.76 | 2,135,870,676.96 | 100.00% | 117,764,252.53 | 5.51% | 2,018,106,424.43 |
Individual withdrawal of bad debt provision: RMB25,123,263.57
Unit: RMB
| Name | Ending balance | |||
| Carrying amount | Bad debt provision | Withdrawal proportion | Withdrawal reason | |
| Customer A | 11,220,827.14 | 11,220,827.14 | 100.00% | Involved in the lawsuit, the Company won the lawsuit in the second instance, which had not yet executed completely |
| Customer B | 5,711,450.39 | 5,711,450.39 | 100.00% | Less likely to be recovered |
| Customer C | 4,687,053.33 | 4,687,053.33 | 100.00% | The customer is |
Annual Report 2022
| insolvent, a judgment has been filed and enforcement has been applied for | ||||
| Customer D | 815,484.27 | 815,484.27 | 100.00% | Expectedly unlikely to recover |
| Customer E | 761,769.31 | 761,769.31 | 100.00% | Expectedly irrecoverable |
| Customer F | 526,858.54 | 526,858.54 | 100.00% | The customer is bankrupt, a judgment has been filed and enforcement has been applied for |
| Customer G | 523,448.92 | 523,448.92 | 100.00% | The customer is bankrupt |
| Customer H | 521,689.32 | 521,689.32 | 100.00% | The other party is bankrupt and going through legal proceedings |
| Customer I | 171,282.32 | 171,282.32 | 100.00% | Expected to be unrecoverable |
| Customer J | 145,321.00 | 145,321.00 | 100.00% | Expected to be unrecoverable |
| Customer K | 21,928.68 | 21,928.68 | 100.00% | Expected to be unrecoverable |
| Customer L | 16,150.35 | 16,150.35 | 100.00% | Expected to be unrecoverable |
| Total | 25,123,263.57 | 25,123,263.57 |
Withdrawal of bad debt provision by group: RMB98,359,660.29
Unit: RMB
| Name | Ending balance | ||
| Carrying amount | Bad debt provision | Withdrawal proportion | |
| Credit risk group | 2,019,130,602.05 | 98,359,660.29 | 4.87% |
| Total | 2,019,130,602.05 | 98,359,660.29 | |
Note:
Please refer to the relevant information of disclosure of bad debt provision of other receivables if adopting thegeneral mode of expected credit loss to withdraw bad debt provision of accounts receivable.
□Applicable ? Not applicable
Disclosure by aging
Unit: RMB
| Aging | Ending balance |
| Within 1 year (including 1 year) | 1,799,959,881.31 |
| 1 to 2 years | 161,368,649.46 |
| 2 to 3 years | 25,396,115.75 |
| Over 3 years | 57,529,219.10 |
| 3 to 4 years | 9,748,535.08 |
| 4 to 5 years | 30,412,705.43 |
Annual Report 2022
| Over 5 years | 17,367,978.59 |
| Total | 2,044,253,865.62 |
(2) Bad Debt Provision Withdrawn, Reversed or Collected during the Reporting PeriodBad debt provision withdrawn in the Reporting Period:
Unit: RMB
| Category | Beginning balance | Increase/decrease | Ending balance | |||
| Withdrawn | Reversed or collected | Verified | Other | |||
| Bad debt provision separately accrued | 31,481,638.85 | 2,364,455.12 | 1,203,963.23 | 7,518,867.17 | 25,123,263.57 | |
| Bad debt provision withdrawn according to groups | 86,282,613.68 | 12,324,508.95 | 0.00 | 247,462.34 | 98,359,660.29 | |
| Total | 117,764,252.53 | 14,688,964.07 | 1,203,963.23 | 7,766,329.51 | 123,482,923.86 | |
Of which, bad debt provision collected or reversed with significant amount:
Unit: RMB
| Name of the entity | Amount collected or reversed | Way |
| No. 1 | 1,188,965.28 | Bank transfer |
| No. 2 | 14,997.95 | Bank transfer |
| Total | 1,203,963.23 |
The amount of expected credit losses accrued during the current period was RMB14,688,964.07 and the amountof expected credit losses recovered or reversed during the current period was RMB1,203,963.23, which wasRMB7,101.14 different from the amount of credit impairment loss on accounts receivable accrued during thecurrent period of RMB13,492,101.98, which was due to the difference in translation of foreign currencystatements at the end of the current period.
(3) Accounts Receivable with Actual Verification for the Reporting Period
Unit: RMB
| Item | Amount |
| No. 1 | 7,400,681.91 |
| No. 2 | 133,711.50 |
| No. 3 | 117,018.83 |
| No. 4 | 113,400.28 |
| Other retails accounts | 1,516.99 |
Annual Report 2022
Of which, verification of significant accounts receivable:
Unit: RMB
| Name of the entity | Nature | Amount | Reason | Procedure | Whether occurred because of related-party transactions |
| No. 1 | Payment for goods | 7,400,681.91 | Unrecoverable | Expectedly irrecoverable due to the insolvency of the relevant company | Not |
| No. 2 | Payment for goods | 133,711.50 | Historical litigation payments | Irrecoverable | Not |
| No. 3 | Payment for goods | 117,018.83 | Unrecoverable | Irrecoverable | Not |
| No. 4 | Payment for goods | 113,400.28 | Unrecoverable | Irrecoverable | Not |
| Other retails accounts | Payment for goods | 1,516.99 | Unrecoverable | Irrecoverable | Not |
| Total | 7,766,329.51 |
Note:
The approval procedure for the verification of accounts receivable during the Reporting Period had beenperformed in accordance with provisions of the bad debt management system of the Company.
(4) Top 5 of the Ending Balance of the Accounts Receivable Collected according to the Arrears Party
Unit: RMB
| Name of units | Ending balance of accounts receivable | Proportion to total ending balance of accounts receivable (%) | Ending balance of bad debt provision |
| No. 1 | 131,509,845.75 | 6.43% | 3,945,295.37 |
| No. 2 | 109,279,237.01 | 5.35% | 3,278,377.11 |
| No. 3 | 76,600,163.00 | 3.75% | 2,298,004.89 |
| No. 4 | 76,077,621.37 | 3.72% | 2,282,328.64 |
| No. 5 | 52,602,563.16 | 2.57% | 1,052,051.26 |
| Total | 446,069,430.29 | 21.82% |
(5) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvementof Accounts ReceivableNaught
(6) Derecognition of Accounts Receivable due to the Transfer of Financial AssetsNaught
Annual Report 2022
6. Accounts Receivable Financing
Unit: RMB
| Item | Ending balance | Beginning balance |
| Bank acceptance | 569,868,831.79 | 10,660,409.19 |
| Total | 569,868,831.79 | 10,660,409.19 |
The changes of accounts receivable financing in the Reporting Period and the changes in fair value
□Applicable ? Not applicable
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable ifadopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivablefinancing.
□Applicable ? Not applicable
Other notes:
The Company's business model for the management of notes receivable changed in 2022 to target both thecollection of contractual cash flows and the sale of notes receivable (endorsed or discounted) and is thereforeclassified as a financial asset at fair value through other comprehensive income and presented in receivablesfinancing.
7. Prepayment
(1) Listed by Aging
Unit: RMB
| Aging | Ending balance | Beginning balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 36,419,452.21 | 80.00% | 26,750,375.88 | 78.66% |
| 1 to 2 years | 3,345,048.70 | 7.35% | 4,740,511.32 | 13.94% |
| 2 to 3 years | 3,313,296.20 | 7.28% | 557,418.69 | 1.64% |
| Over 3 years | 2,448,751.82 | 5.38% | 1,957,342.86 | 5.76% |
| Total | 45,526,548.93 | 34,005,648.75 | ||
Notes of the reasons of the prepayment aging over 1 year with significant amount but failed settled in time:
Naught
(2) Top 5 of the Ending Balance of the Prepayments Collected according to the Prepayment Target
Unit: RMB
| Name of units | Relationship with the Company | Ending balance | Proportion to total prepayments (%) | Prepayment time |
| No. 1 | Non-related party | 9,083,410.92 | 19.95% | Within 1 year |
| No. 2 | Non-related party | 2,540,646.17 | 5.58% | 2 to 3 years |
Annual Report 2022
| No. 3 | Non-related party | 2,281,714.08 | 5.01% | Within 1 year |
| No. 4 | Non-related party | 2,092,681.22 | 4.60% | Within 1 year |
| No. 5 | Non-related party | 1,981,680.20 | 4.35% | Within 1 year |
| Total | 17,980,132.59 | 39.49% |
8. Other Receivables
Unit: RMB
| Item | Ending balance | Beginning balance |
| Interest receivable | ||
| Dividends receivable | ||
| Other receivables | 32,902,865.98 | 37,605,156.73 |
| Total | 32,902,865.98 | 37,605,156.73 |
(1) Interest Receivable
1) Category of Interest Receivable
Unit: RMB
| Item | Ending balance | Beginning balance |
| Total | 0.00 | 0.00 |
2) Significant Overdue Interest
Naught
3) Withdrawal of Bad Debt Provision
□Applicable ? Not applicable
(2) Dividends Receivable
1) Category of Dividends Receivable
Unit: RMB
| Project (or investee) | Ending balance | Beginning balance |
| Total | 0.00 | 0.00 |
2) Significant Dividends Receivable Aged over 1 Year
Naught
3) Withdrawal of Bad Debt Provision
□Applicable ? Not applicable
Annual Report 2022
(3) Other Receivables
1) Other Receivables Disclosed by Account Nature
Unit: RMB
| Nature | Ending carrying amount | Beginning carrying amount |
| Other receipts and payments | 45,041,494.42 | 46,700,271.18 |
| Performance bonds | 14,472,948.78 | 12,126,403.00 |
| Export VAT rebates | 10,011,271.72 | 4,674,335.06 |
| Rents and utilities | 1,220,591.91 | 2,564,557.87 |
| Staff loans and imprests | 1,164,918.15 | 4,018,439.87 |
| Total | 71,911,224.98 | 70,084,006.98 |
2) Information of Withdrawal of Bad Debt Provision
Unit: RMB
| Bad debt provision | First stage | Second stage | Third stage | Total |
| Expected credit loss of the next 12 months | Expected loss in the duration (credit impairment not occurred) | Expected loss in the duration (credit impairment occurred) | ||
| Balance of 1 January 2022 | 937,268.37 | 6,189,279.95 | 25,352,301.93 | 32,478,850.25 |
| Balance of 1 January 2022 in the Current Period | ||||
| Withdrawal of the Current Period | -346,762.17 | -1,129,673.37 | 3,316,365.74 | 1,839,930.20 |
| Reversal of the Current Period | ||||
| Verification of the Current Period | -6,100.00 | -274,321.45 | -30,000.00 | -310,421.45 |
| Other | 5,000,000.00 | 5,000,000.00 | ||
| Balance of 31 December 2022 | 584,406.20 | 4,785,285.13 | 33,638,667.67 | 39,008,359.00 |
Changes of carrying amount with significant amount changed of loss provision in the current period
□Applicable ? Not applicable
Disclosure by aging
| aging | Ending balance |
| Within 1 year (including 1 year) | 30,536,942.63 |
| 1 to 2 years | 2,955,796.80 |
| 2 to 3 years | 8,142,805.16 |
Annual Report 2022
| Over 3 years | 30,275,680.39 |
| 3 to 4 years | 4,691,584.24 |
| 4 to 5 years | 1,234,886.46 |
| Over 5 years | 24,349,209.69 |
| Total | 71,911,224.98 |
3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Bad debt provision withdrawn in the Reporting Period:
Unit: RMB
| Category | Beginning balance | Increase/decrease | Ending balance | |||
| Withdrawn | Reversed or collected | Verified | Other | |||
| Other receivables | 32,478,850.25 | 1,839,930.20 | 310,421.45 | 5,000,000.00 | 39,008,359.00 | |
| Total | 32,478,850.25 | 1,839,930.20 | 310,421.45 | 5,000,000.00 | 39,008,359.00 | |
The expected credit losses accrued in the current period amounted to RMB1,839,930.20, the expected creditlosses recovered or reversed in the current period was RMB0.00 and the expected credit losses written off in thecurrent period was RMB310,421.45, which was different from the credit impairment loss on other receivablesaccrued in the current period of RMB1,839,930.20, mainly due to the impairment provision ofRMB5,000,000.00 made by subsidiary NationStar Optoelectronics for its long-term equity investment inJiangsu Fozhao Contract Energy Management Development Co., Ltd., which had been previously recorded inasset impairment provisions, was reclassified as other receivables with the carrying amount of the said long-term equity investment and the provision for bad debt.Of which the important Bad debt provision reversal or recoverable amount in the Reporting periodNaught
4) Particulars of the Actual Verification of Other Receivables during the Reporting Period
Unit: RMB
| Item | Amount |
| Customer A | 246,628.45 |
| Tender deposits and security deposits | 32,743.00 |
| Other | 31,050.00 |
Of which significant actual verification of other receivables:
Unit: RMB
| Name of the entity | Nature | Amount | Reason | Procedure | Whether occurred because of related-party transactions |
| No. 1 | Current money | 246,628.45 | Litigation costs are high and there is a risk of losing | The approval procedure shall be carried out according to the | Not |
Annual Report 2022
| Company’s rules for managing bad debts regarding to verification application before accounts can be verified | |||||
| No. 2 | Security and deposit | 30,000.00 | The statute of limitations has expired and there is a risk of losing | The approval procedure shall be carried out according to the Company’s rules for managing bad debts regarding to verification application before accounts can be verified | Not |
| No. 3 | Security and deposit | 10,000.00 | The statute of limitations has expired and there is a risk of losing | The approval procedure shall be carried out according to the Company’s rules for managing bad debts regarding to verification application before accounts can be verified | Not |
| No. 4 | Current money | 9,693.00 | The statute of limitations has expired and there is a risk of losing | The approval procedure shall be carried out according to the Company’s rules for managing bad debts regarding to verification application before accounts can be verified | Not |
| No. 5 | Security and deposit | 5,050.00 | The statute of limitations has expired and there is a risk of losing | The approval procedure shall be carried out according to the | Not |
Annual Report 2022
| Company’s rules for managing bad debts regarding to verification application before accounts can be verified | |||||
| No. 6 | Security and deposit | 5,000.00 | The statute of limitations has expired and there is a risk of losing | The approval procedure shall be carried out according to the Company’s rules for managing bad debts regarding to verification application before accounts can be verified | Not |
| No. 7 | Current money | 3,000.00 | The statute of limitations has expired and there is a risk of losing | The approval procedure shall be carried out according to the Company’s rules for managing bad debts regarding to verification application before accounts can be verified | Not |
| No. 8 | Current money | 1,050.00 | The statute of limitations has expired and there is a risk of losing | The approval procedure shall be carried out according to the Company’s rules for managing bad debts regarding to verification application before accounts can be verified | Not |
| Total | 310,421.45 |
Annual Report 2022
5) Top 5 of the Ending Balance of the Other Receivables Collected according to the Arrears Party
Unit: RMB
| Name of the entity | Nature | Ending balance | Aging | Proportion to total ending balance of other receivables (%) | Ending balance of bad debt provision |
| No. 1 | Other intercourse accounts | 20,000,000.00 | Over 5 years | 27.81% | 20,000,000.00 |
| No. 2 | VAT export tax refunds | 10,011,271.72 | Within 1 year | 13.92% | 300,338.15 |
| No. 3 | Other intercourse accounts | 5,938,549.43 | Within 2 years | 8.26% | 179,845.37 |
| No. 4 | Other intercourse accounts | 5,000,000.00 | Within 1 year | 6.95% | 5,000,000.00 |
| No. 5 | Other intercourse accounts | 4,289,457.98 | Within 3 years | 5.96% | 4,289,457.98 |
| Total | 45,239,279.13 | 62.90% | 29,769,641.50 |
6) Accounts Receivable Involving Government Grants
Naught
7) Derecognition of Other Receivables due to the Transfer of Financial AssetsNaught
8) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvementof Other ReceivablesNaught
9. Inventory
Whether the Company needs to comply with disclosure requirements for real estate industryNo
(1) Category of Inventory
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Falling price reserves of inventory or depreciation reserves of | Carrying value | Carrying amount | Falling price reserves of inventory or depreciation reserves of | Carrying value | |
Annual Report 2022
| contract performance cost | contract performance cost | |||||
| Raw materials | 414,134,452.55 | 6,893,242.38 | 407,241,210.17 | 384,214,026.01 | 8,746,846.57 | 375,467,179.44 |
| Goods in process | 239,412,167.33 | 239,412,167.33 | 320,205,615.06 | 320,205,615.06 | ||
| Inventory goods | 1,019,990,159.16 | 139,368,445.90 | 880,621,713.26 | 975,145,274.51 | 120,166,259.74 | 854,979,014.77 |
| Goods in transit | 391,149,213.49 | 9,805,170.06 | 381,344,043.43 | 337,255,469.51 | 7,129,722.56 | 330,125,746.95 |
| Semi-finished goods | 113,621,240.54 | 914,242.37 | 112,706,998.17 | 100,723,505.66 | 377,760.65 | 100,345,745.01 |
| Low-value consumables | 2,742,435.82 | 2,742,435.82 | 3,231,115.87 | 3,231,115.87 | ||
| Others | 7,568,833.69 | 7,568,833.69 | 5,177,062.67 | 5,177,062.67 | ||
| Total | 2,188,618,502.58 | 156,981,100.71 | 2,031,637,401.87 | 2,125,952,069.29 | 136,420,589.52 | 1,989,531,479.77 |
(2)Falling Price Reserves of Inventory and Depreciation Reserves of Contract Performance Cost
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance | ||
| Withdrawal | Other | Reversal or write-off | Other | |||
| Raw materials | 8,746,846.57 | 5,965,516.32 | 7,819,120.51 | 6,893,242.38 | ||
| Goods in process | ||||||
| Inventory goods | 120,166,259.74 | 67,243,195.39 | 48,041,009.23 | 139,368,445.90 | ||
| Semi-finished goods | 377,760.65 | 960,653.50 | 424,171.78 | 914,242.37 | ||
| Goods in transit | 7,129,722.56 | 7,795,594.80 | 5,120,147.30 | 9,805,170.06 | ||
| Total | 136,420,589.52 | 81,964,960.01 | 61,404,448.82 | 156,981,100.71 | ||
(3) Notes to the Ending Balance of Inventories Including Capitalized Borrowing ExpenseNaught
(4) Amortization Amount of Contract Performance Cost during the Reporting PeriodNaught
Annual Report 2022
10. Contract Assets
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserves | Carrying value | Carrying amount | Depreciation reserves | Carrying value | |
| Contract assets | 6,074,305.63 | 607,430.56 | 5,466,875.07 | 8,826,085.67 | 264,782.57 | 8,561,303.10 |
| Total | 6,074,305.63 | 607,430.56 | 5,466,875.07 | 8,826,085.67 | 264,782.57 | 8,561,303.10 |
Amount of significant changes in carrying value of contract assets in the Reporting Period and reasons thereof:
NaughtIf the bad debt provision for contract assets in accordance with the general model of expected credit losses, the information relatedto the bad debt provision shall be disclosed by reference to the disclosure method of other receivables:
□Applicable ? Not applicable
Withdrawal of impairment provision for contract assets in the Reporting Period
Unit: RMB
| Item | Withdrawal | Reversal | Verification | Reason |
| Contract assets | 342,647.99 | Normal withdrawal at aging | ||
| Total | 342,647.99 | —— |
11. Held-for-Sale Assets
Unit: RMB
| Item | Ending carrying amount | Depreciation reserves | Ending carrying value | Fair value | Estimated disposal expense | Estimated disposal time |
| Houses, buildings and land involved in expropriation | 17,147,339.84 | 17,147,339.84 | 183,855,895.00 | 55,718,333.95 | 31 December 2023 | |
| Total | 17,147,339.84 | 0.00 | 17,147,339.84 | 183,855,895.00 | 55,718,333.95 |
Other notes:
Note: For details, see Part X-XVI.Other Major Events-8.Other: "Demolition Matters of Nanjing Fozhao" of thisReport. The estimated disposal costs include employee resettlement fees, compensation for the termination ofthe original tenant's contract, and taxes related to the proceeds of demolition.
12. Current Portion of Non-current Assets
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Annual Report 2022
13. Other Current Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Input tax of VAT to be certified and deducted | 72,851,826.53 | 111,647,463.39 |
| Advance payment of enterprise income tax | 3,676,607.32 | 10,562,615.78 |
| Others | 2,910,143.04 | 3,507,355.35 |
| Total | 79,438,576.89 | 125,717,434.52 |
14. Investments in debt obligations
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15. Other Investments in Debt Obligations
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16. Long-term Accounts Receivable
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17. Long-term Equity Investment
Unit: RMB
| Investees | Beginning balance (carrying value) | Increase/decrease | Ending balance (carrying value) | Ending balance of depreciation reserves | |||||||
| Additional investment | Reduced investment | Gains and losses recognized under the equity method | Adjustment of other comprehensive income | Changes of other equity | Cash bonus or profits announced to issue | Withdrawal of depreciation reserves | Other | ||||
| I. Joint ventures | |||||||||||
| II. Associated enterprises | |||||||||||
| Jiangsu Fozhao Contrac | |||||||||||
Annual Report 2022
| t Energy Management Development Co., Ltd. | |||||||||||
| Shenzhen Primatronix (Nanho) Electronics Ltd. | 181,545,123.09 | 2,467,060.07 | 2,080,390.50 | 181,931,792.66 | |||||||
| Subtotal | 181,545,123.09 | 2,467,060.07 | 2,080,390.50 | 181,931,792.66 | |||||||
| Total | 181,545,123.09 | 2,467,060.07 | 2,080,390.50 | 181,931,792.66 |
Other notes:
1. The Company's subsidiary, NationStar Optoelectronics, entered into the Contribution Agreement of JiangsuFozhao Contract Energy Management Development Co., Ltd. with the natural persons, Ye Zongcai and ZhaoQiaoyue, on 3 August 2012, to jointly establish Jiangsu Fozhao Contract Energy Management Development Co.,Ltd. (Jiangsu Fozhao) with the registered capital of RMB20 million, wherein NationStar Optoelectronicscontributed RMB5 million, representing 25.00% of the total investment.Since its inception, Jiangsu Fozhao hasbeen in a loss-making position, has ceased production and has low realisable value of its assets. The investmenthas obvious signs of impairment. In accordance with the relevant provisions of ASBE No. 8 - Impairment ofAssets, etc., full provision for impairment was made. In 2022, NationStar Optoelectronics applied for thedissolution of the company, and the dispute resulted in the judgment of the Hefei Intermediate People's Court inAnhui Province, and the subsidiary NationStar Optoelectronics exited its investment in Jiangsu Fozhao on 20September 2022. Due to the financial difficulties of the shareholders of the company, NationStarOptoelectronics made a full bad debt provision against its receivables.
18. Other Equity Instrument Investment
Unit: RMB
| Item | Ending balance | Beginning balance |
| Hefei Guoxuan High-Tech Power Energy Co., Ltd. | 493,967,194.53 | 887,464,218.75 |
| Xiamen Bank Co.,Ltd. | 328,664,290.95 | 575,955,944.40 |
| China Guangfa Bank Co.,Ltd. | 500,000.00 | 500,000.00 |
| Beijing Guangrong Lianmeng Semiconductor lighting Industry Investment Center(L.P.) | 8,059,860.92 | 8,059,860.92 |
| Guangdong Rising Finance Co., Ltd. | 30,000,000.00 | 30,000,000.00 |
| Foshan Nanhai District United | 3,000,000.00 | 3,000,000.00 |
Annual Report 2022
| Guangdong New Light Source Industry Innovation Center | ||
| Total | 864,191,346.40 | 1,504,980,024.07 |
Disclosure of non-trading equity instrument investment by items
Unit: RMB
| Item | Dividend income recognized | Accumulative gains | Accumulative losses | Amount of other comprehensive income transferred to retained earnings | Reason for assigning to measure in fair value and the changes included in other comprehensive income | Reason for other comprehensive income transferred to retained earnings |
| Hefei Guoxuan High-Tech Power Energy Co., Ltd. | 1,715,644.18 | 410,952,709.40 | 6,804,316.24 | Not satisfied with the condition of trading equity instrument | Sale of shareholdings | |
| Xiamen Bank Co.,Ltd. | 14,339,628.75 | 175,706,684.12 | 94,112,907.95 | Not satisfied with the condition of trading equity instrument | Sale of shareholdings | |
| Beijing Guangrong Lianmeng Semiconductor lighting Industry Investment Center(L.P.) | 601,263.41 | Not satisfied with the condition of trading equity instrument | Not applicable | |||
| Guangdong Rising Finance Co., Ltd. | 4,080.96 | 4,080.96 | Not satisfied with the condition of trading equity instrument | Not applicable | ||
| Total | 16,059,353.89 | 587,264,737.89 | 100,917,224.19 |
19. Other Non-current Financial Assets
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Annual Report 2022
20. Investment Property
(1)Investment Property Adopting the Cost Measurement Mode
? Applicable □ Not applicable
Unit: RMB
| Item | Houses and buildings | Land use right | Construction in progress | Total |
| I. Original carrying value | ||||
| 1. Beginning balance | 54,404,787.78 | 54,404,787.78 | ||
| 2. Increased amount of the period | ||||
| (1) Outsourcing | ||||
| (2) Transfer from inventories/fixed assets/construction in progress | ||||
| (3) Enterprise combination increase | ||||
| 3. Decreased amount of the period | ||||
| (1) Disposal | ||||
| (2) Other transfer | ||||
| 4. Ending balance | 54,404,787.78 | 54,404,787.78 | ||
| II. Accumulative depreciation and accumulative amortization | ||||
| 1. Beginning balance | 7,302,573.44 | 7,302,573.44 | ||
| 2. Increased amount of the period | 2,490,331.90 | 2,490,331.90 | ||
| (1) Withdrawal or amortization | 2,490,331.90 | 2,490,331.90 | ||
| 3. Decreased amount of the period | ||||
| (1) Disposal | ||||
| (2) Other transfer | ||||
| 4. Ending balance | 9,792,905.34 | 9,792,905.34 | ||
| III. Depreciation reserves | ||||
| 1. Beginning balance | ||||
| 2. Increased amount of the period |
Annual Report 2022
| (1) Withdrawal | ||||
| 3. Decreased amount of the period | ||||
| (1) Disposal | ||||
| (2) Other transfer | ||||
| 4. Ending balance | ||||
| IV. Carrying value | ||||
| 1. Ending carrying value | 44,611,882.44 | 44,611,882.44 | ||
| 2. Beginning carrying value | 47,102,214.34 | 47,102,214.34 |
(2) Investment Property Adopting the Fair Value Measurement Mode
□Applicable ? Not applicable
(3) Investment Property Failed to Accomplish Certification of Property
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21. Fixed Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Fixed assets | 3,505,729,627.80 | 3,514,558,966.21 |
| Disposal of fixed assets | 2,364,654.61 | 164,686.99 |
| Total | 3,508,094,282.41 | 3,514,723,653.20 |
(1) List of Fixed Assets
Unit: RMB
| Item | Houses and buildings | Machinery equipment | Transportation equipment | Electronic equipment | Other(Note:1) | Total |
| I. Original carrying value | ||||||
| 1. Beginning balance | 1,845,382,179.08 | 4,842,806,253.19 | 45,166,265.31 | 68,041,654.21 | 85,697,154.74 | 6,887,093,506.53 |
| 2. Increased amount of the period | 158,499,978.63 | 371,451,717.67 | 1,136,854.89 | 6,995,439.27 | 2,312,469.93 | 540,396,460.39 |
| (1) Purchase | 688,612.51 | 55,567,715.66 | 1,126,677.90 | 5,632,354.77 | 471,238.37 | 63,486,599.21 |
| (2) Transfer from construction in progress | 157,593,282.48 | 312,650,703.35 | 10,176.99 | 1,257,780.96 | 1,533,948.21 | 473,045,891.99 |
Annual Report 2022
| (3) Others (note 2) | 218,083.64 | 3,233,298.66 | 105,303.54 | 307,283.35 | 3,863,969.19 | |
| 3. Decreased amount of the period | 58,376,198.96 | 187,732,226.78 | 3,369,032.26 | 3,490,714.51 | 777,133.35 | 253,745,305.86 |
| (1) Disposal or scrap | 58,365,421.75 | 172,369,242.62 | 3,360,983.98 | 3,475,757.96 | 776,575.89 | 238,347,982.20 |
| (2) Equipment transformation | 12,193,769.71 | 12,193,769.71 | ||||
| (3) Others (note 2) | 10,777.21 | 3,169,214.45 | 8,048.28 | 14,956.55 | 557.46 | 3,203,553.95 |
| 4. Ending balance | 1,945,505,958.75 | 5,026,525,744.08 | 42,934,087.94 | 71,546,378.97 | 87,232,491.32 | 7,173,744,661.06 |
| II. Accumulative depreciation | ||||||
| 1. Beginning balance | 689,409,014.96 | 2,529,306,663.11 | 33,757,191.68 | 51,265,111.78 | 61,292,077.18 | 3,365,030,058.71 |
| 2. Increased amount of the period | 78,992,657.69 | 418,418,098.14 | 2,504,766.80 | 4,973,224.58 | 8,667,469.28 | 513,556,216.49 |
| (1) Withdrawal | 78,206,249.53 | 412,961,302.76 | 2,504,766.80 | 4,955,677.35 | 8,574,685.64 | 507,202,682.08 |
| (2) Transfer from construction in progress | 5,456,795.38 | 5,456,795.38 | ||||
| (3) Others (note 2) | 786,408.16 | 17,547.23 | 92,783.64 | 896,739.03 | ||
| 3. Decreased amount of the period | 46,619,060.98 | 167,972,125.72 | 2,867,042.08 | 3,316,759.43 | 1,271,197.74 | 222,046,185.95 |
| (1) Disposal or scrap | 46,614,504.24 | 156,777,911.13 | 2,865,540.66 | 3,298,743.55 | 736,792.81 | 210,293,492.39 |
| (2) Equipment transformation | 8,593,503.06 | 8,593,503.06 | ||||
| (3) Others (note) | 4,556.74 | 2,600,711.53 | 1,501.42 | 18,015.88 | 534,404.93 | 3,159,190.50 |
| 4. Ending balance | 721,782,611.67 | 2,779,752,635.53 | 33,394,916.40 | 52,921,576.93 | 68,688,348.72 | 3,656,540,089.25 |
| III. Depreciation reserves | ||||||
| 1. Beginning | 7,503,053.68 | 1,427.93 | 7,504,481.61 |
Annual Report 2022
| balance | ||||||
| 2. Increased amount of the period | 3,651,651.37 | 69.83 | 342,427.13 | 1,587.18 | 3,995,735.51 | |
| (1) Withdrawal | 3,651,651.37 | 69.83 | 342,427.13 | 1,587.18 | 3,995,735.51 | |
| 3. Decreased amount of the period | 25,273.11 | 25,273.11 | ||||
| (1) Disposal or scrap | 25,273.11 | 25,273.11 | ||||
| 4. Ending balance | 11,129,431.94 | 69.83 | 343,855.06 | 1,587.18 | 11,474,944.01 | |
| IV. Carrying value | ||||||
| 1. Ending carrying value | 1,223,723,347.08 | 2,235,643,676.61 | 9,539,101.71 | 18,280,946.98 | 18,542,555.42 | 3,505,729,627.80 |
| 2. Beginning carrying value | 1,155,973,164.12 | 2,305,996,536.40 | 11,409,073.63 | 16,775,114.50 | 24,405,077.56 | 3,514,558,966.21 |
Note 1: Fixed assets-Other refers to the cooling system and sewage treatment station of NationStarOptoelectronics and tools of Nanning Liaowang, etc.Note 2: Other increases or decreases in gross amount and accumulated depreciation are due to the addition ofbuilding accessories and adjustments made to the fixed asset classes during the current period.
(2) List of Temporarily Idle Fixed Assets
Unit: RMB
| Item | Original carrying value | Accumulated depreciation | Depreciation reserves | Carrying value | Note |
| Machinery equipment | 50,680,329.86 | 40,037,101.10 | 3,651,651.37 | 6,991,577.39 | Idle |
| Electronic equipment | 7,785,983.92 | 7,353,662.39 | 342,427.13 | 89,894.40 | Idle |
| Transportation equipment | 137,560.60 | 130,682.57 | 69.83 | 6,808.20 | Idle |
| Others | 3,645.30 | 1,875.86 | 1,587.18 | 182.26 | Idle |
| Total | 58,607,519.68 | 47,523,321.92 | 3,995,735.51 | 7,088,462.25 |
Annual Report 2022
(3) Fixed Assets Leased out by Operation Lease
Naught
(4) Fixed Assets Failed to Accomplish Certification of Property
Other notes:
The Company's Fuwan Standard Workshop J3, Fuwan Standard Workshop K1, Building 8 of Gaoming FamilyDormitory, Fuwan Staff Dormitory Building 7, Family Dormitory Building 3 to 6, Staff Village DormitoryBuilding A, Staff Village Dormitory Building 2, 3, 5, 6, 10 to 13, Staff Dormitory Building 1 to 4, FuwanEnergy Saving Lamp Workshop 2, Glass Workshop 8, Glass Workshop 9, Fluorescent Lamp Workshop,Standard Workshop A and led Workshop have been completed and put into use and carried forward fixed assets.As of 31 December 2022, the relevant real estate licenses are being processed. The management believed thatthere are no substantive legal barriers to the handling of these title certificates, and it will not have a significantadverse impact on the normal operation of the Company.In addition, the T5 warehouse in the North Zone, the equipment warehouse, the materials warehouse (east endof the single-end workshop), the storage tank pond of the gas station in the North Zone, the LPG station in theNorth Zone, the subsidiary warehouse of the new finished goods warehouse, the 3662M2 new finished goodswarehouse and the assembly plant of Gaoming LED lamps have no property ownership certificates due tohistorical matters, and these buildings and constructions are involved in the "pending expropriation" project,which is planned to be implemented by the relevant government departments, as detailed in Note Ⅶ (31) Othernon-current assets.
(5) Proceeds from Disposal of Fixed Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Applying for scrapping updisposed equipment | 2,364,654.61 | 164,686.99 |
| Total | 2,364,654.61 | 164,686.99 |
22. Construction in progress
Unit: RMB
| Item | Ending balance | Beginning balance |
| Construction in progress | 1,282,780,335.14 | 1,087,564,087.47 |
| Total | 1,282,780,335.14 | 1,087,564,087.47 |
(1) List of Construction in Progress
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserves | Carrying value | Carrying amount | Depreciation reserves | Carrying value | |
Annual Report 2022
| Construction in progress | 1,284,307,890.13 | 1,527,554.99 | 1,282,780,335.14 | 1,088,882,887.47 | 1,318,800.00 | 1,087,564,087.47 |
| Total | 1,284,307,890.13 | 1,527,554.99 | 1,282,780,335.14 | 1,088,882,887.47 | 1,318,800.00 | 1,087,564,087.47 |
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB
| Item | Budget | Beginning balance | Increased amount | Transferred in fixed assets | Other decreased amount | Ending balance | Proportion of accumulative investment in constructions to budget | Job schedule | Accumulative amount of interest capitalization | Of which: amount of capitalized interests for the Reporting Period | Capitalization rate of interests for the Reporting Period | Capital resources |
| Kelian Building | 726,738,900.00 | 501,594,852.04 | 64,659,894.57 | 566,254,746.61 | 88.05% | 90.00% | 36,640,953.02 | Self-financing and Borrowing | ||||
| The Project of the Geely Industrial Park | 1,714,546,700.00 | 234,319,701.33 | 191,732,170.02 | 4,743,362.80 | 421,308,508.55 | 27.06% | 27.06% | 37,835.82 | 37,835.82 | 3.09% | Self-financing and Borrowing | |
| Gaoming office building | 115,000,000.00 | 22,209,451.41 | 51,012,788.28 | 73,222,239.69 | 63.67% | 65.00% | Self-financing | |||||
| The smart LED Lighting Production Plant in the Gaoming Production Base (1-3 buildin | 148,271,900.00 | 68,275,373.87 | 68,275,373.87 | 46.05% | 80.00% | Self-financing |
Annual Report 2022
| gs) | ||||||||||||
| FSLHainan Industrial Park I | 310,400,000.00 | 37,522,769.10 | 37,522,769.10 | 12.09% | 60.00% | Self-financing | ||||||
| FSL intelligent manufacturing factory project | 89,680,000.00 | 23,808,849.57 | 23,808,849.57 | 26.55% | 30.00% | Self-financing | ||||||
| The LED R&D and Production Base on Jihua Second Road. Others (sporadic equipment) | 75,630,000.00 | 7,348,850.20 | 40,322,208.01 | 35,041,414.44 | 12,629,643.77 | 60.25% | 60.25% | Self-financing | ||||
| The Project of Production Expansion of Packaging Components and Chips of New-generation LEDs | 913,412,500.00 | 107,986,244.68 | 120,666,221.42 | 216,848,632.41 | 11,803,833.69 | 97.72% | 97.72% | Self-financing | ||||
| Gaoming Intelligent Warehouse phase II constr | 26,180,000.00 | 7,854,436.33 | 7,854,436.33 | 30.00% | 30.00% | Self-financing |
Annual Report 2022
| uction project | ||||||||||||
| New electronic workshop decoration project | 9,782,438.76 | 6,220,339.01 | 6,220,339.01 | 64.00% | 64.00% | Self-financing | ||||||
| Gaoming R&D Workshop 11, 12, 13, 14 and 18 | 71,690,000.00 | 53,531,061.32 | 7,400,900.23 | 57,100,118.79 | 3,831,842.76 | 0.00 | 100.00% | 100.00% | Self-financing | |||
| Overhaul of Gaoming No. 8 tank furnace Work order: 20029 Gaoming tank furnace | 10,890,000.00 | 6,242,799.53 | 87,805.31 | 6,330,604.84 | 100.00% | 100.00% | Self-financing | |||||
| 15th and 16th floors office buildings of R&F Center | 115,752,763.00 | 106,195,222.94 | 2,896,780.26 | 109,092,003.20 | 100.00% | 100.00% | Self-financing | |||||
| Total | 4,327,975,201.76 | 1,063,237,033.02 | 598,651,686.41 | 429,156,136.48 | 3,831,842.76 | 1,228,900,740.19 | 36,678,788.84 | 37,835.82 |
(3) List of the Withdrawal of the Depreciation Reserves for Construction in Progress
Unit: RMB
| Item | Amount withdrawn | Reason for withdrawal |
| Pad printing machine loading conveyor belt (19030) general bulb workshop | 208,754.99 | The project was suspended from Y2021, and there is no plan to continue using it for the time being. |
| Total | 208,754.99 | -- |
Annual Report 2022
(4) Engineering Materials
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23. Productive Living Assets
(1) Productive Living Assets Adopting Cost Measurement Mode
□Applicable ? Not applicable
(2) Productive Living Assets Adopting Fair Value Measurement Mode
□Applicable ? Not applicable
24. Oil and Gas Assets
□Applicable ? Not applicable
25. Right-of-use Assets
Unit: RMB
| Item | Houses and buildings | Land use right | Total |
| I. Original carrying value | |||
| 1. Beginning balance | 17,864,418.29 | 25,688,364.03 | 43,552,782.32 |
| 2. Increased amount of the period | 6,528,499.16 | 6,528,499.16 | |
| (1) Business combination increase | 6,528,499.16 | 6,528,499.16 | |
| 3. Decreased amount of the period | 2,675,514.50 | 6,597,603.65 | 9,273,118.15 |
| 4. Ending balance | 21,717,402.95 | 19,090,760.38 | 40,808,163.33 |
| II. Accumulated amortization | |||
| 1. Beginning balance | 5,377,288.39 | 24,049,287.85 | 29,426,576.24 |
| 2. Increased amount of the period | 6,040,111.33 | 1,085,371.48 | 7,125,482.81 |
| (1) Withdrawal | 1,661,609.93 | 1,085,371.48 | 2,746,981.41 |
| (2) Business combination increase | 4,378,501.40 | 4,378,501.40 | |
| 3. Decreased amount of the period | 2,311,157.10 | 6,480,466.35 | 8,791,623.45 |
| 4. Ending balance | 9,106,242.62 | 18,654,192.98 | 27,760,435.60 |
| IV. Carrying value | |||
| 1. Ending carrying value | 12,611,160.33 | 436,567.40 | 13,047,727.73 |
| 2. Beginning carrying value | 12,487,129.90 | 1,639,076.18 | 14,126,206.08 |
Annual Report 2022
26. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
| Item | Land use right | Patent | Non-patent technology | Software | Others (note 1) | Total |
| I. Original carrying value | ||||||
| 1. Beginning balance | 456,550,796.29 | 25,339,982.16 | 29,895,792.52 | 24,344,062.26 | 536,130,633.23 | |
| 2. Increased amount of the period | 5,428,033.42 | -12,277.36 | 5,415,756.06 | |||
| (1) Purchase | 5,428,033.42 | -12,277.36 | 5,415,756.06 | |||
| 3. Decreased amount of the period | 48,537,036.60 | 1,141,509.42 | 5,421.50 | 24,282,675.00 | 73,966,642.52 | |
| (1) Disposal | 48,537,036.60 | 5,421.50 | 48,542,458.10 | |||
| (2) Lapsed and derecognized parts | 1,141,509.42 | 24,282,675.00 | 25,424,184.42 | |||
| 4. Ending balance | 408,013,759.69 | 24,198,472.74 | 35,318,404.44 | 49,109.90 | 467,579,746.77 | |
| II. Accumulated amortization | ||||||
| 1. Beginning balance | 99,103,256.74 | 24,618,597.10 | 13,864,588.55 | 24,332,807.83 | 161,919,250.22 | |
| 2. Increased amount of the period | 8,960,274.04 | 313,922.07 | 2,881,532.11 | -1,022.93 | 12,154,705.29 |
Annual Report 2022
| (1) Withdrawal | 8,960,274.04 | 313,922.07 | 2,881,532.11 | -1,022.93 | 12,154,705.29 | |
| 3. Decreased amount of the period | 21,837,047.45 | 929,952.53 | 24,282,675.00 | 47,049,674.98 | ||
| (1) Disposal | 21,837,047.45 | 21,837,047.45 | ||||
| (2) Lapsed and derecognized parts | 929,952.53 | 24,282,675.00 | 25,212,627.53 | |||
| 4. Ending balance | 86,226,483.33 | 24,002,566.64 | 16,746,120.66 | 49,109.90 | 127,024,280.53 | |
| III. Depreciation reserves | ||||||
| 1. Beginning balance | 388,613.87 | 388,613.87 | ||||
| 2. Increased amount of the period | ||||||
| 3. Decreased amount of the period | ||||||
| 4. Ending balance | 388,613.87 | 388,613.87 | ||||
| IV. Carrying value | ||||||
| 1. Ending carrying value | 321,787,276.36 | 195,906.10 | 18,183,669.91 | 0.00 | 340,166,852.37 | |
| 2. Beginning carrying value | 357,447,539.55 | 721,385.06 | 15,642,590.10 | 11,254.43 | 373,822,769.14 |
The proportion of intangible assets formed from the internal R&D of the Company at the period-end to the ending balance of
Annual Report 2022
intangible assets was 0.00%.
(2) Land Use Right with Certificate of Title Uncompleted
NaughtOther notes:
Note 1: Intangible assets-others mainly included the customer relationships and sales networks obtained throughthe accounting of acquired enterprises, which were amortised in 2021 and liquidated in 2022.Note 2: The original value and the increase in cumulated amortisation of “intangible assets-others” in thecurrent period were negative, because Nanning Liaowang’s emission right estimated and recorded in 2021 wasconfirmed to have no such asset in 2022 and the estimated original value and amortisation were offset.
27. Development Costs
Naught
28. Goodwill
(1) Original Carrying Value of Goodwill
Unit: RMB
| Name of the invested units or events generating goodwill | Beginning balance | Increase | Decrease | Ending balance | ||
| Formed by business combination | Disposal | |||||
| Nanning Liaowang Auto Lamp Co., Ltd. | 16,211,469.82 | 16,211,469.82 | ||||
| Foshan NationStar Optoelectronics Co., Ltd. | 405,620,123.64 | 405,620,123.64 | ||||
| Total | 421,831,593.46 | 421,831,593.46 | ||||
Note: Guangdong Electronics Information Industry Group Ltd., a wholly-owned subsidiary of Guangdong RisingHoldings Group Co., Ltd., acquired NationStar Optoelectronics in 2014, and the difference between the fair valueand the net assets attributable to shareholders of the listed company at the date of acquisition of NationStarOptoelectronics resulted in a goodwill of RMB405,620,123.64.
(2) Goodwill impairment provisions
NaughtInformation on the Assets Groups or Combination of Assets Groups which Goodwill Belongs toThe Company's management uses the smallest combination of assets that can independently generate cash inflows
Annual Report 2022
under the management or control of production and operating activities as the criteria for identifying an assetgroup or combination of asset groups.Goodwill impairment testing process and key parametersIn testing goodwill for impairment, the Company compares the carrying amount of the relevant asset group(including goodwill) with its recoverable amount, and if the recoverable amount is less than the carrying amount,the relevant difference is recognized in profit or loss for the current period. The recoverable amount of an assetgroup is determined as the present value of the estimated future cash flows. The present value of cash flows isbased on the Company's management's projections of future cash flows over a five-year detailed forecast periodand subsequent stabilisation periods. The projected future cash flows for the detailed forecast period are based onthe business plan developed by management; the projected future cash flows for the subsequent stabilisationperiod are determined at the level of the last year of the detailed forecast period. The key assumptions used by theCompany in projecting the present value of future cash flows include business volume growth rates and discountrates, with pre-tax discount rates ranging from 9.52% to 11.14% for 2022 and growth rates ranging from 2% to
15.31% for the detailed forecast period. The Company's management determined the parameters associated witheach key assumption in a manner consistent with the Company's historical experience or external sources ofinformation.Influence of goodwill impairment testing:
The goodwill impairment testing of the Company has no influence on statements.Other notes:
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29. Long-term Prepaid Expense
Unit: RMB
| Item | Beginning balance | Increased amount | Amortization amount of the period | Other decreased amount | Ending balance |
| Mould | 87,127,962.04 | 120,854,878.97 | 49,500,170.13 | 34,781,315.04 | 123,701,355.84 |
| Expense on maintenance and decoration | 53,715,154.13 | 19,852,103.36 | 19,630,249.81 | 53,937,007.68 | |
| Boarding box | 2,991,248.46 | 332,672.57 | 2,952,192.39 | 371,728.64 | |
| Other | 8,892,147.93 | 10,257,340.57 | 7,032,952.75 | 12,116,535.75 | |
| Total | 152,726,512.56 | 151,296,995.47 | 79,115,565.08 | 34,781,315.04 | 190,126,627.91 |
Annual Report 2022
30. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets that Had not Been Off-set
Unit: RMB
| Item | Ending balance | Beginning balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Provision for impairment of assets | 355,634,218.16 | 53,741,627.33 | 336,793,647.28 | 51,513,913.81 |
| Unrealized profit of internal transactions | 52,989,043.64 | 7,948,356.52 | 21,583,736.24 | 3,237,560.44 |
| Deductible loss | 72,901,011.65 | 12,503,679.82 | 36,016,962.39 | 7,312,677.73 |
| Depreciation of fixed assets | 57,459,943.55 | 8,618,991.55 | 63,273,361.51 | 9,491,004.25 |
| Accrued liabilities | 9,579,783.06 | 1,436,967.46 | 7,671,948.69 | 1,150,792.30 |
| Change in fair value of trading financial assets | 5,013,923.26 | 752,088.49 | ||
| Long-term deferred expenses | 3,888,860.58 | 583,329.09 | ||
| Payroll payable | 51,262,888.11 | 7,689,433.22 | ||
| Change in fair value of trading financial liabilities | 154,129.55 | 23,119.43 | ||
| Others | 18,675,496.41 | 2,802,165.99 | 11,486,383.38 | 1,843,287.40 |
| Total | 576,142,280.31 | 88,387,206.25 | 528,243,057.15 | 82,261,788.58 |
(2) Deferred Income Tax Liabilities Had not Been Off-set
Unit: RMB
| Item | Ending balance | Beginning balance | ||
| Taxable temporary difference | Deferred income tax liabilities | Taxable temporary difference | Deferred income tax liabilities | |
| Assets assessment appreciation from business consolidation not under the same control | 88,576,232.73 | 13,286,434.92 | 93,485,366.87 | 14,022,805.03 |
| Changes in fair value of other investments in equity instruments | 580,809,393.51 | 87,121,409.03 | 1,152,615,606.86 | 172,892,341.03 |
| Changes in the fair value of trading financial instruments and derivative financial instruments | 14,216.68 | 2,132.50 | 4,912,265.32 | 776,194.13 |
| One-off depreciation of fixed assets | 680,398,140.98 | 102,059,721.15 | 616,542,996.01 | 92,481,449.40 |
| Total | 1,349,797,983.90 | 202,469,697.60 | 1,867,556,235.06 | 280,172,789.59 |
Annual Report 2022
(3) Deferred Income Tax Assets or Liabilities Listed by Net Amount after Off-set
Unit: RMB
| Item | Mutual set-off amount of deferred income tax assets and liabilities at the period-end | Amount of deferred income tax assets or liabilities after off-set at the period-end | Mutual set-off amount of deferred income tax assets and liabilities at the period-begin | Amount of deferred income tax assets or liabilities after off-set at the period-begin |
| Deferred income tax assets | 88,387,206.25 | 82,261,788.58 | ||
| Deferred income tax liabilities | 202,469,697.60 | 280,172,789.59 |
(4) List of Unrecognized Deferred Income Tax Assets
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(5) Deductible Losses of Unrecognized Deferred Income Tax Assets will Due in the Following YearsNaught
31. Other Non-current Assets
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserve | Carrying value | Carrying amount | Depreciation reserve | Carrying value | |
| Advance payment for equipment and project | 44,132,869.26 | 44,132,869.26 | 43,706,539.24 | 43,706,539.24 | ||
| Long-term assets to be disposed (note) | 36,553,212.64 | 36,553,212.64 | ||||
| Prepayments for equity acquisition | 10,000,000.00 | 10,000,000.00 | 465,129,434.98 | 10,000,000.00 | 455,129,434.98 | |
| Assets of subsidiaries to be cleared and cancelled | 613,072.43 | 613,072.43 | 903,887.30 | 903,887.30 | ||
| Other | 244,358.52 | 244,358.52 | ||||
| Total | 91,543,512.85 | 10,000,000.00 | 81,543,512.85 | 509,739,861.52 | 10,000,000.00 | 499,739,861.52 |
Other notes:
1. The other non-current assets of RMB455 million at the beginning of the period was the advance payment forthe equity acquisition (such payment accounted for 30% of the total price of the equity acquisition) paid byNationStar Optoelectronics to the original shareholders of NationStar Optoelectronics, in accordance with theShare Transfer Agreement. The merger under the same control for the current period has been completed.
Annual Report 2022
2. The Company's subsidiary, NationStar Optoelectronics, entered into the Capital Injection Agreement withNanyang Xicheng Technology Co., Ltd. (Xicheng Tech). NationStar Optoelectronics paid RMB10 million forcapital injection. Later, the agreement was re-signed to change the investment method. In order to addressissues related to the above payment, NationStar Optoelectronics filed a lawsuit with the court, claiming thereturn of the above payment for capital injection. Currently, the court has rejected the claim. As of the end ofthe Reporting Period, the impairment provision had been set aside in full.
3. Note: The Company intends to hand over the plots of land located on the south and north sides of the GongyeRoad to the government for revitalisation in the form of "pending expropriation". When the governmentsuccessfully sells the plots through a public auction, the Company will be given the compensation for the landtransfer according to the policy. The buildings and constructions to be revitalized include the plant of LEDWorkshop 3, the added plant of LED Workshop 3, South Plant (single-end workshop), North Plant (4 buildings),spark plug workshop of energy-saving lamps warehouse, T8 Workshop 1 (Building 2), LED Workshop 2,Iodine Lamp Workshop 3155m (building 14), the Company's new finished goods warehouse 3662M2, materialswarehouse (east end of single-end workshop), North Zone LPG station , T5 warehouse in the North Zone, etc.
32. Short-term Borrowings
(1) Category of Short-term Borrowings
Unit: RMB
| Item | Ending balance | Beginning balance |
| Mortgage loans | 100,000,000.00 | |
| Guarantee loans | 97,700,000.00 | |
| Credit loans | 37,596,526.02 | 128,914,000.00 |
| Acceptance bill discount | 20,000,000.00 | |
| Interest from short-term borrowings | 118,833.33 | 165,997.01 |
| Total | 157,715,359.35 | 226,779,997.01 |
Note: For details about the collateral for mortgage loans please refer to XIV-(III) Other in Part X.Letter of credit
(2) List of the Short-term Borrowings Overdue but not Returned
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33. Trading Financial Liabilities
Unit: RMB
| Item | Ending balance | Beginning balance |
| Trading financial liabilities | 4,679,000.00 | 9,367.37 |
| Including: | ||
| Other | 4,679,000.00 | 9,367.37 |
| Including: | ||
| Total | 4,679,000.00 | 9,367.37 |
Other notes:
Annual Report 2022
As of 31 December 2022, the loss from changes in fair value of hedge instrument of the Company wasRMB4,679,000.00 which was recorded into the trading financial liabilities to account.
34. Derivative Financial Liabilities
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35. Notes Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| Bank acceptance bill | 1,923,641,752.28 | 2,067,479,953.98 |
| letter of credit | 52,101,816.43 | |
| Total | 1,975,743,568.71 | 2,067,479,953.98 |
The total amount of the due but not paid notes payable at the end of the period was of RMB0.00.
36. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| Accounts payable | 2,513,177,458.14 | 2,455,934,273.28 |
| Total | 2,513,177,458.14 | 2,455,934,273.28 |
(2) Significant Accounts Payable Aging over One Year
Unit: RMB
| Item | Ending balance | Unpaid/ Un-carry-over reason |
| Supplier A | 52,949,523.64 | It has not reached the settlement period |
| Supplier B | 11,091,509.09 | Unsettled for bankruptcy |
| Supplier C | 6,460,648.00 | Equipment has not been accepted |
| Supplier D | 3,484,654.24 | It has not reached the settlement period |
| Supplier E | 3,435,466.98 | It has not reached the settlement period |
| Supplier F | 3,407,500.00 | Equipment has not been accepted |
| Supplier G | 2,563,292.33 | Failed to settle since part of the product pricing failed to reach an agreement |
| Supplier H | 2,110,178.88 | Unsettled |
| Total | 85,502,773.16 |
Annual Report 2022
37. Advances from Customer
(1) List of Advances from Customers
Unit: RMB
| Item | Ending balance | Beginning balance |
| Advances from customers | 2,532,442.44 | 8,106,923.79 |
| Total | 2,532,442.44 | 8,106,923.79 |
(2) Significant Advances from Customers Aging over One Year
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38. Contract Liabilities
Unit: RMB
| Item | Ending balance | Beginning balance |
| Advances on sales | 125,143,161.61 | 141,336,712.44 |
| Total | 125,143,161.61 | 141,336,712.44 |
39. Employee Benefits Payable
(1) List of Employee Benefits Payable
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| I. Short-term salary | 181,785,253.31 | 1,297,265,600.67 | 1,310,115,734.49 | 168,935,119.49 |
| II. Post-employment benefit-defined contribution plans | 670,312.10 | 103,889,334.63 | 100,669,575.22 | 3,890,071.51 |
| III. Termination benefits | 2,621,830.38 | 2,412,869.20 | 208,961.18 | |
| IV. Current portion of other benefits | 0.00 | |||
| Total | 182,455,565.41 | 1,403,776,765.68 | 1,413,198,178.91 | 173,034,152.18 |
(2) List of Short-term Salary
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| 1. Salary, bonus, allowance, subsidy | 178,777,798.91 | 1,136,389,060.85 | 1,150,510,888.93 | 164,655,970.83 |
| 2. Employee welfare | 793,469.95 | 63,353,308.12 | 63,479,853.04 | 666,925.03 |
| 3. Social insurance | 477,866.35 | 51,145,609.34 | 50,255,777.12 | 1,367,698.57 |
| Of which: Medical insurance premiums | 409,349.38 | 48,655,317.26 | 47,864,025.86 | 1,200,640.78 |
Annual Report 2022
| Work-related injury insurance | 68,516.97 | 2,490,292.08 | 2,391,751.26 | 167,057.79 |
| 4. Housing fund | 242,880.71 | 34,068,543.35 | 33,852,467.68 | 458,956.38 |
| 5. Labor union budget and employee education budget | 1,493,237.39 | 12,309,079.01 | 12,016,747.72 | 1,785,568.68 |
| Total | 181,785,253.31 | 1,297,265,600.67 | 1,310,115,734.49 | 168,935,119.49 |
(3) List of Defined Contribution Plans
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| 1. Basic pension benefits | 435,529.62 | 97,346,651.90 | 94,124,158.60 | 3,658,022.92 |
| 2. Unemployment insurance | 14,782.48 | 1,983,229.54 | 1,866,368.03 | 131,643.99 |
| 3. Annuity | 220,000.00 | 4,559,453.19 | 4,679,048.59 | 100,404.60 |
| Total | 670,312.10 | 103,889,334.63 | 100,669,575.22 | 3,890,071.51 |
Other notes:
The Company participates in the scheme of pension insurance and unemployment insurance established bygovernment agencies as required. According to the scheme, fees are paid to it on a monthly basis and at the rateof stipulated by government agencies. In addition to the above monthly deposit fees, the Company no longerassumes further payment obligations. Corresponding expenses are recorded into the current profits or losses orthe cost of related assets when incurred.
(4) Termination Benefits
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| 1. Compensation for termination of labor relations | 2,621,830.38 | 2,412,869.20 | 208,961.18 | |
| 2. Estimated internal staff expenditure | ||||
| Total | 2,621,830.38 | 2,412,869.20 | 208,961.18 |
40. Taxes Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| VAT | 35,832,025.02 | 19,366,830.68 |
| Corporate income tax | 9,503,893.79 | 55,204,098.83 |
| Personal income tax | 2,569,142.68 | 3,613,227.79 |
| Urban maintenance and construction tax | 2,934,691.53 | 2,589,765.78 |
| Property tax | 8,147,187.30 | 855,233.46 |
| Education surcharge | 2,015,767.71 | 1,915,052.36 |
| Land use tax | 1,817,585.50 | 545,215.31 |
| Other | 1,475,258.57 | 7,507,467.30 |
Annual Report 2022
| Total | 64,295,552.10 | 91,596,891.51 |
41. Other Payables
Unit: RMB
| Item | Ending balance | Beginning balance |
| Interest payable | 0.00 | 0.00 |
| Dividends payable | 15,646.07 | 15,646.07 |
| Other payables | 440,214,434.98 | 376,053,534.67 |
| Total | 440,230,081.05 | 376,069,180.74 |
(1) Interest Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| Total | 0.00 | 0.00 |
(2) Dividends Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| Ordinary share dividends | 15,646.07 | 15,646.07 |
| Total | 15,646.07 | 15,646.07 |
(3) Other Payables
1) Other Payables Listed by Nature
Unit: RMB
| Item | Ending balance | Beginning balance |
| Payment for equity transfer | 134,409,650.00 | - |
| Account current | 133,618,069.56 | 220,566,219.57 |
| Performance bond | 67,039,416.12 | 59,185,869.60 |
| Payments for demolition | 36,734,144.44 | 54,990,047.00 |
| Relevant expense of sales | 29,232,738.55 | 12,531,559.28 |
| Other | 39,180,416.31 | 28,779,839.22 |
| Total | 440,214,434.98 | 376,053,534.67 |
2) Significant Other Payables Aging over One Year
Unit: RMB
| Item | Ending balance | Reason for not repayment or carry-over |
| Unit A | 120,352,181.20 | Unsettled |
| Unit B | 5,752,000.00 | Unsettled for involving in lawsuits |
| Total | 126,104,181.20 |
Annual Report 2022
42. Liabilities Held for sale
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43. Current Portion of Non-current Liabilities
Unit: RMB
| Item | Ending balance | Beginning balance |
| Current portion of long-term borrowings | 60,322,923.28 | |
| Current portion of long-term payables | 19,423,561.38 | |
| Current portion of lease liabilities | 5,217,587.39 | 8,176,624.77 |
| Total | 65,540,510.67 | 27,600,186.15 |
44. Other Current Liabilities
Unit: RMB
| Item | Ending balance | Beginning balance |
| Pending changerover output VAT and others | 8,370,764.15 | 10,716,009.78 |
| Reversed notes that are endorsed and undue | 91,821,916.85 | |
| Total | 100,192,681.00 | 10,716,009.78 |
45. Long-term Borrowings
(1) Category of Long-term Borrowings
Unit: RMB
| Item | Ending balance | Beginning balance |
| Credit borrowings | 808,253,946.99 | |
| Less: Current portion of long-term borrowings | 60,322,923.28 | |
| Total | 747,931,023.71 | 0.00 |
46. Bonds Payable
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47. Lease Liabilities
Unit: RMB
| Item | Ending balance | Beginning balance |
| Lease liabilities | 12,273,129.57 | 16,242,185.35 |
| Less: current portion of lease liabilities | 5,217,587.39 | 8,176,624.77 |
| Total | 7,055,542.18 | 8,065,560.58 |
Annual Report 2022
48. Long-term Payables
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49. Long-term Employee Benefits Payable
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50. Provisions
Unit: RMB
| Item | Ending balance | Beginning balance | Reason for formation |
| Product quality assurance | 9,587,043.31 | 17,418,343.01 | Withdrawal of customers’ claims for quality and product quality assurance expenses |
| Total | 9,587,043.31 | 17,418,343.01 |
51. Deferred Income
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance | Reason for formation |
| Government grants | 126,304,272.50 | 22,636,696.87 | 51,862,735.94 | 97,078,233.43 | |
| Total | 126,304,272.50 | 22,636,696.87 | 51,862,735.94 | 97,078,233.43 | -- |
Item involving government grants:
Unit: RMB
| Item | Beginning balance | Amount of newly subsidy | Amount recorded into non-operating income in the Reporting Period | Amount recorded into other income in the Reporting Period | Amount offset cost in the Reporting Period | Other changes | Ending balance | Related to assets/related to income |
| Government grants related to assets | 99,798,518.52 | 10,582,700.00 | 35,196,150.45 | 75,185,068.07 | ||||
| Of which: | ||||||||
| The Subsidy for Metal-organic Chemical Vapour | 42,090,261.19 | 19,999,999.20 | 22,090,261.99 | Related to assets |
Annual Report 2022
| Deposition (MOCVD) | ||||||||
| The Projects of the Production Expansion and Technological Transformation of Components of Small-spacing and Outdoor LED Displays | 22,197,600.80 | 4,064,551.68 | 18,133,049.12 | Related to assets | ||||
| The Project of the Innovation in Packaging Technology and Technological Transformation of Key Packaging Equipment of LEDs with High Colour Rendering Index for Illumination | 4,590,348.80 | 6,822,700.00 | 1,990,360.99 | 9,422,687.81 | Related to assets | |||
| The Project of the Innovation in Packaging Technology | 6,299,718.30 | 1,020,885.84 | 5,278,832.46 | Related to assets |
Annual Report 2022
| and Technological Transformation of Key Packaging Equipment of LEDs with Small Spacing for Display | ||||||||
| The Project of Resource Conservation and Environmental Protection | 6,059,215.88 | 1,809,367.44 | 4,249,848.44 | Related to assets | ||||
| The First Batch of 2022 Special Funds for Industrial Technological Transformation by the Finance Bureau of Liang Jiang New Area | 2,560,000.00 | 255,999.99 | 2,304,000.01 | Related to assets | ||||
| The 2019 Second Batch of Special Funds for the Industrial and Information Developme | 2,100,000.00 | 300,000.00 | 1,800,000.00 | Related to assets |
Annual Report 2022
| nt of the City | ||||||||
| The 2019 14th Batch of Industrial Support Funds | 1,050,000.00 | 150,000.00 | 900,000.00 | Related to assets | ||||
| The Light-converting Films and Components of Highly Efficient White-light LEDs | 1,322,376.26 | 588,076.92 | 734,299.34 | Related to assets | ||||
| Research and Development and Industrialization of TD-LTE Terminal Rf Chip | 1,714,151.29 | 1,329,277.68 | 384,873.61 | Related to assets | ||||
| Research and Development and Industrialization of LGBT, the Key Power Electronic Device of Electric Vehicle | 2,229,614.82 | 1,864,300.03 | 365,314.79 | Related to assets | ||||
| Others | 10,145,231.18 | 1,200,000.00 | 1,823,330.68 | 9,521,900.50 | Related to assets | |||
| Government grants related to income | 26,505,753.98 | 12,053,996.87 | 16,666,585.49 | 21,893,165.36 | ||||
| Of which: |
Annual Report 2022
| The Research on the Key Technology of 4K/8K Full-colour Micro-LED Displays with Ultra High Definition (UHD) | 3,900,000.00 | 492,543.45 | 3,407,456.55 | Related to income | ||||
| The Research on Full-colour and Integrated Packaging of Micro-LED Display with High Brightness and Contrast | 2,096,708.45 | 1,098,996.87 | 960,995.46 | 2,234,709.86 | Related to income | |||
| Research Project on Key Technologies of the Third Generation of High Efficiency and Frequency Semiconductor Electronic Power Module | 1,661,468.98 | 1,575,000.00 | 1,464,522.72 | 1,771,946.26 | Related to income | |||
| The First Batch of Special | 2,166,666.85 | 399,999.96 | 1,766,666.89 | Related to income |
Annual Report 2022
| Funds for the Industrial and Information Development for the Guangxi Zhuang Autonomous Region for 2017 (Technological Transformation) for Liuzhou Guige | ||||||||
| The Second Batch of Support Funds for the “Technological Transformation of Thousands of Enterprises” in the Guangxi Zhuang Autonomous Region for 2021 | 1,966,666.66 | 200,000.04 | 1,766,666.62 | Related to income | ||||
| The Project of the First Batch of Support Funds for Enterprises in Liuzhou | 1,800,000.00 | 300,000.00 | 1,500,000.00 | Related to income |
Annual Report 2022
| City for 2017 for Liuzhou Guige | ||||||||
| Research and Development and Industrialization of Potassium Nitride-based Rf Devices in the Field of Next Generation Mobile Communication | 1,143,201.24 | 1,800,000.00 | 1,972,219.14 | 970,982.10 | Related to income | |||
| The Key Labs of Semiconductor Micro Display Enterprises in Guangdong Province (for 2020) | 1,216,601.56 | 706,601.56 | 510,000.00 | Related to income | ||||
| The Research on the Key Technology and Innovative Application of Deep Ultraviolet Solid-state Light Sources | 1,067,475.44 | 875,475.44 | 192,000.00 | Related to income | ||||
| The Research | 1,537,498.09 | 1,387,498.09 | 150,000.00 | Related to income |
Annual Report 2022
| and Industrialization of New and High-performance Display Components | ||||||||
| The Research and Development of Chip-on-Board (COB) Integrated Packaging and Systems of LED Displays with High Density and Small Spacing | 84,920.52 | 1,100,000.00 | 1,112,123.36 | 72,797.16 | Related to income | |||
| The Research on the Key Technology of High-lumen Compound Reflex LED Chips for Automobiles and High-density Matrix Packaging | 367,534.48 | 1,800,000.00 | 2,122,534.48 | 45,000.00 | Related to income | |||
| Others | 11,397,011.71 | 780,000.00 | 4,672,071.79 | 7,504,939.92 | Related to income |
Annual Report 2022
| Total | 126,304,272.50 | 22,636,696.87 | 51,862,735.94 | 97,078,233.43 |
52. Other Non-current Liabilities
Unit: RMB
| Item | Ending balance | Beginning balance |
| Pending changerover output VAT | 307,696.87 | |
| Liabilities of subsidiaries to be cleared and cancelled | 1,083.74 | 22,653.46 |
| Total | 308,780.61 | 22,653.46 |
53. Share Capital
Unit: RMB
| Beginning balance | Increase/decrease (+/-) | Ending balance | |||||
| New shares issued | Bonus shares | Bonus issue from profit | Other (note) | Subtotal | |||
| The sum of shares | 1,399,346,154.00 | -37,351,507.00 | -37,351,507.00 | 1,361,994,647.00 | |||
Other notes:
Unit: RMB
| Item/Investor | Beginning balance | Increase | Decrease | Ending balance | ||
| Invested amount | Proportion | Invested amount | Proportion | |||
| Restricted shares | 13,169,196.00 | 0.94% | 2,415,538.00 | 10,753,658.00 | 0.79% | |
| Unrestricted shares | 1,386,176,958.00 | 99.06% | 34,935,969.00 | 1,351,240,989.00 | 99.21% | |
| Total | 1,399,346,154.00 | 100.00% | 37,351,507.00 | 1,361,994,647.00 | 100.00% | |
Note: Other decrease in share capital was due to deregistration of treasury shares. For details, please refer toPart VI-XVI. Other Significant Events-Cancellation of Shares of this Report.
54. Other Equity Instruments
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55. Capital Reserves
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| Capital premium (premium on stock) | 1,043,912,642.64 | 1,043,912,642.64 | ||
| Other capital reserves | 7,245,971.54 | 7,245,971.54 | ||
| Total | 1,051,158,614.18 | 1,043,912,642.64 | 7,245,971.54 |
Other notes, including changes and reason of change:
Annual Report 2022
1. The cancellation of treasury shares offset the capital reserve of RMB4,825,948.60.
2. Due to the merger of NationStar Optoelectronics under the same control in the current period, the openingbalance of the capital reserve, upon retroactive adjustment, was RMB1,036,001,099.28. The merger in thecurrent period decreased by RMB1,039,086,694.04.
56. Treasury Shares
Unit: RMB
| Item | Beginning balance | Increase | Decrease (note) | Ending balance |
| Treasury shares (A-share) | 201,955,572.33 | 119,790,428.18 | 82,165,144.15 | |
| Treasury shares (B-share) | 48,645,302.21 | 48,645,302.21 | ||
| Total | 250,600,874.54 | 168,435,730.39 | 82,165,144.15 |
Other notes, including changes and reason of change:
Note: The decrease in treasury shares for the Reporting Period was due to deregistration of treasury shares. Fordetails, please refer to Part VI-XVI. Other Significant Events-Cancellation of Shares of this Report.
57. Other Comprehensive Income
Unit: RMB
| Item | Beginning balance | Reporting Period | Ending balance | |||||
| Income before taxation in the Current Period | Less: Recorded in other comprehensive income in prior period and transferred to profit or loss in the Current Period | Less: Recorded in other comprehensive income in prior period and transferred to retained earnings in the Current Period | Less: Income tax expense | Attributable to owners of the Company as the parent after tax | Attributable to non-controlling interests after tax | |||
| I. Other comprehensive income that may not subsequently be reclassified | 983,157,254.51 | -451,270,053.94 | 100,917,224.19 | -67,690,508.09 | -484,496,770.04 | 498,660,484.47 | ||
Annual Report 2022
| to profit or loss | ||||||||
| Changes in fair value of other equity instrument investment | 983,157,254.51 | -451,270,053.94 | 100,917,224.19 | -67,690,508.09 | -484,496,770.04 | 498,660,484.47 | ||
| II. Other comprehensive income that may subsequently be reclassified to profit or loss | -169,800.43 | -122,008.25 | -349,665.34 | 227,657.09 | -519,465.77 | |||
| Differences arising from translation of foreign currency-denominated financial statements | -169,800.43 | -122,008.25 | -349,665.34 | 227,657.09 | -519,465.77 | |||
| Total of other comprehensive income | 982,987,454.08 | -451,392,062.19 | 100,917,224.19 | -67,690,508.09 | -484,846,435.38 | 227,657.09 | 498,141,018.70 |
58. Specific Reserve
Naught
59. Surplus Reserves
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| Statutory surplus | 699,673,077.00 | 11,785,496.74 | 661,779,817.55 | 49,678,756.19 |
Annual Report 2022
| reserves | ||||
| Discretionary surplus reserves | 41,680,270.96 | 41,680,270.96 | ||
| Total | 741,353,347.96 | 11,785,496.74 | 661,779,817.55 | 91,359,027.15 |
Notes including changes and reasons thereof:
1. The increase for the Reporting Period refers to the accrued surplus reserves of RMB11,785,496.74.
2. The decrease in surplus reserves for the Reporting Period is mainly due to the de-registration of treasuryshares and the combination of NationStar Optoelectronics under the same control in the Reporting Period.
60. Retained Earnings
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Beginning balance of retained earnings before adjustments | 1,758,462,062.48 | |
| Beginning balance of total retained earnings of adjustments (“+” for increase, “-“ for decrease) | 148,592,079.08 | |
| Beginning balance of retained earnings after adjustments | 3,111,864,076.86 | 1,907,054,141.56 |
| Add: Net profit attributable to owners of the Company as the parent | 230,394,235.91 | 299,614,354.88 |
| Less: Withdrawl of statutory surplus reserves | 11,785,496.74 | |
| Dividend of ordinary shares payable | 134,899,464.70 | 135,847,668.70 |
| Add: Others (note) | 100,917,224.19 | 1,041,043,249.12 |
| Ending retained earnings | 3,296,490,575.52 | 3,111,864,076.86 |
Note: When selling stocks in the Reporting Period, the accumulative fair value changes previously included in othercomprehensive income were transferred into retained earnings.List of adjustment of beginning retained earnings:
(1) RMB0.00 beginning retained earnings was affected by retrospective adjustment conducted according to the AccountingStandards for Business Enterprises and relevant new regulations.
(2) RMB0.00 beginning retained earnings was affected by changes in accounting policies.
(3) RMB0.00 beginning retained earnings was affected by correction of significant accounting errors.
(4) RMB148,592,079.08 beginning retained earnings was affected by changes in combination scope arising from same control.
(5) RMB0.00 beginning retained earnings was affected totally by other adjustments.
61. Operating Revenue and Cost of Sales
Unit: RMB
| Item | Reporting Period | Same period of last year | ||
| Operating revenue | Cost of sales | Operating revenue | Cost of sales | |
| Main operations | 8,494,775,305.34 | 7,040,206,010.36 | 8,495,224,683.73 | 7,059,866,653.21 |
| Other operations | 265,189,970.62 | 183,765,491.17 | 231,016,369.77 | 182,792,408.54 |
Annual Report 2022
| Total | 8,759,965,275.96 | 7,223,971,501.53 | 8,726,241,053.50 | 7,242,659,061.75 |
Whether the lower of the net profit before and after deduction of non-recurring gains and losses through audit is negative
□Yes ? No
Relevant information of revenue:
Unit: RMB
| Category of contracts | Total |
| Types of products | 8,759,965,275.96 |
| Of which: | |
| General lighting products | 3,136,174,210.72 |
| LED packaging and component products | 2,562,831,923.06 |
| Vehicle lamp products | 1,729,839,032.11 |
| Trade and other products | 1,331,120,110.07 |
| By operating places | 8,759,965,275.96 |
| Of which: | |
| Domestic | 6,625,258,201.57 |
| Overseas | 2,134,707,074.39 |
Information related to performance obligations:
NaughtInformation in relation to the transaction price apportioned to the residual contract performance obligation:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or not fully performed yetwas RMB312,334,915.47 .
62. Taxes and Surtaxes
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Urban maintenance and construction tax | 16,433,160.03 | 22,722,495.15 |
| Education surcharge | 8,648,196.05 | 12,429,031.47 |
| Property tax | 21,704,695.10 | 15,987,326.40 |
| Land use tax | 6,829,390.37 | 6,557,198.44 |
| Vehicle and vessel use tax | 45,539.98 | 36,967.26 |
| Stamp duty | 7,098,838.10 | 5,984,571.34 |
| Local education surcharge | 2,959,947.15 | 3,900,946.03 |
| Environmental protection tax | 129,730.62 | 127,434.40 |
| VAT of land | -2,047,738.45 | |
| Others | 225,457.17 | 393,432.00 |
| Total | 62,027,216.12 | 68,139,402.49 |
Other notes:
Note: It was mainly because of the land appreciation tax accrued for the sale of real estate in the previous period.The over-accrued land appreciation tax of RMB2,047,738.45 was released, when the actual payment was madethis year.
Annual Report 2022
63. Selling Expense
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Employee benefits | 124,898,336.26 | 110,595,613.31 |
| Business propagandize fees and advertizing fees | 54,868,902.89 | 47,924,059.61 |
| After-sales expenses | 15,001,278.36 | 39,986.89 |
| Sales promotion fees | 12,365,392.75 | 12,840,438.91 |
| Office expenses | 10,546,333.93 | 13,040,259.46 |
| Business travel charges | 8,486,981.36 | 12,521,726.49 |
| Commercial insurance premium | 5,802,490.36 | 4,762,651.65 |
| Other | 24,850,877.91 | 34,270,721.57 |
| Total | 256,820,593.82 | 235,995,457.89 |
64. Administrative Expense
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Employee benefits | 253,446,528.98 | 217,818,947.11 |
| Depreciation charge | 48,169,909.92 | 41,691,181.03 |
| Office expenses | 23,802,294.29 | 20,489,882.18 |
| Intermediary agency fee | 10,681,650.48 | 9,686,674.93 |
| Utilities | 8,318,833.90 | 5,070,688.64 |
| Amortization of intangible assets | 7,406,254.55 | 6,856,771.02 |
| Engineering decoration cost | 6,308,994.29 | 6,980,479.30 |
| Labor cost | 3,790,883.26 | 2,802,839.41 |
| Security fund for the disabled | 2,773,339.56 | 2,722,348.51 |
| Rent of land and management charge | 1,636,038.99 | 4,477,445.47 |
| Others | 41,784,681.00 | 33,342,014.75 |
| Total | 408,119,409.22 | 351,939,272.35 |
65. Development Costs
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Employee benefits | 196,235,469.02 | 152,596,071.77 |
| Material consumption | 144,117,100.51 | 143,852,260.60 |
| Depreciation and long-term prepaid expense | 50,965,688.04 | 38,423,035.97 |
| Certification and testing fee | 14,678,874.32 | 10,471,002.67 |
| Expense on equipment debugging | 8,256,764.80 | 9,255,666.89 |
| Charges related to patents | 2,525,432.48 | 1,169,438.63 |
| Others | 24,008,604.89 | 19,207,465.11 |
Annual Report 2022
| Total | 440,787,934.06 | 374,974,941.64 |
Other notes:
In respect of R&D expense incurred by the Company, expense other than that on bench-scale and pilot-scaleproduction is included in R&D expense; and sales revenue of products from bench-scale and pilot-scaleproduction is included in core business revenue and the relevant costs are included in cost of sales of corebusiness.
66. Finance Costs
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Interest expense | 22,311,206.70 | 11,811,659.37 |
| Less: Interest income | 29,169,641.75 | 30,522,913.04 |
| Foreign exchange gains or losses | -26,718,075.66 | 15,599,915.72 |
| Others | 2,098,422.28 | 2,705,641.88 |
| Total | -31,478,088.43 | -405,696.07 |
67. Other Income
Unit: RMB
| Sources | Reporting Period | Same period of last year |
| The Subsidy for Metal-organic Chemical Vapour Deposition (MOCVD) | 19,999,999.20 | 19,999,999.20 |
| One-time Stay Allowance | 5,257,845.00 | |
| The Subsidy for Employees' On-the-job Training | 4,887,500.00 | 2,663,240.00 |
| The Projects of the Production Expansion and Technological Transformation of Components of Small-spacing and Outdoor LED Displays | 4,064,551.68 | 4,064,551.68 |
| Grants for High-tech Enterprises | 2,870,936.00 | 5,845,000.00 |
| The Special Fund for Promoting High-quality Economic Development | 2,865,247.03 | 2,438,064.00 |
| Science and Technology Fund Allocated by the Government | 2,484,900.99 | |
| The Research on the Key Technology of High-lumen Compound Reflex LED Chips for Automobiles and High-density Matrix Packaging | 2,122,534.48 | |
| The 2021 Support Fund of the Foshan Municipal Financial Bureau for Promoting the Digital Intelligent Transformation of the Manufacturing Industry in Foshan City | 2,000,000.00 |
Annual Report 2022
| The Project of the Innovation in Packaging Technology and Technological Transformation of Key Packaging Equipment of LEDs with High Colour Rendering Index for Illumination | 1,990,360.99 | |
| Research and Development and Industrialization of Potassium Nitride-based Rf Devices in the Field of Next Generation Mobile Communication | 1,972,219.14 | 1,051,721.76 |
| Research and Development and Industrialization of LGBT, the Key Power Electronic Device of Electric Vehicle | 1,864,300.03 | 379,098.36 |
| The Project of Resource Conservation and Environmental Protection | 1,809,367.44 | 1,809,367.44 |
| Research on Key Technologies of the Third Generation of High Frequency Semiconductor Electronic Power Module in Colleges and Universities | 1,464,522.72 | 85,485.02 |
| The Subsidy for Stabilizing Employment | 1,440,668.72 | 2,993,359.27 |
| The Research and Industrialization of New and High-performance Display Components | 1,387,498.09 | |
| Research and Development and Industrialization of TD-LTE Terminal Rf Chip | 1,329,277.68 | 315,537.48 |
| The Special Support Fund for the Industrial Internet of Things (IIOT) Development | 1,320,000.00 | 809,900.00 |
| Refund of Individual Income Tax | 1,146,553.80 | 501,207.64 |
| The Research and Development of Chip-on-Board (COB) Integrated Packaging and Systems of LED Displays with High Density and Small Spacing | 1,112,123.36 | |
| The Demonstration of Industrial Internet of Things (IIOT) Applications for LED Production Control | 441,702.63 | 1,097,962.93 |
| The Research and Application of Epitaxial Wafers, Chips, and Packaging of Near-ultraviolet Silica-based AlGaN Vertical LEDs with High Power | 369,238.72 | 5,987,959.60 |
| 2020 Supporting Fund for Guangdong Provincial Science and Technology | 3,000,000.00 |
Annual Report 2022
| Award of Foshan Municipal Government | ||
| The Research and Application on the Key Technology of High-lumen Compound Reflex LED Chips for Automobiles and High-density Matrix Packaging | 1,518,820.56 | |
| Support Funds for Industrial Design Industry Development in Chancheng District, Foshan City | 1,000,000.00 | |
| Other | 20,693,446.22 | 18,380,382.55 |
| Total | 84,894,793.92 | 73,941,657.49 |
68. Investment Income
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Long-term equity investment income accounted by equity method | 2,467,060.07 | 2,260,497.27 |
| Investment income from disposal of long-term equity investment | -995,989.54 | |
| Investment income from holding of trading financial assets | -9,764,664.95 | 6,357,117.65 |
| Investment income from disposal of trading financial assets | 285,376.51 | |
| Dividend income from holding of other equity instrument investment | 16,059,353.89 | 23,643,370.02 |
| Income received from financial products and structural deposits | 1,586,828.50 | 2,048,985.41 |
| Total | 10,633,954.02 | 33,313,980.81 |
69. Net Gain on Exposure Hedges
Naught
70. Gain on Changes in Fair Value
Unit: RMB
| Sources | Reporting Period | Same period of last year |
| Trading financial assets | -4,839,428.58 | 4,523,330.79 |
| Of which: gains on changes in fair value of derivative financial instrument | -4,839,428.58 | 4,523,330.79 |
| Trading financial liabilities | -4,679,000.00 | -27,790.90 |
| Total | -9,518,428.58 | 4,495,539.89 |
Annual Report 2022
71. Credit Impairment Loss
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Bad debt loss on other receivables | -1,839,930.20 | 64,660.67 |
| Expected credit loss on accounts receivable | -13,492,101.98 | -8,552,761.66 |
| Expected credit loss on contract assets | -264,782.57 | |
| Others | -72,731.43 | |
| Total | -15,404,763.61 | -8,752,883.56 |
72. Asset Impairment Loss
Unit: RMB
| Item | Reporting Period | Same period of last year |
| II. Loss on inventory valuation and contract performance cost | -79,344,281.60 | -72,264,251.24 |
| V. Loss on impairment of fixed assets | -3,995,735.51 | -398,525.90 |
| VII. Loss on impairment of construction in progress | -208,754.99 | -1,318,800.00 |
| X. Loss on impairment of intangible assets | -388,613.87 | |
| XII. Loss on impairment of contract assets | -342,647.99 | |
| XIII. Others | -7,625,958.29 | -19,723,413.98 |
| Total | -91,517,378.38 | -94,093,604.99 |
73. Assets Disposal Income
Unit: RMB
| Sources | Reporting Period | Same period of last year |
| Disposal income of fixed assets | 968,273.19 | 77,714,217.87 |
74. Non-operating Income
Unit: RMB
| Item | Reporting Period | Same period of last year | Amount recorded in the current non-recurring profit or loss |
| Government grants | 976,090.45 | 0.00 | 976,090.45 |
| Total income from scrap of non-current assets | 1,324,933.00 | 2,003,455.62 | 1,324,933.00 |
| Of which: income from scrap of fixed assets | 1,324,933.00 | 2,003,455.62 | 1,324,933.00 |
| Income from default money | 5,810,061.05 | 7,060,000.00 | 5,810,061.05 |
| Confiscated income | 65,728.35 | 14,228,534.73 | 65,728.35 |
| Other | 10,580,244.78 | 15,817,044.20 | 10,580,244.78 |
| Total | 18,757,057.63 | 24,880,499.82 | 18,759,974.73 |
Annual Report 2022
Government grants recorded into current profit or loss:
Unit: RMB
| Item | Distribution entity | Distribution reason | Nature | Whether influence the profits or losses of the year or not | Special subsidy or not | Reporting Period | Same period of last year | Related to assets/related income |
| Supporting fund for industrial development | Subsidy | No | No | 976,090.45 | 0.00 | Related to income |
75. Non-operating Expense
Unit: RMB
| Item | Reporting Period | Same period of last year | Amount recorded in the current non-recurring profit or loss |
| Loss on non-monetary assets exchange | 10,610,248.46 | 1,618,655.31 | 10,610,248.46 |
| Donations | 100,000.00 | ||
| Losses on inventories | 311,858.32 | ||
| Penalty and delaying payment | 701,242.02 | 190,278.72 | 701,242.02 |
| Others | 5,501,043.60 | 4,103,945.65 | 5,501,043.60 |
| Total | 16,812,534.08 | 6,324,738.00 | 16,812,534.08 |
76. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Current income tax expense | 28,931,905.70 | 33,326,112.43 |
| Deferred income tax expense | 1,942,422.33 | 25,035,603.51 |
| Total | 30,874,328.03 | 58,361,715.94 |
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
| Item | Reporting Period |
| Profit before taxation | 381,717,683.75 |
| Current income tax expense accounted at statutory/applicable tax rate | 57,257,652.56 |
| Influence of applying different tax rates by subsidiaries | 2,373,228.24 |
Annual Report 2022
| Influence of income tax before adjustment | 5,724,192.96 |
| Influence of non-taxable income | -3,248,653.74 |
| Influence of non-deductable costs, expenses and losses | 2,487,911.51 |
| The effect of using deductible losses of deferred income tax assets that have not been recognized in the previous period | -1,602,765.18 |
| Influence of unrecognized deductible temporary differences and deductible losses | 12,138,013.09 |
| Influence of deduction | -45,841,241.76 |
| Regarded as sales | 1,465,678.68 |
| Change in beginning deferred income tax asset/liability balance due to tax rate adjustment | 120,311.67 |
| Income tax expense | 30,874,328.03 |
77. Other Comprehensive Income
Refer to Note VII Notes to Main Items of Consolidated Financial Statements-57 for details.
78. Cash Flow Statement
(1) Cash Generated from Other Operating Activities
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Income from subsidy | 62,131,715.65 | 51,478,912.74 |
| Margin income | 35,275,803.41 | 40,666,019.15 |
| Income from waste | 33,443,489.15 | 27,289,018.10 |
| Deposit interest | 27,525,377.17 | 34,906,276.94 |
| Rental income from property and equipment, utility | 7,071,449.02 | 12,980,397.19 |
| Income from insurance compensation | 25,003.20 | |
| Collection of tax on transfer of equity interests of the original shareholders of Nanning Liaowang | 48,637,165.49 | |
| Others | 58,928,366.38 | 32,958,058.25 |
| Total | 224,376,200.78 | 248,940,851.06 |
(2) Cash Used in Other Operating Activities
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Administrative expense paid in cash | 130,797,239.14 | 127,589,873.25 |
| Selling expense paid in cash | 89,476,822.32 | 61,331,324.84 |
| Returned cash deposit | 27,259,278.23 | 42,863,242.64 |
| Finance costs paid in cash | 1,887,258.78 | 1,302,431.92 |
| Payment of tax on transfer of equity interests of the original shareholders of Nanning Liaowang | 48,637,165.49 | |
| Others | 117,228,372.83 | 40,770,593.51 |
| Total | 366,648,971.30 | 322,494,631.65 |
Annual Report 2022
(3) Cash Generated from Other Investing Activities
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Compensation received for demolition | 54,990,047.00 | |
| Total | 54,990,047.00 |
(4) Cash Used in Other Investing Activities
Naught
(5) Cash Generated from Other Financing Activities
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Receipt of financing notes | 12,225,701.60 | |
| Cash deposit collected | 6,916,618.99 | |
| Total | 19,142,320.59 | 0.00 |
(6) Cash Used in Other Financing Activities
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Cash paid for acquisition of NationStar Optoelectronics under the same control | 1,061,968,681.64 | 464,531,545.66 |
| Cash paid for acquisition of Fenghua Semiconductor under the same control | 134,409,650.00 | |
| Finance lease rental | 49,995,876.21 | |
| Repurchase of treasury shares | 250,814,566.13 | |
| Payment for cash deposit of bank acceptance bills | 25,540,463.98 | |
| Others | 3,792,167.09 | 49,492.70 |
| Total | 1,200,170,498.73 | 790,931,944.68 |
79. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
| Supplemental information | Reporting Period | Same period of last year |
| 1. Reconciliation of net profit to net cash flows generated from operating activities: | ||
| Net profit | 350,843,355.72 | 499,751,566.84 |
| Add: Provision for impairment of assets | 106,922,141.99 | 102,846,488.55 |
| Depreciation of fixed assets, oil-gas assets, and productive living assets | 509,693,013.98 | 438,529,743.34 |
| Depreciation of right-of-use assets | 7,125,482.81 | 7,338,716.52 |
Annual Report 2022
| Amortization of intangible assets | 12,154,705.29 | 14,504,737.18 |
| Amortization of long-term prepaid expenses | 79,115,565.08 | 57,320,573.64 |
| Loss from disposal of fixed assets, intangible assets and other long-term assets (gains: negative) | -968,273.19 | -77,714,217.87 |
| Losses from scrapping of fixed assets (gains: negative) | 9,285,315.46 | -251,165.05 |
| Losses from changes in fair value (gains: negative) | 9,518,428.58 | -4,495,539.89 |
| Finance costs (gains: negative) | 22,311,206.70 | 12,729,250.18 |
| Investment loss (gains: negative) | -10,633,954.02 | -33,313,980.81 |
| Decrease in deferred income tax assets (increase: negative) | -6,125,417.67 | 16,357,779.25 |
| Increase in deferred income tax liabilities (“-” for decrease) | -77,703,091.99 | 8,757,301.94 |
| Decrease in inventory (“-” for increase) | -62,666,433.29 | -41,037,550.29 |
| Decrease in operating receivables (“-” for increase) | 434,804,727.86 | -492,603,920.16 |
| Increase in operating payables (“-” for decrease) | -318,788,452.62 | -75,245,835.03 |
| Others | ||
| Net cash generated from/used in operating activities | 1,064,888,320.69 | 433,473,948.34 |
| 2. Significant investing and financing activities without involvement of cash receipts and payments | ||
| Transfer of debts into capital | ||
| Current portion of convertible corporate bonds | ||
| Fixed assets leased in for financing | ||
| 3.Net increase/decrease of cash and cash equivalents: | ||
| Ending balance of cash | 1,945,971,307.26 | 1,940,209,052.92 |
| Less: Beginning balance of cash | 1,940,209,052.92 | 1,369,319,225.08 |
| Add: Ending balance of cash equivalents | ||
| Less: Beginning balance of cash equivalents | ||
| Net increase in cash and cash equivalents | 5,762,254.34 | 570,889,827.84 |
(2) Net Cash Paid For Acquisition of Subsidiaries
Unit: RMB
Annual Report 2022
| Amount | |
| Cash or cash equivalents paid in the current period for the business combination occurring in the current period | 1,199,095,022.30 |
| Of which: | |
| Foshan NationStar Optoelectronics Co., Ltd. | 1,061,968,681.64 |
| Guangdong Fenghua Semiconductor Technology Co., Ltd. | 134,409,650.00 |
| Of which: | |
| Of which: | |
| Net cash paid for acquisition of subsidiaries | 1,199,095,022.30 |
(3) Net Cash Received from Disposal of the Subsidiaries
Naught
(4) Cash and Cash Equivalents
Unit: RMB
| Item | Ending balance | Beginning balance |
| I. Cash | 1,945,971,307.26 | 1,940,209,052.92 |
| Including: Cash on hand | 52,093.54 | 24,635.14 |
| Bank deposit on demand | 1,944,304,141.61 | 1,840,860,114.33 |
| Other monetary assets on demand | 1,615,072.11 | 99,324,303.45 |
| III. Ending balance of cash and cash equivalents | 1,945,971,307.26 | 1,940,209,052.92 |
80. Notes to Items of the Statements of Changes in Owners’ Equity
Notes to the name of “Other” of ending balance of the same period of last year adjusted and the amount adjusted:
Not applicable
81. Assets with Restricted Ownership or Right of Use
Unit: RMB
| Item | Ending carrying value | Reason for restriction |
| Monetary assets | 534,826,528.99 | Security deposit of notes, letter of guarantee, pre-sale house payment, L/C guarantee deposits, etc. |
| Notes receivable | 751,280,639.50 | Endorsed outstanding notes receivable, pledged notes receivable |
| Fixed assets | 149,146,773.04 | Mortgaged for short-term borrowings from banks and borrowings by related parties |
| Intangible assets | 10,963,743.21 | Lands mortgaged for short-term borrowings from banks |
Annual Report 2022
| Total | 1,446,217,684.74 |
82. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RMB
| Item | Ending foreign currency balance | Exchange rate | Ending balance converted to RMB |
| Monetary assets | 141,775,489.42 | ||
| Of which: USD | 16,913,082.96 | 6.9646 | 117,792,972.64 |
| EUR | 829,331.00 | 7.4229 | 6,156,041.08 |
| HKD | 51,802.62 | 0.8933 | 46,273.73 |
| IDR | 39,955,510,046.82 | 0.000445 | 17,780,201.97 |
| Accounts receivable | 290,496,511.21 | ||
| Of which: USD | 41,006,458.60 | 6.9646 | 285,593,581.59 |
| EUR | 261,766.21 | 7.4229 | 1,943,064.41 |
| HKD | 40,459.39 | 0.8933 | 36,141.09 |
| IDR | 6,570,166,561.80 | 0.000445 | 2,923,724.12 |
| Long-term borrowings | 181,079,600.00 | ||
| Of which: USD | 26,000,000.00 | 6.9646 | 181,079,600.00 |
| Other receivables | 1,210,226.93 | ||
| Of which: EUR | 3,428.15 | 7.4229 | 25,446.81 |
| IDR | 2,662,427,225.50 | 0.000445 | 1,184,780.12 |
| Accounts payable | 12,261,879.17 | ||
| Of which: USD | 524,630.87 | 6.9646 | 3,653,844.16 |
| EUR | 600.00 | 7.4229 | 4,453.74 |
| IDR | 19,333,890,494.38 | 0.000445 | 8,603,581.27 |
| Other non-current assets | 512,409.25 | ||
| Of which: EUR | 69,030.87 | 7.4229 | 512,409.25 |
| Other non-current liabilities | 932,202.67 | ||
| Of which: EUR | 125,584.70 | 7.4229 | 932,202.67 |
| Other current assets | 693,021.22 | ||
| Of which: IDR | 1,557,351,052.71 | 0.000445 | 693,021.22 |
(2) Notes to Overseas Entities Including: for Significant Oversea Entities, Main Operating Place,Recording Currency and Selection Basis Shall Be Disclosed; if there Are Changes in Recording Currency,Relevant Reasons Shall Be Disclosed.
□Applicable ? Not applicable
83. Arbitrage
Qualitative and quantitative information of relevant arbitrage instruments, hedged risk in line with the type of arbitrage to disclose:
Naught
Annual Report 2022
84. Government Grants
(1) Basic Information on Government Grants
Unit: RMB
| Category | Amount | Listed items | Amount recorded in the current profit or loss |
| The Project of the Innovation in Packaging Technology and Technological Transformation of Key Packaging Equipment of LEDs with High Colour Rendering Index for Illumination (Phase II) | 6,822,700.00 | Deferred income | 1,333,317.79 |
| One-time Stay Allowance | 5,271,945.00 | Other income | 5,271,945.00 |
| The Research on the Key Technology of 4K/8K Full-colour Micro-LED Displays with Ultra High Definition | 3,900,000.00 | Deferred income | 492,543.45 |
| Technical Transformation Project of Chongqing Liang Jiang New Area | 2,560,000.00 | Deferred income | 255,999.99 |
| The 2021 Support Fund of the Foshan Municipal Financial Bureau for Promoting the Digital Intelligent Transformation of the Manufacturing Industry in Foshan City | 2,000,000.00 | Other income | 2,000,000.00 |
| The Fund of Foshan City for Promoting the Robot Application and Industry | 2,000,000.00 | Other income | 2,000,000.00 |
| The Special Fund for Promoting High-quality Economic Development | 1,922,388.51 | Other income | 1,922,388.51 |
| The Research on the Key Technology of High-lumen Compound Reflex LED Chips for Automobiles and High-density Matrix Packaging | 1,800,000.00 | Deferred income | 1,779,018.22 |
| Research and Development and Industrialization Project of Potassium Nitride-based Rf Devices in the Field of Next Generation Mobile Communication | 1,800,000.00 | Deferred income | 1,800,000.00 |
| Research Project on Key Technologies of the Third Generation of High Efficiency and Frequency Semiconductor Electronic | 1,575,000.00 | Deferred income | 1,575,000.00 |
Annual Report 2022
| Power Module | |||
| The Subsidy for Stabilizing Employment | 2,004,363.49 | Other income | 2,004,363.49 |
| The Special Support Fund for the Industrial Internet of Things (IIOT) Development in Foshan City for 2021 (the Special Project of IIOT Demonstration) (the First Batch) | 1,320,000.00 | Other income | 1,320,000.00 |
| The Subsidy of the Chancheng District Human Resources and Social Security Bureau, Foshan City, for the Skill Training of Millions of Workers for March 2022 | 1,148,000.00 | Other income | 1,148,000.00 |
| The Research and Development of Chip-on-Board (COB) Integrated Packaging and Systems of LED Displays with High Density and Small Spacing | 1,100,000.00 | Deferred income | 1,100,000.00 |
| The Research on the Key Technology of Full-colour Micro-LED Displays with High Brightness and Contrast | 1,098,996.87 | Deferred income | 93,365.93 |
| Special Funds for High-quality Economic Development in Foshan in 2022 (Foreign Trade Direction) Import Discount Project Funds | 1,000,000.00 | Other income | 1,000,000.00 |
| The 2021 Annual Research and Development Subsidy | 919,061.00 | Other income | 919,061.00 |
| The Special Support Fund for the Industrial Internet of Things (IIOT) Development in Foshan City | 892,500.00 | Other income | 892,500.00 |
| The Special Fund for the Vocational Skill Improvement Campaign | 848,000.00 | Other income | 848,000.00 |
| Foshan Chancheng District Market Supervision Bureau obtain the 2022 quality award project incentive (Township) | 750,000.00 | Other income | 750,000.00 |
| Intelligent Transformation Incentive Subsidy of Small and Medium-sized Manufacturing Enterprises in Chongqing (The First Batch of Special Funds for Industrial Technological Transformation by the Finance Bureau of Liang | 700,000.00 | Deferred income | 70,000.00 |
Annual Report 2022
| Jiang New Area in 2022) | |||
| The Research and Development Subsidy for High-tech Enterprises of Foshan Science and Technology Bureau | 670,414.00 | Other income | 670,414.00 |
| Industrial Support Fund of the Finance Bureau of Liang Jiang New Area, Chongqing (The L.J.C.Y. [2021] No. 557 Industrial Support Fund of the Finance Bureau of Liang Jiang New Area, Chongqing) | 610,000.00 | Other income | 610,000.00 |
| The Annual Incentive for Developing Technological Innovation Platforms in Nanhai District —Large Outstanding Enterprises—Research and Development Subsidies | 504,068.20 | Other income | 504,068.20 |
| 2021 Guangxi Digital Workshop Incentive Funds | 500,000.00 | Other income | 500,000.00 |
| The Management Committee of the Liuzhou High-tech Industrial Development Zone 10 Enterprises After the First Batch of Electricity Subsidy in 2020 | 500,000.00 | Other income | 500,000.00 |
| Guangxi Industrial Leading Award in 2021 from Nanning City of the Management Committee of the Nanning New & High-tech Industrial Development Zone | 500,000.00 | Non-operating income | 500,000.00 |
| Chongqing Liang Jiang New Area Resumption of Work and Production Incentive Funds | 449,488.45 | Other income | 449,488.45 |
| Special Fund for Advanced Manufacturing Development | 427,200.00 | Other income | 427,200.00 |
| 2021 Management Contribution Award (10 Advanced Manufacturing Industries 2.0) | 410,000.00 | Other income | 410,000.00 |
| Policy Enjoyment of Preferential Reduction and Exemption for the Poor with Set up Files | 369,850.00 | Other income | 369,850.00 |
| The Visible Light Communication and Positioning System for the Industrial Internet of Things (IIOT) | 360,000.00 | Deferred income |
Annual Report 2022
| The Technology Research and Industrialization of the Micro Display Module Based on Highly Efficient Colour Conversion | 340,000.00 | Deferred income | 285,998.55 |
| Supplementary Awards for the 22nd China Patent Award The 8th Guangdong Patent Award | 300,000.00 | Other income | 300,000.00 |
| N.C.G.J. [2021] No. 452 "Fund for Specialized and Refined Projects" in Nanning City of the Management Committee of the Nanning New & High-tech Industrial Development Zone | 300,000.00 | Other income | 300,000.00 |
| N.C.G.J. [2022] No.235 “the Subsidy for Electricity Consumption of Enterprises in the First Quarter of 2022” in Nanning City of the Management Committee of the Nanning New & High-tech Industrial Development Zone | 300,000.00 | Other income | 300,000.00 |
| Others | 8,036,347.17 | Other income, non-operating income, deferred income | 7,139,313.17 |
| Total | 56,010,322.69 | 41,841,835.75 |
(2) Return of Government Grants
□Applicable ? Not applicable
85. Other
NaughtVIII. Changes of Consolidation Scope
1. Business Combination Not under the Same Control
(1) Business Combination Not under the Same Control in the Reporting Period
Naught
(2) Combination Cost and Goodwill
Naught
Annual Report 2022
(3) The Identifiable Assets and Liabilities of Acquiree on Purchase Date
Naught
(4) Gains or losses from Re-measurement of Equity Held before the Purchase Date at Fair ValueWhether there is a transaction that through multiple transaction step by step to realize business combination and gaining thecontrol during the Reporting Period
□Yes ?No
(5) Notes to Reasonable Consideration or Fair Value of Identifiable Assets and Liabilities of the Acquiree that Cannot BeDetermined on the Acquisition Date or during the Period-end of the MergerNaught
(6) Other Notes
Naught
2. Business Combination under the Same Control
(1) Business Combination under the Same Control during the Reporting Period
Unit: RMB
| Combined party | Proportion of the equity | Basis | Combination date | Recognition basis of combination date | Income from the period-begin to the combination date of the acquiree | Net profits from the period-begin to the combination date of the acquiree | Income of the acquiree during the period of comparison | Net profits of the acquiree during the period of comparison |
| Foshan NationStar Optoelectronics Co., Ltd. | 21.48% | Under the control of the Company’s actual controller both before and after the combination | 28 February 2022 | The actual control has achieved and the industrial and commercial changes have been completed | 453,644,780.94 | 9,568,639.83 | 580,345,830.39 | 29,049,597.07 |
| Foshan Sigma Venture Capital Co., Ltd. | 100.00% | Under the control of the Company’s actual controller both before | 28 February 2022 | The actual control has achieved and the industrial and commercial | -700.00 |
Annual Report 2022
| and after the combination | changes have been completed | |||||||
| Guangdong Fenghua Semiconductor Technology Co., Ltd. | 21.45% | Under the control of the Company’s actual controller both before and after the combination | 30 November 2022 | The actual control has achieved and the industrial and commercial changes have been completed | 136,258,589.74 | 12,935,605.25 | 216,574,892.37 | 28,593,060.57 |
Other notes:
1. The Company held the 19th meeting of the ninth Board of Directors and the Third Extraordinary GeneralMeeting in 2021 on 27 October 2021 and 31 December 2021 respectively, where the untport on Major AssetPurchase and Related Party Trading of Foshan Electrical and Lighting Co., Ltd. (Draft) and Its Summary" andother proposals related to this trading was deliberated and adopted. It was agreed that the Company willpurchase 100% equity of Sigma held by Electronics Group (Sigma holds 79,753,050 shares of NationStarOptoelectronics) and 52,051,945 tradable shares of NationStar Optoelectronics held by Rising Group andRising Capital in total by paying cash. Before the spin-off, FSL held 1,014,900 shares of NationStarOptoelectronics, accounting for 0.16% of the total share capital of NationStar Optoelectronics. Uponcompletion of the spin-off, FSL and its wholly-owned subsidiary will hold 132,819,895 shares of NationStarOptoelectronics in total, accounting for 21.48% of the total share capital of NationStar Optoelectronics, makingFSL the controlling shareholder of NationStar Optoelectronics. As of the end of February 2022, the Companyhas paid 100% of the equity acquisition amount, and the industrial and commercial change registration of Sigmahas been completed.
2. Reviewed and approved by the general meetings of the Company and its majority-owned subsidiaryNationStar Optoelectronics, NationStar Optoelectronics acquired 99.87695% equity of Guangdong FenghuaSemiconductor Technology Co., Ltd. held by Guangdong Fenghua Advanced Technology Holding Co., Ltd.with RMB268.8193 million. On 25 November 2022, the transfer of the subject assets involved in the transactionwas completed. Henceforth, the Company indirectly holds 24.45% equity of Guangdong FenghuaSemiconductor Technology Co., Ltd. in totalAs the Company, NationStar Optoelectronics, Sigma and Fenghua Semiconductor are all controlled by theactual controller Guangdong Rising Holdings Group Co., Ltd. before and after the equity change and suchcontrol is not temporary, the merger falls under the previous data of retrospective adjustment of businesscombination under the same control.
(2) Combination Cost
Unit: RMB
| Combination cost | Foshan NationStar Optoelectronics Co., Ltd., Foshan Sigma Venture Capital Co., Ltd. | Guangdong Fenghua Semiconductor Technology Co., Ltd. |
| --Cash | 1,517,098,116.62 | 268,819,271.98 |
| --Carrying value of non-cash assets | ||
| --Carrying value of debts issued or assumed | ||
| --Face value of equity securities issued | ||
| --Contingent consideration |
Annual Report 2022
Contingent consideration and changes thereof:
NaughtOther notes:
Naught
(3) The Carrying Value of Assets and Liabilities of the Combined Party on the Combination Date
Unit: RMB
| Foshan NationStar Optoelectronics Co., Ltd. | Foshan Sigma Venture Capital Co., Ltd. | Guangdong Fenghua Semiconductor Technology Co., Ltd. | ||||
| Combination date | Period-end of the last period | Combination date | Period-end of the last period | Combination date | Period-end of the last period | |
| Assets: | ||||||
| Monetary assets | 921,042,415.96 | 997,688,184.63 | 4,226.45 | 4,926.45 | 46,578,599.90 | 53,314,589.55 |
| Accounts receivable | 525,596,155.73 | 554,384,717.05 | 21,692,360.84 | 36,567,580.17 | ||
| Inventories | 894,257,346.12 | 905,045,064.13 | 19,098,236.50 | 15,873,522.63 | ||
| Fixed assets | 2,035,468,559.47 | 2,037,263,584.35 | 139,179,341.12 | 154,383,742.25 | ||
| Intangible assets | 103,117,840.45 | 103,886,463.82 | 5,133,659.92 | 4,868,606.80 | ||
| Held-for-trading financial assets | 20,000,000.00 | 20,000,000.00 | ||||
| Notes receivable | 1,000,511,991.86 | 1,102,333,515.11 | ||||
| Accounts receivable financing | 7,650,917.92 | 10,660,409.19 | ||||
| Prepayments | 13,259,667.27 | 13,354,147.30 | 397,325.47 | 531,544.43 | ||
| Other receivables | 2,748,733.29 | 3,451,162.14 | 399,345.10 | 289,084.71 | ||
| Other current assets | 41,339,558.12 | 39,981,159.43 | 47,374.91 | 42,286.35 | ||
| Long-term equity investments | 16,852,876.19 | 16,852,876.19 | 73,096,690.00 | 73,096,690.00 | ||
| Other investments in equity instruments | 41,059,860.92 | 41,059,860.92 | ||||
| Construction in progress | 326,952,490.30 | 356,665,733.21 | 315,034.84 | 303,034.84 | ||
| Right-of-use | 574,365.58 | 629,067.08 | ||||
Annual Report 2022
| assets | ||||||
| Long-term prepaid expense | 26,736,143.96 | 27,487,572.51 | ||||
| Deferred income tax assets | 28,064,526.77 | 28,064,526.77 | ||||
| Investment property | 3,639,628.87 | 3,754,390.00 | ||||
| Other non-current assets | 30,051,607.66 | 29,197,939.66 | 781,708.31 | 390,091.11 | ||
| Liabilities: | ||||||
| Borrowings | ||||||
| Accounts payable | 717,846,900.05 | 899,927,502.97 | 29,133,036.70 | 25,318,591.28 | ||
| Held-for-trading financial liabilities | 2,224.02 | 9,367.37 | ||||
| Notes payable | 1,184,541,823.20 | 1,247,131,988.05 | ||||
| Contract liabilities | 75,559,067.88 | 55,409,842.62 | 920,910.83 | 1,108,584.60 | ||
| Employee benefits payable | 50,815,459.88 | 78,858,200.44 | 5,963,148.10 | 14,671,475.77 | ||
| Taxes payable | 9,532,874.37 | 8,970,415.15 | 2,649,790.65 | 615,416.91 | ||
| Other payables | 31,251,670.01 | 34,566,878.65 | 1,429,418.90 | 42,931,543.43 | ||
| Current portion of non-current liabilities | 323,784.42 | 320,912.61 | 123,133.72 | |||
| Other current liabilities | 1,983,259.30 | 2,538,611.14 | 138,927.49 | |||
| Lease liabilities | 166,405.64 | 202,757.36 | ||||
| Provisions | 8,545,934.02 | 9,746,394.32 | ||||
| Deferred income | 100,184,002.53 | 102,346,903.64 | 5,106,849.15 | 9,542,702.15 | ||
| Deferred income tax liabilities | 92,481,449.40 | 92,481,449.40 | ||||
| Net assets | 3,754,399,284.93 | 3,744,834,350.58 | 73,100,916.45 | 73,101,616.45 | 199,587,245.65 | 186,651,640.40 |
| Less: Non-controlling interests | -117,113.13 | -117,113.13 | 245,592.11 | |||
| Net assets acquired | 3,754,516,398.06 | 3,744,951,463.71 | 73,100,916.45 | 73,101,616.45 | 199,341,653.54 |
Contingent liabilities of the combined party undertaken in the business combination:
Annual Report 2022
NaughtOther notes:
Naught
3. Counter Purchase
Basic information of trading, the basis of transactions constitute counter purchase, the retain assets , liabilitiesof the listed companies whether constituted a business and its basis, the determination of the combination costs,the amount and calculation of adjusted rights and interests in accordance with the equity transaction process:
Naught
4. Disposal of Subsidiary
Whether there is a single disposal of the investment to the subsidiary and lost control?
□Yes ? No
Whether there are several disposals of the investment to the subsidiary and lost controls?
□Yes ? No
5. Changes in Combination Scope for Other Reasons
Note to changes in combination scope for other reasons (such as newly establishment or liquidation ofsubsidiaries, etc.) and relevant information:
Naught
6. Other
NaughtIX. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
| Name | Main operating place | Registration place | Nature of business | Holding percentage | Way of gaining | |
| Directly | Indirectly | |||||
| Foshan Fozhao Zhicheng Technology Co., Ltd. | Foshan | Foshan | Production and sales | 100.00% | Newly established | |
Annual Report 2022
| FSL Chanchang Optoelectronics Co., Ltd. | Foshan | Foshan | Production and sales | 100.00% | Newly established | |
| Foshan Taimei Times Lamps and Lanterns Co., Ltd. | Foshan | Foshan | Production and sales | 70.00% | Newly established | |
| Foshan Electrical & Lighting (Xinxiang) Co., Ltd. | Xinxiang | Xinxiang | Production and sales | 100.00% | Newly established | |
| Nanjing Fozhao Lighting Components Manufacturing Co., Ltd. | Nanjing | Nanjing | Production and sales | 100.00% | Acquired | |
| FSL Zhida Electric Technology Co., Ltd. | Foshan | Foshan | Production and sales | 51.00% | Newly established | |
| FSL LIGHTING GMBH | Germany | Germany | Production and sales | 100.00% | Newly established | |
| Foshan Haolaite Lighting Co., Ltd. | Foshan | Foshan | Production and sales | 51.00% | 10.53% | Newly established |
| NationStar Optoelectronics (Germany) Co., Ltd. | Germany | Germany | Trade | 61.53% | Business combination under the same control | |
| Foshan Kelian New Energy Technology Co., Ltd. | Foshan | Foshan | Property development | 100.00% | Acquired | |
| Fozhao (Hainan) Technology Co., Ltd. | Haikou | Haikou | Production and sales | 100.00% | Newly established | |
| Nanning Liaowang Auto Lamp Co., Ltd. | Nanning | Nanning | Manufacturing of vehicle lamps | 53.79% | Acquired | |
| Liuzhou Guige | Liuzhou | Liuzhou | Manufacturing | 53.79% | Acquired |
Annual Report 2022
| Lighting Technology Co., Ltd. | of vehicle lamps | |||||
| Liuzhou Guige Foreshine Technology Co., Ltd. | Liuzhou | Liuzhou | Manufacturing of automotive electronic products | 53.79% | Acquired | |
| Chongqing Guinuo Lighting Technology Co., Ltd. | Chongqing | Chongqing | Manufacturing of vehicle lamps | 53.79% | Acquired | |
| Qingdao Guige Lighting Technology Co., Ltd. | Qingdao | Qingdao | Manufacturing of vehicle lamps | 53.79% | Acquired | |
| Indonesia Liaowang Auto Lamp Co., Ltd. | Indonesia | Indonesia | Manufacturing of vehicle lamps | 53.79% | Acquired | |
| Foshan Sigma Venture Capital Co., Ltd. | Foshan | Foshan | Business services | 100.00% | Business combination under the same control | |
| Foshan NationStar Optoelectronics Co., Ltd. (note) | Foshan | Foshan | Electronic manufacturing | 21.48% | Business combination under the same control | |
| Foshan NationStar Semiconductor Technology Co., Ltd. | Foshan | Foshan | Electronic manufacturing | 21.48% | Business combination under the same control | |
| Foshan NationStar Electronic Manufacturing Co., Ltd. | Foshan | Foshan | Electronic manufacturing | 21.48% | Business combination under the same control | |
| Nanyang Baoli Vanadium Industry Co., Ltd. | Henan | Nanyang | Mining | 12.89% | Business combination under the same control | |
| Guangdong New Electronic Information Ltd. | Guangzhou | Guangzhou | Trade | 21.48% | Business combination under the same control | |
| Guangdong Fenghua Semiconductor Technology Co., Ltd. | Guangzhou | Guangzhou | Electronic manufacturing | 21.45% | Business combination under the same control |
Notes to holding proportion in subsidiary different from voting proportion:
Annual Report 2022
NaughtBasis of holding half or less voting rights but still controlling the investee and holding more than half of thevoting rights but not controlling the investee:
NaughtSignificant structural entities and controlling basis in the scope of combination:
NaughtBasis of determining whether the Company is the agent or the principal:
NaughtOther notes:
Note: Foshan Guoxing Electronic Manufacture Co., Ltd., Foshan NationStar Semiconductor Co., Ltd. NanyangBaoli Vanadium Industry Co., Ltd., Guangdong New Electronics Information Ltd. and Guangdong FenghuaSemiconductor Technology Co., Ltd. are subsidiaries of Foshan NationStar Optoelectronics Co., Ltd.
(2) Significant Non-wholly-owned Subsidiary
Unit: RMB
| Name | Shareholding proportion of non-controlling interests | The profit or loss attributable to the non-controlling interests | Declaring dividends distributed to non-controlling interests | Balance of non-controlling interests at the period-end |
| Foshan Taimei Times Lamps and Lanterns Co., Ltd. | 30.00% | 904,663.00 | 12,355,214.98 | |
| FSL Zhida Electric Technology Co., Ltd. | 49.00% | 4,907,076.81 | 29,533,842.68 | |
| Foshan Haolaite Lighting Co., Ltd. | 38.47% | 1,023,597.00 | 14,256,475.38 | |
| Nanning Liaowang Auto Lamp Co., Ltd. | 46.21% | 18,484,083.51 | 1,848,270.19 | 439,367,591.89 |
| Foshan NationStar Optoelectronics Co., Ltd. | 78.52% | 95,129,699.49 | 24,282,863.70 | 2,931,767,610.92 |
Holding proportion of non-controlling interests in subsidiary different from voting proportion:
NaughtOther notes:
Naught
Annual Report 2022
(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary
Unit: RMB
| Name | Ending balance | Beginning balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liability | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liability | Total liabilities | |
| Foshan Taimei Times Lamps and Lanterns Co., Ltd. | 72,330,352.64 | 14,293,589.70 | 86,623,942.34 | 45,439,892.42 | 45,439,892.42 | 135,829,008.12 | 17,573,437.36 | 153,402,445.48 | 115,233,938.88 | 115,233,938.88 | ||
| FSL Zhida Electric Technology Co., Ltd. | 148,999,066.65 | 8,928,180.94 | 157,927,247.59 | 85,320,425.79 | 85,320,425.79 | 126,777,943.85 | 12,494,211.78 | 139,272,155.63 | 76,679,776.30 | 76,679,776.30 | ||
| Foshan Haolaite Lighting Co., Ltd. | 65,960,025.19 | 10,224,679.49 | 76,184,704.68 | 39,268,890.83 | 39,268,890.83 | 62,819,525.66 | 12,890,560.24 | 75,710,085.90 | 41,069,777.21 | 41,069,777.21 | ||
| Nanning Liaowang Auto Lamp Co., Ltd. | 1,587,631,841.28 | 864,846,568.82 | 2,452,478,410.10 | 1,547,730,991.04 | 29,231,051.82 | 1,576,962,042.86 | 1,346,863,737.14 | 817,363,839.98 | 2,164,227,577.12 | 1,305,420,077.19 | 23,058,696.78 | 1,328,478,773.97 |
| Foshan NationStar Optoelectronics Co., Ltd. | 3,793,005,331.67 | 2,786,809,474.96 | 6,579,814,806.63 | 2,079,712,881.27 | 746,557,864.73 | 2,826,270,746.00 | 3,753,516,966.82 | 2,804,807,489.51 | 6,558,324,456.33 | 2,412,518,258.48 | 214,320,206.87 | 2,626,838,465.35 |
Annual Report 2022
| Total | 5,667,926,617.43 | 3,685,102,493.91 | 9,353,029,111.34 | 3,797,473,081.35 | 775,788,916.55 | 4,573,261,997.90 | 5,425,807,181.59 | 3,665,129,538.87 | 9,090,936,720.46 | 3,950,921,828.06 | 237,378,903.65 | 4,188,300,731.71 |
Unit: RMB
| Name | Reporting Period | Same period of last year | ||||||
| Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | |
| Foshan Taimei Times Lamps and Lanterns Co., Ltd. | 137,883,002.63 | 3,015,543.32 | 3,015,543.32 | 218,572.66 | 147,525,074.10 | 2,474,926.17 | 2,474,926.17 | 3,103,173.55 |
| FSL Zhida Electric Technology Co., Ltd. | 211,155,180.35 | 10,014,442.47 | 10,014,442.47 | 1,675,831.36 | 164,800,910.54 | 5,129,689.55 | 5,129,689.55 | -10,852,478.65 |
| Foshan Haolaite Lighting Co., Ltd. | 61,703,120.95 | 2,718,786.93 | 2,534,205.16 | 15,893,975.30 | 109,953,100.11 | 3,027,751.57 | 3,000,758.76 | -191,537.05 |
| Nanning Liaowang Auto Lamp Co., Ltd. | 1,559,021,639.99 | 44,172,944.70 | 43,767,419.46 | 24,278,302.67 | 707,022,757.31 | 28,862,888.63 | 28,924,930.33 | 13,797,867.21 |
| Foshan NationStar Optoelectronics Co., Ltd. | 3,579,885,727.44 | 121,273,711.19 | 121,801,228.10 | 391,449,155.58 | 4,044,638,683.41 | 233,275,576.92 | 233,248,584.11 | 710,512,416.91 |
| Total | 5,549,648,671.36 | 181,195,428.61 | 181,132,838.51 | 433,515,837.57 | 5,173,940,525.47 | 272,770,832.84 | 272,778,888.92 | 716,369,441.97 |
(4) Significant Restrictions on Using the Assets and Liquidating the Liabilities of the Company
Naught
(5) Financial Support or Other Supports Provided to Structural Entities Incorporated into the Scope of ConsolidatedFinancial StatementsNaught
Annual Report 2022
2. The Transaction of the Company with Its Owner’s Equity Share Changed but Still Controlling theSubsidiary
(1) Note to the Owner’s Equity Share Changed in Subsidiary
Naught
(2) The Transaction’s Influence on the Equity of Non-controlling Interests and the Owner's Equity Attributable to theCompany as the ParentNaught
3. Equity in Joint Ventures or Associated Enterprises
(1) Significant Joint Ventures or Associated Enterprises
Naught
(2) Main Financial Information of Significant Joint Ventures
Naught
(3) Main Financial Information of Significant Associated Enterprises
Naught
(4) Summary Financial Information of Insignificant Joint Ventures or Associated Enterprises
Unit: RMB
| Ending balance/Reporting Period | Beginning balance/Same period of last year | |
| Joint ventures: | ||
| The total of following items according to the shareholding proportions | ||
| Associated enterprises: | ||
| Total carrying value of investment | 181,931,792.66 | 181,545,123.09 |
| The total of following items according to the shareholding proportions | ||
| --Net profit | 2,467,060.07 | 2,260,497.27 |
| --Total comprehensive income | 2,467,060.07 | 2,260,497.27 |
(5) Note to the Significant Restrictions on the Ability of Joint Ventures or Associated Enterprises toTransfer Funds to the CompanyNaught
Annual Report 2022
(6) The Excess Loss of Joint Ventures or Associated Enterprises
Naught
(7) The Unrecognized Commitment Related to Investment to Joint Ventures
Naught
(8) Contingent Liabilities Related to Investment to Joint Ventures or Associated Enterprises
Naught
4. Significant Common Operation
Naught
5. Equity in the Structured Entity Excluded in the Scope of Consolidated Financial StatementsNotes to the structured entity excluded in the scope of consolidated financial statements:
Naught
6. Other
NaughtX. The Risk Related to Financial InstrumentsThe financial instruments of the Company included: equity investment, notes receivable, accounts receivable,accounts payable, etc. The details of each financial instrument see relevant items of Note V.The main risks of the Company due to financial instruments were credit risk, liquidity risk and market risk. Theoperating management of the Company was responsible for the risk management target and the recognition of thepolicies.(I) Credit riskCredit risk was one party of the contract failed to fulfill the obligations and causes loss of financial assets of theother party. The credit risk the Company faced was selling on credit which leads to customer credit risk.The Company will evaluate credit risk of new customer, and set credit limit, once the balance of accountreceivable over credit limit, require the customer to pay or producing and delivering goods shall be approved bythe management of the Company.The Company through monthly aging analysis of account receivable and monitoring the collection situation of thecustomer ensured the overall credit risk of the Company was in control scope. Once appear abnormal situation,the Company should conduct necessary measures to requesting the payment timely.(II) Liquidity RiskLiquidity risk is referred to their risk of incurring capital shortage when performing settlement obligation in theway of cash payment or other financial assets. The policies of the Company are to ensure that there was sufficientcash to pay the due liabilities. The liquidity risk is centralized controlled by the Financial Department of the
Annual Report 2022
Company. The financial department through supervising the balance of the cash and securities can be convert tocash at any time and the rolling prediction of cash flow in future 12 months to ensure the Company have sufficientcash to pay the liabilities under the case of all reasonable prediction.(III) Market riskMarket risk was referred to risk of the fair value or future cash flow of financial instrument changed due to thechange of market price, including: exchange rate risk, interest rate risk and other price risk.
1. Exchange rate risk
Exchange rate risk refers to the risk of loss due to exchange rate changes. The Company's exposure to foreignexchange risk is mainly related to the US dollar and the euro. As of 31 December 2022, the Company's assets andliabilities were in RMB, except for the balances of usd, euro, Hong Kong dollar and rupiah as set out in this NoteVII-82, Foreign Currency Monetary Items. Foreign exchange risk arising from the assets and liabilities of suchforeign currency balances may have a certain impact on the Company's operating results. The Company madeefforts to avoid exchange rate risk through forward exchange settlement, improving operation management andpromoting the international competitiveness of the Company, etc.
2. Interest rate risk
Interest rate risk is refers to fluctuation risk of the fair value or future cash flow of financial instrument change dueto the change of market interest rates. The interest rate risk faced by the Company mainly comes from bankborrowings. By establishing a good bank-enterprise relationship, the Company reasonably designed the credit line,credit variety and credit period, ensured sufficient credit line of banks, and met various short-term financing needsof the Company with preferential loan interest rates. As of 31 December 2022, the Company's fixed interest rateloan balance was RMB945,969,306.34, accounting for 100% of the total loan balance, and the risks in this partwere controllable.
3. Other price risk
Naught
XI. The Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
| Item | Ending fair value | |||
| Fair value measurement items at level 1 | Fair value measurement items at level 2 | Fair value measurement items at level 3 | Total | |
| I. Consistent fair value measurement | -- | -- | -- | -- |
| (I) Trading financial assets | 972,032.92 | 260,569,863.53 | 261,541,896.45 | |
| 1. Financial assets at fair value through profit or loss | 972,032.92 | 260,569,863.53 | 261,541,896.45 | |
| (1) Wealth management products | 260,569,863.53 | 260,569,863.53 | ||
| (2) Investments in | 972,032.92 | 972,032.92 | ||
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| equity instruments | ||||
| (II) Other equity instrument investment | 822,631,485.48 | 41,559,860.92 | 864,191,346.40 | |
| (III) Receivable financing | 569,868,831.79 | 569,868,831.79 | ||
| Total assets measured at fair value on a recurring basis | 823,603,518.40 | 260,569,863.53 | 41,559,860.92 | 1,125,733,242.85 |
| (VII) Refer as financial liabilities measured by fair value and the changes included in the current gains and losses | 4,679,000.00 | 4,679,000.00 | ||
| Total liabilities of consistent fair value measurement | 4,679,000.00 | 4,679,000.00 | ||
| II. Inconsistent fair value measurement | -- | -- | -- | -- |
2. Basis for determining the market value of continuing and discontinuing level 1 fair value measurementitemsLevel 1 fair value measurements are determined based on the market price of equities at the balance sheet dateand the mid-price of the RMB exchange rate published by the State Administration of Foreign Exchange asquoted prices in an active market.
3. Continuing and discontinuing Level 2 fair value measurement items, qualitative and quantitativeinformation on the valuation techniques used and significant parametersThe fair value of financial products subscribed by the Group that are measured at fair value is determined byreference to the expected rate of return provided by the financial institutions.
4. Continuing and discontinuing Level 3 fair value measurement items, qualitative and quantitativeinformation on the valuation techniques used and significant parameters
(1) The Company measured the investment at cost as a reasonable estimate of fair value because there were nosignificant changes in the business environment and operating and financial conditions of the investee, GF Bank.
(2) The Company measured the investee, Shenzhen Zhonghao (Group) Company Limited, at nil as a reasonableestimate of fair value due to the deterioration of its business environment and operating and financial conditions.
(3) The Company measured the investment at cost as a reasonable estimate of fair value because there were nosignificant changes in the business environment and operating and financial conditions of the investee companies,
Annual Report 2022
Foshan Nanhai District United Guangdong New Light Source Industry Innovation Center, Beijing Guang RongUnion Semiconductor Lighting Industry Investment Center and Guangdong Rising Finance Co., Ltd.
(4) The receivables financing represents bank acceptance notes held by the Company with a short remainingmaturity, the face value of which approximates the fair value and the face amount is used to recognize the fair valueat the statement date.
5. Sensitiveness Analysis on Unobservable Parameters and Adjustment Information between Beginningand Ending Carrying Value of Consistent Fair Value Measurement Items at Level 3Naught
6. Explain the Reason for Conversion and the Governing Policy when the Conversion Happens ifConversion Happens among Consistent Fair Value Measurement Items at Different LevelsNaught
7. Changes in the Valuation Technique in the Current Period and the Reason for Such ChangesNaught
8. Fair Value of Financial Assets and Liabilities Not Measured at Fair ValueFinancial assets and liabilities not measured at fair value include: monetary assets, accounts receivable andaccounts payable, etc. There is small difference between the carrying value of above financial assets and liabilitiesand fair value.
9. Other
Naught
XII. Related Party and Related-party Transactions
1. The parent company of the Company
| Name | Registration place | Nature of business | Registered capital | Proportion of share held by the Company as the parent against the Company (%) | Proportion of voting rights owned by the Company as the parent against the Company (%) |
| Hongkong Wah Shing Holding Company Limited | Hong Kong | Investment | HKD110,000 | 13.84% | 13.84% |
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| Guangdong Electronics Information Industry Group Ltd. | Guangzhou | Production and sales | RMB462 million | 9.01% | 9.01% |
| Guangdong Rising Holdings Group Co., Ltd. | Guangzhou | Investment | RMB10 billion | 6.10% | 6.10% |
| Rising Investment Development Limited | Hong Kong | Investment | RMB200 million and HKD1 million | 1.87% | 1.87% |
| Total | 30.82% | 30.82% |
Notes: Information on parent company of the CompanyHongkong Wah Shing Holding Company Limited (hereinafter referred to as "Hongkong Wah Shing"), thelargest shareholder of the Company, is a wholly-owned subsidiary of Guangdong Electronics InformationIndustry Group Ltd. (hereinafter referred to as "Electronics Group"), and Electronics Group, Shenzhen RisingInvestment Development Co., Ltd. (hereinafter referred to as "Shenzhen Rising"), Guangdong Rising HoldingsGroup Co., Ltd. (renamed Guangdong Rising Capital Investment Co., Ltd. on 13 December 2021, hereinafterreferred to as “Rising Capital”) and Rising Investment Development Limited (hereinafter referred to as “RisingInvestment”) are wholly-owned subsidiaries of Guangdong Rising Holdings Group Co., Ltd. (hereinafterreferred to as “Rising Holdings Group”). According to the relevant provisions of the Company Law and theMeasures for the Administrative Measures on Acquisition of Listed Companies, Electronics Group, ShenzhenRising, Rising Capital and Rising Investment are concerted actors, and Rising Holdings Group becomes theactual controller of the Company. On 15 December 2021, Shenzhen Rising and Rising Capital transferred alltheir shares of the Company to Rising Holdings Group. After the transfer, Rising Holdings Group, ElectronicsGroup and Rising Investment acted in concert with each other. As of 31 December 2022, the above-mentionedpersons acting in concert held a total of 419,803,826.00 A and B shares of the Company, accounting for 30.82%of the total share capital of the Company.The final controller of the Company is Guangdong Rising Holdings Group Co., Ltd.
2. Subsidiaries of the Company
Refer to Note IX Equity in Other Entities-1. Equity in Subsidiaries for details.
3. Information on the Joint Ventures and Associated Enterprises of the CompanyRefer to Note IX Equity in Other Entities-3. Equity in Joint Ventures or Associated Enterprises for details of significant jointventures or associated enterprises of the Company.
4. Information on Other Related Parties
| Name | Relationship with the Company |
| Prosperity Lamps & Components Limited | Shareholder owning over 5% shares |
| Guangdong Fenghua Advanced Technology (Holding) Co., Ltd. | Under same actual controller |
| Guangdong Electronic Technology Research Institute | Under same actual controller |
Annual Report 2022
| Guangdong Zhongnan Construction Co., Ltd. | Under same actual controller |
| Guangdong Yixin Changcheng Construction Group | Under same actual controller |
| Guangdong Zhongren Group Construction Co., Ltd | Under same actual controller |
| Shenzhen Yuepeng Construction Co., Ltd. | Under same actual controller |
| Foshan Fulong Environmental Technology Co., Ltd. | Under same actual controller |
| Jiangmen Dongjiang Environmental Company Limited | Under same actual controller |
| Zhuhai Doumen District Yongxingsheng Environmental Industry Waste Recovery and Comprehensive Treatment Co., Ltd. | Under same actual controller |
| Shenzhen Zhongjin Lingnan Nonfemet Co., Ltd. | Under same actual controller |
| Guangdong Zhongjin Lingnan Equipment Technology Co., Ltd. | Under same actual controller |
| Guangdong Rising South Construction Co., Ltd. | Under same actual controller |
| Guangdong Electronics Information Industry Group Ltd. | Under same actual controller |
| Guangdong Zhongjin Lingnan Junpeng Intelligent Equipment Co., Ltd. | Under same actual controller |
| Guangdong Rising Rare Metals and New Photoelectric Materials Co., Ltd. | Under same actual controller |
| Guangdong Heshun Property Management Co., Ltd. | Under same actual controller |
| Guangdong Zhongjin Construction and Installation Engineering Co., Ltd. | Under same actual controller |
| Guangzhou Huajian Engineering Construction Co., Ltd. | Under same actual controller |
| Guangdong Heshun Property Management Co., Ltd. The Pinnacle Branch | Under same actual controller |
| Guangdong Zhongjin Lingnan Engineering Technology Co., Ltd. | Under same actual controller |
| Guangdong Huajian Enterprise Group Co., Ltd. | Under same actual controller |
| Guangdong Rising Capital Investment Co., Ltd. | Under same actual controller |
| MTM Semiconductor Equipment Co., Ltd. | Under same actual controller |
| Dongguan Hengjian Environmental Protection Technology Co., Ltd. | Under same actual controller |
| Shenzhen Longgang Dongjiang Industrial Waste Treatment Co., Ltd. | Under same actual controller |
| Guangdong Electronic Technology Research Institute | Under same actual controller |
| Guangzhou Wanshun Investment Management Co., Ltd. | Under same actual controller |
| Guangdong The Great Wall Building Co., Ltd. | Under same actual controller |
| Guangzhou Shengdu Investment Development Co., Ltd. | Under same actual controller |
| Guangdong Rising Finance Co., Ltd. | Under same actual controller |
| Primatronix Nanho Technology Ltd. | Under same actual controller |
| Fenghua Research Institute (Guangzhou) Limited | Under same actual controller |
| Guangdong Rising Research and Development Institute Co. Ltd. | Under same actual controller |
| Zhaoqing Fenghua Machinery and Electronic Import & Export Co., Ltd. | Under same actual controller |
| Hangzhou Times Lighting Electric Appliances Co., Ltd. | Enterprise controlled by related natural person |
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| Prosperity (China) Electrical Company Limited | Enterprise controlled by related natural person |
| Nanning Ruixiang Industrial Investment Co., Ltd. | Enterprise significantly affected by related natural person |
5. List of Related-party Transactions
(1) Information on Acquisition of Goods and Reception of Labor Service
Information on acquisition of goods and reception of labor service
Unit: RMB
| Related party | Content | Reporting Period | The approval trade credit | Whether exceed trade credit or not | Same period of last year |
| Guangdong Fenghua Advanced Technology (Holding) Co., Ltd. | Purchase of materials | 5,695,752.29 | 26,100,000.00 | Not | 8,358,519.13 |
| Prosperity Lamps & Components Limited | Purchase of materials | 773,460.05 | 6,000,000.00 | Not | 2,654,442.36 |
| Hangzhou Times Lighting Electric Appliances Co., Ltd. | Purchase of materials | 222,265.48 | 646,501.00 | ||
| Prosperity (China) Electrical Company Limited | Purchase of materials | 1,394,588.50 | |||
| MTM Semiconductor Equipment Co., Ltd. | Purchase of materials | 128,389.38 | |||
| Guangdong Electronic Technology Research Institute | Purchase of equipment | 1,151,902.67 | |||
| Guangdong Zhongren Group Construction Co., Ltd | Receiving labor service | 289,930,912.14 | 218,330,275.23 | ||
| Guangdong Yixin Changcheng Construction Group | Receiving labor service | 111,475,305.10 | 16,489,569.63 | ||
| Guangdong Zhongnan | Receiving labor service | 103,677,209.29 | 60,430,362.16 |
Annual Report 2022
| Construction Co., Ltd. | |||||
| Shenzhen Yuepeng Construction Co., Ltd. | Receiving labor service | 3,386,152.77 | 611,333.38 | ||
| Guangdong Electronic Technology Research Institute | Receiving labor service | 823,008.85 | 2,734.91 | ||
| Foshan Fulong Environmental Technology Co., Ltd. | Receiving labor service | 584,364.15 | 52,830.19 | ||
| Jiangmen Dongjiang Environmental Company Limited | Receiving labor service | 534,608.11 | 3,000,000.00 | Not | 1,088,182.44 |
| Dongguan Hengjian Environmental Protection Technology Co., Ltd. | Receiving labor service | 411,123.02 | 358,241.80 | ||
| Shenzhen Longgang Dongjiang Industrial Waste Treatment Co., Ltd. | Receiving labor service | 243,366.03 | |||
| Zhuhai Doumen District Yongxingsheng Environmental Industry Waste Recovery and Comprehensive Treatment Co., Ltd. | Receiving labor service | 194,018.86 | 5,660.38 | ||
| Guangdong The Great Wall Building Co., Ltd. | Receiving labor service | 68,616.45 | 3,396.23 | ||
| Total | 518,020,162.59 | 35,100,000.00 | 311,706,929.39 |
Information of sales of goods and provision of labor service
Unit: RMB
Annual Report 2022
| Related party | Content | Reporting Period | Same period of last year |
| Prosperity Lamps & Components Limited | Sale of products | 21,966,484.49 | 25,442,505.36 |
| Guangdong Fenghua Advanced Technology Holding Co., Ltd. | Sale of products | 14,629,816.41 | 19,106,120.12 |
| Shenzhen Zhongjin Lingnan Nonfemet Co., Ltd. | Sale of products | 1,325,641.06 | 3,104,398.07 |
| Guangzhou Wanshun Investment Management Co., Ltd. | Sale of products | 538,207.40 | |
| Guangdong Yixin Changcheng Construction Group | Sale of products | 441,210.93 | 3,089,642.46 |
| Guangzhou Shengdu Investment Development Co., Ltd. | Sale of products | 281,946.91 | |
| Guangdong Rising South Construction Co., Ltd. | Sale of products | 174,054.95 | 14,356.46 |
| Guangdong Zhongjin Lingnan Equipment Technology Co., Ltd. | Sale of products | 122,855.75 | 225,710.62 |
| Guangdong Zhongjin Lingnan Engineering Technology Co., Ltd. | Sale of products | 103,340.71 | |
| Prosperity (China) Electrical Company Limited | Sale of products | 66,276.48 | 26,984.56 |
| Guangdong Zhongnan Construction Co., Ltd. | Sale of products | 44,383.37 | 1,863,057.74 |
| Guangdong Electronics Information Industry Group Ltd. | Sale of products | 27,796.46 | 8,013.27 |
| Guangdong Zhongjin Lingnan Junpeng Intelligent Equipment Co., Ltd. | Sale of products | 23,742.48 | 49,674.33 |
| Guangdong Electronic Technology Research Institute | Sale of products | 8,792.92 | |
| Guangdong Rising Rare Metals and New Photoelectric Materials Co., Ltd. | Sale of products | 8,100,954.40 | |
| Guangdong Heshun Property Management Co., Ltd. | Sale of products | 73,458.68 | |
| Guangdong Heshun Property Management Co., Ltd. Rising International Building Branch | Sale of products | 619,220.36 | |
| Guangdong Zhongjin Construction and Installation Engineering Co., Ltd. | Sale of products | 108,592.02 | |
| Guangdong Rising Holdings Group Co., Ltd. | Sale of products | 30,226.55 | |
| Guangzhou Huajian Engineering Construction Co., Ltd. | Sale of products | 6,145.47 | |
| Primatronix Nanho Technology Ltd. | Sale of products | 857.79 | |
| Total | 39,754,550.32 | 61,869,918.26 |
Annual Report 2022
Notes:
1. The pricing policy for related-party transactions between the Company and its related parties is as follows:
The pricing of related-party transactions should be market-oriented and subject to the market prices when such atransaction occurs. The relevant funds should be paid on time according to the actual transaction.
2. The related-party transactions between the Company and its subsidiaries and between subsidiaries have beenoffset during report consolidation.
(2) Information on Related-party Trusteeship/Contract
Lists of trusteeship/contract:
NaughtLists of entrust/contractee:
Unit: RMB
| Name of the entruster/contractee | Name of the entrustee/ contractor | Type | Start date | Due date | Pricing basis | Charge recognized in this Reporting Period |
| Foshan NationStar Optoelectronics Co., Ltd. | Guangdong Zhongren Group Construction Co., Ltd | 30 December 2020 | 31 December 2022 | |||
| Fozhao (Hainan) Technology Co., Ltd. | Guangdong Zhongnan Construction Co., Ltd. | 30 March 2022 | 24 April 2023 | |||
| Foshan Electrical and Lighting Co., Ltd. | Guangdong Yixin Changcheng Construction Group | 28 May 2021 | 28 February 2023 | |||
| Foshan Kelian New Energy Technology Co., Ltd. | Guangdong Zhongnan Construction Co., Ltd. | 23 june 2021 | 23 December 2022 |
Notes to entrust/contractee:
1. The Company’s subsidiary Foshan NationStar Optoelectronics Co., Ltd. entered into the General ContractingContract of NationStar Optoelectronics for the Survey, Design, and Construction of the Geely Industrial Parkwith Guangdong Zhongren Group Construction Co., Ltd., Guangdong Architectural Design & ResearchInstitute Co., Ltd., and CSIC International Engineering Co., Ltd. on 30 December 2020. The above parties takecharge of the survey, design, and construction of the Geely Industrial Park. The total price of the contract isRMB509,292,500. The project is in progress now.
Annual Report 2022
2. The Company’s subsidiary Fozhao (Hainan) Technology Co., Ltd. entered into the General ContractingContract for Design and Construction of FSL Hainan Industrial Park Phase I with Guangdong ZhongnanConstruction Co., Ltd. and Guangdong Architectural Design & Research Institute Co., Ltd. on 30 March 2022.The above parties take charge of the design and construction of FSL Hainan Industrial Park. The total price ofthe contract is RMB179,051,600, and the planned total construction period is 390 calendar days (50 days fordesign and 340 days for construction). The project is in progress now.
3. The Company entered into the General Contracting Contract of Foshan Electrical and Lighting Co., Ltd. forthe Design and Construction of the Office Buildings of Gaoming Headquarters Production Base Phase II withGuangdong Yixin Changcheng Construction Group Co., Ltd. and Guangdong Architectural Design & ResearchInstitute Co., Ltd. on 28 May 2021. The above parties take charge of the design and construction of Gaomingoffice buildings. The total price of the contract is RMB175,025,600, and the planned total construction period is650 calendar days (90 days for design and 560 days for construction). The overall project is expected to becompleted, accepted and filed by 28 February 2023. The project is in progress now.
4. The Company’s subsidiary Foshan Kelian New Energy Technology Co., Ltd. entered into the GeneralContracting Contract for Design and Construction of the Foshan Kelian Building Decoration Engineering withGuangdong Zhongnan Construction Co., Ltd. and Guangdong Architectural Design & Research Institute Co.,Ltd. on 23 June 2021. The above parties take charge of the survey, design and construction of Kelian Building.The total price of the contract is RMB189,070,200, and the planned total construction period is 240 calendardays. The overall project is expected to be completed, accepted and filed by 23 December 2022. Among them,except for the self-used layers, the construction period shall be counted from the date when the constructionactually begins. The project is in progress now.
(3) Information on Related-party Lease
The Company was lessor:
Unit: RMB
| Name of lessee | Category of leased assets | The lease income confirmed in the Reporting Period | The lease income confirmed in the same period of last year |
| Guangdong Rising Research and Development Institute Co., Ltd. and its majority-owned subsidiaries | Plant | 1,194,370.76 | 885,499.49 |
The Company served as the lessee:
Unit: RMB
| Name of lessor | Type of assets leased | Rental expenses of short-term lease simplified treated and low-value asset lease (if applicable) | Variable lease payments not included in the measurement of lease liabilities (if applicable) | Paid rent | Income expense of lease liabilities undertaken | Increased right-of-use assets | |||||
| Reporting Period | The same period of last | Reporting Period | The same period of last | Reporting Period | The same period of last | Reporting Period | The same period of last | Reporting Period | The same period of last | ||
Annual Report 2022
| year | year | year | year | year | |||||||
| Guangdong Great Wall Building Co., Ltd. | Operating lease | 237,451.34 | 18,285.71 | 1,557.46 | 15,572.39 | 54,673.41 | 428,496.18 |
(4) Information on Related-party Guarantee
Naught
(5) Information on Inter-bank Lending of Capital of Related Parties
Naught
(6) Information on Assets Transfer and Debt Restructuring by Related PartyNaught
(7) Information on Remuneration for Key Management Personnel
Unit: RMB
| Item | Reporting period | Same period of last year |
| Chairman of the Board | 1,284,350.64 | 1,503,487.93 |
| General Manager | 1,215,545.40 | 1,425,147.02 |
| Chairman of the Supervisory Committee | 778,048.20 | 1,328,797.52 |
| Secretary of the Board | 483,110.98 | 306,708.16 |
| Chief Financial Officer | 982,355.46 | 1,302,654.16 |
| Other | 7,936,351.27 | 10,793,083.07 |
| Total | 12,679,761.95 | 16,659,877.86 |
(8) Other Related-party Transactions
(8.1) Share acquisition from related partiesIn October 2021, Electronics Group signed the Equity Transfer Agreement with the Company on Foshan SigmaVenture Capital Co., Ltd., and transferred its 100% equity of Sigma (Sigma holds 79,753,050 shares ofNationStar Optoelectronics) to the Company at a consideration of RMB917,980,229.67. In the same month,Rising Holdings Group and Rising Capital respectively signed the Share Transfer Agreement on FoshanNationStar Optoelectronics Co., Ltd. with the Company, and transferred their total 52,051,945 tradable sharesof NationStar Optoelectronics with unlimited selling conditions to the Company at a consideration ofRMB599,117,886.95 (RMB11.51/share). As of 31 December 2022, the Company has paid 100% of the equityacquisition amount. For details of the equity acquisition, please refer to Note VIII-2. Business Combinationunder the Same Control.(8.2) Related-party deposits and loansIn accordance with the Financial Service Agreement signed by the Company in 2022, the total maximum daily
Annual Report 2022
deposit balance of the Company and its majority-owned subsidiaries deposited in Guangdong Rising FinanceCo., Ltd. shall not exceed RMB1.2 billion, and the general credit limit provided by Guangdong Rising FinanceCo., Ltd. for the Company and its majority-owned subsidiaries shall not exceed RMB2 billion. As of 31December 2022, the deposit balance of the Company and its subsidiaries deposited in Guangdong RisingFinance Co., Ltd. is RMB1,191,722,800. The Company and its majority-owned subsidiaries have signed acredit agreement of RMB1.5 billion with Guangdong Rising Finance Co., Ltd., of which RMB20.18 million hasbeen used.(8.3) Equity acquisition by the subsidiary NationStar Optoelectronics from the related partyIn August 2022, NationStar Optoelectronics, the Company’s majority-owned subsidiary, planned to acquire
99.87695% equity of Guangdong Fenghua Semiconductor Technology Co., Ltd. held by Guangdong FenghuaAdvanced Technology Holding Co., Ltd. with RMB268.8193 million. On 25 November 2022, the transfer ofthe subject assets involved in the transaction was completed, and 50% of the purchase price was paid. TheCompany indirectly holds 21.45% of shares in Fenghua Semiconductor which will be included in theCompany’s consolidated financial statements. For details, please refer to Note VIII-2. Business Combinationunder the Same Control.
6. Accounts Receivable and Payable of Related Party
(1) Accounts Receivable
Unit: RMB
| Item | Related party | Ending balance | Beginning balance | ||
| Carrying amount | Bad debt provision | Carrying amount | Bad debt provision | ||
| Monetary capital- accrued interest | Guangdong Rising Finance Co., Ltd. | 3,774,186.39 | 1,514,111.47 | ||
| Accounts receivable | Guangdong Fenghua Advanced Technology Holding Co., Ltd. | 2,805,991.79 | 56,119.84 | 4,615,675.06 | |
| Accounts receivable | Prosperity Lamps & Components Limited | 2,754,557.10 | 82,636.71 | 7,536,111.98 | 226,083.36 |
| Accounts receivable | Guangdong Yixin Changcheng Construction Group | 2,049,187.54 | 266,394.38 | 5,752,518.74 | 172,575.56 |
| Accounts receivable | Guangdong Zhongjin Lingnan Equipment Technology Co., Ltd. | 703,256.00 | 103,815.51 | 670,784.00 | 46,301.49 |
| Accounts receivable | Guangdong Heshun Property Management Co., Ltd. Rising Internatioal Building Branch | 669,790.40 | 66,979.04 | 669,790.40 | 20,093.71 |
| Accounts receivable | Fenghua Research Institute (Guangzhou) Limited | 582,275.60 | 11,645.51 | 93,811.81 | 4,690.59 |
| Accounts receivable | Shenzhen Zhongjin Lingnan Nonfemet Co., | 546,626.00 | 16,398.78 | 2,621,178.80 | 78,635.36 |
Annual Report 2022
| Ltd. | |||||
| Accounts receivable | Guangdong Rising Rare Metals and New Photoelectric Materials Co., Ltd. | 457,703.96 | 45,770.40 | 6,455,385.93 | 193,661.58 |
| Accounts receivable | Guangdong Zhongnan Construction Co., Ltd. | 218,038.46 | 18,816.26 | 1,095,727.04 | 32,871.81 |
| Accounts receivable | Guangdong Zhongjin Lingnan Engineering Technology Co., Ltd. | 116,775.00 | 3,503.25 | 10,118.00 | 303.54 |
| Accounts receivable | Guangzhou Huajian Engineering Construction Co., Ltd. | 44,297.00 | 13,289.10 | 44,823.00 | 4,445.48 |
| Accounts receivable | Guangdong Zhongjin Lingnan Junpeng Intelligent Equipment Co., Ltd. | 20,179.00 | 605.37 | ||
| Accounts receivable | Guangdong Rising Research and Development Institute Co. Ltd. | 3,080.00 | 61.60 | ||
| Accounts receivable | Guangdong Heshun Property Management Co., Ltd. | 2,303.60 | 69.11 | ||
| Prepayments | Prosperity (China) Electrical Company Limited | 39,428.00 | |||
| Prepayments | Guangdong Fenghua Advanced Technology Holding Co., Ltd. | 148.68 | |||
| Prepayments | Guangdong Electronic Technology Research Institute | 194,000.00 | |||
| Prepayments | Guangdong Yixin Changcheng Construction Group | 126,896.06 | |||
| Other receivables | Guangdong The Great Wall Building Co., Ltd. | 53,041.92 | 4,708.84 | 45,600.00 | 912.00 |
| Other receivables | Guangdong Huajian Enterprise Group Co., Ltd. | 7,060,000.00 | 211,800.00 | ||
| Other non-current assets | Guangdong Electronics Information Industry Group Ltd. | 275,394,068.90 | |||
| Other non-current assets | Guangdong Rising Holdings Group Co., Ltd. | 159,735,852.51 | |||
| Other non-current | Guangdong Rising Capital Investment | 19,999,513.57 |
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| assets | Co., Ltd. | ||||
| Total | 14,838,562.84 | 690,744.59 | 493,638,270.87 | 992,443.59 |
(2) Accounts Payable
Unit: RMB
| Item | Related party | Ending carrying amount | Beginning carrying amount |
| Notes payable | Guangdong Zhongren Group Construction Co., Ltd | 52,101,816.43 | |
| Notes payable | Guangdong Fenghua Advanced Technology Holding Co., Ltd. | 449,283.50 | 798,496.60 |
| Accounts payable | Guangdong Zhongren Group Construction Co., Ltd | 129,250,643.46 | 163,292,707.38 |
| Accounts payable | Guangdong Fenghua Advanced Technology Holding Co., Ltd. | 3,038,287.38 | 2,417,521.87 |
| Accounts payable | Prosperity Lamps & Components Limited | 773,460.05 | 1,337,304.32 |
| Accounts payable | Guangdong Electronic Technology Research Institute | 736,000.00 | |
| Accounts payable | Hangzhou Times Lighting Electric Appliances Co., Ltd. | 99,115.04 | 178,185.14 |
| Accounts payable | Foshan Fulong Environmental Technology Co., Ltd. | 64,375.00 | |
| Accounts payable | Dongguan Hengjian Environmental Protection Technology Co., Ltd. | 46,520.40 | 118,352.30 |
| Accounts payable | Shenzhen Longgang Dongjiang Industrial Waste Treatment Co., Ltd. | 14,010.00 | |
| Accounts payable | Guangdong Zhongnan Construction Co., Ltd. | 12,370,475.74 | |
| Accounts payable | Guangdong Yixin Changcheng Construction Group | 3,825,018.07 | |
| Accounts payable | Prosperity (China) Electrical Company Limited | 567,218.00 | |
| Other payables | Nanning Ruixiang Industrial Investment Co., Ltd. | 120,352,181.20 | 120,352,181.20 |
| Other payables | Guangdong Huajian Enterprise Group Co., Ltd. | 3,216,344.40 | 1,726,264.40 |
| Other payables | Shenzhen Yuepeng | 2,359,738.14 | 298,300.64 |
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| Construction Co., Ltd. | |||
| Other payables | Guangdong Fenghua Advanced Technology Holding Co., Ltd. | 1,037,278.57 | 1,008,558.26 |
| Other payables | Guangdong Zhongnan Construction Co., Ltd. | 846,938.10 | |
| Other payables | Guangdong Electronic Technology Research Institute | 391,025.00 | |
| Other payables | Zhaoqing Fenghua Machinery and Electronic Import & Export Co., Ltd. | 202,103.81 | |
| Contract liabilities, other current liabilities | Prosperity (China) Electrical Company Limited | 59,428.00 | 59,428.00 |
| Contract liabilities, other current liabilities | Guangdong Rising South Construction Co., Ltd. | 3,233.00 | |
| Contract liabilities, other current liabilities | Guangdong Heshun Property Management Co., Ltd. | 2,303.60 | |
| Total | 314,445,419.67 | 308,948,677.33 |
7. Commitments of Related Party
1. Commitment on Avoidance of Horizontal Competition
(1) Commitment maker: Electronics Group and Hong Kong Rising Investment
Contents of Commitment: Electronics Group and its acting-in-concert parties Hong Kong Rising Investment havemade more commitments as follows to avoid horizontal competition with the Company: 1. They shall conductsupervision and restraint on the production and operation activities of themselves and their relevant enterprises sothat besides the enterprise above that is in horizontal competition with the Company for now, if the products orbusiness of them or their relevant enterprises become the same with or similar to those of the Company or itssubsidiaries in the future, they shall take the following measures: (1) If the Company thinks necessary, they andtheir relevant enterprises shall reduce and wholly transfer their relevant assets and business; and (2) If theCompany thinks necessary, it is given the priority to acquire first, by proper means, the relevant assets andbusiness of them and their relevant enterprises. 2. All the commitments made by them to eliminate or avoidhorizontal competition with the Company are also applicable to their directly or indirectly controlled subsidiaries.They are obliged to urge and make sure that other subsidiaries execute what’s prescribed in the relevant documentand faithfully honor all the relevant commitments. 3. If they or their directly or indirectly controlled subsidiariesbreak the aforesaid commitments and thus cause a loss for the Company, they shall compensate the Company on arational basis.Date of commitment making: 4 December 2015Term of commitment: Long-standingFulfillment: In execution
(2) Commitment maker: Rising Group
Contents of Commitment: 1. The Promisor will take active measures to avoid any business or activity thatcompetes or may compete with the principal business of the Company and its auxiliary enterprises, and urge the
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Promisor to control enterprises to avoid any business or activity that competes or may compete with the principalbusiness of the Company and its auxiliary enterprises. 2. If the Promisor and its controlled enterprises are giventhe opportunity to engage in new business that constitutes or may constitute horizontal competition with theprincipal businesses of the Company and its auxiliary enterprises, the Promisor will make every effort to make thebusiness opportunity first available to the Company or its auxiliary enterprises on reasonable and fair terms andconditions on the premise that conditions permit and in the interest of the listed company.Date of commitment making: 4 November 2021Term of commitment: Long-standingFulfillment: In execution
(3) Commitment maker: Rising Group, Rising Capital, and Hongkong Wah ShingContents of Commitment: 1. They shall conduct supervision and restraint on the production and operationactivities of themselves and their relevant enterprises so that besides the enterprise above that is in horizontalcompetition with FSL for now, if the products or business of them or their relevant enterprises become the samewith or similar to those of FSL or its subsidiaries in the future, they shall take the following measures: (1) If FSLthinks necessary, they and their relevant enterprises shall reduce and wholly transfer their relevant assets andbusiness; and (2) If FSL thinks necessary, it is given the priority to acquire first, by proper means, the relevantassets and business of them and their relevant enterprises. 2. All the commitments made by them to eliminate oravoid horizontal competition with FSL are also applicable to their directly or indirectly controlled subsidiaries.They are obliged to urge and make sure that other subsidiaries execute what’s prescribed in the relevant documentand faithfully honor all the relevant commitments. 3. If they or their directly or indirectly controlled subsidiariesbreak the aforesaid commitments and thus cause a loss for FSL, they shall compensate FSL on a rational basis.Date of commitment making: 27 October 2021.Term of commitment: Long-standing.Fulfillment: In execution.
2. Commitment on Reduction and Regulation of Related-party Transactions
(1) Commitment maker: Electronics Group and Hong Kong Rising Investment
Contents of Commitment: Electronics Group and Hong Kong Rising Investment have made a commitment thatduring their direct or indirect holding of the Company’s shares, they shall 1. Strictly abide by the regulatorydocuments of the CSRC and the SZSE, the Company’s Articles of Association, etc. and not harm the interests ofthe Company or other shareholders of the Company in their production and operation activities by takingadvantage of their position as the controlling shareholder and actual controller; 2. make sure that they or theirother controlled subsidiaries, branch offices, jointly-run or associated companies (the “Relevant Enterprises” forshort) will try their best to avoid or reduce related-party transactions with the Company or the Company’ssubsidiaries; 3. strictly follow the market principle of justness, fairness and equal value exchange for necessaryand unavoidable related-party transactions between them and their Relevant Enterprises and the Company, andwithdraw from voting when a related-party transaction with them or their Relevant Enterprises is being voted onat a general meeting or a board meeting, and execute the relevant approval procedure and information disclosureduties pursuant to the applicable laws, regulations and regulatory documents. Where the aforesaid commitmentsare broken and a loss is thus caused for the Company, its subsidiaries or the Company’s other shareholders, theyshall be obliged to compensate.Date of commitment making: 4 December 2015Term of commitment: Long-standingFulfillment: In execution
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(2) Commitment maker: Rising Group
Contents of Commitment: 1. Strictly abide by the regulatory documents of the CSRC and the SZSE, theCompany’s Articles of Association, etc; and not harm the interests of the Company or other shareholders of theCompany in their production and operation activities by taking advantage of their position as the controllingshareholder and actual controller; 2. make sure that they or their other controlled subsidiaries, branch offices,jointly-run or associated companies (the "Relevant Enterprises" for short) will try their best to avoid or reducerelated-party transactions with the Company or the Company’s subsidiaries; 3. strictly follow the market principleof justness, fairness and equal value exchange for necessary and unavoidable related-party transactions betweenthem and their Relevant Enterprises and the Company, and withdraw from voting when a related-party transactionwith them or their Relevant Enterprises is being voted on at a general meeting or a board meeting, and execute therelevant approval procedure and information disclosure duties pursuant to the applicable laws, regulations andregulatory documents.Date of commitment making: 4 November 2021Term of commitment: Long-standingFulfillment: In execution
(3) Commitment maker: Rising Group, Rising Capital, and Hongkong Wah ShingContents of Commitment: They have made a commitment that during their direct or indirect holding of FSLactivities of themselvesstrictly abide by the regulatory documents of the CSRC and the SZSE,FSL’s Articles ofAssociation, etc. and not harm the interests of the Company or other shareholders of FSL in their production andoperation activities by taking advantage of their position as the controlling shareholder and actual controller; 2.make sure that they or their other controlled subsidiaries, branch offices, jointly-run or associated companies (the"Relevant Enterprises" for short) will try their best to avoid or reduce related-party transactions with FSL or FSL’ssubsidiaries; 3. strictly follow the market principle of justness, fairness and equal value exchange for necessaryand unavoidable related-party transactions between them and their Relevant Enterprises and FSL, and withdrawfrom voting when a related-party transaction with them or their Relevant Enterprises is being voted on at a generalmeeting or a board meeting, and execute the relevant approval procedure and information disclosure dutiespursuant to the applicable laws, regulations and regulatory documents. Where the aforesaid commitments arebroken and a loss is thus caused for FSL, its subsidiaries or FSL’s other shareholders, they shall be obliged tocompensate.Date of commitment making: 27 October 2021.Term of commitment: Long-standing.Fulfillment: In execution.
3. Commitment on Independence
(1) Commitment maker: Electronics Group and Hong Kong Rising Investment
Contents of Commitment: In order to ensure the independence of FSL in business, personnel, asset, organizationand finance, Electronics Group and Hong Kong Rising Investment have made the following commitments: 1.They will ensure the independence of FSL in business: (1) They promise that FSL will have the assets, personnel,qualifications and capabilities for it to operate independently as well as the ability of independent, sustainableoperation in the market. (2) They promise not to intervene in FSL’s business activities other than the execution oftheir rights as FSL’s shareholders. (3) They promise that they and their related parties will not be engaged inbusiness that is substantially in competition with FSL’s business. And (4) They promise that they and their relatedparties will try their best to reduce related-party transactions between them and FSL; for necessary andunavoidable related-party transactions, they promise to operate fairly following the market-oriented principle and
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at fair prices, and execute the transaction procedure and the duty of information disclosure pursuant to theapplicable laws, regulations and regulatory documents. 2.They will ensure the independence of FSL in personnel:
(1) They promise that FSL’s GM, deputy GMs, CFO, Company Secretary and other senior management personnelwill work only for and receive remuneration from FSL, not holding any positions in them or their other controlledsubsidiaries other than director and supervisor. (2) They promise FSL’s absolute independence from their relatedparties in labor, human resource and salary management. And (3) They promise to follow the legal procedure intheir recommendation of directors, supervisors and senior management personnel to FSL and not to hire ordismiss employees beyond FSL’s Board of Directors and General Meeting. 3. They will ensure the independenceand completeness of FSL in asset: (1) They promise that FSL will have a production system, an auxiliaryproduction system and supporting facilities for its operation; legally have the ownership or use rights of the land,plants, machines, trademarks, patents and non-patented technology in relation to its production and operation; andhave independent systems for the procurement of raw materials and the sale of its products. (2) They promise thatFSL will have independent and complete assets all under FSL’s control and independently owned and operated byFSL. And (3) They promise that they and their other controlled subsidiaries will not illegally occupy FSL’s fundsand assets in any way, or use FSL’s assets to provide guarantees for the debts of themselves or their othercontrolled subsidiaries with. 4. They will ensure the independence of FSL in organization: (1) They promise thatFSL has a sound corporate governance structure as a joint-stock company with an independent and completeorganization structure. (2) They promise that the operational and management organs within FSL willindependently execute their functions according to laws, regulations and FSL’s Articles of Association. 5. Theywill ensure the independence of FSL in finance: (1) They promise that FSL will have an independent financialdepartment and financial accounting system with normative, independent financial accounting rules. (2) Theypromise that FSL will have independent bank accounts and not share bank accounts with its related parties. (3)They promise that FSL’s financial personnel do not hold concurrent positions in its related parties. (4) Theypromise that FSL will independently pay its tax according to law. And (5) They promise that FSL can makefinancial decisions independently and that they will not illegally intervene in FSL’s use of its funds.Date of commitment making: 4 December 2015Term of commitment: Long-standingFulfillment: In execution
(2) Commitment maker: Rising Group
Contents of Commitment: To maintain the independence of the Company, the Promisor has made the followingcommitments: 1. It will ensure the personnel independence of the Company. It promises to ensure personnelindependence with the Company, and GM, deputy GMs, CFO, Secretary of the Board of Directors and othersenior management personnel of the Company will not hold positions other than directors and supervisors in theenterprises wholly owned, controlled or actually controlled by it and its subsidiaries (hereinafter referred to as"subsidiaries"), and will not receive salaries from it or its subsidiaries. the Company: To maintain theindependence of the Company, the Promisor has made the following commitments: 1. It will ensure the personnelindependence of the Company. It promises to ensure personnel independence with the Company, and GM, depnd
(2) It promises that it and its subsidiaries will not illegally occupy the Company’s funds and assets in any way. 3.It will ensure the financial independence of the Company: (1) It promises that the Company will have anindependent financial department and financial accounting system. (2) It promises that the Company will have astandardized and independent financial accounting system. (3) It promises that the Company will haveindependent bank accounts and not share bank accounts with it. (4) It promises that the Company’s financialpersonnel do not hold concurrent positions in it or its subsidiaries. And (5) It promises that the Company canmake financial decisions independently and that they will not illegally intervene in the Company’s use of its funds.
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4. It will ensure the independence of the Company in organization: (1) It promises that the Company can operateindependently with an independent and complete organization structure. (2) It promises that the office andproduction and business premises of the Company are separated from those of Rising Holdings Group. And (3) Itpromises that the Board of Directors, the Supervisory Committee and various functional departments of theCompany operate independently, and there is no subordinate relationship with the functional departments ofRising Holdings Group. And 5, It will ensure the independence of the Company in business: (1) It promises thatthe Company will have independence in business. And (2) It promises that the Company will have the assets,personnel, qualifications and capabilities for it to operate independently as well as the ability of independent,sustainable operation in the market.Date of commitment making: 4 November 2021Term of commitment: Long-standingFulfillment: In execution
4. Commitment on effective performance of measures to fill up returns
Commitment maker: Rising Group, Rising Capital, Electronics Group, Hongkong Wah Shing, Hong Kong RisingInvestment and Shenzhen Rising InvestmentContents of Commitment: 1. They promise not to interfere in the operation and management activities of the listedcompany beyond their authority and not to encroach on the interests of the listed company. 2. From the date ofissuance of these commitments to the completion of this trading of the listed company, if the CSRC makes newregulatory requirements on measures to fill up returns and commitments of relevant personnel, and the abovecommitments cannot meet these new regulatory requirements of the CSRC, they promise to issue supplementarycommitments according to the latest regulations of the CSRC at that time. 3. They promise to earnestly fulfill themeasures to fill up returns formulated by the listed company and any commitments made by them. If they violatethese commitments and causes losses to the listed company or investors, they are willing to bear the compensationresponsibility for the listed company or investors according to law. As one of the subjects responsible for themeasures to fill up returns, if they violate the above commitments or refuses to fulfill the above commitments,they agree that the securities regulatory agencies such as the CSRC and the SZSE will punish them or takerelevant regulatory measures in accordance with the relevant regulations and rules they formulated or issued.Date of commitment making: 27 October 2021.Term of commitment: Long-standing.Fulfillment: In execution.
5. Commitment on non-reduction of FSL shares during major asset restructuringCommitment maker: Rising Group, Rising Capital, Electronics Group, Hongkong Wah Shing, Hong Kong RisingInvestment and Shenzhen Rising InvestmentContents of Commitment: 1. They promise that there will be no share reduction plan from the date of issuance ofthis Letter of Commitments to the completion of this trading, and they will not reduce its FSL shares in any otherway (except the transfer or transfer between Rising Holdings Group and its wholly-owned subsidiaries). 2. If FSLimplements ex-rights behaviors such as share conversion, share offering and share allotment from the date ofissuance of this Letter of Commitments to the completion of this trading, the newly added shares obtained bythem will also be subject to the above commitments related to not reducing share holdings.Date of commitment making: 28 September 2021.Term of commitment: Until the completion of this trading.Fulfillment: Complete
6. Commitment on compensation for possible violations of laws and regulations by NationStarOptoelectronics
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Commitment maker: Rising Holdings Group, Electronics Group, and Rising CapitalContents of Commitment: If NationStar Optoelectronics is subject to administrative penalties such asaccountability and fines by relevant competent departments after the completion of this trading due to the illegalacts of NationStar Optoelectronics before the completion of this acquisition, they promise to fully bear the lossesof NATIONSTAR or FSL, as well as the expenses and fees under punishment or recourse, to ensure thatNationStar Optoelectronics or FSL will not suffer any economic losses.Date of commitment making: 27 October 2021.Term of commitment: Long-standing.Fulfillment: In execution.
7. Commitment on explanation of confidentiality measures and confidentiality system adopted for thistradingCommitment maker: Rising Group, Electronics Group, and Rising CapitalContents of Commitment: 1. During the preliminary negotiation between the listed company and the counterpartyon this trading, necessary and sufficient confidentiality measures were taken to limit the scope of knowledge ofrelevant sensitive information. According to the requirements of the SZSE, the listed company has completed thesubmission and online reporting of the memorandum of trading process, relevant materials of insider informationinsiders. The listed company has hired independent financial advisers, legal advisers, audit institutions, valuationinstitutions and other intermediaries, and signed confidentiality agreements or appointment agreements withconfidentiality clauses with the above intermediaries, clearly stipulating the scope of confidential information andthe confidentiality responsibilities of each intermediary. 2. In communicating with the transaction counterparties,the listed company made clear to them that they shall be strictly confidential about the relevant information, shallnot leak the information to others, and shall not trading in shares of the listed company with the information. 3.When discussing the problems, solutions, suggestions, ideas and solutions with respect to the transaction, thetransaction counterparties did not leak the restructuring information to any other irrelevant entities or individuals.
4. Before the listed company discloses information in relation to the transaction, the transaction counterpartiesstrictly abided by the confidentiality obligation and did not conduct any insider trading using the information.Date of commitment making: 27 October 2021.Term of commitment: Until the completion of this trading.Fulfillment: Complete.
8. Commitment on the truthfulness, accuracy and completeness of the information provided during thismajor asset restructuring
(1) Commitment maker: Rising Group, Electronics Group, and Rising Capital
Contents of Commitment: 1. They promise that the information provided is true, accurate and complete, and thereare no false records, misleading statements or material omissions. 2. They have provided relevant information anddocuments (including but not limited to original written materials, duplicate materials or oral testimony, etc.)related to this trading to the intermediaries. They promise that the copies or photocopies of the documents andmaterials provided are consistent with the originals, and that the signatures and seals of the documents andmaterials are authentic, and the signatories of the documents have been legally authorized and effectively signedthe documents; that there are no false records, misleading statements or material omissions. 3. They promise thatthe explanations and confirmations issued by them are true, accurate and complete, and there are no false records,misleading statements or material omissions. 4. During this trading, they will disclose the information about thistrading in a timely manner in accordance with relevant laws and regulations, the CSRC and the SZSE, and ensurethe authenticity, accuracy and completeness of such information. 5. They shall bear legal responsibility for theauthenticity, accuracy and completeness of the information, documents, materials, explanations and confirmations
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provided. In case of any violation or losses caused to the listed company, investors, parties to the trading andintermediaries participating in this trading, they will be liable for compensation according to law. 6. Where theinformation provided or disclosed by them in this trading is suspected of false records, misleading statements ormaterial omissions, and they are filed for investigation by the judicial organ or by the CSRC, the shares withinterests in the listed company will not be transferred until the investigation conclusion is formed.Date of commitment making: 27 October 2021.Term of commitment: Long-standing.Fulfillment: In execution.
9. Commitment on the clarity of the underlying assets of this major asset restructuring
(1) Commitment maker: Electronics Group
Contents of Commitment: Electronics Group promises that the 100% equity of Sigma it held is clear in ownershipand is not subject to any dispute or potential dispute, and there is no situation affecting its legal existence; andthere is no pending or potential litigation, arbitration and any other administrative or judicial procedure that maylead to the seizure, freezing, expropriation or restriction of transfer of the above-mentioned equity by the relevantjudicial or administrative organs. There is no entrusted shareholding or trust shareholding, restriction orprohibition of transfer of the above-mentioned equity controlled by Electronics Group.Term of commitment: Long-standing.Fulfillment: In execution.
(2) Commitment maker: Rising Group and Rising Capital
Contents of Commitment: Rising Group and Rising Capital promise that the shares of NationStar Optoelectronicsit held is clear in ownership and is not subject to any dispute or potential dispute, and there is no situationaffecting its legal existence; the above shares are not subject to any other pledges, guarantees or third-partyinterests or restrictions and there is no pending or potential litigation, arbitration and any other administrative orjudicial procedure that may lead to the seizure, freezing, expropriation or restriction of transfer of the above-mentioned equity by the relevant judicial or administrative organs. There is no entrusted shareholding or trustshareholding, restriction or prohibition of transfer of the above-mentioned equity controlled by Rising Group andRising Capital.Date of commitment making: 27 October 2021.Term of commitment: Long-standing.Fulfillment: In execution.
10. Commitment on compliance of this major asset restructuring with Several Provisions on the Reductionof Shares by Shareholders, Directors and Supervisors of Listed CompaniesCommitment maker: Rising Group and Rising CapitalContents of Commitment: 1. They are not subject to any securities and futures crimes as stipulated in Article 6 ofSeveral Provisions on the Reduction of Shares by Shareholders, Directors and Supervisors of Listed Companies.During the period when the CSRC or the judicial organ filed a case for investigation, and less than six monthsafter the administrative penalty decision and criminal judgment were made, there was no situation that the sharesof NATIONSTAR could not be reduced due to violation of the rules of stock exchanges and public censure bystock exchanges for less than three months. 2. In case of any violation or losses caused to NATIONSTAR,investors, parties to the trading and intermediaries participating in this trading, they will be liable forcompensation according to law.Date of commitment making: 27 October 2021.Term of commitment: Until the completion of this trading.Fulfillment: Complete.
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11. Commitment on the release of credit guarantee
Commitment maker: Electronics GroupContents of Commitment: 1. As of the date of issuance of the Letter of Commitments, Sigma has signed theMaximum Guarantee Contract (Contract No.: XYYBZ (BY) No.201906280001-1) and the Maximum PledgeContract for Stocks of Listed Companies (Contract No.: XYYZZ (BY) No.201906280001-2) with GuangzhouBranch of Industrial Bank Co., Ltd. Sigma will provide the maximum guarantee and pledge guarantee for the debtof Electronics Group, with the guarantee amount of RMB400 million (in words: RMB Four Hundred Million),and the guarantee will be valid from 28 June 2019 to 27 June 2022. Electronics Group promises that on the date ofissuance of this Letter of Commitment, all the loans involved in the Maximum Guarantee Contract and theMaximum Pledge Contract for Stocks of Listed Companies have been repaid, there is no debt based on theguarantee under the above contracts, and 39,876,500 shares of NationStar Optoelectronics held by Sigma havebeen released from pledge. At the same time, Electronics Group further makes an irrevocable commitment that itwill not add any new loans to Guangzhou Branch of Industrial Bank Co., Ltd. as a borrower before the expirationdate of the Maximum Guarantee Contract and the Maximum Pledge Contract for Stocks of Listed Companies, soas to ensure that Sigma will not actually assume any guarantee responsibilities due to the above guaranteecontracts. 2. Electronics Group promises that it will not arrange for Sigma to add any form of guarantee before thecompletion of the delivery of Sigma's equity in this trading. 3. In case of any violations of the above commitments,Electronics Group shall solve and eliminate the above situation within ten days, and bear corresponding legalresponsibilities to Sigma and FSL.Date of commitment making: 27 October 2021Term of commitment: Until the completion of this trading.Fulfillment: Complete.12．About absence of insider tradingCommitment maker: Key management personnel of Rising Group, Electronics Group, and Rising CapitalContents of Commitment: They promise that they will not disclose the relevant insider information of this tradingor make use of the insider information for insider trading; 2. As of the issuance date of the Report on Major AssetPurchase and Related Party Trading of Foshan Electrical and Lighting Co., Ltd. (Draft), they have not been placedon file for investigation or criminal investigation due to suspected insider trading related to this trading, and havenot been subject to administrative punishment by the CSRC or criminal responsibility investigated by judicialorgans according to law for insider trading related to any major asset restructuring, and have not been prohibitedfrom engaging in any major asset restructuring of listed companies according to Article 13 of the InterimProvisions on Strengthening the Supervision of Abnormal Stock Trading Related to Major Asset Restructuring ofListed Companies in the last 36 months; 3. In case of violation of the above commitments, they will bear all lossescaused to the listed company and its shareholders.Date of commitment making: 27 October 2021Term of commitment: From the date of the issuance of the letter of commitment until the completion of thistradingFulfillment: Complete.
8. Other
Naught
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XIII. Stock Payment
1. The Overall Situation of Stock Payment
□Applicable ? Not applicable
2. The Stock Payment Settled in Equity
□Applicable ? Not applicable
3. The Stock Payment Settled in Cash
□Applicable ? Not applicable
4. Modification and Termination of the Stock Payment
Naught
5. Other
NaughtXIV. Commitments and Contingency
1. Significant Commitments
Significant commitments on the balance sheet date
(1) Commitment to cash dividends
Commitment maker: The Company.Contents: The annual profits distributed in cash by the Company shall be not less than 30% of the distributableprofits of the year.Date of commitment making: 27 May 2009.Term of commitment: Long-standing.Fulfilment: In execution.
(2) Commitment to the development of Haikou plot
In November 2021, Hainan Technology, a wholly-owned subsidiary of the Company, acquired an industrial landlocated in Mei’an Science and Technology New City, Haikou, with a land area of 34,931.13 square meters and aland price of RMB26,596,784.43. In the same month, Hainan Technology signed the Agreement on IndustrialProject Development and Land Access with Haikou National High-tech Industrial Development ZoneManagement Committee (hereinafter referred to as the “Haikou Development Zone Management Committee”).The agreement stipulates that the above-mentioned plot is used for the development of marine lighting R&Dand manufacturing base projects, and the investment of fixed assets is approximately RMB314 million(including plants, equipment, and land, equivalent to RMB6 million per mu (1 mu equals to 666.67 squaremeters). Hainan Technology promises to complete the planning scheme design within two months from the dateof signing the Confirmation of Listing and Transferring the Right to Use State-owned Construction Land;complete the construction drawing design within three months after completing the planning scheme design and
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obtain the Building Construction Permits and start construction at the same time (subject to the foundationconcrete pouring of the main buildings). The project will be put into production within 18 months from the dateof signing the Confirmation of Listing and Transferring the Right to Use State-owned Construction Land. Fromthe date of signing the contract to the first year after the project is put into production, the accumulated taxpayment is not less than RMB10 million; the accumulated tax payment in the first two years is not less thanRMB27.4 million; the accumulated tax payment in the first three years is not less than RMB67.1 million; theaccumulated tax payment in the first four years is not less than RMB117 million; the accumulated tax paymentin the five years is not less than RMB203 million. The total industrial output value (or revenue) in the first yearafter the project is put into production is not less than RMB218 million; the accumulated value in the first twoyears is not less than RMB433 million; the accumulated value in the first three years is not less than RMB929million; the accumulated value in the first four years is not less than RMB1,578 million; the accumulated valuein the five years is not less than RMB2.62 billion. If the project fails to start construction within 12 months fromthe date of signing the Confirmation of Listing and Transferring the Right to Use State-owned ConstructionLand due to Hainan Technology reasons, the Haikou Development Zone Management Committee has the rightto unilaterally terminate the contract and the municipal government will recover the land use rights according tolaw; if the total amount of tax paid in the year after the project is put into production does not reach the totalannual tax payment as agreed, Hainan Technology shall pay liquidated damages to the Haikou DevelopmentZone Management Committee according to the difference; if Hainan Technology has idle land not due togovernment reasons and force majeure, the municipal government shall collect idle land fees or recover theright to use state-owned construction land.
2. Contingency
(1) Significant Contingency on Balance Sheet Date
1. Litigation between Foshan Kelian and Shenzhen Chuanglian Real Estate Agency Co., Ltd.The plaintiff Shenzhen Chuanglian Real Estate Agency Co., Ltd. (hereinafter referred to as “Chuanglian”) andFoshan Kelian New Energy Technology Co., Ltd. (hereinafter referred to as “Foshan Kelian”) signed theExclusive Sales Agreement of Property of Foshan Kelian Center Project in August 2019, which was terminatedby both parties through consultation. Chuanglian sued for the refund of the house purchase funds paid before[Case No.: (2021) Y. 0604 M.CH. No. 42183]. On 16 August 2022, judgment of first instance issued by FoshanChancheng District People’s Court was received and as follows: 1. Foshan Kelian shall return the deposit ofRMB3.65 million and pay interest to Chuanglian within ten days from the effective date of the judgment; 2.other claims of Chuanglian were rejected. Both parties appealed against the ruling [Second Trial Case No.:
(2022) Y. 06 M.ZH. No. 17185] and the judgment of second instance issued by Foshan Intermediate People'sCourt was received on 28 March 2023: The appeal is rejected and the original decision is affirmed.
2. Litigation between FSL Zhida Electric Technology Co., Ltd. and Shenzhen Secket Electrician TechnologyCo., Ltd.The plaintiff Shenzhen Secket Electrician Technology Co., Ltd. (hereinafter referred to as “Secket”) claimedthat it enjoyed the utility model patent of a safety socket and that the defendants Chengdu ArGangle InsulatedElectrical Manufacturing Co., Ltd., Chengdu ArGangle Yuanhu Technology Co., Ltd., FSL Zhida ElectricTechnology Co., Ltd. and Zhejiang Tmall Network Co., Ltd. produced and sold the products involved withoutits authorization. Therefore the plaintiff sued to the court for compensation of RMB11 million. The plaintifffiled the lawsuit in three cases and Guangzhou Intellectual Property Court heard the three cases together [CaseNo.: (2021) Y. 73 M.ZH. No. 1775, 1776 and 1880]. The case was heard on 25 April 2022, for the second time
Annual Report 2022
on 20 June, for the third time on 23 September and for the fourth time on 22 November, and has not beenconcluded as of the date of this report.
3. Litigation between the Company and Kunming Guodong Economic & Trade Co., Ltd.Kunming Guodong Economic & Trade Co., Ltd. (hereinafter referred to as “Guodong Economic & Trade”) is adistributor of the Company for many years and defaulted on the payment for goods of the Company totalingRMB1,987,021.16 as of April 2022. Therefore the Company filed a lawsuit with Chancheng District People’sCourt [(2022) Y. 0604 M.ZH. No. 20844] and the judgment of first instance issued by Foshan ChanchengDistrict People’s Court on 2 November 2022 was received and as follows: 1. Guodong Economic & Trade shallpay FSL RMB1,881,849 and interest; 2. Bi Lingqing and Li Peng shall assume joint-and-several liability; 3.other claims of FSL were rejected. Guodong Economic & Trade appealed against the ruling [Second Trial CaseNo.: (2023) Y. 06 M.ZH. No. 1205] and the judgment of second instance issued by Foshan IntermediatePeople's Court was received on 27 March 2023: The appeal is rejected and the original decision is affirmed. Thecase has concluded as of the date of this report. The Company owns the property of Guodong Economic &Trade as collateral and provides bad debt allowance of RMB152,339.88 based on expected credit losses.
4. Litigation between the Company and Xuzhou Longxiang Lighting Equipment Sales Co., Ltd.Xuzhou Longxiang Lighting Equipment Sales Co., Ltd. (hereinafter referred to as “Longxiang”) is a distributorof the Company for many years and defaulted on the payment for goods of the Company totalingRMB2,427,830.95 as of August 2022. Therefore the Company filed a lawsuit with Chancheng District People’sCourt [(2022) Y. 0604 M.ZH. No. 32528]. The trial of the case was held on 21 February 2023 in the FoshanChancheng District People’s Court. As of the date of this report, the above case has not been concluded. TheCompany owns the property of Long Xiang as collateral and has provided a bad debt provision ofRMB184,212.00 based on expected credit losses.
5. Guangzhou CM Punk Optoelectronics Co., Ltd. (hereinafter referred to as "CM Punk") sued the Company ina dispute over the sales contract, involving an amount of RMB4,361,300, the basic situation and progress of thecase are as follows: CM Punk supplied the Company with light guide plate products, due to the quality defectsof CM Punk's products, resulting in the quality problems of the Company's products. As a result, the Companywithheld a deposit of RMB2 million from CM Punk. CM Punk sued the Company for RMB4,361,300,000 inarrears of payment and interest, and the Company filed an application for jurisdictional objection. The secondinstance ruling rejected CM Punk's request and the jurisdictional objection was upheld and transferred to theFoshan Chancheng District People's Court. The Foshan Chancheng District People's Court filed a case on 7May 2022, and the Company filed a counterclaim on 27 May 2022, arguing that CM Punk's claims had nofactual or legal basis and counterclaiming that CM Punk was liable for quality losses of approximatelyRMB2.02 million. The case was heard for the first time on 15 June 2022, for the second time on 13 July 2022and for the third time on 1 September 2022. During the trial, CM Punk applied for an appraisal of the signaturehandwriting in the Sales Contract and the Quality Discount Agreement, and the court shook the beads todetermine the appraisal agency in September. The identification agency responded with a letter on 30 December2022, regarding additional information. As of the date of this report, the case is in the process of first instancehearing and the court has not yet decided.
6. Litigation between Liuzhou Lighting, Nanning Liaowang and Laster Electronic Tech (Dongguan) Co., Ltd.Laster Electronic Tech (Dongguan) Co., Ltd. (hereinafter referred to as "Laster Electronic") is the supplier ofLiuzhou Guige and Nanning Liaowang. Laster Electronic requests that: 1. Liuzhou Lighting shall pay thearrears of RMB77,932.00 and the corresponding interest loss, and compensate for the material lossRMB405,461.00 caused by the production of the products in question and interest loss of RMB25,337.10, aswell as compensate for the loss of storage fee and labor storage fee of RMB26,000.00 caused by the material
Annual Report 2022
stagnation; 2, Nanning Liaowang shall pay the arrears of RMB34,822.00 and the corresponding interest loss,and compensate for the material loss of RMB401,029.00 and interest loss of RMB23,385.81 caused by theproduction of the product in question, as well as compensate for the loss of storage fee and manpower storagefee of RMB24,000.00 caused by the material stagnation; 3. Liuzhou Lighting and Nanning Liaowang shall payRMB309,793.00 and RMB1,595,680.00 respectively to Laster Electronic for the apportioned cost of mold test.The lawsuit is expected to be heard in April 2023, no litigation results yet.
7. Litigation between the Company and Guiyang Zhengtianhe Trading Co., Ltd.
Guiyang Zhengtianhe Trading Co., Ltd. (hereinafter referred to as "Zhengtianhe"), a distributor of the Companyfor many years, owed the Company RMB4,384,929.27 for the goods, and the Company filed a lawsuit withFoshan Chancheng District People's Court [(2022) Yue 0604 Civil No. 21387]. The first instance judgment fromFoshan Chancheng District People's Court was received on 3 November 2022: 1. Zhengtianhe paid the purchaseprice of RMB4,364,929.27 and interest to the Company; 2. Meng Qingning, Meng Qingan and Lu Shufenassumed joint and several liabilities for the settlement; 3. The Company was entitled to a priority right ofpayment for one of Meng Qingning's properties; 4. The Company was entitled to a priority right of payment fortwo of Meng Qingning's properties; 5. Rejected other litigation requests of the Company. On 9 January 2023,the Company applied for court enforcement, and Foshan Chancheng District People's Court accepted the caseon 13 February 2023. As of the date of this report, pending the execution of the judgment by Zhengtianhe, theCompany owns Zhengtianhe's properties as collateral and has made a bad debt provision of RMB449,788.82based on expected credit losses.
(2) In Despite of no Significant Contingency to Disclose, the Company Shall Also Make RelevantStatementsThere was no significant contingency in the Company.
3. Other
As of 31 December 2022, guarantees of subsidiaries were as follows (RMB’0,000):
| Principal debtor | Principal debtee | Guarantor | Type of guarantee | Guarantee amount | Guarantee balance |
| Nanning Liaowang (note 1) | Nanning Branch of Industrial Bank | Kuang Linchang, Liang Xiaoling, Yang Shiyue, Gu Hanhua, Qingdao Lighting, Liuzhou Lighting, Chongqing Guinuo | Joint-liability guarantee | 20,000.00 | 0.00 |
| Nanning Liaowang (note 2) | Far Eastern International Financial Leasing Co., Ltd. | Nanning Liaowang, Qingdao Lighting, Liuzhou Lighting, Kuang Linchang, Liang Xiaoling, Yang Shiyue, Gu Hanhua | Joint-liability guarantee | 2,600.00 | 0.00 |
| Liuzhou Lighting (note 3) | Nanning Branch of Industrial Bank | Nanning Liaowang, Liuzhou Lighting, Kuang Linchang, Liang Xiaoling, Yang Shiyue, Gu Hanhua | Joint-liability guarantee | 15,000.00 | 0.00 |
| Chongqing Guinuo (note 4) | Far Eastern International Financial | Nanning Liaowang, Qingdao Lighting, Liuzhou Lighting, Kuang Linchang, Liang Xiaoling, Yang Shiyue, Gu | Joint-liability guarantee | 3,999.00 | 0.00 |
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| Leasing Co., Ltd. | Hanhua | ||||
| Nanning Liaowang, Liuzhou Foreshine, Liuzhou Lighting (note 5) | Nanning Branch of Industrial Bank | Nanning Liaowang Auto Lamp Co., Ltd. | Mortgage | 4,500.00 | 4,500.00 |
| Nanning Liaowang (note 6) | Nanning Branch of Industrial Bank | Chongqing Guinuo Lighting Technology Co., Ltd. | Mortgage | 8,100.00 | 6,510.64 |
| Nanning Liaowang, Liuzhou Fuxuan, Liuzhou Lighting (note 7) | Nanning Branch of Industrial Bank | Liuzhou Guige Lighting Technology Co., Ltd. | Mortgage | 9,100.00 | 9,100.00 |
| NationStar Semiconductor (note 8) | Foshan Branch of China Merchants Bank | Foshan NationStar Optoelectronics Co., Ltd. | Joint-liability guarantee | 30,000.00 | 0.00 |
| Total | —— | —— | —— | 93,299.00 | 20,110.64 |
Note 1: Nanning Liaowang and Nanning Branch of Industrial Bank signed the Working Capital Loan Contract(XYGCBLJ Zi (2021) No.1001), with a loan amount of RMB47.7 million (from 1 February 2021 to 1 February2022). This guarantee has been terminated. Kuang Linchang, Liang Xiaoling, Yang Shiyue, Gu Hanhua, QingdaoLighting, Liuzhou Guige Lighting and Chongqing Guinuo jointly assume joint and several guarantee liabilities forall creditor's rights balances under the maximum principal limit of RMB200 million, and the guarantee amount isvalid from 30 December 2019 to 30 December 2024. This guarantee has been terminated on 1 February 2022.Note 2: On 18 May 2020, Nanning Liaowang and Far East International Financial Leasing Co., Ltd. (hereinafterreferred to as "Far East Leasing") signed the Sale Lease Contract (Contract No.: IFELC20DE24MZT-L-01), witha financing loan amount of RMB26 million, and the actual loan amount obtained was RMB24 million (thedifference with the financing loan amount was RMB2 million as a deposit, which was withheld by Far EastLeasing), and the loan term of finance lease is 30 months. Liuzhou Guige Lighting, Qingdao Lighting, YangShiyue, Gu Hanhua, Kuang Linchang and Liang Xiaoling provide joint and several liability guarantee for thisfinancing loan. Nanning Liaowang signed the Ownership Transfer Agreement with Far East Leasing. Accordingto the General Terms and Conditions of the Sale and Return Lease Contract: Under the condition that Party B(Nanning Liaowang, the same below) enjoys all the rights under this contract and does not affect Party B's normaluse, Party A (Far East Leasing, the same below) may transfer its ownership of the leased items to any third party,or mortgage the leased items and other guarantees, and the validity of the contract will not be affected. Party Aundertakes not to adversely affect Party B's rights (especially the performance of this contract) due to thetransfer/mortgage. Party B shall perform this contract according to the contract, and Party A shall guarantee thatParty B shall have the right to use the leased items and the ownership after the expiration of the lease periodaccording to the contract. This guarantee has been terminated on 26 November 2022.Note 3: Liuzhou Guige Lighting and Nanning Branch of Industrial Bank signed loan contracts numbered
Annual Report 2022
WYZH2021012600174, WYZH2021042100164 and WYZH2021042100146, borrowing RMB10 million (from26 January 2021 to 26 January 2022), RMB20 million (from 21 April 2021 to 21 April 2022), and RMB20 million(from 22 April 2021 to 22 April 2022) respectively. This guarantee has been terminated. Nanning Liaowang,Kuang Linchang, Liang Xiaoling, Yang Shiyue and Gu Hanhua provide joint and several liability guarantee withthe maximum balance of principal creditor's rights not exceeding RMB150 million exposure, and the guaranteeamount is valid from 30 December 2019 to 30 December 2024. This guarantee has been terminated on 22 April2022.Note 4: On 21 June 2020, Chongqing Guinuo signed the Sale and Return Lease Contract with Far East Leasing(Contract No.: IFELC20DE2XZXM-L-01), with a financing loan amount of RMB39.9 million and an actual loanamount of RMB35.99 million (the difference with the financing loan amount is RMB4 million as a deposit, whichis withheld by Far East Leasing), and the loan term of finance lease is 30 months. This financial lease loan ismortgaged by Chongqing Guinuo with 28 fixed assets and 104 molds owned by itself. Chongqing Guinuo signedthe Ownership Transfer Agreement with Far East Leasing, and Nanning Liaowang, Liuzhou Guige Lighting,Qingdao Lighting, Liang Xiaoling, Yang Shiyue, Gu Hanhua and Kuang Linchang provided joint and severalliability guarantee for the lease loan. According to the General Terms and Conditions of the Sale and ReturnLease Contract: Under the condition that Party B (Chongqing Guinuo, the same below) enjoys all the rights underthis contract and does not affect Party B's normal use, Party A (Far East Leasing, the same below) may transfer itsownership of the leased items to any third party, or mortgage the leased items and other guarantees, and thevalidity of the contract will not be affected. Party A undertakes not to adversely affect Party B's rights (especiallythe performance of this contract) due to the transfer/mortgage. Party B shall perform this contract according to thecontract, and Party A shall guarantee that Party B shall have the right to use the leased items and the ownershipafter the expiration of the lease period according to the contract. This guarantee has been terminated on 20December 2022.Note 5: Nanning Liaowang Auto Lamp Co., Ltd. (Nanning Liaowang) and Nanning Branch of Industrial BankCo., Ltd. entered into the Maximum Financing Agreement (X.Y.G.CH.B.R.Z.Z. [2022] No. (01)) to conduct a billtransaction of RMB45 million. Nanning Liaowang provides mortgage guarantee with the immovable propertyowned as collateral, and the balance of its creditor's rights does not exceed the maximum mortgage principal ofRM72,344,400 in the original guarantee contract. The mortgage amount is valid from 23 June 2020 to 23 June2025. This guarantee has been terminated on 24 April 2022. In the new guarantee contract, Nanning Liaowangprovides mortgage guarantee with the immovable property owned as collateral, and the balance of its creditor’srights does not exceed the maximum mortgage principal of RMB69,139,100. The mortgage amount is valid from25 April 2022 to 31 December 2025 and the guarantee amount is RMB45 million. The mortgaged real estate is a)YG (2017) NNSBDCQZ No.0065501; b) EG (2017) NNSBDCQZ No.0065499; c) SG (2017) NNSBDCQZNo.0065498; d) SG (2017) NNSBDCQZ No.0065497.Note 6: Nanning Liaowang and Nanning Branch of Industrial Bank Co., Ltd. entered into the Working CapitalLoan Contracts, numbered WYZH2022021100314 and WYZH2022021100248, with the loan amounts ofRMB19.8 million (from 11 February 2022 to 11 February 2023) and RMB30.2 million (from 11 February 2022 to11 February 2023), respectively. Chongqing Guinuo Lighting Technology Co., Ltd. (Chongqing Guinuo) providemortgage guarantee with the immovable property owned as collateral, and the balance of its creditor's rights doesnot exceed the maximum mortgage principal of RM122,294,700. The guarantee amount is RMB81 million andvalid from 15 June 2020 to 15 June 2023. The mortgaged real estate is a) YY (2020) LJXQBDCQ No.000436821,b) EY (2020) LJXQBDCQ No.000437330, c) SY (2020) LJXQBDCQ No.000437429 and d) SY (2020)LJXQBDCQ No.000437448.Note 7: Liuzhou Guige Photoelectric Technology Co., Ltd. (Liuzhou Guige) and Nanning Branch of Industrial
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Bank Co., Ltd. entered into the Working Capital Loan Contract, numbered WYZH2022050700423, with a loan ofRMB15 million (from 7 May 2022 to 7 May 2023). Liuzhou Guige and Nanning Branch of Industrial Bank Co.,Ltd. entered into the Agreement on Banker's Acceptance Financing Business Cooperation (X.Y.G.CH.B.SH.X.[2022] No. 1002), with a loan of RMB15 million (from 7 May 2022 to 7 May 2023), to conduct a bill transactionof RMB20 million. In the original guarantee contract, Liuzhou Guige provides mortgage guarantee with theimmovable property owned as collateral, and the balance of its creditor's rights does not exceed RMB150 million.The mortgage amount is valid from 30 December 2019 to 30 December 2024. The guarantee has been terminatedon 23 April 2022. In the new guarantee contract, Liuzhou Guige provides mortgage guarantee with the immovableproperty owned as collateral, and the balance of its principal creditor's rights does not exceed RMB139,943,700.The guarantee amount is RMB91 million and valid from 24 April 2022 to 31 December 2025. The mortgaged realestate is: a) YG (2019) LZSBDCQ No.0191988, located at No.1 Factory Building, No.12 Hengsi Road, Cheyuan;b) EG (2019) LZSBDCQ No.0191991, located in the mold center of No.12 Hengsi Road, Cheyuan; c) SG (2019)LZSBDCQ No.0191994, located in the logistics gate guard room at No.12 Hengsi Road, Cheyuan; d) SG (2019)LZSBDCQ No.0191995, located in the guard room of Gate 12, Hengsi Road, Cheyuan.Note 8: Foshan NationStar Optoelectronics Co., Ltd. convened the 9
th Meeting of the 4
thBoard of Directors on18 September 2017, on which, the Proposal on Providing Guarantee for the Company’s Wholly-ownedSubsidiary was reviewed and approved and the Company was agreed to provide a credit guarantee notexceeding RMB300 million for the corporation overdraft conducted by its wholly-owned subsidiary NationStarSemiconductor at China Merchants Bank. NationStar Semiconductor signed the Credit Agreement, numbered757XY2018015331 with Foshan Branch of China Merchants Bank which agreed to provide the credit line ofRMB100 million for NationStar Semiconductor within the credit period stipulated in the Credit Agreement(from 28 May 2018 to 27 May 2019). The guarantor Foshan NationStar Optoelectronics Co., Ltd. has given theLetter of Irrevocable Guarantee for Maximum Amount, numbered 757XY201801533101 to undertake jointliability guarantee for the principal debtor valid from 12 June 2018 to 27 May 2022. This guarantee has expiredon 27 May 2022.XV. Events after Balance Sheet Date
1. Significant Non-adjusted Events
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2. Distribution of Profit
Unit: RMB
| Profit or dividend to be distributed | 134,899,464.70 |
| Profit distribution plan | Based on the share capital of 1,348,994,647 shares (the total share capital of 1,361,994,647 shares minus the remaining 13,000,000 A-shares repurchased in the share repurchase account at the disclosure date of the 2022 Annual Report, a cash dividend of RMB1 (tax inclusive) per 10 shares is to be distributed to the shareholders, with no bonus issue from either profit or capital reserves. Where any change occurs to the total shares entitled to the final dividend due to any new issue, grant of equity incentives, etc. when the final dividend plan is implemented, the dividend per share shall remain the same while the total payout amount shall be adjusted accordingly.This profit distribution plan is subject to the approval of the company's general meeting of |
Annual Report 2022
shareholders before it can be implemented.
3. Sales Return
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4. Notes to Other Events after Balance Sheet Date
(I) Pre-plan for the Issuance of A-shares to Specific Objects in 2023The Company reviewed and approved the Proposal on the Company’s Issuance of A-Shares to Specific Objectsin 2023 at the 39
th
Meeting of 9
th
Board of Directors held on 14 March 2023, and intended to issue additional A-shares to no more than 35 specific targets, including the Company's de facto controller Rising Group, who meetthe conditions stipulated by the CSRC. The number of shares to be issued to the specific targets will not exceed30% of the total share capital before issuance, i.e. not more than 408,598,394 shares (inclusive), and the totalamount of funds to be raised will not exceed RMB 1,094,551,800 (inclusive).The raised funds will be invested in FSL automation transformation and digital transformation project, FSLHainan Industrial Park I, smart street light construction project, vehicle lamp module production constructionproject and R & D center construction project, the use of raised funds is closely related to the Company's futuredevelopment strategy and existing main business.After the completion of the issuance, the total share capital and net assets of the Company will be increasedsubstantially and the overall capital strength of the Company will be enhanced. Since the implementation andbenefit generation of the investment projects with raised funds will take a certain process and time, the netprofit of the Company may not be able to keep the same growth as the share capital and net assets in the shortterm, resulting in a decrease in the indicators of earnings per share and return on net assets of the Companycompared to those before the issuance. There is a risk that the earnings per share and return on net assets will bediluted after the completion of the issuance to the specific targets. The Company has measured the impact of theissuance of shares to specific targets on the dilution of shareholders' immediate return and considered andapproved the analysis of the dilution of immediate return of the financing, the measures to fill immediate returnand the commitments of the relevant commitment bodies at the 39
th
meeting of the 9
thBoard of Directors.The issuance of shares to specific targets is subject to the approval of the Company's general meeting, thereview and approval of the Shenzhen Stock Exchange and the consent of the CSRC to the registration decision
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before implementation.(II) Equity Incentive PlanIn order to further improve the Company's long-term incentive mechanism, fully mobilize the enthusiasm andcreativity of the Company's management and core staff, effectively combine the interests of shareholders, theCompany's interests and the personal interests of employees, pay attention to the long-term development of theCompany and work together for it, in accordance with the Company Law of the People's Republic of China, theSecurities Law of the People's Republic of China, the Administrative Measures for the Implementation ofEquity Incentives for Listed Companies (Domestic) and other relevant laws, regulations and normativedocuments as well as the provisions of the Articles of Association of the Company, it is proposed to plan thelaunch of the Restricted Stock Incentive Plan (hereinafter referred to as "Incentive Plan").The Incentive Plan is proposed to be in the form of restricted stock incentive. The source of the shares is therepurchased RMB A ordinary shares in the special repurchased securities account of the Company, and thescope of the incentive objects are the directors, senior management, middle management and core and keypersonnel of the Company, excluding independent directors, supervisors, shareholders holding more than 5% ofshares individually or in aggregate or the actual controller and their spouses, parents and children, and thenumber of restricted shares to be granted does not exceed 13 million shares, representing approximately 0.95%of the total share capital of the Company at present.The matter of the equity incentive plan is still in the planning stage, and there is uncertainty whether it can beimplemented eventually.
XVI. Other Significant Events
1. The Accounting Errors Correction in Previous Period
2. Debt Restructuring
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3. Assets Replacement
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4. Pension Plans
In accordance with provisions of Measures for Enterprise Annuity (RSBL No. 36), Measures for ManagingEnterprise Annuity Fund (RSBL No. 11) and other policies, the Company has formulated the Enterprise Annuity
Annual Report 2022
Plan of Foshan Electrical and Lighting Co., Ltd. (hereinafter referred to as the “Plan”).The Plan adopts the corporate trusteeship mode. The collected enterprise annuity fund will be managed by thetrustee entrusted by Foshan Electrical and Lighting Co., Ltd. with the Enterprise Annuity Fund TrusteeshipContract. And the trustee of the enterprise annuity fund will entrust eligible account managers, custodians andinvestment managers to provide unified related services. The expenses required shall be jointly borne by theCompany and the employees. The payment channels of the Company shall be implemented according torelevant regulations of the state, and the part that shall be paid by employees themselves will be withheld andpaid by the Company from their salaries.The Plan has been filed at Chancheng District Human Resources and Social Security Bureau of Foshan City andimplemented since 1 June 2022. The management of the enterprise annuity fund is subject to the supervisionand inspection of relevant state departments.
5. Discontinued Operations
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6. Segment Information
| Item | General lighting and vehicle lamp products | LED packaging and component products and other products | Offset among segments | Total |
| I. Operating revenue | 5,240,011,434.90 | 3,579,885,727.44 | -59,931,886.38 | 8,759,965,275.96 |
| II. Cost of sales | 4,139,363,944.10 | 3,145,045,565.85 | -60,438,008.42 | 7,223,971,501.53 |
| III. Income from investments to joint ventures and associates | 2,467,060.07 | 1,309,748.51 | -1,309,748.51 | 2,467,060.07 |
| IV. Credit impairment loss | -17,343,728.93 | 2,003,200.53 | -64,235.21 | -15,404,763.61 |
| V. Asset impairment loss | -45,335,149.00 | -46,182,229.38 | -91,517,378.38 | |
| VI. Depreciation and amortization cost | 232,221,176.22 | 375,867,590.94 | 608,088,767.16 | |
| VII. Total profits | 257,921,463.39 | 130,307,220.67 | -6,511,000.31 | 381,717,683.75 |
| VIII. Income tax expense | 21,687,405.69 | 9,039,564.19 | 147,358.15 | 30,874,328.03 |
| IX. Net profits | 236,234,057.70 | 121,267,656.48 | -6,658,358.46 | 350,843,355.72 |
| X. Total assets | 9,573,672,136.23 | 6,579,901,330.87 | -866,512,347.40 | 15,287,061,119.70 |
| XI. Total liabilities | 3,897,838,225.60 | 2,826,270,746.00 | -37,394,683.51 | 6,686,714,288.09 |
7. Other Significant Transactions and Events with Influence on Investors’ Decision-makingNaught
8. Other
(I) Plan of the Major Assets Reorganization by NationStar OptoelectronicsNationStar Optoelectronics intends to acquire 60% of equity (the final shareholding ratio is subject to thespecific share transfer agreement signed by the parties) in Yancheng Dongshan Precision Manufacturing Co.,
Annual Report 2022
Ltd. (hereinafter referred to as “Target Company”), the wholly-owned subsidiary of Suzhou Dongshan PrecisionManufacturing Co., Ltd. (hereinafter referred to as “shareholder of the Target Company” or “DongshanPrecision”). Upon completion of the transaction, NationStar Optoelectronics will hold 60% of equity interest inthe Target Company, and the Target Company will become a majority-owned subsidiary of the Company and beincluded in the scope of the Company's consolidated financial statements. As of the disclosure date of thisReport, NationStar has actively organized various intermediaries to actively carry out due diligenceinvestigation as well as audit and appraisal of the underlying assets in accordance with relevant regulations.(II) Application for Registration and Issuance of SCP by NationStar OptoelectronicsNationStar Optoelectronics reviewed and approved the Proposal on Application for Registration and Issuance ofSCP at the 22nd Meeting of the 5th Board of Directors and the 19th Meeting of the 5th Supervisory Committeeheld on 29 August 2022 and submitted it to the 3rd Extraordinary General Meeting of 2022 of NationStarOptoelectronics for consideration. On 11 November 2022, NationStar Optoelectronics convened the 3rdExtraordinary General Meeting of 2022 to vote on above-mentioned proposal and agreed the application forregistration and issuance of SCP by NationStar Optoelectronics with the scale not exceeding RMB1 billion(inclusive). The final registration amount will be subject to the amount stated in the registration notice of ChinaInterbank Market Dealers Association. The registration is valid for two years and may be issued multiple timeswithin the registration period with each issuance period not exceeding 270 days (inclusive). The project iscurrently progressing in an orderly manner.（III）Demolition Matters of Nanjing FozhaoAccording to the Decision of Nanjing Lishui District People's Government on House Expropriation on State-owned Land of Honglan Street Affordable Housing Project in Lishui District (NLFZ Zi [2020] No.18), Thehouse owned by Nanjing Fozhao, a wholly-owned subsidiary of the Company, located at 688 Jinniu North Road,Honglan Street, Lishui District, Nanjing (the total construction area of the house is 44,558.09 square meters,which is an industrial house; The land use right covers an area of 135,882.4 square meters, which is industrialland) belongs to the expropriation scope, and the compensation, relocation fee, loss fee of production andbusiness suspension and other rewards of the expropriated assets total RMB183,855,895.00. As of 30 June 2022,Nanjing Fozhao has received 30% of the compensation, that is, RMB55,160,000.00, and the land use rightcertificate and house ownership certificate of the assets involved have been cancelled. As of the date of thisreport, the site handover is still in progress. After the demolition work is completed, Nanjing Fozhao plans tocarry out liquidation and cancellation.XVII. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable
(1) Category of Accounts Receivable
Unit: RMB
| Item | Ending balance | Beginning balance | ||||||||
| Carrying amount | Bad debt provision | Carrying value | Carrying amount | Bad debt provision | Carrying value | |||||
| Amount | Proportion | Amount | Withdrawal proportion | Amount | Proportion | Amount | Withdrawal proportion | |||
| Account | 11,220,8 | 1.13% | 11,220,8 | 100.00% | 0.00 | 11,220,8 | 1.00% | 8,976,66 | 80.00% | 2,244,16 |
Annual Report 2022
| s receivable for which bad debt provision separately accrued | 27.14 | 27.14 | 27.14 | 1.72 | 5.42 | |||||
| Of which: | ||||||||||
| Accounts receivable for which bad debt provision separately accrued | 11,220,827.14 | 1.13% | 11,220,827.14 | 100.00% | 0.00 | 11,220,827.14 | 1.00% | 8,976,661.72 | 80.00% | 2,244,165.42 |
| Accounts receivable for which bad debt provision accrued by group | 979,581,821.17 | 98.87% | 64,706,145.17 | 6.61% | 914,875,676.00 | 1,108,641,819.86 | 99.00% | 51,950,320.95 | 4.69% | 1,056,691,498.91 |
| Of which: | ||||||||||
| (1) Common business portfolio | 921,740,497.75 | 93.03% | 64,706,145.17 | 7.02% | 857,034,352.58 | 1,022,005,643.56 | 91.26% | 51,950,320.95 | 5.08% | 970,055,322.61 |
| (2) Internal business portfolio | 57,841,323.42 | 5.84% | 57,841,323.42 | 86,636,176.30 | 7.74% | 86,636,176.30 | ||||
| Total | 990,802,648.31 | 100.00% | 75,926,972.31 | 7.66% | 914,875,676.00 | 1,119,862,647.00 | 100.00% | 60,926,982.67 | 5.44% | 1,058,935,664.33 |
Individual withdrawal of bad debt provision by single item: RMB11,220,827.14
Annual Report 2022
Unit: RMB
| Name | Ending balance | |||
| Carrying amount | Bad debt provision | Withdrawal proportion | Reason for withdrawal | |
| Customer A | 11,220,827.14 | 11,220,827.14 | 100.00% | Expectedly irrecoverable for involvement in lawsuit |
| Total | 11,220,827.14 | 11,220,827.14 | ||
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if adopting the generalmode of expected credit loss to withdraw bad debt provision of accounts receivable.
□Applicable ? Not applicable
Disclosure by aging
Unit: RMB
| Aging | Ending balance |
| Within 1 year (including 1 year) | 792,004,489.20 |
| 1 to 2 years | 139,049,799.35 |
| 2 to 3 years | 17,633,235.95 |
| Over 3 years | 42,115,123.81 |
| 3 to 4 years | 6,563,656.53 |
| 4 to 5 years | 20,564,402.16 |
| Over 5 years | 14,987,065.12 |
| Total | 990,802,648.31 |
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period:
Unit: RMB
| Category | Beginning balance | Changes in the Reporting Period | Ending balance | |||
| Withdrawal | Reversal or recovery | Write-off | Other | |||
| Bad debt provision withdrawn separately | 8,976,661.72 | 2,244,165.42 | 11,220,827.14 | |||
| Bad debt provision withdrawn by group | 51,950,320.95 | 12,869,499.54 | 113,675.32 | 64,706,145.17 | ||
| Total | 60,926,982.67 | 15,113,664.96 | 113,675.32 | 75,926,972.31 | ||
Annual Report 2022
Note: In the current period, the provision for expected credit losses was RMB15,113,664.96, and RMB0.00 ofexpected credit losses was recovered or reversed.
(3) Accounts Receivable with Actual Verification during the Reporting Period
单位：元
| Item | Amount |
| No.1 | 113,400.28 |
| No.2 | 275.04 |
Of which,verification of significant accounts receivable:
Unit: RMB
| Name of the entity | Nature | Amount | Reason | Procedure | Whether occurred because of related-party transactions |
| No.1 | Payment for goods | 113,400.28 | Irrecoverable | The approval procedure is carried out according to the Company’s rules for managing bad debt. | Not |
| No.2 | Payment for goods | 275.04 | Irrecoverable | The approval procedure is carried out according to the Company’s rules for managing bad debt. | Not |
| Total | 113,675.32 |
Notes to verification of accounts receivable:
The write-offs of accounts receivable during the period were all other small and sporadic amounts, for which the approval processhad been performed in accordance with the Company's bad debt management system
(4) Top 5 of the Ending Balance of the Accounts Receivable Collected according to the Arrears Party
Unit: RMB
| Name of units | Ending balance of accounts receivable | Proportion to total ending balance of accounts receivable (%) | Ending balance of bad debt provision |
| No. 1 | 131,509,845.75 | 13.27% | 3,945,295.37 |
| No. 2 | 76,077,621.37 | 7.68% | 2,282,328.64 |
| No. 3 | 62,916,149.22 | 6.35% | 2,100,690.83 |
| No. 4 | 25,857,388.73 | 2.61% | 2,378,852.92 |
| No. 5 | 24,804,411.54 | 2.50% | 2,231,110.45 |
| Total | 321,165,416.61 | 32.41% |
Annual Report 2022
(5) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvementof Accounts Receivable
Naught
(6) Derecognition of Accounts Receivable due to the Transfer of Financial AssetsNaught
2. Other Receivables
Unit: RMB
| Item | Ending balance | Beginning balance |
| Interest receivable | 0.00 | |
| Dividend receivable | 0.00 | |
| Other receivables | 511,036,345.72 | 511,056,231.24 |
| Total | 511,036,345.72 | 511,056,231.24 |
(1) Interest Receivable
1) Category of Interest Receivable
Naught
2) Significant Overdue Interest
Naught
3) Information of Withdrawal of Bad Debt Provision
□Applicable ? Not applicable
(2) Dividend Receivable
Naught
(3) Other Receivables
1) Other Receivables Disclosed by Account Nature
Unit: RMB
| Nature | Ending balance | Beginning balance |
| Other current accounts | 499,569,435.12 | 497,805,458.10 |
| Export VAT rebates | 9,247,208.98 | 4,674,335.06 |
| Performance bonds | 2,535,349.17 | 5,597,832.99 |
Annual Report 2022
| Rents and utilities | 2,211,666.93 | 2,564,557.87 |
| Staff loans and imprests | 1,467,513.80 | 3,486,778.81 |
| Total | 515,031,174.00 | 514,128,962.83 |
2) Information of Withdrawal of Bad Debt Provision
Unit: RMB
| Bad debt provision | First stage | Second stage | Third stage | Total |
| Expected credit loss of the next 12 months | Expected loss in the duration (credit impairment not occurred) | Expected loss in the duration (credit impairment occurred) | ||
| Balance of 1 January 2022 | 763,248.72 | 2,309,482.87 | 3,072,731.59 | |
| Balance of 1 January 2022 in the Current Period | ||||
| Withdrawal of the Current Period | -192,812.04 | 1,114,908.73 | 922,096.69 | |
| Balance of 31 December 2022 | 570,436.68 | 3,424,391.60 | 3,994,828.28 |
Changes of carrying amount with significant amount changed of loss provision in the current period
□Applicable ? Not applicable
Disclosure by aging
Unit: RMB
| Aging | Ending balance |
| Within 1 year (including 1 year) | 107,707,632.83 |
| 1 to 2 years | 402,271,482.67 |
| 2 to 3 years | 1,736,367.27 |
| Over 3 years | 3,315,691.23 |
| 3 to 4 years | 1,049,621.10 |
| 4 to 5 years | 763,885.44 |
| Over 5 years | 1,502,184.69 |
| Total | 515,031,174.00 |
3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Information of bad debt provision withdrawn:
Unit: RMB
| Category | Beginning balance | Changes in the Reporting Period | Ending balance | |||
| Withdrawal | Reversal or recovery | Write-off | Other | |||
| Other receivables | 3,072,731.59 | 922,096.69 | 3,994,828.28 | |||
Annual Report 2022
| Total | 3,072,731.59 | 922,096.69 | 3,994,828.28 |
Note: In the current period, the provision for expected credit losses was RMB922,096.69, and RMB0.00 ofexpected credit losses was recovered or reversed.
4) Particulars of the Actual Verification of Other Receivables during the Reporting PeriodNaught
5) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RMB
| Name of the entity | Nature | Ending balance | Aging | Proportion to total ending balance of other receivables (%) | Ending balance of bad debt provision |
| No. 1 | Internal business group | 454,153,471.06 | Within 2 years | 88.18% | 0.00 |
| No. 2 | Internal business group | 21,486,135.57 | Within 1 year | 4.17% | 0.00 |
| No. 3 | VAT export tax refunds | 9,247,208.98 | Within 1 year | 1.80% | 277,416.27 |
| No. 4 | Internal business group | 8,031,040.17 | Within 2 years | 1.56% | 0.00 |
| No. 5 | Internal business group | 3,987,471.15 | Within 2 years | 0.77% | 0.00 |
| Total | 496,905,326.93 | 96.48% | 277,416.27 |
6) Accounts Receivable Involving Government Grants
Naught
7) Derecognition of Other Receivables due to the Transfer of Financial Assets
Naught
8) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of OtherReceivablesNaught
3. Long-term Equity Investment
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserve | Carrying value | Carrying amount | Depreciation reserve | Carrying value | |
| Investment to | 2,323,631,238.41 | 2,323,631,238.41 | 1,061,536,766.02 | 1,061,536,766.02 | ||
Annual Report 2022
| subsidiaries | ||||||
| Investment to joint ventures and associated enterprises | 181,931,792.66 | 181,931,792.66 | 181,545,123.09 | 181,545,123.09 | ||
| Total | 2,505,563,031.07 | 2,505,563,031.07 | 1,243,081,889.11 | 1,243,081,889.11 |
(1) Investment to Subsidiaries
Unit: RMB
| Investee | Beginning balance (carrying value) | Increase/decrease | Ending balance (carrying value) | Ending balance of depreciation reserve | |||
| Additional investment | Reduced investment | Depreciation reserves withdrawn | Other | ||||
| FSL Chanchang Optoelectronics Co., Ltd. | 82,507,350.00 | 82,507,350.00 | |||||
| Foshan Taimei Times Lamps and Lanterns Co., Ltd. | 350,000.00 | 350,000.00 | |||||
| Nanjing Fozhao Lighting Components Manufacturing Co., Ltd. | 72,000,000.00 | 72,000,000.00 | |||||
| Foshan Electrical & Lighting (Xinxiang) Co., Ltd. | 35,418,439.76 | 35,418,439.76 | |||||
| Foshan Fozhao Zhicheng Technology Co., Ltd. | 15,000,000.00 | 15,000,000.00 | |||||
| FSL Zhida Electric Technology Co., Ltd. | 25,500,000.00 | 25,500,000.00 | |||||
| FSL EUROPE GMBH | 195,812.50 | 195,812.50 | |||||
| Foshan Haolaite | 16,685,000.00 | 16,685,000.00 | |||||
Annual Report 2022
| Lighting Co., Ltd. | |||||||
| Fozhao (Hainan) Technology Co., Ltd. | 150,000,000.00 | 50,000,000.00 | 200,000,000.00 | ||||
| Nanning Liaowang Auto Lamp Co., Ltd. | 493,880,163.76 | 493,880,163.76 | |||||
| Foshan Kelian New Energy Technology Co., Ltd. | 170,000,000.00 | 170,000,000.00 | |||||
| Foshan Sigma Venture Capital Co., Ltd. | 0.00 | 4,226.45 | 4,226.45 | ||||
| Foshan NationStar Optoelectronics Co., Ltd. | 0.00 | 1,212,090,245.94 | 1,212,090,245.94 | ||||
| Total | 1,061,536,766.02 | 1,262,094,472.39 | 2,323,631,238.41 |
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
| Investee | Beginning balance (carrying value) | Increase/decrease | Ending balance (carrying value) | Ending balance of depreciation reserve | |||||||
| Additional investment | Reduced investment | Gains and losses recognized under the equity method | Adjustment of other comprehensive income | Changes of other equity | Cash bonus or profits announced to issue | Withdrawal of impairment provision | Other | ||||
| I. Joint ventures | |||||||||||
| II. Associated enterprises | |||||||||||
| ShenzhenPrimatronix (Nanho) Electronics Ltd. | 181,545,123.09 | 2,467,060.07 | 2,080,390.50 | 181,931,792.66 | |||||||
| Subtota | 181,545,123.09 | 2,467,060.07 | 2,080,390.50 | 181,931,792.66 | |||||||
Annual Report 2022
| l | |||||||||||
| Total | 181,545,123.09 | 2,467,060.07 | 2,080,390.50 | 181,931,792.66 |
(3) Other Notes
Naught
4. Operating Revenue and Cost of Sales
Unit: RMB
| Item | Reporting Period | Same period of last year | ||
| Operating revenue | Cost of sales | Operating revenue | Cost of sales | |
| Main business | 3,140,930,568.54 | 2,545,166,965.71 | 3,548,713,016.46 | 3,011,542,500.00 |
| Other business | 173,106,570.74 | 138,938,600.08 | 169,595,356.00 | 142,496,679.53 |
| Total | 3,314,037,139.28 | 2,684,105,565.79 | 3,718,308,372.46 | 3,154,039,179.53 |
Information related to transaction value assigned to residual performance obligations:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or notfully performed yet was RMB0.00 at the period-end.
5. Investment Income
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Long-term equity investment income accounted by cost method | 8,704,927.43 | 38,645,385.25 |
| Long-term equity investment income accounted by equity method | 2,467,060.07 | 2,260,497.27 |
| Investment income from disposal of long-term equity investment | 7,349,443.02 | |
| Dividend income from holding of other investments in equity instruments | 16,055,272.93 | 23,643,370.02 |
| Investment income from financial products and structural deposits | 1,595,691.60 | 971,514.99 |
| Other | -9,764,664.95 | 6,013,450.00 |
| Total | 19,058,287.08 | 78,883,660.55 |
6. Other
Naught
Annual Report 2022
XVIII. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
? Applicable □ Not applicable
Unit: RMB
| Item | Amount | Note |
| Gain/Loss arising from disposal of non-current assets | -8,216,871.49 | |
| Government grants recognized in the current period, except for those acquired in the ordinary course of business or granted at certain quotas or amounts according to the government’s unified standards | 68,903,156.89 | |
| Capital occupation charges on non-financial enterprises that are recorded into current profit or loss | 339,583.00 | |
| Current net profit or loss of subsidiaries acquired in business combination under the same control from period-beginning to combination date | 22,504,245.08 | |
| Gain/loss from change of fair value of trading financial assets and liabilities, and investment gains from disposal of trading financial assets and liabilities, and available-for-sale financial assets, other than valid hedging related to the Company’s common businesses | -19,057,137.27 | |
| Reverse of provision for impairment of accounts receivable individually conducting impairment test | 1,203,963.23 | |
| Other non-operating income and expenses other than the above | 10,557,819.17 | |
| Less: Income tax effects | 4,465,855.78 | |
| Non-controlling interests effects | 62,919,728.02 | |
| Total | 8,849,174.81 | -- |
Others that meets the definition of non-recurring gain/loss:
□Applicable ? Not applicable
No such cases in the Reporting Period.Explain the reasons if the Company classifies any extraordinary gain/loss item mentioned in the Explanatory
Annual Report 2022
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Non-recurring Gains and Losses as a recurrent gain/loss item
□Applicable ? Not applicable
2. Return on Equity and Earnings Per Share
| Profit as of Reporting Period | Weighted average ROE (%) | EPS (Yuan/share) | |
| EPS-basic | EPS-diluted | ||
| Net profit attributable to ordinary shareholders of the Company | 4.13% | 0.1708 | 0.1692 |
| Net profit attributable to ordinary shareholders of the Company after deduction of non-recurring profit or loss | 4.12% | 0.1642 | 0.1627 |
3. Differences between Accounting Data under Domestic and Overseas Accounting Standards
(1) Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under Internationaland Chinese Accounting Standards
□Applicable ? Not applicable
(2) Differences of Net profit and Net assets Disclosed in Financial Reports Prepared under Overseas andChinese Accounting Standards
□Applicable ? Not applicable
(3) Explain Reasons for the Differences between Accounting Data under Domestic and OverseasAccounting Standards; for any Adjustment Made to the Difference Existing in the Data Audited by theForeign Auditing Agent, Such Foreign Auditing Agent’s Name Shall Be Clearly StatedNaught
4. Other
Naught
Wu Shenghui, legal representativeFoshan Electrical and Lighting Co., Ltd.
6 April 2023