Foshan Electrical and Lighting Co., Ltd. Interim Report 2023
FOSHAN ELECTRICAL AND LIGHTING CO., LTD.
INTERIM REPORT 2023
August 2023
Foshan Electrical and Lighting Co., Ltd. Interim Report 2023
Part 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.Any plans for the future and other forward-looking statements mentioned in this Report andits summary shall NOT be considered as absolute promises of the Company to investors.Therefore, investors are reminded to exercise caution when making investment decisions.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, and the risk of the recoverability of accounts receivable. Please refer to thesection headed “Risks Facing the Company and Countermeasures” in Item X of Part III ofthis Report.The Company has no interim dividend plan, either in the form of cash or stock.This Report and its summary have been prepared in both Chinese and English. Should therebe any discrepancies or misunderstandings between the two versions, the Chinese versionsshall prevail.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2023
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 ...... 10
Part IV Corporate Governance ...... 30
Part V Environmental and Social Responsibility ...... 32
Part VI Significant Events ...... 50
Part VII Share Changes and Shareholder Information ...... 66
Part VIII Preferred Shares ...... 72
Part IX Bonds ...... 73
Part X Financial Statements ...... 74
Documents Available for Reference
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 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.
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 Holdings | 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. (stock code: 002449) |
| 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. |
| 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 |
Part II Corporate Information and Key Financial InformationI Corporate Information
| Stock name | FSL, FSL-B | Stock code | 000541, 200541 |
| Stock exchange for stock listing | Shenzhen Stock Exchange | ||
| Company name in Chinese | 佛山电器照明股份有限公司 | ||
| Abbr. (if any) | 佛山照明 | ||
| Company name in English (if any) | FOSHAN ELECTRICAL AND LIGHTING GO.,LTD | ||
| Abbr. (if any) | FSL | ||
| Legal representative | Wu Shenghui | ||
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 Other Information
1. Contact Information of the Company
Indicate by tick mark whether any change occurred to the registered address, office address and their zip codes,website address, email address and other contact information of the Company in the Reporting Period.
□ Applicable ? Not applicable
No change occurred to the said information in the Reporting Period, which can be found in the 2022 AnnualReport.
2. Media for Information Disclosure and Place where this Report is Kept
Indicate by tick mark whether any change occurred to the information disclosure media and the place forkeeping the Company’s periodic reports in the Reporting Period.
□ Applicable ? Not applicable
The website of the stock exchange, media and other websites where the Company’s periodic reports aredisclosed, as well as the place for keeping such reports did not change in the Reporting Period. The saidinformation can be found in the 2022 Annual Report.
3. Other Information
Indicate by tick mark whether any change occurred to other information in the Reporting Period.
□ Applicable ? Not applicable
IV Key Financial Information
Indicate 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 and change to accounting policies
| H1 2023 | H1 2022 | Change (%) | ||
| Before | Restated | Restated | ||
| Operating revenue (RMB) | 4,566,062,729.02 | 4,348,268,999.31 | 4,433,331,393.42 | 2.99% |
| Net profit attributable to the listed company’s shareholders (RMB) | 168,935,232.54 | 160,664,433.28 | 163,528,019.78 | 3.31% |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | 180,389,211.53 | 160,862,524.18 | 162,214,595.34 | 11.20% |
| Net cash generated from/used in operating activities (RMB) | 387,869,057.20 | 150,034,906.39 | 177,102,491.01 | 119.01% |
| Basic earnings per share (RMB/share) | 0.1252 | 0.1191 | 0.1212 | 3.30% |
| Diluted earnings per share (RMB/share) | 0.1240 | 0.1180 | 0.1201 | 3.25% |
| Weighted average return on equity (%) | 3.23% | 2.68% | 2.03% | 1.20% |
| 30 June 2023 | 31 December 2022 | Change (%) | ||
| Before | Restated | Restated | ||
| Total assets (RMB) | 15,119,943,822.76 | 15,287,061,119.70 | 15,288,860,907.09 | -1.10% |
| Equity attributable to the listed company’s shareholders (RMB) | 5,156,107,466.23 | 5,173,066,095.76 | 5,173,011,348.74 | -0.33% |
Reason for changes in accounting policies:
The Ministry of Finance issued in November 2022 Interpretation No. 16 for the Accounting Standards forBusiness Enterprises (hereinafter referred to as “Interpretation No. 16”), which stipulates the accountingtreatments for deferred income taxes associated with assets and liabilities arising from a single transaction towhich the initial recognition exemption does not apply. For further information, see “44. (1) Changes tosignificant accounting policies” under Item V of Part X.
V 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 Differences under CAS and IFRS
□ Applicable ? Not applicable
No such differences for the Reporting Period.
2. Net Profit and Equity Differences under CAS and Foreign Accounting Standards
□ Applicable ? Not applicable
No such differences for the Reporting Period.
VI Exceptional Gains and Losses? Applicable □ Not applicable
Unit: RMB
| Item | Amount | Note |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | -1,399,118.95 | |
| 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) | 27,400,992.05 | |
| Capital occupation charges on non-financial enterprises that are recognized in profit or loss | 145,423.54 | |
| 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) | -20,978,503.38 | |
| Non-operating income and expense other than the above | -841,057.39 | |
| Less: Income tax effects | -966,253.59 | |
| Non-controlling interests effects (net of tax) | 16,747,968.45 | |
| Total | -11,453,978.99 |
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.
Part III Management Discussion and AnalysisI Principal Activity of the Company in the Reporting Period(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) Industry developmentCurrently, the lighting industry is affected by the unfavourable factor of sluggish market demand, which bringsgreater pressure to business expansion. The industry reshuffle was still in progress. Enterprises with advantagesin technology, fund and brand were gradually expanding their market shares, and high-quality resources werebeing 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 lightquality. Concurrently, with the continuously upgraded technologies and policy encouragement, segmentationssuch as intelligent lighting, healthy lighting, marine lighting, animal and plant lighting embrace freshdevelopment opportunities.Automotive lights are core parts of an automobile, which are closely linked to the development of theautomotive industry. In accordance with the statistics released by the China Association of AutomobileManufacturers (CAAM), the automobile output and sales in China for the first half of the year reached 13.248million and 13.239 million, up by 9.3% and 9.8% year on year, respectively. Particularly, the new energyvehicle industry achieved ongoing fast growth. Statistically, the output and sales of new energy vehicles for thefirst half of the year reached 3.788 million and 3.747 million, up by 42.4% and 44.1% year on year, respectively.Additionally, the market share of new energy vehicles reached 28.3%. The growth in automobile output andsales boosted the demand in the automotive light market. As the R&D capabilities of the upstream, midstreamand downstream enterprises along the domestic automotive-light industrial chain have improved in the last fewyears, Chinese auto parts enterprises have gradually been incorporated by vehicle companies into their supplychain systems. This has contributed to the continuously accelerated replacement with domestic products andgiven more opportunities to Chinese automotive light enterprises. At the same time, with the development ofautomotive industry technologies, the increasingly electronic and intelligent automotive light-relatedtechnologies have enabled automotive lights to carry more functions in addition to traditional lighting, whichhas not only brought users more environmental, safe, recreational, and intelligent driving experience but alsoinjected new growth impetus into the industry.With the resumption of commercial, cultural, tourist, sports and other activities, LED packaging demand isgradually picking up. With the upgraded technologies, new application sub-markets will be constantly expanded.Meanwhile, the emerging application fields, such as new Mini/Micro LED displays, plant lighting, intelligentlighting, and the Internet of Things are going to enter a critical phase of rapid development, bringing newdevelopment opportunities for the LED packaging industry. Additionally, with the rollout of relevant industrypolicies and consumption upgrading, the transformation toward high energy-saving, highly reliable, andintelligent LED semiconductors with better light quality will be expedited, which has set a stricter requirementfor enterprises' innovation capability. Top players in the industry will have more say.(III) 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.
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, and e-commerce & retail sale channels. For foreign sales, the Company adopts the models of OEM and independentbrands. The sale of products of independent brands abroad is carried 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.(IV) 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 products, improve product quality,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.II 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:
Channel advantage
The 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 four major sales channels in domesticmarket (hardware distribution, home, engineering, and e-commerce & retail sales channels), forming amarketing network covering the whole country; in foreign market, the Company has made active steps todevelop international market business, sold products to more than 120 countries and regions in North America,Europe, Southeast Asia, Africa and Oceania, and kept improving overseas sales channel. By virtue of itspowerful and comprehensive sales channels, the Company has enabled its products to enter market rapidly,substantially enhancing its market development abilities and competitiveness. Nanning Liaowang is a majormanufacturer in the Chinese automotive light industry. It has accumulated stable whole-automobilemanufacturing clients and has been developing new clients. Its client entities are increasingly diverse.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 65 years' experience in the lighting industry and enjoyed continuouslyincreasing influence and brand value for its "FSL". For 18 consecutive years, the Company has been included inthe list of "China's 500 Most Valuable Brands". In 2023, the value of FSL brand reached RMB31.219 billion. Inrecent years, with the enhancement of its development positioning, product design and user experience, theCompany has initiated the strategy of brand upgrading and carried out promotion by centering around the new"Professional, Healthy, Fashionable and Intelligent". In addition, it has accelerated brand building through high-end mainstream media platform, Internet emerging media and offline terminal advertising respectively,maximized the brand and product communication effect, formed a comprehensive and diversified publicityposition, and driven the transition of “FSL” from an industrial brand to a popular brand to maintain the brandvitality and competitiveness. The brand "FSL" has become one of the most influential and popular industrialbrands in China, and the powerful brand influence has played a key role in driving the sustained growth of theCompany’s sales. Nanning Liaowang strictly abides by the national industry standards when producingautomotive lights of the "Liaowang" brand. It has been hailed as a high-quality supplier of car manufacturers forquite a few times. NationStar Optoelectronics has been awarded honors such as "National High-tech EnterpriseCertification", "Brand Power", "Top 10 LED Packaging Brands", “GG Golden Globe Award”, and “Companyof the Year 2022”, which constantly enhances its image of professionalism and brand advantages.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-techcompany, 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" and established a
"Postdoctoral Research Station (Substation)" and a "Guangdong Science and Technology Expert Workstation"to explore and intensify efforts in the cutting-edge technology of LEDs, and address key issues and commontechnology issues in the industry. It has formed technical barriers with proprietary intellectual property rights inlighting, spectroscopic, electrical, IoT, AI and many other fields. Cumulatively, the company and its holdingsubsidiaries have been granted more than 1,900 valid patents. Also, they have led or participated in theformulation or revision of 160 standards at all levels, which have been issued. The Company actively integratesinternal and external resources and collaborates with Tsinghua University, Fudan University, Sun Yat-senUniversity, South China University of Technology, Institute of Deep-Sea Science and Engineering of CAS,Dalian Ocean University and other scientific research institutes to establish in-depth industrial and researchcooperation, so as to promote key technological breakthroughs and transformation of scientific andtechnological achievements. Meanwhile, the Company has formed a smooth R&D talent cultivation channel toprovide a strong guarantee for the Company to maintain technological leadership and continuous productinnovation. Nanning Liaowang boasts a provincial enterprise technology center, a provincial R&D center, and aGuangxi automotive lighting parts engineering technology research center; and established the AutomotiveLighting Research Institute. In recent years, Nanning Liaowang has increased investment in R&D, acceleratedinvestment in various lens modules and interactive signal lamp technologies, and continuously enhanced itsR&D strength. NationStar Optoelectronics has created 16 R&D platforms, including the Postdoctoral ResearchStation, and the National- and local-joint Engineering Laboratory for Semiconductor Lighting Materials andComponents. It has undertaken near 30 national research projects such as the national "863" program and thekey national R&D program, in addition to more than 100 provincial and ministerial research projects. Besides,it has won honors such as "National Intellectual Property Demonstration Enterprise", “Gold Award at the 24
th
China Patent Awards”, "China Award for Excellent Patents", "Guangdong Science and Technology ProgressAward (first/second prize)", as well as Advanced Technology Golden Globe Award "2022 Company of theYear” and “2022 Innovative Technology". Moreover, it has constantly made breakthroughs and surmountedtechnological challenges in emerging areas such as Mini/Micro LED, the third generation of semiconductor,smart wear, automotive components, and new optoelectronic components.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 chainBy 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.
III Analysis of Principal OperationsOverviewIn the first half of 2023, aiming at the annual objectives, the Company made every effort to stabilise growth andpromote development by focusing on the four drivers of "internal management, market expansion, innovation-driven growth, and M&A support". As a result, the Company achieved a steady, high quality year-on-yearincrease in both operating revenue and profit. During the Reporting Period, the Company recorded operatingrevenue of RMB 4566.0627 million, up 2.99% year on year, and a net profit attributable to its shareholders ofRMB 168.9352 million, increasing by 3.31% year on year.During the Reporting Period, the Company mainly focused on the following tasks:
1. Spared no effort to expand growth
The Company prioritised the expansion of business growth as the main theme for the whole year. To this end,the leadership members took the lead in surveying the market, visiting key customers, and delving into marketdemands in order to expand business orders. Also, it intensified efforts to complete large customer projects,secured several big project orders, and undertook 20 automotive light projects. Based on its years oftechnological accumulation in lighting, especially intelligent lighting, the Company sped up the segmentationlayout, with a focus on deep-sea lighting, fish-collecting lighting, aquaculture lighting, and coastal lighting. Itestablished 27 sales outlets and six experiencing zones (halls) in eight coastal provinces in China and theSoutheast Asian markets and laid out more than 40 aquaculture demonstration bases. With intelligent home asthe focus, the Company constantly expanded into intelligent lampposts, intelligent buildings, and otherintelligent application fields, doing so to continue to provide customers with diversified products and servicesand expand markets. In terms of overseas business, the Company constantly consolidated its cooperation withbig customers by improving its service capabilities in R&D, manufacturing, and marketing. Meanwhile, itactively developed new customers, securing a stable increase in the proportion of sales of overseas independentbrands.
2. Took a variety of measures to minimise costs
Adhering to the "tighten the belt" philosophy, the Company launched the cost reduction campaign to dig formore cost reduction space from multiple perspectives. Specifically, it partnered with professional institutions,enhanced the research and judgment of the trends of commodity prices, and took measures such as price inquiryand comparison, price negotiation, new material replacement, and supplier optimisation to reduce theprocurement cost. The "robot assembly line" strategy was promoted on an ongoing basis by transforming andupgrading assembly lines with automation equipment. Additionally, measures such as automated production,process and procedure optimisation, and implementing standard costing were employed to reduce themanufacturing cost.
3. Improved management for higher quality and efficiency
Based on the "three refinements in management" plan with "five optimisations, six decreases, and sevenreductions" at the core carried out last year, the Company further refined tasks and measures to secure in-depth
and solid advances. In terms of organisational streamlining, the Company further optimised the position set-up,simplified the approval procedures, and intensified the authority delegation. As a result, the productivity percapita in the first half of the year was significantly boosted. In terms of management refinement, efforts wereredoubled at comprehensive budget management and expenditure control through stringent "standard costing"and cost control. Carry out a series of special actions such as improving quality, "accounts receivable andinventory" management and control, and achieved certain effects. In terms of lean operations, the Companyoptimised the R&D system to promote integrated innovation, focused on the R&D and production of luminaries,intelligent products, and products in the new segmentation, optimised the product mix, and increased theproportion of products with high added value. Doing so helped the Company constantly boost its corecompetitiveness.
4. Strengthened innovation unswervingly
In terms of product iteration and upgrading, to develop differentiated and functional products and the "lightplus" overall solution, the Company developed 367 new products in the first half of the year. Additionally, itrolled out the "photocatalysis" second-generation healthy lighting product, optimised and upgraded eightintelligent systems, including the intelligent home, and made arrangements for cutting-edge technologies,including deep-sea laser illumination, doing so to sharpen up its competitive edge. In terms of the packagingfield, the Company targeted several emerging areas, including Mini/Micro LED, the third-generationsemiconductor, and automotive components, thereby cultivating new development drivers. In terms oftechnology R&D, the Company applied for 182 new patents, including 62 patents for invention, and steered orparticipated in the formulation of 15 international, national, industry, and group standards. Moreover, fortechnologies with the Company's participation, the ultraviolet core technology won the Guangdong Science andTechnology Progress Award (second prize); the deep-sea laser illumination technology won the Award ofExcellence of the 1st Guangdong-Hong Kong-Macao Greater Bay Area Postdoctoral Innovation andEntrepreneurship Competition; the full-colour light-emitting device and display module won the China PatentAward (Gold).Year-on-year changes in key financial data:
Unit: RMB
| H1 2023/30 June 2023 | H1 2022/31 December 2022 | Change (%) | Main reason for change | |
| Operating revenue | 4,566,062,729.02 | 4,433,331,393.42 | 2.99% | |
| Cost of sales | 3,733,474,828.88 | 3,654,061,368.03 | 2.17% | |
| Selling expense | 131,921,130.00 | 111,269,248.57 | 18.56% | |
| Administrative expense | 200,946,085.42 | 186,307,739.44 | 7.86% | |
| Finance costs | -30,162,622.41 | -24,237,724.21 | -24.44% | |
| Income tax expense | 31,304,364.49 | 41,412,077.91 | -24.41% | |
| R&D expense | 227,718,701.74 | 224,438,932.77 | 1.46% | |
| Net cash generated from/used in operating activities | 387,869,057.20 | 177,102,491.01 | 119.01% | The Company as the parent enhanced inventory control in the current period. |
| Net cash generated from/used in investing activities | -4,465,936.70 | 121,495,601.82 | -103.68% | The same period of last year saw more cash from the recovery of bank’s wealth management products. |
| Net cash generated from/used in financing activities | -359,583,672.75 | -823,625,807.19 | 56.34% | The same period of last year saw a higher payment for the acquisition of equity interests in subsidiary NationStar Optoelectronics under common control. |
| Net increase in cash and cash equivalents | 28,750,024.39 | -504,782,096.83 | 105.70% | Increased net cash generated from financing activities in the current period |
| Held-for-trading financial assets | 81,882,834.67 | 261,541,896.45 | -68.69% | Recovery of wealth management products upon maturity in the current period |
| Other current assets | 173,015,911.64 | 79,438,576.89 | 117.80% | Reclassification of additional large-amount deposit certificates to other current assets in the current period |
| Held-for-trading financial liabilities | 23,741,475.00 | 4,679,000.00 | 407.40% | Changes in the fair value of forward forex settlement contracts as a result of exchange rate fluctuations |
| Other receivables | 150,403,234.75 | 32,902,865.98 | 357.11% | Mainly due to the transfer of some current dividend payment to China Securities Depository and Clearing Corporation Limited. |
| Advances from customers | 196,200.00 | 2,532,442.44 | -92.25% | Decrease in advances of rentals in the current period |
| Other payables | 645,736,648.53 | 440,230,081.05 | 46.68% | Mainly due to the declaration of cash dividends in the current period and withdrawal the amount of profit distribution for 2022. |
| Dividends payable | 134,915,110.77 | 15,646.07 | 862193.92% | Mainly due to the declaration of cash dividends in the current period and withdrawal the amount of profit distribution for 2022. |
| Other current liabilities | 136,138,329.46 | 100,192,681.00 | 35.88% | Increased undue notes receivable that were endorsed in the current period |
| Long-term borrowings | 493,362,857.84 | 747,931,023.71 | -34.04% | Repayment of some long-term borrowings in the current period |
| Other non-current liabilities | 206,307.09 | 308,780.61 | -33.19% | Decreased liabilities of subsidiary to be liquidated and de-registered |
| Taxes and levies | 37,443,299.13 | 25,534,415.81 | 46.64% | Increased provisions for value-added |
| surtaxes and property tax in the current period | ||||
| Interest expense | 14,255,244.44 | 7,068,335.84 | 101.68% | Increased interest on borrowings in the current period |
| Interest income | 24,520,047.73 | 13,000,154.06 | 88.61% | Increased interest on deposits in the current period |
| Other income | 27,389,992.05 | 40,797,290.95 | -32.86% | Decreased continuing government grants in the current period |
| Share of profit or loss of joint ventures and associates | 1,186,031.53 | 650,457.40 | 82.34% | Increased net profits of associates attributable to owners of the Company as the parent in the current period |
| Gain on changes in fair value | -22,153,522.56 | -10,766,595.97 | -105.76% | Changes in the fair value of forward forex settlement contracts as a result of exchange rate fluctuations |
| Credit impairment loss (“-” for loss) | -18,947,421.03 | -10,246,248.56 | -84.92% | Mainly due to the influence of the increase in the balance of accounts receivable for the current period on the increase in bad debt provision. |
| Asset disposal income | 110,475.52 | 82,362.19 | 34.13% | Increased income from the disposal of fixed assets in the current period |
| Non-operating income | 2,440,914.48 | 8,990,018.61 | -72.85% | In the same period of last year, subsidiary NationStar Optoelectronics transferred payables that it did not need to pay to non-operating income. |
| Non-operating expense | 4,780,570.32 | 7,994,166.62 | -40.20% | The same period of last year saw a greater loss on the disposal of fixed assets. |
| Other comprehensive income, net of tax | -49,800,869.38 | -128,025,149.83 | 61.10% | Decreased amount of changes in the fair value of investments in other equity instruments in the current period |
| Other comprehensive income, net of tax attributable to owners of the Company as the parent | -50,939,650.35 | -128,036,703.73 | 60.21% | Decreased amount of changes in the fair value of investments in other equity instruments in the current period |
| Changes in the fair value of investments in other equity | -52,237,967.85 | -128,132,332.34 | 59.23% | Decreased amount of changes in the fair value of investments in other equity |
| instruments | instruments in the current period | |||
| Differences arising from the translation of foreign currency-denominated financial statements | 1,298,317.50 | 95,628.61 | 1257.67% | Fluctuations of the RMB against foreign currencies |
| Other comprehensive income, net of tax attributable to non-controlling interests | 1,138,780.97 | 11,553.90 | 9756.25% | Fluctuations of the RMB against foreign currencies |
| Total comprehensive income | 175,304,418.91 | 115,521,481.07 | 51.75% | Decreased amount of changes in the fair value of investments in other equity instruments in the current period |
| Total comprehensive income attributable to owners of the Company as the parent | 117,995,582.19 | 35,491,316.05 | 232.46% | Decreased amount of changes in the fair value of investments in other equity instruments in the current period |
Material changes to the profit structure or sources of the Company in the Reporting Period:
□Applicable?Not applicable
No such changes in the Reporting Period.
Breakdown of operating revenue:
Unit: RMB
| H1 2023 | H1 2022 | Change (%) | |||
| Operating revenue | As % of total operating revenue (%) | Operating revenue | As % of total operating revenue (%) | ||
| Total | 4,566,062,729.02 | 100% | 4,433,331,393.42 | 100% | 2.99% |
| By operating division | |||||
| Lighting products and luminaries | 2,710,661,113.22 | 59.37% | 2,698,671,734.04 | 60.87% | 0.44% |
| Electronic component manufacturing | 1,360,444,139.66 | 29.79% | 1,316,554,701.04 | 29.70% | 3.33% |
| Export trade and other | 494,957,476.14 | 10.84% | 418,104,958.34 | 9.43% | 18.38% |
| By product category | |||||
| General lighting products | 1,792,551,295.05 | 39.26% | 1,713,682,850.48 | 38.65% | 4.60% |
| LED packaging and components | 1,253,523,386.12 | 27.45% | 1,320,355,785.57 | 29.78% | -5.06% |
| Auto lamps | 806,133,465.65 | 17.65% | 788,150,928.31 | 17.78% | 2.28% |
| Trade and other | 713,854,582.20 | 15.63% | 611,141,829.06 | 13.79% | 16.81% |
| By operating segment | |||||
| Domestic | 3,478,275,919.17 | 76.18% | 3,315,915,661.48 | 74.80% | 4.90% |
| Overseas | 1,087,786,809.85 | 23.82% | 1,117,415,731.94 | 25.20% | -2.65% |
Operating Division, Product Category or Operating Segment Contributing over 10% of Operating Revenue orOperating 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 | 2,710,661,113.22 | 2,126,704,067.38 | 21.54% | 0.44% | -2.02% | 1.97% |
| Electronic component manufacturing | 1,360,444,139.66 | 1,149,050,783.53 | 15.54% | 3.33% | 3.47% | -0.11% |
| Export trade and other | 494,957,476.14 | 457,719,977.97 | 7.52% | 18.38% | 22.72% | -3.27% |
| By product category | ||||||
| General lighting products | 1,792,551,295.05 | 1,375,368,424.17 | 23.27% | 4.60% | 0.32% | 3.27% |
| LED packaging and components | 1,253,523,386.12 | 1,015,930,695.77 | 18.95% | -5.06% | -6.80% | 1.51% |
| Auto lamps | 806,133,465.65 | 668,454,235.14 | 17.08% | 2.28% | 2.14% | 0.11% |
| Trade and other | 713,854,582.20 | 673,721,473.80 | 5.62% | 16.81% | 25.08% | -6.24% |
| By operating segment | ||||||
| Domestic | 3,478,275,919.17 | 2,796,411,970.75 | 19.60% | 4.90% | 4.69% | 0.16% |
| Overseas | 1,087,786,809.85 | 937,062,858.13 | 13.86% | -2.65% | -4.66% | 1.82% |
Data of principal operations of the latest period adjusted according to the changed statistical caliber in theReporting Period:
□ Applicable ? Not applicable
IV Analysis of Non-Principal Operations
? Applicable □ Not applicable
Unit: RMB
| Amount | As % of profit before tax | Source/Reason | Recurrent or not | |
| Return on investment | 22,449,570.63 | 8.76% | 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 | -22,153,522.56 | -8.64% | Gain/loss on changes in fair value of financial instruments | Not |
| Asset impairments | -16,390,888.73 | -6.39% | Inventory valuation allowances | Not |
| Non-operating income | 2,440,914.48 | 0.95% | Receipt of compensation, sale of retired equipment, and carryforwards of payables that require no payment | Not |
| Non-operating expense | 4,780,570.32 | 1.86% | Loss on retirement of non-current assets | Not |
| Other income | 27,389,992.05 | 10.68% | Receipt of continuing government grants | Not |
| Credit impairment loss | -18,947,421.03 | -7.39% | Allowances for | Not |
| doubtful notes receivable, accounts receivable and other receivables | ||||
| Asset disposal income | 110,475.52 | 0.04% | Gains or losses on the disposal of non-current assets | Not |
V Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
| 30 June 2023 | 31 December 2022 | Change in percentage (%) | Reason for significant change | |||
| Amount | As % of total assets | Amount | As % of total assets | |||
| Monetary assets | 2,518,177,714.99 | 16.65% | 2,484,508,907.43 | 16.25% | 0.40% | |
| Accounts receivable | 2,347,099,724.92 | 15.52% | 1,920,770,941.76 | 12.56% | 2.96% | Increased sales in the current period |
| Contract assets | 5,153,358.98 | 0.03% | 5,466,875.07 | 0.04% | -0.01% | |
| Inventory | 1,646,526,195.36 | 10.89% | 2,031,637,401.87 | 13.29% | -2.40% | The Company as the parent enhanced inventory control in the current period. |
| Investment property | 43,366,716.49 | 0.29% | 44,611,882.44 | 0.29% | 0.00% | |
| Long-term equity investments | 183,117,824.19 | 1.21% | 181,931,792.66 | 1.19% | 0.02% | |
| Fixed assets | 3,365,628,092.29 | 22.26% | 3,508,094,282.41 | 22.95% | -0.69% | |
| Construction in progress | 1,377,403,873.06 | 9.11% | 1,282,780,335.14 | 8.39% | 0.72% | |
| Right-of-use assets | 9,832,756.11 | 0.07% | 13,047,727.73 | 0.09% | -0.02% | |
| Short-term borrowings | 190,926,526.02 | 1.26% | 157,715,359.35 | 1.03% | 0.23% | |
| Contract liabilities | 131,700,995.68 | 0.87% | 125,143,161.61 | 0.82% | 0.05% | |
| Long-term borrowings | 493,362,857.84 | 3.26% | 747,931,023.71 | 4.89% | -1.63% | Repayment of some long-term borrowings in the current period |
| Lease liabilities | 6,477,932.48 | 0.04% | 7,055,542.18 | 0.05% | -0.01% | |
| Notes receivable | 811,254,925.34 | 5.37% | 821,537,774.07 | 5.37% | 0.00% | |
| Receivables financing | 444,845,917.62 | 2.94% | 569,868,831.79 | 3.73% | -0.79% | |
| Other current liabilities | 136,138,329.46 | 0.90% | 100,192,681.00 | 0.66% | 0.24% | |
| Other receivables | 150,403,234.75 | 0.99% | 32,902,865.98 | 0.22% | 0.77% | |
2. Major Assets Overseas
□ Applicable ? Not applicable
3. 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) | 60,004,849.31 | 978,980.82 | 110,000,000.00 | 90,000,000.00 | 80,983,830.13 | |||
| 2. Derivative financial assets | 972,032.92 | -73,028.38 | 899,004.54 | |||||
| 3. Investments in other equity instruments | 864,191,346.40 | -61,456,432.76 | 525,202,960.76 | 981,292.12 | 801,753,621.52 | |||
| 4. Receivables financing | 569,868,831.79 | 125,022,914.17 | 444,845,917.62 | |||||
| Subtotal of financial assets | 1,495,037,060.42 | -60,550,480.32 | 525,202,960.76 | 110,000,000.00 | 216,004,206.29 | 1,328,482,373.81 | ||
| Total of the above | 1,495,037,060.42 | -60,550,480.32 | 525,202,960.76 | 110,000,000.00 | 216,004,206.29 | 1,328,482,373.81 | ||
| Financial liabilities | -4,679,000.00 | -19,062,475.00 | -23,741,475.00 | |||||
Details about other changes:
N/ASignificant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes ? No
4. Restricted Asset Rights as at the Period-End
Unit: RMB
| Item | Ending carrying value | Reason for restriction |
| Monetary assets | 535,698,818.93 | Security deposits for notes, performance bonds, payments by buyers for pre-sale of properties |
| Notes receivable | 729,042,157.57 | In pledge for notes pool and notes receivable that are endorsed and undue |
| Fixed assets | 143,870,553.97 | As mortgage and guarantee for related party, see XIV (III) “Guarantees” in Part X |
| Intangible assets | 10,808,229.15 | |
| Total | 1,419,419,759.62 | -- |
VI 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 (%) |
| 30,578,843.07 | 1,175,378,372.86 | -97.40% |
2. Major Equity Investments Made in the Reporting Period
□ Applicable ? Not applicable
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable ? Not applicable
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 Reporting Period | Accumulated fair-value changes charged to 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 | 493,967,194.53 | -20,731,887.11 | 390,220,822.29 | 473,235,307.42 | Investments in other equity instruments | Self-funded |
| Domestically/Overseas listed stock | 601187 | Xiamen Bank | 152,957,606.83 | Fair value method | 328,664,290.95 | -40,724,545.65 | 134,982,138.47 | 16,633,969.35 | 287,939,745.30 | 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/Overseas listed stock | 601777 | Lifan Technology | 1,176,008.74 | Fair value method | 972,032.92 | -73,028.38 | 899,004.54 | Held-for-trading financial assets | Other | ||||
| Total | 237,648,100.70 | -- | 824,103,518.40 | -61,529,461.14 | 525,202,960.76 | 0.00 | 0.00 | 16,633,969.35 | 762,574,057.26 | -- | -- | ||
(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 | 1,000 | 0.00 | 0 | 0 | 1,000 | 0 | 0.00% |
| General forward | 1,000 | -49.23 | 0 | 0 | 0 | 1,000 | 0.84% |
| General forward | 1,000 | -49.23 | 0 | 0 | 0 | 1,000 | 0.84% |
| Forex option | 250 | -12.32 | 0 | 250 | 0 | 250 | 0.21% |
| Forex option | 300 | -15.28 | 0 | 300 | 0 | 300 | 0.25% |
| Forex option | 375 | -19.64 | 0 | 375 | 0 | 375 | 0.31% |
| Forex option | 375 | -20.15 | 0 | 375 | 0 | 375 | 0.31% |
| Forex option | 375 | -20.63 | 0 | 375 | 0 | 375 | 0.31% |
| Forex option | 375 | -21.10 | 0 | 375 | 0 | 375 | 0.31% |
| Forex option | 250 | -12.63 | 0 | 250 | 0 | 250 | 0.21% |
| Forex option | 300 | -15.66 | 0 | 300 | 0 | 300 | 0.25% |
| Forex option | 375 | -20.06 | 0 | 375 | 0 | 375 | 0.31% |
| Forex option | 375 | -20.57 | 0 | 375 | 0 | 375 | 0.31% |
| Forex option | 375 | -21.08 | 0 | 375 | 0 | 375 | 0.31% |
| Forex option | 375 | -21.56 | 0 | 375 | 0 | 375 | 0.31% |
| Total | 7,100 | -319.14 | 0 | 4,100 | 1,000 | 6,100 | 5.08% |
| 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 gain stood at 2.154 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 market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) | 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 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 | 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. | ||||||
| include measurement method and related assumptions and parameters) | |
| 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 investments and risk control | 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 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.
VII 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
VIII Major Subsidiaries
? Applicable □ Not applicable
Major 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 | 6,310,970,021.75 | 3,770,239,883.45 | 1,758,744,095.83 | 58,065,521.34 | 53,804,452.96 |
| Nanning Liaowang Auto Lamp Co., Ltd. | Subsidiary | Manufacturing | 35,055,700.00 | 2,237,010,389.09 | 900,208,304.91 | 720,209,306.91 | 26,841,131.01 | 22,341,749.52 |
| FSL Zhida Electric Technology Co., Ltd. | Subsidiary | Manufacturing | 38,150,000.00 | 205,091,192.08 | 78,302,381.89 | 138,646,788.74 | 10,426,883.92 | 8,695,560.09 |
| FSL Chanchang Optoelectronics Co., Ltd. | Subsidiary | Manufacturing | 72,782,944.00 | 828,103,942.50 | 312,506,062.67 | 649,913,158.96 | 99,750,151.28 | 83,226,371.37 |
Subsidiaries obtained or disposed in the Reporting Period:
□ Applicable ? Not applicable
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 NationStar OptoelectronicsCo., Ltd. (NationStar) from Rising Holdings and its acting-in-concert party. Upon the conclusion of the transaction, the Companyeventually holds a 21.48% interest in NationStar, and NationStar has become a majority-owned subsidiary of the Company. TheCompany has included NationStar in its consolidated financial statements 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. FSL Zhida changed its registered capital onthe basis of paid-in-capital on 16 January 2023. Upon the completion of the change, the Company holds a stake of
66.84% in it. The Company has included FSL Zhida in its consolidated financial statements since the date of FSLZhida’s incorporation.—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 23August 2016, the Company and Prosperity Lamps and Components Ltd signed the equity transfer agreement. TheCompany purchased 30% equity of Foshan Chanchang Electric Appliances (Gaoming) Co., Ltd. held byProsperity Lamps and Components Ltd. After the purchasing, the Company held 100% equity of FSL ChanchangOptoelectronics Co., Ltd.IX Structured Bodies Controlled by the Company
□ Applicable ? Not applicable
X 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.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
The Company has significant overseas sales, which are mainly settled in USD. If RMB experiences significantappreciation, the price competitiveness of overseas sales could be undermined and exchange 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.
Part IV Corporate Governance
I Annual and Extraordinary General Meeting 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 First Extraordinary General Meeting of 2023 | Extraordinary General Meeting | 43.60% | 31 March 2023 | 1 April 2023 | Resolutions of the First Extraordinary General Meeting of 2023 |
| The 2022 Annual General Meeting | Annual General Meeting | 43.16% | 10 May 2023 | 11 May 2023 | Resolutions of the 2022 Annual General Meeting |
2. Extraordinary General Meetings Convened at the Request of Preference Shareholders with ResumedVoting Rights
□ Applicable ? Not applicable
II Change of Directors, Supervisors and Senior Management
□ Applicable ? Not applicable
The Company’s directors, supervisors and senior management remained unchanged during the Reporting Period.For further information, see the 2022 Annual Report.III Interim Dividend Plan
□ Applicable ? Not applicable
The Company has no interim dividend plan, either in the form of cash or stock.
IV Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measuresfor Employees? Applicable □ Not applicable
1. Equity incentives
On 12 June 2023, the 2023 Restricted Share Incentive Plan (Draft) and Its Summary, together with otherrelevant proposals, were approved at the 44
th
Meeting of the Ninth Board of Directors and the 22
ndMeeting ofthe Ninth Supervisory Committee. As such, it was approved to grant no more than 13,000,000 restricted shares
(accounting for 0.95% of the Company’s total share capital of 1,361.9946 million shares at the date of theannouncement on the draft plan of the incentive plan) to 262 awardees. To be specific, there were 11.7 millionshares for the first grant, accounting for 90.00% of the total grant under the incentive plan; and there were 1.3million reserved shares, accounting for 10.00% of the total grant under the incentive plan. The restricted shareswere A-stock ordinary shares repurchased by the Company. And the grant price for the first grant wasRMB3.81/share. This equity incentive plan is subject to approval by the State-owned Assets Supervision andAdministration Commission of Guangdong Province and a general meeting of shareholders of the Company.For further information, see the 2023 Restricted Share Incentive Plan (Draft) and Its Summary and otherrelevant proposals that have been disclosed on http://www.cninfo.com.cn/ dated 13 June 2023.
2. Implementation of Employee Stock Ownership Plans
□ Applicable ? Not applicable
3. Other Incentive Measures for Employees
□ Applicable ? Not applicable
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 |
| 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 | Environmental Transport | 19 February 2014 | MGY |
| Protection Acceptance Opinions on Energy-saving Lamp Expansion Project of Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | and Urban Management Bureau of Gaoming District (Environmental Protection) | [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 ofFoshan Electrical and LightingCo., 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 District, Foshan City, of Environmental Impact Report on Glass Kiln (Change) Construction Project of Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | Environmental Protection Bureau of Gaoming District, Foshan City | 14 January 2019 | MHS [2019] No. 11 |
| 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 | Liuzhou Liudong New Area Administrative | 28 October 2019 | LDSPHB Zi [2019] No. 70 |
| 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) | Examination and Approval Bureau | |||
| 15 | Sewage Discharge License | Liuzhou Liudong New Area Administrative Examination and Approval Bureau | 18 July 2023 | 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 New Semiconductor Light-emitting Device Construction Project | Environmental Protection Bureau of Chancheng District, Foshan City | 10 October 2007 | C.H.Y. [2007] No. 161 |
| 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 |
| 25 | Approval for the Report on the Environmental Influence of the | Foshan Environmental Protection Bureau | 21 January 2008 | F2008-8 |
| Project of Key Technology for Semiconductor Lighting Lamps and Industrialization of Foshan NationStar Optoelectronics Co., Ltd. | ||||
| 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 Technological Improvement Project for Power-based LED and LED Luminary Module of Foshan NationStar Optoelectronics Co., Ltd. | Foshan Environmental Protection Bureau | 16 May 2016 | F.H.H. [2016] No. 457 |
| 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 | Environmental Protection Bureau of Chancheng | 29 November 2010 | CB2010-0135 |
| New Top LED Manufacturing Technology and Industrialization Project | District, Foshan City | |||
| 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 NationStar Optoelectronics Co., Ltd. | Environmental Protection and Urban Management Bureau of Chancheng District, Foshan City | 29 December 2014 | C.H.Y.B [2014] No. 46 |
| 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 | Environmental Protection Bureau of Chancheng District, Foshan City | 11 April 2017 | C.H.Y.B. 2017-4-110 |
| Illumination | ||||
| 41 | 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 | Environmental Protection Bureau of Chancheng District, Foshan City | 1 November 2016 | C.B. 2016-4-206 |
| 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 | 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 V) | Foshan Municipal Ecology and Environment Bureau | 31 March 2023 | F.C.H.S. [2023] No. 4 |
| 46 | Registration Receipt for the Discharge of Fixed Pollution Sources | Foshan Municipal Ecology and Environment Bureau | 19 January 2020 | 914406001935264036001X |
| 47 | Approval from Foshan Environmental Protection Bureau to the Report on the Influence of Environment Change of the Epitaxial Chip Project (Phase I) of Foshan NationStar Semiconductor Co., | Foshan Municipal Ecology and Environment Bureau | 14 July 2016 | F.H.H. [2016] No. 746 |
| Ltd. | ||||
| 48 | Letter of Opinions from Foshan Environmental Protection Bureau on the Acceptance Inspection of the Environmental Protection of the Changed Completion Environment of the Epitaxial Chip Project (Phase I) of Foshan NationStar Semiconductor Co., Ltd. | Foshan Municipal Ecology and Environment Bureau | 3 May 2017 | F.H.H. [2017] No. 426 |
| 49 | Sewage Discharge Permit | Foshan Municipal Ecology and Environment Bureau | 21 November 2022 | 91440600570160743B001Q |
| 50 | 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 |
| 51 | 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 |
| 52 | 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 |
| 53 | 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 |
| 54 | 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 |
| 55 | 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 |
| 56 | Approval for the Report on the 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. | Construction and Environmental Protection Bureau of Guangzhou Economic and Technological Development Zone | 17 August 2011 | S.K.H.J.Y.Z [2011] No. 272 |
| 57 | 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 | Environmental Protection and Urban Management Bureau of Guangzhou Economic and Technological Development Zone | 19 March 2015 | S.K.H.Y.Z [2015] No. 44 |
| Co., Ltd. | ||||
| 58 | 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 |
| 59 | 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 |
| 60 | 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 |
| 61 | 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 |
| 62 | Registration Receipt for the Discharge of Fixed Pollution Sources | Guangzhou Municipal Ecological Environment Bureau | 27 February 2020 | 91440000725451562J001Y |
Discharge standards and pollutants discharged in production and operation activities:
| Name of Company or Subsidiary Company | Type of Major and Characteristic Pollutants | Name of Major and Characteristic Pollutants | Discharge Method | Outlet Quantity | Outlet Distribution | Discharge Concentration /intensity | Pollutant Discharge Standards | Total Actual Discharge | Total Discharge Approved | Excessive 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 | Exhaust gas | Volatile organic compound | Discharged in an un-organized | 2 | In the plant | Discharged upon reaching | Integrated Emission Standards | / | / | None |
| Technology Co., Ltd. | s | manner | applicable standards | of Air Pollutants (GB16297-1996) | ||||||
| Foshan NationStar Optoelectronics Co., Ltd. | Wastewater | Chemical oxygen demand ("COD") and ammonia nitrogen | Discharged by standards after treatment | 1 | Wastewater treatment station | Ammonia nitrogen: 0.067 mg/L | Table 1 “Limits for direct discharges in water pollutant discharge limits” in Discharge Standard of Water Pollutants for Electronic Industry (GB39731-2020) | Ammonia nitrogen:0.00201t/a | / | None |
| Foshan NationStar Optoelectronics Co., Ltd. | Exhaust gas | Total volatile organic compounds ("VOCs"), NMHC, and particulate matters | Discharged by standards after treatment | 2 | Rooftop of East Tower and West Tower | Total VOCs: 0.215mg/m? NMHC: 2.79mg/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:0.04 t/a NMHC: 0.53568 t/a | / | None |
| Foshan NationStar Optoelectronics Co., Ltd. | Noise | Noise | Discharged by standards | / | / | Daytime: 57; nighttime: 49, Unit: dB (A) | Emission Standard for Noise of Industrial Enterprises at Boundary (GB12348-2008): Standard Class II | / | / | None |
| Foshan NationStar Semiconductor | Wastewater | COD, ammonia nitrogen, suspended | Discharged by standards after | 1 | Wastewater station | PH: Six to nine COD: 90 mg/L | Discharge Limits of Water Pollutants | COD:0.67t/a Ammonia | COD：3.129t/a Ammonia nitrogen： | None |
| Technology Co., Ltd | solids, and fluoride | treatment | BOD5: 20 mg/L Suspended solids: 60 mg/L Ammonia nitrogen: 10 mg/L Fluoride: 10 mg/L | (DB44/26-2001) of Guangdong Province: Standard Class I for Time Period II. | nitrogen：0.000515t/a | 0.201t/a | ||||
| Foshan NationStar Semiconductor Technology Co., Ltd. | Exhaust gas | Sulfur dioxide, nitrogen oxide, particulate matter, ammonia, ozone concentration, hydrogen chloride, fluoride, chlorine gas, sulphuric acid mist, stupid, toluene and xylene, total VOCs | Discharged by standards after treatment | 6 | Rooftop | Sulfur dioxide: 500 mg/m?; 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? | Emission Limits of Air Pollutants (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. | SO2:0t/a; NOX: 2.3233 t/a Total VOCs：0.4589t/a | SO2:0.25t/a; NOX:11.96t/a Total VOCs：2.45t/a | None |
| 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 | / | / | None |
| -2008): Standard Class II | ||||||||||
| 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 Period II. | COD:0.219t/a | / | None |
| 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 | Guangdong StandardDB44/27-2001, Discharge Limits 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 pollutants such as VOCs,NMHC, and particulate matters, which was treated through dry filtration and secondary activated carbonadsorption. Upon treatment, the Emission Limits of Air Pollutants (DB 44/27-2001), the Emission Standard ofVolatile Organic Compounds for Furniture Manufacturing (DB44/814-2010), and the Integrated EmissionStandard of Volatile Organic Compounds for Stationary Pollution Source (DB44/ 2367—2022) were met.NationStar Semiconductor: a) Pollutants, 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 pollutants 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 pollutants, such as dustand particulate matters, organic exhaust gas, sulfuric acid mist, and hydrogen chloride mist. Through filter vatsand 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, and
then 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: wastes, such as COD and ammonia nitrogen, was mainly generated during themanufacturing of LED components. Upon treatment through coagulation, sedimentation, and frame filtering,the discharge limits and requirements stipulated in the Discharge Standard of Water Pollutants for ElectronicIndustry (GB 39731-2020) 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.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.
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, andfiled with the Foshan Municipal Ecology and Environment Bureau Gaoming Sub-bureau (Filing No.: 440608-2020-056-M) on 25 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)in 2020.NationStar Semiconductor formulated the Contingency Plan for Environmental Emergencies of NationStarSemiconductor (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 (Filing No.: 440600-2020-047-M) on 12 August 2020.Fenghua Semiconductor formulated the Contingency Plan for Environmental Emergencies of GuangdongFenghua Semiconductor Technology Co., Ltd. (including Risk Assessment Report and Material Survey ofEnvironmental Emergencies) according to the requirements of the Management Methods for EnvironmentalEmergencies, and had it filed with the Guangzhou Municipal Ecology and Environment Bureau (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 RMB4.3354 million, and their environmentalprotection-related taxes paid amounted to RMB41.5 thousand.
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 Huaqiang
Environmental 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 self-monitoring plan. It entrusted aqualified third-party environmental testing agency to perform the inspection of the pollutants on a half-yearbasis. All the inspection results were lower than the standard limits. Meanwhile, it accepted the quarterlysupervision and monitoring by local environmental protection departments. All the monitoring results werelower than the standard limits.According to its self-monitoring plan, Guangdong Fenghua Semiconductor Technology Co., Ltd. entrusted aqualified third-party environmental testing agency to perform the inspection of the pollutants on a half-yearbasis. All the inspection results were lower than the standard limits. Meanwhile, it accepted the quarterlyinspection by local environmental protection departments. All the monitoring results were lower than thestandard limits.
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.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.
Other relevant information:
None.II Social ResponsibilityThe Company places a high value on corporate social responsibility and commitment. Adhering to the "create thevalue of light" corporate mission, the Company vigorously performs its social responsibility and constantlyenhances its protection for the interests of stakeholders in order to create a healthy and beautiful life of light forcustomers, create and improve the space for personal development for employees and help them achieve the valueof life, and contribute to the sound and sustainable development of the society.
1. Protection of the rights and interests of our shareholders and creditors
We continuously improve our corporate governance structure, regulate our operation and enhance ourmanagement on information disclosure and investor relations. We treat all our investors fairly and justly, ensuretheir rights to know about, participate in and vote on the significant events of the Company, and safeguard thelegal rights and interests of all our shareholders, especially our minority shareholders.
2. Protection of the rights and interests of our employees
Considering employees the most valuable resource for our survival and development, we constantly improve ouremployment system, improve the compensation packages for our employees and attach importance to talentcultivation so as to provide opportunities and space for the sustainable development of our employees as well asrealize the common development of the employees and the Company. We also pay attention to the health of ouremployees, attach importance to production safety and labor protection, and improve the working and livingconditions for our employees so as to formulate harmonious and stable labor relations.
3. Protection of the rights and interests of our customers and consumers
We have been upholding the “Customer First” principle in our provision of quality products and services tocustomers. We operate honestly and disallow any unfair trade practice against commercial ethics, market rulesand the fair competition principle. We also improve our product quality and after-sales services and try to build awin-win relationship with our customers.
4. Protection of the rights and interests of our suppliers
We respect and protect the legal rights and interests of our suppliers, carefully protect their secret and proprietaryinformation, encourage and push them to continuously improve the quality of their products and services through
creating an environment for open and fair competition among them so as to realize mutual benefits and mutualdevelopment of the suppliers and the Company.
5. Production Safety, Environmental Protection and Sustainable Development
The Company sees production safety, environmental protection and energy conservation as an important part ofits strategy of sustainable development. It implements accountability systems in relation environmental protectionand production safety in strict accordance with the applicable laws and regulations. In addition, it is ISO9001-(aquality management system), IATF16949-(a quality management system), ISO14001-(an environmentmanagement system), ISO45001-(a management system for occupational health and safety) and ISO50001-(anenergy management system) certified. In 2018, upon the review and publication by the Ministry of Industry andInformation Technology, the Company was certified as one of the second batch of National Demonstration Entityof Green Factory.
6. Public relations and welfare
We attach importance to the realization of our social value and see creating a prosperous society as acommitment that we should take on, trying to boost the local economy through our own development. Duringthe Reporting Period, the Company spent more than RMB90,000 on consumption assistance products. It alsoorganised voluntary blood donations, attracting more than two hundred participants. Moreover, it launched the"Fulfil Our Original Aspiration and Mission, Carry Forward the Lei Feng Spirit" Party Day & VoluntaryService activity in elderly care communities, giving gifts such as little nightlights and milk to the seniors there.Additionally, to fulfil the social responsibility of state-owned enterprises, the Company cared about specialretirees in the communities. On the Learn from Lei Feng Day, the Company, under the coordination andarrangements of the public service offices of the communities, joined hands with other caring enterprises tolaunch the "Learn the Lei Feng Spirit, Fulfil Our Original Aspiration and Mission" series of caring andvoluntary assistance services, helping 65 households of special seniors in the communities change or installlights for free.
Part VI Significant EventsI Commitments of the Company’s De Facto Controller, Shareholders, Related Parties andAcquirers, as well as the Company Itself and Other Entities Fulfilled in the ReportingPeriod or Ongoing at the Period-End
□ Applicable ? Not applicable
No such cases in the Reporting Period.II Occupation of the Company’s Capital by the Controlling Shareholder or any of ItsRelated Parties 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 Engagement and Disengagement of Independent AuditorAre the interim financial statements audited?
□Yes ? No
These interim financial statements are unaudited.
V Explanations Given by the Board of Directors and the Supervisory Committee Regardingthe Independent Auditor's “Modified Opinion” on the Financial Statements of theReporting Period
□ Applicable ? Not applicable
VI Explanations Given by the Board of Directors Regarding the Independent Auditor's“Modified Opinion” on the Financial Statements of Last Year
□ Applicable ? Not applicable
VII Insolvency and Reorganization
□ Applicable ? Not applicable
No such cases in the Reporting Period.
VIII Legal MattersSignificant lawsuits and arbitrations
□ Applicable ? Not applicable
No such cases in the Reporting Period.
Other 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 |
| 71 other litigation matters that did not meet litigation standards | 6,717.3 | No | 31 cases have been closed; 40 cases is not closed. | No significant influence on the Company | N/A | N/A |
IX Punishments and Rectifications
□ Applicable ? Not applicable
X Credit Quality of the Company as well as its Controlling Shareholder and De FactoController? Applicable □ Not applicableIn the Reporting Period, the Company and its controlling shareholder and de facto controller were not involvedin any unsatisfied court judgments, large-amount overdue liabilities or the like.XI 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 | Under same actual contro | Purchasing products | Purchase of materials | Market price | 142.71 | 142.71 | 0.05% | 4,500 | Not | Bank transfers or bank | 142.71 | 2 March 2023 | www.cninfo.com.cn |
| Advanced Technology Holding Co., Ltd. | ller | and receiving labor service from related party | acceptance notes | ||||||||||
| Prosperity Lamps & Components Limited | Shareholder that holds over 5% shares of the Company | Purchasing products and receiving labor service from related party | Purchase of materials | Market price | 5.73 | 5.73 | 0.00% | 700 | Not | Bank transfers or bank acceptance notes | 5.73 | 2 March 2023 | www.cninfo.com.cn |
| Shenzhen Yuepeng Construction Co., Ltd. | Under same actual controller | Purchasing products and receiving labor service from related party | Receiving labor service | Market price | 75.45 | 75.45 | 0.36% | 3,800 | Not | Bank transfers or bank acceptance notes | 75.45 | 2 March 2023 | www.cninfo.com.cn |
| Guangzhou Haixinsha Industry General Company | Under same actual controller | Purchasing products and receiving labor service from related party | Receiving labor service | Market price | 46.71 | 46.71 | 0.85% | Bank transfers or bank acceptance notes | 46.71 | ||||
| Foshan Fulong Environme | Under same actual controller | Purchasing products and receiv | Receiving labor service | Market price | 16.29 | 16.29 | 0.08% | Bank transfers or bank acceptance | 16.29 |
| ntal Technology Co., Ltd. | ing labor service from related party | notes | ||||||||
| Shenzhen Longgang Dongjiang Industrial Waste Treatment Co., Ltd. | Under same actual controller | Purchasing products and receiving labor service from related party | Receiving labor service | Market price | 11.67 | 11.67 | 0.06% | Bank transfers or bank acceptance notes | 11.67 | |
| 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 | 7.69 | 7.69 | 0.04% | Bank transfers or bank acceptance notes | 7.69 | |
| Jiangmen Dongjiang Environmental Technology Co, Ltd. | Under same actual controller | Purchasing products and receiving labor service from related party | Receiving labor service | Market price | 7.00 | 7 | 0.03% | Bank transfers or bank acceptance notes | 7.00 | |
| Zhuhai Dongjiang Environmental Techn | Under same actual controller | Purchasing products and receiving labor | Receiving labor service | Market price | 1.31 | 1.31 | 0.01% | Bank transfers or bank acceptance notes | 1.31 |
| ology Co, Ltd. | service from related party | ||||||||||||
| 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 | 8.70 | 8.7 | 0.04% | Bank transfers or bank acceptance notes | 8.70 | N/A | |||
| Guangdong Tianxin Commercial Service Co., Ltd. | Under same actual controller | Purchasing products and receiving labor service from related party | Receiving labor service | Market price | 8.38 | 8.38 | 0.04% | Bank transfers or bank acceptance notes | 8.38 | N/A | |||
| Prosperity Lamps & Components Limited | Shareholder that holds over 5% shares of the Company | Selling products and providing labor service to related party | Selling products | Market price | 1,264.15 | 1,264.15 | 0.14% | 4,000 | Not | Bank transfers or bank acceptance notes | 1,264.15 | 2 March 2023 | www.cninfo.com.cn |
| Guangdong Fenghua Advanced Technology Holding Co., Ltd. | Under same actual controller | Selling products and providing labor service to relate | Selling products | Market price | 746.66 | 746.66 | 0.09% | 1,500 | Not | Bank transfers or bank acceptance notes | 746.66 | 2 March 2023 | www.cninfo.com.cn |
| d party | |||||||||||||
| Guangdong Zhongnan Construction Co., Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 301.25 | 301.25 | 0.03% | 13,000 | Not | Bank transfers or bank acceptance notes | 301.25 | 2 March 2023 | www.cninfo.com.cn |
| Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 71.04 | 71.04 | 0.01% | 1,550 | Not | Bank transfers or bank acceptance notes | 71.04 | 2 March 2023 | www.cninfo.com.cn |
| Shandong Zhongjin Lingnan Copper Co., Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 22.38 | 22.38 | 0.00% | 22.38 | |||||
| Guangdong Zhongjin Lingnan Engineering Technology Co., Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 2.31 | 2.31 | 0.00% | Bank transfers or bank acceptance notes | 2.31 | ||||
| Guangdong Zhuyuan | Under same actual contro | Selling products | Selling products | Market price | 1.23 | 1.23 | 0.00% | 1,800 | Not | Bank transfers or bank | 1.23 | 2 March 2023 | www.cninfo.com.cn |
| Construction and Engineering Co., Ltd. | ller | and providing labor service to related party | acceptance notes | ||||||||||
| Guangdong Rising Holdings Group Co., Ltd. | Actual controller | Selling products and providing labor service to related party | Selling products | Market price | 0.28 | 0.28 | 0.00% | Not | Bank transfers or bank acceptance notes | 0.28 | N/A | ||
| Guangdong Xintaochip Microelectronics Co., Ltd. (formerly known as Fenghua Research Institute (Guangzhou) Limited) | Under same actual controller | Selling products and providing labor service to related party | Providing labor service | Market price | 57.79 | 57.79 | 0.01% | Not | Bank transfers or bank acceptance notes | 57.79 | N/A | ||
| Guangdong Rising Research and Development Institute Co., | Under same actual controller | Selling products and providing labor service to related | Providing labor service | Market price | 0.44 | 0.44 | 0.00% | Not | Bank transfers or bank acceptance notes | 0.44 | N/A |
| Ltd. | party | ||||||||||||
| Total | -- | -- | 2,799.17 | -- | 30,850 | -- | -- | -- | -- | -- | |||
| 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 June 2023, 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 Rising Real Estate Group Co., Ltd. and its majority-owned subsidiaries, Guangdong Electronic Technology Research Institute, Guangdong Rising Research and Development Institute Co., Ltd. and its majority-owned subsidiaries, Guangdong Rising Property Group Co., Ltd. and its majority-owned subsidiaries, as well as Dongjiang Environmental Company Limited and its majority-owned subsidiaries. Concerning the purchases from related parties, the actual amount in H1 2023 was RMB3.3164 million, accounting for 3.49% of the estimate for 2023. As for the sales to related parties, the actual amount in H1 2023 was RMB24.6753million, accounting for 9.77%of the estimate for 2023. | ||||||||||||
| 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
No such cases in the Reporting Period.
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:
| Related party | Relationship | Daily | Interest rate | Beginning | Actual amount | Ending |
| maximum limits (RMB’0,000) | range | balance (RMB’0,000) | Total deposited in (RMB’0,000) | Total withdrawn (RMB’0,000) | balance (RMB’0,000) | ||
| Guangdong Rising Finance Co., Ltd. | Controlled by the same controlling shareholder | 120,000 | 0.25%-3.3% | 119,172.29 | 272,402.11 | 289,629.86 | 101,944.54 |
Loan business:
N/ACredit 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 controlling shareholder | Credit granting | 150,000 | 0.00 |
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 | 5,850.05 | 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 controller | Purchasing products and receiving labor service from related party | Receiving labor service | Market price | 4,245.36 | Bank transfers or bank acceptance notes | 6 May 2021 | www.cninfo.com.cn |
| Guangdong Zhongren Group Construction Co., Ltd. | Under same actual controller | Purchasing products and receiving | Receiving labor service | Market price | 2,667.77 | Bank transfers or bank acceptance notes | 1 December 2020 | www.cninfo.com.cn (announcement of subsidiary |
| labor service from related party | NationStar Optoelectronics) |
XII Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
? Applicable □ Not applicableOn 30 August 2022, a wholly-owned subsidiary of the Company, Foshan Kelian New Energy Technology Co.,Ltd. (hereinafter referred to as "Foshan Kelian"), issued the Bidding Announcement for Operation and InvestmentAttraction and Property Management Services of Kelian Building on the open platforms and conducted publicbidding for the operation and investment attraction and property management services of Kelian Building. Afterthe corresponding procedures of qualification inspection, accreditation and publicity, the winning bidder wasdetermined to be Guangdong Huajian Enterprise Group Co., Ltd. (hereinafter referred to as "Huajian Group"). On10 October 2022, the Board of Directors of the Company reviewed and approved the Proposal on a Related-PartyTransaction Due to a Call for Public Bids. It agreed to entrust the properties encompassing Kelian BuildingIndustrial (R&D Centre) (located in Building 1), commercial property (service-oriented apartments), commercialproperty (shops), and part of the underground parking lot, 70,340.04 square meters in total, to Huajian Group foroperation and investment attraction. After the Company hands the foregoing properties to Huajian Group, thelatter shall pay RMB300 million to the Company within the operation and investment attraction period (ten years)as the minimum guaranteed rental income. For details, see the Announcement on a Related-Party Transaction Dueto a Call for Public Bids dated 11 October 2022 disclosed by the Company on www.cninfo.com.cn. On 21 April2023, Foshan Kelian and Huajian Group entered into the Contract on the Operation and Investment AttractionServices for Kelian Building.
Projects that generated a gain/loss that accounted for 10% or more of the Company’s gross profit in theReporting Period:
□ Applicable ? Not applicable
There is no entrustment project that generated a gain/loss that accounted for 10% or more of the Company’sgross profit in the Reporting Period.
(2) Contracting
□ Applicable ? Not applicable
No such cases in the Reporting Period.
(3) Leases
The Company was not involved in any significant lease in the Reporting Period.
2. Major guarantees
? Applicable □ Not applicable
Unit: RMB'0,000
| Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for 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 (A3) | 0 | 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) | 0 | 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 |
| Nanning Liaowang Auto Lamp | 2 March 2023 | 4,500 | 21 June 2023 | 1,547.33 | Secured | Yes | None | 25 April 2022 -31 December 2025 | No | No |
| Co., Ltd., Liuzhou Guige Foreshine Technology Co., Ltd., Liuzhou Guige Lighting Technology Co., Ltd. | ||||||||||
| Nanning Liaowang Auto Lamp Co., Ltd., Chongqing Guinuo Lighting Technology Co., Ltd. | 2 March 2023 | 9,900 | 10 February 2023 | 5,826.87 | Secured | Yes | None | 15 June 2020 -15 June 2023, 25 May 2023 -24 May 2024 | No | No |
| Nanning Liaowang Auto Lamp Co., Ltd., Liuzhou Guige Foreshine Technology Co., Ltd., Liuzhou Guige Lighting Technology Co., Ltd. | 2 March 2023 | 9,600 | 24 March 2023 | 9,600 | Secured | Yes | None | 24 April 2022 -31 December 2025 | No | No |
| Total approved line for such guarantees in the Reporting Period (C1) | 24,000 | Total actual amount of such guarantees in the Reporting Period (C2) | 16,974.2 | |||||||
| Total approved line for such guarantees at the end of the Reporting Period (C3) | 24,000 | Total actual balance of such guarantees at the end of the Reporting Period (C4) | 16,974.2 | |||||||
| Total guarantee amount (total of the three kinds of guarantees above) | ||||||||||
| Total guarantee line approved in the | 24,000 | Total actual guarantee amount in | 16,974.2 | |||||||
| Reporting Period (A1+B1+C1) | the Reporting Period (A2+B2+C2) | ||
| Total approved guarantee line at the end of the Reporting Period (A3+B3+C3) | 24,000 | Total actual guarantee balance at the end of the Reporting Period (A4+B4+C4) | 16,974.2 |
| Total actual guarantee amount (A4+B4+C4) as % of the Company’s net assets | 3.29% | ||
Compound guarantees:
None.Note:
Chongqing Guinuo Lighting Technology Co., Ltd. (referred to as “Chongqing Guinuo”), Liuzhou GuigeForeshine Technology Co., Ltd. (referred to as “Liuzhou Foreshine”), and Liuzhou Guige Lighting TechnologyCo., Ltd. (referred to as “Liuzhou Lighting”) are all wholly-owned subsidiaries of Nanning Liaowang AutoLamp Co., Ltd. (referred to as “Nanning Liaowang”). As of 30 June 2023, guarantees between NanningLiaowang and its subsidiaries and collaterals are set out in “3. Other” under “XIV Commitments andContingencies” in Part X of this Report.
3. Cash Entrusted for Wealth Management
? Applicable □ Not applicable
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 | 24,000 | 8,000 | 0 | 0 |
| Total | 24,000 | 8,000 | 0 | 0 | |
High-risk wealth management transactions with a significant single amount, or with low security and lowliquidity:
? Applicable □ Not applicable
Unit: RMB'0,000
| Trustee | 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) |
| Foshan | Bank | Structur | 4,000 | Self-owned | 30 Dec | 4 July | Other | Subject | 2.98% | 57.09 | 56.09 | To be | Yes | Incompli | Announc |
| branch of Bank of China | ed deposit | funds | ember 2022 | 2023 | to actual investment period | received | ance with prescribed approval procedure | ement No. 2023-007 on Entrustment of Some Idle Funds for Wealth Management on http://www.cninfo.com.cn/ | ||||||||
| Foshan branch of Bank of China | Bank | Structured deposit | 4,000 | Self-owned funds | 9 March 2023 | 6 September 2023 | Other | Subject to actual investment period | 3.15% | 58.61 | 36.75 | To be received | Yes | Incompliance with prescribed approval procedure | Announcement No. 2023-007 on Entrustment of Some Idle Funds for Wealth Management on http://www. |
| cninfo.com.cn/ | ||||||||||||||
| Total | 8,000 | -- | -- | -- | -- | -- | -- | 115.7 | 92.84 | -- | 0 | -- | -- | -- |
Situation where the principal is expectedly irrecoverable or an impairment may be incurred:
□ Applicable ? Not applicable
4. Other Significant Contracts
□ Applicable ? Not applicable
No such cases in the Reporting Period.XIII Other Significant Events? Applicable □ Not applicableShare offering to specific partiesThe Company intends to raise gross proceeds of no more than RMB1,094.5518 million through an offering ofA-stock shares to specific parties. The amount exclusive of the issuance costs will be used to invest in the FSLautomation and digital transformation construction project, the FSL Hainan Industrial Park Phase I, theintelligent street light construction project, the automotive lamp module production and construction project,and the R&D centre construction project. The said share offering plan has been approved at the 39
th
Meeting ofthe Ninth Board of Directors and a general meeting of shareholders on 14 March 2023 and 31 March 2023,respectively, as well as by the Public Offering Review Centre of the Shenzhen Stock Exchange on 17 July 2023.The plan is still subject to final approval of the CSRC before implementation. And there is uncertainty withrespect to the said approval and the timing.
XIV 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 Fozhao
Lighting 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 30 June 2023, Nanjing Fozhaohas received 30% of the compensation, that is, RMB55,160,000.00, and the land use right certificate and houseownership certificate of the assets involved have been cancelled. As of the date of this report, the site handover isstill 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 date of this Report, theCompany is handling the relevant procedures for liquidation and cancellation.
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 | 10,753,658 | 0.79% | 10,753,658 | 0.79% | |||||
| 1.1 Shares held by the state | |||||||||
| 1.2 Shares held by state-own legal person | 1 | 0.00% | 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 person | 1,338,434 | 0.10% | 1,338,434 | 0.10% | |||||
| Shares held by domestic natural person | 487,591 | 0.04% | 487,591 | 0.04% | |||||
| 1.4 Oversea shareholdings | 8,927,632 | 0.66% | 8,927,632 | 0.66% | |||||
| Among | |||||||||
| which: shares held by oversea legal person | |||||||||
| Shares held by oversea natural person | 8,927,632 | 0.66% | 8,927,632 | 0.66% | |||||
| 2. Unrestricted shares | 1,351,240,989 | 99.21% | 1,351,240,989 | 99.21% | |||||
| 2.1 RMB ordinary shares | 1,056,501,050 | 77.57% | 1,056,501,050 | 77.57% | |||||
| 2.2 Domestically listed foreign shares | 294,739,939 | 21.64% | 294,739,939 | 21.64% | |||||
| 2.3 Oversea listed foreign shares | |||||||||
| 2.4 Other | |||||||||
| 3. Total shares | 1,361,994,647 | 100.00% | 1,361,994,647 | 100.00% |
Reasons for share changes:
□Applicable ? Not applicable
Approval of share changes:
□Applicable ? Not applicable
Transfer of share ownership:
□Applicable ? Not applicable
Progress on any share repurchase:
□Applicable ? Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□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 accountingperiod, respectively:
□Applicable ? Not applicable
Other information that the Company considers necessary or is required by the securities regulator to bedisclosed:
□Applicable ? Not applicable
2. Changes in Restricted Shares
□Applicable ? Not applicable
II. Issuance and Listing of Securities
□Applicable ? Not applicable
III. Total Number of Shareholders and Their Shareholdings
Unit: share
| Total number of ordinary shareholders at the period-end | 66,019 | Total number of preference shareholders with resumed voting rights at the period-end (if any) (see Note 8) | 0 | |||||
| Shareholding of ordinary shareholders holding more than 5% shares or the top 10 of ordinary shareholders | ||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Total ordinary shares held at the period-end | Increase/decrease in the Reporting Period | Restricted ordinary shares held | Non-restricted ordinary shares held | Shares in pledge, marked or frozen | |
| Status | Shares | |||||||
| Hong Kong Wah Shing Holding Company Limited | Foreign corporation | 13.84% | 188,496,430 | 188,496,430 | ||||
| Prosperity Lamps & Components Limited | Foreign corporation | 10.79% | 146,934,857 | 146,934,857 | ||||
| Guangdong Electronics Information Industry Group Ltd. | State-owned corporation | 9.01% | 122,694,246 | 122,694,246 | ||||
| Guangdong Rising Holdings Group Co., Ltd. | State-owned corporation | 6.10% | 83,130,898 | 83,130,898 | ||||
| Essence International Securities | Foreign corporation | 2.78% | 37,896,494 | 1,758,035 | 37,896,494 | |||
| (Hong Kong) Limited | ||||||||
| Central Huijin Asset Management Co., Ltd. | State-owned corporation | 2.43% | 33,161,800 | 33,161,800 | ||||
| Rising Investment Development Limited | Foreign corporation | 1.87% | 25,482,252 | 25,482,252 | ||||
| Zhuang Jianyi | Foreign individual | 0.87% | 11,903,509 | 8,927,632 | 2,975,877 | |||
| Zhang Shaowu | Domestic individual | 0.86% | 11,700,000 | 999,950 | 11,700,000 | |||
| Hong Kong Securities Clearing Company Limited | Foreign corporation | 0.68% | 9,296,300 | 9,296,300 | 9,296,300 | |||
| 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 11) | 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 ordinary shareholders | ||||||||
| Name of shareholder | Unrestricted ordinary shares at the period-end | Type of shares | ||||||
| Type | Shares | |||||||
| Hong Kong 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 | |||||
| Guangdong Rising Holdings Group Co., Ltd. | 83,130,898 | RMB-denominated ordinary stock | 83,130,898 | |||||
| Essence International Securities (Hong Kong) | 37,896,494 | Domestically listed | 37,896,494 | |||||
| Limited | foreign stock | ||
| 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 |
| Zhang Shaowu | 11,700,000 | RMB-denominated ordinary stock | 11,700,000 |
| Hong Kong Securities Clearing Company Limited | 9,296,300 | RMB-denominated ordinary stock | 9,296,300 |
| China Merchants Securities (HK) Co., Limited | 9,196,898 | Domestically listed foreign stock | 9,196,898 |
| 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.
IV Change in Shareholdings of Directors, Supervisors and Senior Management
□Applicable ? Not applicable
No changes occurred to the shareholdings of the directors, supervisors and senior management in the ReportingPeriod. See the 2022 Annual Report for more details.
V Change of the Controlling Shareholder or the Actual Controller
Change of the controlling shareholder in the Reporting Period
□Applicable ? Not applicable
No such cases in the Reporting Period.Change of the actual controller in the Reporting Period
□Applicable ? Not applicable
No such cases in the Reporting Period.
Part VIII Preference Shares
□Applicable ? Not applicable
No preference shares in the Reporting Period.
Part IX Bonds
□Applicable ? Not applicable
Part X Financial StatementsI Auditor’s ReportWhether the interim report has been audited?
□Yes ? No
The interim report of the Company has not been audited.
II Financial StatementsCurrency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Foshan Electrical and Lighting Co., Ltd.
30 June 2023
Unit: RMB
| Item | 30 June 2023 | 1 January 2023 |
| Current assets: | ||
| Monetary assets | 2,518,177,714.99 | 2,484,508,907.43 |
| Settlement reserve | ||
| Interbank loans granted | ||
| Held-for-trading financial assets | 81,882,834.67 | 261,541,896.45 |
| Derivative financial assets | ||
| Notes receivable | 811,254,925.34 | 821,537,774.07 |
| Accounts receivable | 2,347,099,724.92 | 1,920,770,941.76 |
| Accounts receivable financing | 444,845,917.62 | 569,868,831.79 |
| Prepayments | 41,451,120.26 | 45,526,548.93 |
| Premiums receivable | ||
| Reinsurance receivables | ||
| Receivable reinsurance contract reserve | ||
| Other receivables | 150,403,234.75 | 32,902,865.98 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Financial assets purchased under resale agreements | ||
| Inventories | 1,646,526,195.36 | 2,031,637,401.87 |
| Contract assets | 5,153,358.98 | 5,466,875.07 |
| Assets held for sale | 17,147,339.84 | 17,147,339.84 |
| Current portion of non-current assets | ||
| Other current assets | 173,015,911.64 | 79,438,576.89 |
| Total current assets | 8,236,958,278.37 | 8,270,347,960.08 |
| Non-current assets: | ||
| Loans and advances to customers | ||
| Investments in debt obligations | ||
| Investments in other debt obligations | ||
| Long-term receivables | ||
| Long-term equity investments | 183,117,824.19 | 181,931,792.66 |
| Investments in other equity instruments | 801,753,621.52 | 864,191,346.40 |
| Other non-current financial assets | ||
| Investment property | 43,366,716.49 | 44,611,882.44 |
| Fixed assets | 3,365,628,092.29 | 3,508,094,282.41 |
| Construction in progress | 1,377,403,873.06 | 1,282,780,335.14 |
| Productive living assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 9,832,756.11 | 13,047,727.73 |
| Intangible assets | 337,814,725.13 | 340,166,852.37 |
| Development costs | ||
| Goodwill | 421,831,593.46 | 421,831,593.46 |
| Long-term prepaid expense | 171,879,033.97 | 190,126,627.91 |
| Deferred income tax assets | 94,138,960.42 | 90,186,993.64 |
| Other non-current assets | 76,218,347.75 | 81,543,512.85 |
| Total non-current assets | 6,882,985,544.39 | 7,018,512,947.01 |
| Total assets | 15,119,943,822.76 | 15,288,860,907.09 |
| Current liabilities: | ||
| Short-term borrowings | 190,926,526.02 | 157,715,359.35 |
| Borrowings from the central bank | ||
| Interbank loans obtained | ||
| Held-for-trading financial liabilities | 23,741,475.00 | 4,679,000.00 |
| Derivative financial liabilities | ||
| Notes payable | 1,853,353,460.65 | 1,975,743,568.71 |
| Accounts payable | 2,437,263,015.38 | 2,513,177,458.14 |
| Advances from customers | 196,200.00 | 2,532,442.44 |
| Contract liabilities | 131,700,995.68 | 125,143,161.61 |
| 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 | 162,300,069.89 | 173,034,152.18 |
| Taxes payable | 78,233,220.74 | 64,295,552.10 |
| Other payables | 645,736,648.53 | 440,230,081.05 |
| Including: Interest payable | ||
| Dividends payable | 134,915,110.77 | 15,646.07 |
| Handling charges and commissions payable | ||
| Reinsurance payables | ||
| Liabilities directly associated with assets held for sale | ||
| Current portion of non-current liabilities | 63,473,244.52 | 65,540,510.67 |
| Other current liabilities | 136,138,329.46 | 100,192,681.00 |
| Total current liabilities | 5,723,063,185.87 | 5,622,283,967.25 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term borrowings | 493,362,857.84 | 747,931,023.71 |
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 6,477,932.48 | 7,055,542.18 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | 9,518,319.01 | 9,587,043.31 |
| Deferred income | 80,860,487.74 | 97,078,233.43 |
| Deferred income tax liabilities | 196,099,462.78 | 204,371,264.18 |
| Other non-current liabilities | 206,307.09 | 308,780.61 |
| Total non-current liabilities | 786,525,366.94 | 1,066,331,887.42 |
| Total liabilities | 6,509,588,552.81 | 6,688,615,854.67 |
| Owners’ equity: | ||
| Share capital | 1,361,994,647.00 | 1,361,994,647.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 7,245,971.54 | 7,245,971.54 |
| Less: Treasury stock | 82,165,144.15 | 82,165,144.15 |
| Other comprehensive income | 447,201,368.35 | 498,141,018.70 |
| Specific reserve | ||
| Surplus reserves | 91,359,027.15 | 91,359,027.15 |
| General reserve | ||
| Retained earnings | 3,330,471,596.34 | 3,296,435,828.50 |
| Total equity attributable to owners of the Company as the parent | 5,156,107,466.23 | 5,173,011,348.74 |
| Non-controlling interests | 3,454,247,803.72 | 3,427,233,703.68 |
| Total owners’ equity | 8,610,355,269.95 | 8,600,245,052.42 |
| Total liabilities and owners’ equity | 15,119,943,822.76 | 15,288,860,907.09 |
Legal representative: Wu Shenghui Chief 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 | 30 June 2023 | 1 January 2023 |
| Current assets: | ||
| Monetary assets | 681,210,754.40 | 616,301,656.56 |
| Held-for-trading financial assets | 200,565,014.22 | |
| Derivative financial assets | ||
| Notes receivable | 110,657,146.53 | 130,473,889.36 |
| Accounts receivable | 1,086,975,621.84 | 914,875,676.00 |
| Accounts receivable financing | 60,666,671.99 | 14,127,710.41 |
| Prepayments | 7,737,747.01 | 13,129,004.94 |
| Other receivables | 978,598,589.43 | 511,036,345.72 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Inventories | 306,898,828.61 | 475,047,674.61 |
| Contract assets | 5,153,358.98 | 5,466,875.07 |
| Assets held for sale | ||
| Current portion of non-current assets | ||
| Other current assets | 105,373,508.94 | 9,844,377.83 |
| Total current assets | 3,343,272,227.73 | 2,890,868,224.72 |
| Non-current assets: | ||
| Investments in debt obligations | ||
| Investments in other debt obligations | ||
| Long-term receivables | ||
| Long-term equity investments | 2,506,749,062.60 | 2,505,563,031.07 |
| Investments in other equity instruments | 761,675,052.72 | 823,131,485.48 |
| Other non-current financial assets | ||
| Investment property | 39,800,117.43 | 40,982,686.40 |
| Fixed assets | 555,297,116.18 | 548,743,031.51 |
| Construction in progress | 220,291,866.58 | 187,318,584.50 |
| Productive living assets |
| Oil and gas assets | ||
| Right-of-use assets | 5,813,183.28 | 6,963,639.23 |
| Intangible assets | 95,701,146.70 | 94,698,330.35 |
| Development costs | ||
| Goodwill | ||
| Long-term prepaid expense | 30,215,256.11 | 37,118,287.24 |
| Deferred income tax assets | 37,984,595.01 | 31,202,848.92 |
| Other non-current assets | 45,361,377.95 | 48,873,160.34 |
| Total non-current assets | 4,298,888,774.56 | 4,324,595,085.04 |
| Total assets | 7,642,161,002.29 | 7,215,463,309.76 |
| Current liabilities: | ||
| Short-term borrowings | ||
| Held-for-trading financial liabilities | 23,741,475.00 | 4,679,000.00 |
| Derivative financial liabilities | ||
| Notes payable | 795,588,488.59 | 826,037,810.34 |
| Accounts payable | 1,285,429,617.40 | 788,288,700.08 |
| Advances from customers | 2,285,714.30 | |
| Contract liabilities | 73,386,563.67 | 47,498,783.11 |
| Employee benefits payable | 60,341,858.15 | 49,182,531.44 |
| Taxes payable | 30,073,622.90 | 9,700,312.91 |
| Other payables | 417,929,824.40 | 202,509,326.09 |
| Including: Interest payable | ||
| Dividends payable | 134,899,464.70 | |
| Liabilities directly associated with assets held for sale | ||
| Current portion of non-current liabilities | 1,427,782.66 | 1,881,117.79 |
| Other current liabilities | 74,912,121.36 | 88,215,663.53 |
| Total current liabilities | 2,762,831,354.13 | 2,020,278,959.59 |
| Non-current liabilities: | ||
| Long-term borrowings | 182,912,120.75 | |
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 4,385,400.62 | 5,082,521.44 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | ||
| Deferred income tax liabilities | 78,774,921.62 | 88,165,954.92 |
| Other non-current liabilities | ||
| Total non-current liabilities | 83,160,322.24 | 276,160,597.11 |
| Total liabilities | 2,845,991,676.37 | 2,296,439,556.70 |
| Owners’ equity: | ||
| Share capital | 1,361,994,647.00 | 1,361,994,647.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 7,426,635.62 | 7,426,635.62 |
| Less: Treasury stock | 82,165,144.15 | 82,165,144.15 |
| Other comprehensive income | 446,550,316.94 | 498,788,284.79 |
| Specific reserve | ||
| Surplus reserves | 322,663,096.39 | 322,663,096.39 |
| Retained earnings | 2,739,699,774.12 | 2,810,316,233.41 |
| Total owners’ equity | 4,796,169,325.92 | 4,919,023,753.06 |
| Total liabilities and owners’ equity | 7,642,161,002.29 | 7,215,463,309.76 |
Legal representative: Wu Shenghui Chief Financial Officer: Tang Qionglan
Person-in-charge of the Company’s accounting organ: Liang Yuefei
3. Consolidated Income Statement
Unit: RMB
| Item | H1 2023 | H1 2022 |
| 1. Revenue | 4,566,062,729.02 | 4,433,331,393.42 |
| Including: Operating revenue | 4,566,062,729.02 | 4,433,331,393.42 |
| Interest income | ||
| Insurance premium income | ||
| Handling charge and commission income | ||
| 2. Costs and expenses | 4,299,771,626.28 | 4,165,508,040.62 |
| Including: Cost of sales | 3,733,474,828.88 | 3,654,061,368.03 |
| Interest expense | ||
| 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 | 37,443,299.13 | 25,534,415.81 |
| Selling expense | 131,921,130.00 | 111,269,248.57 |
| Administrative expense | 200,946,085.42 | 186,307,739.44 |
| R&D expense | 226,148,905.26 | 212,572,992.98 |
| Finance costs | -30,162,622.41 | -24,237,724.21 |
| Including: Interest expense | 14,255,244.44 | 7,068,335.84 |
| Interest income | 24,520,047.73 | 13,000,154.06 |
| Add: Other income | 27,389,992.05 | 40,797,290.95 |
| Return on investment (“-” for loss) | 22,449,570.63 | 19,613,744.86 |
| Including: Share of profit or loss of joint ventures and associates | 1,186,031.53 | 650,457.40 |
| 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) | -22,153,522.56 | -10,766,595.97 |
| Credit impairment loss (“-” for loss) | -18,947,421.03 | -10,246,248.56 |
| Asset impairment loss (“-” for loss) | -16,390,888.73 | -23,341,049.45 |
| Asset disposal income (“-” for loss) | 110,475.52 | 82,362.19 |
| 3. Operating profit (“-” for loss) | 258,749,308.62 | 283,962,856.82 |
| Add: Non-operating income | 2,440,914.48 | 8,990,018.61 |
| Less: Non-operating expense | 4,780,570.32 | 7,994,166.62 |
| 4. Profit before tax (“-” for loss) | 256,409,652.78 | 284,958,708.81 |
| Less: Income tax expense | 31,304,364.49 | 41,412,077.91 |
| 5. Net profit (“-” for net loss) | 225,105,288.29 | 243,546,630.90 |
| 5.1 By operating continuity | ||
| 5.1.1 Net profit from continuing operations (“-” for net loss) | 225,105,288.29 | 243,546,630.90 |
| 5.1.2 Net profit from discontinued |
| operations (“-” for net loss) | ||
| 5.2 By ownership | ||
| 5.2.1 Net profit attributable to shareholders of the Company as the parent (“-” for net loss) | 168,935,232.54 | 163,528,019.78 |
| 5.2.1 Net profit attributable to non-controlling interests (“-” for net loss) | 56,170,055.75 | 80,018,611.12 |
| 6. Other comprehensive income, net of tax | -49,800,869.38 | -128,025,149.83 |
| Attributable to owners of the Company as the parent | -50,939,650.35 | -128,036,703.73 |
| 6.1 Items that will not be reclassified to profit or loss | -52,237,967.85 | -128,132,332.34 |
| 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 | -52,237,967.85 | -128,132,332.34 |
| 6.1.4 Changes in the fair value arising from changes in own credit risk | ||
| 6.1.5 Other | ||
| 6.2 Items that will be reclassified to profit or loss | 1,298,317.50 | 95,628.61 |
| 6.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method | ||
| 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 | 1,298,317.50 | 95,628.61 |
| 6.2.7 Other | ||
| Attributable to non-controlling interests | 1,138,780.97 | 11,553.90 |
| 7. Total comprehensive income | 175,304,418.91 | 115,521,481.07 |
| Attributable to owners of the Company as the parent | 117,995,582.19 | 35,491,316.05 |
| Attributable to non-controlling interests | 57,308,836.72 | 80,030,165.02 |
| 8. Earnings per share | ||
| 8.1 Basic earnings per share | 0.1252 | 0.1212 |
| 8.2 Diluted earnings per share | 0.1240 | 0.1201 |
Where business combinations under common control occurred in the current period, the net profit achieved by the acquirees beforethe combinations was RMB0.00, with the amount for the same period of last year being RMB0.00.Legal representative: Wu Shenghui Chief 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 | H1 2023 | H1 2022 |
| 1. Operating revenue | 1,767,119,810.22 | 1,809,179,992.86 |
| Less: Cost of sales | 1,475,930,147.80 | 1,476,364,107.19 |
| Taxes and surcharges | 14,118,151.89 | 10,450,725.11 |
| Selling expense | 76,993,414.88 | 60,671,112.08 |
| Administrative expense | 77,700,935.31 | 65,659,865.20 |
| R&D expense | 72,152,520.98 | 80,982,862.27 |
| Finance costs | -23,728,727.28 | -11,830,352.67 |
| Including: Interest expense | 3,685,018.81 | 4,427,927.34 |
| Interest income | 7,478,589.21 | 3,313,721.07 |
| Add: Other income | 1,095,070.80 | 5,635,099.60 |
| Return on investment (“-” for loss) | 27,748,972.71 | 21,542,755.12 |
| Including: Share of profit or loss of joint ventures and associates | 1,186,031.53 | 650,457.40 |
| 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) | -23,059,475.00 | -10,811,400.00 |
| Credit impairment loss (“-” for loss) | -9,630,073.47 | -9,623,686.25 |
| Asset impairment loss (“-” for loss) | -1,814,506.09 | -6,552,785.39 |
| Asset disposal income (“-” for loss) | ||
| 2. Operating profit (“-” for loss) | 68,293,355.59 | 127,071,656.76 |
| Add: Non-operating income | 36,865.24 | -667,333.19 |
| Less: Non-operating expense | 745,254.33 | 4,998,457.51 |
| 3. Profit before tax (“-” for loss) | 67,584,966.50 | 121,405,866.06 |
| Less: Income tax expense | 3,301,961.09 | 15,251,135.30 |
| 4. Net profit (“-” for net loss) | 64,283,005.41 | 106,154,730.76 |
| 4.1 Net profit from continuing operations (“-” for net loss) | 64,283,005.41 | 106,154,730.76 |
| 4.2 Net profit from discontinued operations (“-” for net loss) | ||
| 5. Other comprehensive income, net of tax | -52,237,967.85 | -129,543,043.34 |
| 5.1 Items that will not be reclassified to profit or loss | -52,237,967.85 | -129,543,043.34 |
| 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 | -52,237,967.85 | -129,543,043.34 |
| 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 | ||
| 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 | 12,045,037.56 | -23,388,312.58 |
| 7. Earnings per share | ||
| 7.1 Basic earnings per share | ||
| 7.2 Diluted earnings per share |
Legal representative: Wu Shenghui Chief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Liang Yuefei
5. Consolidated Cash Flow Statement
Unit: RMB
| Item | H1 2023 | H1 2022 |
| 1. Cash flows from operating activities: | ||
| Proceeds from sale of commodities and rendering of services | 3,850,932,261.31 | 4,073,694,274.24 |
| 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 | ||
| Net increase in interbank loans obtained | ||
| Net increase in proceeds from repurchase transactions | ||
| Net proceeds from acting trading of securities | ||
| Tax rebates | 100,132,103.39 | 145,624,893.13 |
| Cash generated from other operating activities | 141,107,593.13 | 127,521,912.96 |
| Subtotal of cash generated from operating activities | 4,092,171,957.83 | 4,346,841,080.33 |
| Payments for commodities and services | 2,663,359,134.35 | 3,081,521,621.90 |
| 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 | 687,281,073.20 | 732,832,071.44 |
| Taxes paid | 204,166,141.70 | 184,736,431.09 |
| Cash used in other operating activities | 149,496,551.38 | 170,648,464.89 |
| Subtotal of cash used in operating activities | 3,704,302,900.63 | 4,169,738,589.32 |
| Net cash generated from/used in operating activities | 387,869,057.20 | 177,102,491.01 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disinvestment | 190,981,292.12 | 502,992,240.66 |
| Return on investment | 22,659,407.23 | 21,038,833.14 |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets | 1,402,000.00 | 232,233.41 |
| Net proceeds from the disposal of subsidiaries and other business units | ||
| Cash generated from other investing activities | ||
| Subtotal of cash generated from investing activities | 215,042,699.35 | 524,263,307.21 |
| Payments for the acquisition of fixed assets, intangible assets and other long-lived assets | 109,147,876.06 | 331,071,942.08 |
| Payments for investments | 110,000,000.00 | 71,695,763.31 |
| Net increase in pledged loans granted | ||
| Net payments for the acquisition of subsidiaries and other business units | ||
| Cash used in other investing activities | 360,759.99 | |
| Subtotal of cash used in investing activities | 219,508,636.05 | 402,767,705.39 |
| Net cash generated from/used in investing activities | -4,465,936.70 | 121,495,601.82 |
| 3. Cash flows from financing activities: | ||
| Capital contributions received | ||
| Including: Capital contributions by non-controlling interests to subsidiaries | ||
| Borrowings raised | 126,598,725.21 | 687,436,000.00 |
| Cash generated from other financing activities | 381,437.71 | 53,126,214.00 |
| Subtotal of cash generated from financing activities | 126,980,162.92 | 740,562,214.00 |
| Repayment of borrowings | 323,893,000.00 | 342,313,038.15 |
| Interest and dividends paid | 160,367,407.65 | 159,780,554.62 |
| Including: Dividends paid by subsidiaries to non-controlling interests | 30,294,736.68 | 24,282,863.70 |
| Cash used in other financing activities | 2,303,428.02 | 1,062,094,428.42 |
| Subtotal of cash used in financing activities | 486,563,835.67 | 1,564,188,021.19 |
| Net cash generated from/used in financing activities | -359,583,672.75 | -823,625,807.19 |
| 4. Effect of foreign exchange rates changes on cash and cash equivalents | 4,930,576.64 | 20,245,617.53 |
| 5. Net increase in cash and cash equivalents | 28,750,024.39 | -504,782,096.83 |
| Add: Cash and cash equivalents, beginning of the period | 1,945,971,307.26 | 1,940,209,052.92 |
| 6. Cash and cash equivalents, end of the period | 1,974,721,331.65 | 1,435,426,956.09 |
Legal representative: Wu Shenghui Chief 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
| Item | H1 2023 | H1 2022 |
| 1. Cash flows from operating activities: | ||
| Proceeds from sale of commodities and rendering of services | 1,496,145,578.96 | 1,647,925,557.33 |
| Tax rebates | 53,498,627.75 | 66,177,691.70 |
| Cash generated from other operating activities | 33,751,986.68 | 49,023,640.18 |
| Subtotal of cash generated from operating activities | 1,583,396,193.39 | 1,763,126,889.21 |
| Payments for commodities and services | 1,035,027,746.06 | 1,182,528,555.48 |
| Cash paid to and for employees | 232,728,601.56 | 279,898,010.00 |
| Taxes paid | 35,941,134.26 | 111,471,325.43 |
| Cash used in other operating activities | 56,041,082.96 | 63,008,054.83 |
| Subtotal of cash used in operating activities | 1,359,738,564.84 | 1,636,905,945.74 |
| Net cash generated from/used in operating activities | 223,657,628.55 | 126,220,943.47 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disinvestment | 100,000,000.00 | 492,992,240.66 |
| Return on investment | 27,483,617.76 | 23,125,665.53 |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets | 42,771.45 | |
| Net proceeds from the disposal of subsidiaries and other business units | ||
| Cash generated from other investing activities | ||
| Subtotal of cash generated from investing activities | 127,483,617.76 | 516,160,677.64 |
| Payments for the acquisition of fixed assets, intangible assets and other long-lived assets | 11,143,401.81 | 59,178,832.68 |
| Payments for investments | 1,166,664,444.95 | |
| Net payments for the acquisition of subsidiaries and other business units | ||
| Cash used in other investing activities | ||
| Subtotal of cash used in investing activities | 11,143,401.81 | 1,225,843,277.63 |
| Net cash generated from/used in investing activities | 116,340,215.95 | -709,682,599.99 |
| 3. Cash flows from financing activities: | ||
| Capital contributions received | ||
| Borrowings raised | 382,336,000.00 | |
| Cash generated from other financing activities | ||
| Subtotal of cash generated from financing activities | 382,336,000.00 | |
| Repayment of borrowings | 178,893,000.00 | 197,016,000.00 |
| Interest and dividends paid | 119,898,677.90 | 135,641,014.35 |
| Cash used in other financing activities | ||
| Subtotal of cash used in financing activities | 298,791,677.90 | 332,657,014.35 |
| Net cash generated from/used in financing activities | -298,791,677.90 | 49,678,985.65 |
| 4. Effect of foreign exchange rates changes on cash and cash equivalents | 1,541,521.95 | 15,401,360.65 |
| 5. Net increase in cash and cash equivalents | 42,747,688.55 | -518,381,310.22 |
| Add: Cash and cash equivalents, | 461,062,144.20 | 861,826,014.29 |
| beginning of the period | ||
| 6. Cash and cash equivalents, end of the period | 503,809,832.75 | 343,444,704.07 |
Legal representative: Wu Shenghui Chief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Liang Yuefei
7. Consolidated Statements of Changes in Owners’ Equity
H1 2023
Unit: RMB
| Item | H1 2023 | ||||||||||||||
| 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 of the period of prior year | 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 | ||||||
| Add: Adjustment for change in accounting policy | -54,747.02 | -54,747.02 | -47,032.17 | -101,779.19 | |||||||||||
| Adjustment for correction of previous error | |||||||||||||||
| Adjustment for business combination under common control | |||||||||||||||
| Other adjustments | |||||||||||||||
| 2. Balance as at the beginning of the Reporting Period | 1,361,994,647.00 | 7,245,971.54 | 82,165,144.15 | 498,141,018.70 | 91,359,027.15 | 3,296,435,828.50 | 5,173,011,348.74 | 3,427,233,703.68 | 8,600,245,052.42 | ||||||
| 3. Increase/ decrease in the period (“-” for decrease) | -50,939,650.35 | 34,035,767.84 | -16,903,882.51 | 27,014,100.04 | 10,110,217.53 | ||||||||||
| 3.1 Total comprehensi | -50, | 168,93 | 117,99 | 57,308 | 175,30 | ||||||||||
| ve income | 939,650.35 | 5,232.54 | 5,582.19 | ,836.72 | 4,418.91 | ||||||||||
| 3.2 Capital increased and reduced by owners | |||||||||||||||
| 3.2.1 Ordinary shares increased by 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 | |||||||||||||||
| 3.3 Profit distribution | -134,899,464.70 | -134,899,464.70 | -30,294,736.68 | -165,194,201.38 | |||||||||||
| 3.3.1 Appropriation to surplus reserves | |||||||||||||||
| 3.3.2 Appropriation to general reserve | |||||||||||||||
| 3.3.3 Appropriation to owners (or shareholders) | -134,899,464.70 | -134,899,464.70 | -30,294,736.68 | -165,194,201.38 | |||||||||||
| 3.3.4 Other | |||||||||||||||
| 3.4 Transfers within owners’ equity | |||||||||||||||
| 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 | |||||||||||||||
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | |||||||||||||||
| 3.4.5 Other comprehensive income 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 Reporting Period | 1,361,994,647.00 | 7,245,971.54 | 82,165,144.15 | 447,201,368.35 | 91,359,027.15 | 3,330,471,596.34 | 5,156,107,466.23 | 3,454,247,803.72 | 8,610,355,269.95 |
H1 2022
Unit: RMB
| Item | H1 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 of the period of prior 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 | ||||||
| Add: Adjustment for change in accounting | 18,918.22 | 18,918.22 | 16,252 | 35,170.51 | |||||||||||
| policy | .29 | ||||||||||||||
| Adjustment for correction of previous error | |||||||||||||||
| Adjustment for business combination under common control | |||||||||||||||
| Other adjustments | |||||||||||||||
| 2. Balance as at the beginning of the Reporting Period | 1,399,346,154.00 | 1,051,158,614.18 | 250,600,874.54 | 982,987,454.08 | 741,353,347.96 | 3,111,882,995.08 | 7,036,127,690.76 | 3,543,757,427.50 | 10,579,885,118.26 | ||||||
| 3. Increase/ decrease in the period (“-” for decrease) | -37,351,507.00 | -1,043,912,642.64 | -168,435,730.39 | -228,953,927.92 | -604,269,697.37 | 129,545,779.27 | -1,616,506,265.27 | 55,747,301.32 | -1,560,758,963.95 | ||||||
| 3.1 Total comprehensive income | -128,036,703.73 | 163,528,019.78 | 35,491,316.05 | 80,030,165.02 | 115,521,481.07 | ||||||||||
| 3.2 Capital increased and reduced by owners | -37,351,507.00 | -1,043,912,642.64 | -168,435,730.39 | -604,269,697.37 | -1,517,098,116.62 | -1,517,098,116.62 | |||||||||
| 3.2.1 Ordinary shares increased by owners | -37,351,507.00 | -4,825,948.60 | -168,435,730.39 | -126,258,274.79 | |||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | |||||||||||||||
| 3.2.3 Share-based payments included in owners’ |
| equity | |||||||||||||||
| 3.2.4 Other | -1,039,086,694.04 | -478,011,422.58 | -1,517,098,116.62 | -1,517,098,116.62 | |||||||||||
| 3.3 Profit distribution | -134,899,464.70 | -134,899,464.70 | -24,282,863.70 | -159,182,328.40 | |||||||||||
| 3.3.1 Appropriation to surplus reserves | |||||||||||||||
| 3.3.2 Appropriation to general reserve | |||||||||||||||
| 3.3.3 Appropriation to owners (or shareholders) | -134,899,464.70 | -134,899,464.70 | -24,282,863.70 | -159,182,328.40 | |||||||||||
| 3.3.4 Other | |||||||||||||||
| 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 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 | |||||||||||||||
| 3.5 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 Reporting Period | 1,361,994,647.00 | 7,245,971.54 | 82,165,144.15 | 754,033,526.16 | 137,083,650.59 | 3,241,428,774.35 | 5,419,621,425.49 | 3,599,504,728.82 | 9,019,126,154.31 |
Legal representative: Wu Shenghui Chief 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
H1 2023
Unit: RMB
| Item | H1 2023 | |||||||||||
| 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 period of prior year | 1,361,994,647.00 | 7,426,635.62 | 82,165,144.15 | 498,788,284.79 | 322,663,096.39 | 2,810,316,233.41 | 4,919,023,753.06 | |||||
| Add: Adjustment for change in accounting policy | ||||||||||||
| Adjustment for correction of previous error | ||||||||||||
| Other adjustments | ||||||||||||
| 2. Balance as at the beginning of | 1,361,994, | 7,426,635. | 82,165,144 | 498,788,28 | 322,663,09 | 2,810,316, | 4,919,023, | |||||
| the Reporting Period | 647.00 | 62 | .15 | 4.79 | 6.39 | 233.41 | 753.06 | |||||
| 3. Increase/ decrease in the period (“-” for decrease) | -52,237,967.85 | -70,616,459.29 | -122,854,427.14 | |||||||||
| 3.1 Total comprehensive income | -52,237,967.85 | 64,283,005.41 | 12,045,037.56 | |||||||||
| 3.2 Capital increased and reduced by owners | ||||||||||||
| 3.2.1 Ordinary shares increased by 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 | ||||||||||||
| 3.3 Profit distribution | -134,899,464.70 | -134,899,464.70 | ||||||||||
| 3.3.1 Appropriation to surplus reserves | ||||||||||||
| 3.3.2 Appropriation to owners (or shareholders) | -134,899,464.70 | -134,899,464.70 | ||||||||||
| 3.3.3 Other | ||||||||||||
| 3.4 Transfers within owners’ equity | ||||||||||||
| 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 | ||||||||||||
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | ||||||||||||
| 3.4.5 Other comprehensive income 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 Reporting Period | 1,361,994,647.00 | 7,426,635.62 | 82,165,144.15 | 446,550,316.94 | 322,663,096.39 | 2,739,699,774.12 | 4,796,169,325.92 |
H1 2022
Unit: RMB
| Item | H1 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 period of 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 | ||||||||||||
| Other adjustments | ||||||||||||
| 2. Balance as at the | 1,399 | 22,56 | 250,6 | 984,6 | 741,3 | 2,738 | 5,635 | |||||
| beginning of the Reporting Period | ,346,154.00 | 8,665.93 | 00,874.54 | 95,765.83 | 53,347.96 | ,229,003.27 | ,592,062.45 | |||||
| 3. Increase/ decrease in the period (“-” for decrease) | -37,351,507.00 | -4,825,948.60 | -168,435,730.39 | -230,460,267.53 | -440,791,830.02 | 72,172,490.25 | -472,821,332.51 | |||||
| 3.1 Total comprehensive income | -129,543,043.34 | 106,154,730.76 | -23,388,312.58 | |||||||||
| 3.2 Capital increased and reduced by owners | -37,351,507.00 | -4,825,948.60 | -168,435,730.39 | -440,791,830.02 | -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 | ||||||||
| 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 | -314,533,555.23 | -314,533,555.23 | ||||||||||
| 3.3 Profit distribution | -134,899,464.70 | -134,899,464.70 | ||||||||||
| 3.3.1 Appropriation to surplus reserves | ||||||||||||
| 3.3.2 Appropriation to owners (or shareholders) | -134,899,464.70 | -134,899,464.70 | ||||||||||
| 3.3.3 Other | ||||||||||||
| 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 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 | ||||||||||||
| 3.5 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 Reporting Period | 1,361,994,647.00 | 17,742,717.33 | 82,165,144.15 | 754,235,498.30 | 300,561,517.94 | 2,810,401,493.52 | 5,162,770,729.94 |
Legal representative: Wu Shenghui Chief 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’s
Republic 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, totalling 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.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,etc.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 29 August 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“Nanyang Baoli”), Guangdong New Electronic Information Ltd. (referred to as “New Electronic”), NationStarOptoelectronics (Germany) Co., Ltd. (referred to as “Germany NationStar”) and Guangdong FenghuaSemiconductor 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 Interim Report 2023 of Nanyang Baoli for the current period was formulatedat fair value or costs whichever was lower.Compared with the beginning of the year, the consolidated scope of financial statements in this period does notchange. For details, see note IX "equity in other entities".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, business results and cash flows, as well as other relevant information.
2. Fiscal Year
A fiscal year starts on January 1
st and ends on December 31
staccording 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.
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 ofconsolidation 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.
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 initial
recognition. 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 eliminatedor 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, andother 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 instruments
For 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.
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 typeof 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:
① 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 |
② Accounts Receivable with Expected Credit Losses Provision Based on Credit Risk Portfolio
| Portfolio name | Basis for portfolio recognition | Determination method of expected credit losses |
| Business portfolio of general lighting and auto lamps | General lighting, auto lamps and other relevant business with the Company as the parent and the subsidiary Nanning Liaowang as the representative, this portfolio takes the aging of accounts receivable as the credit risk characteristics | Prepare the comparative list between aging of accounts receivable and expected credit loss rate over the entire life and calculate the expected credit loss by consulting historical experience in credit losses, combining current situation and prediction for future economic situation. |
Business portfolio of LEDpackaging and components
| Business portfolio of LED packaging and components | LED packaging, components and other relevant business with the subsidiary NationStar Optoelectronics as the representative, this portfolio takes the aging of accounts receivable as the credit risk characteristics | Prepare the comparative list between aging of accounts receivable and expected credit loss rate over the entire life and calculate the expected credit loss by consulting historical experience in credit losses, combining current situation and prediction for future economic situation. |
Internal business portfolio
| Internal business portfolio | Related parties and internal transactions | 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
| Portfolio 2 | Trade acceptance | Prepare the comparative list between aging of accounts receivable and expected credit loss rate over the entire life and calculate the expected credit loss by consulting historical experience in credit losses, combining current situation and prediction for future economic situation. |
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 | |
| Business portfolio of general lighting and auto lamps | Business portfolio of LED packaging and components | |
Within 1 year (including 1 year)
| Within 1 year (including 1 year) | 3% | 2% |
| 1 to 2 years | 10% | 10% |
| 2 to 3 years | 30% | 30% |
| 3 to 4 years | 50% | 50% |
| 4 to 5 years | 80% | 80% |
| Over 5 years | 100% | 100% |
③ 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
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 referenced to accounts receivable.
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
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 net
realizable 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:
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 investee
Having 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 methodDepreciation 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 | 3-36 years | 1%-10% | 31.67%-3.17% |
| Machinery equipment | Straight-line depreciation method | 2-11years | 1%-10% | 47.50%-8.18% |
| Transportation equipment | Straight-line depreciation method | 5-10 years | 1%-10% | 19.00%-9.50% |
| Electronic equipment | Straight-line depreciation method | 2-8 years | 1%-10% | 47.50%-11.88% |
| Other equipment | Straight-line depreciation method | 5 years | 1%-10% | 19%-18% |
(3) Impairment testing methods for fixed assets and provision for impairment
For 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.
（5）Recognition Basis, Pricing and Depreciation Method of Fixed Assets by Finance LeaseNot applicable
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 intendeduseable 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
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 assets
witnesses 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.
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. If
the 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.
(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 shall
be 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 Bonds
Not 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 amountsexpected 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 revenue
recognized 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
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. However, for atransaction with the following characteristics concurrently, the deferred income tax assets arising from the initialrecognition of assets or liabilities shall not be recognised: 1) The transaction is not a business combination; 2) the
transaction affects neither the accounting profit nor the taxable income (or the deductible losses) when it isaffected.
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. Wherethere 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
None
44. Changes in Main Accounting Policies and Estimates
(1) Change in accounting policies
? Applicable □ Not applicable
| Changes to the accounting policies and why | Approval process | Remark |
| In November 2022, the Ministry of Finance ("MOF") issued Accounting Standard for Business Enterprises Interpretation No. 16 (hereinafter referred to as "Interpretation No. 16"), which regulated the accounting treatment for the exemption from initial recognition of the deferred income taxes related to assets and liabilities arising from a single transaction. It specified that, for single transactions that are not business combinations, that affect neither accounting profit nor taxable income (or deductible losses) at the time the transaction occurs, and where the initial recognition of assets and liabilities results in taxable temporary differences and deductible temporary differences of equal amounts, exemption from initial recognition of deferred income tax liabilities and deferred income tax assets under Article XI (II) and Article XIII of Accounting Standard for Business Enterprises No. 18 -- Income Taxes is not applicable. An enterprise shall recognise the corresponding deferred income tax liabilities and deferred income tax assets for the taxable temporary differences and deductible temporary differences arising from the initial recognition of assets and liabilities in respect of the transaction when the transaction occurs. This provision came into force on 1 January 2023 and can be executed in advance. | Deliberation and approved by the 46th Meeting of the 9th Board of Directors | Refer to Note 44. Changes in Main Accounting Policies and Estimates-(3) for details. |
(2) Changes in accounting estimates
□Applicable ?Not applicable
(3) Adjustments to Financial Statement Items at the Beginning of the Year of the First Implementation ofthe New Accounting Standards Implemented since 2023? Applicable □ Not applicableNoteThe account data of financial statements are retroactively adjusted as follows:
Unit: RMB
| Consolidated balance sheet | |||
| 1 January 2022 | |||
| Item | Before | After | Affected |
| Deferred income tax assets | 82,261,788.58 | 84,159,937.92 | 1,898,149.34 |
| Deferred income tax liabilities | 280,172,789.59 | 282,035,768.42 | 1,862,978.83 |
| Retained earnings | 3,111,864,076.86 | 3,111,882,995.08 | 18,918.22 |
| Total equity attributable to owners of the Company as the parent | 7,036,108,772.54 | 7,036,127,690.76 | 18,918.22 |
| Non-controlling interests | 3,543,741,175.21 | 3,543,757,427.50 | 16,252.29 |
| Total owners’ equity | 10,579,849,947.75 | 10,579,885,118.26 | 35,170.51 |
Unit: RMB
| Consolidated balance sheet | |||
| 1 January 2023 | |||
| Item | Before | After | Affected |
| Deferred income tax assets | 88,387,206.25 | 90,186,993.64 | 1,799,787.39 |
| Deferred income tax liabilities | 202,469,697.60 | 204,371,264.18 | 1,901,566.58 |
| Retained earnings | 3,296,490,575.52 | 3,296,435,828.50 | -54,747.02 |
| Total equity attributable to owners of the Company as the parent | 5,173,066,095.76 | 5,173,011,348.74 | -54,747.02 |
| Non-controlling interests | 3,427,280,735.85 | 3,427,233,703.68 | -47,032.17 |
| Total owners’ equity | 8,600,346,831.61 | 8,600,245,052.42 | -101,779.19 |
Unit: RMB
| Consolidated income statement | |||
| 2022 | |||
| Item | Before | After | Affected |
| Income tax expense | 30,874,328.03 | 31,011,277.73 | 136,949.70 |
| Net profit | 350,843,355.72 | 350,706,406.02 | -136,949.70 |
| Net profit attributable to shareholders of the Company as the parent | 230,394,235.91 | 230,320,570.67 | -73,665.24 |
| Net profit attributable to non-controlling interests | 120,449,119.81 | 120,385,835.35 | -63,284.46 |
Note: The amount affected by the retroactive adjustment of this accounting policy change has not been audited.
45. Other
Naught
VI. 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% |
| 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. Chanchang Company passed the examination for High-tech Enterprises respectively in December 2021, andthus Chanchang Company paid the corporate income tax based on a tax rate of 15% within three years since 1January 2021 in accordance with relevant provisions in Corporate Income Tax Law of the People’s Republic ofChina and the Administration 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 ofGuangxi 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 to 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 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 to 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 16 December 2008 and its certificate number was GR200844000295. Itwas re-recognized as a high-tech enterprise in 2021, and its new certificate number is GR202144008851 dated 31December 2021. Its corporate income tax rate for 2021-2023 is 15%.
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 Central Governmentshall determine, in accordance with the actual situation in the region and the needs of macroeconomic regulationand control, that resource tax, urban maintenance and construction tax, property tax, urban land use tax, stampduty (excluding stamp duty on securities transactions), arable land occupation tax and education surcharge andlocal education surcharge may be reduced within a tax range of 50% for small and micro enterprises.
13. Zhida Company passed the certification of high-tech enterprise in December 2019 and was re-recognized as ahigh-tech enterprise in 2022. In accordance with the relevant provisions of the Enterprise Income Tax Law of thePeople's Republic of China promulgated in 2007 and the Administrative Measures for the Recognition of High-tech Enterprises, the Company is entitled to a reduced corporate income tax rate of 15% for three yearscommencing from 1 January 2022.
3. Other
Pay in accordance with the relevant provisions of the tax law
VII. Notes to Main Items of Consolidated Financial Statements
1. Monetary Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Cash on hand | 45,923.56 | 52,093.54 |
| Bank deposits | 1,979,561,171.78 | 1,957,903,758.15 |
| Other monetary assets (note 1) | 530,315,488.92 | 522,361,684.92 |
| To-be-received interest (note 2) | 8,255,130.73 | 4,191,370.82 |
| Total | 2,518,177,714.99 | 2,484,508,907.43 |
| Of which: Total amount deposited overseas | 28,196,729.48 | 34,169,227.46 |
| Total amount with restrictions on use due to mortgage, pledge or freeze | 535,698,818.93 | 534,826,528.99 |
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 | 81,882,834.67 | 261,541,896.45 |
| Including: | ||
| Wealth management products | 80,983,830.13 | 260,569,863.53 |
| Equity instrument investments | 899,004.54 | 972,032.92 |
| Including: | ||
| Total | 81,882,834.67 | 261,541,896.45 |
3. Derivative Financial Assets
Naught
4. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
| Item | Ending balance | Beginning balance |
| Bank acceptance bill | 750,857,065.95 | 786,244,513.66 |
| Commercial acceptance bill | 60,397,859.39 | 35,293,260.41 |
| Total | 811,254,925.34 | 821,537,774.07 |
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 | |||
| Notes receivable withdrawn bad debt provision by group | 812,487,534.72 | 100.00% | 1,232,609.38 | 100.00% | 811,254,925.34 | 822,258,044.69 | 100.00% | 720,270.62 | 100.00% | 821,537,774.07 |
| Of which: | ||||||||||
| Bank acceptance bill | 750,857,065.95 | 92.41% | 0.00 | 0.00% | 750,857,065.95 | 786,244,513.66 | 95.62% | 0.00 | 0.00% | 786,244,513.66 |
| Commercial acceptance bill | 61,630,468.77 | 7.59% | 1,232,609.38 | 100.00% | 60,397,859.39 | 36,013,531.03 | 4.38% | 720,270.62 | 100.00% | 35,293,260.41 |
| Total | 812,487,534.72 | 100.00% | 1,232,609.38 | 100.00% | 811,254,925.34 | 822,258,044.69 | 100.00% | 720,270.62 | 100.00% | 821,537,774.07 |
Withdrawal of bad debt provision by group: RMB1,232,609.38
Unit: RMB
| Name | Ending balance | ||
| Carrying amount | Bad debt provision | Withdrawal proportion | |
| Within 1 year | 61,630,468.77 | 1,232,609.38 | 2.00% |
| Total | 61,630,468.77 | 1,232,609.38 | |
Note:
NaughtPlease 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
| Category | Beginning balance | Increase/decrease | Ending balance | |||
| Withdrawn | Reversed or collected | Verified | Other | |||
| Notes receivable withdrawn bad debt provision by group | 720,270.62 | 512,338.76 | 1,232,609.38 | |||
| Total | 720,270.62 | 512,338.76 | 1,232,609.38 | |||
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 | 654,426,305.62 |
| Total | 654,426,305.62 |
(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 | 448,926,920.31 | 74,615,851.95 |
| Total | 448,926,920.31 | 74,615,851.95 |
(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 proportion | Amount | Proportion | Amount | Withdrawal proportion | |||
| Accounts | 19,769,199.92 | 0.80% | 19,769,199.92 | 100.00% | 25,123,263.57 | 1.23% | 25,123,263.57 | 100.00% | ||
| receivable withdrawn bad debt provision separately | ||||||||||
| Accounts receivable withdrawn bad debt provision by group | 2,465,295,096.57 | 99.20% | 118,195,371.65 | 4.79% | 2,347,099,724.92 | 2,019,130,602.05 | 98.77% | 98,359,660.29 | 4.87% | 1,920,770,941.76 |
| Of which: | ||||||||||
| (1) Business portfolio of general lighting and auto lamps | 1,843,921,468.08 | 74.20% | 104,946,889.16 | 5.69% | 1,738,974,578.92 | 1,499,783,089.81 | 73.37% | 87,156,675.78 | 5.81% | 1,412,626,414.03 |
| (2) Business portfolio of LED packaging and components | 621,373,628.49 | 25.00% | 13,248,482.49 | 2.13% | 608,125,146.00 | 519,347,512.24 | 25.40% | 11,202,984.51 | 2.16% | 508,144,527.73 |
| Total | 2,485,064,296.49 | 100.00% | 137,964,571.57 | 5.55% | 2,347,099,724.92 | 2,044,253,865.62 | 100.00% | 123,482,923.86 | 6.04% | 1,920,770,941.76 |
Individual withdrawal of bad debt provision: RMB19,769,199.92
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 | 815,484.27 | 815,484.27 | 100.00% | Less likely to be recovered |
| Customer D | 761,769.31 | 761,769.31 | 100.00% | Expected to be unrecoverable |
| Customer E | 526,858.54 | 526,858.54 | 100.00% | The customer is insolvent, a judgment has been filed and enforcement has been applied for |
| Customer F | 523,448.92 | 523,448.92 | 100.00% | The customer is bankrupt |
| Customer G | 171,282.32 | 171,282.32 | 100.00% | Expected to be unrecoverable |
| Customer H | 21,928.68 | 21,928.68 | 100.00% | Expected to be unrecoverable |
| Customer I | 16,150.35 | 16,150.35 | 100.00% | Expected to be unrecoverable |
| Total | 19,769,199.92 | 19,769,199.92 |
Withdrawal of bad debt provision by group: RMB118,195,371.65
Unit: RMB
| Name | Ending balance | ||
| Carrying amount | Bad debt provision | Withdrawal proportion | |
| Credit risk group | 2,465,295,096.57 | 118,195,371.65 | 4.79% |
| Total | 2,465,295,096.57 | 118,195,371.65 | |
Note:
NaughtPlease 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) | 2,217,602,166.86 |
| 1 to 2 years | 172,512,834.98 |
| 2 to 3 years | 41,194,435.41 |
| Over 3 years | 53,754,859.24 |
| 3 to 4 years | 6,082,506.14 |
| 4 to 5 years | 25,601,627.43 |
| Over 5 years | 22,070,725.67 |
| Total | 2,485,064,296.49 |
(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 | 25,123,263.57 | 5,354,063.65 | 19,769,199.92 | |||
| Bad debt provision withdrawn according to | 98,359,660.29 | 19,695,758.51 | 140,000.00 | 47.15 | 118,195,371.65 | |
| groups | ||||||
| Total | 123,482,923.86 | 19,695,758.51 | 140,000.00 | 5,354,110.80 | 137,964,571.57 |
Of which, bad debt provision collected or reversed with significant amount:
Unit: RMB
| Name of the entity | Amount collected or reversed | Way |
| No. 1 | 140,000.00 | Court enforcement funds |
| Total | 140,000.00 |
The amount of expected credit losses accrued during the current period was RMB19,695,758.51, the amount ofexpected credit losses recovered or reversed during the current period was RMB140,000.00, and the amount ofexpected credit losses verified during the current period was RMB5,354,110.80, which was RMB23,101.38different from the amount of credit impairment loss on accounts receivable accrued during the current period ofRMB19,672,657.13, which was due to the difference in translation of foreign currency statements at the end ofthe current period.
(3) Accounts Receivable with Actual Verification for the Reporting Period
Unit: RMB
| Item | Amount |
| No. 1 | 4,687,053.33 |
| No. 2 | 521,689.32 |
| No. 3 | 145,321.00 |
| Other retails accounts | 47.15 |
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 | 4,687,053.33 | The enterprise is insolvent and not expected to be recovered | Perform the approval procedures in accordance with the Company’s bad debt management system | Not |
| No. 2 | Payment for goods | 521,689.32 | The enterprise is insolvent and not expected to be recovered | Perform the approval procedures in accordance with the Company’s bad debt management system | Not |
| No. 3 | Payment for goods | 145,321.00 | The enterprise is insolvent and not expected to be recovered | Perform the approval procedures in accordance with the Company’s bad debt management system | Not |
| Total | 5,354,063.65 |
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 | 261,026,852.86 | 10.50% | 7,830,805.59 |
| No. 2 | 152,452,817.41 | 6.13% | 4,573,584.52 |
| No. 3 | 93,476,069.87 | 3.76% | 2,804,282.10 |
| No. 4 | 55,627,701.25 | 2.24% | 1,283,037.33 |
| No. 5 | 55,226,986.80 | 2.22% | 1,675,758.38 |
| Total | 617,810,428.19 | 24.85% |
(5) Derecognition of Accounts Receivable due to the Transfer of Financial Assets
Naught
(6) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvementof Accounts ReceivableNaught
6. Accounts Receivable Financing
Unit: RMB
| Item | Ending balance | Beginning balance |
| Bank acceptance bills | 444,845,917.62 | 569,868,831.79 |
| Total | 444,845,917.62 | 569,868,831.79 |
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
7. Prepayment
(1) Listed by Aging
Unit: RMB
| Aging | Ending balance | Beginning balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 31,552,324.47 | 76.12% | 36,419,452.21 | 80.00% |
| 1 to 2 years | 2,624,032.73 | 6.33% | 3,345,048.70 | 7.35% |
| 2 to 3 years | 4,381,417.53 | 10.57% | 3,313,296.20 | 7.28% |
| Over 3 years | 2,893,345.53 | 6.98% | 2,448,751.82 | 5.38% |
| Total | 41,451,120.26 | 45,526,548.93 | ||
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 | Aging | Proportion to total prepayments (%) |
| No. 1 | Non-related supplier | 8,853,527.27 | Within 1 year | 21.36% |
| No. 2 | Non-related supplier | 2,540,646.17 | 1 to 2 years, 2 to 3 years | 6.13% |
| No. 3 | Non-related supplier | 1,327,340.00 | 2 to 3 years | 3.20% |
| No. 4 | Non-related supplier | 1,322,725.73 | Within 1 year | 3.19% |
| No. 5 | Non-related supplier | 1,311,535.80 | Within 1 year | 3.16% |
| Total | 15,355,774.97 | 37.05% |
8. Other Receivables
Unit: RMB
| Item | Ending balance | Beginning balance |
| Other receivables | 150,403,234.75 | 32,902,865.98 |
| Total | 150,403,234.75 | 32,902,865.98 |
(1) Interest Receivable
1) Category of Interest Receivable
Naught
2) Significant Overdue Interest
Naught
3) Withdrawal of Bad Debt Provision
□Applicable ? Not applicable
(2) Dividends Receivable
1) Category of Dividends Receivable
Naught
2) Significant Dividends Receivable Aged over 1 Year
Naught
3) Withdrawal of Bad Debt Provision
□Applicable ? Not applicable
(3) Other Receivables
1) Other Receivables Disclosed by Account Nature
Unit: RMB
| Nature | Ending carrying amount | Beginning carrying amount |
| Dividend payment (note) | 111,892,889.20 | |
| Other current accounts | 43,848,497.77 | 45,041,494.42 |
| Performance bonds | 18,415,192.27 | 14,472,948.78 |
| Export VAT rebates | 11,326,131.26 | 10,011,271.72 |
| Staff loans and imprests | 1,984,223.92 | 1,164,918.15 |
| Rents and utilities | 724,524.41 | 1,220,591.91 |
| Total | 188,191,458.83 | 71,911,224.98 |
Note: refer to the dividend payment transferred to China Securities Depository and Clearing CorporationLimited.
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 2023 | 584,406.20 | 4,785,285.13 | 33,638,667.67 | 39,008,359.00 |
| Balance of 1 January 2023 in the Current Period | ||||
| Withdrawal of the Current Period | 210,014.79 | -701,413.34 | -728,736.37 | -1,220,134.92 |
| Balance of 30 June 2023 | 794,420.99 | 4,083,871.79 | 32,909,931.30 | 37,788,224.08 |
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) | 149,905,951.05 |
| 1 to 2 years | 3,027,584.32 |
| 2 to 3 years | 6,134,698.71 |
| Over 3 years | 29,123,224.75 |
| 3 to 4 years | 3,781,427.91 |
| 4 to 5 years | 1,721,323.52 |
| Over 5 years | 23,620,473.32 |
| Total | 188,191,458.83 |
3) Bad Debt Provision Withdrawn, Reversed or Recovered in 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 | |||
| Other receivables | 39,008,359.00 | -1,220,134.92 | 37,788,224.08 | |||
| Total | 39,008,359.00 | -1,220,134.92 | 37,788,224.08 | |||
The amount of expected credit losses accrued during the current period was RMB1,220,134.92, the amount ofexpected credit losses recovered or reversed during the current period was RMB0.00, and the amount ofexpected credit losses verified during the current period was RMB0.00, which was RMB17,439.94 differentfrom the amount of credit impairment loss on other receivables accrued during the current period ofRMB1,237,574.86, which was due to the difference in translation of foreign currency statements at the end ofthe current period.
4) Particulars of the Actual Verification of Other Receivables during the Reporting PeriodNaught
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 | Dividend payment | 111,892,889.20 | Within 1 year | 59.46% | 0.00 |
| No. 2 | Other intercourse accounts | 20,000,000.00 | Within 5 year | 10.63% | 20,000,000.00 |
| No. 3 | VAT export tax | 11,326,131.26 | Within 1 year | 6.02% | 339,783.94 |
| refunds | |||||
| No. 4 | Other intercourse accounts | 5,000,000.00 | Within 1 years | 2.66% | 5,000,000.00 |
| No. 5 | Other intercourse accounts | 4,289,457.98 | Within 3 year | 2.28% | 4,289,457.98 |
| Total | 152,508,478.44 | 81.05% | 29,629,241.92 |
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 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 contract performance cost | Carrying value | Carrying amount | Falling price reserves of inventory or depreciation reserves of contract performance cost | Carrying value | |
| Raw materials | 379,135,335.60 | 9,645,310.90 | 369,490,024.70 | 414,134,452.55 | 6,893,242.38 | 407,241,210.17 |
| Goods in process | 227,936,650.78 | 227,936,650.78 | 239,412,167.33 | 239,412,167.33 | ||
| Inventory goods | 796,421,911.36 | 142,385,621.23 | 654,036,290.13 | 1,019,990,159.16 | 139,368,445.90 | 880,621,713.26 |
| Goods in transit | 295,172,317.67 | 2,962,926.23 | 292,209,391.44 | 391,149,213.49 | 9,805,170.06 | 381,344,043.43 |
| Semi-finished goods | 87,046,434.83 | 1,414,324.51 | 85,632,110.32 | 113,621,240.54 | 914,242.37 | 112,706,998.17 |
| Low-value consumables | 2,036,927.65 | 2,036,927.65 | 2,742,435.82 | 2,742,435.82 | ||
| Others | 15,184,800.34 | 15,184,800.34 | 7,568,833.69 | 7,568,833.69 | ||
| Total | 1,802,934,378.23 | 156,408,182.87 | 1,646,526,195.36 | 2,188,618,502.58 | 156,981,100.71 | 2,031,637,401.87 |
(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 | 6,893,242.38 | 3,250,464.48 | 498,395.96 | 9,645,310.90 | ||
| Inventory goods | 139,368,445.90 | 13,794,313.64 | 10,777,138.31 | 142,385,621.23 | ||
| Goods in transit | 9,805,170.06 | 6,842,243.83 | 2,962,926.23 | |||
| Semi-finished goods | 914,242.37 | 500,423.64 | 341.50 | 1,414,324.51 | ||
| Total | 156,981,100.71 | 17,545,201.76 | 18,118,119.60 | 156,408,182.87 | ||
For the Reporting Period, the falling price reserves of inventory were accrued RMB17,545,201.76, reversedRMB2,968,819.12 and verified RMB15,149,300.48.
(3) Notes to the Ending Balance of Inventories Including Capitalized Borrowing ExpenseNaught
(4) Amortization Amount of Contract Performance Cost during the Reporting PeriodNaught
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 | 920,946.65 | 5,153,358.98 | 6,074,305.63 | 607,430.56 | 5,466,875.07 |
| Total | 6,074,305.63 | 920,946.65 | 5,153,358.98 | 6,074,305.63 | 607,430.56 | 5,466,875.07 |
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, theinformation related to the bad debt provision shall be disclosed by reference to the disclosure method of otherreceivables:
□Applicable ? Not applicable
Withdrawal of impairment provision for contract assets in the Reporting Period
Unit: RMB
| Item | Withdrawal | Reversal | Verification | Reason |
| Contract assets | 313,516.09 | Normal withdrawal at aging | ||
| Total | 313,516.09 |
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 | 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
Naught
13. Other Current Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Large bank certificates of deposit (note) | 100,000,000.00 | |
| Input tax of VAT to be certified and deducted | 63,856,804.78 | 72,851,826.53 |
| Advance payment of enterprise income tax | 5,462,208.91 | 3,676,607.32 |
| Others | 3,696,897.95 | 2,910,143.04 |
| Total | 173,015,911.64 | 79,438,576.89 |
Note: refer to large bank certificates of deposit matured over three months which can be transferred but not beredeemed in advance.
14. Investments in debt obligations
Naught
15. Other Investments in Debt Obligations
Naught
16. Long-term Accounts Receivable
Naught
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 | |||||||||||
| Shenzhen Primatronix (Nanho) Electronics Ltd. | 181,931,792.66 | 1,186,031.53 | 183,117,824.19 | ||||||||
| Subtotal | 181,931,792.66 | 1,186,031.53 | 183,117,824.19 | ||||||||
| Total | 181,931,792.66 | 1,186,031.53 | 183,117,824.19 | ||||||||
18. Other Equity Instrument Investment
Unit: RMB
| Item | Ending balance | Beginning balance |
| Gotion High-tech Co., Ltd. | 473,235,307.42 | 493,967,194.53 |
| Xiamen Bank Co.,Ltd. | 287,939,745.30 | 328,664,290.95 |
| Guangdong Rising Finance Co., Ltd. | 30,000,000.00 | 30,000,000.00 |
| Beijing Guangrong Lianmeng Semiconductor lighting Industry Investment Center(L.P.) | 7,078,568.80 | 8,059,860.92 |
| Foshan Nanhai District United Guangdong New Light Source Industry Innovation Center | 3,000,000.00 | 3,000,000.00 |
| China Guangfa Bank Co.,Ltd. | 500,000.00 | 500,000.00 |
| Total | 801,753,621.52 | 864,191,346.40 |
Disclosure of non-trading equity instrument investment by items
Unit: RMB
| Item | Dividend income recognized | Accumulative gains | Accumulative losses | Amount of other comprehensive income | Reason for assigning to measure in fair value and the | Reason for other comprehensive income |
| transferred to retained earnings | changes included in other comprehensive income | transferred to retained earnings | ||||
| Gotion High-tech Co., Ltd. | 390,220,822.29 | Not satisfied with the condition of trading equity instrument | ||||
| Xiamen Bank Co.,Ltd. | 16,633,969.35 | 134,982,138.47 | Not satisfied with the condition of trading equity instrument | |||
| Beijing Guangrong Lianmeng Semiconductor lighting Industry Investment Center(L.P.) | 52,364.46 | 653,627.87 | Not satisfied with the condition of trading equity instrument | |||
| Guangdong Rising Finance Co., Ltd. | 4,080.96 | Not satisfied with the condition of trading equity instrument |
19. Other Non-current Financial Assets
Naught
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 | 9,792,905.34 | 9,792,905.34 | ||
| 2. Increased amount of the period | 1,245,165.95 | 1,245,165.95 | ||
| (1) Withdrawal or amortization | 1,245,165.95 | 1,245,165.95 | ||
| 3. Decreased amount of the period | ||||
| (1) Disposal | ||||
| (2) Other transfer | ||||
| 4. Ending balance | 11,038,071.29 | 11,038,071.29 | ||
| III. Depreciation reserves | ||||
| 1. Beginning balance | ||||
| 2. Increased amount of the period | ||||
| (1) Withdrawal | ||||
| 3. Decreased amount of the period | ||||
| (1) Disposal | ||||
| (2) Other transfer | ||||
| 4. Ending balance | ||||
| IV. Carrying value | ||||
| 1. Ending carrying value | 43,366,716.49 | 43,366,716.49 | ||
| 2. Beginning carrying value | 44,611,882.44 | 44,611,882.44 |
(2) Investment Property Adopting the Fair Value Measurement Mode
□Applicable ? Not applicable
(3) Investment Property Failed to Accomplish Certification of Property
Naught
21. Fixed Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Fixed assets | 3,362,929,170.95 | 3,505,729,627.80 |
| Disposal of fixed assets | 2,698,921.34 | 2,364,654.61 |
| Total | 3,365,628,092.29 | 3,508,094,282.41 |
(1) List of Fixed Assets
Unit: RMB
| Item | Houses and buildings | Machinery equipment | Transportation equipment | Electronic equipment | Other(Note) | Total |
| I. Original carrying value | ||||||
| 1. Beginning 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 |
| 2. Increased | 12,588,085.08 | 107,093,477.39 | 1,240,590.88 | 2,770,437.76 | 1,010,300.93 | 124,702,892.04 |
| amount of the period | ||||||
| (1) Purchase | 1,707,909.03 | 22,416,839.63 | 1,230,973.46 | 2,200,324.01 | 421,845.13 | 27,977,891.26 |
| (2) Transfer from construction in progress | 10,738,504.05 | 83,014,052.55 | 569,758.82 | 581,127.85 | 94,903,443.27 | |
| (3) Others | 141,672.00 | 1,662,585.21 | 9,617.42 | 354.93 | 7,327.95 | 1,821,557.51 |
| 3. Decreased amount of the period | 4,301,800.00 | 34,205,228.18 | 1,698,224.38 | 45,882.86 | 1,472,933.96 | 41,724,069.38 |
| (1) Disposal or scrap | 4,301,800.00 | 31,285,387.93 | 1,698,224.38 | 45,882.86 | 1,424,801.82 | 38,756,096.99 |
| (2) Equipment transformation | 198,725.31 | 48,132.14 | 246,857.45 | |||
| (3) Others | 2,721,114.94 | 2,721,114.94 | ||||
| 4. Ending balance | 1,953,792,243.83 | 5,099,413,993.29 | 42,476,454.44 | 74,270,933.87 | 86,769,858.29 | 7,256,723,483.72 |
| II. Accumulative depreciation | ||||||
| 1. Beginning 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 |
| 2. Increased amount of the period | 40,831,789.42 | 213,421,265.70 | 1,198,443.95 | 3,180,364.58 | 3,872,346.01 | 262,504,209.66 |
| (1) Withdrawal | 40,831,789.42 | 210,964,319.41 | 1,188,969.19 | 3,180,014.92 | 3,865,126.77 | 260,030,219.71 |
| (2) Transfer from construction in progress | 2,044,078.82 | 2,044,078.82 | ||||
| (3) Others | 412,867.47 | 9,474.76 | 349.66 | 7,219.24 | 429,911.13 | |
| 3. Decreased amount of the period | 4,227,078.99 | 30,998,798.93 | 1,613,313.16 | 44,465.80 | 1,342,263.27 | 38,225,920.15 |
| (1) Disposal or scrap | 4,086,710.00 | 29,173,107.69 | 1,613,313.16 | 44,465.80 | 1,294,709.41 | 36,212,306.06 |
| (2) Equipment transformation | 149,506.56 | 47,553.86 | 197,060.42 | |||
| (3) Others | 140,368.99 | 1,676,184.68 | 1,816,553.67 | |||
| 4. Ending balance | 758,387,322.10 | 2,962,175,102.30 | 32,980,047.19 | 56,057,475.71 | 71,218,431.46 | 3,880,818,378.76 |
| III. Depreciation reserves | ||||||
| 1. Beginning balance | 11,129,431.94 | 69.83 | 343,855.06 | 1,587.18 | 11,474,944.01 | |
| 2. Increased amount of the period | 1,500,990.00 | 1,500,990.00 | ||||
| (1) Withdrawal | 1,500,990.00 | 1,500,990.00 | ||||
| 3. Decreased amount of the period | ||||||
| (1) Disposal or scrap | ||||||
| 4. Ending balance | 12,630,421.94 | 69.83 | 343,855.06 | 1,587.18 | 12,975,934.01 | |
| IV. Carrying value | ||||||
| 1. Ending carrying value | 1,195,404,921.73 | 2,124,608,469.05 | 9,496,337.42 | 17,869,603.10 | 15,549,839.65 | 3,362,929,170.95 |
| 2. Beginning 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 |
Note: Fixed Assets-Other refer to cooling system and sewage treatment station of NationStar Optoelectronicsand instruments and implement of Nanning Liaowang.
(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 | 41,182,831.19 | 3,651,651.37 | 5,845,847.30 | Idle |
| Electronic equipment | 7,785,983.92 | 7,370,095.02 | 342,427.13 | 73,461.77 | 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 | 48,685,484.64 | 3,995,735.51 | 5,926,299.53 |
(3) Fixed Assets Leased out by Operation Lease
Naught
(4) Fixed Assets Failed to Accomplish Certification of Property
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, led Workshop, R&D Workshop 11 to 14 and R&D Workshop 18 have been completedand put into use and carried forward fixed assets. As of 30 June 2023, the relevant real estate licenses are beingprocessed. The management believed that there are no substantive legal barriers to the handling of these titlecertificates, and it will not have a significant adverse 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 indisposed equipment | 2,698,921.34 | 2,364,654.61 |
| Total | 2,698,921.34 | 2,364,654.61 |
22. Construction in progress
Unit: RMB
| Item | Ending balance | Beginning balance |
| Construction in progress | 1,377,403,873.06 | 1,282,780,335.14 |
| Total | 1,377,403,873.06 | 1,282,780,335.14 |
(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 | |
| Construction in progress | 1,378,931,428.05 | 1,527,554.99 | 1,377,403,873.06 | 1,284,307,890.13 | 1,527,554.99 | 1,282,780,335.14 |
| Total | 1,378,931,428.05 | 1,527,554.99 | 1,377,403,873.06 | 1,284,307,890.13 | 1,527,554.99 | 1,282,780,335.14 |
(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 | 566,254,746.61 | 3,452,617.96 | 569,707,364.57 | 88.58% | 90.00% | 36,640,953.02 | Self-financing and Borrowing | ||||
| The Project of the Geely Industrial Park | 1,714,546,700.00 | 421,308,508.55 | 6,157,824.38 | 458,407.06 | 427,007,925.87 | 27.44% | 27.44% | 110,085.00 | 72,249.18 | 3.52% | Self-financing and Borrowing | |
| FSLHainan Industrial Park I | 310,400,000.00 | 37,522,769.10 | 59,621,359.89 | 97,144,128.99 | 34.11% | 61.00% | Self-financing | |||||
| The smart LED Lighti | 148,271,900.00 | 68,275,373.87 | 24,759,409.84 | 93,034,783.71 | 68.39% | 83.00% | Self-financing |
| ng Production Plant in the Gaoming Production Base (1-3 buildings) | ||||||||||||
| Gaoming office building | 115,000,000.00 | 73,222,239.69 | 18,438,005.84 | 91,660,245.53 | 86.88% | 87.00% | Self-financing | |||||
| FSL intelligent manufacturing factory project | 89,680,000.00 | 23,808,849.57 | 23,808,849.57 | 30.00% | 30.00% | Self-financing | ||||||
| The LED R&D and Production Base on Jihua Second Road. Others (sporadic equipment) | 26,632,094.62 | 12,629,643.77 | 18,382,287.91 | 19,323,976.47 | 905,130.42 | 10,782,824.79 | 78.00% | 78.00% | Self-financing | |||
| The Project of Production Expansion of Packaging Components and Chips of New- | 913,412,500.00 | 11,803,833.69 | 896,671.28 | 5,294,232.63 | 7,406,272.34 | 97.83% | 97.83% | Self-financing |
| generation LEDs | ||||||||||||
| Color paint line equipment | 5,292,035.40 | 1,058,407.06 | 3,695,139.30 | 4,753,546.36 | 89.82% | 90.00% | Self-financing | |||||
| F1Line body | 6,476,106.19 | 1,715,867.26 | 1,718,051.72 | 3,433,918.98 | 53.02% | 80.00% | Self-financing | |||||
| AP[2022]043-Spray-Paint Lines | 4,053,097.35 | 3,242,478.00 | 3,242,478.00 | 80.00% | 90.00% | Self-financing | ||||||
| Tederic 2022070501-1920T injection machine | 3,097,345.13 | 1,858,407.08 | 1,002,358.64 | 2,860,765.72 | 92.36% | 90.00% | Self-financing | |||||
| Synchronous laser welding machine /Vibration A8SR | 3,672,566.37 | 2,707,964.54 | 2,330.10 | 2,710,294.64 | 73.80% | 80.00% | Self-financing | |||||
| The Project of Production Expansion of Chip LED | 20,390,000.00 | 430,088.50 | 943,362.85 | 430,088.51 | 943,362.84 | 50.79% | 50.79% | Self-financing | ||||
| Total | 4,087,663,245.06 | 1,225,839,177.29 | 139,069,419.71 | 25,506,704.67 | 905,130.42 | 1,338,496,761.91 | 36,751,038.02 | 72,249.18 |
(3) List of the Withdrawal of the Depreciation Reserves for Construction in ProgressNaught
(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 | 21,717,402.95 | 19,090,760.38 | 40,808,163.33 |
| 2. Increased amount of the period | 919,748.13 | 919,748.13 | |
| (1) Leased in | 919,748.13 | 919,748.13 | |
| 3. Decreased amount of the period | 36,010.14 | 36,010.14 | |
| 4. Ending balance | 22,601,140.94 | 19,090,760.38 | 41,691,901.32 |
| II. Accumulated amortization | |||
| 1. Beginning balance | 9,106,242.62 | 18,654,192.98 | 27,760,435.60 |
| 2. Increased amount of the period | 3,776,607.81 | 436,567.40 | 4,213,175.21 |
| (1) Withdrawal | 3,776,607.81 | 436,567.40 | 4,213,175.21 |
| 3. Decreased amount of the period | 114,465.60 | 114,465.60 | |
| 4. Ending balance | 12,768,384.83 | 19,090,760.38 | 31,859,145.21 |
| III. Depreciation reserves | |||
| 1. Beginning balance | |||
| 2. Increased amount of the period | |||
| (1) Withdrawal | |||
| 3. Decreased amount of the period | |||
| (1) Disposal | |||
| 4. Ending balance | |||
| IV. Carrying value | |||
| 1. Ending carrying value | 9,832,756.11 | 9,832,756.11 | |
| 2. Beginning carrying value | 12,611,160.33 | 436,567.40 | 13,047,727.73 |
26. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
| Item | Land use right | Patent | Non-patent technology | Software | Others (note) | Total |
| I. Original carrying value | ||||||
| 1. Beginning balance | 408,013,759.69 | 24,198,472.74 | 35,318,404.44 | 49,109.90 | 467,579,746.77 | |
| 2. Increased amount of the period | 350,661.10 | 3,435,711.18 | 3,786,372.28 | |||
| (1) Purchase | 350,661.10 | 3,435,711.18 | 3,786,372.28 | |||
| (2) Internal R&D | ||||||
| (3) Business combination increase | ||||||
| 3. Decreased amount of the period | ||||||
| (1) Disposal | ||||||
| 4. Ending balance | 408,364,420.79 | 24,198,472.74 | 38,754,115.62 | 49,109.90 | 471,366,119.05 | |
| II. Accumulated amortization | ||||||
| 1. Beginning balance | 86,226,483.33 | 24,002,566.64 | 16,746,120.66 | 49,109.90 | 127,024,280.53 | |
| 2. Increased amount of the period | 3,948,502.13 | 91,046.90 | 2,098,950.49 | 6,138,499.52 | ||
| (1) Withdrawal | 3,948,502.13 | 91,046.90 | 2,098,950.49 | 6,138,499.52 | ||
| 3. Decreased amount of the period | ||||||
| (1) Disposal | ||||||
| 4. Ending balance | 90,174,985.46 | 24,093,613.54 | 18,845,071.15 | 49,109.90 | 133,162,780.05 | |
| III. Depreciation reserves | ||||||
| 1. Beginning balance | 388,613.87 | 388,613.87 | ||||
| 2. Increased amount of the period | ||||||
| (1) Withdrawal | ||||||
| 3. Decreased amount of the period | ||||||
| (1) Disposal | ||||||
| 4. Ending balance | 388,613.87 | 388,613.87 | ||||
| IV. Carrying |
| value | ||||||
| 1. Ending carrying value | 318,189,435.33 | 104,859.20 | 19,520,430.60 | 337,814,725.13 | ||
| 2. Beginning carrying value | 321,787,276.36 | 195,906.10 | 18,183,669.91 | 340,166,852.37 |
The proportion of intangible assets formed from the internal R&D of the Company at the period-end to the ending balance ofintangible assets was 0.00%.
(2) Land Use Right with Certificate of Title Uncompleted
NaughtOther notes:
Note: “Intangible Assets-Others” mainly refers to the emission right of Nanning Liaowang recognized in 2022.
27. Development Costs
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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. (note) | 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 GuangdongRising Holdings Group Co., Ltd., acquired NationStar Optoelectronics in 2014, and the difference between thefair value and the net assets attributable to shareholders of the listed company at the date of acquisition ofNationStar Optoelectronics resulted in a goodwill of RMB405,620,123.64.
(2) Goodwill impairment provisions
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29. Long-term Prepaid Expense
Unit: RMB
| Item | Beginning balance | Increased amount | Amortization | Other decreased | Ending balance |
| amount of the period | amount | ||||
| Mould | 123,701,355.84 | 19,318,247.77 | 18,177,894.17 | 16,664,943.47 | 108,176,765.97 |
| Expense on maintenance and decoration | 53,937,007.68 | 11,981,690.98 | 11,125,457.79 | 54,793,240.87 | |
| Boarding box | 371,728.64 | 310,440.16 | 185,274.05 | 496,894.75 | |
| Other | 12,116,535.75 | 599,459.45 | 4,303,862.82 | 8,412,132.38 | |
| Total | 190,126,627.91 | 32,209,838.36 | 33,792,488.83 | 16,664,943.47 | 171,879,033.97 |
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 | 369,692,376.93 | 55,910,294.84 | 355,634,218.16 | 53,741,627.33 |
| Unrealized profit of internal transactions | 45,049,689.58 | 6,117,103.55 | 52,989,043.64 | 7,948,356.52 |
| Deductible loss | 59,430,734.45 | 10,501,457.66 | 72,901,011.65 | 12,503,679.82 |
| Depreciation of fixed assets | 56,881,472.25 | 8,532,220.85 | 57,459,943.55 | 8,618,991.55 |
| Change in fair value of trading financial assets | 23,814,503.38 | 3,572,175.51 | 5,013,923.26 | 752,088.49 |
| Lease liabilities | 9,756,245.93 | 1,463,436.88 | 12,273,129.57 | 1,799,787.39 |
| Accrued liabilities | 9,518,319.01 | 1,427,747.85 | 9,579,783.06 | 1,436,967.46 |
| Long-term deferred expenses | 3,888,860.58 | 583,329.09 | ||
| Others | 44,091,211.68 | 6,614,523.28 | 18,675,496.41 | 2,802,165.99 |
| Total | 618,234,553.21 | 94,138,960.42 | 588,415,409.88 | 90,186,993.64 |
(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 | 86,121,665.67 | 12,918,249.86 | 88,576,232.73 | 13,286,434.92 |
| Changes in fair value of other investments in equity instruments | 519,352,960.75 | 77,902,944.12 | 580,809,393.51 | 87,121,409.03 |
| One-off depreciation of fixed assets | 690,169,165.63 | 103,525,374.85 | 680,398,140.98 | 102,059,721.15 |
| Right-of-use assets | 9,681,614.81 | 1,452,242.22 | 13,047,727.73 | 1,901,566.58 |
| Book-tax difference in depreciation period of fixed assets | 1,194,076.92 | 298,519.23 | ||
| Changes in the fair value of trading financial assets | 14,216.68 | 2,132.50 | 14,216.68 | 2,132.50 |
| Total | 1,306,533,700.46 | 196,099,462.78 | 1,362,845,711.63 | 204,371,264.18 |
(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 | 94,138,960.42 | 90,186,993.64 | ||
| Deferred income tax liabilities | 196,099,462.78 | 204,371,264.18 |
(4) List of Unrecognized Deferred Income Tax Assets
Naught
(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 | 35,069,785.36 | 35,069,785.36 | 44,132,869.26 | 44,132,869.26 | ||
| Long-term assets to be disposed (note 1) | 40,230,664.84 | 40,230,664.84 | 36,553,212.64 | 36,553,212.64 | ||
| Prepayments for equity acquisition (note 2) | 10,000,000.00 | 10,000,000.00 | 10,000,000.00 | 10,000,000.00 | ||
| Assets of subsidiaries to be cleared and cancelled | 510,864.76 | 510,864.76 | 613,072.43 | 613,072.43 | ||
| Other | 407,032.79 | 407,032.79 | 244,358.52 | 244,358.52 | ||
| Total | 86,218,347.75 | 10,000,000.00 | 76,218,347.75 | 91,543,512.85 | 10,000,000.00 | 81,543,512.85 |
Other notes:
Note 1: 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 government
successfully 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.Note 2: The Company's subsidiary, NationStar Optoelectronics, entered into the Capital Injection Agreementwith Nanyang Xicheng Technology Co., Ltd. (Xicheng Tech). NationStar Optoelectronics paid RMB10 millionfor capital 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.
32. Short-term Borrowings
(1) Category of Short-term Borrowings
Unit: RMB
| Item | Ending balance | Beginning balance |
| Mortgage loans | 118,330,000.00 | 100,000,000.00 |
| Credit loans | 72,596,526.02 | 37,596,526.02 |
| Acceptance bill discount | 20,000,000.00 | |
| Interest from short-term borrowings | 118,833.33 | |
| Total | 190,926,526.02 | 157,715,359.35 |
Note:
For details about the collateral for mortgage loans please refer to XIV-(III) Other in Part X.
(2) List of the Short-term Borrowings Overdue but not Returned
Naught
33. Trading Financial Liabilities
Unit: RMB
| Item | Ending balance | Beginning balance |
| Trading financial liabilities | 23,741,475.00 | 4,679,000.00 |
| Including: | ||
| Other (note) | 23,741,475.00 | 4,679,000.00 |
| Including: | ||
| Total | 23,741,475.00 | 4,679,000.00 |
note: refer to losses on changes in fair value arising from the Company’s hedge instruments.
34. Derivative Financial Liabilities
Naught
35. Notes Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| Bank acceptance bill | 1,786,199,423.18 | 1,923,641,752.28 |
| letter of credit | 67,154,037.47 | 52,101,816.43 |
| Total | 1,853,353,460.65 | 1,975,743,568.71 |
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 | 2,437,263,015.38 | 2,513,177,458.14 |
| Total | 2,437,263,015.38 | 2,513,177,458.14 |
(2) Significant Accounts Payable Aging over One Year
Unit: RMB
| Item | Ending balance | Unpaid/ Un-carry-over reason |
| Supplier A | 53,874,419.09 | It has not reached the settlement period |
| Supplier B | 11,091,750.64 | Unsettled for bankruptcy |
| Supplier C | 5,468,703.00 | Quality guarantee deposit |
| Supplier D | 4,249,699.04 | It has not reached the settlement period |
| Supplier E | 3,560,177.00 | It has not reached the settlement period |
| Supplier F | 2,702,000.00 | It has not reached the settlement period |
| Total | 80,946,748.77 |
37. Advances from Customer
(1) List of Advances from Customers
Unit: RMB
| Item | Ending balance | Beginning balance |
| Advances from customers | 196,200.00 | 2,532,442.44 |
| Total | 196,200.00 | 2,532,442.44 |
(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 | 131,700,995.68 | 125,143,161.61 |
| Total | 131,700,995.68 | 125,143,161.61 |
39. Employee Benefits Payable
(1) List of Employee Benefits Payable
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| I. Short-term salary | 168,935,119.49 | 625,092,899.71 | 633,858,737.63 | 160,169,281.57 |
| II. Post-employment benefit-defined contribution plans | 3,890,071.51 | 54,523,735.92 | 56,433,980.29 | 1,979,827.14 |
| III. Termination benefits | 208,961.18 | 426,638.74 | 484,638.74 | 150,961.18 |
| IV. Current portion of other benefits | 93,935.66 | 93,935.66 | ||
| Total | 173,034,152.18 | 680,137,210.03 | 690,871,292.32 | 162,300,069.89 |
(2) List of Short-term Salary
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| 1. Salary, bonus, allowance, subsidy | 164,655,970.83 | 547,553,308.79 | 555,725,501.76 | 156,483,777.86 |
| 2. Employee welfare | 666,925.03 | 28,195,163.27 | 28,212,291.70 | 649,796.60 |
| 3. Social insurance | 1,367,698.57 | 26,368,995.25 | 27,213,373.53 | 523,320.29 |
| Of which: Medical insurance premiums | 1,200,640.78 | 26,446,761.75 | 27,295,390.84 | 352,011.69 |
| Work-related injury insurance | 167,057.79 | 1,496,952.65 | 1,492,701.84 | 171,308.60 |
| Others | 31,534.96 | 31,534.96 | ||
| 4. Housing fund | 458,956.38 | 17,705,004.42 | 17,708,217.38 | 455,743.42 |
| 5. Labor union budget and employee education budget | 1,785,568.68 | 5,270,427.98 | 4,999,353.26 | 2,056,643.40 |
| Total | 168,935,119.49 | 625,092,899.71 | 633,858,737.63 | 160,169,281.57 |
(3) List of Defined Contribution Plans
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| 1. Basic pension benefits | 3,658,022.92 | 49,996,646.16 | 51,971,231.59 | 1,683,437.49 |
| 2. Unemployment insurance | 131,643.99 | 1,354,271.20 | 1,378,298.97 | 107,616.22 |
| 3. Annuity | 100,404.60 | 3,172,818.56 | 3,084,449.73 | 188,773.43 |
| Total | 3,890,071.51 | 54,523,735.92 | 56,433,980.29 | 1,979,827.14 |
Other notes:
The Company participates in the scheme of pension insurance and unemployment insurance established by
government 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.
40. Taxes Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| VAT | 35,873,033.86 | 35,832,025.02 |
| Corporate income tax | 23,568,788.01 | 9,503,893.79 |
| Personal income tax | 1,695,872.03 | 2,569,142.68 |
| Urban maintenance and construction tax | 2,828,109.38 | 2,934,691.53 |
| Property tax | 7,925,415.89 | 8,147,187.30 |
| Land use tax | 2,880,439.83 | 1,817,585.50 |
| Education surcharge | 1,421,991.02 | 2,015,767.71 |
| Other | 2,039,570.72 | 1,475,258.57 |
| Total | 78,233,220.74 | 64,295,552.10 |
41. Other Payables
Unit: RMB
| Item | Ending balance | Beginning balance |
| Dividends payable | 134,915,110.77 | 15,646.07 |
| Other payables | 510,821,537.76 | 440,214,434.98 |
| Total | 645,736,648.53 | 440,230,081.05 |
(1) Interest Payable
Naught
(2) Dividends Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| Ordinary share dividends | 134,915,110.77 | 15,646.07 |
| Total | 134,915,110.77 | 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 | 134,409,650.00 |
| Account current | 142,100,932.05 | 133,618,069.56 |
| Performance bond | 75,214,029.74 | 67,039,416.12 |
| Relevant expense of sales | 72,952,540.76 | 29,232,738.55 |
| Payments for demolition | 36,734,144.44 | 36,734,144.44 |
| Other | 49,410,240.77 | 39,180,416.31 |
| Total | 510,821,537.76 | 440,214,434.98 |
2) Significant Other Payables Aging over One Year
Unit: RMB
| Item | Ending balance | Reason for not repayment or carry-over |
| Unit A | 115,352,181.20 | Unsettled |
| Unit B | 5,752,000.00 | Unsettled for involving in lawsuits |
| Total | 121,104,181.20 |
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 | 60,085,490.98 | 60,322,923.28 |
| Current portion of lease liabilities | 3,387,753.54 | 5,217,587.39 |
| Total | 63,473,244.52 | 65,540,510.67 |
44. Other Current Liabilities
Unit: RMB
| Item | Ending balance | Beginning balance |
| Pending changerover output VAT and others | 9,938,765.60 | 8,370,764.15 |
| Reversed notes that are endorsed and undue | 126,199,563.86 | 91,821,916.85 |
| Total | 136,138,329.46 | 100,192,681.00 |
45. Long-term Borrowings
(1) Category of Long-term Borrowings
Unit: RMB
| Item | Ending balance | Beginning balance |
| Mortgage loans | 8,268,725.21 | |
| Credit borrowings | 545,179,623.61 | 808,253,946.99 |
| Less: Current portion of long-term borrowings | 60,085,490.98 | 60,322,923.28 |
| Total | 493,362,857.84 | 747,931,023.71 |
46. Bonds Payable
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47. Lease Liabilities
Unit: RMB
| Item | Ending balance | Beginning balance |
| Lease liabilities | 9,865,686.02 | 12,273,129.57 |
| Less: current portion of lease liabilities | 3,387,753.54 | 5,217,587.39 |
| Total | 6,477,932.48 | 7,055,542.18 |
48. Long-term Payables
Naught
49. Long-term Employee Benefits Payable
Naught
50. Provisions
Unit: RMB
| Item | Ending balance | Beginning balance | Reason for formation |
| Product quality assurance | 9,518,319.01 | 9,587,043.31 | Withdrawal of customers’ claims for quality and product quality assurance expenses |
| Total | 9,518,319.01 | 9,587,043.31 |
51. Deferred Income
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance | Reason for formation |
| Government grants | 97,078,233.43 | 2,331,221.32 | 18,548,967.01 | 80,860,487.74 | Government allocations |
| Total | 97,078,233.43 | 2,331,221.32 | 18,548,967.01 | 80,860,487.74 |
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 | 88,313,595.06 | 1,708,400.00 | 15,456,657.30 | 208,250.00 | 74,357,087.76 | |||
| The Projects of the Production Expansion and Technological Transformation of Components of Small-spacing and Outdoor | 18,133,049.12 | 2,032,275.84 | 16,100,773.28 | Related to assets |
| LED Displays | ||||||||
| The Subsidy for Metal-organic Chemical Vapour Deposition (MOCVD) | 22,090,261.99 | 8,258,085.76 | 13,832,176.23 | 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 (Phase II) | 5,489,382.21 | 685,509.34 | 4,803,872.87 | 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 | 3,933,305.60 | 328,521.60 | 3,604,784.00 | Related to assets | ||||
| The Project of Resource Conservation and Environmental Protection | 4,249,848.44 | 904,683.72 | 3,345,164.72 | Related to assets | ||||
| The Project of the Innovation in Packaging Technology and Technological Transformation of Key Packaging Equipment of LEDs with Small Spacing for Display (II) | 3,477,734.25 | 240,686.70 | 3,237,047.55 | Related to assets | ||||
| The First Batch of 2022 Special Funds for Industrial Technological Transformation | 2,304,000.01 | 127,999.98 | 2,176,000.03 | Related to assets |
| by the Finance Bureau of Liang Jiang New Area | ||||||||
| Research on Key Technologies of the Third Generation of High Frequency Semiconductor Electronic Power Module in Colleges and Universities | 1,771,946.26 | 33,235.86 | 1,738,710.40 | Related to assets | ||||
| The Second Batch of Support Funds for the "Technological Transformation of Thousands of Enterprises" in the Guangxi Zhuang Autonomous Region for 2021 | 1,766,666.62 | 100,000.02 | 1,666,666.60 | Related to assets | ||||
| The 2019 Second Batch of Special Funds of RMB3 million for the Industrial and Information Development of the City | 1,800,000.00 | 150,000.00 | 1,650,000.00 | Related to assets | ||||
| The First Batch of Special Funds for the Industrial and Information Development for the Guangxi Zhuang Autonomous Region for 2017 (Technological Transformation) for Liuzhou Guige | 1,766,666.89 | 199,999.98 | 1,566,666.91 | Related to assets | ||||
| The Project of the Innovation in Packaging Technology and Technological Transformation of Key Packaging Equipment of LEDs with Small Spacing for Display | 1,801,098.21 | 269,756.22 | 1,531,341.99 | Related to assets |
| The Project of the First Batch of Support Funds for Enterprises in Liuzhou City for 2017 for Liuzhou Guige | 1,500,000.00 | 150,000.00 | 1,350,000.00 | Related to assets | ||||
| Carrying forward the Research and Development and Industrialization of Potassium Nitride-based Rf Devices in the Field of Next Generation Mobile Communication | 970,982.10 | 56,798.76 | 914,183.34 | Related to assets | ||||
| The 2019 14th Batch of Industrial Support Funds of RMB1.5 million | 900,000.00 | 75,000.00 | 825,000.00 | Related to assets | ||||
| The Project of Support Funds for Enterprises in Liuzhou City for 2020 for Liuzhou Guige | 716,666.61 | 100,000.02 | 616,666.59 | Related to assets | ||||
| The First Batch of 2022 Special Funds for Micro, Small, and Medium Enterprises | 630,000.00 | 34,999.98 | 595,000.02 | Related to assets | ||||
| The Project of the Third Batch of Special Funds of Innovation-driven Development for the Guangxi Zhuang Autonomous Region for 2018 for Liuzhou Guige | 616,000.00 | 48,000.00 | 568,000.00 | Related to assets | ||||
| The Project of Financial Support for Developing Liuzhou City into an Industrial Internet of | 579,333.28 | 79,000.02 | 500,333.26 | Related to assets |
| Things (IIOT) Demonstration City for 2021 for Liuzhou Guige | ||||||||
| The Key Labs of Semiconductor Micro Display Enterprises in Guangdong Province (for 2020) | 510,000.00 | 37,718.70 | 472,281.30 | Related to assets | ||||
| The Demonstration of Industrial Internet of Things (IIOT) Applications for LED Production Control | 515,334.44 | 67,332.78 | 448,001.66 | Related to assets | ||||
| The Light-converting Films and Components of Highly Efficient White-light LEDs | 734,299.34 | 294,038.46 | 440,260.88 | Related to assets | ||||
| The Project of Key Technologies and Industrialisation of Silica-based Gallium Nitride Power Components | 441,240.00 | 30,495.00 | 410,745.00 | Related to assets | ||||
| The Project of Research and Development and Industrialisation of NB-IoT-based Multi-Mode Low-Power Wide-Area Internet of Things Node Chips and Packaging Technology | 399,557.60 | 18,915.90 | 380,641.70 | Related to assets | ||||
| The Project of the First Batch of Support Funds for Enterprises in Liuzhou City for 2018 for Liuzhou Guige | 349,999.85 | 28,000.02 | 321,999.83 | Related to assets | ||||
| The | 366,784.04 | 54,586.26 | 312,197.78 | Rela |
| Industrialisation of LED Flip-chips and Light Source Modules for the Backlight of Large-size LCDs | ted to assets | |||||||
| The Construction Project for the Centre for Cultivating and Arranging High-Value Patents of NationStar Optoelectronics | 300,000.00 | 300,000.00 | Related to assets | |||||
| Others | 10,499,438.20 | 1,408,400.00 | 1,051,016.38 | 208,250.00 | 10,648,571.82 | Related to assets | ||
| Government grants related to income | 8,764,638.37 | 622,821.32 | 2,884,059.71 | 6,503,399.98 | ||||
| The Research on the Key Technology of 4K/8K Full-colour Micro-LED Displays with Ultra High Definition (UHD) | 3,407,456.55 | 1,338,901.10 | 2,068,555.45 | Related to income | ||||
| The Research on Full-colour and Integrated Packaging of Micro-LED Display with High Brightness and Contrast | 1,826,069.52 | 116,069.52 | 1,710,000.00 | Related to income | ||||
| The Innovation Fund for Enterprises in Liudong New Area for 2017 for Liuzhou Guige | 750,000.00 | 75,000.00 | 675,000.00 | Related to income | ||||
| The Fund for the Intelligent Transformation and Upgrading Projects of Automobile Enterprises for 2021 | 555,333.26 | 34,000.02 | 521,333.24 | Related to income | ||||
| The Fund for | 512,000.08 | 31,999.98 | 480,000.10 | Rela |
| the Project of the Management Committee of the Liuzhou High-tech Industrial Development Zone | ted to income |
The SpecialFund of theScience andTechnologyDepartment ofthe GuangxiZhuangAutonomousRegion forInnovation-drivenDevelopment for2020
| 400,000.00 | 30,000.00 | 370,000.00 | Related to income | |||||
| LED Technology for Efficient Cultivation in Modern Agriculture and Its Demonstrative Application | 440,000.00 | 79,614.21 | 360,385.79 | Related to income | ||||
| Others | 1,313,778.96 | 182,821.32 | 1,178,474.88 | 318,125.40 | Related to income | |||
| Total | 97,078,233.43 | 2,331,221.32 | 18,340,717.01 | 208,250.00 | 80,860,487.74 |
52. Other Non-current Liabilities
Unit: RMB
| Item | Ending balance | Beginning balance |
| Pending changerover output VAT | 205,769.48 | 307,696.87 |
| Liabilities of subsidiaries to be cleared and cancelled | 537.61 | 1,083.74 |
| Total | 206,307.09 | 308,780.61 |
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 | 1,361,994,647.00 | 1,361,994,647.00 | |||||
Other notes:
| Item/Investor | Beginning balance | Increase | Decrease | Ending balance | ||
| Invested amount | Proportion | Invested amount | Proportion | |||
| Restricted shares | 10,753,658.00 | 0.79% | 10,753,658.00 | 0.79% | ||
| Unrestricted shares | 1,351,240,989.00 | 99.21% | 1,351,240,989.00 | 99.21% | ||
| Total | 1,361,994,647.00 | 100.00% | 1,361,994,647.00 | 100.00% | ||
54. Other Equity Instruments
Naught
55. Capital Reserves
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| Other capital reserves | 7,245,971.54 | 7,245,971.54 | ||
| Total | 7,245,971.54 | 7,245,971.54 |
56. Treasury Shares
Unit: RMB
| Item | Beginning balance | Increase | Decrease (note) | Ending balance |
| Treasury shares (A-share) | 82,165,144.15 | 82,165,144.15 | ||
| Total | 82,165,144.15 | 82,165,144.15 |
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 to profit or loss | 498,660,484.47 | -61,456,432.76 | -9,218,464.91 | -52,237,967.85 | 446,422,516.62 | |||
| Changes in fair value of other equity | 498,660,484.47 | -61,456,432.76 | -9,218,464.91 | -52,237,967.85 | 446,422,516.62 | |||
| instrument investment | ||||||||
| II. Other comprehensive income that may subsequently be reclassified to profit or loss | -519,465.77 | 2,437,098.47 | 1,298,317.50 | 1,138,780.97 | 778,851.73 | |||
| Differences arising from translation of foreign currency-denominated financial statements | -519,465.77 | 2,437,098.47 | 1,298,317.50 | 1,138,780.97 | 778,851.73 | |||
| Total of other comprehensive income | 498,141,018.70 | -59,019,334.29 | -9,218,464.91 | -50,939,650.35 | 1,138,780.97 | 447,201,368.35 |
58. Specific Reserve
Naught
59. Surplus Reserves
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| Statutory surplus reserves | 49,678,756.19 | 49,678,756.19 | ||
| Discretionary surplus reserves | 41,680,270.96 | 41,680,270.96 | ||
| Total | 91,359,027.15 | 91,359,027.15 |
60. Retained Earnings
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Beginning balance of retained earnings before adjustments | 3,296,435,828.50 | 3,111,864,076.86 |
| Beginning balance of total retained earnings of adjustments (“+” for increase, “-“ for decrease) | 18,918.22 | |
| Beginning balance of retained earnings after adjustments | 3,296,435,828.50 | 3,111,882,995.08 |
| Add: Net profit attributable to owners of the Company as the parent | 168,935,232.54 | 230,320,570.67 |
| Less: Withdrawal of statutory surplus reserves | 11,785,496.74 | |
| Dividend of ordinary shares | 134,899,464.70 | 134,899,464.70 |
| payable | ||
| Add: Others (note) | 100,917,224.19 | |
| Ending retained earnings | 3,330,471,596.34 | 3,296,435,828.50 |
Note: Others refer to the retained earnings transferred from accumulative fair value changes previously included in othercomprehensive income when selling stocks in the same period of last year.List of adjustment of beginning retained earnings:
(1) RMB18,918.22 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) RMB0.00 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 | 4,405,159,052.69 | 3,604,574,132.92 | 4,282,577,147.55 | 3,545,848,583.67 |
| Other operations | 160,903,676.33 | 128,900,695.96 | 150,754,245.87 | 108,212,784.36 |
| Total | 4,566,062,729.02 | 3,733,474,828.88 | 4,433,331,393.42 | 3,654,061,368.03 |
Relevant information of revenue:
Unit: RMB
| Category of contracts | Total |
| Types of products | 4,566,062,729.02 |
| Of which: | |
| General lighting products | 1,792,551,295.05 |
| LED packaging and component products | 1,253,523,386.12 |
| Vehicle lamp products | 806,133,465.65 |
| Trade and other products | 713,854,582.20 |
| By operating places | 4,566,062,729.02 |
| Of which: | |
| Domestic | 3,478,275,919.17 |
| Overseas | 1,087,786,809.85 |
Information related to performance obligations:
NaughtInformation 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 RMB251,621,886.53.
62. Taxes and Surtaxes
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Urban maintenance and construction tax | 11,300,137.99 | 7,589,677.86 |
| Education surcharge | 5,980,104.43 | 4,217,219.09 |
| Resources tax |
| Property tax | 11,009,535.41 | 7,584,289.36 |
| Land use tax | 3,483,007.51 | 3,046,600.37 |
| Vehicle and vessel use tax | 11,986.96 | 16,021.56 |
| Stamp duty | 3,297,666.10 | 3,690,824.51 |
| Local education surcharge | 2,165,938.97 | 997,922.28 |
| Deed tax | 146,289.40 | |
| Environmental protection tax | 41,537.23 | 37,241.04 |
| Embankment fee | 128.45 | |
| VAT of land | -2,047,738.45 | |
| Water conservancy construction funds | 191,148.44 | |
| Resources tax | 35,167.94 | |
| Others | 6,966.68 | 176,041.81 |
| Total | 37,443,299.13 | 25,534,415.81 |
Other notes:
It was mainly because of the land appreciation tax accrued for the sale of real estate in 2021. The over-accruedland appreciation tax of RMB2,047,738.45 was released, when the actual payment was made in previous period.
63. Selling Expense
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Employee benefits | 57,961,009.41 | 56,515,402.06 |
| Business propagandize fees and advertizing fees | 30,216,805.26 | 20,532,657.97 |
| Sales promotion fees | 7,233,896.10 | 5,847,930.26 |
| After-sales expenses | 6,867,083.35 | 4,669,333.02 |
| Business travel charges | 4,858,839.15 | 2,105,508.78 |
| Commercial insurance premium | 3,582,158.77 | 2,387,669.16 |
| Office expenses | 2,944,396.54 | 1,630,996.07 |
| Other | 18,256,941.42 | 17,579,751.25 |
| Total | 131,921,130.00 | 111,269,248.57 |
64. Administrative Expense
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Employee benefits | 125,958,952.18 | 115,142,871.77 |
| Depreciation charge | 25,811,976.14 | 20,892,696.89 |
| Office expenses | 13,062,802.09 | 10,109,798.15 |
| Engineering decoration cost | 6,357,723.64 | 2,822,639.45 |
| Amortization of intangible assets | 4,630,270.87 | 5,813,822.32 |
| Utilities | 4,491,149.48 | 3,880,679.53 |
| Intermediary agency fee | 4,119,910.31 | 5,718,962.01 |
| Labor cost | 1,731,130.54 | 3,618,646.20 |
| Rent of land and management charge | 1,104,528.44 | 418,417.45 |
| Security fund for the disabled | 102,385.50 | 108,310.68 |
| Party building funds | 87,374.01 | 86,660.10 |
| Others | 13,487,882.22 | 17,694,234.89 |
| Total | 200,946,085.42 | 186,307,739.44 |
65. Development Costs
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Employee benefits | 108,806,040.39 | 97,942,302.07 |
| Material consumption | 59,589,273.57 | 62,322,047.45 |
| Depreciation and long-term prepaid expense | 22,944,479.85 | 21,427,223.15 |
| Certification and testing fee | 8,136,407.37 | 4,983,719.59 |
| Expense on equipment debugging | 2,876,742.82 | 3,503,274.86 |
| Charges related to patents | 951,123.75 | 1,323,834.59 |
| Others | 22,844,837.51 | 21,070,591.27 |
| Total | 226,148,905.26 | 212,572,992.98 |
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 | 14,255,244.44 | 7,068,335.84 |
| Less: Interest income | 24,520,047.73 | 13,000,154.06 |
| Foreign exchange gains or losses | -21,315,108.34 | -19,186,490.71 |
| Handling charge and others | 1,417,289.22 | 880,584.72 |
| Total | -30,162,622.41 | -24,237,724.21 |
67. Other Income
Unit: RMB
| Sources | Reporting Period | Same period of last year |
| Carry-forward of government grants related to assets in the deferred income | 14,363,657.28 | 15,831,850.89 |
| Carry-forward of government grants related to income in the deferred income | 2,713,059.71 | 5,665,652.84 |
| Policy Enjoyment of Preferential Reduction and Exemption for the Poor with Set up Files | 2,247,050.00 | |
| Incentive Subsidy for Digital and Intelligent Demonstration Workshop of Foshan City in 2022 | 2,000,000.00 | |
| The Company received the N.C.G.J. [2022] No. 532 "the Subsidy for Industrial Logistics in the Second Quarter of 2022 " in Nanning City of the Management Committee of the Nanning New & High-tech Industrial Development Zone | 808,200.00 | |
| Return of handling charges for withholding and remittance | 737,693.99 | 1,123,272.73 |
| The 2021 "100 Enterprises Strive for the First Place" bonus (partial) | 500,000.00 | |
| Incentive for standard products of Foshan City | 400,000.00 | |
| 2022 Special Funds of Nanhai District, Foshan City for Promoting High-quality Development of Foreign Trade | 347,360.00 | |
| The Company received the "2021 Inclusive Subsidy as an Encouragement for Enterprises to Redouble R&D Input" | 333,200.00 |
| from Nanning Science and Technology Bureau. | ||
| Subsidies for stabilizing employment | 230,154.25 | 1,181,087.47 |
| The Special Fund for Promoting High-quality Economic Development | 10,000.00 | 1,842,190.69 |
| The Fund of Foshan City for Promoting the Robot Application and Industry | 2,000,000.00 | |
| 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 | |
| Grants awarded by the Guangzhou Municipal Science and Technology Bureau for the Research and Development and Industrialisation Project of Potassium Nitride-based Rf Devices in the Field of Next Generation Mobile Communication | 1,800,000.00 | |
| 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 | |
| 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 | |
| The Special Support Fund for the Industrial Internet of Things (IIOT) Development in Foshan City | 892,500.00 | |
| The Special Fund for the Vocational Skill Improvement Campaign | 848,000.00 | |
| The L.J.C.Y. [2021] No. 557 Industrial Support Fund of the Finance Bureau of Liang Jiang New Area, Chongqing | 610,000.00 | |
| 2021 Guangxi Digital Workshop Reward Funds | 500,000.00 | |
| The Support Fund of the Administration of the Chancheng Park of the Foshan High-tech Industrial Development Zone for Champion Manufacturing Enterprises in a Single Item for 2020 | 450,000.00 | |
| The First Batch of Subsidies for the Special Project of SME Development and the Auxiliary Project of Industrial Chain Collaboration for 2022 | 427,200.00 | |
| The Fund of the Organisation Department of the Chancheng District Party Committee, Foshan City, China, for Competitive Talent Support Projects | 400,000.00 | |
| The N.C.G.J. [2021] No. 452 "Fund for Specialised and Refined Projects" of the Management Committee of the Nanning New & High-tech Industrial Development Zone | 300,000.00 | |
| Others | 2,699,616.82 | 2,457,536.33 |
| Total | 27,389,992.05 | 40,797,290.95 |
68. Investment Income
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Long-term equity investment income accounted by equity method | 1,186,031.53 | 650,457.40 |
| Investment income from disposal of trading financial assets | 2,154,000.00 | 2,019,911.56 |
| Dividend income from holding of other equity instrument investment | 16,686,333.81 | 16,055,272.93 |
| Income received from financial products and structural deposits | 2,423,205.29 | 888,102.97 |
| Total | 22,449,570.63 | 19,613,744.86 |
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 | 905,952.44 | 35,436.66 |
| Of which: gains on changes in fair value of derivative financial instrument | 905,952.44 | 35,436.66 |
| Trading financial liabilities | -23,059,475.00 | -10,802,032.63 |
| Total | -22,153,522.56 | -10,766,595.97 |
71. Credit Impairment Loss
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Bad debt loss on other receivables | 1,237,574.86 | 200,770.69 |
| Bad debt loss on accounts receivable | -19,672,657.13 | -10,217,235.78 |
| Bad debt loss on notes receivable | -512,338.76 | -229,783.47 |
| Total | -18,947,421.03 | -10,246,248.56 |
72. Asset Impairment Loss
Unit: RMB
| Item | Reporting Period | Same period of last year |
| II. Loss on inventory valuation and contract performance cost | -14,576,382.64 | -19,371,287.36 |
| V. Loss on impairment of fixed assets | -1,500,990.00 | -3,529,839.61 |
| XII. Loss on impairment of contract assets | -313,516.09 | -439,922.48 |
| Total | -16,390,888.73 | -23,341,049.45 |
73. Assets Disposal Income
Unit: RMB
| Sources | Reporting Period | Same period of last year |
| Disposal income of fixed assets | 110,475.52 | 82,362.19 |
| Total | 110,475.52 | 82,362.19 |
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 | 11,000.00 | 976,090.45 | 11,000.00 |
| Total income from scrap of non-current assets | 37,753.32 | 43,160.43 | 37,753.32 |
| Of which: income from scrap of fixed assets | 37,753.32 | 43,160.43 | 37,753.32 |
| Income from default money | 11,400.00 | 165,006.53 | 11,400.00 |
| Confiscated income | 106,635.54 | 106,635.54 | |
| Other | 2,274,125.62 | 7,805,761.20 | 2,274,125.62 |
| Total | 2,440,914.48 | 8,990,018.61 | 2,440,914.48 |
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 |
| Job-subsidy | Subsidy | No | No | 11,000.00 | Related to income | |||
| Supporting fund for industrial development | Subsidy | No | No | 976,090.45 | 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 |
| Total losses on disposal of non-current assets | 1,547,347.79 | 5,943,227.86 | 1,547,347.79 |
| Of which: Loss on disposal of fixed assets | 1,547,347.79 | 5,731,670.97 | 1,547,347.79 |
| Loss on disposal of intangible assets | 0.00 | 211,556.89 | 0.00 |
| Penalty | 1,748,669.05 | 249,481.71 | 1,748,669.05 |
| Losses on inventories | 310,656.66 | 41,677.65 | 310,656.66 |
| Delaying payment | 94,086.36 | 336,802.22 | 94,086.36 |
| Others | 1,079,810.46 | 1,422,977.18 | 1,079,810.46 |
| Total | 4,780,570.32 | 7,994,166.62 | 4,780,570.32 |
76. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Current income tax expense | 34,309,667.76 | 25,762,699.61 |
| Deferred income tax expense | -3,005,303.27 | 15,649,378.30 |
| Total | 31,304,364.49 | 41,412,077.91 |
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
| Item | Reporting Period |
| Profit before taxation | 256,409,652.78 |
| Current income tax expense accounted at statutory/applicable tax rate | 38,461,447.92 |
| Influence of applying different tax rates by subsidiaries | 2,365,215.10 |
| Influence of income tax before adjustment | 670,501.88 |
| Influence of non-taxable income | -3,371,201.39 |
| Influence of non-deductable costs, expenses and losses | |
| The effect of using deductible losses of deferred income tax assets that have not been recognized in the previous period | -2,559,863.24 |
| Influence of unrecognized deductible temporary differences and deductible losses | 9,404,147.48 |
| Influence of deduction | -13,665,883.26 |
| Income tax expense | 31,304,364.49 |
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 |
| Margin income | 35,010,552.18 | 29,429,389.29 |
| Deposit interest | 19,310,323.07 | 12,436,698.44 |
| Income from waste | 12,864,885.36 | 16,645,457.85 |
| Income from subsidy | 10,420,346.33 | 35,860,211.37 |
| Rental income from property and equipment, utility | 3,406,219.56 | 4,954,716.14 |
| Income from insurance compensation | 1,544.06 | 5,333.08 |
| Others | 60,093,722.57 | 28,190,106.79 |
| Total | 141,107,593.13 | 127,521,912.96 |
(2) Cash Used in Other Operating Activities
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Administrative expense paid in cash | 56,194,828.30 | 51,145,137.99 |
| Selling expense paid in cash | 31,789,893.32 | 34,441,261.70 |
| Finance costs paid in cash | 1,521,292.79 | 843,095.07 |
| Returned cash deposit | 28,216,695.73 | 36,477,347.32 |
| Others | 31,773,841.24 | 47,741,622.81 |
| Total | 149,496,551.38 | 170,648,464.89 |
(3) Cash Generated from Other Investing Activities
Naught
(4) Cash Used in Other Investing Activities
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Others | 360,759.99 | |
| Total | 360,759.99 |
(5) Cash Generated from Other Financing Activities
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Cash deposit collected | 381,437.71 | 53,126,214.00 |
| Total | 381,437.71 | 53,126,214.00 |
(6) Cash Used in Other Financing Activities
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Payment for cash deposit of bank acceptance bills | 2,124,043.19 | 121.82 |
| Cash paid for acquisition of NationStar Optoelectronics under the same control | 1,061,968,681.64 | |
| Others | 179,384.83 | 125,624.96 |
| Total | 2,303,428.02 | 1,062,094,428.42 |
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 | 225,105,288.29 | 243,546,630.90 |
| Add: Provision for impairment of assets | 35,338,309.76 | 33,587,298.01 |
| Depreciation of fixed assets, oil-gas assets, and productive living assets | 261,275,385.66 | 245,702,523.31 |
| Depreciation of right-of-use assets | 4,213,175.21 | 4,314,025.31 |
| Amortization of intangible assets | 6,138,499.52 | 6,259,660.38 |
| Amortization of long-term prepaid expenses | 33,792,488.83 | 69,990,299.46 |
| Loss from disposal of fixed assets, intangible assets and other long-term assets (gains: negative) | -110,475.52 | -82,362.19 |
| Losses from scrapping of fixed assets (gains: negative) | 1,509,594.47 | 5,688,510.54 |
| Losses from changes in fair value (gains: negative) | 22,153,522.56 | 10,766,595.97 |
| Finance costs (gains: negative) | 14,255,244.44 | 7,068,335.84 |
| Investment loss (gains: negative) | -22,449,570.63 | -19,613,744.86 |
| Decrease in deferred income tax assets (increase: negative) | -3,951,966.78 | 2,289,157.80 |
| Increase in deferred income tax liabilities (“-” for decrease) | 946,663.51 | 13,172,863.80 |
| Decrease in inventory (“-” for increase) | 367,566,004.75 | 119,836,200.96 |
| Decrease in operating receivables (“-” for increase) | -492,079,133.11 | -211,060,931.19 |
| Increase in operating payables (“-” for decrease) | -65,833,973.76 | -354,362,573.03 |
| Others | ||
| Net cash generated from/used in operating activities | 387,869,057.20 | 177,102,491.01 |
| 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 | 1,974,721,331.65 | 1,435,426,956.09 |
| Less: Beginning balance of cash | 1,945,971,307.26 | 1,940,209,052.92 |
| Add: Ending balance of cash equivalents | ||
| Less: Beginning balance of cash equivalents | ||
| Net increase in cash and cash equivalents | 28,750,024.39 | -504,782,096.83 |
(2) Net Cash Paid For Acquisition of Subsidiaries
Naught
(3) Net Cash Received from Disposal of the Subsidiaries
Naught
(4) Cash and Cash Equivalents
Unit: RMB
| Item | Ending balance | Beginning balance |
| I. Cash | 1,974,721,331.65 | 1,945,971,307.26 |
| Including: Cash on hand | 45,923.56 | 52,093.54 |
| Bank deposit on demand | 1,965,961,432.22 | 1,944,303,946.03 |
| Other monetary assets on demand | 8,713,975.87 | 1,615,267.69 |
| III. Ending balance of cash and cash equivalents | 1,974,721,331.65 | 1,945,971,307.26 |
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 | 535,698,818.93 | The Company and its subsidiaries’ cash deposit for bank acceptance bills, performance bonds, forward exchange settlement margin and L/C guarantee deposits |
| Notes receivable | 729,042,157.57 | Pledged notes and notes receivable not derecognized at period-end |
| Fixed assets | 143,870,553.97 | Related party mortgage guarantees, see Part X-XIV-(III) Guarantees for details |
| Intangible assets | 10,808,229.15 | |
| Total | 1,419,419,759.62 |
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 | 282,980,171.77 | ||
| Of which: USD | 35,632,247.28 | 7.2258 | 257,471,492.40 |
| EUR | 517,843.84 | 7.8771 | 4,079,107.71 |
| HKD | 51,805.21 | 0.92198 | 47,763.37 |
| IDR | 44,177,289,846.92 | 0.000484 | 21,381,808.29 |
| Accounts receivable | 457,282,454.03 | ||
| Of which: USD | 62,710,136.64 | 7.2258 | 453,130,905.33 |
| EUR | 241,345.50 | 7.8771 | 1,901,102.64 |
| HKD | 65,771.39 | 0.92198 | 60,639.91 |
| IDR | 4,524,392,871.90 | 0.000484 | 2,189,806.15 |
| Other receivables | 3,412.31 | ||
| Of which: IDR | 7,050,231.60 | 0.000484 | 3,412.31 |
| Accounts payable | 5,966,627.72 | ||
| Of which: USD | 647,046.38 | 7.2258 | 4,675,427.73 |
| EUR | 600.00 | 7.8771 | 4,726.26 |
| IDR | 2,658,003,574.38 | 0.000484 | 1,286,473.73 |
| Other current assets | 683,715.33 | ||
| Of which: IDR | 1,412,634,975.71 | 0.000484 | 683,715.33 |
| Other non-current assets | 510,864.75 | ||
| Of which: EUR | 64,854.42 | 7.8771 | 510,864.75 |
| Other non-current liabilities | 966,537.50 | ||
| Of which: EUR | 122,702.20 | 7.8771 | 966,537.50 |
(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 ofarbitrage to disclose:
Naught
84. Government Grants
(1) Basic Information on Government Grants
Unit: RMB
| Category | Amount | Listed items | Amount recorded in the current profit or loss |
| Policy Enjoyment of Preferential Reduction and Exemption for the Poor with Set up Files | 2,247,050.00 | Other income | 2,247,050.00 |
| Incentive Subsidy for Digital and Intelligent Demonstration Workshop of Foshan City in 2022 | 2,000,000.00 | Other income | 2,000,000.00 |
| The 2022 Support Fund for Promoting the Digital Intelligent Transformation of the Manufacturing Industry in Foshan City (Projects 5008 and 5009) | 1,208,400.00 | Deferred income | |
| The Company received the N.C.G.J. [2022] No. 532 "the Subsidy for Industrial Logistics in the Second Quarter of 2022 " in Nanning City of the Management Committee of the Nanning New & High-tech Industrial Development Zone | 808,200.00 | Other income | 808,200.00 |
| Return of handling charges for withholding and remittance | 737,693.99 | Other income | 737,693.99 |
| The 2021 "100 Enterprises Strive for the First Place" bonus (partial) | 500,000.00 | Other income | 500,000.00 |
| LED Technology for Efficient Cultivation in Modern Agriculture and Its Demonstrative Application | 440,000.00 | Deferred income | |
| Incentive for standard products of Foshan City | 400,000.00 | Other income | 400,000.00 |
| 2022 Special Funds of Nanhai District, Foshan City for Promoting High-quality Development of Foreign Trade | 347,360.00 | Other income | 347,360.00 |
| The Company received the "2021 Inclusive Subsidy as an Encouragement for Enterprises to Redouble R&D Input " from Nanning Science and Technology Bureau | 333,200.00 | Other income | 333,200.00 |
| Funds for the Construction Project for the Centre for Cultivating and Arranging High-Value Patents of NationStar Optoelectronics | 300,000.00 | Deferred income |
| Employment Subsidy | 271,100.00 | Other income | 271,100.00 |
| Subsidies for stabilizing employment | 230,154.25 | Other income | 230,154.25 |
| Municipal incentive funds for provincial specialised and sophisticated small and medium enterprises that produce novel and unique products | 200,000.00 | Other income | 200,000.00 |
| The Development and Demonstrative Application of Deep Ultraviolet LED Modules and Equipment for Public Health and Other Fields | 200,000.00 | Deferred income | |
| Support Fund for the Digital Intelligent Transformation of the Manufacturing Industry | 172,700.00 | Other income | 172,700.00 |
| Financial Support for the Second Phase of the Research on the Key Technology of Full-colour Micro-LED Displays with High Brightness and Contrast | 142,821.32 | Deferred income | 97,373.13 |
| Refund of unemployment insurance premiums | 140,516.80 | Other income | 140,516.80 |
| Municipal Subsidy for the 2022 Vocational Skill Improvement Campaign | 100,000.00 | Other income | 100,000.00 |
| Special Fund for Technological Development | 100,000.00 | Other income | 100,000.00 |
| 2021 High-tech Enterprise Training Topic | 100,000.00 | Other income | 100,000.00 |
| Chancheng District Postdoctoral Research Funds from Chancheng District Human Resources and Social Security Bureau of Foshan City (Lan Mingwen) | 100,000.00 | Other income | 100,000.00 |
| Others | 316,000.00 | Other income | 316,000.00 |
| Total | 11,395,196.36 | 9,201,348.17 |
(2) Return of Government Grants
□Applicable ? Not applicable
85. Other
Naught
VIII. 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. Business Combination under the Same Control
(1) Business Combination under the Same Control during the Reporting PeriodNaught
3. Counter Purchase
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
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 | |
| FSL Chanchang Optoelectronics Co., Ltd. | Foshan | Foshan | Production and sales | 100.00% | Newly established | |
| Foshan Taimei Times Lamps and Lanterns | Foshan | Foshan | Production and sales | 70.00% | Newly established | |
| Co., Ltd. | ||||||
| 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 | 66.84% | 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 Lighting Technology Co., Ltd. | Liuzhou | Liuzhou | Manufacturing of vehicle lamps | 53.79% | Acquired | |
| 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. | 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:
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:
Naught
(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% | 404,788.01 | 12,760,002.99 | |
| FSL Zhida Electric Technology Co., Ltd. | 33.16% | 2,883,324.64 | 994,800.00 | 31,422,367.33 |
| Foshan Haolaite Lighting Co., Ltd. | 38.47% | 1,154,765.68 | 160,500.24 | 15,201,737.61 |
| Nanning Liaowang Auto Lamp Co., Ltd. | 46.21% | 9,360,005.34 | 449,813,619.14 | |
| Foshan NationStar Optoelectronics Co., Ltd. | 78.52% | 42,367,172.08 | 29,139,436.44 | 2,945,050,076.65 |
Holding proportion of non-controlling interests in subsidiary different from voting proportion:
NaughtOther notes:
Naught
(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. | 70,255,850.25 | 14,797,372.64 | 85,053,222.89 | 42,519,879.59 | 42,519,879.59 | 72,330,352.64 | 14,293,589.70 | 86,623,942.34 | 45,439,892.42 | 45,439,892.42 | ||
| FSL Zhida Electric Technology Co., Ltd. | 194,959,991.96 | 10,131,200.12 | 205,091,192.08 | 126,788,810.19 | 126,788,810.19 | 148,999,066.65 | 8,928,180.94 | 157,927,247.59 | 85,320,425.79 | 85,320,425.79 | ||
| Foshan Haolaite Lighting Co., Ltd. | 73,461,177.58 | 9,252,424.39 | 82,713,601.97 | 43,201,836.74 | 43,201,836.74 | 65,960,025.19 | 10,224,679.49 | 76,184,704.68 | 39,268,890.83 | 39,268,890.83 | ||
| Nanning Liaowang Auto Lamp Co., Ltd. | 1,385,421,572.79 | 851,588,816.30 | 2,237,010,389.09 | 1,301,059,124.09 | 35,742,960.09 | 1,336,802,084.18 | 1,587,631,841.28 | 865,601,810.33 | 2,453,233,651.61 | 1,547,730,991.04 | 30,088,072.52 | 1,577,819,063.56 |
| Foshan NationStar Optoelectronics Co., Ltd. | 3,687,934,784.56 | 2,623,035,237.19 | 6,310,970,021.75 | 1,886,531,129.86 | 654,199,008.44 | 2,540,730,138.30 | 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 |
| Total | 5,412,033,377.14 | 3,508,805,050.64 | 8,920,838,427.78 | 3,400,100,780.47 | 689,941,968.53 | 4,090,042,749.00 | 5,667,926,617.43 | 3,685,857,735.42 | 9,353,784,352.85 | 3,797,473,081.35 | 776,645,937.25 | 4,574,119,018.60 |
Unit: RMB
| Name | Reporting Period | Same period of last year | ||||||
| Operating | Net profit | Total | Cash flows | Operating | Net profit | Total | Cash flows | |
| revenue | comprehensive income | from operating activities | revenue | comprehensive income | from operating activities | |||
| Foshan Taimei Times Lamps and Lanterns Co., Ltd. | 59,784,288.09 | 1,349,293.38 | 1,349,293.38 | -1,102,033.59 | 70,083,077.58 | 1,590,364.47 | 1,590,364.47 | -1,288,012.25 |
| FSL Zhida Electric Technology Co., Ltd. | 138,646,788.74 | 8,695,560.09 | 8,695,560.09 | 10,105,092.96 | 105,086,095.87 | 5,704,490.75 | 5,704,490.75 | 3,913,866.98 |
| Foshan Haolaite Lighting Co., Ltd. | 34,579,511.95 | 3,001,421.42 | 3,013,109.14 | -1,426,965.96 | 33,735,759.76 | 2,025,782.55 | 2,025,782.55 | 7,961,319.24 |
| Nanning Liaowang Auto Lamp Co., Ltd. | 720,209,306.91 | 22,341,749.52 | 24,793,716.86 | 8,225,803.73 | 700,818,199.55 | 20,362,591.07 | 20,527,064.34 | 48,642,332.49 |
| Foshan NationStar Optoelectronics Co., Ltd. | 1,758,744,095.83 | 53,804,452.96 | 53,804,452.96 | 102,905,050.77 | 1,749,843,891.56 | 86,033,355.38 | 85,951,275.40 | 20,660,583.45 |
| Total | 2,711,963,991.52 | 89,192,477.37 | 91,656,132.43 | 118,706,947.91 | 2,659,567,024.32 | 115,716,584.22 | 115,798,977.51 | 79,890,089.91 |
(4) Significant Restrictions on Using the Assets and Liquidating the Liabilities of the CompanyNaught
(5) Financial Support or Other Supports Provided to Structural Entities Incorporated into the Scope ofConsolidated Financial StatementsNaught
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 EquityAttributable to the Company 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 | 183,117,824.19 | 181,931,792.66 |
| The total of following items according to the shareholding proportions | ||
| --Net profit | 1,186,031.53 | 650,457.40 |
| --Total comprehensive income | 1,186,031.53 | 650,457.40 |
(5) Note to the Significant Restrictions on the Ability of Joint Ventures or Associated Enterprises toTransfer Funds to the CompanyNaught
(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 EnterprisesNaught
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 theCompany. 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 30 June 2023, 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 made
efforts 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 30 June 2023, the Company's fixed interest rate loanbalance was RMB744,374,874.84, accounting for 100% of the total loan balance, and the risks in this part werecontrollable.
3. Other price risk
NaughtXI. 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 | 899,004.54 | 80,983,830.13 | 81,882,834.67 | |
| 1. Financial assets at fair value through profit or loss | 899,004.54 | 80,983,830.13 | 81,882,834.67 | |
| 1.1 Wealth management products | 80,983,830.13 | 80,983,830.13 | ||
| 1.2 Investments in equity instruments | 899,004.54 | 899,004.54 | ||
| (II) Other equity instrument investment | 761,175,052.72 | 40,578,568.80 | 801,753,621.52 | |
| (III) Accounts receivable financing | 444,845,917.62 | 444,845,917.62 | ||
| Total assets measured at fair value on a recurring basis | 762,074,057.26 | 80,983,830.13 | 485,424,486.42 | 1,328,482,373.81 |
| (VII) Refer as financial liabilities measured by fair value and the changes included in the current gains and losses | 23,741,475.00 | 23,741,475.00 | ||
| Total liabilities of consistent fair value measurement | 23,741,475.00 | 23,741,475.00 | ||
| 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,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 Value
Financial 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 liabilities
and 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% |
| Guangdong Electronics Information Industry Group Ltd. | Guangzhou | Production and sales | RMB1,162 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 | RMB360 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 30 June 2023, the above-mentioned
persons 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 ofsignificant joint ventures or associated enterprises of the Company.
4. Information on Other Related Parties
| Name | Relationship with the Company |
| PROSPERITY LAMPS & COMPONENTS LTD | 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 |
| 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. 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 |
| Dongguan Hengjian Environmental Protection Technology Co., Ltd. | Under same actual controller |
| Shenzhen Longgang Dongjiang Industrial Waste Treatment Co., Ltd. | 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 |
| Fenghua Research Institute (Guangzhou) Limited | Under same actual controller |
| Guangdong Rising Research and Development Institute Co. Ltd. | Under same actual controller |
| Guangdong Tianxin Commercial Service Co., Ltd. | Under same actual controller |
| Guangdong Xintaochip Microelectronics Co., Ltd. (formerly known as Fenghua Research Institute (Guangzhou) Limited) | Under same actual controller |
| Guangdong Zhuyuan Construction Engineering Co., Ltd. | Under same actual controller |
| Guangzhou Haixinsha Industrial Co., Ltd. | Under same actual controller |
| Guangdong Huajian Engineering Construction Co., Ltd. (formerly known as Guangzhou Huajian Engineering Construction Co., Ltd.) | Under same actual controller |
| Zhuhai Dongjiang Environmental Protection Technology Co., Ltd. | Under same actual controller |
| Shandong Zhongjin Lingnan Copper Co., Ltd. | Under same actual controller |
| Hangzhou Times Lighting Electric Appliances Co., Ltd. | Enterprise controlled by related natural person |
| 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 | 1,427,073.05 | 45,000,000.00 | Not | 2,757,010.92 |
| Prosperity Lamps & Components Limited | Purchase of materials | 57,268.76 | 7,000,000.00 | Not | 773,460.05 |
| Hangzhou Times Lighting Electric Appliances Co., Ltd. | Purchase of materials | 222,265.48 | |||
| Guangdong Zhongnan Construction Co., Ltd. | Receiving labor service | 58,500,517.50 | 42,247,083.75 | ||
| Guangdong Yixin Changcheng Construction Group | Receiving labor service | 42,453,620.42 | 14,543,474.14 | ||
| Guangdong Zhongren Group Construction Co., Ltd | Receiving labor service | 26,677,655.81 | 7,242,570.34 | ||
| Shenzhen Yuepeng Construction Co., Ltd. | Receiving labor service | 754,528.33 | 38,000,000.00 | Not | 470,768.94 |
| Guangzhou Haixinsha Industrial Co., Ltd. | Receiving labor service | 467,135.78 | |||
| Foshan Fulong Environmental Technology Co., Ltd. | Receiving labor service | 162,917.93 | 206,850.94 | ||
| Shenzhen Longgang Dongjiang Industrial Waste Treatment Co., Ltd. | Receiving labor service | 116,673.57 | 82,605.66 | ||
| Dongguan Hengjian Environmental Protection Technology Co., Ltd. | Receiving labor service | 76,930.19 | 200,598.11 | ||
| Jiangmen Dongjiang Environmental Company Limited | Receiving labor service | 69,970.76 | 221,418.86 | ||
| Zhuhai Dongjiang Environmental Company Limited | Receiving labor service | 13,133.52 |
| Guangdong The Great Wall Building Co., Ltd. | Receiving labor service | 22,053.55 | 36,110.42 | ||
| Guangdong Tianxin Commercial Service Co., Ltd. | Receiving labor service | 18,779.44 | |||
| Guangdong Electronic Technology Research Institute | Receiving labor service | 854,625.55 | |||
| Zhuhai Doumen District Yongxingsheng Environmental Industry Waste Recovery and Comprehensive Treatment Co., Ltd. | Receiving labor service | 46,041.51 | |||
| Total | 130,818,258.61 | 90,000,000.00 | 69,904,884.67 |
Information of sales of goods and provision of labor service
Unit: RMB
| Related party | Content | Reporting Period | Same period of last year |
| Prosperity Lamps & Components Limited | Sale of products | 12,641,522.79 | 11,487,387.08 |
| Guangdong Fenghua Advanced Technology (Holding) Co., Ltd. | Sale of products | 7,466,567.41 | 8,534,248.00 |
| Guangdong Zhongnan Construction Co., Ltd. | Sale of products | 3,012,466.81 | 44,383.37 |
| Shenzhen Zhongjin Lingnan Nonfemet Co., Ltd. | Sale of products | 710,376.99 | 607,072.04 |
| Shandong Zhongjin Lingnan Copper Co., Ltd. | Sale of products | 223,796.46 | |
| Guangdong Zhongjin Lingnan Engineering Technology Co., Ltd. | Sale of products | 23,113.27 | |
| Guangdong Zhuyuan Construction Engineering Co., Ltd. | Sale of products | 12,318.58 | |
| Guangdong Rising Holdings Group Co., Ltd. | Sale of products | 2,787.61 | |
| Guangzhou Wanshun Investment Management Co., Ltd. | Sale of products | 538,207.40 | |
| Guangdong Yixin Changcheng Construction Group | Sale of products | 441,210.96 | |
| Guangzhou Shengdu Investment Development Co., Ltd. | Sale of products | 281,946.91 | |
| Guangdong Rising South Construction Co., Ltd. | Sale of products | 69,965.06 | |
| Guangdong Zhongjin Lingnan Equipment Technology Co., Ltd. | Sale of products | 122,855.75 | |
| Prosperity (China) Electrical Company Limited | Sale of products | 41,285.35 | |
| Guangdong Electronics Information Industry Group Ltd. | Sale of products | 27,796.46 | |
| Guangdong Zhongjin Lingnan Junpeng Intelligent Equipment Co., Ltd. | Sale of products | 5,884.96 | |
| Total | 24,092,949.92 | 22,202,243.34 |
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 | 14 May 2023 | |||
| Foshan Electrical and Lighting Co., Ltd. | Guangdong Yixin Changcheng Construction Group Co., Ltd. | 28 May 2021 | 29 December 2022 | |||
| Foshan Electrical and Lighting Co., Ltd. | Guangdong Yixin Changcheng Construction Group Co., Ltd. | 1 March 2022 | 11 December 2022 | |||
| 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.
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 is560 calendar days (560 days for construction including 90 days for design). The project is in progress now.
4. The Company entered into the General Contracting Contract of Foshan Electrical and Lighting Co., Ltd. forthe Design and Construction of the Smart LED Lighting Production Plant in the Gaoming Production Base (1-3Buildings) with Guangdong Yixin Changcheng Construction Group Co., Ltd. and Guangdong ArchitecturalDesign & Research Institute Co., Ltd. on 1 March 2022. The above parties take charge of the design andconstruction of the Gaoming three factory buildings. The total price of the contract is RMB129,991,400, and theplanned total construction period is 285 calendar days (30 days for design and 255 days for construction). Theproject is in progress now.
5. 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. Among them, except for the self-used layers, the construction period shall be counted from the date whenthe construction actually 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 | 582,347.85 | 563,992.42 |
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 year | Reporting Period | The same period of last year | Reporting Period | The same period of last year | Reporting Period | The same period of last year | Reporting Period | The same period of last year | ||
| Guangdong | Operating lease | 64,954.29 | 109,714.21 | 1,801.29 | 1,557.46 | 54,673.41 | |||||
| Great Wall Building Co., Ltd. | |||||||||||
| Guangdong Tianxin Commercial service Co., Ltd. | Operating lease | 65,059.65 | 1,211.87 |
(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 Party
Naught
(7) Information on Remuneration for Key Management Personnel
Unit: RMB
| Item | Reporting period | Same period of last year |
| Chairman of the Board | 486,397.79 | 380,814.62 |
| General Manager | 475,655.67 | 355,594.62 |
| Chairman of the Supervisory Committee | 467,681.15 | 335,628.62 |
| Secretary of the Board | 275,841.67 | 227,878.62 |
| Chief Financial Officer | 466,313.55 | 336,094.62 |
| Other | 3,782,176.00 | 2,924,372.07 |
| Total | 5,954,065.83 | 4,560,383.17 |
(8) Other Related-party Transactions
In accordance with the Financial Service Agreement signed by the Company in 2023, the total maximum dailydeposit 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 30 June2023, the deposit balance of the Company and its subsidiaries deposited in Guangdong Rising Finance Co., Ltd.is RMB1,019,445,400. The Company and its majority-owned subsidiaries have signed a credit agreement ofRMB1.5 billion with Guangdong Rising Finance Co., Ltd., of which RMB0 has been used.
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. | 4,937,389.67 | 3,774,186.39 | ||
| Accounts receivable | Guangdong Fenghua Advanced Technology Holding Co., Ltd. | 8,838,027.13 | 176,760.54 | 2,805,991.79 | 56,119.84 |
| Accounts receivable | Prosperity Lamps & Components Limited | 6,107,629.95 | 183,228.90 | 2,754,557.10 | 82,636.71 |
| Accounts receivable | Guangdong Zhongnan Construction Co., Ltd. | 3,622,125.97 | 123,926.48 | 218,038.46 | 18,816.26 |
| Accounts receivable | Guangdong Yixin Changcheng Construction Group | 2,049,187.54 | 72,332.48 | 2,049,187.54 | 266,394.38 |
| Accounts receivable | Shenzhen Zhongjin Lingnan Nonfemet Co., Ltd. | 870,317.00 | 26,109.51 | 546,626.00 | 16,398.78 |
| Accounts receivable | Guangdong Xintaochip Microelectronics Co., Ltd. (formerly known as Fenghua Research Institute (Guangzhou) Limited) | 385,865.86 | 7,717.32 | 582,275.60 | 11,645.51 |
| Accounts receivable | Shandong Zhongjin Lingnan Copper Co., Ltd. | 252,890.00 | 7,586.70 | ||
| Accounts receivable | Guangdong Heshun Property Management Co., Ltd. Rising International Building Branch | 242,112.68 | 7,263.38 | 669,790.40 | 66,979.04 |
| Accounts receivable | Guangdong Zhongjin Lingnan Engineering Technology Co., Ltd. | 195,269.90 | 5,858.10 | 116,775.00 | 3,503.25 |
| Accounts receivable | Guangdong Huajian Engineering Construction Co., Ltd. (formerly known as Guangzhou Huajian Engineering Construction Co., Ltd.) | 44,297.00 | 18,398.78 | 44,297.00 | 13,289.10 |
| Accounts | Guangdong Rising | 1,540.00 | 30.80 | 3,080.00 | 61.60 |
| receivable | Research and Development Institute Co. Ltd. | ||||
| Accounts receivable | Guangdong Zhongjin Lingnan Equipment Technology Co., Ltd. | 703,256.00 | 103,815.51 | ||
| Accounts receivable | Guangdong Rising Rare Metals and New Photoelectric Materials Co., Ltd. | 457,703.96 | 45,770.40 | ||
| Accounts receivable | Guangdong Zhongjin Lingnan Junpeng Intelligent Equipment Co., Ltd. | 20,179.00 | 605.37 | ||
| Prepayments | Prosperity (China) Electrical Company Limited | 39,428.00 | 39,428.00 | ||
| Prepayments | Guangdong Tianxin Commercial Service Co., Ltd. | 6,912.00 | |||
| Prepayments | Guangdong Fenghua Advanced Technology Holding Co., Ltd. | 148.68 | 148.68 | ||
| Other receivables | Guangdong Fenghua Advanced Technology Holding Co., Ltd. | 223,372.07 | 4,467.44 | 178,585.99 | 3,571.72 |
| Other receivables | Guangdong Tianxin Commercial Service Co., Ltd. | 67,165.92 | 1,343.32 | ||
| Other receivables | Nanning Ruixiang Industrial Investment Co., L | 5,000.00 | |||
| Other receivables | Guangdong The Great Wall Building Co., Ltd. | 53,041.92 | 4,708.84 | ||
| Total | 27,888,679.37 | 635,023.75 | 15,017,148.83 | 694,316.31 |
(2) Accounts Payable
Unit: RMB
| Item | Related party | Ending carrying amount | Beginning carrying amount |
| Notes payable | Guangdong Zhongren Group Construction Co., Ltd | 67,154,037.47 | 52,101,816.43 |
| Notes payable | Guangdong Fenghua Advanced Technology Holding Co., Ltd. | 320,747.68 | 449,283.50 |
| Notes payable | Guangdong Electronic Technology Research Institute | 689,500.00 | |
| Accounts payable | Guangdong Zhongren Group Construction Co., Ltd | 104,280,896.68 | 129,250,643.46 |
| Accounts payable | Guangdong Fenghua Advanced Technology Holding Co., Ltd. | 2,766,260.53 | 3,038,287.38 |
| Accounts payable | Guangzhou Haixinsha Industrial Co., Ltd. | 461,805.00 | |
| Accounts payable | Hangzhou Times Lighting Electric Appliances Co., Ltd. | 112,000.00 | 99,115.04 |
| Accounts payable | Prosperity Lamps & Components Limited | 57,268.76 | 773,460.05 |
| Accounts payable | Foshan Fulong Environmental Technology Co., Ltd. | 56,630.00 | 64,375.00 |
| Accounts payable | Dongguan Hengjian Environmental Protection Technology Co., Ltd. | 51,546.00 | 46,520.40 |
| Accounts payable | Shenzhen Longgang Dongjiang Industrial Waste Treatment Co., Ltd. | 23,184.00 | 14,010.00 |
| Accounts payable | Zhuhai Dongjiang Environmental Protection Technology Co., Ltd. | 10,645.53 | |
| Accounts payable | Guangdong Electronic Technology Research Institute | 46,500.00 | 736,000.00 |
| Accounts payable | Shenzhen Yuepeng Construction Co., Ltd. | 1,885,437.50 | |
| Other payables | Guangdong Fenghua Advanced Technology Holding Co., Ltd. | 135,475,547.74 | 135,446,928.57 |
| Other payables | Nanning Ruixiang Industrial Investment Co., Ltd. | 115,352,181.20 | 120,352,181.20 |
| Other payables | Guangdong Zhongnan Construction Co., Ltd. | 14,633,468.54 | 846,938.10 |
| Other payables | Guangdong Huajian Enterprise Group Co., Ltd. | 3,607,588.15 | 3,216,344.40 |
| Other payables | Shenzhen Yuepeng Construction Co., Ltd. | 474,900.64 | 474,300.64 |
| Other payables | Guangzhou Haixinsha Industrial Co., Ltd. | 162,266.76 | |
| Other payables | Zhuhai Dongjiang Environmental Protection Technology Co., Ltd. | 50,000.00 | |
| Other payables | Shenzhen Longgang Dongjiang Industrial Waste Treatment Co., Ltd. | 50,000.00 | |
| Other payables | Dongguan Hengjian Environmental Protection Technology Co., Ltd. | 50,000.00 | |
| Contract liabilities, other current liabilities | Prosperity Lamps & Components Limited | 59,428.00 | 59,428.00 |
| Total | 445,946,402.68 | 448,855,069.67 |
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 or
business 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 Holdings
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 thePromisor 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 Holdings , Rising Capital, and Hongkong Wah Shing
Contents 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.
(4) Commitment maker: Rising Holdings , Electronics Group, Hong Kong Rising Investment, and Hongkong WahShing
Contents of Commitment: The Promisors have made commitments as follows to avoid horizontal competition,protect interests of the Company and other shareholders:
1. They shall conduct supervision and restraint on the production and operation activities of themselves andtheir relevant enterprises so that, if the products or business of them or their relevant enterprises become thesame 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 relevantassets and business;
(2) If FSL 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 avoid horizontal competition with FSL are also applicableto their directly or indirectly controlled subsidiaries. They are obliged to urge and make sure that othersubsidiaries execute what’s prescribed in the relevant document and faithfully honor all the relevantcommitments.
3. As of the issuance of this statement and commitment, if any business opportunity obtained by thecommitment maker (hereinafter referred to as "we" or "us") from any third party constitutes or may constitutehorizontal competition with the business operated by FSL and its wholly-owned and majority-ownedsubsidiaries, we will notify FSL forthwith and give up such an opportunity to FSL at its requirement. Then, FSL,under the same conditions, shall preferentially acquire the assets or equity interests of the relevant business at afairer and more reasonable price. Doing so helps us avoid horizontal competition or potential horizontalcompetition with FSL and its wholly-owned and majority-owned subsidiaries.
4. We undertake not to provide any assistance in respect of funds, business, techniques, management, andbusiness secrets to any other company, business, economic organisation, or individual in or potentially inhorizontal competition with FSL or its wholly-owned or majority-owned subsidiaries.
5. We undertake not to engage, in any form, in any business activities that may impact the operations anddevelopment of FSL and its wholly-owned and majority-owned subsidiaries, including:
(1) using our existing social resources and customer resources to hinder or restrict the independent developmentof FSL or its wholly-owned or majority-owned subsidiaries;
(2) fabricating and disseminating news unfavourable to FSL and its wholly-owned and majority-ownedsubsidiaries and damaging their goodwill;
(3) leveraging our holdings in or control over FSL to exert adverse influence, thus causing abnormal changes insenior management members, R&D personnel, and technical personnel of FSL and its wholly-owned andmajority-owned subsidiaries; and
(4) engaging professional technical or marketing personnel or senior management members from FSL and itswholly-owned and majority-owned subsidiaries.
6. We undertake that, if we violate the foregoing commitments and thus cause financial losses to FSL, we shallassume the corresponding legal liability for all FSL's losses arising therefrom.Date of commitment making: 14 March 2023Term of commitment: Long-standingFulfillment: 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 regulatory
documents 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
(2) Commitment maker: Rising Holdings
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 Holdings , Rising Capital, and Hongkong Wah Shing
Contents of Commitment: They have made a commitment that during their direct or indirect holding of FSL 1.activities of themselves strictly 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.
(4) Commitment maker: Rising Holdings, Electronics Group, Hong Kong Rising Investment, and HongkongWah ShingContents of Commitment: To protect interests of the Company and other shareholders, they have made acommitment that during their direct or indirect holding of FSL:
1. activities of themselves strictly abide by the regulatory documents of the CSRC and the SZSE,FSL’s Articlesof Association, etc. and not harm the interests of the Company or other shareholders of FSL in their productionand 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 orFSL’s subsidiaries;
3. strictly follow the market principle of justness, fairness and equal value exchange for necessary andunavoidable 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 ageneral meeting or a board meeting, and execute the relevant approval procedure and information disclosureduties pursuant to the applicable laws, regulations and regulatory documents. We undertake that we will neithertransfer nor convey benefits by taking advantage of related-party transactions nor harm, through the improperexercise of rights for shareholders or other improper means, the legitimate rights and interests of the Companyor the other shareholders of the Company.
4. We have disclosed our related parties and related-party transactions during our Reporting Period in full and indetail as required by the laws and regulations on securities regulation as well as normative documents. Exceptfor the related-party transactions already disclosed in relevant application documents on the Company'sissuance of A-shares to specific objects in 2023, we and other companies or businesses under our control havenot effected any related-party transactions with FSL or its wholly-owned or majority-owned subsidiaries thatshould have been disclosed as required by laws, regulations, and relevant provisions of securities regulatoryauthorities.
5. If we violate the foregoing commitments and thus cause financial losses to FSL and the other shareholders,we shall assume the corresponding legal liability for all the losses of FSL and the other shareholders arisingtherefrom.Date of commitment making: 14 March 2023Term of commitment: Long-standingFulfillment: 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 related
parties 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 andat 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 Holdings
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. 2. It will ensure the asset independence ofthe Company. (1) It promises that the Company has independent and complete assets. (2) It promises that it and itssubsidiaries will not illegally occupy the Company’s funds and assets in any way. 3. It will ensure the financialindependence of the Company: (1) It promises that the Company will have an independent financial departmentand financial accounting system. (2) It promises that the Company will have a standardized and independentfinancial accounting system. (3) It promises that the Company will have independent bank accounts and not sharebank accounts with it. (4) It promises that the Company’s financial personnel do not hold concurrent positions init or its subsidiaries. And (5) It promises that the Company can make financial decisions independently and that
they will not illegally intervene in the Company’s use of its funds. 4. It will ensure the independence of theCompany in organization: (1) It promises that the Company can operate independently with an independent andcomplete organization structure. (2) It promises that the office and production and business premises of theCompany are separated from those of Rising Holdings Group. And (3) It promises that the Board of Directors, theSupervisory Committee and various functional departments of the Company operate independently, and there isno subordinate relationship with the functional departments of Rising Holdings Group. And 5, It will ensure theindependence of the Company in business: (1) It promises that the Company will have independence in business.And (2) It promises that the Company will have the assets, personnel, qualifications and capabilities for it tooperate 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
(3) Commitment maker: Rising Holdings, Electronics Group, Hong Kong Rising Investment, and HongkongWah ShingContents of Commitment:
1. Ensure the independence of FSL in personnel: (1) We promise the absolute independence of FSL and itssubsidiaries (the same below, collectively referred to as "FSL") from us and other companies, businesses, andeconomic organisations under our control in labour, human resource and salary management. (2) We promisethat FSL's senior management personnel will work only for and receive remuneration from FSL, not holdingany positions in us or other companies, businesses, or economic organisations under our control other thandirector and supervisor. (3) We promise not to intervene in the exercise of authority by the Shareholders'General Meeting and Board of Directors of FSL to decide personnel appointment and removal.
2. Ensure the independence of FSL in organisation: (1) We promise that FSL has a sound corporate governancestructure with an independent and complete organisation structure. (2) We promise that the Shareholders'General Meeting, Board of Directors, and Supervisory Committee of FSL will independently execute theirfunctions according to laws, regulations and FSL's Articles of Association. (3) We promise that FSL will havethe right to set up and adjust functional departments independently and will not be subject to rule-violatingintervention from us or other companies, businesses, or economic organisations under our control. We promisethat neither the superior-subordinate relationship nor mixed ownership and co-office situation exist betweenFSL and us or other companies, businesses, or economic organisations under our control.
3. Ensure the asset independence and integrity of FSL: (1) We promise that FSL will have independent andcomplete assets related to production and operations, which are not shared with us or other companies,businesses, or economic organisations under our control. (2) We promise that FSL's office and businesspremises are independent from those of us and other companies, businesses, and economic organisations underour control. (3) We promise that except for regular business dealings, neither FSL's funds nor assets will beoccupied by us or other companies, businesses, or economic organisations under our control.
4. Ensure the independence of FSL in business: (1) We promise that FSL has relevant qualifications forconducting business activities independently, is capable of independent, autonomous, and ongoing operations inthe market, and does not rely on us or other companies, businesses, or economic organisations under our controlin production and operations. (2) We promise that we and other companies, businesses, and economicorganisations under our control will not engage in business in competition with FSL or other companies,businesses, or economic organisations under its control. (3) We promise that we and other companies,businesses, and economic organisations under our control will minimise the related-party transactions with FSLand other companies, businesses, and economic organisations under its control. For necessary and unavoidable
related-party transactions, we promise to operate fairly following the market-oriented principle and at fair prices,and execute relevant approval procedures and the duty of information disclosure pursuant to the applicable laws,regulations and regulatory documents.
5. Ensure the independence of FSL in finance: (1) We promise that FSL will have an independent financialdepartment and financial accounting system with normative, independent financial accounting rules. (2) Wepromise that FSL will have independent bank accounts and will not share bank accounts with us or othercompanies, businesses, or economic organisations under our control. (3) We promise that FSL's financialpersonnel do not hold concurrent positions in us or other companies, businesses, or economic organisationsunder our control. (4) We promise that FSL can make financial decisions independently and that we will notintervene in FSL's use of its funds. (5) We promise that FSL will independently pay its tax according to law.If we violate the foregoing commitments, we shall be liable for the losses of FSL arising therefrom.Date of commitment making: 14 March 2023Term of commitment: Long-standingFulfillment: In execution
4. Commitment on effective performance of measures to fill up returns
(1) Commitment maker: Rising Holdings, Rising Capital, Electronics Group, Hongkong Wah Shing, Hong KongRising Investment 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 refuse to fulfill the above commitments, theyagree that the securities regulatory agencies such as the CSRC and the SZSE will punish them or take relevantregulatory 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.
(2) Commitment maker: Rising Holdings, Electronics Group, Hong Kong Rising Investment, and Hongkong WahShingContents 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 of issuance of these commitments to the completion of this offering of the Company to specifictargets, if the CSRC makes new regulatory requirements on measures to fill up returns and commitments ofrelevant personnel, and the above commitments cannot meet these new regulatory requirements of the CSRC, theypromise 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 anycommitments made by them. If they violate these commitments and causes losses to the listed company orinvestors, 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 orrefuse to fulfill the above commitments, they agree that the securities regulatory agencies such as the CSRC andthe SZSE will punish them or take relevant regulatory measures in accordance with the relevant regulations andrules they formulated or issued.Date of commitment making: 14 March 2023.Term of commitment: Long-standing.Fulfillment: In execution.
5. Commitment on measures to fill up returns for risks arising from diluting immediate return in majorasset restructuringCommitment markers: Directors and senior management of the CompanyContents of Commitment: 1. We promise not to transfer benefits to other units or individuals free of charge orunder unfair conditions, and not to harm the interests of the Company in any other ways. 2. We promise torestrain position-related consumption behavior. 3. We promise not to use the Company's assets to engage ininvestment and consumption activities unrelated to the performance of duties. 4. We promise that the futureremuneration system formulated by the Board of Directors or the Remuneration and Assessment Committeewill be linked to the implementation of the Company's measures to fill up returns. 5. If the Company formulatesan equity incentive plan in the future, we will actively promote the exercise conditions of the future equityincentive plan to be linked with the implementation of the Company's measures to fill up returns. 6. From thedate of issuance of these commitments to the completion of this major asset restructuring of the Company, if theCSRC makes other new regulatory provisions on measures to fill up returns and the relevant commitments, andthese commitments cannot meet these provisions of the CSRC, we promise to issue supplementarycommitments in accordance with the latest regulations of the CSRC at that time. 7. We promise to earnestlyfulfil the compensation measures formulated by the Company and any commitments we make. If we violate anyof these commitments and cause losses to the Company or investors, we are willing to bear corresponding legalresponsibilities to the Company or investors according to law.Date of commitment making: 27 October 2021Term of commitment: Long-standing.Fulfilment: In execution
6. Commitment on compensation for possible violations of laws and regulations by NationStarOptoelectronicsCommitment maker: Rising Holdings, 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 the truthfulness, accuracy and completeness of the information provided during thismajor asset restructuring
(1) Commitment maker: Rising Holdings, 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 confirmationsprovided. 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.
(2) Commitment markers: Directors and senior management of the Company
Contents of Commitment: 1. We have provided relevant information and documents (including but not limited tooriginal written materials, duplicate materials or oral testimony, etc.) related to this trading to the intermediariesproviding professional services of auditing, assessment, legal and financial consultancy for this trading. Wepromise 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 thedocuments have been legally authorized and effectively signed the documents; that the provided information anddocuments are authentic, accurate and complete and that there are no false records, misleading statements ormaterial omissions. We also promise to bear individual and joint and several liability. 2. We promise that theinformation provided is true, accurate and complete. In case of any losses caused to investors due to any falsepresentations, misleading statements or material omissions in the information provided, we will be liable forcompensation according to law. 3. Where the information provided or disclosed by us in this trading is suspectedof false records, misleading statements or material omissions, and we are filed for investigation by the judicialorgan or by the CSRC, the shares with interests in the listed company will not be transferred until the investigationconclusion is formed.Date of commitment making: 27 October 2021Term of commitment: Long-standing.Fulfilment: In execution
8. 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 Holdings and Rising Capital
Contents of Commitment: Rising Holdings Group and Rising Capital promise that the shares of NationStarOptoelectronics it held is clear in ownership and is not subject to any dispute or potential dispute, and there is nosituation 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 otheradministrative or judicial procedure that may lead to the seizure, freezing, expropriation or restriction of transferof the above-mentioned equity by the relevant judicial or administrative organs. There is no entrustedshareholding or trust shareholding, restriction or prohibition of transfer of the above-mentioned equity controlledby Rising Group and Rising Capital.Date of commitment making: 27 October 2021.Term of commitment: Long-standing.Fulfillment: In execution.
9. Commitment on the truthfulness, accuracy and completeness of the information provided inapplication documents for issuanceCommitment maker: Rising Holdings, Electronics Group, Hong Kong Rising Investment, and Hongkong WahShingContents of Commitment: 1. They promise that the information provided for the specific targets of this offering istrue, accurate and complete, and there are no false records, misleading statements or material omissions. 2. Theyhave provided relevant information and documents (including but not limited to original written materials,duplicate materials or oral testimony, etc.) to the intermediaries engaging in this offering to specific targets. Theypromise 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 thedocuments have been legally authorized and effectively signed the documents; that there are no false records,misleading statements or material omissions. 3. They promise that the explanations and confirmations issued bythem for this offering to specific targets are true, accurate and complete, and there are no false records, misleadingstatements or material omissions. 4. During the application and review period of this offering to specific targets,they will disclose relevant information in a timely manner in accordance with relevant laws and regulations, theCSRC and the SZSE, and ensure the authenticity, accuracy and completeness of such information. 5. They shallbear 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,and intermediaries participating in the preparation for this offering to specific targets, they will be liable forcompensation according to law. 6. Where the information provided or disclosed by them in this offering tospecific targets is suspected of false records, misleading statements or material omissions, and they are filed forinvestigation by the judicial organ or by the CSRC, the shares with interests in the listed company will not betransferred until the investigation conclusion is formed.
Date of commitment making: 14 March 2023.Term of commitment: Long-standing.Fulfillment: In execution.
10. Commitment on the subscription for A-shares offered to specific objects in 2023Commitment maker: Rising HoldingsContents of Commitment: 1. We agree to subscribe for A-shares offered to specific objects with a subscriptionamount of 25% of the total amount of funds raised. The subscription volume shall be determined according tothe issuer's actual issue price and the subscription amount of the subscribers after the Stock SubscriptionAgreement of Foshan Electrical and Lighting Co., Ltd. comes into force. In the actual issuance phase ahead, ifthe subscription volume calculated based on the ultimate inquiry result contains fractional shares, such sharesshall be rounded off. 2. The base day for pricing the shares to be offered to specific objects is the first day of theissuance period. The issue price shall not be lower than 80% of the average trading price of FSL's A-shares forthe 20 trading days prior to the base day for pricing (that is, the "bottom issue price of this issuance"), whichequals the total amount of the Company's shares traded in the 20 trading days prior to the base day for pricingdivided by the total volume of the Company's shares traded in this period. Upon the review and approval by theShenzhen Stock Exchange (SZSE) of the issuance of shares to specific objects and the consent of the ChinaSecurities Regulatory Commission (CSRC) to the registration, the ultimate issue price shall be determined byour Board of Directors with authorisation of the Shareholders' General Meeting and in consultation with thesponsor (lead underwriter) according to the subscription offers from the issuance objects in compliance with therelevant provisions of the CSRC and SZSE and the principle of price preference. In case of ex-rights or ex-dividend matters occurring to FSL's shares between the base day for pricing and the date of issuance, such asdividend payout, bonus issue, and capital reserve converted into share capital, the bottom issue price of theissuance of shares to specific objects shall be adjusted accordingly. We shall not participate in the inquiryprocess of the pricing of this issuance but undertake to accept the market inquiry result and to subscribe for theshares to be offered by the Company to specific objects at the same price as other issuance objects. If the issueprice of this issuance cannot be determined through the market inquiry, we will subscribe for the shares offeredby FSL to specific objects at the bottom issue price of this issuance. 3. We agree not to transfer the shares forwhich we subscribe this time within 18 months of the completion of the issuance of shares to specific objects.However, if we and parties acting in concert have increased our holdings by more than 2% of the shares FSLalready offered in the 12 months prior to the completion of this issuance, we shall not transfer the shares forwhich we subscribe this time within 36 months of the completion of this issuance.Date of commitment making: 14 March 2023Term of commitment: Until the expiration of the restriction period for the shares issued to Rising HoldingsGroup in 2023.Fulfilment: In execution.
11. Commitment on the absence of acceptance of financial assistance, compensation, promise of benefitsor arrangements agreed upon otherwiseCommitment maker: Rising HoldingsContents of Commitment: The funds used by us to subscribe for the shares offered this time are all legal self-owned funds. There is no external fund raising, proxy holding, structural arrangement or direct or indirect use offunds of FSL and its related parties (except for us) for this subscription. There is no financial support,compensation, promise of benefits or other arrangements by FSL or its controlling shareholder, actual controller
(except for us), or substantial shareholders to me directly or through their stakeholders. Our subscription for theshares of this issuance is free of shareholding as prohibited by laws and regulations. The intermediary for thisissuance or its head, senior management members, or handling personnel are free of illegal shareholding orimproper transfer of benefits.Date of commitment making: 14 March 2023Term of commitment: Until the completion of A-shares issuance to specific objects in 2023.Fulfilment: In execution.
12. About non-occupation of the Company's funds or assets
Commitment makers: Rising Holdings, Electronics Group, Hong Kong Rising Investment, and Hongkong WahShingContents of Commitment: As at the date of issuance of the Proposal on the Company's Issuance of A-Shares toSpecific Objects in 2023 of FSL, we had not occupied the Company's funds or assets. Nor had the Companyprovided illegal guarantees for us. Upon the completion of this issuance, the Company shall continue to strictlyobserve relevant laws, regulations, and internal control systems to prevent the provision by the Company ofillegal guarantees for us.Date of commitment making: 14 March 2023Term of commitment: Until the completion of A-shares issuance to specific objects in 2023.Fulfilment: In execution.
13. Commitment on the measures to fill up immediate returns diluted by the issuance of A-shares tospecific objectsCommitment markers: Directors and senior management of the CompanyContents of Commitment: 1. We promise not to transfer benefits to other units or individuals free of charge orunder unfair conditions, and not to harm the interests of the Company in any other ways. 2. We promise torestrain position-related consumption behaviour. 3. We promise not to use the Company's assets to engage ininvestment and consumption activities unrelated to the performance of duties. 4. We promise that theremuneration system formulated by the Board of Directors or the Remuneration and Assessment Committee islinked to the implementation of the Company's measures to fill up returns. 5. If the Company implements anequity incentive plan in the future, the exercise conditions of the future equity incentive plan will be linked withthe implementation of the Company's measures to fill up returns. 6. From the date of issuance of thesecommitments to the completion of the issuance of shares to specific objects, if the CSRC makes other newregulatory provisions on measures to fill up returns and the relevant commitments, and these commitmentscannot meet these provisions of the CSRC, we promise to issue supplementary commitments in accordance withthe latest regulations of the CSRC at that time. As one of the subjects responsible for the measures to fill upreturns, if we violate the above commitments or refuse to fulfil the above commitments, we agree that thesecurities regulatory agencies such as the CSRC and the SZSE will punish us or take relevant regulatorymeasures in accordance with the relevant regulations and rules they formulated or issued.Date of commitment making: 14 March 2023Term of commitment: Long-standing.Fulfilment: In execution.
14. Commitment on matters on special self-inspection of the real estate business
Commitment markers: Rising Holdings, Electronics Group, Hong Kong Rising Investment, Hongkong Wah
Shing and the directors and senior management of the CompanyContents of Commitment: The Self-inspection Report has truthfully disclosed the self-inspection of the realestate development projects of the Company and its subsidiaries between 1 January 2020 and 31 December2022. If the Company is identified with illegalities or violations not disclosed as required by the self-inspection,such as idle land, land speculation, holding real estate projects from selling, and house price rigging, thuscausing losses to itself and the investors, we/I will be liable for compensation in line with relevant laws,regulations, and requirements of securities regulatory authorities.Date of commitment making: 14 March 2023Term of commitment: Long-standing.Fulfilment: In execution.
15. Commitment on the confirmation of and commitment to matters concerning the absence of areduction in the shares in the issuerCommitment makers: Rising Holdings, Electronics Group, Hong Kong Rising Investment, and Hongkong WahShing
1. We confirm that, between the date six months prior to the date of the resolution of the Board of Directors onthis issuance of shares to specific objects to the issuance of this letter, we have not reduced our shares in FSL. 2.The base day for pricing the shares to be offered by FSL to specific objects is the first day of the issuance period.We promise not to transfer our shares in FSL within six months from the date of issuance of this letter to thecompletion of this issuance.Date of commitment making: 5 July 2023Term of commitment: Six months from the date of issuance of this commitment to the completion of thisissuance.Fulfilment: In execution.
16. Commitment on share subscription
Commitment maker: Rising HoldingsIf no one quotes in this issuance of shares to specific objects, we will still participate in the subscription.However, we shall not participate in the market inquiry of the pricing of this issuance but undertake to acceptthe market inquiry result and to subscribe at the same price as investors. If the issue price of this issuancecannot be determined through the foregoing market inquiry, we will subscribe for the shares offered by FSL tospecific objects at the bottom issue price of this issuance. The subscription amount shall be 25% of the totalamount of funds raised this time. The subscription volume shall be determined according to the actualsubscription amount and issue price.Date of commitment making: 5 July 2023Term of commitment: Till the completion of the issuance of A-shares to specific objects in 2023.Fulfilment: In execution.
8. Other
Naught
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 dateCommitment to the development of Haikou plotIn 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 andobtain 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; the
accumulated 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 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 timeon 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.
2. 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 totallingRMB2,427,830.95 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 ofRMB559,463.71 based on expected credit losses.
3. 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 materialstagnation; 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 first trial of the lawsuit is to be notified by the court, and the result of the lawsuit is not yet available.
4. About the litigation between the Company and Guangzhou Tianli Construction Co., Ltd.Guangzhou Tianli Construction Co., Ltd. (hereinafter referred to as "Guangzhou Tianli") purchased wires andcables from FSL, for which the payment was RMB5,953,278.71 Despite several rounds of collection,Guangzhou Tianli still refused to pay. Therefore, the Company filed a lawsuit [Case (2023) Y. 0104 M.CH. No.9027] with the People's Court of Yuexiu District, Guangzhou, which tried the case on 14 June 2023. As of thedate of this report, the above case has not been concluded.
5. About the litigation between the Company and Wang Jundao, Peng Xiaoli, and Dali Haofeng Furniture Storein Nanhai District, Foshan CityThe defendant (hereinafter referred to as the "Defendant") Haofeng Furniture leased from the Company the first,second, and third floors of the property located at 1 1st Lecheng Road, Luocun Subdistrict, Nanhai District, andthe plaintiffs (hereinafter collectively referred to as the "Plaintiff") Wang Jundao and Peng Xiaoli purchasedfrom the Company a ground floor and 24 residential units in the middle block of Buildings No. 1 located at 11st Lecheng Road, Luocun Subdistrict. According to the Plaintiff, after the foregoing properties were handedover, the Defendant shall pay the Plaintiff the rental for the shops on the ground floor, but the Defendantrefused to do so and even still occupied part of the properties. Therefore, the Plaintiff filed a lawsuit [Case(2023) Y. 0605 M.CH. No. 9004] with the People's Court of Nanhai District, Foshan City to claimRMB2,664,820.00from the Defendant as compensation for all costs. In the case, the court added the Companyas a third party. The case was tried on 4 July 2023. As of the date of this report, the above case has not beenconcluded.
6. Litigation between NationStar Optoelectronics and Guangzhou CM Punk Optoelectronics Co., Ltd.Guangzhou CM Punk Optoelectronics Co., Ltd (hereinafter referred to as "CM Punk") and FoshanNationStar Optoelectronics Co., Ltd. over the sales contract, both parties disputed the goods payment andcompensation for quality defects in products and thus filed a lawsuit with the court. CM Punk suedNationStar and requested the latter to pay for the goods and pay the interest, totalling approximatelyRMB4.36 million (including approximately RMB3.77 million for the goods). NationStar defended itselfby arguing that CM Punk's claim was not supported by factual and legal bases and lodged a counterclaimfor approximately RMB2.02 million from CM Punk as an indemnity for quality losses. As of the date ofthis report, the case is in the process of first instance hearing and the court has not yet decided.
7. Litigation between Nanyang Baoli and the People's Government of ZhechuanOn 2 November 2009, the People's Government of Zhechuan released the Notice of Zhechuan County onthe Preferential Policies for Accelerating the Development of Industrial Clusters (Provisional), whichmade it clear that the indemnities paid by eligible industrial enterprises for the land they acquired shall befully reimbursed by the financial authority of the county. On 12 October 2011, Nanyang Baoli VanadiumIndustry Co., Ltd. ("Nanyang Baoli") submitted the Application of Nanyang Baoli Vanadium Industry Co.,Ltd. for Preferential Policies for the Efficient and Clean Vanadium Ore Extraction Project to the People'sGovernment of Zhechuan and applied to use land. Additionally, by the application, Nanyang Baoli shallpay the taxes and dues arising from the land acquisition in the early stage. After the land is transferred toNanyang Baoli upon legal bid invitation, auction and listing, the government of the place of receipt shallsubsidize Nanyang Baoli in two installments for all the land acquisition payments, except for the
endowment insurance of farmers in the place where land is acquired and the land reporting fees. ThePeople's Government of Zhechuan approved the application by stamping it with the seal and specified that"land costs shall be subject to Document X.F. [2012] No. 17. Specifically, to meet the investmentrequirements, investors shall bear only RMB30,000 per mu (a mu is equivalent to approximately 666.667square meters), and the People's Government of Zhechuan shall be responsible for the remaining costs andcompleting the certificate application." Subsequently, Nanyang Baoli paid a total of RMB10,994,400 tothe People's Government of Zhechuan. For the land intended as the project site, formalities for landacquisition and for bid invitation, auction, and listing have not yet been completed and initiated,respectively. As a result, Nanyang Baoli has not obtained the land use right for the land in question, andthe land remains the collective land as it has not yet been acquired. At present, the People's Government ofZhechuan is unable to obtain land use approval to complete the land acquisition and hand over the land toNanyang Baoli. Nor shall it have the right to transfer the foregoing land. Hence, Nanyang Baoli has filed alawsuit with the Nanyang Intermediate People's Court, requesting a refund of the advance payment and anindemnity for its losses. Moreover, Nanyang Baoli has not yet carried out exploitation since its inception,but the mining concession has expired. Therefore, Nanyang Baoli requested a refund of the deposit ofRMB100,000 for environmental governance and restoration transferred to the segregated account of theOff-budget Fund Management Bureau of Zhechuan County for deposits for environmental governance andrestoration of mines. The case was accepted by the Nanyang Intermediate People's Court on 24 March2023 and came to trial on 16 May 2023.As of the date of this report, the above case has not beenconcluded.
(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 30 June 2023, mutual guarantees among Nanning Liaowang and its subsidiaries were as follows(RMB’0,000):
| No. | Principal debtor | Principal debtee | Guarantor | Type of guarantee | Guarantee amount | Guarantee balance |
| 1 | Nanning Liaowang Auto Lamp Co., Ltd. (note 1) | Nanning Branch of Industrial Bank | Nanning Liaowang Auto Lamp Co., Ltd., Liuzhou Guige Fuxuan Technology Co., Ltd., Liuzhou Guige Lighting Technology Co., Ltd. | Mortgage | 4,500.00 | 1,547.33 |
| 2 | Chongqing Guinuo Lighting Technology Co., Ltd. (note 2) | Nanning Branch of Industrial Bank | Nanning Liaowang Auto Lamp Co., Ltd., Chongqing Guinuo Lighting Technology Co., Ltd. | Mortgage | 9,900.00 | 5,826.87 |
| 3 | Liuzhou Guige Lighting Technology Co., Ltd. (note 3) | Nanning Branch of Industrial Bank | Nanning Liaowang Auto Lamp Co., Ltd., Liuzhou Guige Fuxuan Technology Co., Ltd., Liuzhou Guige Lighting Technology Co., Ltd. | Mortgage | 9,600.00 | 9,600.00 |
| Total | —— | —— | —— | 24,000.00 | 16,974.20 |
Note 1: Nanning Liaowang and Nanning Branch of Industrial Bank entered into the Maximum Financing
Agreement (X.Y.G.CH.B.R.Z.Z. [2022] No. (01)) to conduct a bill transaction of RMB15,473,300. NanningLiaowang provides mortgage guarantee with the immovable property owned as collateral, and the balance of itscreditor's rights does not exceed the maximum mortgage principal of RMB69,139,100. The mortgage amount isvalid from 25 April 2022 to 31 December 2025 and the guarantee amount is RMB45 million. The mortgagedreal estate is a) Y.G. (2017) N.N.S.B.D.CH.Q.ZH. No. 0065501; b) E.G. (2017) N.N.S.B.D.CH.Q.ZH. No.0065499; c) S.G. (2017) N.N.S.B.D.CH.Q.ZH. No. 0065498; d) S.G. (2017) N.N.S.B.D.CH.Q.ZH. No.0065497.Note 2: 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 2022to 11 February 2023), respectively. The foregoing transactions were closed out on 11 February 2023. NanningLiaowang and Nanning Branch of Industrial Bank Co., Ltd. entered into the Master Agreement on Local Letterof Credit Financing, numbered LD2302073907, with the loan amount of RMB50 million (from 7 February2023 to 8 February 2024). Chongqing Guinuo Lighting Technology Co., Ltd. (Chongqing Guinuo) providesmortgage guarantee with the immovable property owned as collateral, and the balance of its creditor's rightsdoes not exceed the maximum mortgage principal of RM122,294,700. The guarantee amount is RMB99 millionand the mortgage amount is valid from 15 June 2020 to 15 June 2023. The mortgaged real estate is a) Y.Y.(2020) L.J.X.Q.B.D.CH.Q. No. 000436821, b) E.Y. (2020) L.J.X.Q.B.D.CH.Q. No. 000437330, c) S.Y. (2020)L.J.X.Q.B.D.CH.Q. No. 000437429 and d) S.Y. (2020) L.J.X.Q.B.D.CH.Q. No. 000437448.Chongqing Guinuo and Chongqing Branch of Industrial Bank entered into the Fixed Asset Loan Contractnumbered CQ2023-477, with the contract amount being RMB50 million (from 21 June 2023 to 20 June 2026).As at 30 June 2023, RMB8,268,700 had been granted. The mortgage amount is valid from 25 May 2023 to 24May 2024. Chongqing Guinuo and Chongqing Branch of Industrial Bank entered into the Maximum MortgageContract numbered X.Y.Y.L.J.G.N.D. No. 2023001. The mortgaged real estate is a) Y. (2020)L.J.X.Q.B.D.CH.Q. No. 000436821, b) Y. (2020) L.J.X.Q.B.D.CH.Q. No. 000437330, c) Y. (2020)L.J.X.Q.B.D.CH.Q. No. 00437448 and d) Y. (2020) L.J.X.Q.B.D.CH.Q. No. 000437429.Note 3: Liuzhou Fuxuan and Nanning Branch of Industrial Bank Co., Ltd. entered into the Working CapitalLoan Contract, numbered WYZH2022050700423, with a loan of RMB15 million (from 7 May 2022 to 7 May2023). Liuzhou Guige Photoelectric Technology Co., Ltd. (Liuzhou Guige) and Nanning Branch of IndustrialBank Co., Ltd. entered into the Agreement on Banker's Acceptance Financing Business Cooperation(X.Y.G.CH.B.SH.X. [2022] No. 1002) to conduct a bill transaction of RMB20 million (from 5 May 2022 to 7May 2023). The foregoing transactions have been closed out. Liuzhou Fuxuan and Nanning Branch ofIndustrial Bank Co., Ltd. entered into the Working Capital Loan Contract, numbered WYZH2022091600234,with a loan of RMB35 million (from 16 September 2022 to 16 September 2023). In the guarantee contract,Liuzhou Guige provides mortgage guarantee with the immovable property owned as collateral, and the balanceof its creditor's rights does not exceed RMB139,943,700. The guarantee amount is RMB96 million and validfrom 24 April 2022 to 31 December 2025. The mortgaged real estate is: a) Y.G. (2019) L.ZH.SH.B.D.CH.Q.No. 0191988, located at No. 1 Factory Building, No. 12 Hengsi Road, Cheyuan; b) E.G. (2019)L.ZH.SH.B.D.CH.Q. No. 0191991, located in the mould Centre of No. 12 Hengsi Road, Cheyuan; c) S.G.(2019) L.ZH.SH.B.D.CH.Q. No. 0191994, located in the logistics gate guard room at No. 12 Hengsi Road,Cheyuan; d) S.G. (2019) L.ZH.SH.B.D.CH.Q. No. 0191995, located in the guard room of Gate 12, Hengsi Road,Cheyuan.
XV. Events after Balance Sheet Date
1. Significant Non-adjusted Events
Naught
2. Profit Distribution
Naught
3. Sales Return
Naught
4. Notes to Other Events after Balance Sheet Date
NaughtXVI. Other Significant Events
1. The Accounting Errors Correction in Previous Period
Naught
2. Debt Restructuring
Naught
3. Assets Replacement
(1) Non-monetary Assets Exchange
Naught
(2) Other Assets Replacement
Naught
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 AnnuityPlan 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 the
Company 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
Naught
6. Segment Information
(1) Determination Basis and Accounting Policies of Reportable Segment
In accordance with the internal organization structure, management requirements and internal report system, theCompany identifies the reporting segment based on the operating segment and discloses the segmentinformation. The Company divides its business into two operating segments, on the basis of which, it identifiestwo reporting segments, namely the general and automotive lighting product segment and the LED packaging,modules, and other products segment. Segment reporting information is disclosed in line with the accountingpolicies and measurement criteria adopted by each segment when reporting to the management. Suchmeasurement standards are consistent with the accounting policies and measurement criteria used for financialstatements.
(2) The Financial Information of Reportable Segment
| Item | General lighting and vehicle lamp products | LED packaging and component products and other products | Offset among segments | Total |
| I. Operating revenue | 2,829,149,431.23 | 1,758,744,095.83 | -21,830,798.04 | 4,566,062,729.02 |
| II. Cost of sales | 2,216,663,649.68 | 1,537,803,485.99 | -20,992,306.79 | 3,733,474,828.88 |
| III. Income from investments to joint ventures and associates | 1,186,031.53 | 1,470,664.40 | -1,470,664.40 | 1,186,031.53 |
| IV. Credit impairment loss | -16,431,945.66 | -2,467,862.94 | -47,612.43 | -18,947,421.03 |
| V. Asset impairment loss | -4,211,706.74 | -12,179,181.99 | -16,390,888.73 | |
| VI. Depreciation and amortization cost | 115,507,761.79 | 190,292,917.45 | -381,130.02 | 305,419,549.22 |
| VII. Total profits | 204,718,353.73 | 56,700,512.58 | -5,009,213.53 | 256,409,652.78 |
| VIII. Income tax expense | 28,534,078.56 | 2,896,059.62 | -125,773.69 | 31,304,364.49 |
| IX. Net profits | 176,184,275.17 | 53,804,452.96 | -4,883,439.84 | 225,105,288.29 |
| X. Total assets | 9,680,174,630.01 | 6,310,970,021.75 | -871,200,829.00 | 15,119,943,822.76 |
| XI. Total liabilities | 4,014,157,764.30 | 2,540,730,138.30 | -45,299,349.79 | 6,509,588,552.81 |
(3) If there Was no Reportable Segment, or the Total Amount of Assets and Liabilities of Each ReportableSegment Could not Be Reported, Relevant Reasons Shall Be Clearly StatedNaught
(4) Other notes
Naught
7. Other Significant Transactions and Events with Influence on Investors’ Decision-makingNaught
8. Other
(1) Pre-plan for the Issuance of A-shares to Specific Objects in 2023
The Company intends to raise gross proceeds of no more than RMB1,094.5518 million through an offering ofA-stock shares to specific parties. The amount exclusive of the issuance costs will be used to invest in the FSLautomation and digital transformation construction project, the FSL Hainan Industrial Park Phase I, theintelligent street light construction project, the automotive lamp module production and construction project,and the R&D centre construction project. The said share offering plan has been approved at the 39th Meeting ofthe Ninth Board of Directors and a general meeting of shareholders on 14 March 2023 and 31 March 2023,respectively, as well as by the Public Offering Review Centre of the Shenzhen Stock Exchange on 12 July 2023.The plan is still subject to final approval of the CSRC before implementation. And there is uncertainty withrespect to the said approval and the timing.
(2) Equity Incentive Plan
On 12 June 2023, the 2023 Restricted Share Incentive Plan (Draft) and Its Summary, together with otherrelevant proposals, were approved at the 44th Meeting of the Ninth Board of Directors and the 22nd Meeting ofthe Ninth Supervisory Committee. As such, it was approved to grant no more than 13,000,000 restricted shares(accounting for 0.95% of the Company’s total share capital of 1,361.9946 million shares at the date of theannouncement on the draft plan of the incentive plan) to 262 awardees. To be specific, there were 11.7 millionshares for the first grant, accounting for 90.00% of the total grant under the incentive plan; and there were 1.3million reserved shares, accounting for 10.00% of the total grant under the incentive plan. The restricted shareswere RMB A-stock ordinary shares repurchased by the Company in its repurchased special securities account.And the grant price for the first grant was RMB3.81/share. This equity incentive plan is subject to approval bythe State-owned Assets Supervision and Administration Commission of Guangdong Province and a generalmeeting of shareholders of the Company. For further information, see the 2023 Restricted Share Incentive Plan
(Draft) and Its Summary and other relevant proposals that have been disclosed on http://www.cninfo.com.cn/dated 13 June 2023.
（3）Demolition Matters of Nanjing Fozhao
According 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.
(4) Plan of the Major Assets Reorganization by NationStar Optoelectronics
NationStar 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.,Ltd. (hereinafter referred to as “Target Company” or “Yancheng Dongshan”), the wholly-owned subsidiary ofSuzhou Dongshan Precision Manufacturing Co., Ltd. (hereinafter referred to as “shareholder of the TargetCompany” or “Dongshan Precision”). Upon completion of the transaction, NationStar Optoelectronics will hold60% of equity interest in the Target Company, and the Target Company will become a majority-ownedsubsidiary of the Company and be included in the scope of the Company's consolidated financial statements. Asof the disclosure date of this Report, NationStar has actively organized various intermediaries to actively carryout due diligence investigation as well as audit and appraisal of the underlying assets in accordance withrelevant regulations.
(5) Application for Registration and Issuance of SCP by NationStar Optoelectronics
NationStar 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 NationStar
Optoelectronics 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). On 29 August 2023,NationStar Optoelectronics announced that it had received the Notice of Acceptance of Registration (ZSXZ[2023] SCP No. 363) from National Association of Financial Market Institutional Investors (NAFMII), in whichNAFMII decided to accept the registration of NationStar Optoelectronics’s SCP with the registered amount ofRMB1 billion and the registration quota being valid for 2 years from the date of the notice. The Company mayissue the SCP by installment within the validity of the registration. The project is currently progressing in anorderly manner.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 | |||
| Accounts receivable for which bad debt provision separately accrued | 11,220,827.14 | 0.96% | 11,220,827.14 | 100.00% | 11,220,827.14 | 1.13% | 11,220,827.14 | 100.00% | ||
| Of which: | ||||||||||
| Accounts receivable for which bad debt provisio | 1,162,170,464.79 | 99.04% | 75,194,842.95 | 6.47% | 1,086,975,621.84 | 979,581,821.17 | 98.87% | 64,706,145.17 | 6.61% | 914,875,676.00 |
| n accrued by group | ||||||||||
| Of which: | ||||||||||
| （1）Business portfolio of general lighting and auto lamps | 1,093,694,613.15 | 93.21% | 75,194,842.95 | 6.88% | 1,018,499,770.20 | 921,740,497.75 | 93.03% | 64,706,145.17 | 7.02% | 857,034,352.58 |
| (2) Internal business portfolio | 68,475,851.64 | 5.84% | 68,475,851.64 | 57,841,323.42 | 5.84% | 57,841,323.42 | ||||
| Total | 1,173,391,291.93 | 100.00% | 86,415,670.09 | 7.36% | 1,086,975,621.84 | 990,802,648.31 | 100.00% | 75,926,972.31 | 7.66% | 914,875,676.00 |
Individual withdrawal of bad debt provision by single item: RMB11,220,827.14
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 | ||
Withdrawal of bad debt provision by group: RMB75,194,842.95
Unit: RMB
| Name | Ending balance | ||
| Carrying amount | Bad debt provision | Withdrawal proportion | |
| Credit risk portfolio | 1,162,170,464.79 | 75,194,842.95 | 6.47% |
| Total | 1,162,170,464.79 | 75,194,842.95 | |
Notes:
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 receivable.
□Applicable ? Not applicable
Disclosure by aging
Unit: RMB
| Aging | Ending balance |
| Within 1 year (including 1 year) | 956,928,518.34 |
| 1 to 2 years | 143,074,413.22 |
| 2 to 3 years | 29,742,543.36 |
| Over 3 years | 43,645,817.01 |
| 3 to 4 years | 4,547,062.16 |
| 4 to 5 years | 19,562,268.29 |
| Over 5 years | 19,536,486.56 |
| Total | 1,173,391,291.93 |
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting PeriodBad 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 | 23,244,540.81 | 18.81 | 75,194,842.95 | ||
| Total | 60,926,982.67 | 25,488,706.23 | 18.81 | 86,415,670.09 | ||
Of which significant amount of reversed or recovered bad debt provision:
In the current period, the provision for expected credit losses was RMB25,488,706.23, and RMB0.00 ofexpected credit losses was recovered or reversed.
(3) Accounts Receivable with Actual Verification during the Reporting Period
Unit: RMB
| Item | Amount |
| Other driblet small amount | 18.81 |
Of which, verification of significant accounts receivable:
Naught
(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 | 261,026,852.86 | 22.25% | 7,830,805.59 |
| No. 2 | 93,476,069.87 | 7.97% | 2,804,282.10 |
| No. 3 | 24,804,411.54 | 2.11% | 2,345,630.85 |
| No. 4 | 23,857,388.73 | 2.03% | 2,376,830.59 |
| No. 5 | 22,932,132.84 | 1.95% | 687,963.99 |
| Total | 426,096,855.84 | 36.31% |
(5) Derecognition of Accounts Receivable due to the Transfer of Financial Assets
Naught
(6) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvementof Accounts ReceivableNaught
2. Other Receivables
Unit: RMB
| Item | Ending balance | Beginning balance |
| Other receivables | 978,598,589.43 | 511,036,345.72 |
| Total | 978,598,589.43 | 511,036,345.72 |
(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
1) Category of Dividend Receivable
Naught
2) Significant Dividends Receivable Aging over 1 Year
Naught
3) Information of Withdrawal of Bad Debt Provision
□Applicable ? Not applicable
(3) Other Receivables
1) Other Receivables Disclosed by Account Nature
Unit: RMB
| Nature | Ending carrying amount | Beginning carrying amount |
| Other intercourse | 850,921,784.64 | 499,569,435.12 |
| Dividend payment (note) | 111,892,889.20 | |
| VAT export tax refunds | 11,326,131.26 | 9,247,208.98 |
| Performance bond | 5,413,590.63 | 2,535,349.17 |
| Staff borrow and petty cash | 1,564,968.85 | 1,467,513.80 |
| Rent, water & electricity fees | 615,410.01 | 2,211,666.93 |
| Total | 981,734,774.59 | 515,031,174.00 |
Note: refer to the dividend payment transferred to China Securities Depository and Clearing CorporationLimited.
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 2023 | 570,436.68 | 3,424,391.60 | 3,994,828.28 | |
| Balance of 1 January 2023 in the Current Period | ||||
| Withdrawal of the Current Period | 83,004.29 | -1,639,484.05 | 697,836.64 | -858,643.12 |
| Balance of 30 June 2023 | 653,440.97 | 1,784,907.55 | 697,836.64 | 3,136,185.16 |
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) | 560,139,191.08 |
| 1 to 2 years | 416,812,193.31 |
| 2 to 3 years | 2,705,441.78 |
| Over 3 years | 2,077,948.42 |
| 3 to 4 years | 369,789.28 |
| 4 to 5 years | 1,010,322.50 |
| Over 5 years | 697,836.64 |
| Total | 981,734,774.59 |
3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting PeriodInformation 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 | 3,994,828.28 | -858,643.12 | 3,136,185.16 | |||
| Total | 3,994,828.28 | -858,643.12 | 3,136,185.16 | |||
In the current period, the provision for expected credit losses was RMB-858,643.12, and RMB0.00 of expectedcredit losses was recovered or reversed.
Of which the bad debt provision reversed or recovered with significant amount during the Reporting Period:
Naught
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 group | 471,166,334.23 | Within 2 years | 47.99% | |
| No. 2 | Internal group | 250,685,820.33 | Within 3 years | 25.53% | |
| No. 3 | Dividend payment | 111,892,889.20 | Within 1 years | 11.40% | |
| No. 4 | Internal group | 56,398,668.11 | Within 2 years | 5.74% | |
| No. 5 | Internal group | 31,047,876.71 | Within 2 year | 3.16% | |
| Total | 921,191,588.58 | 93.82% |
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 Involvementof Other ReceivablesNaught
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 subsidiaries | 2,323,631,238.41 | 2,323,631,238.41 | 2,323,631,238.41 | 2,323,631,238.41 | ||
| Investment to joint ventures and associated enterprises | 183,117,824.19 | 183,117,824.19 | 181,931,792.66 | 181,931,792.66 | ||
| Total | 2,506,749,062.60 | 2,506,749,062.60 | 2,505,563,031.07 | 2,505,563,031.07 | ||
(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 | ||||
| Foshan NationStar Optoelectronics Co., Ltd. | 1,212,090,245.94 | 1,212,090,245.94 | |||||
| Nanning Liaowang Auto Lamp Co., Ltd. | 493,880,163.76 | 493,880,163.76 | |||||
| Fozhao (Hainan) Technology Co., Ltd. | 200,000,000.00 | 200,000,000.00 | |||||
| Foshan Kelian New Energy Technology Co., Ltd. | 170,000,000.00 | 170,000,000.00 | |||||
| FSL Chanchang Optoelectronics Co., Ltd. | 82,507,350.00 | 82,507,350.00 | |||||
| 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 | |||||
| FSL Zhida Electric Technology Co., Ltd. | 25,500,000.00 | 25,500,000.00 | |||||
| Foshan Haolaite Lighting Co., Ltd. | 16,685,000.00 | 16,685,000.00 | |||||
| Foshan Fozhao Zhicheng Technology Co., Ltd. | 15,000,000.00 | 15,000,000.00 | |||||
| Foshan Taimei Times Lamps and Lanterns Co., Ltd. | 350,000.00 | 350,000.00 | |||||
| FSL LIGHTING GMBH | 195,812.50 | 195,812.50 | |||||
| Foshan | 4,226.45 | 4,226.45 | |||||
| Sigma Venture Capital Co., Ltd. | |||||||
| Total | 2,323,631,238.41 | 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. | 181,931,792.66 | 1,186,031.53 | 183,117,824.19 | ||||||||
| Subtotal | 181,931,792.66 | 1,186,031.53 | 183,117,824.19 | ||||||||
| Total | 181,931,792.66 | 1,186,031.53 | 183,117,824.19 | ||||||||
(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 | 1,711,281,228.74 | 1,436,735,973.21 | 1,743,824,866.67 | 1,430,083,022.73 |
| Other business | 55,838,581.48 | 39,194,174.59 | 65,355,126.19 | 46,281,084.46 |
| Total | 1,767,119,810.22 | 1,475,930,147.80 | 1,809,179,992.86 | 1,476,364,107.19 |
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 | 6,007,918.32 | 2,653,342.25 |
| Long-term equity investment income accounted by equity method | 1,186,031.53 | 650,457.40 |
| Investment income from disposal of trading financial assets | 2,154,000.00 | 1,734,535.05 |
| Dividend income from holding of other investments in equity instruments | 16,633,969.35 | 16,055,272.93 |
| Investment income from financial products and structural deposits | 1,767,053.51 | 449,147.49 |
| Total | 27,748,972.71 | 21,542,755.12 |
6. Other
NaughtXVIII. 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 (inclusive of impairment allowance write-offs) | -1,399,118.95 | |
| 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 | 27,400,992.05 | |
| Capital occupation charges on non-financial enterprises that are recorded into current profit or loss | 145,423.54 | |
| 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 | -20,978,503.38 | |
| Other non-operating income and expenses other than the above | -841,057.39 | |
| Less: Income tax effects | -966,253.59 | |
| Non-controlling interests effects | 16,747,968.45 | |
| Total | -11,453,978.99 | -- |
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 ExplanatoryAnnouncement 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 | 3.23% | 0.1252 | 0.1240 |
| Net profit attributable to ordinary shareholders of the Company after deduction of non-recurring profit or loss | 3.45% | 0.1337 | 0.1324 |
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
Foshan Electrical and Lighting Co., Ltd.Legal representative: Wu Shenghui29 August 2023