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粤照明B:2023年年度报告(英文版) 下载公告
公告日期:2024-04-19

Annual Report 2023

FOSHAN ELECTRICAL AND LIGHTING CO., LTD.

ANNUAL REPORT 2023

April 2024

Annual Report 2023

ANNUAL 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.Wan Shan, the Company’s legal representative, Tang Qionglan, the Company’s ChiefFinancial Officer (CFO), and Liang Yuefei, the person-in-charge of the Company’s accountingorgan (equivalent to accounting manager) hereby guarantee that the Financial Statementscarried in this Report are factual, accurate and complete.All the Company’s directors have attended the Board meeting for the review of this Reportand its summary.The future plans and other forward-looking statements, as well as the cautionary statementsmentioned in this Report shall NOT be considered as virtual promises of the Company toinvestors. And investors are kindly reminded to be well aware of possible risks.The Company has described in detail in this Report the risk of macro-economic fluctuationsand intensified market competition, the risk of rising raw material prices, the risk of exchangerate fluctuations, the risk of the recoverability of accounts receivable. Please refer to thesection headed “Potential Risks” in Item XI of Part III of this Report.The Board has approved a final dividend plan as follows: based on the share capital of1,535,778,230 shares (the total share capital of 1,548,778,230 shares minus the remaining13,000,000 A-shares repurchased in the share repurchase account at the disclosure date of the2023 Annual Report, a cash dividend of RMB1.2 (tax inclusive) per 10 shares is to bedistributed to the shareholders, with no bonus issue from either profit or capital reserves.Where any change occurs to the total shares entitled to the final dividend due to any new issue,grant of equity incentives, etc. when the final dividend plan is implemented, the dividend pershare shall remain the same while the total payout amount shall be adjusted accordingly.This Report has been prepared in both Chinese and English. Should there be anydiscrepancies or misunderstandings between the two versions, the Chinese version shallprevail.

Annual Report 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 ...... 13

Part IV Corporate Governance ...... 60

Part V Environmental and Social Responsibility ...... 91

Part VI Significant Events ...... 104

Part VII Share Changes and Shareholder Information ...... 149

Part VIII Preferred Shares ...... 165

Part IX Corporate Bonds ...... 166

Part X Financial Statements ...... 167

Annual Report 2023

Documents Available for Reference

Investors and interested parties can get access to the following materials in the Board Secretary’sOffice in the Company’s office building:

1. The financial statements signed and stamped by the Company’s legal representative, ChiefFinancial Officer, and the person-in-charge of the Company’s accounting organ.

2. The original copy of the Independent Auditor’s Report signed and stamped by the certified publicaccountants and stamped by the CPA firm.

3. The originals of all the Company’s announcements and documents disclosed to the public duringthe Reporting Period on the media designated by the CSRC for information disclosure.

Annual Report 2023

Definitions

TermDefinition
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 GroupGuangdong Rising Holdings Group Co., Ltd.
Electronics GroupGuangdong Electronics Information Industry Group Ltd.
Hong Kong Rising InvestmentRising Investment Development Limited
Hongkong Wah ShingHongkong Wah Shing Holding Company Limited
Rising CapitalGuangdong Rising Capital Investment Co., Ltd. (formerly known as “Guangdong Rising Finance Holding Co., Ltd.”)
Shenzhen Rising InvestmentShenzhen Rising Investment Development Co., Ltd.
NationStar OptoelectronicsFoshan NationStar Optoelectronics Co., Ltd.
NationStar SemiconductorFoshan NationStar Semiconductor Technology Co., Ltd.
SigmaFoshan Sigma Venture Capital Co., Ltd.
Nanning LiaowangNanning Liaowang Auto Lamp Co., Ltd.
Fenghua SemiconductorGuangdong Fenghua Semiconductor Technology Co., Ltd. (formerly known as “Guangdong Yuejing High-tech Co., Ltd.”)
CSRCChina Securities Regulatory Commission
SZSEShenzhen Stock Exchange
General meetingGeneral meeting of Foshan Electrical and Lighting Co., Ltd.
Board of DirectorsThe board of directors of Foshan Electrical and Lighting Co., Ltd.
Supervisory CommitteeThe supervisory committee of Foshan Electrical and Lighting Co., Ltd.
RMB, RMB’0,000, RMB’00,000,000Expressed in the Chinese currency of Renminbi, expressed in tens of thousands of Renminbi, expressed in hundreds of millions of Renminbi

Annual Report 2023

Part II Corporate Information and Key Financial InformationI Corporate Information

Stock nameFSL, FSL-BStock code000541/200541
Stock exchange for listingShenzhen Stock Exchange
Company name in Chinese佛山电器照明股份有限公司
Abbr.佛山照明
Company name in English (if any)FOSHAN ELECTRICAL AND LIGHTING CO.,LTD
Abbr. (if any)FSL
Legal representativeWan Shan
Registered addressNo. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, P.R.China
Zip code528000
Changes of registered addressN/A
Office addressNo. 8, Zhihui Road, Chancheng District, Foshan City, Guangdong Province, P.R.China
Zip code528051
Company websitewww.chinafsl.com
Email addressgzfsligh@pub.foshan.gd.cn

II Contact Information

Board SecretarySecurities Representative
NameHuang ZhenhuanHuang Yufen
AddressNo. 8, Zhihui Road, Chancheng District, Foshan City, Guangdong Province, P.R.ChinaNo. 8, Zhihui Road, Chancheng District, Foshan City, Guangdong Province, P.R.China
Tel.(0757)82810239(0757)82966028
Fax(0757)82816276(0757)82816276
Email addressfsldsh@chinafsl.comfslhyf@163.com

III Media for Information Disclosure and Place where this Report Is Lodged

Stock exchange website where this Report is disclosedhttp://www.cninfo.com.cn
Media and website where this Report is disclosedChina Securities Journal, and http://www.cninfo.com.cn
Place where this Report is lodgedBoard Office, FSL Office Building, No. 8, Zhihui Road, Chancheng

Annual Report 2023

District, Foshan City, Guangdong Province, P.R.China

IV Change to Company Registered Information

Unified social credit code91440000190352575W
Change to principal activity of the Company since going public (if any)Unchanged
Every change of controlling shareholder since incorporation (if any)In April 2006, the State-owned Assets Supervision and Administration Commission (SASAC) of Foshan Municipal People's Government, the former controlling shareholder of the Company, transferred 13.47% of shares it held in the Company to OSRAM Prosperity Holding Company Limited (later renamed as "OSRAM Holding Company Limited"), and at the same time, SASAC of Foshan Municipal People's Government transferred 10.50% of shares it held in the Company to Prosperity Lamps & Components Limited. Upon completion of such transfer, the biggest shareholder of the Company was OSRAM Prosperity Holding Company Limited, and the Company had no any controlling shareholder or actual controller. In December 2015, OSRAM of Germany transferred 100% equity it held in OSRAM Holding Company Limited (OSRAM Holding Company Limited held 13.47% of shares of the Company, being the biggest shareholder of the Company and later renamed as "Hongkong Wah Shing Holding Company Limited") to Electronics Group. In addition, Electronics Group and its parties acting in concert (Rising Capital, Shenzhen Rising Investment and Hong Kong Rising Investment), held 23.144% of the shares of the Company through increasing their shareholding of the Company. Electronics Group and its parties acting in concert became the controlling shareholder of the Company and Electronics Group is a wholly-owned subsidiary of Rising Holdings Group. In December 2021, wholly-owned subsidiaries of Rising Holdings Group, Rising Capital and Shenzhen Rising Investment transferred 5.94% of shares they held in the Company to Rising Holdings Group through transfer by agreement for no compensation. Therefore, Rising Holdings Group and its parties acting in concert held 30% of shares in the Company. In February 2022, the Company repurchased and retired certain shares, and Rising Holdings Group and its parties acting in concert held 30.82% of shares in the Company. In November 2023, the Company carried out a private placement of 186,783,583 shares of A-stock to specific parties, of which Rising Holdings Group subscribed for 46,695,895 shares. As of the date of this Report, Rising Holdings Group and its parties acting in concert hold 30.12% of shares in the Company.

V Other InformationThe independent audit firm hired by the Company:

NameWUYIGE Certified Public Accountants LLP
Office addressRoom 2206, 22/F, 1 Zhichun Road, Haidian District, Beijing
Accountants writing signaturesHe Xiaojuan, and Wang Jingkun

The independent sponsor hired by the Company to exercise constant supervision over the Company in the

Annual Report 2023

Reporting Period:

? Applicable □ Not applicable

Name of sponsorOffice addressName of representativePeriod of supervision
Guotai Junan Securities Co., Ltd.No. 618, Shangcheng Road, China (Shanghai) Pilot Free Trade ZoneXu Zhenyu, and Yang HaoyueFrom 4 December 2023 to 31 December 2024

The independent financial advisor hired by the Company to exercise constant supervision over the Company inthe Reporting Period:

? Applicable □ Not applicable

Name of financial advisorOffice addressName of representativePeriod of supervision
China Industrial Securities Co., Ltd.52/F, T2 Office Building, Shenye Shangcheng (South Zone), 5001 Huanggang Road, Futian District, ShenzhenQiu Kaijuan, and Guo XiaominFrom 23 February 2022 to 31 December 2023

VI Key Financial Information

Indicate by tick mark whether there is any retrospectively restated datum in the table below.? Yes □ NoReason for retrospective restatement:

Change to accounting policies

202320222023-over-2022 change (%)2021
BeforeRestatedRestatedBeforeRestated
Operating revenue (RMB)9,057,292,003.908,759,965,275.968,759,965,275.963.39%8,726,241,053.508,726,241,053.50
Net profit attributable to the listed company’s shareholders (RMB)290,357,652.22230,394,235.91230,320,570.6726.07%299,614,354.88299,633,273.10
Net profit attributable to the listed company’s shareholders before exceptional274,838,768.63221,545,061.10222,164,265.4923.71%149,573,177.56149,612,843.61

Annual Report 2023

gains and losses (RMB)
Net cash generated from/used in operating activities (RMB)1,174,389,978.981,064,888,320.691,064,888,320.6910.28%433,473,948.34433,473,948.34
Basic earnings per share (RMB/share)0.21280.17080.170724.66%0.22210.2161
Diluted earnings per share (RMB/share)0.21080.16920.169124.66%0.22000.2141
Weighted average return on equity (%)5.51%4.13%4.13%1.38%4.20%4.20%
31 December 202331 December 2022Change of 31 December 2023 over 31 December 2022 (%)31 December 2021
BeforeRestatedRestatedBeforeRestated
Total assets (RMB)16,934,439,915.0215,287,061,119.7015,288,917,918.8610.76%16,599,918,628.3516,601,816,777.69
Equity attributable to the listed company’s shareholders (RMB)6,285,442,808.195,173,066,095.765,173,011,348.7421.50%7,036,108,772.547,036,127,690.76

Reason for changes in accounting policies and correction of accounting error:

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 “43. (1) Changes tosignificant accounting policies” under Item V of Part X.The Company has adopted the Explanatory Announcement No. 1 on Information Disclosure for Companies

Annual Report 2023

Offering Their Securities to the Public—Exceptional Gain/Loss Items (Revised in 2023), and carried out therelevant retrospective restatements.Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders beforeand after exceptional gains and losses was negative for the last three accounting years, and the latestindependent auditor’s report indicated that there was uncertainty about the Company’s ability to continue as agoing concern.

□ Yes ? No

Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders beforeand after exceptional gains and losses was negative.

□ Yes ? No

VII Accounting Data Differences under China’s Accounting Standards for BusinessEnterprises (CAS) and International Financial Reporting Standards (IFRS) and ForeignAccounting Standards

1. Net Profit and Equity under CAS and IFRS

□ Applicable ? Not applicable

No difference for the Reporting Period.

2. Net Profit and Equity under CAS and Foreign Accounting Standards

□ Applicable ? Not applicable

No difference for the Reporting Period.

VIII Key Financial Information by Quarter

Unit: RMB

Q1Q2Q3Q4
Operating revenue2,193,613,606.542,372,449,122.482,230,945,274.662,260,284,000.22
Net profit attributable to the listed company’s shareholders66,221,546.43102,713,686.1169,756,568.6551,665,851.03
Net profit attributable to the listed company’s shareholders before exceptional gains and losses59,526,020.95120,863,190.5849,838,998.4344,610,558.67

Annual Report 2023

Net cash generated from/used in operating activities74,718,240.10313,150,817.10365,697,164.52420,823,757.26

Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differsmaterially from what have been disclosed in the Company’s quarterly or interim reports.

□ Yes ? No

IX Exceptional Gains and Losses? Applicable □ Not applicable

Unit: RMB

Item202320222021Note
Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs)11,286,004.48-8,216,871.4982,233,742.26
Government grants recognised in current profit or loss (exclusive of those that are closely related to the Company's normal business operations and given in accordance with defined criteria and in compliance with government policies, and have a continuing impact on the Company's profit or loss)52,146,676.2067,165,060.7615,936,448.78
Gain or loss on fair-value changes in financial assets and liabilities held by a non-financial enterprise, as well as on disposal of financial assets and liabilities (exclusive of the effective portion of hedges that arise in the Company’s ordinary course of business)-10,070,899.66-19,057,137.2710,663,119.44
Capital occupation charges on a non-financial enterprise that are charged to current profit or loss224,271.91339,583.00881,704.19
Reversed portions of573,448.921,203,963.23

Annual Report 2023

impairment allowances for receivables which are tested individually for impairment
Current profit or loss on subsidiaries obtained in business combinations involving enterprises under common control from the period-beginning to combination dates, net22,504,245.08233,275,576.92
Non-operating income and expense other than the above4,424,223.1010,557,819.1710,640,975.11
Less: Income tax effects5,440,558.974,192,386.7117,217,193.63
Non-controlling interests effects (net of tax)37,624,282.3962,147,970.59186,393,943.58
Total15,518,883.598,156,305.18150,020,429.49--

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.

Annual Report 2023

Part III Management Discussion and Analysis

I Industry Overview for the Reporting PeriodIn 2023, the lighting industry experienced a period of recovery under pressure. On one hand, the continuedslump in the domestic real estate market and weak downstream demand have had a certain impact on therecovery of the domestic lighting market. On the other hand, the international market is complex and volatile,combined with weakened external demand and the relocation of industrial chains, making market expansionmore challenging. The industry reshuffle is accelerating. Enterprises with advantages in technology, fund andbrand were gradually expanding their market shares, and high-quality resources were being channeled toleading players. With the national policy of "Carbon Emission Peak and Carbon Neutrality", major lightingenterprises accelerated the development of high energy-saving and intelligent products with better light quality.To this end, they carried out integration and extension by focusing on healthy and intelligent lighting.Concurrently, with the continuously iterated technologies and policy encouragement, the lighting applicationscenarios got increasingly diversified. Moreover, segmentations such as intelligent lighting, healthy lighting,animal and plant lighting would usher in more development opportunities, injecting new impetus into theindustry development.As automotive lights are core parts of an automobile, the automotive light industry development is closelylinked to the development of the automotive industry. In 2023, due to the policy incentives for car purchasesand the growing market for new energy vehicles, the automobile output and sales in China for 2023 reached

30.161 million and 30.094 million, up by 11.62% and 12.02% year on year, respectively. The new energyvehicle industry achieved ongoing rapid growth. Statistically, the output and sales of new energy vehicles for2023 reached 9.587 million and 9.495 million, up by 35.8% and 37.9% year on year, respectively. Additionally,the market share of new energy vehicles rose to 31.6%. The growth in automobile output and sales boosted thedemand in the automotive light market. In recent years, with the significant growth in sales of new energyvehicles, the rise of domestic automotive brands, and the improvement of research and development capabilitiesand cost advantages of enterprises along the entire industry chain, Chinese auto parts enterprises have graduallybeen incorporated by vehicle companies into their supply chain systems. This has contributed to thecontinuously accelerated replacement with domestic products and given more opportunities to Chineseautomotive light enterprises. At the same time, with the development of automotive industry technologies, theincreasingly electronic, intelligent and diversified automotive light-related technologies have brought newdevelopment opportunities to the industry, while also placing higher demands on the innovative capabilities ofautomotive lighting companies.Affected by the slow global economic recovery and consumer downgrading, the recovery of end-marketdemand fell short of expectations in 2023, bringing a certain impact on the development of the LED packagingindustry. Many small and medium-sized enterprises were forced to exit, suggesting a potential increase inindustry concentration. Still, with the upgraded technologies, some application fields, such as new Mini/MicroLED displays and automotive LED lighting are experiencing a counter-trend growth. The application domainsof these products continue to expand, accelerating the industry's transformation towards high value-addedbusinesses. Enterprises with strong technological innovation capabilities, brand influence, and capital strengthwill continue to benefit from the industry's development.

Annual Report 2023

II Principal Operations of the Company in the Reporting Period(I) Principal operationsThe 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, airport lighting, and animal and plantlighting.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, SERES, IM, Bestune, SAIC Maxus Automotive,and other whole-automobile manufacturers. And medium- and high-end products take up an increasingpercentage of its total sales of automotive lights.The Company conducts LED packaging business mainly by relying on its majority-owned subsidiaryNationStar Optoelectronics (stock code: 002449). The primary products include LED epitaxial wafers and chips,LED packaging and component products, integrated circuit packaging products, and third generation compoundsemiconductor packaging products, which are widely used for consumer electronics, home appliances,computers, communications, display and lighting products, general lighting, automotive lighting, sterilizationand purification, plant lighting, and other fields.(II) Business models

1. Procurement model

The Company's procurement department should ensure that the procured materials and products meet theprescribed requirements and that procurement activities are under control. Besides, it should consider the needsof each department and the reasonable stock quantity before carrying out any procurement, and determinesuppliers by means of bidding, price negotiation, and price comparison. There should be several backupsuppliers of each principal raw material to ensure fair procurement price, timely material supply, and reliablequality.

Annual Report 2023

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 primarily sells in hardware distribution, home, engineering,and e-commerce & retail sale channels. For foreign sales, the Company adopts the models of OEM andindependent brands. 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.(III) Main driving forces for growthThe Company upholds the overall idea of "stabilizing the fundamentals and strengthening 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, lighting companieswith weak competitiveness will be gradually elbowed out of the market while large enterprises or enterpriseswith core competitiveness will have more market opportunities. By virtue of its advantages in technology, brand,channel and scale, the Company has continued to promote the technical upgrading of its primary products,improve product quality, beef up market expansion and optimize the business portfolio through sustainedspending on R&D and technical innovation. Meanwhile, it has gained an advantageous position in the processof enhancing market concentration by increasing the level of production automation, effectively controllingpurchase costs and ramping up production efficiency.III Core Competitiveness AnalysisThe Company has been dedicated to the R&D, manufacturing and sale of lighting products since itsestablishment. Through continuous channel development, branding, investment in R&D and innovation as wellas vertical integration of the industrial chain, the core competitiveness of the Company has been furtherstrengthened, which is mainly reflected in the following aspects:

Annual Report 2023

Channel advantageThe Company has been sticking to the market strategy of deeply cultivating and refining channels. Over yearsof development and experience, the Company has been equipped with 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 customers of medium- and high-end and new energy vehiclemakers. Its client entities are increasingly diverse. NationStar Optoelectronics has an excellent client structure.It has established a long-term cooperative relationship with industry-leading display manufacturers andinternationally famous home appliance enterprises, has successfully showcased its products in many largeevents and high-end venues at home and abroad, and is widely recognized by end clients and the market.Brand advantageAs a national brand that has 66 years of experience in the lighting industry, the presence and value of “FSL” hascontinued to increase. For 18 consecutive years, the Company has been included in the list of "China's 500 MostValuable Brands". In 2023, the value of FSL brand reached RMB31.219 billion. In 2014, “FSL” was recognizedby China’s Ministry of Commerce as a “China Time-honored Brand”. In recent years, with the enhancement ofits development positioning, product design and user experience, the Company has initiated the strategy ofbrand upgrading and carried out promotion by centering around the new "Professional, Healthy, Fashionableand 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 productcommunication effect, formed a comprehensive and diversified publicity position, and driven the transition of“FSL” from an industrial brand to a popular brand to maintain the brand vitality and competitiveness. The brand"FSL" has become one of the most influential and popular industrial brands in China, and the powerful brandinfluence has played a key role in driving the sustained growth of the Company’s sales. Nanning Liaowangstrictly abides by the national industry standards when producing automotive lights of the "Liaowang" brand. Ithas been hailed as a high-quality supplier of car manufacturers for quite a few times. NationStarOptoelectronics has been awarded honors such as "National High-tech Enterprise Certification", "Brand Power","Top 10 LED Packaging Brands", GREE’s “Excellent Display Device Suppler”, and Midea’s “Partner ofExcellent Quality”, 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 introducedfirst-class R&D equipment and facilities from home and abroad to provide favourable conditions for scientificand technological innovation. The Company is a national high-tech company, and its testing center has theCNAS-approved qualification. In addition, the Company has built innovative platforms such as "Guangdong

Annual Report 2023

Engineering Technology Development Center", "Guangdong Industrial Design Center", "Guangdong EnterpriseTechnology Center", and "Lighting Research Institute". Besides, the Company has won the title of "National IPDemonstration Enterprise" and established a "Postdoctoral Research Station (Substation)" and a "GuangdongScience and Technology Expert Workstation" to explore and intensify efforts in the cutting-edge technology ofLEDs, and address key issues and common technology issues in the industry. It has formed technical barrierswith proprietary intellectual property rights in lighting, spectroscopic, electrical, IoT, AI and many other fields.Cumulatively, the company and its holding subsidiaries have been granted more than 2,200 valid patents. Also,they have led or participated in the formulation or revision of 238 standards at all levels, which have beenissued. The Company actively integrates internal and external resources and collaborates with TsinghuaUniversity, Fudan University, Sun Yat-sen University, South China University of Technology, Dalian OceanUniversity, Institute of Deep-Sea Science and Engineering of CAS, Ji Hua Laboratory, and other scientificresearch institutes to establish in-depth industrial and research cooperation, so as to promote key technologicalbreakthroughs and transformation of scientific and technological achievements. Meanwhile, the Company hasformed a smooth R&D talent cultivation channel to provide a strong guarantee for the Company to maintaintechnological leadership and continuous product innovation. Nanning Liaowang boasts a provincial enterprisetechnology center, a provincial R&D center, and a Guangxi automotive lighting parts engineering technologyresearch center; and established the Automotive Lighting Research Institute and multiple R&D centres. Inrecent years, Nanning Liaowang has increased investment in R&D, accelerated investment in various lensmodules and interactive signal lamp technologies, and continuously enhanced its R&D strength. NationStarOptoelectronics has created 14 R&D platforms, including the Postdoctoral Research Station, and the National-and local-joint Engineering Laboratory for Semiconductor Lighting Materials and Components. It hasundertaken near 30 national research projects such as the national "863" program and the key national R&Dprogram, in addition to more than 100 provincial and ministerial research projects. Besides, it has won honorssuch as "National Intellectual Property Demonstration Enterprise", “China Patent Gold Award”, "NationalScience and Technology Progress Award (first/second prize)", as well as “GG Golden Globe Award”.Moreover, it has constantly made breakthroughs and surmounted technological challenges in emerging areassuch as Mini/Micro LED, third-generation semiconductor SiC power devices and GaN devices, smart healthsensors, 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 chain

Annual Report 2023

By controlling NationStar Optoelectronics, whose business covers the entire LED industry chain, includingupstream LED chip manufacturing, midstream LED packaging, and downstream LED application products, theCompany has optimized the industry chain and further enhanced its competitiveness and visibility in theindustry.IV Analysis of Principal Operations

1. Overview

In 2023, in response to unfavourable factors such as weak global economic recovery and reduced demand in thelighting industry, the Company adhered to the principal business of manufacturing, putting “Stable Growth andIncreased Earnings” top on its agenda. By implementing the four-driver development measures of “internalmanagement, market expansion, innovation-driven growth, and capital support”, the Company has takentargeted and down-to-earth actions, thus improving its quality and efficiency and maintaining its overall stableproduction and operations. During the Reporting Period, the Company recorded operating revenue ofRMB9.057 billion, up by 3.39% year-on-year (YoY); and a net profit attributable to its shareholders ofRMB290 million , up by 26.07% YoY.During the Reporting Period, the Company mainly focused on the following tasks:

1. "Striving" for market expansion, the Company achieved stable and progressive business performance.The Company strengthened its situation judgment and analysis and operational management, continuouslyimplementing the "four major actions" and adopting multiple approaches to expand markets. First, channelshave been optimized. The Company have promoted channel extension, enhanced services to end-users, anddeveloped more hardware retail outlets. Additionally, a batch of exclusive stores were newly opened. Throughinitiatives such as supporting weaker partners and promoting benchmarking, the Company improved theoperational capabilities of service providers, effectively driving sales growth. Second, actions were made toenhance engineering business. The Company introduced a group of capable engineering distributors andimplemented high-level marketing and targeted sales strategies. As a result, it successfully won bids for anumber of centralized procurement projects and engineering projects. Additionally, the Company was selectedas a qualified supplier by several large corporate brand portfolios. Third, initiatives were launched to expandoverseas market. The Company conducted in-depth exploration of the potential of major customers, activelyengaged with their specific needs, and enhanced its service capabilities. Furthermore, it increased the promotionand sales of its proprietary brands in the Middle East and South America, actively developing untapped marketsand developing new customers. Fourth, make new energy vehicle (NEV) lamp market. Newly developed 7automobile OEMs, 62 new project orders, and project exchanges with a number of potential customers, andmake every effort to strive for more new products and new project orders.

2. Adhering to "Strict" management, the Company continued to improve the operation qualityThe Company implementing special actions to improve fine management, focusing on key points anddifficulties, and taking multiple measures to reduce costs and improve quality and efficiency. First, a variety ofmeasures were adopted to minimize costs The Company strengthened the analysis of price trends for bulkcommodities and implemented measures such as supplier optimization, price comparison inquiries, negotiation

Annual Report 2023

and bargaining, material substitution with new materials, reduction of material specifications, production lineacceleration, and process optimization to reduce procurement and manufacturing costs. Furthermore, itenhanced comprehensive budget management and controlled expenditure to control costs. Second, strengthenits control over inventory and accounts receivable. The Company strengthened sales forecasting and thedocking of production and marketing to improve production scheduling accuracy. It implemented real-timemonitoring and monthly inspections of product inventory, adhering to the principles of "Three Determinationsand Three Lines" to control inventory levels effectively. Furthermore, it enhanced credit evaluation for accountreceivables, employing measures such as production suspension recovery, bill factoring, legal action, and riskagency to recover outstanding receivables. Third, continue to promote manufacturing upgrades and digitaltransformation. The Company carried out automation and intelligent upgrades, successfully completing theconstruction of the second phase of the intelligent warehouse project. This initiative further enhanced logisticsefficiency and reduced storage costs, earning recognition as a "Digital and Intelligent TransformationBenchmark Demonstration Project" in Foshan City. The Company also launched systems for research anddevelopment lifecycle management, digital archives management, and initiated the construction of a financialshared services centre and digitalized human resources systems. These efforts laid a solid foundation for thecomprehensive digital transformation of the Company.

3. Focus on speed, the Company prioritized innovation, effectively enhancing its technological support.The Company has identified intelligent, healthy, and low-carbon lighting as its main focus for innovation. It hasconsistently increased its investment in this area, accelerating technological upgrades and product iterations. Indoing so, the Company is committed to building a "hardcore support" for high-quality development.Throughout the year, the Company invested a total of RMB535 million in research and development (R&D)funds, representing a year-on-year growth of 16.18%. The intensity of R&D investment reached 5.9%. TheCompany targeted market demands and conducted technological research to develop innovative products. Itintroduced functional products such as interactive technology-based smart headlights and full-spectrumintelligent eye-care desk lamps. The Company also built a competitive product portfolio with high-qualityofferings in areas such as constant lighting, photocatalysis, and outdoor lighting. Furthermore, it optimized andupgraded eight major smart systems including smart home. The Company strengthened its efforts in applyingfor independent intellectual property rights. Throughout the year, it was granted 334 authorized patents,including 52 invention patents. It participated in the formulation of 28 industry standards and was awarded thetitle of "Advanced Collective in the National Light Industry Standardization Work". It made the list of "LeadingEnterprises" in the national corporate standards for two consecutive years. The Company's UV core technology,developed in collaboration, received the second prize of Guangdong Provincial Science and TechnologyProgress Award. Additionally, three LED headlight technologies received the Guangxi Automotive IndustryTechnology Innovation Achievement Award. The "High-Density and High-Reliability LED Display DevicePackaging and Testing Technology for 4K/8K" was selected for the "Leading Technologies" list in "Scienceand Technology Innovation China". The MIP0404 device won the "Most Influential Product Award" in theExpert Aurora Awards.

4. Prioritizing practical actions, the Company contributed to industrial transformation and upgrading.During the Reporting Period, the Company successfully completed the project of issuing shares to specificobjects, and the funds raised were used for automation transformation and digital transformation, HainanIndustrial Park I, intelligent street lamps, automotive lamp module production and construction of R&D centres,

Annual Report 2023

which provided a strong financial guarantee for the Company's new business cultivation, scientific andtechnological innovation, and automation and digital upgrading.

2. Revenue and Cost Analysis

(1) Breakdown of Operating Revenue

Unit: RMB

20232022Change (%)
Operating revenueAs % of total operating revenue (%)Operating revenueAs % of total operating revenue (%)
Total9,057,292,003.90100%8,759,965,275.96100%3.39%
By operating division
Lighting products and luminaries5,372,636,104.7359.32%5,037,643,901.4857.51%6.65%
Electronic component manufacturing2,720,580,207.9130.04%2,821,927,649.9732.21%-3.59%
Export trade and other964,075,691.2610.64%900,393,724.5110.28%7.07%
By product category
General lighting products3,329,722,911.7836.76%3,136,174,210.7235.80%6.17%
LED packaging and components2,497,194,527.3227.57%2,562,831,923.0629.26%-2.56%
Auto lamps1,830,397,791.0120.21%1,729,839,032.1119.75%5.81%
Trade and other1,399,976,773.7915.46%1,331,120,110.0715.20%5.17%
By operating segment
Domestic7,028,294,952.4877.60%6,625,258,201.5775.63%6.08%
Overseas2,028,997,051.4222.40%2,134,707,074.3924.37%-4.95%
By sales model
Direct sales82,407,639.560.91%51,977,666.740.59%58.54%
Distribution8,701,184,844.6696.07%8,442,797,638.6096.38%3.06%
Other273,699,519.683.02%265,189,970.623.03%3.21%

(2) Operating Division, Product Category, Operating Segment and Distribution Model Contributing over10% of Operating Revenue or Operating Profit? Applicable □ Not applicable

Unit: RMB

Annual Report 2023

Operating revenueCost of salesGross profit marginYoY change in operating revenue (%)YoY change in cost of sales (%)YoY change in gross profit margin (%)
By operating division
Lighting products and luminaries5,372,636,104.734,148,715,571.8322.78%6.65%3.32%2.49%
Electronic component manufacturing2,720,580,207.912,314,709,765.3514.92%-3.59%-3.31%-0.25%
Export trade and other964,075,691.26891,388,914.837.54%7.07%9.43%-1.99%
By product category
General lighting products3,329,722,911.782,496,127,614.4825.03%6.17%2.25%2.87%
LED packaging and components2,497,194,527.322,043,780,170.4418.16%-2.56%-4.27%1.46%
Auto lamps1,830,397,791.011,498,785,095.8718.12%5.81%3.98%1.45%
Trade and other1,399,976,773.791,316,121,371.225.99%5.17%9.08%-3.37%
By operating segment
Domestic7,028,294,952.485,590,598,879.2020.46%6.08%4.35%1.32%
Overseas2,028,997,051.421,764,215,372.8113.05%-4.95%-5.48%0.49%
By sales model
Direct sales82,407,639.5655,027,394.1933.23%58.54%66.13%-3.05%
Distribution8,701,184,844.667,093,981,599.1518.47%3.06%1.24%1.46%
Other273,699,519.68205,805,258.6724.81%3.21%11.99%-5.89%

Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:

□ Applicable ? Not applicable

(3) Whether Revenue from Physical Sales Is Higher than Service Revenue

? Yes □ No

Operating divisionItemUnit20232022Change (%)
Lighting products and luminariesUnit salesPiece714,617,415744,109,776-3.96%
OutputPiece721,393,924740,109,114-2.53%
InventoryPiece115,735,970108,959,4616.22%
Electronic componentUnit sales0,000 pieces18,219,06121,582,719-15.58%
Output0,000 pieces18,815,03820,960,964-10.24%

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manufacturingInventory0,000 pieces3,504,7772,908,80020.49%

Any over 30% YoY movements in the data above and why:

□ Applicable ? Not applicable

(4) Execution Progress of Major Signed Sales and Purchase Contracts in the Reporting Period

□ Applicable ? Not applicable

(5) Breakdown of Cost of Sales

By operating division and product category

Unit: RMB

Operating divisionItem20232022Change (%)
Cost of salesAs % of total cost of sales (%)Cost of salesAs % of total cost of sales (%)
Lighting products and luminariesRaw materials3,316,446,132.2245.09%3,223,139,894.6744.62%2.89%
Lighting products and luminariesLabor cost468,703,890.326.37%440,097,973.976.09%6.50%
Lighting products and luminariesDepreciation and other363,565,549.294.94%348,261,748.354.82%4.39%
Electronic component manufacturingRaw materials1,600,633,606.2021.76%1,746,279,785.1424.17%-8.34%
Electronic component manufacturingLabor cost147,593,047.132.01%163,881,020.622.27%-9.94%
Electronic component manufacturingManufacturing costs566,483,112.027.70%487,707,388.506.75%16.15%
TradeOther685,583,656.169.32%630,838,199.118.73%8.68%
OtherOther205,805,258.672.80%183,765,491.172.54%11.99%
Total7,354,814,252.01100.00%7,223,971,501.53100.00%1.81%

Unit: RMB

Product categoryItem20232022Change (%)
Cost of salesAs % of total cost of sales (%)Cost of salesAs % of total cost of sales (%)

Annual Report 2023

General lighting productsRaw materials1,990,393,132.2427.06%1,935,461,260.5926.79%2.84%
General lighting productsLabor cost288,182,082.503.92%300,220,823.124.16%-4.01%
General lighting productsDepreciation and other217,552,399.742.96%205,416,457.122.84%5.91%
General lighting productsSubtotal2,496,127,614.4833.94%2,441,098,540.8333.79%2.25%
Auto lampsRaw materials1,189,156,564.2016.17%1,171,866,396.7316.22%1.48%
Auto lampsLabor cost172,159,579.912.34%133,268,897.371.84%29.18%
Auto lampsDepreciation and other137,468,951.761.87%136,335,174.111.89%0.83%
Auto lampsSubtotal1,498,785,095.8720.38%1,441,470,468.2119.95%3.98%
LED packaging and componentsRaw materials1,460,582,341.0119.86%1,576,705,592.8821.83%-7.36%
LED packaging and componentsLabor cost122,206,881.331.66%142,881,340.981.98%-14.47%
LED packaging and componentsDepreciation and other460,990,948.106.27%415,288,632.515.75%11.00%
LED packaging and componentsSubtotal2,043,780,170.4427.79%2,134,875,566.3729.55%-4.27%
Trade and otherRaw materials962,531,357.1313.09%896,164,035.0412.41%7.41%
Trade and otherLabor cost33,748,393.710.46%32,061,365.700.44%5.26%
Trade and otherDepreciation and other114,036,361.711.55%94,536,034.211.31%20.63%
Trade and otherSubtotal1,110,316,112.5515.10%1,022,761,434.9514.16%8.56%
OtherOther205,805,258.672.80%183,765,491.172.54%11.99%

(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period? Yes □ No

Annual Report 2023

For details, see “5. Other changes to the consolidation scope” under “IX Changes to the Consolidation Scope” in“Part X Financial Statements” of this Report.

(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period

□ Applicable ? Not applicable

(8) Major Customers and Suppliers

Major customers:

Total sales to top five customers (RMB)1,873,925,420.73
Total sales to top five customers as % of total sales of the Reporting Period (%)20.69%
Total sales to related parties among top five customers as % of total sales of the Reporting Period (%)0.00%

Information about top five customers:

No.CustomerSales revenue contributed for the Reporting Period (RMB)As % of total sales revenue (%)
1Customer A640,670,416.957.07%
2Customer B424,932,709.954.69%
3Customer C415,427,120.644.59%
4Customer D203,981,711.602.25%
5Customer E188,913,461.592.09%
Total--1,873,925,420.7320.69%

Other information about major customers:

? Applicable □ Not applicableNone of the top five customers is a related party of the Company.Major suppliers:

Total purchases from top five suppliers (RMB)712,586,626.83
Total purchases from top five suppliers as % of total purchases of the Reporting Period (%)11.94%
Total purchases from related parties among top five suppliers as % of total purchases of the Reporting Period (%)0.00%

Information about top five suppliers:

No.SupplierPurchase in the Reporting Period (RMB)As % of total purchases (%)
1Supplier A242,848,987.194.07%
2Supplier B131,979,877.922.21%
3Supplier C125,457,729.032.10%
4Supplier D111,621,371.721.87%
5Supplier E100,678,660.971.69%

Annual Report 2023

Total--712,586,626.8311.94%

Other information about major suppliers:

? Applicable □ Not applicableNone of the top five suppliers is a related party of the Company.

3. Expense

Unit: RMB

20232022Change (%)Main reason for any significant change
Selling expense331,039,604.55256,820,593.8228.90%Business promotion and advertising expenses, travel expenses, employee remunerations and the like associated with product sales that were paid for market expansion purposes in the current period
Administrative expense430,544,371.96408,119,409.225.49%
Finance costs-32,498,749.52-31,478,088.43-3.24%
R&D expense483,579,093.81440,787,934.069.71%

4. R&D Investments

? Applicable □ Not applicable

Names of main R&D projectsProject objectivesProject progressObjectives to be achievedExpected impact on the future development of the Company
Research on the Key Technology of High-power LED Lighting Lamps with High Luminous EfficiencyIn various specific fields, there is an increasing demand for high-power and high-efficiency LED luminaries. To meet the market's new certification standards regarding luminous efficacy levels, the Company will develop lighting products with high power and high luminous efficiency, and also conduct relevant research in areas such as fluorescent powder materials, heat dissipation materials, and optical design.In progressSolve the problem of thermal management of high power and high power density LED luminaries, break through the bottleneck of high temperature and long life of power supply, and improve the luminous efficacy and reliability of the lamp system.The Company will strategically focus on core technology patents in optical design and thermal management to expand its portfolio of high-power and high-efficiency products.
Research on the application of specific spectra in visual healthFind out the relationship between specific spectra and the refractiveIn progressTo investigate the relationship between specific spectra and the development of refractive errorsThe Company will further involve itself in the field of vision

Annual Report 2023

development of the eye and determine its influence mechanism; study the relationship between environmental improvement and subjective visual perception, visual fatigue, visual acuity changes and the development of myopia; establish a model of the influence of light sources and light distribution on visual protection; obtain the safe use range and conditions of semiconductor lighting; research and develop lighting sources and products that can reduce the incidence of myopia.in the eyes, and to determine the underlying mechanisms, the study will involve setting up experimental and control groups to examine the impact of different lighting environments on the occurrence and progression of myopia. Various measurements will be conducted, including small and dilated pupil refraction tests, as well as eye biometric parameters such as axial length, corneal curvature, and anterior chamber depth.protection and health lighting, in order to solve the key technology of vision protection and carry out medical device certification, thus cultivating an excellent team for medical device product development and the construction of a healthcare system.
Research on the intelligent dynamic light environment technology and its applicationThe potential harm of artificial lighting to human eyes, the disruption of the human circadian rhythm, and the increased risk of various health issues have garnered significant attention in the field of light and vision, both domestically and internationally. These concerns have become hot topics of interest in academia and industry alike, emerging as an urgent issue for the design of lighting solutions for healthy living environments.In progressThe project focuses on three dimensions: visual efficacy, circadian regulation, and emotional intervention, to conduct a series of exploration and studies concerning experiments, designs, and applications. It aims to actively promote the concept of "healthy light" and the integrated innovative application of LED lighting. The project also aims to explore an experimental research method that is suitable for light and health. Based on the characteristics and needs of different groups of people, the project conducts a comprehensive application study in educational, office, home, and medical & elderly care scenarios, thereby achieving healthy and dynamic lighting through the integration of intelligent lighting technologies and developing Fozhao's "secret lighting" technology.Switch the spectrum through intelligent regulation, iteratively upgrade the commercial colour rendering lighting products, effectively transfer the new technology of intelligent dynamic light environment for industrialization, and promote the high-quality development of the Company's intelligent products.
Research on Key Technologies of Intelligent Building Lighting SystemThe Company is building its core smart lighting strategy, focusing on SaaS+PaaS platform technologies for smart buildings. It adopts a series of related technologies such as dynamic transformation of multi-In progressThrough the intelligent lighting system solutions, it can realize "people-oriented", provide more comfortable, safer and more energy-saving light environment for human beings, realize the interconnection of different protocols of intelligent lighting and security products, andBy adding intelligent control modules in the luminaries, it realizes intelligent control and meets rich light-using scenarios, realizes the application of artificial intelligence technology in the field of

Annual Report 2023

attribute data and time-series databases. The platform provides multiple interfaces including HTTP and MQTT. Through a unified cloud ecosystem and strategy service system, it offers customized smart building solutions for different building users.realize the application of artificial intelligence technology in the field of intelligent family.intelligent family, and promotes the development of intelligent lighting products to the high-end.
Research on Human Behaviour Recognition and Feedback TechnologyTraditional monitoring methods rely on sensors such as cameras, however, cameras involve privacy and are not suitable for monitoring in many home scenarios. Compared to other devices, millimetre-wave radar, as a wireless sensing device, has several distinct advantages including non-contact operation, privacy protection, immunity to lighting conditions, long-range capabilities, and higher accuracy and resolution. These characteristics make millimetre-wave radar sensors highly valuable and applicable in a wide range of scenarios.In progressA complex network of WiFi links is constructed in the area to isolate the concurrent activities of different people in different spaces and to perform the functions of activity sensing, tracking and localization functions with accurate discrimination of postures (standing, sitting, lying down, falling) respectively. And through advanced learning techniques, behaviour recognition methods are adapted to different environments.Intelligence and sustainability are the trends of the future, and mastering the core technology of millimetre-wave radar sensors is essential. Researching human behaviour recognition and feedback using these sensors provides excellent support for upgrading the Company's human-centric lighting products.
Research on Wireless Communication Application TechnologiesTo allow users to use the lighting products in a more convenient comfortable and safer manner, the Company is trying to upgrade its products in a short term. Short-range wireless communication is widely considered as one of the most suitable communication technologies, and the application of various short-range wireless communication protocols has a significant impact on lighting systems and architectures.In progressEstablish ZigBee, Z-Wave wireless communication application technology, Zigbee/Bluetooth dual-mode wireless communication technology, Wi-Fi/Bluetooth dual-mode wireless communication application technology library, including hardware, RF, firmware, system integration and other application development technology, to realize the base object communication and networking function.Development of power carrier communication application technology, so that the network with the Dentsu in the same power supply environment to realize the communication between the equipment, telecommunication and other functions, to solve the industry's key technologies, and promote the Company's intelligent lighting technology continues to progress.
Research on Intelligent LED Technology and System for Efficient Planting Demand in Modern AgricultureIn order to study the impact of lighting on modern agriculture and develop various green, ecological, safe, and intelligent lighting systems forIn progressUtilizing the characteristics of diversified and controllable artificial LED light sources, we select traditional Chinese herbs in bulk with different light quality needs in China throughBy developing specialized LED luminaries and intelligent control systems for high-value plants, the Company

Annual Report 2023

regulating biological growth and development, it is important to focus on key technological innovations and research the patterns of influence.combined artificial light source management such as matching the ratio of red and blue and other light qualities to carry out systematic research.aims to break the technical and market monopoly held by international giants in the field of plant lighting LEDs. This will help the Company overcome the constraints imposed by patents held by foreign giants and promote core technological advancements in LED plant lighting.
Aquaculture ecological lighting technology and industrializationDevelop specialized luminaries for specific high economic value breeding species and apply them in the marine aquaculture industry, clarify the photobiological characteristics of intensive aquaculture of aquaculture species, and obtain the parameters of marine aquaculture light factors to build a database of photobiological effects of major aquaculture species.In progressThrough special optical design and material upgrading, LED aquaculture lighting products will further match the artificial light source with the visual sensitivity of fish, effectively enhance the growth rate of fish with the help of appropriate artificial light supplementation, reduce the cost of bait feeding, enhance the survival rate in the aquaculture cycle, and ensure that the fish are in a healthy growth state.Developed aquaculture ecological lighting technology can fine-tune the growth environment of aquatic organisms, promote the normal growth and development of fish, increase the quality and yield of fish and other fish, and at the same time to enable the aquaculture user to reduce production costs and improve economic efficiency. It plays an important role in developing the market for the Company's newly developed marine lighting circuit.
Intelligent ADB high beam moduleDevelop an intelligent high beam module, which can effectively use the high beam mode by switching the high beam mode under different driving modes, and improve the driving safety of automobiles. Make driving more comfortable.In progressImprove the intelligent development ability of the Company through the design and development regarding electronic software, system and optics.Improve the technical ability of the Company to equip intelligent ADB high beam in the middle and high-end models, and enable the Company to better occupy the middle and high-end market.
Headlight ModuleThe project is designed to strengthen the competitiveness of the module product series in the market.In progressThe project is intended to form a module series, thereby satisfying the need of mainstream customers in the market.The project will develop module products that can meet the market and customer demands and enhance the product competitiveness of the Company.
Electronic Controllers for Automotive LightsThe project is designed to develop special electronic controllers to control eachIn progressThe project is intended to achieve platform-based modules through the standardisation ofThe project will boost the Company's competitiveness in the

Annual Report 2023

feature of high-performance modules.software modules.electronic field.
The R&D and Industrialization of Quantum Dot Light-emitting Materials and Components with Low Environmental PollutionThe quantum dot materials in the quantum dot backlight technology in the industry are mainly in line with the CdSe system, and the cadmium content in the CdSe quantum dot backlight display products is above the RoHS standards of the European Union. Additionally, China has introduced a similar standard for low cadmium. The project is designed to lower the content of cadmium in the quantum dot backlight diaphragm to within the RoHS standard through the research of the low-cadmium quantum dot backlight technology and integrate the industrial chain from the quantum dot materials to quantum dot backlight machine to boost the development of the quantum dot backlight and display industry.Trial productionThrough the project and based on the requirement for quantum dot light emission with low environmental disruption, the business's advantages in the LED industry will be fully leveraged to research the backlight technology applicable to quantum dots with low environmental pollution and build a pilot scale assembly line for backlight modules for the quantum dot technology with low environmental pollution.The project will improve product quality and market share.
The Guangdong-Hong Kong-Macao Joint Lab of Intelligent Micro-nano Photoelectric TechnologyIntelligent micro/nano optoelectronic technology, which integrates photonics, nanotechnology, and artificial intelligence, is a key scientific technology in the field of national advanced manufacturing and artificial intelligence. This laboratory is oriented towards major national needs and economic innovation and development in the Greater Bay Area of Guangdong, Hong Kong, and Macao. It gathers the advantages of four parties to carry out research on new photoelectric materials and micro/nano device technology, semiconductor photoelectric chip micro/nano intelligent manufacturing, and semiconductor micro/nano intelligent display, addressing forward-looking international scientific issues and industry common technical issues. The establishment of the laboratory will promote the construction of the International Science and Technology Innovation Center in the Greater BayTrial productionWith the geographical and resource advantages of the Guangdong-Hong Kong-Macao Greater Bay Area, the lab focuses on the "photoelectric materials-micro-nano devices-micro-nano manufacturing-micro-nano display" chain and researches the technology roadmap of the Micro-LED micro-nano display, thereby addressing forward-looking scientific issues and common technical issues in the industry.Through the innovative cooperation mechanism and the complementation of the advantages of Guangdong Province and Macao, the common technical issues in the industry can be resolved, thereby advancing the high-quality development of the Company.

Annual Report 2023

Area, and is of great significance for achieving high-quality development of the photoelectric industry in the Greater Bay Area of Guangdong, Hong Kong, and Macao.
The Research on Key Technology of Full-color Micro-LED Display with High Brightness and ContrastWith the advantages of high efficiency, energy conservation, active luminescence and ultra-high resolution, Micro-LED stands out from an array of novel display technologies and has become a focus in novel technology competitions. This project aims to satisfy the major demand for large-screen 4K/8K UHD display from national policies and social development. In combination with the main development trend of full-color Micro-LED display at home and abroad, we will overcome the core technology bottleneck of the industry such as full-color packaging technology, and develop high-brightness and high-contrast Micro-LED display devices and modules that meet the market demand for better interactivity and display performance.Trial productionThis project aims to satisfy the major demand for large-screen 4K/8K UHD display from national policies and social development. In combination with the main development trend of full-color Micro-LED display at home and abroad, we will overcome the core technology bottleneck of the industry such as full-color packaging technology, and develop high-brightness and high-contrast Micro-LED display devices and modules that meet the market demand for better interactivity and display performance. By doing so, the development of upstream and downstream industries of the industry chain will be boosted, and China’s dominant position in display applications will be further consolidated.The project is of vital importance in terms of promoting the localization of China’s LED display industry chain.
The Research on the Key Technology of 4K/8K Full-color Micro-LED Displays with Ultra High Definition (UHD)The core technology of UHD display represented by Micro/Mini-LED devices is still monopolized by Samsung of South Korea, Apple of the US, Sony of Japan and other international giants. Manufacturers in the province need to pay high royalties to engage in the business, which seriously constrains the strategic transformation of the LED industry in Guangdong Province. Therefore, to vigorously develop the UHD video display industry, the key solutionsTrial productionIn this project, we will develop high performance Mini/Micro-LED display devices and display modules by researching technical problems such as high density IMD Mini/Micro-LED integrated packaging technology, high compatibility pixel cutout manufacturing technology of Mini/Micro-LED display devices, and mass transfer technology of Micro-LED chips. Related technology will be developed to remove the blockade of international giants, fill the gap of local high-end applications, and achieve the efficient and rapid 4K/8K development for the HDThe Company’s dominant position in display applications will be consolidated.

Annual Report 2023

are to break through the bottleneck of Micro/Mini-LED device technology and motivate the transformation and upgrading of UHD display in the LED industry, so as to secure the internationally advanced technology status of the province’s LED display.display.
LED Technology for Efficient Cultivation in Modern Agriculture and Its Demonstrative ApplicationAgriculture is the core of the farming industry and the cornerstone of national food security. The cultivation of high-value crops serves as an important industrial foundation for rural revitalization. LED plant lighting is a new technology that has emerged with the development of modern agricultural production methods and semiconductor lighting technology. It has been recognized domestically and internationally as an important direction for the emerging high-tech industry in agriculture. However, the development of LED plant lighting technology in our country started relatively late, and there exists a gap in technological level compared to leading international companies. To meet the industrial demand to improve light efficiency and reduce energy consumption in LED plant lighting, as well as the physiological requirements of high light efficiency during crop breeding processes, an LED technology system for efficient cultivation in modern agriculture will be developed to promote the industrial application of LED technology in crop breeding and the efficientAt the stage of research and developmentThis project aims to develop an LED technology system for efficient cultivation in modern agriculture through research on efficient LED epitaxial regulation for modern agricultural cultivation, design and fabrication processes of high light efficiency LED chips, as well as design and packaging processes of high light efficiency LED devices. The goal is to provide chip and device support for the manufacturing of specialized LED luminary systems dedicated to efficient cultivation in modern agriculture, promoting the advancement of LED plant lighting technology in our country to reach an international leading level.Plant lighting: Promote the demonstration of the Company’s plant lighting products in high-value crops Ultraviolet (UV) products: Promote the demonstration of the Company’s deep UV products in the field of public sanitation

Annual Report 2023

production of high-value crops, thereby driving the high-quality development of smart agriculture.
The Development and Application Demonstration of Deep Ultraviolet LED Modules and Equipment for Public Health and Other FieldsDeep ultraviolet LED is a preferred alternative to traditional mercury lamps for disinfection and sterilization due to its efficient virus and bacteria-killing abilities, as well as its safety, environmental friendliness, and free of secondary pollution. With the improvement of deep ultraviolet LED performance, there is great potential for implementing deep ultraviolet LED applications in pathogen inactivation in public health and logistics sectors. This project aims to promote the integration between the public health safety sector and the deep ultraviolet LED industry by conducting research on high-security and intelligent deep ultraviolet LED disinfection equipment and system solutions for the public health domain. It strives to drive the large-scale application of purification and disinfection in the public health and logistics sectors in China, contributing to the safeguarding of national public health security.At the stage of research and developmentThis project aims to develop a low thermal resistance and highly reliable universal deep ultraviolet (UV) LED light source for pathogen disinfection, addressing the technological and market demands of deep UV LED virus inactivation. It integrates intelligent identification and driving control technologies tailored to specific application scenarios. The project also involves the application of pathogen disinfection equipment in the field of public health, driving the upgrading and development of industries related to public disinfection. Its goal is to effectively prevent, control, and eliminate the hazards of sudden public health emergencies, ensuring the physical well-being and safety of the public.This project will drive the upgrading and development of industries related to public disinfection using deep ultraviolet technology.
Epitaxial Growth and Chip Fabrication Techniques for High-Performance Deep Ultraviolet LEDThis project aims to promote the development of the LED industry in the Pearl River Delta region by collaborating with countries along the Belt and Road. Through the introduction of advanced international technologies, the project aims to provide Guangdong Province with independent intellectual property rights and high-performance deep ultraviolet LED fabrication technologies. By doing so,At the stage of research and developmentThis project develops epitaxial growth and chip preparation technologies for high-performance deep-ultraviolet LEDs with flip-flop structures, and optimizes key processes to obtain high-quality and high A1-component A1GaN materials, high-performance deep-ultraviolet LED epitaxial structures, and realize the development of deep-ultraviolet LED chips.The project will improve product quality and market share.

Annual Report 2023

we will catch up with the international counterparts, or even lead them in this industry.
Wide Bandwidth Gallium Oxide Single Crystal Materials and DevicesGallium oxide crystals are a new type of ultra-wideband semiconductor with important applications in military, energy, medical and environmental fields. At present, the high price of gallium oxide single crystal substrate and the immaturity of epitaxial and device technology have greatly affected the process of gallium oxide industry. This project aims to establish a complete industrial chain from single crystal substrates to practical devices, facilitating the industrialization of the LED industry in Guangdong Province. It will strengthen Guangdong's efforts in the field of third-generation semiconductors and promote the province as a hub for wide-bandgap semiconductor research in China.At the stage of trial productionThis project focuses on gallium oxide single crystals and devices, adopting a complete chain design from single crystal substrates to epitaxial thin films, devices, and packaging. The goal is to overcome the bottlenecks in the industrialization of gallium oxide and develop gallium oxide Schottky diodes for power electronic devices and gallium oxide MOSFETs for power electronic devices, ultimately achieving industrialization.The project will improve product quality and market share.
Research and Application of Key Technologies for Indoor Fine-Pitch LED Display Devices for Next-Generation DisplaysAs LED technology continues to advance and the miniaturization of LED sizes further develops, it brings new vitality to the display industry, with emerging display technologies such as small-pitch LED displays, Mini LED displays, and Micro LED displays taking the stage one after another. Based on the new opportunities created by 5G+4K/8K ultra-high-definition display platform for indoor small-pitch display application scenarios, this project carries out the research on key technologies of indoor fine-pitch LED display devices, seizes the technological heights in theAt the stage of research and developmentThis project leverages its technological advantages in display packaging to further break through the performance limitations of LED display devices and optimize the packaging processes of display modules to improve their utilization. It aims to promote the application and adoption of fine-pitch display devices in high-definition display terminal products, seize the technological high ground in the field of new display technologies, establish strong technical barriers within the industry, and consolidate the core competitiveness of the enterprise.Increase product market share and consolidate core competitiveness

Annual Report 2023

field of new displays, forms a demonstration of new displays, establishes a strong technological barrier, and consolidates the core competitiveness of enterprises.
Research and Application of Intelligent Display Module for Home AppliancesDisplay module is one of the most widely used areas of LED applications, air conditioners, refrigerators, water heaters, washing machines, a variety of household appliances on the use of LED display modules to further expand. By venturing into the smart home and home appliance market, this project aims to provide customers with comprehensive, efficient, and customized smart design solutions. This not only injects new vitality into the smart home appliance market but also helps drive the healthy and high-quality development of the smart home appliance industry. Furthermore, it creates stable economic benefits for the enterprise.At the stage of research and developmentThis project focuses on leveraging the advantages of LED display modules in home appliances, medical devices, toys, gaming consoles, and other applications. Through research on intelligent display modules, including Bluetooth communication, voice broadcasting, touch control, and high-definition colour display, the aim is to further expand user scenarios, improve the functionality of display modules, and make the interaction between display modules and external modules more intelligent and integrated. These efforts will promote the healthy and high-quality development of the smart home appliance industry.The project will improve product quality and market share.
Development and Application of Key Technologies for High-Performance Consumer Optoelectronic DevicesThe improving consumption level of residents, the robust consumer electronics market, and the increasing demand from consumers for enhanced performance in their products have strongly driven the upgrading of high-performance consumer electronics. However, the packaging technology for high-performance consumer electronic components has long been dominated by developed countries such as the United States, Japan, and Germany. Therefore, it is urgent to achieve breakthroughs in major technologies for high-performance consumer electronics LED devices,At the stage of trial productionThis project aims to promote the development of high-performance consumer electronic component manufacturing towards higher precision and sophistication by tackling the industry's forefront technologies, including improving the spatial colour uniformity of LED devices through packaging processes, developing new chip-level packaging structures for high-performance consumer electronics LED devices, and reducing the voiding rate. Furthermore, it seeks to further facilitate the domestic substitution of high-performance consumer electronic components.The project will improve product quality and market share.

Annual Report 2023

break the foreign companies' monopoly on high-performance consumer electronics, promote the domestic substitution of high-performance consumer electronic components, and drive innovation and upgrading throughout the LED technology industry chain.
Research and Application of Key Packaging Technologies for General and Automotive LED IlluminationWith the development of LED lighting technology, the development trend in the field of general lighting is to continuously improve the quality of light, health and high luminous efficacy is the main direction, improve LED lighting technology is not enough to enhance the luminous efficacy is the key to enter the high-end lighting market. In the automotive lighting field, as the intelligence level of vehicles continues to improve, intelligent interactive LED lighting has gradually emerged as a new track for automotive lighting. Therefore, it is of great significance to carry out research on key technologies of LED for general lighting and automotive lighting.At the stage of trial productionBased on the market demand of general lighting and automotive lighting, this project focuses on the field of white LED encapsulation, improves the light quality, luminous efficacy, display effect as well as heat dissipation and heat-resistant performance of LEDs, and forms new products with independent intellectual property rights, so as to enhance the influence of the Company's white LEDs in the market of general lighting and automotive lighting, and to broaden the lighting market.The project will improve product quality and market share.

Details about R&D personnel:

20232022Change (%)
Number of R&D personnel1,7351920-9.64%
R&D personnel as % of total employees14.17%14.89%-0.72%
Educational background
Bachelor’s degree962999-3.70%
Master’s degree104105-0.90%
Doctoral degree and above1518-16.67%
Junior college and below654798-18.05%
Age structure
Below 30621793-21.69%

Annual Report 2023

30~40747777-3.24%
Over 403673553.38%

Details about R&D investments:

20232022Change (%)
R&D investments (RMB)534,561,947.29503,728,194.026.12%
R&D investments as % of operating revenue5.90%5.75%0.15%
Capitalized R&D investments (RMB)0.0043,625,369.92-100.00%
Capitalized R&D investments as % of total R&D investments0.00%8.66%-8.66%

Reason for any significant change to the composition of R&D personnel and impact:

□ Applicable ? Not applicable

Reasons for any significant YoY change in the percentage of R&D investments in operating revenue:

□ Applicable ? Not applicable

Reason for any sharp variation in the percentage of capitalized R&D investments and rationale:

? Applicable □ Not applicablePresented in 2023 in accordance with the relevant requirements of "Rule No. 15 of the Rules Governing thePreparation of Information Disclosure by Publicly Offered Companies - General Provisions on FinancialReporting (Revised in 2023)", R&D investments in 2022 included expenditures on the construction, acquisition,alteration and expansion, and overhaul of fixed assets due to R&D activities, including expenditures on land andconstructions, and expenditures on instruments and equipment.Other notes: The R&D investment calculated according to the Administration Measures for Identification ofHigh-tech Enterprises and other relevant regulations includes the R&D input included in operating costs andR&D expenditures expensed in accordance with accounting standards. In 2023, the R&D investment of theCompany was RMB534,561,900, accounting for 5.90% of the operating revenues, among which, the salesrevenue of products from bench-scale and pilot-scale production was included in core business revenue and therelevant costs were included in cost of sales of core business of RMB50,982,900.

5. Cash Flows

Unit: RMB

Item20232022Change (%)
Subtotal of cash generated from operating activities8,513,648,453.748,658,886,730.27-1.68%

Annual Report 2023

Subtotal of cash used in operating activities7,339,258,474.767,593,998,409.58-3.35%
Net cash generated from/used in operating activities1,174,389,978.981,064,888,320.6910.28%
Subtotal of cash generated from investing activities423,342,286.04378,208,504.0011.93%
Subtotal of cash used in investing activities1,130,862,869.12724,926,218.6456.00%
Net cash generated from/used in investing activities-707,520,583.08-346,717,714.64-104.06%
Subtotal of cash generated from financing activities1,404,603,429.351,156,078,320.5921.50%
Subtotal of cash used in financing activities721,157,492.221,901,637,286.67-62.08%
Net cash generated from/used in financing activities683,445,937.13-745,558,966.08191.67%
Net increase in cash and cash equivalents1,155,281,636.625,762,254.3419,949.13%

Explanation of why any of the data above varies significantly:

? Applicable □ Not applicable

(1) Net cash generated from operating activities increased by 10.28% year on year, mainly due to the Companyas the parent strengthening inventory control.

(2) Net cash generated from investing activities decreased by 104.06% year on year, mainly due to the increasedpurchases of large-denomination certificates, etc. in the current period.

(3) Net cash generated from financing activities increased by 191.67% year on year, mainly because the sameperiod of last year saw a higher payment for the acquisition of equity interests in subsidiary NationStarOptoelectronics under common control, and raised funds were received in a capital increase and shareexpansion in the current period.

(4) Net increase in cash and cash equivalents increased by 19,949.13% year on year, mainly because raisedfunds were received in a capital increase and share expansion in the current period.Explanation of why net cash generated from/used in operating activities varies significantly from net profit forthe Reporting Period:

? Applicable □ Not applicableThere is a gap of RMB789,717,377.00 between net cash generated from operating activities ofRMB1,174,389,978.98 and net profit of RMB384,672,601.98 in the year, mainly because cash received from

Annual Report 2023

sale of goods was higher than cash paid for raw materials, in addition to high non-cash costs, in the currentperiod.V Analysis of Non-Core Businesses? Applicable □ Not applicable

Unit: RMB

AmountAs % of profit before taxMain source/reasonRecurrent or not
Return on investment14,598,948.353.60%Dividend income from other equity investments held during the period, and interest income from other debt investmentsYes
Gain/loss on changes in fair value1,129,444.260.28%Gain/loss on changes in fair value of financial instrumentsYes
Asset impairments-81,268,657.36-20.03%Inventory valuation allowancesYes
Non-operating income9,540,666.392.35%Sale of retired equipment, and carryforwards of payables that require no paymentNot
Non-operating expense6,538,763.701.61%Loss on retirement of non-current assets and transfer of prepaymentsNot
Other income90,204,646.6222.23%Receipt of continuing government grantsNot
Credit impairment loss-52,131,054.21-12.85%Allowances for doubtful accounts receivable and other receivablesYes
Asset disposal income12,719,324.893.13%Gains or losses on the disposal of non-current assetsNot

VI Analysis of Assets and Liabilities

1. Significant Changes in Asset Composition

Unit: RMB

Annual Report 2023

31 December 20231 January 2023Change in percentage (%)Reason for any significant change
AmountAs % of total assetsAmountAs % of total assets
Monetary assets3,596,049,654.5521.24%2,484,508,907.4316.25%4.99%Raised funds were received in a capital increase and share expansion in the current period
Accounts receivable2,093,499,280.4012.36%1,920,770,941.7612.56%-0.20%
Contract assets4,252,013.940.03%5,466,875.070.04%-0.01%
Inventory1,971,171,641.1411.64%2,031,637,401.8713.29%-1.65%
Investment property163,636,347.410.97%44,611,882.440.29%0.68%
Long-term equity investments179,188,555.151.06%181,931,792.661.19%-0.13%
Fixed assets3,453,214,586.4720.39%3,508,094,282.4122.95%-2.56%
Construction in progress1,174,533,505.116.94%1,282,780,335.148.39%-1.45%
Right-of-use assets8,812,320.640.05%13,047,727.730.09%-0.04%
Short-term borrowings220,019,877.731.30%157,715,359.351.03%0.27%
Contract liabilities235,335,693.281.39%125,143,161.610.82%0.57%
Long-term borrowings253,093,421.291.49%747,931,023.714.89%-3.40%Reclassification of the principals and interest of some borrowings with an initial maturity within one year (inclusive) from the time of borrowing to the time of repayment to the current portion of non-current liabilities
Lease liabilities4,310,967.920.03%7,055,542.180.05%-0.02%
Notes receivable1,057,352,267.606.24%821,537,774.075.37%0.87%

Annual Report 2023

Receivables financing443,201,960.022.62%569,868,831.793.73%-1.11%
Other debt investments454,822,905.252.69%0.000.00%2.69%Purchase of bank’s large-denomination certificates in the current period
Intangible assets434,549,913.992.57%340,166,852.372.22%0.35%
Notes payable2,271,174,787.6913.41%1,975,743,568.7112.92%0.49%
Accounts payable2,875,980,206.6416.98%2,513,177,458.1416.44%0.54%
Current portion of non-current liabilities343,914,214.452.03%65,540,510.670.43%1.60%Reclassification of the principals and interest of some borrowings with an initial maturity within one year (inclusive) from the time of borrowing to the time of repayment

Indicate by tick mark whether overseas assets account for a high proportion of total assets.

□ Applicable ? Not applicable

2. Assets and Liabilities at Fair Value

? Applicable □ Not applicable

Unit: RMB

ItemBeginning amountGain/loss on fair-value changes in the Reporting PeriodCumulative fair-value changes charged to equityImpairment allowance for the Reporting PeriodPurchased in the Reporting PeriodSold in the Reporting PeriodOther changesEnding amount
Financial assets
1. Held-for-trading financial assets (exclusive of derivative financial261,541,896.451,129,444.2690,423,448.92200,565,014.22152,529,775.41

Annual Report 2023

assets)
3. Other debt investments450,000,000.004,822,905.25454,822,905.25
4. Investments in other equity instruments864,191,346.40-163,447,307.93423,212,085.59981,292.12699,762,746.35
5. Receivables financing569,868,831.79126,666,871.77443,201,960.02
Subtotal of financial assets1,695,602,074.64-162,317,863.67423,212,085.59540,423,448.92328,213,178.114,822,905.251,750,317,387.03
Total of the above1,695,602,074.64-162,317,863.67423,212,085.59540,423,448.92328,213,178.114,822,905.251,750,317,387.03
Financial liabilities4,679,000.004,679,000.000.00

Details about other changes:

(1) The purchased amount in the Reporting Period of other debt investments referred to the cash management(large-denomination certificates) by the Company with its own temporarily idle funds, which was classified asfinancial assets at fair value through other comprehensive income. RMB450,000,000.00 of large-denominationcertificates was purchased in the Reporting Period, with the cumulative fair value changes being RMB0.00 andother changes being RMB4,822,905.25 of cumulative recognized interest.Significant changes to the measurement attributes of the major assets in the Reporting Period:

□ Yes ? No

3. Restricted Asset Rights as at the Period-End

Unit: RMB

ItemEnding carrying valueReason for restriction
Monetary assets486,328,752.85Security deposits for notes, performance bonds, payments by buyers for pre-sale of properties
Notes receivable873,275,556.80In pledge for notes pool, undue notes receivable that have been endorsed or discounted
Receivables financing120,221,199.92In pledge for notes pool
Fixed assets219,746,331.38As mortgage and guarantee for related party, see XIV (III) “Guarantees” in Part X
Intangible assets10,652,715.04

Annual Report 2023

Total1,710,224,555.99--

VII Investments Made

1. Total Investment Amount

? Applicable □ Not applicable

Investment amount in the Reporting Period (RMB)Investment amount in the same period of last year (RMB)Change (%)
173,881,228.981,656,670,405.07-89.50%

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

Unit: RMB

Name of projectWay of investmentFixed asset investment or notIndustry of the investment projectInput in the Reporting PeriodCumulative input as of the period-endFunding sourceProject progressPredicted returnCumulative return as of the period-endReason for failure to reach the planned progress and predicted returnDate of disclosure (if any)Disclosure index (if any)
The production ramp-up project for new-generation LED packaging devices and chipsOtherYesLED packaging1,739,348.62870,111,976.30Self-pooled funds97.91%N/A10 January 2019Announcement on Investment in the Production Ramp-up Project for New-generation LED Packaging Device

Annual Report 2023

s and Chips on www.cninfo.com.cn (announcement of subsidiary NationStar Optoelectronics)
The Jili Industrial Park project (not including land purchase)OtherYesLED packaging81,479,441.21536,870,816.20Self-pooled funds31.31%N/A7 August 2020Announcement on Investment in the Construction of NationStar Optoelectronics’ Jili Industrial Park Project on www.cninfo.com.cn (announcement of subsidiary NationStar Optoelectronics)
Total------83,218,789.831,406,982,792.50----------

Annual Report 2023

4. Financial Investments

(1) Securities Investments

? Applicable □ Not applicable

Unit: RMB

Security typeSecurity codeSecurity nameInitial investment costMeasurement methodBeginning carrying valueGain/Loss on fair-value changes in Reporting PeriodAccumulated fair-value changes charged to equityPurchased in Reporting PeriodSold in Reporting PeriodGain/loss in Reporting PeriodEnding carrying valueAccounting titleFunding source
Domestically/Overseas listed stock002074Gotion High-tech Co., Ltd.83,014,485.13Fair value method493,967,194.53-125,590,688.03285,362,021.37368,376,506.50Investments in other equity instrumentsSelf-funded
Domestically/Overseas listed stock601187Xiamen Bank Co.,Ltd.152,957,606.83Fair value method328,664,290.95-37,856,619.90137,850,064.2216,633,969.35290,807,671.05Investments in other equity instrumentsSelf-funded
OtherFoshan branch of Guangdong Development Bank500,000.00Fair value method500,000.00500,000.00Investments in other equity instrumentsSelf-funded
Domestically/Overseas listed stock601777Lifan Technology1,176,008.74Fair value method972,032.92-70,510.16901,522.76Held-for-trading financial assetsOther
Domestically/Overseas listed stock000980ZOTYE Automobile423,448.92Fair value method-345,673.90423,448.9277,775.02Held-for-trading financial assetsOther (passively held due to a debt-to-

Annual Report 2023

equity conversion) (note)
Total238,071,549.62--824,103,518.40-163,863,491.99423,212,085.59423,448.920.0016,633,969.35660,663,475.33----

Note: The shares in Zotye Automobile (000980) held in this period were passively held by Nanning Liaowangin a debt-to-equity conversion during the Reporting Period. Changsha Branch of Zotye New EnergyAutomobile Co., Ltd, a debtor of the Company, was applied for reorganisation by one of its creditors.According to the Civil Ruling made by the court, it was ruled to accept the creditor's reorganisation applicationagainst Zotye Automobile. According to the reorganisation plan, Nanning Liaowang would receiveRMB100,000 cash settlement and 26,099 shares in Zotye Automobile.

(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 derivativeInitial investment amountBeginning amountGain/Loss on fair-value changes in the Reporting PeriodAccumulated fair-value changes recorded in equityPurchased in the Reporting PeriodSold in the Reporting PeriodEnding amountEnding investment amount as % of the Company’s ending equity
General forward1,0001,0000001,00000.00%
General forward1,0001,0000001,00000.00%
General forward1,0001,0000001,00000.00%
Forex option50000050050000.00%
Forex option50000050050000.00%
Forex option60000060060000.00%
Forex option75000075075000.00%
Forex option75000075075000.00%
Forex option75000075075000.00%
Forex option75000075075000.00%
Forex option60000060060000.00%

Annual Report 2023

Forex option75000075075000.00%
Forex option75000075075000.00%
Forex option75000075075000.00%
Forex option75000075075000.00%
Total11,2003,000008,20011,20000.00%
Major changes in accounting policies and specific accounting principles adopted for hedges in the Reporting Period compared to the last reporting periodNo
Actual gain/loss in the Reporting PeriodThe actual loss stood at USD-2.5929 million in the Reporting Period.
Effectiveness of hedgingThe 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 sourceSelf-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, operationalRisk 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

Annual Report 2023

risk, legal risk, etc.)information disclosure related to the foreign exchange hedging business. 3. In order to prevent any delay in the foreign exchange hedging, the Company will strengthen the management of accounts receivable, actively collect receivables, and avoid any overdue receivables. In the meantime, the Company plans to increase the export purchases and purchase corresponding credit insurance so as to reduce the risk of default and customer default. 4. The Company’s foreign exchange hedges must be strictly based on the Company’s foreign exchange earnings prediction. Besides, the Company shall strictly control the scale of its foreign exchange hedges, and manage all risks that the Company may face within a controllable range. 5. The internal audit department of the Company shall check the actual signing and execution situation of all trading contracts on a regular or irregular basis.
Changes in market prices or fair value of derivative investments in Reporting Period (fair value analysis should include measurement method and related assumptions and parameters)The Company carries out recognition and measurement in accordance with the Accounting Standard for Business Enterprises No. 22—Recognition and Measurement of Financial Instruments, the Accounting Standard for Business Enterprises No. 24—Hedges, the Accounting Standard for Business Enterprises No. 37—Presentation of Financial Instrument and other applicable regulations. Fair value is arrived at based on the price provided by pricing service providers such as banks or the price obtained. Fair value measurement and recognition are carried out on a monthly basis. Changes in the fair value of forward exchange settlement contracts entered into by the Company are mainly attributable to difference arising from exchange rate fluctuations.
Legal matters involved (if applicable)N/A
Disclosure date of announcement on board’s approving derivative investment (if any)13 August 2022 and 1 August 2023
Opinion of independent directors on derivative investments and risk controlThe 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.

Annual Report 2023

5. Use of Raised Funds

? Applicable □ Not applicable

(1) General Information about Use of Raised Funds

? Applicable □ Not applicable

Unit: RMB’0,000

Year of raisingWay of raisingTotal amount raisedNet proceedsused in the current periodCumulatively usedRe-purposed amount in the Reporting PeriodCumulative re-purposed amountCumulative re-purposed amount as % of total amount raisedUnused amountPurpose and whereabouts of the unused amountAmount being idle for more than two years
2023Issuance of shares to specific objects109,455.18108,841.55/////109,163.23//
Total--109,455.18108,841.55/////109,163.23--/
Description of the use of raised funds
None

Note: In the year, RMB0.00 in the raised funds account was directly used in raised funds investment projects, atotal self-pooled amount of RMB87,975,313.46 was input in advance to the raised funds investment projectsand awaited swap, and another amount of RMB2,603,975.16 also awaited swap, which was the total of the self-pooled amount that had been paid in advance for issuance costs and stamp duty and the issuance costs to be paid.These amounts that awaited swap have been verified by WUYIGE Certified Public Accountants LLP, whichissued the Verification Report D.X.Z.S.Z. [2023] No. 22-00052. And these amounts still awaited swap by 31December 2023. As of December 31, 2023, the balance was RMB1,091,632,250.94. For details, please refer tothe announcement of the company's "Special Report on the Storage and Actual usage of funds raised and actualusage" disclosed by the company on the “www.cninfo.com.cn”.

(2) Promised Use of Raised Funds

? Applicable □ Not applicable

Unit: RMB’0,000

Promised project funded with raised funds and investmeRe-purposed or partially re-purposed or notTotal promised investment amount with raisedAdjusted total investment amount (1)Investment in the Reporting PeriodCumulative investment amount at the period-end (2)Investment progress as at the period-end (3)=(2)/(1)Time when the project is ready for its intended useReturns derived in the Reporting PeriodMeeting the expected returns or notSignificant change to project feasibility or not

Annual Report 2023

nt with over-raised fundsfunds
Promised projects
FSL’s automation and digitalization projectNo36,464.2735,850.64293.66293.660.82%November 2026-N/ANo
FSL’s Hainan industrial park Phase I construction projectNo25,252.9125,252.917,364.577,364.5729.16%May 2025-N/ANo
The smart street lights projectNo9,179.529,179.5266.1466.140.72%May 2025-N/ANo
The vehicle light module production projectNo24,008.824,008.8150.53150.530.63%May 2025-N/ANo
The R&D centre construction projectNo14,549.6814,549.68922.62922.626.34%May 2024-N/ANo
Subtotal of promised projects--109,455.18108,841.558,797.528,797.52---------
Use of over-raised funds
N/A
Repaying bank loan (if any)----------
Replenishing working capital (if any)----------
Subtotal of use of----------

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over-raised funds
Total--109,455.18108,841.558,797.528,797.52----0----
Explain the circumstances and reasons for failing to achieve the planned progress and expected returns by item (including the reason for selecting “N/A” for “Meeting the expected returns or not”)Projects have not reached their intended status of use
Particulars about significant change to project feasibilityNo significant change occurred to the feasibility of these projects in the Reporting Period.
Amount, purpose and use progress of over-raised fundsN/A
Change of implementation location of raisedN/A

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funds investment projects
Adjustments to the way of implementation of raised funds investment projectsN/A
Advance investments in promised projects funded with raised funds and subsequent swapsApplicable
On 16 January 2024, the Company held the 51st meeting of the 9th Board of Directors and the 25th meeting of the 9th Supervisory Committee, reviewing and passing the Proposal on Using Raised Funds to Replace Self-raised Funds for Pre-invested Capital Projects and Paid Issuance Expenses and agreed to use a total of RMB90.5793 million from the raised funds to replace self-raised funds used for pre-invested capital projects and paid issuance expenses. Specifically, RMB87.9753 million would be used to replace self-raised funds for pre-invested capital projects, and RMB2.604 million would be used to replace self-raised funds for paid issuance expenses. WUYIGE Certified Public Accountants LLP has conducted a special verification on the Company’s use of self-pooled funds in its raised funds investment projects and issued the Verification Report on the Swap of Self-pooled Funds Input to Raised Funds Investment Projects with Raised Funds by Foshan Electrical and Lighting Co., Ltd. (D.X.Z.S.Z. [2023] No. 22-00052). Guotai Junan Securities, the sponsoring institution, has provided a verification opinion on this matter and has no objections to the Company's use of raised funds to replace self-raised funds for pre-invested capital projects. By January 2024, the Company had completed the swap of all the self-pooled funds that had been input in advance to the raised funds investment projects and used to pay for the issuance expenses.
Use of idle raised funds for temporarily supplementing the working capitalN/A
Surplus amount of raised funds upon project implementation and the reasonsN/A
Purpose and whereabouts of unused raisedOn 5 February 2024, the Company utilized RMB599 million of temporarily idle raised funds for cash management, and the remaining amount was deposited in the special account for raised funds.

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funds
Problems or other issues arising in the use and disclosure of raised fundsNo

(3) Re-purposed Raised Funds

□ Applicable ? Not applicable

No such cases in the Reporting Period.VIII Sale of Major Assets and Equity Investments

1. Sale of Major Assets

□ Applicable ? Not applicable

No such cases in the Reporting Period.

2. Sale of Major Equity Investments

□ Applicable ? Not applicable

IX Major Subsidiaries

? Applicable □ Not applicableMajor fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on theCompany’s net profit:

Unit: RMB

NameRelationship with the CompanyPrincipal activityRegistered capitalTotal assetsNet assetsOperating revenueOperating profitNet profit
Foshan NationStar Optoelectronics Co., Ltd.SubsidiaryManufacturing618,477,169.006,526,413,104.583,803,439,979.363,541,637,227.9279,839,482.0485,535,534.98
Nanning Liaowang Auto Lamp Co., Ltd.SubsidiaryManufacturing35,055,700.002,487,842,891.97920,084,548.621,585,442,717.5943,135,821.0847,194,316.22
FSL ZhidaSubsidiaryManufactur38,150,000.192,086,6084,324,956.240,858,6417,144,595.14,718,134.

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Electric Technology Co., Ltd.ing003.96469.448266
FSL Chanchang Optoelectronics Co., Ltd.SubsidiaryManufacturing72,782,944.00786,385,311.38311,088,094.291,248,871,031.5396,964,430.1081,808,402.99

Subsidiaries obtained or disposed in the Reporting Period:

?Applicable □ Not applicable

NameHow the subsidiary was obtained or disposed of in the Reporting PeriodImpact on overall operations and performance
FSL LIGHTING GMBHDe-registeredNo significant impact on the Company’s production and performance

Information about major majority- and minority-owned subsidiaries:

—In a major asset restructuring in February 2022, the Company acquired a 21.32% interest in Foshan NationStarOptoelectronics Co., Ltd. (NationStar) from Rising Holdings and its acting-in-concert party. Upon the conclusionof the transaction, the Company eventually holds a 21.48% interest in NationStar, and NationStar has become amajority-owned subsidiary of the Company. The Company has included NationStar in its consolidated financialstatements since Q1 2022.—Nanning Liaowang Auto Lamp Co., Ltd. signed an equity agreement with its existing shareholders in July 2021,and acquired Nanning Liaowang through equity acquisition and capital increase and share expansion. Upon theconclusion of the transaction, the Company eventually holds a 53.79% interest in Nanning Liaowang, andNanning Liaowang has become a majority-owned subsidiary of the Company. The Company has includedNanning Liaowang in its consolidated financial statements from the date when the Company obtained actualcontrol of it.—FSL Zhida Electric Technology Co., Ltd. (FSL Zhida) was incorporated by the Company, Foshan ZhibidaEnterprise Management Co., Ltd. and Dongguan Baida Semiconductor Material Co., Ltd. on a joint investmentbasis. FSL Zhida obtained its business license on 21 October 2016. 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 2005

Annual Report 2023

through 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.X Structured Bodies Controlled by the Company

□ Applicable ? Not applicable

XI Prospects(I) The Company's development strategiesThe Company will continue to take technology and services as two top-priority fronts, focus on brand and valueand center its efforts on upgrading to medium- to high-end smart manufacturing, transitioning to a provider ofproducts and integrated solutions and transcending to "smart, healthy, green and human-oriented lighting”. In themeantime, the Company will step up efforts on the application end, further exploit the Internet-of-Things (IoT)ecosphere and niche markets, develop more new application scenarios and products, continuously improve ourcore competitiveness and accelerate the new round of development.(II) Operational plan for 2024

1. Focus on incremental expansion to further consolidate the good situation

The Company will persist in maintaining profitability and steady growth by employing a combination of marketexpansion strategies. First, vigorously promote the marketing model change. The Company will focus on effectivedistributor management, nurturing and developing a group of capable and sizable distributors. It will continuouslyexpand its network of hardware retail outlets and specialty stores, accelerating market expansion and coverage inuntapped areas. The Company will maintain a balance between B2B and B2C approaches, leveraging avenuessuch as expanding into e-commerce and home improvement markets to rapidly grow its B2C business and self-operated sales volume. Furthermore, it will vigorously expand its overseas independent brand business, aiming toincrease market share consistently. Second, focus on attacking large customers and large projects. The Company

Annual Report 2023

will focus on large projects for large customers as the top management priority, strengthen cooperation withdesign institutes, import projects from the source, and seize the development opportunities of the "1310" specificdeployment in Guangdong Province. Third, accelerate the volume and scale of new business. The Company willmake every effort to expand its new energy vehicle lighting business in the Yangtze River Delta and the PearlRiver Delta, continuously increasing the sales proportion of mid-to-high-end products. It will seize opportunitiesin the construction of domestic marine ranches and make a concentrated effort to develop businesses related toaquaculture, fish collection, and vessel lighting. In the fields of smart lighting and health lighting, the Companywill leverage its product and channel advantages, identify key areas for growth, and continuously expand its sales.

2. Focus on innovation drive to further enhance core competitiveness

By striving to achieve excellence in three aspects, the Company aims to accumulate innovative momentum andenhance its core competitiveness. To establish a first-class research and development institution, the Companywill continue to collaborate with renowned universities and research institutes. It will integrate innovationresources and create collaborative innovation platforms to provide strong impetus for technological innovation. Inthe introduction of first-class R & D talent, the relevant person in charge of the Institute and the R & D teampersonnel, to provide talent support for the development of new products. In the pursuit of launching first-classproducts, the Company will accelerate research and development efforts to introduce high-quality anddifferentiated products with Company's characteristics, thus embarking on a "lighting+" path of integratedinnovation.

3. Improve internal management to further enhance operational quality and efficiencyThe Company will continue to strengthen internal management and tap into its potential to improve efficiency andeffectiveness. First, continuously improve the level of refined management. The Company will focus on keyfinancial indicators and continuously benchmark its performance. It will implement targeted actions such asimproving collection efforts, reducing inventory, lowering costs, and controlling expenses. These initiatives aimto address management deficiencies and strengthen the foundation of the Company's overall managementpractices. Second, strengthen the quality improvement. The Company will construct a comprehensive qualitycontrol system that covers the entire supply chain, from design, procurement, production, to inspection, with anaim to enhancing the overall quality level comprehensively. Third, continue to strengthen risk prevention andcontrol. The Company will establish a sound compliance management system, strengthen compliance reviews ofmajor matters, and effectively handle significant risks and issues. It will persistently prioritize and implement

Annual Report 2023

safety and environmental protection measures to ensure stable and sustainable development of the enterprise.Fourth, cultivate the brand and foster a strong corporate culture. The Company will refine and upgrade its brandby integrating the recognition of being a "Chinese time-honoured brand." It will reinterpret the brand's essenceand carry out promotional activities to continuously enhance its brand value and influence. Additionally, theCompany will explore its mission, vision, core values, and other aspects, and design a cultural system todisseminate them. The goal is to make "Buddha Lighting Culture" a soft power that supports the high-qualitydevelopment of the enterprise.(III) Potential risks facing the Company and countermeasures

1. Risks of macro economic fluctuations and fiercer market competition

At present, economic uncertainties remain at home and abroad. If economic growth continues to slow down, itmay have an adverse impact on the development of the industry. Meanwhile, the lighting industry is a fullycompetitive industry. And as market demand slows down in growth, the Company could be facing fiercercompetition.Countermeasures: The Company will adhere to the set strategies, spend greater effort in developing new products,constantly refine the business portfolio, and actively explore segment markets such as intelligent lighting, healthylighting, ocean lighting, animal and plant lighting. It will also accelerate the introduction of new manufacturingprocesses, technologies and products to the market for new competitive edges. At the same time, by optimizingmarketing network and strengthening the business focus and expansion on domestic and foreign major customers,the Company will improve service quality, strengthen internal management, and increase core competitivecapacity constantly.

2. Risk of raw material price fluctuations

The main raw materials of the Company and its subsidiaries include chips, lamp beads, electronic components,aluminum substrates, plastic parts, metal materials, etc., and the price fluctuations of main raw materials will havean impact on the Company's production costs. If the price of raw materials continues to rise in the future, it mayadversely affect the Company's production and operation.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.

Annual Report 2023

3. Risk of exchange rate fluctuations

Overseas sales, which are mainly settled in USD, account for over 20% of the Company’s total sales. If RMBexperiences significant appreciation, the price competitiveness of overseas sales could be undermined andexchange losses may increase, which will produce adverse impacts on the Company’s net profit.Countermeasures: By keeping abreast of and analyzing exchange rate policies and fluctuation trend of settlementcurrencies in time, intensifying settlement currency management, ,and carrying out foreign exchange hedgingbusiness when the timing is right, the Company can relatively lock in exchange rates and minimize the risksbrought by exchange rate fluctuations.

4. Risk associated with the recoverability of accounts receivable

Receivables grow along with the Company's business. Customers who fail to repay loans timely or becomeinsolvent, due to changes in macroeconomic trends, market environments, and their business, will place theCompany at the risk of non-performing receivables.Countermeasures: In order to reduce the receivable collection risk, the Company can constantly optimize thereceivable risk management system, categorise customers for better management, regularly assess customers'credit profiles, and enhance customer risk assessment. Meanwhile, it can reinforce contract approval andmanagement, double its effort to collect receivables, and incorporate the collection of receivables into theperformance assessment system for business departments.XII Communications with the Investment Community such as Researches, Inquiries andInterviews? Applicable □ Not applicable

DatePlaceWay of communicationType of visitorVisitorMain discussions and materials providedIndex to communication information
6 February 2023The CompanyOne-on-one meetingInstitutionIndustrial Securities, Zheshang Securities, TF Securities, Evergrande Life.See Investor Relations Activities Log Sheet No. 2023-01www.cninfo.com.cn
15 March 2023The CompanyThrough an online platformInstitutionGuosen Securities, Essence Securities, Huaxi Securities,See Investor Relations Activities Log Sheet No. 2023-02www.cninfo.com.cn

Annual Report 2023

CITIC Securities and 17 other institutional investors.
12 June 2023The CompanyThrough an online platformInstitutionEssence Securities, Hanhe Capital and Bosera Fund and 39 other institutional investors.See Investor Relations Activities Log Sheet No. 2023-03www.cninfo.com.cn
28 June 2023www.p5w.netThrough an online platformOtherMinsheng Securities, Cinda Securities, Kaiyuan Securities and four other institutional investors and online network investors.See Investor Relations Activities Log Sheet No. 2023-04www.cninfo.com.cn
30 August 2023The CompanyOne-on-one meetingInstitutionGuotai Junan Securities, Shunyin Industrial Finance, First Capital and six other institutional investors.See Investor Relations Activities Log Sheet No. 2023-05www.cninfo.com.cn
19 September 2023www.p5w.netThrough an online platformOtherA wide range of investors who participate remotely over the Internet.See Investor Relations Activities Log Sheet No. 2023-06www.cninfo.com.cn
20 October 2023The CompanyOne-on-one meetingInstitutionGuotai Junan Securities, Ping An Securities, China Securities and 17 other institutional investors.See Investor Relations Activities Log Sheet No. 2023-07www.cninfo.com.cn
27 October 2023The CompanyOne-on-one meetingInstitutionShen Zhen Fortune Investment, CMS Zhiyuan Capital, Huati Private Equity Fund and 17 other institutional investors.See Investor Relations Activities Log Sheet No. 2023-08www.cninfo.com.cn
15 NovemberThe CompanyOne-on-oneInstitutionGF Securities,See Investorwww.cninfo.co

Annual Report 2023

2023meetingZhujiang Life Insurance, Hongchou Investment and two other institutional investors.Relations Activities Log Sheet No. 2023-09m.cn
21 November 2023The CompanyOne-on-one meetingInstitutionHuichuang Yixiang Private Equity Fund, Abama Asset, and Guosen Securities and three other institutional investors.See Investor Relations Activities Log Sheet No. 2023-10www.cninfo.com.cn

XIII Implementation of the “Quality and Earnings Dual Improvement” Action Plan

Indicate whether the Company has disclosed the “Quality and Earnings Dual Improvement” Action Plan.

□ Yes ? No

Annual Report 2023

Part IV Corporate GovernanceI General Information of Corporate GovernanceDuring the Reporting Period, in strict accordance with relevant requirements of Company Law, Securities Law,Code of Corporate Governance of Listed Companies and Rules of Stock Listing of Shenzhen Stock Exchange aswell as other relevant laws, rules and regulations, the Company continuously perfected the corporate governancestructure and set up an effective corporate governance system. At present, the Company has set up governancestructure of responsible Shareholders’ General Meeting, the Board of Directors, the Supervisory Committee andmanagers, who performed right of decision-making, execution and supervision respectively according to theirduties; besides, the Company set up special committees of the Board of Directors and system for independentdirectors. The Company strengthened information disclosure of principal shareholders and persons acting-in-concert, forbidden shareholders of the Company to misapply their rights. The Company separated from theprincipal shareholder in personnel, assets, business, financial affairs and organizational, and was absolutelyimpendent. The Company timely revised and perfected various systems in accordance with the latest issued laws& rules and relevant regulations of CSRC and Shenzhen Stock Exchange. And the corporate governance isbasically in line with the requirements of relevant laws, regulations and regulatory documents.Indicate by tick market whether there is any material incompliance with the applicable laws, regulations, or rulesissued by the CSRC governing the governance of listed companies.

□ Yes ? No

No such cases in the Reporting Period.II The Company’s Independence from Its Controlling Shareholder and Actual Controller inAsset, Personnel, Financial Affairs, Organization and BusinessThe Company is completely separated from its controlling shareholder and actual controller in aspects such asbusiness, personnel, assets, institutions and finance and possesses independent and complete business and self-dependent operating ability.

1. As for the business, the Company is independent of its controlling shareholder and actual controller and theirsubordinate enterprises and owns the independent business departments and management system as well as

Annual Report 2023

possesses of impendent and entire business and self-dependent operating ability.

2. As for the personnel, the Company formulates the independent management system such as the labor, personneland the salary, possesses the independent personnel department and the operating management team. The SeniorExecutives of the Company are serving at the Company in full time and receiving the salary from the Company.

3. As for the assets, the assets of the Company are independent and entire with clear ownership, and possesses theindependent production system, BOP system and the supporting facilities, as well as possesses the legalownership of the land, factories, equipments related to the production and operating and the assets such as thetrademark, patent and the non-patent technology, and possesses the entire control and govern power of all theassets of the Company without any behavior such as the controlling shareholder or the actual controller occupiesthe assets of the Company.

4. As for the institutions, the Company set up the independent and entire organizations and institutions, and theconstruction as well as the operating of the corporate governance institutions is executed strictly executedaccording to the Articles of Association, and the production and operating as well as the offices are entirelyindependent from the controlling shareholder and the actual controller with any situation of working under oneroof with the controlling shareholder or the actual controller.

5. As for the finance, the Company set up the independent finance department and builds up the independent andnormative accounting and financial control system according to the requirements of the ASBE, set up theindependent bank account and pays the taxes legally and independently and the Company could make thefinancial decisions independently without any situation of the controlling shareholder or the actual controllerintervenes the capital usage of the Company.III Horizontal Competition

□ Applicable ? Not applicable

IV Annual and Special General Meetings Convened during the Reporting Period

1. General Meeting Convened during the Reporting Period

MeetingTypeInvestor participation ratioConvened dateDisclosure dateResolutions of the meeting
The 1stExtraordinary43.60%31 March 20231 April 2023Resolutions of the

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Extraordinary General Meeting of 2023General Meeting1st Extraordinary General Meeting of 2023
The 2022 Annual General MeetingAnnual General Meeting43.16%10 May 202311 May 2023Resolutions of the 2022 Annual General Meeting
The 2nd Extraordinary General Meeting of 2023Extraordinary General Meeting41.47%22 December 202323 December 2023Resolutions of the 2nd Extraordinary General Meeting of 2023

2. Special General Meetings Convened at the Request of Preferred Shareholders with Resumed VotingRights

□ Applicable ? Not applicable

V Directors, Supervisors and Senior Management

1. General Information

NameGenderAgeOffice titleIncumbent/FormerStart of tenureEnd of tenureBeginning shareholding (share)Increase in the Reporting Period (share)Decrease in the Reporting Period (share)Other increase/decrease (share)Ending shareholding (share)Reason for share changes
Wan ShanMale54Chairman of the BoardIncumbent26 February 202400000
Zhuang JianyiMale72Vice Chairman of the BoardIncumbent25 December 201511,903,50900011,903,509
Zhang XuequanMale46DirectorIncumbent26 February 202473,05200073,052
General ManagerIncumbent21 December 2023

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Chen MingjieMale40DirectorIncumbent26 February 202400000
Hu FengcaiMale58DirectorIncumbent30 June 202200000
Li XiyuanMale62Independent DirectorIncumbent13 September 202100000
Zhang RenshouMale58Independent DirectorIncumbent13 September 202100000
Dou LinpingMale64Independent DirectorIncumbent24 August 202000000
Li JingweiMale47Chairman of the Supervisory CommitteeIncumbent18 January 202200000
Zhuang JunjieMale38SupervisorIncumbent25 December 201500000
Li YizhiMale36SupervisorIncumbent24 August 202000000
Ye ZhenghongMale50SupervisorIncumbent27 May 201077,56100077,561
Lin QingMale54SupervisorIncumbent20 September 201622,58300022,583
Zhang YongMale49Executive Deputy GeneralIncumbent5 February 202477,59600077,596

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Manager
Chen YuMale51Deputy General ManagerIncumbent13 May 201466,06600066,066
Tang QionglanFemale53CFOIncumbent26 January 201675,94000075,940
Huang ZhenhuanMale36Board SecretaryIncumbent19 May 202100000
Wu ShenghuiMale53Chairman of the BoardFormer7 May 202023 February 202400000
Lei ZiheMale56DirectorFormer7 May 202011 September 202300000
General ManagerFormer7 May 202011 September 2023
Zhang XianfengMale53DirectorFormer24 August 202011 September 202300000
Huang ZhiyongMale54DirectorFormer25 December 20155 February 202400000
Jiao ZhigangMale51Deputy General ManagerFormer17 September 201329 December 202390,39900090,399
Wei BinMale54Deputy General ManagerFormer28 September 200919 January 2024105,226000105,226
Total------------12,491,93200012,491,932--

Annual Report 2023

Indicate by tick mark whether any director, supervisor or senior management resigned during the ReportingPeriod.? Yes □ NoIn September 2023, Mr. Lei Zihe resigned as Director and General Manager and from the relevant specialcommittees of the Company due to reassignment.In September 2023, Mr. Zhang Xianfeng resigned as Director and from the relevant special committees of theCompany due to reassignment.In December 2023, Mr. Jiao Zhigang resigned as Deputy General Manager of the Company due to reassignment.In January 2024, Mr. Wei Bin resigned as Deputy General Manager of the Company due to reassignment.In February 2024, Mr. Huang Zhiyong resigned as Director and from the relevant special committees of theCompany due to reassignment.In February 2024, Mr. Wu Shenghui resigned as Chairman of the Board and Director and from the relevantspecial committees of the Company due to reassignment.

Change of directors, supervisors and senior management:

? Applicable □ Not applicable

NameOffice titleType of changeDate of changeReason for change
Wu ShenghuiChairman of the BoardResignation23 February 2024Resignation due to reassignment
Lei ZiheDirectorResignation11 September 2023Resignation due to reassignment
General Manager
Zhang XianfengDirectorResignation11 September 2023Resignation due to reassignment
Jiao ZhigangDeputy General ManagerResignation29 December 2023Resignation due to reassignment
Wei BinDeputy General ManagerResignation19 January 2024Resignation due to reassignment
Huang ZhiyongDirectorResignation5 February 2024Resignation due to reassignment
Wan ShanDirector and Chairman of the BoardElected26 February 2024Elected
Zhang XuequanDirectorElected26 February 2024Elected
General ManagerAppointed21 December 2023Appointed as the General Manager
Chen MingjieDirectorElected26 February 2024Elected
Zhang YongExecutive Deputy General ManagerAppointed5 February 2024Appointed as an Executive Deputy General Manager

2. Biographical Information

Professional backgrounds, major work experience and current duties in the Company of the incumbent directors,supervisors and senior management:

(I) Work Experience of the Directors

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Mr. Wan Shan: Born in October 1969, a member of the Communist Party of China, MBA of College of PublicManagement of Sun Yat-Sen University. He was the Deputy Director Clerk of the Lecturers' Brigade in thePropaganda Department of the Guangdong Provincial Party Committee. He also worked as a team member in the"Ten Hundred Thousand Million" Work Team stationed in Yongdong Village, Rongcheng District, Jieyang City.Additionally, Wan Shan held the position of Deputy Director in the Research and Teaching Office of theLecturers' Brigade in the Publicity Department of CPC Guangdong Provincial Committee. He further served asthe Deputy Director of the Office in the Publicity Department of CPC Guangdong Provincial Committee, theDirector of the Office of the Publicity Department of CPC Guangdong Provincial Committee, Deputy Director inthe State-owned Cultural Assets Supervision and Administration Office of the People’s Government. Furthermore,he has worked as the Assistant to the General Manager and Board Secretary, as well as the Office Director atGuangdong Rising Assets Management Co., Ltd. (now renamed as Guangdong Rising Holdings Group Co., Ltd.).He was also the Deputy Secretary of the Party Committee, Director, and Chairman of the Labor Union in FoshanNationstar Optoelectronics Co., Ltd, as well as the Director of Party-Masses Department of Guangdong RisingHoldings Group Co., Ltd. He has served as Secretary of Party Committee in the Company since January 2024;and as the Chairman of the Board of the Company since February 2024.Mr. Zhuang Jianyi: Born in 1951, with a bachelor’s degree and MBA. He now acts as the Chairman of the Boardof Hong Kong Youchang Lighting Equipment, and has been engaged in the electric light source equipmentproduction as well as the trading business for about 40 years. From 1995 to 2010, he acted as the Directors, theVice Chairman of the Board and the Chairman of the Board of the Company. And he has been serving as the ViceChairman of the Board of the Company since December 2015.Mr. Zhang Xuequan: Born in December 1977, a member of the Communist Party of China, MBA of LingnanCollege of Sun Yat-Sen University. He joined the Company in 1996. He worked in the former Iodine-tungstenLamp Workshop from October to December 1996; worked in the Technology Department and then the QualityControl Department from January 1997 to August 2002; acted as the Workshop Manager of Lamp Workshop fromSeptember 2002 to May 2008; acted as the Department Director of the Business Management Department of theCompany from June 2008 to August 2016. He concurrently acted as the Office Director and the Head of theInvestment Department from February 2016 to December 2018. He was the Party Branch Secretary for theAdministrative Office of the Company from July 2010 to June 2017, and a member of the party committee of theCompany since July 2015. He was a supervisor of the Company from May 2013 to August 2016, a Deputy

Annual Report 2023

General Manager of the Company from August 2016 to March 2020, an Executive Deputy General Manager ofthe Company from March 2020 to December 2023. He has been serving as the Deputy Secretary of the CPCCommittee and General Manager of the Company since December 2023 and a Director of the Company sinceFebruary 2024. In addition, he serves as a Director of FSL Zhida Electric Technology Co., Ltd., the Chairman ofthe Board and General Manager of Foshan Taimei Times Lamp Co., Ltd., an Executive Director of Foshan KelianNew Energy Technology Co., Ltd., and a Director of Nanning Liaowang Auto Lamp Co., Ltd. Currently, he isalso a Director of the Company’s majority-owned subsidiary NationStar Optoelectronics.Mr. Chen Mingjie: Born in September 1983, member of the Communist Party of China and has no right ofpermanent residence in a foreign country. He graduated from the Business School of Renmin University of China,majoring in business management. He served as the Deputy Supervisor of the Political and Cultural Department atGuangdong People's Broadcasting Station; the Secretary of the Party Committee Office, Senior Supervisor,Deputy Director, then the Director, and Youth League Committee Secretary of the Party and Mass PersonnelDepartment at Guangdong Provincial Guangsheng Asset Management Co., Ltd. (now renamed as GuangdongProvincial Guangsheng Holdings Group Co., Ltd.). He has been the Deputy Secretary of the Party Committee andChairman of the Labor Union in the Company since August 2023; as the Director of the Company since February2024.Mr. Hu Fengcai: Born in September 1965, member of the Communist Party of China, graduated from the PartySchool of the Guangdong Provincial Committee of CPC, majoring in Modern Economic Management. He is asenior accountant. He worked as Deputy Manager of the Finance Department and Deputy Manager and Managerof the Financial Audit Department of Guangdong Metallurgical Industry Corporation, member of the PartyCommittee and Deputy General Manager of Guangdong Guangye Metallurgical Limited Corporation,Independent Director of SGIS Songshan Co., Ltd., director, member of the Party Committee, and Deputy GeneralManager of Guangdong Rising Metallurgical Co., Ltd., Chairman of the Supervisory Committee of the ThirdWorking Group of the Supervisory Committee, and deputy head of the Operation Management Department ofGuangdong Rising Assets Management Co., Ltd. (GRAM), and deputy head of the Operation ManagementDepartment of Guangdong Rising Holdings Group Co., Ltd. (Rising Group). Now he serves as a full-time directorassigned to the listed company of Rising Group. He has been a Director of the Company since June 2022.Currently, he is also a Director of Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd., Guangdong FenghuaAdvanced Technology Holding Co., Ltd., and Foshan NationStar Optoelectronics Co., Ltd.

Annual Report 2023

Mr. Li Xiyuan: Born in March 1961, member of the Communist Party of China, no permanent residence abroad,doctoral degree, professor-level senior engineer. He has served as deputy director of the ConstructionManagement Office of the Northern Section of Beijing-Zhuhai Expressway in Guangdong Province, DeputyDirector of Infrastructure Management Department of Guangdong Provincial Communication Group Co., Ltd.,General Manager of Guangdong Gaintop Highway Engineering Construction Group Co., Ltd., General Managerand Chairman of Guangdong Provincial Expressway Development Co., Ltd., Chairman of Guangdong Road andBridge Construction Development Co., Ltd., Director of Guangdong Construction Engineering Group Co., Ltd.,Guangdong Province Navigation Group Co., Ltd., Guangdong Namyue Group Co., Ltd. and GuangdongProvincial Railway Construction Investment Group Co., Ltd. He is currently an external director of GuangzhouPort Group Co., Ltd. and an independent director of Dongguan Development (Holdings) Co., Ltd. and ShenzhenTagen Group Co., Ltd. He has been an Independent Director of the Company since September 2021.Mr. Zhang Renshou: Born in May 1965, Ph.D., professor, postdoctoral co-supervisor, doctoral supervisor, nopermanent residence abroad, doctoral degree. He used to serve as a teaching assistant, lecturer and associateprofessor of Guangzhou Foreign Language Training Center of Ministry of Petroleum Industry, as well as anEditor of Development Research Center of People's Government of Guangdong Province. Now, he is a Professorof Accounting Department of School of Management of Guangzhou University, as well as an IndependentDirector of Jiangmen Rural Commercial Bank Company Limited (non-listed company) and Guangdong ProvincialExpressway Development Co., Ltd. He also serves as: Member of the Expert Group of the Budget Committee ofGuangzhou Municipal People's Congress, Member of the Expert Group of the Economic Committee ofGuangzhou Municipal People's Congress, Member of the 8th Committee of Guangdong Social SciencesAssociation, Member of the Academic Committee of Research Center for Guangdong Local Public Finance,Professional Advisory Committee Member of Guangdong Statistics Bureau, Member of the Academic Committeeof Guangdong Coastal Economic Belt Development Research Center, President of Guangdong South ChinaEconomic Development Research Association, Major Administrative Decision Demonstration Expert andInnovation and Entrepreneurship Development Expert of Shaoguan Municipal People's Government ofGuangdong Province, and Special Researcher of Guangzhou Taxation Bureau of State Taxation Administration ofthe People's Republic of China. He has been an Independent Director of the Company since September 2021.Mr. Dou Linping: Han nationality, was born in August 1959. He is of Chinese nationality and has no right ofpermanent residence in a foreign country. He received a bachelor's degree and bears a professional title of Senior

Annual Report 2023

Engineer. Previously, he has served as Deputy Chief of the Design Section of Beijing Luminaries Factory,Director of the Office of Design Standards and then Vice Director of Beijing Luminaries Research Institution,Deputy Secretary-General and Managing Director of China Association of Lighting Industry, and ManagingDirector and Secretary-General of China Illuminating Engineering Society. At present, he serves as Vice Director-General of China Solid State Lighting Alliance, Director of the Urban, Cultural and Tourism Lighting ProfessionalCommittee of CSA, and Independent Director of Hengdian Group TOSPO Lighting Co., Ltd. and Beijing NewSpace Technology Co., Ltd.. He has been an Independent Director of the Company since August 2020.

2. Work Experience of the Supervisors

Mr. Li Jingwei: Born in November 1976, member of the Communist Party of China, holds a master's degree andis an economist and Senior Labour Relations Coordinator. He worked as head, direct, Deputy Secretary of theParty Committee, Secretary of the Committee for Discipline Inspection, and Chairman of the Labour Union of theComprehensive Management Department of Guangdong Changsheng Enterprise Group Co., Ltd., director,Deputy Secretary of the Party Committee, Secretary of the Committee for Discipline Inspection, Chairman of theLabour Union of Guangdong Rising Real Estate Group Co., Ltd., member of the Party Committee, Secretary ofthe Committee for Discipline Inspection, and Chairman of the Supervisory Committee of Foshan NationStarOptoelectronics Co., Ltd. (NationStar), and Deputy Director of Office of Discipline Inspection and Supervision ofGuangdong Rising Assets Management Co., Ltd. (GRAM). He was elected member of the Party Committee andSecretary of the Committee for Discipline Inspection of the Company in December 2021 and became theChairman of the Supervisory Committee of the Company in January 2022.Mr. Li Yizhi: Han nationality, was born in March 1987. He is a member of the CPC. He received a bachelor'sdegree ,intermediate accountant and is an Association of Chartered Certified Accountants (ACCA) certifiedaccountant. Previously, he has worked at the Guangzhou Office of WUYIGE Certified Public Accountants LLP(special general partnership) as an Audit Assistant, at the Guandong Office of Pan-China Certified PublicAccountants LLP (special general partnership) as a Project Manager, at the Shenzhen Office ofPricewaterhouseCoopers Zhong Tian LLP (special general partnership) as an auditor, and at the GuangdongOffice of China Central Public Accounting Firm (special general partnership) as a Project Manager. At present, heserves as the Senior Director of the Finance Department (Settlement Centre) of Guangdong Rising HoldingsGroup Co., Ltd.. He has been a Supervisor of the Company since August 2020.

Annual Report 2023

Mr. Zhuang Junjie: Born in September 1985, a Hong Kong permanent resident. He graduated with a bachelor’sdegree and once acted as the Consultant Manager of Accenture Software and now acts as the Director of HongKong Prosperity Lighting Equipment Co., Ltd. And he has been a Supervisor of the Company since December2015.Mr. Ye Zhenghong: Born in June 1973, a member of the Communist Party of China with a college degree. Hejoined the Company from July 1995; worked in the Machine Repair Shop from July 1995 to June 1997; worked inthe Mechanical Power Department from July 1997 to January 2001; acted as Equipment Management Director inT8 Fluorescent Lamp Factory from February 2001 to January 2005; acted as Director of Machine RepairWorkshop from May 2005 to January 2007; acted as Chief Officer of Machinery Dynamic Department from May2006 to December 2007; and acted as factory director of T8 Fluorescent Lamp Factory from January 2008 toFebruary 2016; and acted as Chief Officer of Production Department from March 2016 to March 2019; and actedas the director of E-Commerce Business Department from April 2019 to June 2020; and acted as the vice GM ofFSL Zhida Electric Technology Co., Ltd. from November 2016 to February 2020, and acted as the GM of FSLZhida Electric Technology Co., Ltd. from March 2020 to March 2021; and has acted as the Chairman of the Boardof FSL Zhida Electric Technology Co., Ltd. since April 2021; the Chairman of the 5

thSupervisory Committee andthe Employee Supervisor of the 6

th, 7

th

, 8

th

and 9

th

Supervisory Committee.Mr. Lin Qing: Born in September 1969, member of the Communist Party of China, undergraduate degree, SeniorEngineer in Electrical Engineering; has been working in the company since August 1991; worked as mercurylamp workshop technician and workshop director from June 1996 to February 2002; as the workshop director andfactory director of the fluorescent lamp factory from March 2002 to September 2009; as the director ofTechnology Department from October 2009 to September 2020; as the Technical Director of the R&DDepartment from October 2020 to January 2022; as the Safety Director of the Company since February 2022; inJuly 2015, elected as a discipline committee member of the company’s CPC committee. And he has been anEmployee Supervisor of the Company since September 2016.

3. Work experience of the Senior Management Staff

Mr. Zhang Xuequan: Born in December 1977, a member of the Communist Party of China, MBA of LingnanCollege of Sun Yat-Sen University. He joined the Company in 1996. He worked in the former Iodine-tungstenLamp Workshop from October to December 1996; worked in the Technology Department and then the Quality

Annual Report 2023

Control Department from January 1997 to August 2002; acted as the Workshop Manager of Lamp Workshop fromSeptember 2002 to May 2008; acted as the Department Director of the Business Management Department of theCompany from June 2008 to August 2016. He concurrently acted as the Office Director and the Head of theInvestment Department from February 2016 to December 2018. He was the Party Branch Secretary for theAdministrative Office of the Company from July 2010 to June 2017, and a member of the party committee of theCompany since July 2015. He was a supervisor of the Company from May 2013 to August 2016, a DeputyGeneral Manager of the Company from August 2016 to March 2020, an Executive Deputy General Manager ofthe Company from March 2020 to December 2023. He has been serving as the Deputy Secretary of the CPCCommittee and General Manager of the Company since December 2023 and a Director of the Company sinceFebruary 2024. In addition, he serves as a Director of FSL Zhida Electric Technology Co., Ltd., the Chairman ofthe Board and General Manager of Foshan Taimei Times Lamp Co., Ltd., an Executive Director of Foshan KelianNew Energy Technology Co., Ltd., and a Director of Nanning Liaowang Auto Lamp Co., Ltd. Currently, he isalso a Director of the Company’s majority-owned subsidiary NationStar Optoelectronics.Mr. Zhang Yong: Born in June 1974, a member of the Communist Party of China and a senior engineer with abachelor degree. He joined in the Company in July 1997. and successively acted as Deputy Director and Directorof Lamp Filament Appliance Workshop from October 1999 to June 2008; acted as Factory Director of GaomingFluorescent Lamp Factory and Factory Director of Gaoming Branch Factory from July 2008 to December 2008;respectively acted as Department Director of Product Department, OEM Department, Mechanical DynamicsDepartment and Infrastructure Department from January 2009 to December 2012; acted as General ManagerAssistant from March 2013 to August 2016. He was a supervisor and the Chairman of the Board of Supervisors ofthe Company from September 2013 to August 2016; served as the chairman of the Labor Union of the Companyfrom September 2013 to May 2019; acted as the Deputy Party Secretary from July 2015 to 27 December 2021;and was a Deputy General Manager of the Company from August 2016 to January 2024. And he has been anExecutive Deputy General Manager of the Company since February 2024.Mr. Chen Yu: Born in December 1972, a member of the Communist Party of China and an engineer with abachelor’s degree. He entered the Company in 1994. And acted as workshop manager of parabolic reflector,coating film, energy saving lamp, factory director of the branch factory of Gaoming and workshop manager ofgeneral bulbs from January 1997 to December 2012, acted as Director of Production Department, OEMDepartment and Mechanical Dynamics Department from January to August 2013, acted as Director of Production

Annual Report 2023

Department and OEM Department from September 2013 to May 2014 as well as acted as Vice GM of theCompany from May 2014. He has also served as Chairman of the Board of Nanning Liaowang since August 2021.Ms. Tang Qionglan: Born in March 1970, member of the Communist Party of China, bachelor degree, ChinaCertified Public Accountant, served as audit manager of BDO China Shu Lun Pan Certified Public AccountantsLLP Foshan Branch; as Deputy Manager of the Finance Department, Manager, Chief Financial Officer, DeputyGeneral Manager and Chief Financial Officer of Foshan NationStar Optoelectronics Co., Ltd.. and serves as theChief Financial Officer of the Company since January 2016.Mr. Huang Zhenhuan: Born in December 1987, he holds a master's degree in finance, is a financial economist,and has obtained the qualification certificate of Secretary of the Board of Directors issued by Shenzhen StockExchange. He used to be the sponsor of Assets Department, Assistant General Manager of Investment Departmentand General Manager of Finance Department of Guangzhou Guangyong State-owned Asset Sales Co., Ltd.,General Manager of Guangzhou Guangyong Equity Investment Fund Management Co., Ltd., General Manager ofCorporate Finance Department III (Industry Center) of Minsheng Bank Guangzhou Branch, Investment Directorof Guangdong Rising Financial Holding Co., Ltd., and Senior Director of Capital Operation Department ofGuangdong Rising Holdings Group Co., Ltd. He has served as the Board Secretary of the Company since May2021.Offices held concurrently in shareholding entities:

? Applicable □ Not applicable

NameShareholding entityOffice held in the shareholding entityStart of tenureEnd of tenureRemuneration or allowance from the shareholding entity
Hu FengcaiGuangdong Rising Holdings Group Co., Ltd.Full-time director accredited to the listed company by capital operation departmentYes
Huang ZhiyongGuangdong Electronics Information Industry Group Ltd.Executive Deputy General ManagerYes
Li YizhiGuangdong Rising Holdings Group Co., Ltd.Senior Director of the Financial DepartmentYes

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(Settlement Center)
Zhuang JianyiProsperity Lamps & Components LimitedChairman of the BoardYes
Zhuang JunjieProsperity Lamps & Components LimitedDirectorYes

Offices held concurrently in other entities:

? Applicable □ Not applicable

NameOther entityOffice held in the entityStart of tenureEnd of tenureRemuneration or allowance from the entity
Zhuang JianyiThinkon Semiconductor Jinzhou Corp.DirectorNo
Hu FengcaiShenzhen Zhongjin Lingnan Nonfemet Co. Ltd.DirectorNo
Hu FengcaiGuangdong Fenghua Advanced Technology Holding Co., Ltd.DirectorNo
Hu FengcaiFoshan NationStar Optoelectronics Co., Ltd.DirectorNo
Li XiyuanGuangzhou Port Group Co., Ltd.DirectorYes
Li XiyuanDongguan Development (Holdings) Co., Ltd.Independent DirectorYes
Li XiyuanShenzhen Tagen Group Co., Ltd.Independent DirectorYes
Zhang RenshouGuangzhou UniversityAccounting ProfessorYes
Zhang RenshouJiangmen Rural Commercial Bank Company LimitedIndependent DirectorYes
Zhang RenshouGuangdong Provincial Expressway Development Co., Ltd.Independent DirectorYes
Dou LinpingChina Solid State Lighting AllianceVice ChairmanNo

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Dou LinpingHengdian Group Tospo Lighting Co., Ltd.Independent DirectorYes
Dou LinpingBeijing New Space Technology Co., Ltd.Independent DirectorYes

Punishments imposed in the recent three years by the securities regulator on the incumbent directors,supervisors and senior management as well as those who left in the Reporting Period:

□ Applicable ? Not applicable

3. Remuneration of Directors, Supervisors and Senior Management

Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisorsand senior management:

The Remuneration & Appraisal Committee under the Board of Directors decided the 2022 remunerations for theleadership team members in accordance with the Measures for Managing the Remuneration of the LeadershipTeam Members, the particulars on completing current main financial indexes & operating goals, as well as thefulfillment of job responsibilities by them, before submitting the remuneration plan to the Board of Directors forapproval.

Remuneration of directors, supervisors and senior management for the Reporting Period

Unit: RMB'0,000

NameGenderAgeOffice titleIncumbent/FormerTotal before-tax remuneration from the CompanyAny remuneration from related party
Zhuang JianyiMale72Vice Chairman of the BoardIncumbentYes
Zhang XuequanMale46Director and GMIncumbent144.13NO
Hu FengcaiMale58DirectorIncumbentYes
Li XiyuanMale62Independent DirectorIncumbent18No
Zhang RenshouMale58Independent DirectorIncumbent18No
Dou LinpingMale64IndependentIncumbent18No

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Director
Li JingweiMale47Chairman of the Supervisory CommitteeIncumbent131.69No
Li YizhiMale36SupervisorIncumbentYes
Zhuang JunjieMale38SupervisorIncumbentYes
Ye ZhenghongMale49SupervisorIncumbent59.53No
Lin QingMale54SupervisorIncumbent50.85No
Zhang YongMale49Executive Deputy General ManagerIncumbent143.07No
Chen YuMale51Deputy General ManagerIncumbent143.55No
Tang QionglanFemale53CFOIncumbent141.96No
Huang ZhenhuanMale36Board SecretaryIncumbent53.52No
Wu ShenghuiMale53Chairman of the BoardFormer170.56No
Lei ZiheMale56Director and GMFormer146.95No
Zhang XianfengMale53DirectorFormer127.36Yes
Huang ZhiyongMale54DirectorFormerYes
Wei BinMale54Deputy General ManagerFormer143.81No
Jiao ZhigangMale51Deputy General ManagerFormer144.66No
Total--------1,655.64--

Other information:

? Applicable □ Not applicableAs the leadership team failed to meet the requirements for the performance bonuses for the year 2023 during theReporting Period, the pre-tax remuneration received by the directors, supervisors and senior management fromthe Company for the year 2023 included the performance bonuses for the year 2022 and excluded those for theyear 2023.

VI Performance of Duty by Directors in the Reporting Period

1. Board Meetings Convened during the Reporting Period

MeetingConvened dateDisclosure dateResolution
The 38th Meeting of the 9th Board of Directors1 March 20232 March 2023Announcement on Resolutions of the 38th

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Meeting of the 9th Board of Directors
The 39th Meeting of the 9th Board of Directors14 March 202316 March 2023Announcement on Resolutions of the 39th Meeting of the 9th Board of Directors
The 40th Meeting of the 9th Board of Directors6 April 202310 April 2023Announcement on Resolutions of the 40th Meeting of the 9th Board of Directors
The 41st Meeting of the 9th Board of Directors11 April 202312 April 2023Announcement on Resolutions of the 41st Meeting of the 9th Board of Directors
The 42nd Meeting of the 9th Board of Directors18 April 2023Announcement on Resolutions of the 42nd Meeting of the 9th Board of Directors
The 43rd Meeting of the 9th Board of Directors28 April 2023Announcement on Resolutions of the 43rd Meeting of the 9th Board of Directors
The 44th Meeting of the 9th Board of Directors12 June 202313 June 2023Announcement on Resolutions of the 44th Meeting of the 9th Board of Directors
The 45th Meeting of the 9th Board of Directors31 July 20231 August 2023Announcement on Resolutions of the 45th Meeting of the 9th Board of Directors
The 46th Meeting of the 9th Board of Directors29 August 202330 August 2023Announcement on Resolutions of the 46th Meeting of the 9th Board of Directors
The 47th Meeting of the 9th Board of Directors26 October 202327 October 2023Announcement on Resolutions of the 47th Meeting of the 9th Board of Directors
The 48th Meeting of the 9th Board of Directors1 November 20233 November 2023Announcement on Resolutions of the 48th Meeting of the 9th Board of Directors
The 49th Meeting of the 9th Board of Directors6 December 20237 December 2023Announcement on Resolutions of the 49th

Annual Report 2023

Meeting of the 9th Board of Directors
The 50th Meeting of the 9th Board of Directors21 December 202322 December 2023Announcement on Resolutions of the 50th Meeting of the 9th Board of Directors

2. Attendance of Directors at Board Meetings and General Meetings

Attendance of directors at board meetings and general meetings
DirectorTotal number of board meetings the director was eligible to attendBoard meetings attended on siteBoard meetings attended by way of telecommunicationBoard meetings attended through a proxyBoard meetings the director failed to attendThe director failed to attend two consecutive board meetings (yes/no)General meetings attended
Wu Shenghui134900No2
Zhuang Jianyi1321100No3
Lei Zihe93600No2
Zhang Xianfeng93600No1
Hu Fengcai1331000No3
Huang Zhiyong1311200No2
Li Xiyuan134900No3
Zhang Renshou134900No3
Dou Linping1321100No3

Explanation on any director failing to attend two consecutive board meetings:

Not applicable.

3. Objections Raised by Directors on Matters of the Company

Indicate by tick mark whether any directors raised any objections on any matter of the Company.

□ Yes ? No

No such cases in the Reporting Period.

Annual Report 2023

4. Other Information about the Performance of Duty by Directors

Indicate by tick mark whether any suggestions from directors were adopted by the Company.? Yes □ NoSuggestions from directors adopted or not adopted by the Company:

During the Reporting Period, the directors of the Company worked to fulfill their functions and duties, activelyattended Board of Directors meetings and Shareholders’ General Meetings, offered advices and suggestions andperformed their rights, functions, duties, and obligations as defined in the Company Law, the Securities Lawand the Articles of Association. They fulfilled their role as a director, upheld the legitimate rights and interestsof the Company and its shareholders, promoted further improvement in corporate governance and effectivelyfacilitated regulatory compliance of the Company's operation. During the Reporting Period, the directors of theCompany actively performed their functions and duties, made full use of their professional knowledge, workeddiligently to fulfill their duties and offered many invaluable advices and suggestions on the Company'smanagement decision-making and major matters based on their in-depth understanding of the Company'soperations. They played their due role in improving the Company's supervision mechanism, promotingimprovement in the Company's risk control capacity and upholding the legitimate rights and interests of theCompany and its shareholders.

VII Performance of Duty by Specialized Committees under the Board in the ReportingPeriod

CommitteeMembersMeetings convenedConvened dateContents reviewedOpinion and adviceOther activitiesObjection (if any)
The Nomination Committee of the Ninth Board of DirectorsLi Xiyuan, Zhang Renshou, and Dou Linping119 December 2023Proposal on the Nomination of General ManagerApproved

Annual Report 2023

The Audit and Risk Management Committee of the Ninth Board of DirectorsZhang Renshou, Hu Fengcai, Huang Zhiyong, Li Xiyuan, and Dou Linping,531 March 20232022 Financial Audit and Internal Control Audit Report; 2023 Financial Budget Report; Proposal on Retrospective Restatement of Financial Data due to Business Combination under Common Control; Proposal on Asset Impairment Allowances; 2022 Annual Work Report and 2023 Work Plan of the Audit Department; and Risk and Compliance Management Summary Report 2022Approved
Zhang Renshou, Hu Fengcai, Huang Zhiyong, Li Xiyuan, and Dou Linping,26 April 2023First Quarterly Report 2023; and Audit Summary for Q1 2023Approved
Zhang Renshou, Hu Fengcai, Huang Zhiyong, Li Xiyuan, and Dou Linping,24 August 2023Interim Report 2023 and Its Summary; Proposal on Change to Accounting Policy; and Work Report of the Audit Department for H1 2023Approved

Annual Report 2023

Zhang Renshou, Hu Fengcai, Huang Zhiyong, Li Xiyuan, and Dou Linping,24 October 2023Third Quarterly Report 2023; Proposal on Asset Impairment Allowances for Q1-Q3 2023; Work Report of the Audit Department for Q1-Q3 2023; Proposal on the Rules for the Appointment of CPA Firm; and Proposal on Bidding Documents for the Appointment of CPA Firm for the 2023-2025 Annual and Internal Control Audits of the CompanyApproved
Zhang Renshou, Hu Fengcai, Huang Zhiyong, Li Xiyuan, and Dou Linping,27 November 2023Proposal on Reappointment of CPA FirmApproved
The Remuneration and Appraisal Committee of the Ninth Board of DirectorsZhang Xianfeng, Hu Fengcai, Li Xiyuan, Zhang Renshou, and Dou Linping,414 March 2023Proposal on Adjustments to Members of the Remuneration and Appraisal Committee of the 9th Board of DirectorsApproved
Zhang Renshou, Hu Fengcai, Huang Zhiyong, Li3 April 2023Proposal on Amendments to the RemunerationApproved

Annual Report 2023

Xiyuan, and Dou LinpingManagement Methods for Leadership Team
Zhang Renshou, Hu Fengcai, Huang Zhiyong, Li Xiyuan, and Dou Linping7 June 2023Proposal on the 2023 Restricted Share Incentive Plan (Draft) and Its Summary; Proposal on the Appraisal Management Methods for the 2023 Restricted Share Incentive Plan; and Proposal on the Management Methods for the 2023 Restricted Share Incentive PlanApproved
Zhang Renshou, Hu Fengcai, Huang Zhiyong, Li Xiyuan, and Dou Linping15 December 2023Proposal on Appraisal Plan for 2022 Remunerations for Leadership Team MembersApproved

VIII Performance of Duty by the Supervisory Committee

Indicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervisionin the Reporting Period.

□ Yes ? No

The Supervisory Committee raised no objections in the Reporting Period.

Annual Report 2023

IX Employees

1. Number, Functions and Educational Backgrounds of Employees

Number of in-service employees of the Company at the period-end4207
Number of in-service employees of main subsidiaries at the period-end8035
Total number of in-service employees at the period-end12,242
Total number of employees with remuneration in this Reporting Period12,242
Number of retirees to whom the Company or its main subsidiaries need to pay retirement pension242
Functions
FunctionNumber of employees
Production8,787
Sales726
Technical1,762
Financial135
Administrative832
Total12,242
Educational backgrounds
Educational backgroundNumber of employees
Junior college and below9,946
Bachelor’s degree2,094
Master’s degree180
Doctoral degree and above22
Total12,242

Note: “Number of retirees to whom the Company or its main subsidiaries need to pay retirement pension” in thetable above refer to retirees of subsidiary Nanning Liaowang, and the payments to them mainly comprise livingallowances, festival allowances, etc. The amount paid by Nanning Liaowang stands at RMB645,900 per year.This is a historical issue coming from before the Company’s acquisition of Nanning Liaowang. Starting from 1January 2021, the number of the retirees and the annually paid amount have ceased to increase.

2. Employee Remuneration Policy

Adhering to the principle of "giving priority to efficiency, giving consideration to fairness, creating and sharingtogether", the Company takes value creation as the guide, constructs four sets of salary systems of management,R&D, sales and production, determines salary grades according to different positions and their characteristics, andinclines salary distribution to core talents and key positions, so as to maximize the enthusiasm of employees.

Annual Report 2023

3. Employee Training Plans

The Company pays attention to personnel training and employee career development and has established theStarlight Lecture Hall. In light of the Company's development needs and post nature, the Company has built up acomplete training plan, and carried out a series of trainings such as R&D, marketing, production and managementby combining offline and offline learning platforms. Also, it organized training camps for internal lecturers, andestablished a training system with multiple dimensions and levels to promote employees' skills upgrading, abilityadvancement and quality improvement.

4. Labor Outsourcing

? Applicable □ Not applicable

Total hours of labor outsourced1,654,724
Total payment for labor outsourcing (RMB)38,989,858.00

X Profit Distributions to Shareholders (in the Form of Cash and/or Stock)How the profit distribution policy, especially the cash dividend policy, for ordinary shareholders was formulated,executed or revised in the Reporting Period:

? Applicable □ Not applicableAccording to the CSRC Notice on Further Implementing Matters Related to Cash Dividend Distribution of ListedCompanies (Zheng-Jian-Fa [2012] No. 37) and the Guangdong CSRC Notice on Further ImplementingRegulations Related to Dividend Distribution of Listed Companies (Guang-Dong-Zheng-Jian [2012] No. 91), inorder to further standardize the dividend mechanism, promote a scientific, sustained and stable dividendmechanism and protect legal rights and interests of investors, in 2012, the Company convened a general meetingto revise the dividend-related contents in its Articles of Association and specify the dividend conditions, thelowest dividend ratio, the decision-making procedure, etc.. Meanwhile, it formulated the Management Rules forProfit Distribution and the Return for Shareholder Plan for the Coming Three Years (2021-2023), specifying thearrangements and forms of dividends, the cash dividend planning and the distribution intervals, which furtherimproved the decision-making and supervision procedures for dividend distribution. According to the Company’sArticles of Association, the profit distributed in cash shall not be less than 30% of the distributable profit achievedin the year.

Annual Report 2023

In compliance with the Company’s Articles of Association and resolution of general meetingYes
Specific and clear dividend standard and ratioYes
Complete decision-making procedure and mechanismYes
Independent directors faithfully performed their duties and played their due roleYes
If the Company has no dividend plan, it should disclose the specific reasons and the next steps it intends to take to enhance investor returnsN/A
Non-controlling interests are able to fully express their opinion and desire and their legal rights and interests are fully protectedYes
In case of adjusting or changing the cash dividend policy, the conditions and procedures involved are in compliance with applicable regulations and transparentN/A

Indicate by tick mark whether the Company fails to put forward a cash dividend proposal for shareholdersdespite the facts that the Company has made profits in the Reporting Period and the profits of the Company asthe parent distributable to shareholders are positive.

□ Applicable ? Not applicable

Final dividend plan for the Reporting Period:

?Applicable □ Not applicable

Bonus shares for every 10 shares (share)0
Dividend for every 10 shares (RMB) (tax inclusive)1.2
Total shares as the basis for the profit distribution proposal (share)1,535,778,230
Cash dividends (RMB) (tax inclusive)184,293,387.60
Cash dividends in other forms (such as share repurchase) (RMB)0.00
Total cash dividends (including those in other forms) (RMB)184,293,387.60
Distributable profit (RMB)2,824,687,635.90
Total cash dividends (including those in other forms) as % of total profit distribution100%
Cash dividend policy
Where it is difficult to determine the development stage of the Company but it has plans for considerable spending, in profit distribution, cash dividends shall reach at least 20% in the total profit to be distributed.
Details about the proposal for profit distribution and converting capital reserve into share capital

Annual Report 2023

As audited by WUYIGE Certified Public Accountants LLP, the after-tax net profits of RMB165,856,519.10 of the Company asthe parent for 2023, plus the beginning retained profits of RMB2,810,316,233.41, minus the distributed profits ofRMB134,899,464.70 for 2022, and minus RMB16,585,651.91 set aside as surplus reserve, equal the ending profits distributable toshareholders of RMB2,824,687,635.90 for 2023. The Board of Directors has proposed a final dividend plan for 2023 as follows:

based on the share capital of 1,535,778,230 shares (the total share capital of 1,548,778,230 shares minus the remaining 13,000,000A-shares repurchased in the share repurchase account at the disclosure date of the 2023 Annual Report, a cash dividend ofRMB1.2 (tax inclusive) per 10 shares is to be distributed to the shareholders, with no bonus issue from either profit or capitalreserves. Where any change occurs to the total shares entitled to the final dividend due to any new issue, grant of equityincentives, etc. when the final dividend plan is implemented, the dividend per share shall remain the same while the total payoutamount shall be adjusted accordingly.

XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measuresfor Employees

? Applicable □ Not applicable

1. Equity incentives

On 12 June 2023, the 2023 Restricted Share Incentive Plan (Draft), together with other relevant proposals, wereapproved at the 44

th Meeting of the Ninth Board of Directors and the 22

ndMeeting of the Ninth SupervisoryCommittee. As such, the Company intended to grant no more than 13,000,000 restricted shares to 262 awardees.To be specific, there were 11.7 million shares for the first grant, accounting for 90.00% of the total grant underthe incentive plan; and there were 1.3 million reserved shares, accounting for 10.00% of the total grant underthe incentive plan. The restricted shares were A-stock ordinary shares repurchased by the Company. And thegrant price for the first grant was RMB3.81/share. This equity incentive plan is subject to approval by the State-owned Assets Supervision and Administration Commission of Guangdong Province and a general meeting ofshareholders of the Company. For further information, see the 2023 Restricted Share Incentive Plan (Draft) andIts Summary and other relevant proposals that have been disclosed on http://www.cninfo.com.cn/ dated 13 June2023.Equity incentives received by directors and senior management:

□ Applicable ? Not applicable

Appraisal mechanism and incentives for senior management:

None.

2. Implementation of Employee Stock Ownership Plans

□ Applicable ? Not applicable

Annual Report 2023

3. Other Incentive Measures for Employees

□ Applicable ? Not applicable

XII Formulation and Implementation of Internal Control System during the ReportingPeriod

1. Internal control formulation and implementation

During the Reporting Period, the Company, in accordance with the Basic Standards for Internal Control and itssupporting guidelines, as well as the actual situation, further revised and improved the relevant internal controlsystems, and established a relatively effective internal control system, so as to effectively prevent and discoverrisks in the process of operation and management in time, and provide guarantee for the legal compliance andasset safety of operation and management.The Board of Directors of the Company has an Audit and Risk Management Committee, which is responsible forreviewing the internal control of the Company, supervising the effective implementation of internal control andself-evaluation of internal control, and cooperating with internal control audit and other related matters. Theinternal audit department of the Company is responsible for the internal audit supervision of the Company,including supervising and inspecting the implementation of the internal control system of the Company, regularlyor irregularly conducting routine audits or special audits on finance, internal control, major projects and theirbusinesses, and putting forward suggestions for improving internal control to control and prevent risks. If theAudit Department finds major defects in internal control in the process of supervision and inspection, it has theright to report directly to the Audit and Risk Management Committee of the Board of Directors and the Board ofSupervisors.According to the identification of major defects in the Company's internal control, there were no major defects inthe internal control of financial reports and non-financial reports in 2023.

2. Material Internal Control Weaknesses Identified for the Reporting Period

□ Yes ? No

XIII Management and Control of Subsidiaries by the Company during the ReportingPeriod

Name ofIntegration planIntegrationProblemsSolutionsSettlementFollow-up

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companyprogressencountered in integrationtakenprogresssettlement plan
NationStar OptoelectronicsIn accordance with the relevant regulations of the China Securities Regulatory Commission (CSRC) and the Shenzhen Stock Exchange (SZSE) and the Articles of Association, as well as the Company’s planning, NationStar Optoelectronics ' technological advantages in the LED packaging industry and the Company's sales advantages in the terminal market were given full play to so as to stimulate both parties to expedite the launch of innovative and competitive products.Close cooperation between the Company and NationStar Optoelectronics was continuously promoted in R&D and market expansionNoneNoneNoneNone

XIV Evaluation Report or Independent Auditor’s Report on Internal Control

1. Internal Control Evaluation Report

Disclosure date of the internal control evaluation report19 April 2024
Index to the disclosed internal control evaluation reportSee www.cninfo.com.cn for the Internal Control Evaluation Report 2023
Evaluated entities’ combined assets as % of consolidated total assets100.00%
Evaluated entities’ combined operating revenue as % of consolidated operating revenue100.00%
Identification standards for internal control weaknesses
TypeWeaknesses in internal control over financial reportingWeaknesses in internal control not related to financial reporting
Nature standardDefect with one of the following characteristics should be recognized as a serious defect: 1. the defect involved with the malpractices of theDefect with one of the following characteristics should be recognized as a serious defect: 1. being punished for seriously

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Directors, the Supervisors and the Senior Executives; 2. the controlled environment is invalid; 3. the CPA discovered any significant misstatement from the current financial report while the internal control could not discover the mistake during the operating process; 4. the supervision from the Corporate Audit Committee and the internal audit institution on the internal control. If there met with one of the situation of the following, should be recognized as an important defect: 1. the recognized important defect is not solved during the reasonable period; 2. corrects the published financial report; 3. the function of the internal audit of the Company is invalid; 4. the control of whether execute the selection and the application of the accounting policies according to the Generally Accepted Accounting Principles is invalid.violating the national laws, the administrative laws and regulations and the normative documents; 2. the Company suffers a serious economic loss due to any serious errors made in decision-making caused by serious lack of decision-making procedures on significant events or unfair decision-making; 3. the Company’s reputation has been unrepairably damaged by any conduct in violation of laws and regulations which produces a far-reaching negative impact and draws the public’s attention widely; 4. the major business involved with the production and operating of the Company lack of the system control or the system control is invalid; 5. the results of the internal control assessment turn out to include any serious defects and such defects fail to be rectified effectively within 12 months. Defects with the following characteristics should be recognized as important defects: 1. owing to partly lack of the decision-making process on significant events and the undemocratic decision-making process which caused the decision-making mistake that led the Company face with certain economic losses; 2. the negative influences owning to the unlawful acts and the irregularities h involve with wide range and cause public concern among the partial regions which bring certain harms to the reputation of the Company; 3. the system of the major business involved with the production and operating of the Company is incomplete or partially invalid; 4. the results of the internal control assessment turn out to include any serious defects and such defects fail to be rectified effectively within 6 months.
Quantitative standardBased on the data of the 2022 consolidated statements, the quantitative criterion of confirming the important degree of the misstatement (including the false negatives) from of the consolidated statements of the listed companies is as follows: serious defect: misstatement ≥1.0% of the total assets amount; important defects: 0.5% of the total assetsAccording to the quantitative criterion of the internal control defects of the financial report, the quantitative criterion of the internal control defects assessment of the non-financial report confirmed by the Company is as follows: serious defect: misstatement ≥1.0% of the total assets amount; important defects: 0.5% of the total assets amount ≤misstatement<1.0% of

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amount ≤misstatement<1.0% of the total assets amount; common defects: misstatement<0.5% of the total assets amount.the total assets amount; common defects: misstatement<0.5% of the total assets amount.
Number of material weaknesses in internal control over financial reporting0
Number of material weaknesses in internal control not related to financial reporting0
Number of serious weaknesses in internal control over financial reporting0
Number of serious weaknesses in internal control not related to financial reporting0

2. Independent Auditor’s Report on Internal Control

? Applicable □ Not applicable

Opinion paragraph in the independent auditor’s report on internal control
WUYIGE Certified Public Accountants LLP considered that: Foshan Electrical and Lighting Co., Ltd. maintained effective internal control of the financial report in all significant aspects according to the Basic Standards for Internal Control and relevant regulations.
Independent auditor’s report on internal control disclosed or notDisclosed
Disclosure date19 April 2024
Index to such report disclosedSee www.cninfo.com.cn for the Auditor’s Report on Internal Control
Type of the auditor’s opinionUnmodified unqualified opinion
Material weaknesses in internal control not related to financial reportingNone

Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s report on theCompany’s internal control.

□ Yes ? No

Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is consistentwith the internal control self-evaluation report issued by the Company’s Board.? Yes □ No

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XV Rectifications of Problems Identified by Self-inspection in the Special Action for ListedCompany GovernanceNone.

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Part V Environmental and Social Responsibility

I Major Environmental Issues

Indicate 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:

Name of the Company or its subsidiaryAdministrative permit grantedPermit No.Date of grantEffective period
Foshan Electrical and Lighting Co., Ltd.Pollutant Discharge Registration for Stationary Source of Pollutant91440000190352575W001W17 March 20205 years
Foshan Electrical and Lighting Co., Ltd. Gaoming BranchPollutant Discharge Permit91440600784850061B001U1 June 20235 years
Foshan Taimei Times Lamp Co., Ltd.Pollutant Discharge Permit91440600782035581D001Q17 November 20225 years
FSL Chanchang Lighting Co., Ltd.Pollutant Discharge Registration for91440600779203775W18 March 20205 years

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Stationary Source of Pollutant
FSL Zhida Electric Technology Co., Ltd.Pollutant Discharge Registration for Stationary Source of Pollutant91440605MA4UWNPY98001W1 September 20215 years
Foshan Haolaite Lighting Co., Ltd.Pollutant Discharge Registration for Stationary Source of Pollutant91440604MA552Q66XM001W14 January 20215 years
Foshan Electrical and Lighting Co., Ltd. Gaoming Lamp BranchPollutant Discharge Registration for Stationary Source of Pollutant914406005666224665001Y20 August 20215 years
Nanning Liaowang Auto Lamp Co., Ltd.Pollutant Discharge Registration for Stationary Source of Pollutant914501001983431121001Y17 March 20205 years
Liuzhou Guige Lighting Technology Co., Ltd.Pollutant Discharge Permit914502000836092085001V18 July 20235 years
Chongqing Guinuo Lighting Technology Co., Ltd.Pollutant Discharge Permit9150000035128048Y001Q25 September 20225 years
Qingdao Guige Lighting Technology Co., Ltd.Pollutant Discharge Registration for Stationary Source of Pollutant913702820530892807001W26 November 20215 years
Foshan NationStar Optoelectronics Co., Ltd.Pollutant Discharge Registration for Stationary Source of Pollutant914406001935264036001X19 January 20205 years
Foshan NationStar Semiconductor Co., Ltd.Pollutant Discharge Permit91440600570160743B001Q21 November 20225 years
Foshan NationStar Semiconductor Co., Ltd.Pollutant Discharge Permit91440600570160743B001Q12 January 20245 years
Guangdong Fenghua SemiconductorPollutant Discharge Registration for Stationary Source of91440000725451562J001Y27 February 20205 years

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Technology Co., Ltd.Pollutant

Discharge standards and pollutants discharged in production and operation activities:

Name of the Company or its subsidiaryType of Major and Characteristic PollutantsName of Major and Characteristic PollutantsDischarge MethodOutlet QuantityOutlet DistributionDischarge Concentration /intensityPollutant Discharge StandardsTotal Actual DischargeTotal Discharge ApprovedExcessive Discharge
Foshan Electrical and Lighting Co., Ltd. Gaoming BranchExhaust gasSO2Discharged in an organized manner1In the plantSO2: 280 mg/m3Emission Standards for Air Pollutants in Glass Industry (DB44/2159-2019)2.611SO2: 40.597 t/yNone
Foshan Electrical and Lighting Co., Ltd. Gaoming BranchExhaust gasOxynitrideDischarged in an organized manner1In the plantOxynitride: 550mg/m3Emission Standards for Air Pollutants in Glass Industry (DB44/2159-2019)30.177Oxynitride: 149.839 t/yNone
Liuzhou Guige Lighting Technology Co., Ltd.Exhaust gasXylene, SO2, nitrogen oxide, benzene, toluene, particulate matter, volatile organic matterDischarged in an organized manner1In the plantDischarged upon reaching applicable standardsIntegrated Emission Standards of Air Pollutants (GB16297-1996)//None
Liuzhou Guige Lighting Technology Co., Ltd.Exhaust gasVolatile organic compoundsDischarged in an un-organized manner2In the plantDischarged upon reaching applicable standardsIntegrated Emission Standards of Air Pollutants (GB16297-1996)//None
FoshanWastewateCOD, andDischarge1WastewateCOD:21mGB39731-COD:1.43/No

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NationStar Optoelectronics Co., Ltd.rammonia nitrogend by standards after treatmentr treatment stationg/L Ammonia:0.035mg/L2020t/a Ammonia:0.00238t/a
Foshan NationStar Optoelectronics Co., Ltd.Exhaust gasTotal VOCs, non-methane total hydrocarbonsDischarged by standards after treatment2Rooftop of East and West BuildingsTotal VOCs:0.22mg/m? Non-methane total hydrocarbons:7.395mg/m?DB44/814-2010DB 44/2367-2022Total VOCs:0.19t/a Non-methane Hydrocarbons:6.37 t/a/No
Foshan NationStar Optoelectronics Co., Ltd.NoiseNoiseDischarged by standards//Daytime 57 Nighttime 49 Unit: dB(A)GB12348-2008//No
Foshan NationStar Semiconductor Technology Co., Ltd.WastewaterCOD, and ammonia nitrogenDischarged by standards after treatment1Wastewater treatment stationCOD: 20mg/L Ammonia: 0.025mg/LDB44/26-2001COD: 1.7425t/a Ammonia: 0.00051t/aCOD: 3.129t/a Ammonia: 0.201t/aNo
Foshan NationStar Semiconductor Technology Co., Ltd.Exhaust gasSulfur dioxide, nitrogen oxides, total VOCsDischarged by standards after treatment6Roof of a buildingSulfur dioxide: 0mg/m? NOx: 31.5mg/m? Total VOCs: 0.635mg/m?DB44/247-2001 DB44/814-2010Sulfur dioxide:0t/a NOx:5.3761t/a Total VOCs:0.7642t/aSulfur dioxide:0.25t/a NOx:11.96t/a Total VOCs:2.45t/aNo
Foshan NationStar Semiconductor Technology Co., Ltd.NoiseNoiseDischarged by standards//Daytime 57 Nighttime 48 Unit: dB(A)GB12348-2008//No
Guangdong Fenghua Semiconductor Technology Co., Ltd.WastewaterCODDischarged by standards after treatment1The main drain is located next to the north duty roomCOD:9.84mg/LDB44/26—2001COD: 0.164 t/a/No
Guangdong Fenghua Semiconductor Technology Co., Ltd.Exhaust gasParticulate matter, total VOCsDischarged by standards after treatment7Roof of the plant IParticulate Matter:6.9mg/m? Total VOCs:3.34mg/m?DB44/27-2001Particulate matter:0.013t/a Total VOCs:0.109t/a/No
Guangdong Fenghua Semiconductor Technology Co., Ltd.NoiseNoiseDischarged by standards//Daytime 55 Nighttime 45 Unit: dB(A)GB12348-2008//No

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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 mainly caused pollutants such as VOCs, NMHC, andparticulate matters, which was treated through three grades of 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.

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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, andthen transferred to wastewater treatment stations for centralized treatment. Upon treatment, the discharge limitsand requirements stipulated in the Discharge Limits of Water Pollutants (DB44/26-2001) of GuangdongProvince: Standard Class III for Time Period II were met.Nanning Liaowang: The manufacturing of auto luminary did not generate industrial wastewater and mainlycaused wastes, such as domestic wastewater. Upon treatment through physicochemical and biochemical, thedischarge limits and requirements stipulated in the Level 1 standards of the Integrated Wastewater DischargeStandard (GB 8978-1996) were met.NationStar Optoelectronics: 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:

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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.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.

Construction and operation of pollution prevention and control facilities:

No.FacilityTotal Investment (RMB10,000)Date of Construction (MM/YYYY)Date of Operation (MM/YYYY)OperatorProcessesDesign processing capacityActual capacityOperating hours
1Exhaust gas treatment facilities500November 20152015 DecemberGaoming BranchSemi-dry flue gas desulphurization (SDFGD) + electric precipitation + SCR denitration60000m3/h60000m3/h24h/d
2Exhaust gas treatment facilities30September 2019May 2020Taimei CompanyCyclone plate tower + activated carbon adsorption12000 m3/h12000 m3/h12h/d
3Wastewater treatment130September 2019May 2020Taimei CompanyConditioning + coagulation +120m?/d120m?/d12h/d

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facilitiessedimentation + air flotation + filtration
4Exhaust gas treatment facilities20Aug-14Apr-15Chanchang Companyactivated carbon adsorption8000m3/h8000m3/h12h/d
5Exhaust gas treatment facilities48September 2020October 2021Zhida CompanyUV photocatalytic oxidation + activated carbon adsorption35000m3/h35000m3/h12h/d
6Photo-Oxygen-Activated Carbon All-in-One Machine28December 20212022 OctoberNanning LiaowangActivated carbon adsorption + UV photo-oxidation catalysis70000㎡/h70000㎡/h24h/d
7VOCs organic waste gas RTO (regenerative thermal incinerator) oxidizer500December 20162017 MarchLiuzhou LightingActivated carbon adsorption + incineration10,000 cubic meters per hour9500 cubic meters per hour24h/d
8VOC organic waste gas treatment facility28.11June 2018February 2019Qingdao Lightingactivated carbon adsorption32000㎡/h32000㎡/h8h/d
9RTO (Regenerative Thermal Incinerator)500Oct-17May 2018Chongqing GuinuoZeolite adsorption+desorption+RTO catalytic combustion75000㎡/h75000㎡/h24h/d
10UV photocatalysis200Oct-17May 2018Chongqing GuinuoZeolite Adsorption + Dedusting + UV Photocatalysis70000㎡/h70000㎡/h24h/d
11Wastewater treatment station39.5April 2017May 2017NationStarCoagulation and sedimentation600t/d227.1t/d24h/d
12Method for treating the exhaust gases of the plant in the259May 2023June 2023NationStarDry filtration + secondary activated carbon adsorption80000m?/h54330m?/h24h/d

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west
13Method for treating the exhaust gases of the plant in the eastMay 2023June 2023NationStarDry filtration + secondary activated carbon adsorption110000m?/h65411m?/h24h/d
14Wastewater treatment station356.7Sep-12Dec-12NATIONSTAR SemiconductorPhysiochemical and biochemical processing1080t/d287.83t/d24h/d
15Method for treating MOCVD exhaust gas209.64Sep-12Nov-12NATIONSTAR SemiconductorEdwards combustion treatment22000m?/h12156m?/h24h/d
16Method for treating MOCVD exhaust gas209.64Sep-12Nov-12NATIONSTAR SemiconductorEdwards combustion treatment22000m?/h14894m?/h24h/d
17Method for treating acid and alkali exhaust gases348.41Sep-12Nov-12NATIONSTAR SemiconductorScrubber combustion water washing and spraying device + acid and alkali exhaust gas scrubber tower device45000m?/h16607m?/h24h/d
18Method for treating acid and alkali exhaust gases348.41Sep-12Nov-12NATIONSTAR SemiconductorScrubber combustion water washing and spraying device + acid and alkali exhaust gas scrubber tower device40000m?/h13166m?/h24h/d
19Method for treating organic exhaust gas348.41Sep-12Nov-12NATIONSTAR SemiconductorUV photolysis and activated carbon absorption40000m?/h19391m?/h24h/d
20Method for treating organic exhaust gas348.41Sep-12Nov-12NATIONSTAR SemiconductorUV photolysis and activated carbon absorption20000m?/h11637m?/h24h/d
21Wastewater251March 2016OctoberFenghuaPhysicochemical,140t/d70t/d24h/d

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treatment station2016Semiconductorbiochemical, reverse osmosis RO membrane treatment processes
22Exhaust gas control facilities20August 2005January 2006Fenghua SemiconductorFilter cartridge dust removal + activated carbon adsorption15000m?/h7728m?/h24h/d
23Exhaust gas control facilities20August 2005January 2006Fenghua SemiconductorFilter cartridge dust removal + activated carbon adsorption15000m?/h7728m?/h24h/d
24Exhaust gas control facilities20August 2005January 2006Fenghua SemiconductorFilter cartridge dust removal + activated carbon adsorption15000m?/h7728m?/h24h/d
25Exhaust gas control facilities20August 2005January 2006Fenghua SemiconductorFilter cartridge dust removal + activated carbon adsorption15000m?/h7728m?/h24h/d
26Exhaust gas control facilities19January 2006August 2006Fenghua Semiconductorlye spray11000m?/h9000m?/h24h/d
27Exhaust gas control facilities19January 2006August 2006Fenghua Semiconductorlye spray11000m?/h9000m?/h24h/d
28Exhaust gas control facilities19January 2006August 2006Fenghua Semiconductorlye spray11000m?/h9000m?/h24h/d

Environmental self-monitoring plan:

Foshan Electrical and Lighting Co., Ltd. Gaoming Branch developed an environmental self-monitoring plan. Itentrusted a third-party environmental testing agency to perform the annual inspection of the exhaust outlet. Allthe inspection results were lower than the standard limits. Meanwhile, it accepted the annual supervision andmonitoring by local environmental protection departments. All the monitoring results were lower than thestandard limits.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 to perform the annualinspection of the exhaust outlet. All the inspection results were lower than the standard limits. Meanwhile, it

Annual Report 2023

accepted the annual supervision and monitoring by local environmental protection departments. All themonitoring 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.

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 Emergency

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Plan 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 revised in 2023 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 (Filing No.: 440604-2023-0040-L).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.: 440605-2023-0124-M) in 2023.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) in 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 RMB11.7953 million, and their environmentalprotection-related taxes paid amounted to RMB90.1 thousand.

Measures taken during the Reporting Period to reduce carbon emissions and the impact:

? Applicable □ Not applicableDuring the Reporting Period, the Company reduced electricity consumption under the same output value byselecting high-efficiency and energy-saving equipment. The Company insists on constantly publicizing

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environmental protection knowledge to employees, improving their awareness of environmental protection, andrealizing the sustainable development goal of harmonious coexistence between enterprises and the environmentthrough the joint efforts of all employees.

Administrative punishments received with respect to environmental issues in the Reporting Period:

The Company/subsidiaryReason for punishmentIncompliancePunishmentImpact on the Company’s operationsRectification
N/AN/AN/AN/AN/AN/A

Other environment-related information that should be disclosed:

None.Other relevant information:

None.II Social ResponsibilityFor details about the Company’s fulfillment of social responsibilities in 2023, please refer to the Environmental,Social, and Governance (ESG) Report 2023 disclosed by the Company on www.cninfo.com.cn on 19 April2024.III Efforts in Poverty Alleviation and Rural RevitalizationDuring the Reporting Period, the Company actively responded to the call for "thousands of enterprises helpingthousands of towns, and ten thousand enterprises revitalizing ten thousand villages." We diligently implementedthe arrangements for supporting rural revitalization work. We have carried out consumer assistance programs inQiandongnan, Guizhou, and Wuhua County, Meizhou, Guangdong, with a total expenditure of RMB1.0458million. Additionally, we donated goods worth RMB71,800, contributing to "the high-quality developmentproject of 100 counties, 1,000 towns and 10,000 villages".

Annual Report 2023

Part VI Significant EventsI Fulfillment of Commitments

1. Commitments of the Company’s Actual Controller, Shareholders, Related Parties and Acquirers, aswell as the Company Itself and other Entities Fulfilled in the Reporting Period or Ongoing at the Period-end? Applicable □ Not applicable

CommitmentPromisorType of commitmentDetails of commitmentDate of commitment makingTerm of commitmentFulfillment
Commitments made in acquisition documents or shareholding alteration documentsElectronics Group and Hong Kong Rising InvestmentAbout avoidance of horizontal competitionElectronics Group and Hong Kong Rising Investment have made commitments as follows to avoid horizontal competition with the Company: 1. They shall conduct supervision and restraint on the production and operation activities of themselves and their relevant enterprises so that besides the enterprise above that is in horizontal competition with the Company for now, if the products or business of them or their relevant enterprises become the same with or similar to those of the Company or its subsidiaries in the future, they shall take the following measures: (1) If the Company thinks necessary, they and their relevant enterprises shall reduce and wholly transfer their relevant assets and business; and (2) If the Company thinks necessary, it is given the priority to acquire first, by proper means, the relevant assets and business of them and their relevant enterprises. 2. All the commitments made by them to eliminate or avoid horizontal competition with the Company are also applicable to their directly or indirectly controlled subsidiaries. They are4 December 2015Long-termOngoing

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obliged to urge and make sure that other subsidiaries execute what’s prescribed in the relevant document and faithfully honor all the relevant commitments. 3. If they or their directly or indirectly controlled subsidiaries break the aforesaid commitments and thus cause a loss for the Company, they shall compensate the Company on a rational basis.
Rising Rising Holdings GroupAbout avoidance of horizontal competition1. Rising Group will take active measures to avoid any business or activity that competes or may compete with the principal business of the Company and its auxiliary enterprises, and urge the Promisor to control enterprises to avoid any business or activity that competes or may compete with the principal business of the Company and its auxiliary enterprises. 2. If Rising Group and its controlled enterprises are given the opportunity to engage in new business that constitutes or may constitute horizontal competition with the principal businesses of the Company and its auxiliary enterprises, Rising Group will make every effort to make the business opportunity first available to the Company or its auxiliary enterprises on reasonable and fair terms and conditions on the premise that conditions permit and in the interest of the listed company.4 November 2021Long-termOngoing
Electronics Group and Hong Kong Rising InvestmentAbout reduction and regulation of related-party transactionsElectronics Group and Hong Kong Rising Investment have made a commitment that during their direct or indirect holding of the Company’s shares, they shall 1. strictly abide by the regulatory documents of the CSRC and the SZSE, the Company’s Articles of Association, etc. and not harm the interests of the Company or other shareholders of the Company in their4 December 2015Long-termOngoing

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production and operation activities by taking advantage of their position as the controlling shareholder and actual controller; 2. make sure that they or their other controlled subsidiaries, branch offices, jointly-run or associated companies (the "Relevant Enterprises" for short) will try their best to avoid or reduce related-party transactions with the Company or the Company’s subsidiaries; 3. strictly follow the market principle of justness, fairness and equal value exchange for necessary and unavoidable related-party transactions between them and their Relevant Enterprises and the Company, and withdraw from voting when a related-party transaction with them or their Relevant Enterprises is being voted on at a general meeting or a board meeting, and execute the relevant approval procedure and information disclosure duties pursuant to the applicable laws, regulations and regulatory documents. Where the aforesaid commitments are broken and a loss is thus caused for the Company, its subsidiaries or the Company’s other shareholders, they shall be obliged to compensate.
Rising Holdings GroupAbout reduction and regulation of related-party transactions1. strictly abide by the regulatory documents of the CSRC and the SZSE, the Company’s Articles of Association, etc. and not harm the interests of the Company or other shareholders of the Company in their production and operation activities by taking advantage of their position as the controlling shareholder and actual controller; 2. make sure that they or their other controlled subsidiaries, branch offices, jointly-run or associated companies (the "Relevant Enterprises" for short) will try their best to avoid or reduce4 November 2021Long-termOngoing

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related-party transactions with the Company or the Company’s subsidiaries; 3. strictly follow the market principle of justness, fairness and equal value exchange for necessary and unavoidable related-party transactions between them and their Relevant Enterprises and the Company, and withdraw from voting when a related-party transaction with them or their Relevant Enterprises is being voted on at a general meeting or a board meeting, and execute the relevant approval procedure and information disclosure duties pursuant to the applicable laws, regulations and regulatory documents.
Electronics Group and Hong Kong Rising InvestmentAbout independenceIn order to ensure the independence of the Company in business, personnel, asset, organization and finance, Electronics Group and Hong Kong Rising Investment have made the following commitments: 1. They will ensure the independence of the Company in business: (1) They promise that the Company will have the assets, personnel, qualifications and capabilities for it to operate independently as well as the ability of independent, sustainable operation in the market. (2) They promise not to intervene in the Company’s business activities other than the execution of their rights as the Company’s shareholders. (3) They promise that they and their related parties will not be engaged in business that is substantially in competition with the Company’s business. And (4) They promise that they and their related parties will try their best to reduce related-party transactions between them and the Company; for necessary and unavoidable related-party transactions,4 December 2015Long-termOngoing

Annual Report 2023

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independently owned and operated by the Company. And (3) They promise that they and their other controlled subsidiaries will not illegally occupy the Company’s funds and assets in any way, or use the Company’s assets to provide guarantees for the debts of themselves or their other controlled subsidiaries with. 4. They will ensure the independence of the Company in organization: (1) They promise that the Company has a sound corporate governance structure as a joint-stock company with an independent and complete organization structure. And (2) They promise that the operational and management organs within the Company will independently execute their functions according to laws, regulations and the Company’s Articles of Association. And 5. They will ensure the independence of the Company in finance: (1) They promise that the Company will have an independent financial department and financial accounting system with normative, independent financial accounting rules. (2) They promise that the Company will have independent bank accounts and not share bank accounts with its related parties. (3) They promise that the Company’s financial personnel do not hold concurrent positions in its related parties. (4) They promise that the Company will independently pay its tax according to law. And (5) They promise that the Company can make financial decisions independently and that they will not illegally intervene in the Company’s use of its funds.
Rising Holdings GroupAbout independence

To maintain the independence of theCompany, Rising Group has made thefollowing commitments: 1. It willensure the personnel independence of

4 November 2021Long-termOngoing

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complete organization structure. (2) It promises that the office and production and business premises of the Company are separated from those of Rising Group. And (3) It promises that the Board of Directors, the Board of Supervisors and various functional departments of the Company operate independently, and there is no subordinate relationship with the functional departments of Rising Group. And 5 It will ensure the independence 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 to operate independently as well as the ability of independent, sustainable operation in the market.
FSLAbout avoidance of horizontal competition1. They shall conduct supervision and restraint on the production and operation activities of themselves and their relevant enterprises so that besides the enterprise above that is in horizontal competition with NATIONSTAR OPTOELECTRONICS for now, if the products or business of them or their relevant enterprises become the same with or similar to those of NATIONSTAR OPTOELECTRONICS or its subsidiaries in the future, they shall take the following measures: (1) If NATIONSTAR OPTOELECTRONICS thinks necessary, they and their relevant enterprises shall reduce and wholly transfer their relevant assets and business; and (2) If NATIONSTAR OPTOELECTRONICS thinks7 October 2021Long-termOngoing

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necessary, it is given the priority to acquire first, by proper means, the relevant assets and business of them and their relevant enterprises. 2. All the commitments made by them to eliminate or avoid horizontal competition with FSL are also applicable to their directly or indirectly controlled subsidiaries. They are obliged to urge and make sure that other subsidiaries execute what’s prescribed in the relevant document and faithfully honor all the relevant commitments. 3. If they or their directly or indirectly controlled subsidiaries break the aforesaid commitments and thus cause a loss for NATIONSTAR OPTOELECTRONICS, they shall compensate NATIONSTAR OPTOELECTRONICS on a rational basis.
FSLAbout reduction and regulation of related-party transactions1. FSL and enterprises under its control (except NATIONSTAR OPTOELECTRONICS and its subsidiaries) will reduce and standardize related transactions with NATIONSTAR OPTOELECTRONICS and its subsidiaries. 2. In case of any inevitable or reasonably justified related party transactions, FSL and enterprises under its control (except NATIONSTAR OPTOELECTRONICS and its subsidiaries) will strictly abide by the market principles, conduct related party transactions with NATIONSTAR OPTOELECTRONICS fairly and reasonably based on the general principles of equality, mutual benefit, equal value and compensation, and perform legal procedures in accordance with laws, regulations, normative documents and relevant regulations of NATIONSTAR7 October 2021Long-termOngoing

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OPTOELECTRONICS.
FSLAbout maintaining independence of the listed companyIn order to promote the standardized management of NATIONSTAR OPTOELECTRONICS, legally and compliantly exercise shareholders' rights and fulfill corresponding obligations, and take practical and effective measures to ensure the independence of NATIONSTAR OPTOELECTRONICS in personnel, assets, finance, institutions and business, the Promisor promises: (I) It will ensure the independence of NATIONSTAR OPTOELECTRONICS in personnel 1. FSL promises that GM, deputy GMs, CFO, Company Secretary and other senior management personnel of NATIONSTAR OPTOELECTRONICS will not hold any positions in FSL and other enterprises under its control (except NATIONSTAR OPTOELECTRONICS and its controlled enterprises, the same below) other than director and supervisor, and not receive salaries from in FSL and other enterprises under its control; 2. It will ensure NATIONSTAR OPTOELECTRONICS’s absolute independence from FSL and enterprises under its control in labor, human resource and salary management. (II) It will ensure the independence of NATIONSTAR OPTOELECTRONICS in asset 1. FSL promises that NATIONSTAR OPTOELECTRONICS will have independent and complete operating assets related to operation; 2. FSL promises that the funds, assets and other resources of NATIONSTAR OPTOELECTRONICS will not be illegally occupied. (III) It will ensure the independence of NATIONSTAR OPTOELECTRONICS in finance 1. It promises that NATIONSTAR OPTOELECTRONICS will have an independent financial department, and independent financial accounting system and financial accounting rules. 2. It promises that NATIONSTAR OPTOELECTRONICS will have independent bank accounts and not share bank accounts with FSL and other enterprises under its control; 3. It promises that the financial7 October 2021Long-termOngoing

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personnel of NATIONSTAR OPTOELECTRONICS do not work part-time and receive salaries in FSL and other enterprises under its control; 4. It promises that NATIONSTAR OPTOELECTRONICS will independently pay its tax according to law; And (5) It promises that NATIONSTAR OPTOELECTRONICS can make financial decisions independently and that it will not illegally intervene in NATIONSTAR OPTOELECTRONICS’s use of its funds. (IV) It will ensure the independence of NATIONSTAR OPTOELECTRONICS in organization It promises that the listed company has a sound corporate governance structure as a joint-stock company with an independent and complete organization structure. (V) It will ensure the independence of NATIONSTAR OPTOELECTRONICS in business It promise that NATIONSTAR OPTOELECTRONICS remains independent in procurement, production, sales and intellectual property rights, and that NATIONSTAR OPTOELECTRONICS will have the assets, personnel, qualifications and capabilities for it to operate independently as well as the ability of independent, sustainable operation in the market.
Commitments made during asset restructuringFSLAbout the truthfulness, accuracy and completeness of the information provided during this major asset restructuring1. FSL has provided relevant information and documents (including but not limited to original written materials, duplicate materials or oral testimony, etc.) related to this trading to the intermediaries providing professional services of auditing, valuation, legal and financial consultancy for this trading. FSL promises that the copies or photocopies of the documents and materials provided are consistent with the originals, and that the signatures and seals of the documents and materials are authentic, and the signatories of the27 October 2021Long-termOngoing

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documents have been legally authorized and effectively signed the documents; that the provided information and documents are authentic, accurate and complete and that there are no false records, misleading statements or material omissions. FSL also promises to bear individual and joint and several liability. 2. The commitment maker promises that the information provided is true, accurate and complete. Where any investor suffers a loss as a result of any misrepresentation, misleading statement or material omission in the information provided, the commitment maker shall be liable for compensation according to law.
Director and senior management office of FSLAbout measures to fill up returns for risks arising from diluting immediate return in major asset restructuring1. They promise not to transfer benefits to other units or individuals free of charge or under unfair conditions, and not to harm the interests of the Company in any other ways; 2. They promise to restrain position-related consumption behavior; 3. They promise not to use the Company's assets to engage in investment and consumption activities unrelated to the performance of duties; 4. They promise that the future remuneration system formulated by the Board of Directors or the Remuneration and Assessment Committee will be linked to the implementation of the Company's measures to fill up returns; 5. If the Company formulates an equity incentive plan in the future, they will actively promote the exercise conditions of the future equity incentive plan to be linked with the implementation of the Company's measures to fill up returns; 6. From the date of issuance of these commitments to the completion of this major asset27 October 2021Long-termOngoing

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restructuring of the Company, if the CSRC makes other new regulatory provisions on measures to fill up returns and the relevant commitments, and these commitments cannot meet these provisions of the CSRC, they promise to issue supplementary commitments in accordance with the latest regulations of the CSRC at that time. 7. They promise to earnestly fulfill the compensation measures formulated by the Company and any commitments it made. If they violate any of these commitments and cause losses to the Company or investors, they are willing to bear corresponding legal responsibilities to the Company or investors according to law.
Directors and senior management of FSLAbout the truthfulness, accuracy and completeness of the information provided during this major asset restructuring1. They have provided relevant information and documents (including but not limited to original written materials, duplicate materials or oral testimony, etc.) related to this trading to the intermediaries providing professional services of auditing, assessment, legal and financial consultancy for this trading. They promise that the copies or photocopies of the documents and materials provided are consistent with the originals, and that the signatures and seals of the documents and materials are authentic, and the signatories of the documents have been legally authorized and effectively signed the documents; that the provided information and documents are authentic, accurate and complete and that there are no false records, misleading statements or material omissions. They also promise to bear individual and joint and several liability. 2. They promise that the information provided is true, accurate27 October 2021Long-termOngoing

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and complete. In case of any losses caused to investors due to any false presentations, misleading statements or material omissions in the information provided, they will be liable for compensation according to law. 3. Where the information provided or disclosed by them in this trading is suspected of false records, misleading statements or material omissions, and they are filed for investigation by the judicial organ or by the CSRC, the shares with interests in the listed company will not be transferred until the investigation conclusion is formed.
Rising Holdings Group, Rising Capital, Electronics Group, Hongkong Wah Shing, Hong Kong Rising Investment and Shenzhen Rising InvestmentAbout effective performance of measures to fill up returns1. They promise not to interfere in the operation and management activities of the listed company beyond their authority and not to encroach on the interests of the listed company. 2. From the date of issuance of these commitments to the completion of this trading of the listed company, if the CSRC makes new regulatory requirements on measures to fill up returns and commitments of relevant personnel, and the above commitments cannot meet these new regulatory requirements of the CSRC, they promise to issue supplementary commitments according to the latest regulations of the CSRC at that time. 3. They promise to earnestly fulfill the measures to fill up returns formulated by the listed company and any commitments made by them. If they violate these commitments and causes losses to the listed company or investors, they are willing to bear the compensation responsibility for the listed company or investors according to law. As one of the subjects responsible for the measures to fill up returns, if they violate the above27 October 2021Long-termOngoing

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commitments or refuse to fulfill the above commitments, they agree that the securities regulatory agencies such as the CSRC and the SZSE will punish them or take relevant regulatory measures in accordance with the relevant regulations and rules they formulated or issued.
Rising Holdings Group, Rising Capital, and Hongkong Wah ShingAbout avoidance of horizontal competition1. They shall conduct supervision and restraint on the production and operation activities of themselves and their relevant enterprises so that besides the enterprise above that is in horizontal competition with FSL for now, if the products or business of them or their relevant enterprises become the same with or similar to those of FSL or its subsidiaries in the future, they shall take the following measures: (1) If FSL thinks necessary, they and their relevant enterprises shall reduce and wholly transfer their relevant assets and business; and (2) If FSL thinks necessary, it is given the priority to acquire first, by proper means, the relevant assets and business of them and their relevant enterprises. 2. All the commitments made by them to eliminate or avoid horizontal competition with FSL are also applicable to their directly or indirectly controlled subsidiaries. They are obliged to urge and make sure that other subsidiaries execute what’s prescribed in the relevant document and faithfully honor all the relevant commitments. 3. If they or their directly or indirectly controlled subsidiaries break the aforesaid commitments and thus cause a loss for FSL, they shall compensate FSL on a rational basis.27 October 2021Long-termOngoing
Rising HoldingsAbout regulation andThey have made a commitment that during their direct or indirect holding of27 OctoberLong-termOngoing

Annual Report 2023

Group, Rising Capital, and Hongkong Wah Shingreduction of related-party transactionsFSL’s shares, they shall 1. strictly abide by the regulatory documents of the CSRC and the SZSE, FSL’s Articles of Association, etc. and not harm the interests of the Company or other shareholders of FSL in their production and operation activities by taking advantage of their position as the controlling shareholder and actual controller; 2. make sure that they or their other controlled subsidiaries, branch offices, jointly-run or associated companies (the "Relevant Enterprises" for short) will try their best to avoid or reduce related-party transactions with FSL or FSL’s subsidiaries; 3. strictly follow the market principle of justness, fairness and equal value exchange for necessary and unavoidable related-party transactions between them and their Relevant Enterprises and FSL, and withdraw from voting when a related-party transaction with them or their Relevant Enterprises is being voted on at a general meeting or a board meeting, and execute the relevant approval procedure and information disclosure duties pursuant to the applicable laws, regulations and regulatory documents. Where the aforesaid commitments are broken and a loss is thus caused for FSL, its subsidiaries or FSL’s other shareholders, they shall be obliged to compensate.2021
Rising Holdings Group, Electronics Group, and Rising CapitalAbout compensation for possible violations of laws and regulations by NATIONSTAR OPTOELECTRONICSIf NATIONSTAR OPTOELECTRONICS is subject to administrative penalties such as accountability and fines by relevant competent departments after the completion of this trading due to the illegal acts of NATIONSTAR OPTOELECTRONICS before the completion of this acquisition, they27 October 2021Long-termOngoing

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promise to fully bear the losses of NATIONSTAR OPTOELECTRONICS or FSL, as well as the expenses and fees under punishment or recourse, to ensure that NATIONSTAR OPTOELECTRONICS or FSL will not suffer any economic losses.
Rising Holdings Group, Electronics Group, and Rising CapitalAbout the truthfulness, accuracy and completeness of the information provided during this major asset restructuring1. They promise that the information provided is true, accurate and complete, and there are no false records, misleading statements or material omissions. 2. They have provided relevant information and documents (including but not limited to original written materials, duplicate materials or oral testimony, etc.) related to this trading to the intermediaries. They promise that the copies or photocopies of the documents and materials provided are consistent with the originals, and that the signatures and seals of the documents and materials are authentic, and the signatories of the documents have been legally authorized and effectively signed the documents; that there are no false records, misleading statements or material omissions. 3. They promise that the explanations and confirmations issued by them are true, accurate and complete, and there are no false records, misleading statements or material omissions. 4. During this trading, they will disclose the information about this trading in a timely manner in accordance with relevant laws and regulations, the CSRC and the SZSE, and ensure the authenticity, accuracy and completeness of such information. 5. They shall bear legal responsibility for the authenticity, accuracy and completeness of the information,27 October 2021Long-termOngoing

Annual Report 2023

documents, materials, explanations and confirmations provided. In case of any violation or losses caused to the listed company, investors, parties to the trading and intermediaries participating in this trading, they will be liable for compensation according to law. 6. Where the information provided or disclosed by them in this trading is suspected of false records, misleading statements or material omissions, and they are filed for investigation by the judicial organ or by the CSRC, the shares with interests in the listed company will not be transferred until the investigation conclusion is formed.
Electronics GroupAbout the clarity of the underlying assets of this major asset restructuringElectronics Group promises that the 100% equity of Sigma it held is clear in ownership and is not subject to any dispute or potential dispute, and there is no situation affecting its legal existence; the above shares are not subject to any other pledges, guarantees or third-party interests or restrictions and there is no pending or potential litigation, arbitration and any other administrative or judicial procedure that may lead to the seizure, freezing, expropriation or restriction of transfer of the above-mentioned equity by the relevant judicial or administrative organs. There is no entrusted shareholding or trust shareholding, restriction or prohibition of transfer of the above-mentioned equity controlled by Electronics Group.27 October 2021Long-termOngoing
Rising Holdings Group and Rising CapitalAbout the clarity of the underlying assets of this major asset restructuringRising Group promises that the shares of NATIONSTAR OPTOELECTRONICS it held is clear in ownership and is not subject to any dispute or potential dispute, and there is no situation affecting its legal existence; the above shares are not subject to any other pledges, guarantees27 October 2021Long-termOngoing

Annual Report 2023

or third-party interests or restrictions and there is no pending or potential litigation, arbitration and any other administrative or judicial procedure that may lead to the seizure, freezing, expropriation or restriction of transfer of the above-mentioned equity by the relevant judicial or administrative organs There is no entrusted shareholding or trust shareholding, restriction or prohibition of transfer of the above-mentioned equity controlled by Rising Group.
NATIONSTAR OPTOELECTRONICSAbout statement and commitment of truthfulness, accuracy and completeness of information providedNATIONSTAR OPTOELECTRONICS has provided the necessary, true, accurate, complete and effective documents, materials or oral statements and explanations for this trading at this stage, and there is no concealment, falsehood or material omission. The copies or photocopies of the documents provided are consistent with the original materials or originals. The signatures and seals on the documents and materials provided are authentic, and NATIONSTAR OPTOELECTRONICS has fulfilled the legal procedures required for such signatures and seals and obtained legal authorization. All the facts stated and explained are consistent with the facts that happened. As this transaction proceeds, the Company shall provide needed information and documents as required by applicable laws, regulations, rules and requirements of CSRC and the stock exchange, and continue to guarantee the truthfulness, accuracy, completeness and validity of the information and documents provided. The Company promises and guarantees the truthfulness, accuracy and completeness of the information provided or disclosed with respect to27 October 2021Long-termOngoing

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this transaction. It guarantees that there are no misrepresentations, misleading statements or material omissions. And it shall be individually and jointly liable for that.
SigmaAbout the clarity of the ownership of the underlying assets of this major asset restructuringAmong 79,753,050 shares of tradable shares with unlimited selling conditions of NATIONSTAR OPTOELECTRONICS held by Sigma, 39,876, 500 shares were pledged for Guangdong Electronics Information Industry Group Ltd. As of the date of issuance of this commitment, the pledge of the above shares has been released. However, the Maximum Pledge Contract for Stocks of Listed Companies (No.: XXYZZ (BY) No. 201906280001-2) signed by Sigma and Guangzhou Branch of Industrial Bank Co., Ltd. has not been dissolved. Guangdong Electronics Information Industry Group Ltd. has promised that it will not add any new loans to Guangzhou Branch of Industrial Bank Co., Ltd. as a borrower during the validity period of the guarantee, and that it will not substantially assume any guarantee responsibility due to the Maximum Pledge Contract for Stocks of Listed Companies. Except as aforesaid, the asset ownership of Sigma is clear, there is no dispute or potential dispute, and there is no situation affecting the legal existence. There is no entrusted shareholding or trust shareholding, restriction or prohibition of transfer of the above-mentioned equity controlled by Rising Group.27 October 2021Long-termOngoing
SigmaAbout no ownership dispute in equity1. Sigma promises that all its registered capital has been paid in. 2. Sigma promises that all existing shareholders contribute their own funds to hold shares, there is no situation such as holding shares on behalf of them, and27 October 2021Long-termOngoing

Annual Report 2023

there is no dispute or potential dispute between shareholders over their shares.
SigmaAbout statement and commitment of truthfulness, accuracy and completeness of information provided1. Sigma has provided relevant information and documents (including but not limited to original written materials, duplicate materials or oral testimony, etc.) related to this trading to the intermediaries providing professional services of auditing, valuation, legal and financial consultancy for this trading. Sigma promises that the copies or photocopies of the documents and materials provided are consistent with the originals, and that the signatures and seals of the documents and materials are authentic, and the signatories of the documents have been legally authorized and effectively signed the documents; that the provided information and documents are authentic, accurate and complete and that there are no false records, misleading statements or material omissions. Sigma also promises to bear individual and joint and several liability. 2. Sigma promises that the information provided is true, accurate and complete. In case of any losses caused to investors due to any false presentations, misleading statements or material omissions in the information provided, Sigma will be liable for compensation according to law.27 October 2021Long-termOngoing
Commitments made in time of IPO or refinancingDirector, senior management office of FSL, Rising Holdings Group, Electronics Group, Hongkong Wah Shing, Hong Kong Rising InvestmentAbout matters on special self-inspection of the real estate businessAccording to the laws and regulations issued by the State Council, such as the Notice of the State Council on Resolutely Curbing the Soaring of Housing Prices in Some Cities (GF [2010] No. 10), the Notice of the General Office of the State Council on Further Improving Regulation of the Real Estate Market (GBF [2013] No. 17) and the Adjustment of Regulatory Policies on Listed Companies' Re-financing, Merger and Acquisition and Reorganization Involving Real Estate Business issued by the CSRC on the relevant requirements for refinancing of listed companies involved in real estate business, the controlling shareholders and all directors and Senior Management of Foshan Electrical and Lighting Co., Ltd. (hereinafter referred to as the "Company") have made the following commitments: The Self-inspection Report on the Company's Involvement in Real Estate Business has truthfully disclosed the self-inspection of the real estate development projects of the Company14 March 2023Long-termOngoing

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and its subsidiaries between 1 January 2020 and 31 December 2022. 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, thus causing losses to itself and the investors, we will be liable for compensation in line with relevant laws, regulations, and requirements of securities regulatory authorities.
Director and senior management office of FSLAbout the measures to fill up immediate returns diluted by the issuance of A-shares to specific objects in 2023According to the Opinions of the General Office of the State Council on Further Strengthening the Protection of the Lawful Rights and Interests of Small and Medium-sized Investors in the Capital Market (GBF [2013] No. 110), Opinions of the State Council on Further Promoting the Sound Development of Capital Markets (GF [2014] No. 17), Guiding Opinions on Matters concerning the Dilution of Immediate Return in Initial Public Offering, Refinancing and Material Asset Restructuring (ZJHGG [2015] No. 31) and other relevant regulations, in order to protect the interests of small and medium-sized investors, the Directors and Senior Management of the Company have made the following commitments that the measures to fill up immediate returns diluted by the issuance of A-shares to specific objects can be effectively fulfilled: “1. We promise not to transfer benefits to other units or individuals for free or under unfair conditions and not to compromise the interests of the Company in other ways. 2. We promise to restrain position-related consumption behaviour. 3. We promise not to use the Company's assets to engage in investment and consumption activities unrelated to the performance of duties. 4. We promise that the remuneration system formulated by the Board of Directors or the Remuneration and Assessment Committee is linked to the implementation of the Company's measures to fill up returns. 5. If the Company implements an equity incentive plan in the future, the exercise conditions of the future equity incentive plan will be linked with the implementation of the Company's measures to fill up returns. 6. From the date of issuance of these commitments to the completion of the issuance of shares to specific objects, if the CSRC makes other new regulatory provisions on measures to fill up returns and the relevant commitments, and these commitments cannot meet these provisions of the CSRC, we promise to issue supplementary14 March 2023Long-termOngoing

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commitments in accordance with the latest regulations of the CSRC at that time. As one of the subjects responsible for the measures to fill up returns, if we violate the above commitments or refuse to fulfil the above commitments, we agree that the securities regulatory agencies such as the CSRC and the Shenzhen Stock Exchange will punish us or take relevant regulatory measures in accordance with the relevant regulations and rules they formulated or issued.
Rising Holdings Group, Electronics Group, Hongkong Wah Shing, Hong Kong Rising InvestmentAbout the effective fulfilment of measures taken by controlling shareholders and de facto controller to fill up immediate returnsAccording to the relevant provisions of the CSRC, in order to ensure that the measures to fill up immediate returns diluted by the issuance of A-shares to specific objects can be practically fulfilled, the Company's controlling shareholders, Rising Holdings Group, Electronics Group, Hong Kong Rising Investment, Hongkong Wah Shing, and the de facto controller, Rising Group, respectively, made the following commitments: "1. We promise not to interfere in the operation and management activities of the listed company beyond our 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 the issuance of shares to specific objects, if the CSRC makes new regulatory requirements on measures to fill up returns and commitments of relevant personnel, and the above commitments cannot meet these new regulatory requirements of the CSRC, we promise to issue supplementary commitments according to the latest regulations of the CSRC at that time. 3. We promise to earnestly fulfil the measures to fill up returns formulated by the listed company and any commitments made by us. If we violate these commitments and cause losses to the listed company or investors, we 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 we violate the above commitments or refuse to fulfil the above commitments, we agree that the securities regulatory agencies such as the CSRC and the Shenzhen Stock Exchange will punish us or take relevant regulatory measures in accordance with the relevant regulations and rules they formulated or issued.14 March 2023Long-termOngoing
Other commitments made toFSLAbout cash dividendsFSL’s profit distributed in cash shall not be less than 30% of the distributable profit realized in the year.27 May 2009Long-termOngoing

Annual Report 2023

minority shareholders of the Company
Whether the commitments were timely performedYes
Specific reasons for failing to fulfill commitments on time and plans for next stepN/A

2. Where there had been an earnings forecast for an asset or project and the Reporting Period was stillwithin the forecast period, explain why the forecast has been reached for the Reporting Period.

□ Applicable ? Not applicable

II Occupation of the Company’s Capital by the Controlling Shareholder or Its RelatedParties for Non-Operating Purposes

□ Applicable ? Not applicable

No such cases in the Reporting Period.

III Irregularities in the Provision of Guarantees

□ Applicable ? Not applicable

No such cases in the Reporting Period.IV Explanations Given by the Board of Directors Regarding the Independent Auditor's“Modified Opinion” on the Financial Statements of the Latest Period

□ Applicable ? Not applicable

V Explanations Given by the Board of Directors, the Supervisory Board and theIndependent Directors (if any) Regarding the Independent Auditor's “Modified Opinion” onthe Financial Statements of the Reporting Period

□ Applicable ? Not applicable

Annual Report 2023

VI YoY Changes to Accounting Policies, Estimates and Correction of Material AccountingErrors

? Applicable □ Not applicableRefer to Part X Financial Statements-V Important Accounting Policies and Estimations-43. Changes in MainAccounting Policies and Estimates for details.VII YoY Changes to the Scope of the Consolidated Financial Statements? Applicable □ Not applicableCompared with the previous period, the consolidated scope of financial statements in this period decreases onecompany that is FSL LIGHTING GMBH. For details, see Part X Financial Statements-IX Change ofConsolidation Scope - 6. Other.VIII Engagement and Disengagement of Independent AuditorCurrent independent auditor:

Name of the domestic independent auditorWUYIGE Certified Public Accountants LLP
The Company’s payment to the domestic independent auditor (RMB’0,000)130
How many consecutive years the domestic independent auditor has provided audit service for the Company2
Names of the certified public accountants from the domestic independent auditor writing signatures on the auditor’s reportHe Xiaojuan, Wang Jingkun
How many consecutive years the certified public accountants from the domestic independent auditor have provided audit service for the Company2

Indicate by tick mark whether the independent auditor was changed for the Reporting Period.

□Yes ? No

Independent auditor, financial advisor or sponsor engaged for the audit of internal controls:

? Applicable □ Not applicableIn the Reporting Period, the Company engaged WUYIGE Certified Public Accountants LLP as its internalcontrol auditor with the total audit fees of RMB250,000.

IX Possibility of Delisting after Disclosure of this Report

□ Applicable ? Not applicable

X Insolvency and Reorganization

□ Applicable ? Not applicable

No such cases in the Reporting Period.

Annual Report 2023

XI Major Legal Matters? Applicable □ Not applicable

Basic information on lawsuit (arbitration)Amount involved (RMB’0,000)Whether there are accrued liabilitiesLawsuit (arbitration) progressLawsuit (arbitration) results and influencesExecution of lawsuit (arbitration) judgmentDate of disclosureDisclosure index
124 other litigation matters that did not meet litigation standards9716No78 cases have been closed; 46 cases are not closed.No significant influence on the CompanyN/AN/AN/A

XII Punishments and Rectifications

□ Applicable ? Not applicable

No such cases in the Reporting Period.XIII Credit Quality of the Company as well as Its Controlling Shareholder and ActualController? Applicable □ Not applicableIn the Reporting Period, the Company and its controlling shareholder and actual controller were not involved inany unsatisfied court judgments, large-amount overdue liabilities or the like.

XIV Major Related-Party Transactions

1. Continuing Related-Party Transactions

? Applicable □ Not applicable

Related partyRelationship with the CompanyType of transactionSpecific transactionPricing principleTransaction price (RMB’0,000)Total value (RMB’0,000)As % of total value of all same-type transactionsApproved transaction line (RMB’0,000)Over the approved line or notMethod of settlementObtainable market price for same-type transactions(RMB’0,000)Disclosure dateIndex to disclosed information
Guangdong FenghUnder same actualPurchasing produPurchase ofMarket price298.60298.600.05%4,500NotBank transfers or298.602 March 2023www.cninfo.com.

Annual Report 2023

ua Advanced Technology Holding Co., Ltd.controllercts and receiving labor service from related partymaterialsbank acceptance notescn
Prosperity Lamps & Components LimitedShareholder that holds over 5% shares of the CompanyPurchasing products and receiving labor service from related partyPurchase of materialsMarket price5.605.600.00%700NotBank transfers or bank acceptance notes5.602 March 2023www.cninfo.com.cn
Shenzhen Yuepeng Construction Co., Ltd.Under same actual controllerPurchasing products and receiving labor service from related partyReceiving labor serviceMarket price168.17168.170.31%3,800NotBank transfers or bank acceptance notes168.172 March 2023www.cninfo.com.cn
Guangzhou Haixinsha Industry General CompanyUnder same actual controllerPurchasing products and receiving labor service from related partyReceiving labor serviceMarket price198.28198.281.67%Bank transfers or bank acceptance notes198.28
Foshan Fulong EnvirUnder same actual controllerPurchasing products andReceiving laborMarket price34.6234.620.08%Bank transfers or bank accept34.62

Annual Report 2023

onmental Technology Co., Ltd.receiving labor service from related partyserviceance notes
Shenzhen Longgang Dongjiang Industrial Waste Treatment Co., Ltd.Under same actual controllerPurchasing products and receiving labor service from related partyReceiving labor serviceMarket price15.6015.600.04%Bank transfers or bank acceptance notes15.60
Jiangmen Dongjiang Environmental Technology Co, Ltd.Under same actual controllerPurchasing products and receiving labor service from related partyReceiving labor serviceMarket price8.228.220.02%Bank transfers or bank acceptance notes8.22
Dongguan Hengjian Environmental Protection Technology Co., Ltd.Under same actual controllerPurchasing products and receiving labor service from related partyReceiving labor serviceMarket price7.697.690.02%Bank transfers or bank acceptance notes7.69
Zhuhai Doumen District YongUnder same actual controllerPurchasing products and receivingReceiving labor serviceMarket price4.354.350.01%Bank transfers or bank acceptance notes4.35

Annual Report 2023

xingsheng Environmental Industry Waste Recovery and Comprehensive Treatment Co., Ltd.labor service from related party
Zhuhai Dongjiang Environmental Technology Co, Ltd.Under same actual controllerPurchasing products and receiving labor service from related partyReceiving labor serviceMarket price21.4021.400.05%Bank transfers or bank acceptance notes21.40
Guangdong Tianxin Commercial Service Co., Ltd.Under same actual controllerPurchasing products and receiving labor service from related partyReceiving labor serviceMarket price27.5827.580.06%Bank transfers or bank acceptance notes27.58N/A
Ramada Pearl Hotel GuangzhouUnder same actual controllerPurchasing products and receiving labor service from relateReceiving labor serviceMarket price10.7010.700.02%Bank transfers or bank acceptance notes10.70N/A

Annual Report 2023

d party
Guangdong The Great Wall Building Co., Ltd.Under same actual controllerPurchasing products and receiving labor service from related partyReceiving labor serviceMarket price8.708.700.02%Bank transfers or bank acceptance notes8.70N/A
Guangdong Dabaoshan Mining Co., Ltd.Under same actual controllerPurchasing products and receiving labor service from related partyReceiving labor serviceMarket price2.552.550.01%Bank transfers or bank acceptance notes2.55N/A
Guangdong Great Wall Hotel Co., Ltd.Under same actual controllerPurchasing products and receiving labor service from related partyReceiving labor serviceMarket price2.342.340.01%Bank transfers or bank acceptance notes2.34N/A
Primatronix Nanho Technology Ltd.Under same actual controllerPurchasing products and receiving labor service from related partyReceiving labor serviceMarket price0.520.520.00%Bank transfers or bank acceptance notes0.52N/A

Annual Report 2023

Guangdong Fenghua Advanced Technology Holding Co., Ltd.Under same actual controllerPurchasing products and receiving labor service from related partyReceiving labor serviceMarket price0.360.360.00%Bank transfers or bank acceptance notes0.36N/A
Prosperity Lamps & Components LimitedShareholder that holds over 5% shares of the CompanySelling products and providing labor service to related partySelling productsMarket price2,642.942,642.940.29%4,000NotBank transfers or bank acceptance notes2,642.942 March 2023www.cninfo.com.cn
Guangdong Fenghua Advanced Technology Holding Co., Ltd.Under same actual controllerSelling products and providing labor service to related partySelling productsMarket price1,269.541,269.540.14%1,500NotBank transfers or bank acceptance notes1,269.542 March 2023www.cninfo.com.cn
Guangdong Zhongnan Construction Co., Ltd.Under same actual controllerSelling products and providing labor service to related partySelling productsMarket price283.67283.670.03%13,000NotBank transfers or bank acceptance notes283.672 March 2023www.cninfo.com.cn
Shenzhen Zhongjin LingnUnder same actual controllerSelling products andSelling produMarket price98.5398.530.01%1,550NotBank transfers or bank accept98.532 March 2023www.cninfo.com.cn

Annual Report 2023

an Nonfemet Co. Ltd.providing labor service to related partyctsance notes
Shandong Zhongjin Lingnan Copper Co., Ltd.Under same actual controllerSelling products and providing labor service to related partySelling productsMarket price63.5463.540.01%Bank transfers or bank acceptance notes63.54
Guangdong Zhuyuan Construction and Engineering Co., Ltd.Under same actual controllerSelling products and providing labor service to related partySelling productsMarket price46.3946.390.01%1,800NotBank transfers or bank acceptance notes46.392 March 2023www.cninfo.com.cn
Guangdong Zhongren Group Construction Co., Ltd.Under same actual controllerSelling products and providing labor service to related partySelling productsMarket price25.6825.680.00%Bank transfers or bank acceptance notes25.68
Guangdong Yixin Changcheng Construction GroupUnder same actual controllerSelling products and providing labor service to relateSelling productsMarket price56.3456.340.01%3,000NotBank transfers or bank acceptance notes56.342 March 2023www.cninfo.com.cn

Annual Report 2023

d party
Guangdong Rising Non-ferrous Metal GroupUnder same actual controllerSelling products and providing labor service to related partySelling productsMarket price34.9534.950.00%Bank transfers or bank acceptance notes34.95N/A
Guangdong Rising Holdings Group Co., Ltd.Actual controllerSelling products and providing labor service to related partySelling productsMarket price25.8125.810.00%Bank transfers or bank acceptance notes25.81N/A
Guangdong Xintaochip Microelectronics Co., Ltd. (formerly known as Fenghua Research Institute (Guangzhou) Limited)Under same actual controllerSelling products and providing labor service to related partyProviding labor serviceMarket price136.47136.470.02%Bank transfers or bank acceptance notes136.47N/A
Guangdong Heshun PropertyUnder same actual controllerSelling products and providProviding labor servicMarket price60.3860.380.01%Bank transfers or bank acceptance60.38N/A

Annual Report 2023

Management Co., Ltd. The Pinnacle Branching labor service to related partyenotes
Guangdong Rising Research and Development Institute Co., Ltd.Under same actual controllerSelling products and providing labor service to related partyProviding labor serviceMarket price0.660.660.00%Bank transfers or bank acceptance notes0.66N/A
Total----5,560.18--33,850----------
Large-amount sales return in detailN/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 PeriodIn December 2023, the Company forecasted the aggregate amount of its routine connected transactions with related parties including Prosperity Lamps & Components Limited and its majority-owned subsidiaries, Guangdong Rising Holdings Group Co., Ltd., Guangdong Fenghua Advanced Technology (Holding) Co., Ltd., Guangdong Electronics Information Industry Group Ltd. 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 Property Group Co., Ltd. and its majority-owned subsidiaries, Guangdong Rising Research and Development Institute Co. Ltd. and its majority-owned subsidiaries, Guangdong Rising Real Estate Group Co., Ltd. and its majority-owned subsidiaries, Dongjiang Environmental Company Limited and its majority-owned subsidiaries, Guangdong Dabaoshan Mining Co., Ltd. and its majority-owned subsidiaries, Guangzhou Rising Non-ferrous Metal Group Co., Ltd. and its majority-owned subsidiaries. In terms of related party procurements, the actual transaction amount for 2023 was RMB8,152,800, representing 8.58% of the forecasted amount for the entire year of 2023; in terms of related party sales, the actual transaction amount for 2023 was RMB47,449,000, accounting for 18.79% of the estimated total for the year 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.

Annual Report 2023

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 partyRelationshipDaily maximum limits (RMB’0,000)Interest rate rangeBeginning balance (RMB’0,000)Actual amountEnding balance (RMB’0,000)
Total deposited in (RMB’0,000)Total withdrawn (RMB’0,000)
Guangdong Rising Finance Co., Ltd.Controlled by the same controlling shareholder120,0000.25%-2.8%119,172.28583,953.81585,210.67117,915.42

Loan business:

NaughtCredit or other financial business:

Related partyRelationshipType of businessTotal amount (RMB’0,000)Actual amount (RMB’0,000)
Guangdong Rising Finance Co., Ltd.Controlled by the same actual controllerCredit granting200,0000

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.

Annual Report 2023

7. Other Major Related-Party Transactions

? Applicable □ Not applicable

Related partyRelationship with the CompanyType of transactionSpecific transactionPricing principleTransaction amount (RMB’0,000)Method of settlementDisclosure dateDisclosure website
Guangdong Zhongnan Construction Co., Ltd.Under same actual controllerPurchasing products and receiving labor service from related partyReceiving labor serviceMarket price12,664.00Bank transfers or bank acceptance notes9 July 2021, 17 August 2021, and 12 March 2022www.cninfo.com.cn
Guangdong Yixin Changcheng Construction GroupUnder same actual controllerPurchasing products and receiving labor service from related partyReceiving labor serviceMarket price14,248.48Bank transfers or bank acceptance notes6 May 2021 and 28 January 2022www.cninfo.com.cn
Guangdong Zhongren Group Construction Co., Ltd.Under same actual controllerPurchasing products and receiving labor service from related partyReceiving labor serviceMarket price4,626.00Bank transfers or bank acceptance notes1 December 2020www.cninfo.com.cn (announcement of subsidiary NationStar Optoelectronics)

Index to the current announcement about the said related-party transaction disclosed:

Title of announcementDisclosure dateDisclosure website
Announcement on a Related-Party Transaction Due to a Call for Public Bids1 December 2020www.cninfo.com.cn (announcement of subsidiary NationStar Optoelectronics)
Announcement on a Related-Party Transaction Due to a Call for Public Bids6 May 2021www.cninfo.com.cn
Announcement on a Related-Party Transaction Due to a Call for Public Bids9 July 2021www.cninfo.com.cn
Announcement on a Related-Party Transaction Due to a Call for Public Bids17 August 2021www.cninfo.com.cn
Announcement on a Related-Party Transaction Due to a Call for Public Bids28 January 2022www.cninfo.com.cn
Announcement on a Related-Party Transaction Due to a Call for Public Bids12 March 2022www.cninfo.com.cn

Annual Report 2023

XV Major Contracts and Execution thereof

1. Entrustment, Contracting and Leases

(1) Entrustment

□ Applicable ? Not applicable

No such cases in the Reporting Period.

(2) Contracting

□ Applicable ? Not applicable

No such cases in the Reporting Period.

(3) Leases

? Applicable □ Not applicableNotes to leasesNo such cases in the Reporting Period.Lease items with a greater-than-10% impact on the Company’s gross profit during the Reporting Period:

□ Applicable ? Not applicable

No such cases in the Reporting Period.

2. Major guarantees

? Applicable □ Not applicable

Unit: RMB'0,000

Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries)
ObligorDisclosure date of the guarantee line announcementLine of guaranteeActual occurrence dateActual guarantee amountType of guaranteeCollateral (if any)Counter guarantee (if any)Term of guaranteeHaving expired or notGuarantee for a related party or not
Total approved line for such guarantees at the end of the Reporting Period (A3)Total actual balance of such guarantees at the end of the Reporting Period (A4)0
Guarantees provided by the Company as the parent for its subsidiaries
ObligorDisclosure date of the guarantee lineLine of guaranteeActual occurrence dateActual guarantee amountType of guaranteeCollateral (if any)Counter guarantee (if any)Term of guaranteeHaving expired or notGuarantee for a related party or not

Annual Report 2023

announcement
Total approved line for such guarantees at the end of the Reporting Period (B3)Total actual balance of such guarantees at the end of the Reporting Period (B4)0
Guarantees provided between subsidiaries
ObligorDisclosure date of the guarantee line announcementLine of guaranteeActual occurrence dateActual guarantee amountType of guaranteeCollateral (if any)Counter guarantee (if any)Term of guaranteeHaving expired or notGuarantee for a related party or not
Nanning Liaowang Auto Lamp Co., Ltd., Liuzhou Guige Foreshine Technology Co., Ltd., Liuzhou Guige Lighting Technology Co., Ltd.2 March 20234,50021 June 2023336.98SecuredYesNone25 April 2022-31 December 2025NoNo
Nanning Liaowang Auto Lamp Co., Ltd., Chongqing Guinuo Lighting Technology Co., Ltd.2 March 20239,90010 February 20239,790.44SecuredYesNone15 June 2020-15 June 2023, 25 May 2023-24 May 2024NoNo
Nanning Liaowang Auto Lamp Co., Ltd., Liuzhou2 March 20239,60024 March 20238,367.27SecuredYesNone24 April 2022-31 December 2025NoNo

Annual Report 2023

Guige Foreshine Technology Co., Ltd., Liuzhou Guige Lighting Technology Co., Ltd.
Total approved line for such guarantees in the Reporting Period (C1)24,000Total actual amount of such guarantees in the Reporting Period (C2)18,494.69
Total approved line for such guarantees at the end of the Reporting Period (C3)24,000Total actual balance of such guarantees at the end of the Reporting Period (C4)18,494.69
Total guarantee amount (total of the three kinds of guarantees above)
Total guarantee line approved in the Reporting Period (A1+B1+C1)24,000Total actual guarantee amount in the Reporting Period (A2+B2+C2)18,494.69
Total approved guarantee line at the end of the Reporting Period (A3+B3+C3)24,000Total actual guarantee balance at the end of the Reporting Period (A4+B4+C4)18,494.69
Total actual guarantee amount (A4+B4+C4) as % of the Company’s net assets2.94%
Of which:

Compound guarantees:

None.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 31 December 2023, guarantees between NanningLiaowang and its subsidiaries and collaterals are set out in “3. Other” under “XVI Commitments andContingencies” in Part X of this Report.

Annual Report 2023

3. Cash Entrusted to Other Entities for Management

(1) Cash Entrusted for Wealth Management

? Applicable □ Not applicableOverview of cash entrusted for wealth management during the Reporting Period

Unit: RMB’0,000

TypeFunding sourceAmountUndue amountUnrecovered overdue amountProvision for impairment on unrecovered overdue amount
Bank financial productsSelf-owned funds77,00015,00000
OthersSelf-owned funds45,00045,000
Total122,00060,00000

High-risk wealth management transactions with a significant single amount, or with low security and lowliquidity:

? Applicable □ Not applicable

Unit: RMB’0,000

TrusteeType of trusteeType of wealth management productPrincipalSource of principalBeginning dateEnding dateUse of principalDetermination of yieldAnnualized yield rate for referenceExpected yield (if any)Actual gain/loss in Reporting PeriodReceipt/payment of such gain/lossAllowance for impairment (if any)Prescribed procedure executed or notPlan for more transaction or notIndex to transaction summary and other information (if any)
Foshan Branch of Bank of ChinaBankStructured deposit4,000Self-owned funds8 September 20236 March 2024OtherSubject to actual investment period2.79%51.297.75To be recoveredYesIn compliance with prescribed approvalAnnouncement No. 2023-007 on Entr

Annual Report 2023

procedureustment of Some Idle Funds for Wealth Management on http://www.cninfo.com.cn/

FoshanSub-branchofLUSOInternationalBankingLtd.

Foshan Sub-branch of LUSO International Banking Ltd.BankStructured deposit4,000Self-owned funds17 July 202316 January 2024OtherSubject to actual investment period3.35%67.1857.84To be recoveredYesIn compliance with prescribed approval procedure
Foshan Sub-branch of LUSO International Banking Ltd.BankStructured deposit3,000Self-owned funds7 August 202329 January 2024OtherSubject to actual investment period3.30%47.4737.36To be recoveredYesIn compliance with prescribed approval procedure
Foshan Sub-branch of LUSO International Banking Ltd.BankStructured deposit4,000Self-owned funds8 November 202313 May 2024OtherSubject to actual investment period3.10%63.5316.99To be recoveredYesIn compliance with prescribed approval procedure
Guangzhou Branch of China Everbright BankBankLarge certificate of deposit10,000Self-owned funds6 January 20236 January 2026OtherSubject to actual investment period3.30%990To be recoveredYesIn compliance with prescribed approval procedure

Annual Report 2023

Foshan Branch of Bank of CommunicationsBankLarge certificate of deposit5,000Self-owned funds31 August 202331 August 2026OtherSubject to actual investment period2.90%435To be recoveredYesIn compliance with prescribed approval procedure
Guangzhou Branch of China Everbright BankBankLarge certificate of deposit15,000Self-owned funds3 November 20233 November 2026OtherSubject to actual investment period2.90%1,305To be recoveredYesIn compliance with prescribed approval procedure
Foshan Hujing Sub-branch of Bank of GuangZhouBankLarge certificate of deposit15,000Self-owned funds1 December 20231 December 2026OtherSubject to actual investment period2.95%1,327.5To be recoveredYesIn compliance with prescribed approval procedure
Total60,000------------4,286.97119.94--------

Situation where the principal is expectedly irrecoverable or an impairment may be incurred:

□ Applicable ? Not applicable

(2) Entrusted Loans

□ Applicable ? Not applicable

No such cases in the Reporting Period.

4. Other Significant Contracts

□ Applicable ? Not applicable

Annual Report 2023

No such cases in the Reporting Period.XVI Other Significant Events

? Applicable □ Not applicable

1. On 14 March 2023 and 31 March 2023, the Company held the 39th Meeting of the Ninth Board of Directorsand the First Extraordinary General Meeting of 2023 to deliberate on and approve the proposals relating to theissuance of shares to specific objects in 2023, and agreed that the Company should apply to the Shenzhen StockExchange for the issuance of shares to specific objects. On 12 July 2023, the Company received a notice ofapproval from the Listing Review Center of the Shenzhen Stock Exchange. On 31 August 2023, the Companyreceived the Reply on the Approval of the Registration of Foshan Electrical and Lighting Co., Ltd. for the Issue ofShares to Specific Objects (ZJXK [2023] No. 1974) issued by the China Securities Regulatory Commission("CSRC") on 25 August 2023, which agreed to the application for registration of the Issue. In November 2023, theCompany issued 186,783,583 A shares to 13 specific objects and on 4 December 2023, the Company was listed onthe Shenzhen Stock Exchange. Upon completion of the issue, the total share capital of the Company increasedfrom 1,361,994,647 shares to 1,548,778,230 shares. For details, please refer to the Report on Alteration in New A-Shares Issued by Foshan Electrical and Lighting Co., Ltd. to Specific Objects and Listing Announcementdisclosed by the Company on 1 December 2023 on http://www.cninfo.com.cn.

2. On 30 October 2023, Fozhao (Hainan) Technology Co., Ltd. (hereinafter referred to as "Hainan Technology"), awholly-owned subsidiary of the Company, entered into a Letter of Intent to Acquire Equity with Jiang Ailiang andJiang Shidi, the shareholders of Shanghai Liangzhou Marine Light Manufacturing Co., Ltd. (hereinafter referredto as the "Subject Company"). Hainan Technology intended to acquire 51% equity interest in the SubjectCompany held by the transferor by cash payment. After the completion of the acquisition, Hainan Technologywould become the controlling shareholder of the Subject Company, and the Subject Company would be includedin the scope of the Company's consolidated statements. The Letter of Intent signed belongs to the intentionalagreement of the basic will of the two parties to the cooperation, and is the basis for further negotiation betweenthe two parties. The equity acquisition is subject to the completion of comprehensive due diligence, audit andasset evaluation and further negotiation based on the relevant results. The final terms of this transaction aresubject to the signing of the formal equity acquisition agreement, and there is uncertainty as to whether it can bereached in the end. For details, please refer to the Announcement on the Signing of the Letter of Intent for EquityAcquisition by Wholly-owned Subsidiary disclosed by the Company on 31 October 2023 on

Annual Report 2023

http://www.cninfo.com.cn.

3. On 6 December 2023 and 22 December 2023, the Company respectively held the 49th meeting of the NinthBoard of Directors and the Second Extraordinary General Meeting of 2023, which approved the Proposal on theDisposal of Assets of the Company and Signing of Reserve Agreement, and the Board of Directors agreed that theCompany would sign the Letter of Intent on Land Reserve with Foshan City Chancheng District Zumiao StreetOffice, and sign the Agreement on the Use Right of State-owned Land with Foshan City Chancheng District LandReserve Center and Foshan City Chancheng District Zumiao Street Office. After completing the preliminary landpreparation work such as demolition of buildings on the ground in accordance with relevant laws, regulations andpolicies, the Fenjiang North Road land parcel would be handed over in three years batch by batch for pendingexpropriation. On 1 February 2024, the Company formally signed the State-owned Land Use Right ReserveAgreement with Foshan Chancheng District Land Reserve Center and Foshan Chancheng District Zumiao StreetOffice. The Company would conduct pending expropriation of Lot No. 64, Fenjiang North Road in accordancewith the relevant contents of the agreement. For details, please refer to the Announcement on the Disposal ofAssets of the Company and Signing of the Reserve Agreement and the Announcement on the Progress of theDisposal of Assets of the Company and Signing of the Reserve Agreement respectively on 7 December 2023 and 3February 2024 on http://www.cninfo.com.cn.XVII Significant Events of Subsidiaries? Applicable □ Not applicable

1. Expropriation of land and above-ground housing of Nanjing Fozhao

The Company held the 24th Meeting of the Ninth Board of Directors on 15 December 2021, where the Proposalon Expropriation of Land and Above-ground Housing of the Wholly-owned Subsidiary Nanjing Fozhao LightingEquipment Manufacturing Co., Ltd., was deliberated and adopted. The Board of Directors agreed that NanjingLishui District People's Government expropriates the land use rights and above-land housing of Nanjing FozhaoLighting Equipment Manufacturing Co., Ltd. (hereinafter referred to as "Nanjing Fozhao"), a wholly-ownedsubsidiary of the Company, at a compensation amount of RMB183,855,895.00, and Nanjing Fozhao signed anexpropriation and compensation agreement with Lishui County House Dismantling, Moving & ResettlingDevelopment Co., Ltd., the implementing unit of the housing expropriation. As of 31 December 2023, NanjingFozhao has received 30% of the compensation, that is, RMB55,160,000.00, and the land use right certificate andhouse ownership certificate of the assets involved have been cancelled. As of the date of this report, the site

Annual Report 2023

handover is still in progress.

2. Cancellation of FSL LIGHTING GmbH

On 22 October 2021, FSL held an office meeting of the general manager, where the proposal for cancellation ofits wholly-owned subsidiary FSL LIGHTING GMBH was deliberated and adopted. As of the end of 2023, theCompany has been liquidated and cancelled.

Annual Report 2023

Part VII Share Changes and Shareholder Information

I Share Changes

1. Share Changes

Unit: share

BeforeIncrease/decrease in the Reporting Period (+/-)After
SharesPercentage (%)New issuesShares as dividend converted from profitShares as dividend converted from capital reservesOtherSubtotalSharesPercentage (%)
1. Restricted shares10,753,6580.79%186,783,583186,783,583197,537,24112.75%
1.1 Shares held by state
1.2 Shares held by state-owned legal persons10.00%69,136,16669,136,16669,136,1674.46%
1.3 Shares held by other domestic investors1,826,0250.13%001,826,0250.12%
Among which: Shares held by domestic legal persons1,338,4340.10%001,338,4340.09%
Shares held487,5910.04%00487,5910.03%

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by domestic natural persons
1.4 Shares held by foreign investors8,927,6320.66%15,553,56415,553,56424,481,1961.58%
Among which: Shares held by foreign legal persons00.00%11,604,09411,604,09411,604,0940.75%
Shares held by foreign natural persons8,927,6320.66%3,949,4703,949,47012,877,1020.83%
1.5. Funds, and other financial products, etc.00.00%102,093,853102,093,853102,093,8536.59%
2. Unrestricted shares1,351,240,98999.21%001,351,240,98987.25%
2.1 RMB-denominated ordinary shares1,056,501,05077.57%001,056,501,05068.22%
2.2 Domestically listed foreign shares294,739,93921.64%00294,739,93919.03%
2.3 Overseas listed

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foreign shares
2.4 Other
3. Total shares1,361,994,647100.00%186,783,583186,783,5831,548,778,230100.00%

Reasons for share changes:

? Applicable □ Not applicableDuring the Reporting Period, in accordance with the Reply on the Approval of the Registration of FoshanElectrical and Lighting Co., Ltd. for the Issue of Shares to Specific Objects (ZJXK [2023] No. 1974) issued by theCSRC, the Company issued 186,783,583 A shares to 13 specific objects and was listed on the Shenzhen StockExchange on 4 December 2023. The shares issued were all restricted shares, among which the shares subscribedby Rising Group in this issue were not transferable within 18 months from the listing date, and the sharessubscribed by other investors in this issue were not transferable within six months from the listing date. Uponcompletion of the issue, the total share capital of the Company increased from 1,361,994,647 shares to1,548,778,230 shares.

Approval of share changes:

? Applicable □ Not applicableOn 14 March 2023 and 31 March 2023, the Company held the 39th Meeting of the Ninth Board of Directors andthe First Extraordinary General Meeting of 2023 to deliberate on and approve the proposals relating to theissuance of shares to specific objects in 2023. On 12 July 2023, the Company received a notice of approval fromthe Listing Review Center of the Shenzhen Stock Exchange. On 31 August 2023, the Company received the Replyon the Approval of the Registration of Foshan Electrical and Lighting Co., Ltd. for the Issue of Shares to SpecificObjects (ZJXK [2023] No. 1974) issued by the China Securities Regulatory Commission ("CSRC") on 25 August2023, which agreed to the application for registration of the Issue.

Transfer of share ownership:

? Applicable □ Not applicableDuring the Reporting Period, the Company completed the registration of the additional shares involved in theissue of A shares to specific objects, and such additional shares were listed on 4 December 2023 on the ShenzhenStock Exchange.

Effects of share changes on the basic and diluted earnings per share, equity per share attributable to theCompany’s ordinary shareholders and other financial indicators of the prior year and the prior accounting period,respectively:

? Applicable □ Not applicableDuring the Reporting Period, the Company increased its share capital by 186,783,583 shares as a result of theissuance of shares to specific objects, and the impact on the basic and diluted earnings per share and net assets pershare attributable to the ordinary shareholders of the Company for the latest one year and the latest period are asfollows:

Item20222023
Based on original share capitalBased on new share capitalBased on new share capital
Basic earnings per share (RMB/share)0.17070.16880.2128
Diluted earnings per share (RMB/share)0.16910.16720.2108
Equity per share attributable to the Company’s shareholders3.83474.07704.0927

Other information that the Company considers necessary or is required by the securities regulator to be disclosed:

□Applicable ? Not applicable

Annual Report 2023

2. Changes in Restricted Shares

? Applicable □ Not applicable

Unit: share

Name of the shareholdersRestricted shares amount at the period-beginRestricted shares increased of the periodRestricted shares relieved of the periodRestricted shares amount at the period-endRestricted reasonsRestricted shares relieved date
Guangdong Rising Holdings Group Co., Ltd.046,695,895046,695,895Restricted shares after the initial offering; subscription for the Company’s A-share issuance to specific objects in 20234 June 2025
Caitong Fund-Huatai Securities Co., Ltd.-Caitong Fund Junxinag Yongxi Single Asset Management Plan015,392,492015,392,492Restricted shares after the initial offering; subscription for the Company’s A-share issuance to specific objects in 20234 June 2024
Nuode Asset Management-Huatai Securities Co., Ltd.-Caitong Fund Pujiang No. 120 Single Asset Management Plan014,846,416014,846,416Restricted shares after the initial offering; subscription for the Company’s A-share issuance to specific objects in 20234 June 2024
CSC Financial Co., Ltd.08,788,39508,788,395Restricted shares after the initial offering; subscription for the Company’s A-share issuance to specific objects in 20234 June 2024
Horizon Asset-Yunnan Trust-Yufeng No. 6 Assembled fund trust program-Horizon Asset Ruicheng No. 1 Order -asset management plans08,703,07108,703,071Restricted shares after the initial offering; subscription for the Company’s A-share issuance to specific objects in 20234 June 2024
Changsha Lugu Capital08,532,42308,532,423Restricted4 June 2024

Annual Report 2023

Management Co., Ltd.shares after the initial offering; subscription for the Company’s A-share issuance to specific objects in 2023
UBS AG06,484,64106,484,641Restricted shares after the initial offering; subscription for the Company’s A-share issuance to specific objects in 20234 June 2024
MORGAN STANLEY & CO. INTERNATIONAL PLC.05,119,45305,119,453Restricted shares after the initial offering; subscription for the Company’s A-share issuance to specific objects in 20234 June 2024
Sichuan Pu Xin Chan Rong Investment Co., Ltd.05,119,45305,119,453Restricted shares after the initial offering; subscription for the Company’s A-share issuance to specific objects in 20234 June 2024
Huatai Youyi Stock Specialized Pension Product-Agricultural Bank of China Limited05,119,45305,119,453Restricted shares after the initial offering; subscription for the Company’s A-share issuance to specific objects in 20234 June 2024
Other shareholders participating in the subscription of shares issued to specific objects061,981,891061,981,891Restricted shares after the initial offering; subscription for the Company’s A-share issuance to specific objects in 20234 June 2024
Total0186,783,5830186,783,583----

Annual Report 2023

II. Issuance and Listing of Securities

1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period

? Applicable □ Not applicable

Name of Stock and derivative securities thereofIssue dateissue price (interest)Issue amountListing dateApproved amount for listingTermination date for tradingDisclosure indexDisclosure date
Stock
2023 Issuance of A-shares to Specific Targets3 November 2023RMB5.86 per share186,783,5834 December 2023186,783,583Refer to the Report on Alteration of Shares and Report on Listing of Shares regarding FSL’s Issuance of A-shares to Specific Targets disclosed on http://www.cninfo.com.cn/1 December 2023

Notes:

In accordance with the Reply on the Approval of the Registration of Foshan Electrical and Lighting Co., Ltd.for the Issue of Shares to Specific Objects (ZJXK [2023] No. 1974) issued by the CSRC, the Company issued186,783,583 A shares to 13 specific objects (hereinafter referred to as “this issue”).The registration of theadditional shares involved in this issue has been completed at Shenzhen Branch of CSDC, and such additionalshares were listed on the Shenzhen Stock Exchange on 4 December 2023. The shares issued were all restrictedshares, among which the shares subscribed by Rising Group in this issue were not transferable within 18 monthsfrom the listing date, and the shares subscribed by other investors in this issue were not transferable within sixmonths from the listing date. Upon completion of the issue, the total share capital of the Company increasedfrom 1,361,994,647 shares to 1,548,778,230 shares, of which, the A-shares increased from 1,058,321,409 shares(before this issue) to 1,245,104,992 shares.

Annual Report 2023

2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures? Applicable □ Not applicableDuring the Reporting Period, in accordance with the Reply on the Approval of the Registration of FoshanElectrical and Lighting Co., Ltd. for the Issue of Shares to Specific Objects (ZJXK [2023] No. 1974) issued bythe CSRC, the Company issued 186,783,583 A shares to 13 specific objects. The total share capital of theCompany was 1,361,994,647 shares prior to this issue and after completion of this issue, the total share capitalof the Company increased to 1,548,778,230 shares. After the completion of the issuance to specific objects, thetotal assets and net asset size of the Company will increase at the same time, the total liabilities will remainunchanged, and the debt-to-asset ratio will decrease, which is conducive to optimizing the asset structure of theCompany, alleviating the pressure on funds and enhancing profitability.

3. Existing Staff-Held Shares

□Applicable ? Not applicable

III Shareholders and Actual Controller

1. Shareholders and Their Shareholdings at the Period-End

Unit: share

Number of ordinary shareholders75,375Number of ordinary shareholders at the month-end prior to the disclosure of this Report75,427Number of preferred shareholders with resumed voting rights (if any) (see note 8)0Number of preferred shareholders with resumed voting rights at the month-end prior to the disclosure of this Report (if any) (see note 8)0
5% or greater shareholders or top 10 shareholders (exclusive of shares lent in refinancing)
Name of shareholderNature of shareholderShareholding percentageTotal shares held at the period-endIncrease/decrease in the Reporting PeriodRestricted shares heldUnrestricted shares heldShares in pledge, marked or frozen
StatusShares
Hongkong Wah Shing HoldingForeign legal person12.17%188,496,43000188,496,430N/A

Annual Report 2023

Company Limited
Prosperity Lamps & Components LimitedForeign legal person9.49%146,934,85700146,934,857N/A
Guangdong Rising Holdings Group Co., Ltd.State-owned legal person8.38%129,826,79346,695,89546,695,89583,130,898N/A
Guangdong Electronics Information Industry Group Ltd.State-owned legal person7.92%122,694,24600122,694,246N/A
Essence International Securities (Hong Kong) Co., Ltd.Foreign legal person2.47%38,226,5242,088,065038,226,524N/A
Central Huijin Asset Management Co., Ltd.State-owned legal person2.14%33,161,8000033,161,800N/A
Hong Kong Securities Clearing Company LimitedForeign legal person1.96%30,367,80630,347,612030,367,806N/A
Rising Investment Development LimitedForeign legal person1.65%25,482,2520025,482,252N/A
Caitong Fund-Huatai Securities Co., Ltd.-Caitong Fund Junxinag Yongxi Single Asset Management PlanOther0.99%15,392,49215,392,49215,392,4920N/A

Annual Report 2023

Nuode Asset Management-Huatai Securities Co., Ltd.-Caitong Fund Pujiang No. 120 Single Asset Management PlanOther0.96%14,846,41614,846,41614,846,4160N/A
Strategic investors or general corporations becoming top-ten shareholders due to placing of new shares (if any) (see note 3)1. Shareholder Caitong Fund-Huatai Securities Co., Ltd.-Caitong Fund Junxinag Yongxi Single Asset Management Plan became one of the top ten shareholders of the Company by participating in the subscription of 15,392,492 A shares issued by the Company to specific objects in 2023. (The shares were listed on the Shenzhen Stock Exchange on 4 December 2023 and shall not be transferred within 6 months from the date of listing, i.e., they are restricted circulating shares during the period from 4 December 2023 to 4 June 2024) 2. Shareholder Nuode Asset Management-Huatai Securities Co., Ltd.-Caitong Fund Pujiang No. 120 Single Asset Management Plan became one of the top ten shareholders of the Company by participating in the subscription of 14,846,416 A shares issued by the Company to specific objects in 2023. (The shares were listed on the Shenzhen Stock Exchange on 4 December 2023 and shall not be transferred within six months from the date of listing, i.e., they are restricted circulating shares during the period from 4 December 2023 to 4 June 2024)
Related or acting-in-concert parties among the shareholders aboveAmong the top 10 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.
Above shareholders involved in entrusting/being entrusted with voting rights and giving up voting rightsNaught
Top 10 unrestricted shareholders
Name of shareholderUnrestricted shares at the Period-endType of shares
TypeShares
Hongkong Wah Shing Holding Company Limited188,496,430RMB-denominated ordinary stock188,496,430
Prosperity Lamps & Components Limited146,934,857RMB-denominated ordinary stock146,934,857
Guangdong Electronics Information Industry Group Ltd.122,694,246RMB-denominated ordinary stock122,694,246
Guangdong Rising Holdings Group Co., Ltd.83,130,898RMB-denominate83,130,898

Annual Report 2023

d ordinary stock
Essence International Securities (Hong Kong) Co., Ltd.38,226,524Domestically listed foreign stock38,226,524
Central Huijin Asset Management Co., Ltd.33,161,800RMB-denominated ordinary stock33,161,800
Hong Kong Securities Clearing Company Limited30,367,806RMB-denominated ordinary stock30,367,806
Rising Investment Development Limited25,482,252Domestically listed foreign stock25,482,252
Zhang Shaowu11,700,000RMB-denominated ordinary stock11,700,000
China Merchants Securities (Hong Kong) Co., Ltd9,048,244Domestically listed foreign stock9,048,244
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 shareholdersAmong 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

Top 10 shareholders involved in refinancing shares lending:

□Applicable ? Not applicable

Changes in top 10 shareholders compared with the prior period

Annual Report 2023

? Applicable □ Not applicable

Unit: share

Changes in top 10 shareholders compared with the end of the prior period
Full name of shareholderNewly added to or exiting from top 10 shareholders in the Reporting PeriodShares lent in refinancing and not yet returned at the period-endShares in the common account and credit account plus shares lent in refinancing and not yet returned at the period-end
Total sharesAs % of total share capitalTotal sharesAs % of total share capital
Hong Kong Securities Clearing Company LimitedNewly added00.00%30,367,8061.96%
Caitong Fund-Huatai Securities Co., Ltd.-Caitong Fund Junxinag Yongxi Single Asset Management PlanNewly added00.00%15,392,4920.99%
Nuode Asset Management-Huatai Securities Co., Ltd.-Caitong Fund Pujiang No. 120 Single Asset Management PlanNewly added00.00%14,846,4160.96%
Zhuang JianyiExiting00.00%11,903,5090.77%
Zhang ShaowuExiting00.00%11,700,0000.76%
China Merchants Securities (Hong Kong) Co., LtdExiting00.00%9,048,2440.58%

Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinaryshareholders of the Company conducted any promissory repo during the Reporting Period.

□Yes ? No

No such cases in the Reporting Period.

2. Controlling Shareholder

Nature of the controlling shareholder: Controlled by a local state-owned legal personType of the controlling shareholder: legal person

Name of controlling shareholderLegal representative/person in chargeDate of establishmentUnified social credit codePrincipal activity
Guangdong Rising Holdings Group Co., Ltd.Lyu Yongzhong23 December 199291440000719283849EAsset management and operation, equity management and

Annual Report 2023

operation, investment operation, and management and re-investment of investment earnings; other business authorized by the state-owned assets administration of the Guangdong Province; contractor service for overseas projects and domestic projects calling for international bids, contractor service for survey, consulting, design and supervision of the aforesaid overseas projects, export of equipment and materials for the aforesaid overseas projects, and dispatch of contract workers for the aforesaid overseas projects; property rental service; and exploitation, sale and deep processing of rare earth (operated by the branches with the relevant licenses).
Guangdong Electronics Information Industry Group Ltd.Wang Jia19 October 200091440000725458764NDevelopment, production and sale of electronics, IT products and electrical appliances, operation of electronic information networks and computers, electronic computer technology service, and equipment and venue rental service; sale of

Annual Report 2023

electronic computers and fittings, electronic components, electron devices, and electrical machinery and equipment; wholesale of coal; energy performance contracting service, development and consulting service of energy-saving technology, and manufacture and installation of energy-saving equipment; parking lot operation (188 Yueken Road, Tianhe District, Guangzhou, Guangdong Province, P.R.China); import and export of goods; and training of professional and technical personnel (Limited to branch operation); .technical services.
Shareholdings of controlling shareholder in other listed companies at home or abroad in reporting periodAt the end of the Reporting Period, Guangdong Rising Holdings Group Co., Ltd. and its parties acting in concert. directly or indirectly held the following stakes in other listed companies at home or abroad: 1. a 40.52% stake of 136,318,684 shares in Rising Nonferrous (stock code: 600259); 2. a 35.72% stake of 1,335,060,698 shares in Zhongjin Lingnan Nonfemet (stock code: 000060); 3. a 23.19% stake of 268,311,117 shares in Fenghua Advanced (stock code: 000636); 4. a 26.37% stake of 291,458,228 A shares and H shares in Dongjiang Environment (stock code: 002672); 5. a 6.26% stake of 5,724,384,653 shares in China Telecom (stock code: 601728).

Change of the controlling shareholder in the Reporting Period:

□Applicable ? Not applicable

No such cases in the Reporting Period.

3. Actual Controller and Its Acting-in-Concert Parties

Nature of the actual controller: Local institution for state-owned assets managementType of the actual controller: legal person

Name of actual controllerLegal representative/personDate of establishmentUnified social credit codePrincipal activity

Annual Report 2023

in charge
Guangdong Rising Holdings Group Co., Ltd.Lyu Yongzhong23 December 199991440000719283849EAsset management and operation, equity management and operation, investment operation, and management and re-investment of investment earnings; other business authorized by the state-owned assets administration of the Guangdong Province; contractor service for overseas projects and domestic projects calling for international bids, contractor service for survey, consulting, design and supervision of the aforesaid overseas projects, export of equipment and materials for the aforesaid overseas projects, and dispatch of contract workers for the aforesaid overseas projects; property rental service; and exploitation, sale and deep processing of rare earth (operated by the branches with the relevant licenses).
Shareholdings of the actual controller in other listed companies at home or abroad in this Reporting PeriodAt the end of the Reporting Period, Guangdong Rising Holdings Group Co., Ltd. and its parties acting in concert. directly or indirectly held the following stakes in other listed companies at home or abroad: 1. a 40.52% stake of 136,318,684 shares in Rising Nonferrous (stock code: 600259); 2. a 35.72% stake of 1,335,060,698 shares in Zhongjin Lingnan Nonfemet (stock code: 000060); 3. a 23.19% stake of 268,311,117 shares in Fenghua Advanced (stock code: 000636); 4. a 26.37% stake of 291,458,228 A shares and H shares in Dongjiang Environment (stock code: 002672); 5. a 6.26% stake of 5,724,384,653 shares in China Telecom (stock code: 601728).

Change of the actual controller during the Reporting Period:

□Applicable ? Not applicable

No such cases in the Reporting Period.Ownership and control relations between the actual controller and the Company:

Annual Report 2023

Indicate by tick mark whether the actual controller controls the Company via trust or other ways of assetmanagement.

□Applicable ? Not applicable

4. Number of Accumulative Pledged Shares held by the Company’s Controlling Shareholder or theLargest Shareholder as well as Its Acting-in-Concert Parties Accounts for 80% of all shares of theCompany held by Them

□Applicable ? Not applicable

5. Other 10% or Greater Corporate Shareholders

□Applicable ? Not applicable

6. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller,Reorganizer and Other Commitment Makers? Applicable □ Not applicable

Annual Report 2023

During the Reporting Period, in accordance with the Reply on the Approval of the Registration of FoshanElectrical and Lighting Co., Ltd. for the Issue of Shares to Specific Objects (ZJXK [2023] No. 1974) issued bythe CSRC, the Company issued 186,783,583 A shares to 13 specific objects, of which Rising Holdings Group,the Company's de facto controller, subscribed for 46,695,895 A shares by way of cash. The shares subscribedby Rising Holdings Group shall not be transferred within 18 months from the date of closing of the issue, andthe shares subscribed by other investors shall not be transferred within six months from the date of listing.IV Specific Implementation of Share Repurchases in the Reporting PeriodProgress on any share repurchases

□Applicable ? Not applicable

Progress on reducing the repurchased shares by means of centralized bidding:

□Applicable ? Not applicable

Annual Report 2023

Part VIII Preference Shares

□Applicable ? Not applicable

No preference shares in the Reporting Period.

Annual Report 2023

Part IX Bonds

□Applicable ? Not applicable

Annual Report 2023

Part X Financial Statements

I Auditor’s Report

Type of the independent auditor’s opinionUnmodified unqualified opinion
Date of signing this report17 April 2024
Name of the independent auditorWUYIGE Certified Public Accountants LLP
No. of independent auditor’s reportWUYIGE Auditor’s Report [2024] No. 22-00012
Names of certified public accountantsHe Xiaojuan, Wang Jingkun

Independent Auditor’s ReportTo the Shareholders of Foshan Electrical and Lighting Co., Ltd.I OpinionWe have audited the financial statements of Foshan Electrical and Lighting Co., Ltd. (the “Company”), whichcomprise the consolidated balance sheets and balance sheet of the Company as the parent as of 31 December 2023,the consolidated income statement and income statement of the Company as the parent, consolidated cash flowstatement and cash flow statement of the Company as the parent and consolidated statement of changes in owners’equity and statement of changes in owners’ equity of the Company as the parent for the year then ended, as well asthe notes to the financial statements.In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidatedand parent company financial position of the Company at 31 December 2023, and the consolidated and thecompany as the parent operating results and cash flows for the year then ended, in conformity with the ChineseAccounting Standards (CAS).II Basis for OpinionWe conducted our audits in accordance with the Audit Standards for Chinese Registered Accountants. Ourresponsibilities under those standards are further described in the Auditor’s Responsibilities for Audit of FinancialStatements section of our report. We are independent of the Company in accordance with the China Code ofEthics for Certified Public Accountants, and we have fulfilled our other ethical responsibilities in accordance withthe said Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.III Key Audit Matters(I) Revenue recognitionKey audit matters are those matters that, in our professional judgment, were of most significance in our audit ofthe financial statements of the current period. These matters were addressed in the context of our audit of thefinancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion onthese matters.

1. Description

As stated in “V-37. Income” and “VII-61. Operating Revenue and Cost of Sales” in the notes to the financial

Annual Report 2023

statements, the Company’s operating revenue was RMB9,057,292,003.90 during 2023, with the main businessrevenue being RMB8,783,592,484.22, accounting for 96.98% of the total operating revenue. The amount of mainbusiness revenue is significant and is a key performance indicator, so there is inherent risk that management willmanipulate the timing of revenue recognition in order to meet specific targets or expectations. Therefore, wedetermined that revenue is recognized as a key audit item.

2. Response to auditing

(1) Understanding and evaluating the design of internal control related to revenue recognition, and testing theeffectiveness of relevant internal control;

(2) Checking whether the revenue recognition policy is in line with the requirements of the Accounting Standardsfor Business Enterprises and is consistently applied;

(3) Selecting the revenue transactions recorded of this year to check invoices, sales contracts, outbound orders,customer receipt records and export documents, and assess whether the relevant revenue recognition conforms tothe accounting policies of the Company for revenue recognition;

(4) Selecting the revenue transactions recorded of this year to carry out independent confirmation procedures andconfirm the authenticity of revenue;

(5) Inquiring about the industrial and commercial registration information of major customers through publicchannels, so as to ensure that major customers operate normally and their business scope conforms to the nature ofthe Company's downstream customers;

(6) Implementing analysis procedures for operating revenue, including analysing the annual and monthly revenueof major products, changes in major customers, changes in sales prices and gross profit margins of major products,and judging the rationality of changes in annual revenue and gross profit margins of this year;

(7) Selecting the revenue transactions recorded around the balance sheet date, checking the outbound order,customer receipt records and other supporting documents to assess whether the revenue is recorded in theappropriate accounting period.(II) Provision for bad debt of accounts receivable

1. Description

As stated in Notes "V-13. Accounts Receivable" and "VII-5. Accounts Receivable" to the financial statements, asof 31 December 2023, the book balance of accounts receivable in the consolidated financial statements of theCompany was RMB2,235,966,456.78, including RMB142,467,176.38 in the balance of bad debt provision. Thedetermination of the recoverability of accounts receivable requires the Management to identify the impaired itemsand objective evidence, assess the expected future cash flows to be obtained, and determine their present value.This involves significant accounting estimates and judgements by the Management, and the provision forimpairment of expected credit losses on accounts receivable is significant to the financial statements. Therefore,the impairment of accounts receivable is considered a key audit matter.

2. Audit Response

(1) Evaluated and tested the design and operating effectiveness of internal controls related to credit policies andreceivables management;

(2) An analysis of the reasonableness of the accounting estimates for the provision for bad debts in respect ofaccounts receivable, including the basis for determining the group of accounts receivable, the judgment of

Annual Report 2023

materiality of amounts, the separate provision for bad debts, and the judgment of expected credit loss rates;

(3) Analysed and calculated the ratio between the amount of provision for bad debts and the balance of accountsreceivable at the balance sheet date, compared the provision for bad debts with the actual amount incurred in priorperiods, and analysed the adequacy of the provision for bad debts for accounts receivable;

(4) Obtained the table of the provisions for bad debts and checked whether the provision making method isimplemented in accordance with the bad debts policy and whether the recalculation of the amount of provision forbad debts is accurate;

(5) Evaluated the reasonableness of the provision for bad debts for accounts receivable by analysing the aging ofthe accounts receivable and the creditworthiness of the customers, and by performing correspondence proceduresfor accounts receivable and checking the post-period recovery.(III) Goodwill impairment tests

1. Description

On 28 February 2022, the Company acquired a 21.48% equity interest in Foshan NationStar Optoelectronics Co.,Ltd. (hereinafter "NationStar Optoelectronics"), resulting in goodwill of RMB405,620,123.64. The goodwill ofNationStar Optoelectronics has a significant impact on its financial statements. Additionally, in the goodwillimpairment test, the Company's Management reasonably judged and identified signs of goodwill impairmentbased on internal and external information. Furthermore, impairment signs and the annual year-end impairmenttest heavily rely on the estimates and assumptions made by the Management, particularly in significant judgmentsregarding the forecast of future revenue, long-term revenue growth rates, gross profit margins, operating expenses,and discount rates of relevant asset groups. These estimates involve uncertainties and may be significantlyinfluenced by the Management's judgments about future markets and economic environments. Different estimatesand assumptions adopted significantly influence the recoverable value of the goodwill appraised. As goodwillimpairment testing involves significant judgments and estimates made by the Management, it is considered a keyaudit matter.

2. Audit Response

(1) Understanding, evaluating and testing the Company's key internal controls related to goodwill impairmenttesting.

(2) For goodwill arising from a business combination, understanding the achievement of performance forecastsfor the acquired company.

(3) Discussing with the management the methodology of goodwill impairment testing, including the asset groupor combination of asset groups related to goodwill, the reasonableness of assumptions such as future earningsprojections and discounted cash flow rates for each asset group or combination of asset groups and the judgmentand assessment of the profitability of each asset group or combination of asset groups.

(4) Evaluating the competency, professional quality and objectivity of the external valuation experts engaged bymanagement.

(5) Discussing with the external valuation experts engaged by the management to understand the reasonablenessof key assumptions used in the impairment test.

(6) Where necessary, with the assistance of internal valuation experts, evaluate the reasonableness of the type ofvalue, valuation methodology and valuation parameters, such as the discount rate, of the asset valuation reports

Annual Report 2023

issued by external valuation experts.IV Other InformationThe Company’s management is responsible for the other information. The other information comprises all of theinformation included in the Company’s 2023 Annual Report other than the financial statements and our auditor’sreport thereon.Our opinion on the financial statements does not cover the other information and we do not express any form ofassurance conclusion thereon.In connection with our audit of the financial statements, our responsibility is to read the other information and, indoing so, consider whether the other information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we haveperformed, we conclude that there is a material misstatement of this other information, we are required to reportthat fact. We have nothing to report in this regard.V Responsibilities of Management and Those Charged with Governance for Financial StatementsThe Company’s management is responsible for the preparation of the financial statements that give a fair view inaccordance with CAS, and for designing, implementing and maintaining such internal control as the managementdetermines is necessary to enable the preparation of financial statements that are free from material misstatement,whether due to fraud or error.In preparing the financial statements, the management is responsible for assessing the Company’s ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern and using the goingconcern basis of accounting unless the management either intends to liquidate the Company or to cease operations,or have no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financial reporting process.VI Auditor’s Responsibilities for Audit of Financial StatementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordancewith CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or errorand are considered material if, individually or in the aggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with CAS, we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:

(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.

(2) Understand the internal controls relevant to the audit in order to design appropriate audit procedures.

(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by the management.

(4) Conclude on the appropriateness of the management’s use of the going concern basis of accounting and, basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Company’s ability to continue as a going concern. If we conclude that a material

Annual Report 2023

uncertainty exists, we are required by CAS to draw users’ attention in our auditor’s report to the relateddisclosures in the financial statements or, if such disclosures are inadequate, we should express modified opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, futureevents or conditions may cause the Company to cease to continue as a going concern.

(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,and whether the financial statements represent the underlying transactions and events in a manner that achievesfair presentation.

(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Company to express an opinion on the financial statements. We are responsible for thedirection, supervision and performance of the Company audit. We remain solely responsible for our audit opinion.We also provide those charged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence, and communicate with them all relationships and other matters that mayreasonably be thought to bear on our independence, and where applicable, related safeguards.From the matters communicated with those charged with governance, we determine those matters that were ofmost significance in the audit of the financial statements of the current period and are therefore the key auditmatters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosureabout the matter or when, in extremely rare circumstances, we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.

WUYIGE Certified Public Accountants LLP Chinese CPA: He Xiaojuan (Engagement Partner)

Beijing · China Chinese CPA: Wang Jingkun

17 April 2024

Annual Report 2023

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.

31 December 2023

Unit: RMB

Item31 December 20231 January 2023
Current assets:
Monetary assets3,596,049,654.552,484,508,907.43
Settlement reserve
Interbank loans granted
Held-for-trading financial assets152,529,775.41261,541,896.45
Derivative financial assets
Notes receivable1,057,352,267.60821,537,774.07
Accounts receivable2,093,499,280.401,920,770,941.76
Accounts receivable financing443,201,960.02569,868,831.79
Prepayments34,508,638.9245,526,548.93
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract reserve
Other receivables49,108,300.8532,902,865.98
Including: Interest receivable
Dividends receivable
Financial assets purchased under resale agreements
Inventories1,971,171,641.142,031,637,401.87
Contract assets4,252,013.945,466,875.07
Assets held for sale17,147,339.8417,147,339.84
Current portion of non-current assets
Other current assets109,292,399.1479,438,576.89
Total current assets9,528,113,271.818,270,347,960.08
Non-current assets:
Loans and advances to customers
Investments in debt obligations
Investments in other debt obligations454,822,905.25
Long-term receivables
Long-term equity investments179,188,555.15181,931,792.66
Investments in other equity instruments699,762,746.35864,191,346.40

Annual Report 2023

Other non-current financial assets
Investment property163,636,347.4144,611,882.44
Fixed assets3,453,214,586.473,508,094,282.41
Construction in progress1,174,533,505.111,282,780,335.14
Productive living assets
Oil and gas assets
Right-of-use assets8,812,320.6413,047,727.73
Intangible assets434,549,913.99340,166,852.37
Development costs
Goodwill421,831,593.46421,831,593.46
Long-term prepaid expense190,362,699.25190,126,627.91
Deferred income tax assets106,283,766.9590,244,005.41
Other non-current assets119,327,703.1881,543,512.85
Total non-current assets7,406,326,643.217,018,569,958.78
Total assets16,934,439,915.0215,288,917,918.86
Current liabilities:
Short-term borrowings220,019,877.73157,715,359.35
Borrowings from the central bank
Interbank loans obtained
Held-for-trading financial liabilities4,679,000.00
Derivative financial liabilities
Notes payable2,271,174,787.691,975,743,568.71
Accounts payable2,875,980,206.642,513,177,458.14
Advances from customers466,872.692,532,442.44
Contract liabilities235,335,693.28125,143,161.61
Financial assets sold under repurchase agreements
Customer deposits and interbank deposits
Payables for acting trading of securities
Payables for underwriting of securities
Employee benefits payable193,830,812.66173,034,152.18
Taxes payable42,940,157.3064,295,552.10
Other payables362,491,923.01440,230,081.05
Including: Interest payable
Dividends payable15,646.07
Handling charges and commissions payable
Reinsurance payables
Liabilities directly associated with assets held for sale
Current portion of non-current liabilities343,914,214.4565,540,510.67

Annual Report 2023

Other current liabilities95,008,427.01100,192,681.00
Total current liabilities6,641,162,972.465,622,283,967.25
Non-current liabilities:
Insurance contract reserve
Long-term borrowings253,093,421.29747,931,023.71
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities4,310,967.927,055,542.18
Long-term payables
Long-term employee benefits payable
Provisions14,277,087.309,587,043.31
Deferred income75,185,461.2797,078,233.43
Deferred income tax liabilities174,806,746.25204,428,275.95
Other non-current liabilities205,769.48308,780.61
Total non-current liabilities521,879,453.511,066,388,899.19
Total liabilities7,163,042,425.976,688,672,866.44
Owners’ equity:
Share capital1,548,778,230.001,361,994,647.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves914,336,325.667,245,971.54
Less: Treasury stock82,165,144.1582,165,144.15
Other comprehensive income360,027,027.59498,141,018.70
Specific reserve1,213,325.92
Surplus reserves107,944,679.0691,359,027.15
General reserve
Retained earnings3,435,308,364.113,296,435,828.50
Total equity attributable to owners of the Company as the parent6,285,442,808.195,173,011,348.74
Non-controlling interests3,485,954,680.863,427,233,703.68
Total owners’ equity9,771,397,489.058,600,245,052.42
Total liabilities and owners’ equity16,934,439,915.0215,288,917,918.86

Legal representative:WanShan 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

Item31 December 20231 January 2023
Current assets:
Monetary assets1,756,256,289.35616,301,656.56

Annual Report 2023

Held-for-trading financial assets200,565,014.22
Derivative financial assets
Notes receivable90,413,382.59130,473,889.36
Accounts receivable840,003,427.41914,875,676.00
Accounts receivable financing105,327,382.8214,127,710.41
Prepayments7,334,575.2913,129,004.94
Other receivables558,342,534.44511,036,345.72
Including: Interest receivable
Dividends receivable
Inventories462,793,053.42475,047,674.61
Contract assets4,252,013.945,466,875.07
Assets held for sale
Current portion of non-current assets
Other current assets8,244,786.979,844,377.83
Total current assets3,832,967,446.232,890,868,224.72
Non-current assets:
Investments in debt obligations
Investments in other debt obligations454,822,905.25
Long-term receivables
Long-term equity investments2,502,623,981.062,505,563,031.07
Investments in other equity instruments659,684,177.55823,131,485.48
Other non-current financial assets
Investment property47,163,026.8340,982,686.40
Fixed assets651,197,430.25548,743,031.51
Construction in progress205,106,029.03187,318,584.50
Productive living assets
Oil and gas assets
Right-of-use assets5,082,521.446,963,639.23
Intangible assets93,932,977.9694,698,330.35
Development costs
Goodwill
Long-term prepaid expense29,727,301.6537,118,287.24
Deferred income tax assets36,285,162.2631,202,848.92
Other non-current assets48,331,060.6248,873,160.34
Total non-current assets4,733,956,573.904,324,595,085.04
Total assets8,566,924,020.137,215,463,309.76
Current liabilities:
Short-term borrowings
Held-for-trading financial liabilities4,679,000.00
Derivative financial liabilities
Notes payable982,735,414.37826,037,810.34
Accounts payable977,444,406.30788,288,700.08
Advances from customers2,285,714.30

Annual Report 2023

Contract liabilities145,086,858.1647,498,783.11
Employee benefits payable64,958,645.4349,182,531.44
Taxes payable20,946,142.079,700,312.91
Other payables324,137,191.03202,509,326.09
Including: Interest payable
Dividends payable
Liabilities directly associated with assets held for sale
Current portion of non-current liabilities1,377,403.641,881,117.79
Other current liabilities82,802,283.9888,215,663.53
Total current liabilities2,599,488,344.982,020,278,959.59
Non-current liabilities:
Long-term borrowings182,912,120.75
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities3,705,117.805,082,521.44
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income
Deferred income tax liabilities63,366,691.0688,165,954.92
Other non-current liabilities
Total non-current liabilities67,071,808.86276,160,597.11
Total liabilities2,666,560,153.842,296,439,556.70
Owners’ equity:
Share capital1,548,778,230.001,361,994,647.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves909,058,541.447,426,635.62
Less: Treasury stock82,165,144.1582,165,144.15
Other comprehensive income359,858,073.06498,788,284.79
Specific reserve897,781.74
Surplus reserves339,248,748.30322,663,096.39
Retained earnings2,824,687,635.902,810,316,233.41
Total owners’ equity5,900,363,866.294,919,023,753.06
Total liabilities and owners’ equity8,566,924,020.137,215,463,309.76

Legal representative:WanShan Chief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Liang Yuefei

Annual Report 2023

3. Consolidated Income Statement

Unit: RMB

Item20232022
1. Revenue9,057,292,003.908,759,965,275.96
Including: Operating revenue9,057,292,003.908,759,965,275.96
Interest revenue
Insurance premium income
Handling charge and commission income
2. Costs and expenses8,639,746,992.688,360,248,566.32
Including: Cost of sales7,354,814,252.017,223,971,501.53
Interest costs
Handling charge and commission expense
Surrenders
Net insurance claims paid
Net amount provided as insurance contract reserve
Expenditure on policy dividends
Reinsurance premium expense
Taxes and surcharges72,268,419.8762,027,216.12
Selling expense331,039,604.55256,820,593.82
Administrative expense430,544,371.96408,119,409.22
R&D expense483,579,093.81440,787,934.06
Finance costs-32,498,749.52-31,478,088.43
Including: Interest expense24,128,844.1722,311,206.70
Interest income47,710,201.2229,169,641.75
Add: Other income90,204,646.6284,894,793.92
Return on investment (“-” for loss)14,598,948.3510,633,954.02
Including: Share of profit or loss of joint ventures and associates1,833,621.592,467,060.07
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)1,129,444.26-9,518,428.58

Annual Report 2023

Credit impairment loss (“-” for loss)-52,131,054.21-15,404,763.61
Asset impairment loss (“-” for loss)-81,268,657.36-91,517,378.38
Asset disposal income (“-” for loss)12,719,324.89968,273.19
3. Operating profit (“-” for loss)402,797,663.77379,773,160.20
Add: Non-operating income9,540,666.3918,757,057.63
Less: Non-operating expense6,538,763.7016,812,534.08
4. Profit before tax (“-” for loss)405,799,566.46381,717,683.75
Less: Income tax expense21,126,964.4831,011,277.73
5. Net profit (“-” for net loss)384,672,601.98350,706,406.02
5.1 By operating continuity
5.1.1 Net profit from continuing operations (“-” for net loss)384,672,601.98350,706,406.02
5.1.2 Net profit from discontinued operations (“-” for net loss)
5.2 By ownership
5.2.1 Net profit attributable to owners of the Company as the parent290,357,652.22230,320,570.67
5.2.1 Net profit attributable to non-controlling interests94,314,949.76120,385,835.35
6. Other comprehensive income, net of tax-137,433,230.11-383,701,554.10
Attributable to owners of the Company as the parent-138,113,991.11-383,929,211.19
6.1 Items that will not be reclassified to profit or loss-138,930,211.73-383,579,545.85
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-138,930,211.73-383,579,545.85
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 loss816,220.62-349,665.34
6.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method

Annual Report 2023

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 statements816,220.62-349,665.34
6.2.7 Other
Attributable to non-controlling interests680,761.00227,657.09
7. Total comprehensive income247,239,371.87-32,995,148.08
Attributable to owners of the Company as the parent152,243,661.11-153,608,640.52
Attributable to non-controlling interests94,995,710.76120,613,492.44
8. Earnings per share
8.1 Basic earnings per share0.21280.1707
8.2 Diluted earnings per share0.21080.1691

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 last year being RMB0.00.Legal representative:WanShan 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

Item20232022
1. Operating revenue3,370,500,210.733,314,037,139.28
Less: Cost of sales2,669,830,010.842,684,105,565.79
Taxes and surcharges28,696,224.9022,878,262.76
Selling expense201,942,644.31148,184,632.71
Administrative expense170,906,350.75156,902,439.16
R&D expense126,839,317.28148,634,853.78
Finance costs-15,149,738.19-4,648,251.30
Including: Interest costs3,768,074.0311,637,904.69
Interest revenue12,619,606.346,836,685.73

Annual Report 2023

Add: Other income14,162,829.1710,475,710.63
Return on investment (“-” for loss)24,345,065.9419,058,287.08
Including: Share of profit or loss of joint ventures and associates1,833,621.592,467,060.07
Income from the derecognition of financial assets at amortized cost (“-” for loss)
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss)-8,945,900.00
Credit impairment loss (“-” for loss)-32,773,855.07-16,035,761.65
Asset impairment loss (“-” for loss)-28,910,470.10-25,904,176.29
Asset disposal income (“-” for loss)12,469,694.01-84,087.53
2. Operating profit (“-” for loss)176,728,664.79136,543,708.62
Add: Non-operating income365,819.087,433,114.60
Less: Non-operating expense1,144,051.2412,232,901.96
3. Profit before tax (“-” for loss)175,950,432.63131,743,921.26
Less: Income tax expense10,093,913.5313,888,953.87
4. Net profit (“-” for net loss)165,856,519.10117,854,967.39
4.1 Net profit from continuing operations (“-” for net loss)165,856,519.10117,854,967.39
4.2 Net profit from discontinued operations (“-” for net loss)
5. Other comprehensive income, net of tax-138,930,211.73-384,990,256.85
5.1 Items that will not be reclassified to profit or loss-138,930,211.73-384,990,256.85
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-138,930,211.73-384,990,256.85
5.1.4 Changes in the fair value arising from changes in own credit risk
5.1.5 Other
5.2 Items that will be reclassified to profit or loss

Annual Report 2023

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 income26,926,307.37-267,135,289.46
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share

Legal representative:WanShan Chief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Liang Yuefei

5. Consolidated Cash Flow Statement

Unit: RMB

Item20232022
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services8,065,012,419.588,205,869,081.25
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

Annual Report 2023

obtained
Net increase in proceeds from repurchase transactions
Net proceeds from acting trading of securities
Tax rebates229,414,220.39228,641,448.24
Cash generated from other operating activities219,221,813.77224,376,200.78
Subtotal of cash generated from operating activities8,513,648,453.748,658,886,730.27
Payments for commodities and services5,219,988,965.355,492,158,956.70
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 employees1,391,392,105.831,398,058,450.95
Taxes paid395,513,858.13337,132,030.63
Cash used in other operating activities332,363,545.45366,648,971.30
Subtotal of cash used in operating activities7,339,258,474.767,593,998,409.58
Net cash generated from/used in operating activities1,174,389,978.981,064,888,320.69
2. Cash flows from investing activities:
Proceeds from disinvestment380,981,292.12364,902,240.66
Return on investment27,200,412.4510,965,289.74
Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets15,079,869.642,340,973.60
Net proceeds from the disposal of subsidiaries and other business units
Cash generated from other investing activities80,711.83
Subtotal of cash generated from investing activities423,342,286.04378,208,504.00
Payments for the acquisition of fixed assets, intangible assets and other long-lived assets376,549,919.12593,230,455.33

Annual Report 2023

Payments for investments720,700,000.00131,695,763.31
Net increase in pledged loans granted
Net payments for the acquisition of subsidiaries and other business units
Cash used in other investing activities33,612,950.00
Subtotal of cash used in investing activities1,130,862,869.12724,926,218.64
Net cash generated from/used in investing activities-707,520,583.08-346,717,714.64
3. Cash flows from financing activities:
Capital contributions received1,091,377,596.17
Including: Capital contributions by non-controlling interests to subsidiaries
Borrowings raised297,756,038.671,136,936,000.00
Cash generated from other financing activities15,469,794.5119,142,320.59
Subtotal of cash generated from financing activities1,404,603,429.351,156,078,320.59
Repayment of borrowings391,955,216.77526,743,238.15
Interest and dividends paid191,158,501.03174,723,549.79
Including: Dividends paid by subsidiaries to non-controlling interests32,130,255.2326,131,133.89
Cash used in other financing activities138,043,774.421,200,170,498.73
Subtotal of cash used in financing activities721,157,492.221,901,637,286.67
Net cash generated from/used in financing activities683,445,937.13-745,558,966.08
4. Effect of foreign exchange rates changes on cash and cash equivalents4,966,303.5933,150,614.37
5. Net increase in cash and cash equivalents1,155,281,636.625,762,254.34
Add: Cash and cash equivalents, beginning of the period1,945,971,307.261,940,209,052.92
6. Cash and cash equivalents, end of the period3,101,252,943.881,945,971,307.26

Legal representative:WanShan 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

Item20232022
1. Cash flows from operating activities:

Annual Report 2023

Proceeds from sale of commodities and rendering of services3,172,331,505.843,237,208,695.89
Tax rebates113,727,709.96120,903,979.22
Cash generated from other operating activities71,968,034.7386,562,699.07
Subtotal of cash generated from operating activities3,358,027,250.533,444,675,374.18
Payments for commodities and services2,003,568,260.171,933,543,212.27
Cash paid to and for employees465,614,131.12517,926,952.08
Taxes paid88,243,833.94157,918,324.75
Cash used in other operating activities135,741,826.48139,013,449.48
Subtotal of cash used in operating activities2,693,168,051.712,748,401,938.58
Net cash generated from/used in operating activities664,859,198.82696,273,435.60
2. Cash flows from investing activities:
Proceeds from disinvestment292,992,240.66
Return on investment36,858,062.0418,264,046.87
Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets10,799,817.0042,771.45
Net proceeds from the disposal of subsidiaries and other business units
Cash generated from other investing activities
Subtotal of cash generated from investing activities47,657,879.04311,299,058.98
Payments for the acquisition of fixed assets, intangible assets and other long-lived assets51,703,074.73106,842,452.24
Payments for investments250,000,000.001,193,664,444.95
Net payments for the acquisition of subsidiaries and other business units
Cash used in other investing activities33,612,950.00
Subtotal of cash used in investing activities335,316,024.731,300,506,897.19
Net cash generated from/used in investing activities-287,658,145.69-989,207,838.21
3. Cash flows from financing activities:
Capital contributions received1,091,377,596.17
Borrowings raised382,336,000.00
Cash generated from other financing activities

Annual Report 2023

Subtotal of cash generated from financing activities1,091,377,596.17382,336,000.00
Repayment of borrowings178,893,000.00367,956,000.00
Interest and dividends paid140,340,441.08141,558,638.42
Cash used in other financing activities1,261,522.662,716,690.66
Subtotal of cash used in financing activities320,494,963.74512,231,329.08
Net cash generated from/used in financing activities770,882,632.43-129,895,329.08
4. Effect of foreign exchange rates changes on cash and cash equivalents936,838.9022,065,861.60
5. Net increase in cash and cash equivalents1,149,020,524.46-400,763,870.09
Add: Cash and cash equivalents, beginning of the period461,062,144.20861,826,014.29
6. Cash and cash equivalents, end of the period1,610,082,668.66461,062,144.20

Legal representative:WanShan Chief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Liang Yuefei

7. Consolidated Statements of Changes in Owners’ Equity

2023

Unit: RMB

Item2023
Equity attributable to owners of the Company as the parentNon-controlling interestsTotal owners’ equity
Share capitalOther equity instrumentsCapital reservesLess: Treasury stockOther comprehensive incomeSpecific reserveSurplus reservesGeneral reserveRetained earningsOtherSubtotal
Preferred sharesPerpetual bondsOther
1. Balance as at the end of the prior1,361,994,647.007,245,971.5482,165,144.15498,141,018.7091,359,027.153,296,435,828.505,173,011,348.743,427,233,703.688,600,245,052.42

Annual Report 2023

year
Add: Adjustment for change in accounting policy
Adjustment for correction of previous error
Other
2. Balance as at the beginning of the year1,361,994,647.007,245,971.5482,165,144.15498,141,018.7091,359,027.153,296,435,828.505,173,011,348.743,427,233,703.688,600,245,052.42
3. Increase/ decrease in the186,783,583.00907,090,354.12-138,113,991.111,213,325.9216,585,651.91138,872,535.611,112,431,459.4558,720,977.181,171,152,436.63

Annual Report 2023

period (“-” for decrease)
3.1 Total comprehensive income-138,113,991.11290,357,652.22152,243,661.1194,995,710.76247,239,371.87
3.2 Capital increased and reduced by owners186,783,583.00907,090,354.121,093,873,937.12-5,458,448.301,088,415,488.82
3.2.1 Ordinary shares increased by owners186,783,583.00901,631,905.821,088,415,488.821,088,415,488.82
3.2.2 Capital increased by holders

Annual Report 2023

of other equity instruments
3.2.3 Share-based payments included in owners’ equity
3.2.4 Other5,458,448.305,458,448.30-5,458,448.30
3.3 Profit distribution16,585,651.91-151,485,116.61-134,899,464.70-31,969,754.99-166,869,219.69
3.3.1 Appropriation to surplus reserves16,585,651.91-16,585,651.91

Annual Report 2023

3.3.2 Appropriation to general reserve
3.3.3 Appropriation to owners (or shareholders)-134,899,464.70-134,899,464.70-31,969,754.99-166,869,219.69
3.3.4 Other
3.4 Transfers within owners’ equity
3.4.1 Increase in capital (or share capital)

Annual Report 2023

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 retai

Annual Report 2023

ned earnings
3.4.5 Other comprehensive income transferred to retained earnings
3.4.6 Other
3.5 Specific reserve1,213,325.921,213,325.921,153,469.712,366,795.63
3.5.1 Increase in the period17,469,664.0517,469,664.0511,283,252.7928,752,916.84
3.5.2 Used in the perio16,256,338.1316,256,338.1310,129,783.0826,386,121.21

Annual Report 2023

d
3.6 Other
4. Balance as at the end of the period1,548,778,230.00914,336,325.6682,165,144.15360,027,027.591,213,325.92107,944,679.063,435,308,364.116,285,442,808.193,485,954,680.869,771,397,489.05

2022

Unit: RMB

Item2022
Equity attributable to owners of the Company as the parentNon-controlling interestsTotal owners’ equity
Share capitalOther equity instrumentsCapital reservesLess: Treasury stockOther comprehensive incomeSpecific reserveSurplus reservesGeneral reserveRetained earningsOtherSubtotal
Preferred sharesPerpetual bondsOther
1. Balance as at the end of the prior year1,399,346,154.001,051,158,614.18250,600,874.54982,987,454.08741,353,347.963,111,864,076.867,036,108,772.543,543,741,175.2110,579,849,947.75
Add: Adjustment for change in18,918.2218,918.2216,252.2935,170.51

Annual Report 2023

accounting policy
Adjustment for correction of previous error
Other
2. Balance as at the beginning of the year1,399,346,154.001,051,158,614.18250,600,874.54982,987,454.08741,353,347.963,111,882,995.087,036,127,690.763,543,757,427.5010,579,885,118.26
3. Increase/ decrease in the period (“-” for decrease)-37,351,507.00-1,043,912,642.64-168,435,730.39-484,846,435.38-649,994,320.81184,552,833.42-1,863,116,342.02-116,523,723.82-1,979,640,065.84
3.1 Total com-383,929,211.230,320,570.67-153,608,640.120,613,492.44-32,995,148.0

Annual Report 2023

prehensive income19528
3.2 Capital increased and reduced by owners-37,351,507.00-1,043,912,642.64-168,435,730.39-661,779,817.55-1,574,608,236.80-211,006,082.37-1,785,614,319.17
3.2.1 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

Annual Report 2023

.2.3 Share-based payments included in owners’ equity
3.2.4 Other-1,039,086,694.04-535,521,542.76-1,574,608,236.80-211,006,082.37-1,785,614,319.17
3.3 Profit distribution11,785,496.74-146,684,961.44-134,899,464.70-26,131,133.89-161,030,598.59
3.3.1 Appropriation to surplus reserves11,785,496.74-11,785,496.74
3.3.2 Appropriation to general reser

Annual Report 2023

ve
3.3.3 Appropriation to owners (or shareholders)-134,899,464.70-134,899,464.70-26,131,133.89-161,030,598.59
3.3.4 Other
3.4 Transfers within owners’ equity-100,917,224.19100,917,224.19
3.4.1 Increase in capital (or share capital) from capital reserves
3.4.2 Incre

Annual Report 2023

ase 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 com-100,917,224.19100,917,224.19

Annual Report 2023

prehensive 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. Balance1,361,994,647.007,245,971.5482,165,144.15498,141,018.7091,359,027.153,296,435,828.505,173,011,348.743,427,233,703.688,600,245,052.42

Annual Report 2023

as attheendoftheperiod

Legal representative:WanShan 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

2023

Unit: RMB

Item2023
Share capitalOther equity instrumentsCapital reservesLess: Treasury stockOther comprehensive incomeSpecific reserveSurplus reservesRetained earningsOtherTotal owners’ equity
Preferred sharesPerpetual bondsOther
1. Balance as at the end of the prior year1,361,994,647.007,426,635.6282,165,144.15498,788,284.79322,663,096.392,810,316,233.414,919,023,753.06
Add: Adjustment for change in accounting policy
Adjustment for correction of

Annual Report 2023

previous error
Other adjustments
2. Balance as at the beginning of the year1,361,994,647.007,426,635.6282,165,144.15498,788,284.79322,663,096.392,810,316,233.414,919,023,753.06
3. Increase/ decrease in the period (“-” for decrease)186,783,583.00901,631,905.82-138,930,211.73897,781.7416,585,651.9114,371,402.49981,340,113.23
3.1 Total comprehensive income-138,930,211.73165,856,519.1026,926,307.37
3.2 Capital increased and reduced by owners186,783,583.00901,631,905.821,088,415,488.82
3.2.1 Ordinary186,783,583.00901,631,905.821,088,415,488.82

Annual Report 2023

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 distribution16,585,651.91-151,485,116.61-134,899,464.70
3.3.1 Appropriation to surplus reserves16,585,651.91-16,585,651.91
3.3.2 Appro-134,899,464.70-134,899,464.70

Annual Report 2023

priation to owners (or shareholders)
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

Annual Report 2023

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 reserve897,781.74897,781.74
3.5.1 Increase in8,010,891.578,010,891.57

Annual Report 2023

the period
3.5.2 Used in the period7,113,109.837,113,109.83
3.6 Other
4. Balance as at the end of the period1,548,778,230.00909,058,541.4482,165,144.15359,858,073.06897,781.74339,248,748.302,824,687,635.905,900,363,866.29

2022

Unit: RMB

Item2022
Share capitalOther equity instrumentsCapital reservesLess: Treasury stockOther comprehensive incomeSpecific reserveSurplus reservesRetained earningsOtherTotal owners’ equity
Preferred sharesPerpetual bondsOther
1. Balance as at the end of the prior year1,399,346,154.0022,568,665.93250,600,874.54984,695,765.83741,353,347.962,738,229,003.275,635,592,062.45
Add: Adjustment for change in accounting policy
Adjustment

Annual Report 2023

for correction of previous error
Other adjustments
2. Balance as at the beginning of the year1,399,346,154.0022,568,665.93250,600,874.54984,695,765.83741,353,347.962,738,229,003.275,635,592,062.45
3. Increase/ decrease in the period (“-” for decrease)-37,351,507.00-15,142,030.31-168,435,730.39-485,907,481.04-418,690,251.5772,087,230.14-716,568,309.39
3.1 Total comprehensive income-384,990,256.85117,854,967.39-267,135,289.46
3.2 Capital increased and reduced by owners-37,351,507.00-15,142,030.31-168,435,730.39-430,475,748.31-314,533,555.23
3.-37,35-4,825-168,4-126,2

Annual Report 2023

2.1 Ordinary shares increased by owners1,507.00,948.6035,730.3958,274.79
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-10,316,081.71-304,217,473.52-314,533,555.23
3.3 Profit distribution11,785,496.74-146,684,961.44-134,899,464.70
3.3.1 Appropriation to surplus reserves11,785,496.74-11,785,496.74

Annual Report 2023

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-100,917,224.19100,917,224.19
3.4.1 Increase in capital (or share capital) from capital reserves
3.4.2 Increase in capital (or share capital) from surplus reserves

Annual Report 2023

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-100,917,224.19100,917,224.19
3.4.6 Other
3.5 Specific reserve

Annual Report 2023

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 period1,361,994,647.007,426,635.6282,165,144.15498,788,284.79322,663,096.392,810,316,233.414,919,023,753.06

Legal representative:WanShan Chief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Liang Yuefei

Annual Report 2023

III Company profile(I) Basic informationFoshan Electrical and Lighting Co., Ltd. (hereinafter referred to as “the Company”), a joint-stock limitedcompany jointly founded by Foshan Electrical and Lighting Company, Nanhai Wuzhuang Color Glazed BrickField, and Foshan Poyang Printing Industrial Co. on 20 October 1992 by raising funds under the approval ofYGS (1992) No. 63 Document issued by the Joint Examination Group for Experimental Enterprises in StockSystem of Guangdong Province and the Economic System Reform Commission of Guangdong Province, is anenterprise with its shares held by both the corporate and the natural persons. As approved by China SecuritiesRegulatory Commission with Document (1993) No. 33, the Company publicly issued 19.3 million shares ofsocial public shares (A shares) to the public in October 1993, and was listed in Shenzhen Stock Exchange fortrade on 23 November 1993. The Company was approved to issue 50,000,000 B shares on 23 July 1995. And,as approved to change into a foreign-invested stock limited company on 26 August 1996 by (1996) WJMZEHZNo. 466 Document issued by the Ministry of Foreign Trade and Economic Cooperation of the People’sRepublic of China. On 11 December 2000, as approved by China Securities Regulatory Commission with ZJGSZi [2000] No. 175 Document, the Company additionally issued 55,000,000 A shares. At approved by theShareholders’ General Meeting 2006, 2007, 2008, 2014 and 2017 the Company implemented the plan ofcapitalization of capital reserve, after the transfer, the registered capital of the Company has increased toRMB1,399,346,154.00. The Company held the 26th Meeting of the 9th Board of Directors on 14 January 2022,where the Proposal on Cancelling Some Shares of the Company's Repurchase Special Securities Account wasdeliberated and adopted. The repurchased 13 million A shares were used for the equity incentive plan. Theremaining 18,952,995 A shares and the repurchased 18,398,512 B shares, totaling 37,351,507 shares, were allderegistered. On 8 February 2022, it was confirmed by Shenzhen Branch of CSDC that the number ofrepurchased public shares canceled this time was 37,351,507, accounting for 2.67% of the total share capital ofthe Company before the cancellation, including 18,952,995 A shares and 18,398,512 B shares. Upon thecancellation of the shares, the total share capital of the Company was changed from 1,399,346,154 shares to1,361,994,647 shares. The Company's registered capital was changed to RMB1,361,994,647.00. On 14 March2023, the Company held the 39th Meeting of the Ninth Session of the Board of Directors and considered andpassed the Proposal on the Company's Compliance with the Conditions for the Issuance of A Shares to SpecificObjects, and the Board of Directors agreed that the Company should apply for the issuance of shares to specific

Annual Report 2023

objects to the Shenzhen Stock Exchange (''SZSE''). According to the resolutions passed at the 39th Meeting ofthe Ninth Board of Directors and the First Extraordinary General Meeting of 2023, the Company applied for theissuance of ordinary shares (A shares) not exceeding 30% of the total share capital, i.e., not exceeding408,598,394 shares to specific investors, and 186,783,583 shares were actually issued. After the issuance ofshares, the total share capital of the Company changed from 1,361,994,647 shares to 1,548,778,230 shares, andthe registered capital of the Company changed to RMB One Billion, Five Hundred and Forty-eight Million,Seven Hundred and Seventy-eight Thousand, Two Hundred and Thirty (RMB1,548,778,230.00).Credibility code of the Company: 91440000190352575W.Legal representative: Mr. Wan ShanCorporate domicile: No. 64, Fenjiang North Road, Chancheng District, Foshan, Guangdong ProvinceOffice address: No. 8, Zhihui Road, Chancheng District, 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 other products.The business term of the Company is long-term, which was calculated from the date of issuance of License ofBusiness Corporation.(II) Authorized issuer and date of approval of the financial reportThe Financial Report was approved and authorized for issue by the Board of Directors on 17 April 2024.(III) 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 Lamp 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 FozhaoZhicheng Technology Co., Ltd. ( referred to as “Zhicheng Company”), FSL Zhida Electric Technology Co., Ltd( referred to as “Zhida Company”), Foshan Hortilite Optoelectronics Co.,Ltd. (referred to as “HortiliteCompany”), Fozhao (Hainan) Technology Co., Ltd. (referred to as “Hainan Technology”), Foshan Kelian NewEnergy Technology Co., Ltd. (referred to as “Foshan Kelian”), Nanning Liaowang Auto Lamp Co., Ltd.(referred to as “Nanning Liaowang”), Foshan NationStar Optoelectronics Co., Ltd. (referred to as “NationStarOptoelectronics”) and Foshan Sigma Venture Capital Co., Ltd. (referred to as “Sigma”) in total 12 subsidiariesand Liuzhou Guige Lighting Technology Co., Ltd. (referred to as “Liuzhou Lighting”), Liuzhou Guige

Annual Report 2023

Foreshine Technology Co., Ltd. (referred to as “Liuzhou Foreshine”), Chongqing Guinuo Lighting TechnologyCo., 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”), FoshanNationStar Electronic Manufacturing Co., Ltd. (referred to as “Guoxing Electronic”), Foshan NationStarSemiconductor Co., Ltd. (referred to as “NationStar Semiconductor”), Nanyang Baoli Vanadium Industry Co.,Ltd. (referred to as “Baoli Vanadium Industry”), Guangdong New Electronic Information Ltd. (referred to as“New Electronic”), NationStar Optoelectronics (Germany) Co., Ltd. (referred to as “Germany NationStar”) andGuangdong Fenghua Semiconductor Technology Co., Ltd. (referred to as “Fenghua Semiconductor”) in total 11sub-subsidiary.Given that Nanyang Baoli Vanadium Industry Co., Ltd. (Baoli Vanadium) is in a state of non-continuingoperations, the Financial Statements 2023 of Baoli Vanadium were formulated at fair value or costs whicheverwas lower.The scope of consolidation of the financial statements for this period decreased by one subsidiary, FSLLIGHTING GMBH, compared with the previous period. See Note IX "Changes in the scope of consolidation"and Note X "Interests in other entities" for details.IV Basis for Preparation of Financial Statements

1. Preparation Basis

The Company's financial statements are prepared on a going concern basis, based on transactions and eventsthat actually occur, in accordance with the provisions of the Accounting Standards for Business Enterprises -Basic Guidelines and specific accounting standards issued by the Ministry of Finance (hereinafter referred to as"ASBEs"), as well as the relevant provisions of "No. 15 of the Rules Governing the Preparation of InformationDisclosures by Companies Offering Securities to the Public - General Provisions on Financial Reporting" of theChina Securities Regulatory Commission and on the basis of the significant accounting policies and accountingestimates formulated.

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 EstimationsReminders of the specific accounting policies and accounting estimations:

The following significant accounting policies and accounting estimates of the Company have been formulated

Annual Report 2023

in accordance with ASBEs. Operations not mentioned are treated in accordance with the relevant accountingpolicies in the ASBE.

1. Statement of Compliance with the Accounting Standards for Business EnterprisesThe financial statements prepared by the Company are in compliance with the Accounting Standards forBusiness Enterprises, which factually and completely present the Company’s and the consolidated financialpositions on 31 December 2023, business results and cash flows, as well as other relevant information for 2023.

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.

5. Methods for Determining materiality standards and selection criteria

?Applicable □ Not applicable

1. Materiality of Financial Statement Items

The Company determines the materiality of financial statement items based on the principle of whether such itemsaffect the users of financial statements making economic decisions in terms of both the nature and amount. Themateriality of financial statement items in terms of the amount is determined based on a certain percentage ofrelevant items in total assets, total liabilities, net assets, operating income, and net profit. The materiality offinancial statement items in terms of nature is based on factors with a significant impact on the Company'sfinancial position and operating results, such as whether they are part of routine operating activities, whether theyresult in changes in profit or loss, and whether they affect regulatory indicators.

2. Materiality of Detailed Items in the Notes to Financial Statement Items

The Company determines the materiality of detailed items in the notes to financial statement items based on themateriality of the financial statement items. This determination is made by considering a certain percentage of thespecific item, or a combination of the amount of the item, taking into account the nature of the specific item.Certain items that are not material to the financial statements may be material to the notes and still requireseparate disclosure in the notes. The materiality criteria related to the notes to the financial statement items are:

ItemMateriality criteria
Significant accounts receivable with bad debt provision separately accruedThe individual amount accounts for more than 10% of the account receivable or bad debt provision, and the amount exceeds RMB10 million.
Bad debt provision of accounts receivable collected or reversed with significant amount in this yearIndividual amount accounts for more than 10% of the current reversal of bad debt provision, and the amount exceeds RMB10 million.
Significant verification of accounts receivable in this yearThe individual amount accounts for more than 10% of the

Annual Report 2023

account receivable or bad debt provision, and the amount exceeds RMB10 million.
Significant construction in progressThe ending balance of an individual construction in progress accounts for more than 10%, and the amount exceeds RMB50 million.
Significant accounts payable/other payables over one yearThe individual amount accounts for more than 10% of accounts payable over 1 year/other payables, and the amount exceeds RMB10 million.
Significant cash flows generated from investment activitiesCash flows of an individual investment accounts for more than 3% of the net assets at the period-end, and the amount exceeds RMB100 million.
Significant non-wholly-owned subsidiaryMinority shareholders hold more than 5% interest and any of the items of total assets, net assets, operating revenues and net profits of the subsidiary accounts for more than 10% of the corresponding items in the consolidated financial statements.
Significant joint ventures or associated enterprisesThe investment income generated from joint ventures or associated enterprises (The loss is calculated in absolute terms) accounts for more than 10% of the net profit of consolidated financial statements.
Significant debt reorganizationThe influence of individual amount on net profit exceeds 10%.
Significant commitmentsThe amount of an individual commitment exceeds RMB10 million.
Significant contingencyThe amount of money involved in cases exceeds RMB10 million.

6. 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

In case of business combination involving enterprises not under the same control, the combination costs shall bethe total fair values of the assets paid, liabilities incurred or assumed and the equity securities issued on the date ofacquisition by the acquirer in exchange for control on the acquiree. Identifiable assets, liabilities and contingentliabilities of the acquiree acquired in a business combination not under the same control that qualify forrecognition are measured at fair value on the date of acquisition. The acquirer recognizes as goodwill thedifference between the combination costs and the fair value share of the identifiable net assets of the acquireeobtained in the combination. If the combination costs are less than the fair value share of the acquiree'sidentifiable net assets obtained in the combination, the difference between the combination costs still less than thefair value share of the acquiree's identifiable net assets obtained in the combination after review shall be includedin the non-operating revenue for the current period.

7. Criteria for Judging Control and Methods for Preparing Consolidated Financial Statements

1. Judgment criteria for control

Annual Report 2023

The scope of consolidation of the consolidated financial statements is determined on the basis of control. Aninvestee is considered to be controlled if the following three elements are present: the possession of power overthe investee, the enjoyment of variable returns as a result of participating in the relevant activities of theinvestee, and the ability to use the power over the investee to affect the amount of returns.

2. Preparation methods for consolidation financial statements

(1) 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.

(2) 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".

(3) Accounting treatment of the acquisition of subsidiaries through consolidationFor 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.

(4) 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 in the consolidated financial statements, and retained earnings is adjusted if the capitalsurplus is not sufficient to cover the reduction. If the control over the investee is lost due to the disposal of part ofequity investments, the residual equity are re-measured at fair value on the date of loss of control. The aggregateof the consideration obtained by disposing of the equity and the fair value of the remaining equity less the portionof the net assets of the subsidiary that has been measured, as calculated at the original shareholding proportion,from the acquisition date or combination date is recognized in profit and loss of the current period on investmentsin which the control is lost, and goodwill shall be offset. Other comprehensive income related to the equityinvestments in the former subsidiary shall be included in the return on investment for the current period when theCompany lost the control.

8. 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.

Annual Report 2023

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.

9. 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.

10. 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. Exchange differences arising from the difference between the spot rate on that date and thespot rate 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 statement

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translation 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.

11. Financial Instruments

1. Classification, recognition and measurement of financial instruments

(1) Financial assets

Based on the business model for managing financial assets and the contractual cash flow characteristics offinancial assets, the Company classifies its financial assets into the following three categories:

a) Financial assets are measured at the amortized cost. The business model of the Company for managing suchfinancial assets aims at obtaining contractual cash flow, and the characteristics of contractual cash flow of suchfinancial assets are basically the same as basic borrowing arrangement, namely the cash flow arising on a specificdate, which are solely payments of principal and interest on the principal amount outstanding. Interest income issubsequently recognized on such financial assets on the basis of the effective interest method.b) Financial assets at fair value and changes included in other comprehensive income The business model of theCompany for managing such financial assets aims at receiving contractual cash flow as well as selling, and thecharacteristics of contractual cash flow of such financial assets are basically the same as basic borrowingarrangement. Such financial assets are subsequently measured at fair value with changes recognized in othercomprehensive income, except for interest income, impairment losses or gains calculated in accordance with theeffective interest method and foreign exchange gains or losses recognized in the current profit or loss.c) Financial assets measured at fair value through profit or loss for the current period Financial assets held that arenot classified as at amortized cost and at fair value through other comprehensive income are measured at fairvalue, with gains or losses (including interest and dividend income) recognized in profit or loss for the currentperiod. On initial recognition, a financial asset may be irrevocably designated as financial asset at fair valuethrough profit or loss if the accounting mismatch can be eliminated or reduced. The designation shall not berevoked once made.For instruments in non-business equity instruments, the Company may irrevocably assign such investments asfinancial assets (equity instruments) measured at fair value through other comprehensive income at initialrecognition. The assignment is made based on investments by item, and the relevant investments meet thedefinition of an equity instrument from the issuer's perspective. Such financial assets are subsequently measured atfair value, and except for dividends received (except for the portion which forms part of investment costrecovered), which are recognized in profit or loss, all other related gains and losses are recognized in othercomprehensive income and are not subsequently transferred to current profit or loss.

(2) Financial liabilities

On initial recognition, financial liabilities are classified into the following categories:

a) Financial liabilities measured at fair value through profit and loss for the current period. Such financialliabilities are subsequently measured at fair value, and the resulting gains or losses are recognized in profit or lossfor the current period.b) Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when thecontinuing involvement approach applies.c) Financial liabilities measured at amortized cost. Such financial liabilities are measured at amortized cost usingthe effective interest method.

2. 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.Under limited circumstances, if the information used to determine fair value is insufficient, or if the range ofpossible estimates of fair value is wide and the cost represents the best estimate of fair value within that range, thecost may represent its appropriate estimate of fair value within that range of distribution. The Company uses all

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information available after the initial recognition date about the investee's performance and operations todetermine whether the cost represents fair value.

3. Derecognition of financial instruments

A financial asset is derecognized when one of the following conditions is met: (1) the contractual right to receivecash flows from the financial asset is terminated; (2) the financial asset is transferred and the conditions forderecognition are met.If the present obligation of a financial liability is discharged in whole or in part, the discharged portion isderecognized. If an existing liability is replaced by another financial liability from the same creditor onsubstantially different terms, or the terms of an existing liability are substantially modified, the existing financialliability is derecognized and a new financial liability is recognized simultaneously. All regular acquisitions orsales of financial assets are recognized and derecognized on a transaction date basis.

12. Notes Receivable

The determination methods and accounting methods of notes receivable are detailed in Note V-13. AccountsReceivable.

13. Accounts Receivable

1. Measurement of expected credit loss

The Company uses expected credit losses as the basis for impairment accounting and recognizes an allowance forbad debts for financial assets measured at amortized cost (including accounts receivable, including notesreceivable and accounts receivable), financing receivables, lease receivables, and other receivables.

2. Recognition method for expected credit losses

The general approach to expected credit losses is that: the Company assesses whether the credit risk of therelevant financial instruments has increased significantly since the initial recognition on each balance sheet date,divides the process of credit impairment of financial instruments into three stages, and applies differentaccounting treatments to the impairment of financial instruments at different stages: (1) in the first stage, if thecredit risk of a financial instrument has not increased significantly since the initial recognition, the Company willmeasure the loss reserves according to the amount equivalent to the expected credit losses in the next 12 months,and calculate the interest revenue according to the book balance (i.e., before deducting the provision forimpairment) and the actual interest rate; (2) In the second stage, if the credit risk of a financial instrument hasincreased significantly since the initial recognition but no credit impairment has occurred, the Company willmeasure the loss reserves based on the expected credit loss over the entire life of the financial instrument andcalculates interest revenue based on the carrying amount of the financial instrument and the effective interest rate;

(3) In the third stage, if credit impairment occurs after the initial recognition, the Company will measure the lossreserves based on the expected credit loss over the life of the financial instrument and calculates interest revenuebased on the amortized cost (carrying amount less provision for impairment) and the effective interest rate.The simplified approach for expected credit losses is to always measure the allowance for losses at an amountequal to the expected credit losses throughout their lives.

3. Accounting methods of the expected credit losses

To reflect the changes in credit risk of financial instruments since initial recognition, the Company remeasuresexpected credit losses at each balance sheet date. The resulting increase or reversal amount of the loss provisionshould be recognized as an impairment loss or gain in profit or loss and offset against the carrying amount of thefinancial asset as stated in the balance sheet or included in projected liabilities, depending on the type of financialinstrument (loan commitments or financial guarantee contracts).

4. Method of the provision for losses on the measurement of receivables, lease receivables

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(1) Receivables with no significant financing component. For receivables arising from transactions governed byAccounting Standard for Business Enterprises No. 14 - Revenue that do not have a significant financingcomponent, the Company uses a simplified approach whereby the allowance for losses is always measured on thebasis of expected credit losses throughout their lives.

①Accounts receivable of expected credit losses withdrawn individually

Rationale for a single provision for expected credit lossesObjective evidence of impairment
Individual accruals for expected credit lossesThe impairment tests are conducted separately for accounts receivable individually accrued. 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

②Accounts Receivable with Expected Credit Losses Provision Based on Credit Risk Portfolio

Portfolio nameBasis for portfolio recognitionDetermination method of expected credit losses

Business portfolio ofgeneral lighting and autolamps

Business portfolio of general lighting and auto lampsGeneral 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 characteristicsPrepare 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 LED packaging and componentsLED 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 characteristicsPrepare 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 portfolioRelated parties and internal transactionsOther methods

Notes Receivable for which the Expected Credit Loss is Withdrawn by Credit Risk Characteristics

Portfolio nameBasis for portfolio recognitionDetermination method of expected credit losses
Portfolio 1Bank acceptance billLow credit risk with no provision for bad debts
Portfolio 2Trade acceptancePrepare 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:

AgingExpected credit loss rate
Business portfolio of general lighting andBusiness portfolio of LED packaging and

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auto lampscomponents
Within 1 year (including 1 year)3%2%
1 to 2 years10%10%
2 to 3 years30%30%

3 to 4 years

3 to 4 years50%50%
4 to 5 years80%80%
Over 5 years100%100%

(2) Receivables and lease receivables containing significant financing components.For receivables with significant financing components and lease receivables, the Company measures theprovision for losses in accordance with the general method, i.e., the "three-stage" model. The credit riskcharacteristics grouping, the aging calculation method based on the credit risk characteristics grouping, and thecriteria for determining individual provisioning are consistent with the recognition standards for those withoutfinancing components.

5. 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.

(1) Categories of bad debt provision according to credit risk characteristics and basis of determinationThe Company divides other receivables into certain credit risk combinations based on the nature of the amounts. Itcalculates expected credit losses based on the combinations, and the basis for determining the combinations is asbelow:

Portfolio nameBasis for portfolio recognition
Porfolio 1: Deposit, security depositBased on nature of accounts
Porfolio 2: Amounts from related partiesBased on nature of accounts
Porfolio 3: Advances on behalf of othersBased on nature of accounts

(2) Aging calculation method for recognizing credit risk combinations based on agingRefer to the description of receivables with no significant financing components.

(3) Criteria for determining the bad debt provision based on individual items

Refer to the description of receivables with no significant financing components.

14. Accounts Receivable Financing

The determination methods and accounting methods of receivables financing are detailed in Note V-13.Accounts Receivable.

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15. Other Receivables

The determination methods and accounting methods of expected credit losses of other receivables is the same asthat of accounts receivable, as detailed in Note V-13. Accounts Receivable.

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. The provision forimpairment of contract assets is made with reference to the method of determining expected credit losses in thisnote.Contract assets are categorized into the following portfolios according to credit risk characteristics:

PortfolioDetermination basis
Portfolio 1: General lighting and lamps business portfolioGeneral lighting, automotive lamps and related businesses represented by the parent company and its subsidiary Nanning Liaowang. This portfolio uses the aging of accounts receivable as the credit risk characteristic.
Portfolio 2: LED packaging and components business portfolioLED packaging, components and other related businesses represented by subsidiary NationStar Optoelectronics. This portfolio uses the aging of accounts receivable as the credit risk characteristic
Portfolio 3: Internal business portfolioThis portfolio involves related-party transactions and internal transactions

17. 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. Inventory system of inventories

The perpetual inventory system is adopted for the inventories of the Company.

4. Amortization of low-value consumables and packing materials

The one-off charge-off method is used for low-value consumables and packaging materials.

5. Criteria for Recognizing and Accrual method of provision for decline in value of inventoriesNet realizable value refers to the amount after deducting the cost estimated until completion, estimated sellingexpenses, and relevant taxes from the estimated selling price of the inventory. The Company determines the netrealizable value of inventories based on solid evidence obtained and after taking into consideration the purpose forwhich the inventory is held, and the impact of post-balance sheet events.The net realizable value of finished goods, materials for sale, and other merchandise inventories used directly forsale is determined in the normal course of production and operation as the estimated selling price of suchinventories, less estimated selling expenses, and related taxes.The net realizable value of material inventories subject to processing is determined in the normal course ofproduction operations as the estimated selling price of the finished goods produced, less the estimated costs to be

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incurred to completion, estimated selling expenses, and related taxes. The Company determines the net realizablevalue of inventories based on solid evidence obtained and after taking into consideration the purpose for which theinventory is held, and the impact of post-balance sheet events.

18. Assets Held for Sale

1. Recognition criteria and accounting treatment for non-current assets classified as held for sale or disposalgroupsA non-current asset or disposal group whose carrying value will be recovered principally through sale rather thanthrough continuing use is classified as held for sale and meets the following conditions: first, it is immediatelyavailable for sale under current conditions based on the customary practice for sales of such assets or disposalgroups in similar transactions; and second, it is highly probable that the sale will occur, i.e., the enterprise hasalready resolved on a plan for the sale and has obtained a firm commitment to purchase, and it is expected that thesale is expected to be completed within one year. The relevant regulations require the approval of the relevant orregulatory 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.The amount of asset impairment loss recognized for disposal groups held for sale shall be offset against thecarrying value of goodwill in the disposal group first, and then against the carrying value of each non-current assetproportionately according to the proportion of the carrying value of each non-current asset in the disposal group asdefined in the applicable measurement of the "Accounting Standards for Business Enterprises - Non-currentAssets Held for Sale, Disposal Groups and Discontinued Operations".

2. Recognition criteria and presentation of discontinued operations

Discontinued operations is a separately distinguishable component that meets one of the following conditions andthat has been disposed of by the Company or classified by the Company as held for sale: the componentrepresents a separate principal business or a separate principal operating area; the component is part of a relatedprogram of proposed dispositions of a separate principal business or a separate principal operating area; Thecomponent is a subsidiary acquired specifically for resale.The Company presents gains and losses from continuing operations and gains and losses from discontinuedoperations separately in the statement of income. Operating gains and losses, such as impairment losses andreversal amounts for discontinued operations, and gains and losses on disposals are presented as gains and lossesfrom discontinued operations. The revenues, expenses, gross profit, income tax expense (benefit) and net profitfrom discontinued operations, impairment losses recognized on assets or disposal groups of discontinuedoperations and the amount of their reversal, total gain or loss on disposal of discontinued operations, income taxexpense (benefit) and net gain or loss on disposal, net cash flows from operating activities, investing activities andfinancing activities of discontinued operations, and gains and losses from continuing operations and gains andlosses from discontinued operations attributable to owners of the parent company are disclosed in the notes.

19. Investment in Debt Obligations

Not applicable

20. Other Investment in Debt Obligations

The determination methods and accounting methods of other investment in debt obligations are detailed in NoteV-11. Financial Instruments.

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21. Long-term Receivables

Not applicable

22. Long-term Equity Investments

1. Judgment criteria for joint control and significant influence

Joint control means that activities that have a significant impact on the return of an arrangement must be decidedupon with the unanimous consent of the participants sharing control, including sales and purchases of goods orservices, management of financial assets, purchases and disposals of assets, research and development activities,and financing activities. Significant influence refers to the condition where an investor holds between 20% to 50%of the voting capital in an investee, generally indicating a significant influence. Or, although less than 20%,having a significant influence 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.

2. 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.

3. 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.

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.

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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

CategoryDepreciation methodDepreciable lifeResidual value rateAnnual depreciation rate
Houses and buildingsStraight-line depreciation method3-36 years1%-10%31.67%-3.17%
Machinery equipmentStraight-line depreciation method2-11 years1%-10%47.50%-8.18%
Transportation equipmentStraight-line depreciation method5-10 years1%-10%19.00%-9.50%
Electronic equipmentStraight-line depreciation method2-8 years1%-10%47.50%-11.88%
Other equipmentStraight-line depreciation method5 years5%-10%19%-18%

The Company's fixed assets are mainly classified into: buildings and structures, machinery and equipment,electronic equipment, transportation equipment, etc. The depreciation method is the average annual limitmethod. The service lives and estimated residual values of fixed assets are determined according to the natureand utilization of each category of fixed assets. At the end of the year, the service lives, estimated residualvalues and depreciation methods of fixed assets are reviewed, and adjustments are made accordingly if there aredifferences from the original estimates. All fixed assets are depreciated, except for fully depreciated fixed assetsthat continue to be used and land that is separately accounted for.

25. Construction in Progress

The Company's construction in progress is divided into two types: Construction on a self-operation basis and acontracted basis. The criteria and time point for carrying forward construction in progress to fixed assets arebased on the construction in progress reaching its intended state of use. The standard for determining theintended usable condition shall be one of the following: The physical construction (including installation) of thefixed assets has been fully completed or substantially completed; production or trial operation has beenconducted, and the results show that the assets can operate normally or can steadily produce qualified products,or the results of the trial operation show that they can function normally or operate; the amount of expenditureon the fixed assets constructed is little or almost no longer incurred; the fixed assets acquired have met thedesign or contract requirements, or are substantially consistent with the design or contract requirements.

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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. Intangible Assets

1. Pricing method of intangible assets

The Company initially measures the intangible assets at cost. For the acquired intangible assets, the actual pricespaid and related expenses shall be regarded as the actual costs. The actual cost of intangible assets invested byinvestors shall be recognized according to the value agreed upon in the investment contract or agreement. In caseof unfair contract or agreement, the actual cost shall be recognized according to the fair value. The cost of self-developed intangible assets shall be the total expenditure incurred before they reach the intended use.

2. Service life and its determination basis, estimation, amortization method, or review procedureIntangible assets with finite service lives are amortized on a straight-line basis over their service lives, and theservice lives and amortization methods of intangible assets are reviewed at the end of the year and adjustedaccordingly if there are differences from the original estimates. Intangible assets with indefinite service lives arenot amortized, but are reviewed at the end of the year for service lives and estimated when there is conclusiveevidence that the service life is finite.The useful life and its determination basis and amortization method of intangible assets with restricted useful life:

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CategoryUseful lifeDetermination basis of useful lifeAmortization method
Land use right20-50Duration of land use rightsMethod of line
Patent use right5-20Expected number of years of benefitMethod of line
Software use right3-10Expected number of years of benefitMethod of line

The intangible assets are regarded as intangible assets with uncertain service life if the term during which they canbring economic benefits to the Company is unforeseeable or if their usage period is uncertain. The bases fordetermining of uncertain service life are: The intangible assets come from contractual or other legal rights, but thecontract or laws have no certain stipulations of the service life; the term during which the intangible assets bringeconomic benefits to the Company is still unforeseeable even with consideration of peer status or demonstrationsof related professionals.At the end of each year, the review of service life of intangible assets with uncertain service life mainly adopts themethod of reviewing from lower department to upper department, where departments related to the use ofintangible assets shall conduct the basic review and make assessment of whether the determining basis ofuncertain service life changes.

3. The scope of R&D expenditure collection and the related accounting treatmentThe scope of the Company's R&D expenditures is mainly formulated based on the Company's research anddevelopment projects, which mainly includes: including R&D personnel's employee remuneration, direct inputexpenses, depreciation expenses and long-term amortization expenses, design expenses, equipmentcommissioning expenses, amortization expenses of intangible assets, commissioned external research anddevelopment expenses, and other expenses, etc.Expenditures incurred during the research phase of an internal research and development project are recognized inprofit or loss when incurred; expenditures incurred during the development phase that meet the conditions forrecognition as an intangible asset are transferred to intangible asset accounting.Specific criteria for dividing the research phase and development phase of internal research and developmentprojects: The expenditures in internal research and development projects of the Company are classified intoexpenditures in research stage and expenditures in development stage. The expenditures in research stage areincluded in the current profits and losses when incurred. The expenditures in development stage are recognized asintangible assets 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.

30. 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

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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.

31. 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.

32. 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 contractliability under the same contract on a net basis.

33. 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 the accounting period when the active staff offering theservice for the Company should be recognized as liabilities and is included in the current profits and losses exceptfor those required or allowed to be included in the assets cost by the Accounting Standards for BusinessEnterprises. The employee services benefits actually happened in the Company shall be included in the currentprofits and losses or relevant assets cost according to the actual amount. Of which the non-monetary benefitsshould be measured according to the fair value. During the accounting term in which employees provide service,the Company calculates and determines the corresponding payroll amount in accordance with the withdrawalbasis and withdrawal proportion specified in regulations with the social insurance premiums such as medicalinsurance premiums, industrial injury insurance premium and birth insurance premium, housing fund, and thelabour union budget and employee education budget withdrawn in regulations, and then recognizes it as liabilitiesthat are included in the current profits and losses or relevant assets cost.

(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 the

Annual Report 2023

current profits and losses or relevant assets cost. The benefit obligations arising from the defined benefit plan shallbe attributable to the period in which the employees provide services based on the formula determined byexpected cumulative welfare unit method and included in current profits and losses or cost of relevant asset.

(3) Accounting treatment of the demission welfare

When offering the demission welfare, the Company shall recognize the payroll liabilities incurred from thedemission welfare on the earlier of the date when the Company could not unilaterally withdraw the demissionwelfare offered by the plan or layoff proposal owing to termination of the labour relationship or the date when theCompany recognizes the cost related to the reorganization of the payment of the demission welfare, and includethe payroll liabilities into the current profits and losses:

(4) Accounting treatment of the welfare of other long-term staffs

The other long-term welfare that the Company offers to the staff, if met with the setting drawing plan, shall bedisposed of according to the relevant setting drawing plan; except for that, net liabilities or net assets of thewelfare of other long-term staff shall be recognized and measured according to the setting drawing plan.

34. Accrued liabilities

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.

35. Share-based Payment

Not applicable

36. Other Financial Instruments such as Preferred Shares and Perpetual BondsNot applicable

37. Revenue

Disclosure of accounting policies adopted for revenue recognition and measurement by type of businessThe Company recognizes revenue based on the transaction price apportioned to the performance obligation in acontract when the customer obtains control of the underlying good or service. Obtaining control of related goodsrefers to that customers can control the use of the goods and obtain almost all the economic benefits from thegoods. A performance obligation is a contractual commitment by the Company to transfer a clearly distinguishablecommodity to a customer. The transaction price is the amount of consideration that the Company expects to beentitled to receive as a result of the transfer of the commodity to the customer, excluding amounts collected onbehalf of third parties and amounts that the Company expects to return to the customer.Whether the performance obligation is to be fulfilled within a certain period of time or at a certain point in timedepends on the terms of the contract and the relevant legal provisions. If the performance obligation is fulfilledwithin a certain period of time, the Company recognizes revenue in accordance with the progress of performance.Otherwise, the Company recognizes revenue at a point in time when the customer obtains control of the

Annual Report 2023

underlying asset.The Company determines whether the Company's status is that of a principal or agent when engaging in atransaction based on whether it has control over the goods or services prior to transferring them to the customer. Ifthe Company is able to control the goods or services before transferring them to the customer, the Company is theprincipal responsible party and recognizes revenue based on the total consideration received or receivable.Otherwise, the Company shall recognize revenue as an agent based on the amount of commissions or fees towhich it is expected to be entitled, which shall be determined at the net amount of the total consideration receivedor receivable less the price payable to other related parties, or at the established commission amount or percentage,etc.Specific principles and measurement methods for revenue recognition by business type: The Company recognizesrevenue from general lighting products, LED packaging and component products, automotive lamp products,trading and other products as follows:

(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; products have been loaded on board; the amount of revenue has been determined, an export salesinvoice has been issued, and the payment has been received or is expected to be recovered.Different business models for the same type of business involving different revenue recognition and measurementmethodsNone.

38. Contract Costs

Contract costs are either the incremental costs of obtaining a contract with a customer or the costs to fulfil acontract with a customer. Incremental costs of obtaining a contract ("contract acquisition costs") are costs thatwon't have been incurred if the contract is not acquired. The Company recognizes as an asset the incremental costsof obtaining a contract with a customer if it expects to recover those costs.Costs incurred for the performance of a contract that do not fall within the scope of other enterprise accountingstandards, such as inventory, are recognized as an asset as contract performance costs when the followingconditions are simultaneously met: The cost is directly related to a current or anticipated acquisition of a contractand includes direct labour, direct materials, manufacturing overhead (or similar costs), costs explicitly attributableto the user, and other costs incurred solely as a result of that contract; the cost increases the resources available tomeet future performance obligations; and the cost is expected to be recovered.Contract performance costs recognized as assets are included in "Inventory" on the balance sheet if theamortization period at the initial recognition doesn't exceed one year or one normal operating cycle; if theamortization period at the initial recognition is more than one year or one normal operating cycle, they areincluded in "Other non-current assets" on the balance sheet.Contract acquisition cost recognized as assets are included in "Other current assets" on the balance sheet if theamortization period at the initial recognition doesn't exceed one year or one normal operating cycle; if theamortization period at the initial recognition is more than one year or one normal operating cycle, they areincluded in "Other non-current assets" on the balance sheet.The Company amortizes the assets recognized for contract acquisition costs and contract performance costs on thesame basis as the revenue recognition of the merchandise to which the assets relate, and recognizes them in profitor loss for the current period. Assets formed from the incremental cost of acquiring a contract with anamortization period of not more than one year are recognized in profit or loss for the current period when it occurs.

Annual Report 2023

If the carrying amount of an asset related to the cost of a contract exceeds the difference between the followingtwo items, the Company makes an allowance for impairment and recognizes an asset impairment loss for theexcess: the remaining consideration expected to be received for the transfer of the merchandise to which the assetrelates; and the estimated costs to be incurred for the transfer of the related merchandise.If the two differences above are higher than the book value of the assets due to the subsequent changes in theimpairment factors in previous periods, the asset impairment provisions set aside should be reversed andrecognized as profit and loss of the current period. However, upon the reversal, the book value of the assets shallnot exceed the book value of the assets on the reversal date, supposing that impairment provisions are not set aside.

39. 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 shall be recognized as asset-related subsidies.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.

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.

40. Deferred Income Tax Assets/Deferred Income Tax Liabilities

1. Recognition of deferred income tax

The Company recognizes the deferred income tax assets or deferred income tax liabilities in accordance with theapplicable tax rate during the estimated period of recapturing the assets or paying the liabilities for the differentamount between the book value of assets or liabilities and its tax base (for items not recognized as assets andliabilities, if its tax basis can be determined according to the tax law, the tax basis is recognized as the differentamount).

2. Measurement of deferred income tax

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.

Annual Report 2023

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.For taxable temporary differences related to the investment in subsidiaries and associated enterprises, the deferredincome tax liabilities are recognized unless the time of temporary differences reversal can be controlled by theCompany and are probably not to be reversed in foreseeable future. For deductible temporary differences relatedto the investment in subsidiaries and associated enterprises, the deferred income tax assets are recognized if thetemporary differences are probably to be reversed in foreseeable future and it is likely to have taxable income tooffset the deductible temporary differences.

3. Basis for netting off deferred income taxes

Deferred income tax assets and deferred income tax liabilities are presented in net amount after offsetting whenthe following conditions are simultaneously met: there is a legal right to settle current income tax assets andcurrent income tax liabilities on a net basis; the deferred income tax assets and deferred income tax liabilities arerelated to income taxes levied by the same tax authority on the same taxable entity or are related to differenttaxable entities, but are not expected to reverse in the future in each of the periods in which the deferred incometax assets and deferred income tax liabilities are material; and the taxable entities involved intend to settle currentincome tax assets and current income tax liabilities on a net basis. However, in each future period in which thedeferred tax assets and deferred tax liabilities are reversed, the taxable entity involved intends to either settle thecurrent income tax assets and current income tax liabilities on a net basis or to acquire the assets and settle theliabilities at the same time.

41. Lease

The Company assesses whether a contract is a lease or contains a lease at the inception date of the contract. Acontract is a lease or contains a lease if one of the parties to the contract has given up the right to control the use ofone or more identified assets for a specified period of time in exchange for consideration.

(1) Accounting treatment for leases as the lessee

1.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.

(1) Right-of-use assets

After the commencement date of the lease term, the Group uses the cost for initial measurement of right-of-useassets. This cost includes the initial measurement amount of the lease liability, lease payments made on or beforethe commencement date of the lease term net of lease incentives, and initial direct cost.If it is reasonably certain that the ownership of the leasehold property will be obtained at the end of the lease term,the Company will depreciate the leasehold property over its estimated remaining service life. If it is notreasonably certain that the ownership of the leasehold property will be obtained at the end of the lease term, theCompany will depreciate the leased assets over the lease term or the remaining service life, whichever is shorter.When the recoverable amount is less than the carrying amount of the right-of-use asset, the carrying amount iswritten down to the recoverable amount.

(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 fixed payments and payments that are reasonably certain to bemade when the option to purchase or terminate the lease is exercised. Variable lease payments that are notcovered in the measurement of the lease liabilities are included in current profit or loss when actually incurred.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.Interest expense on the lease liability for each period during the lease term is calculated on the basis of a fixedperiodic rate, i.e., the discount rate used by the Company or a revised discount rate, and is included in financecosts.

Annual Report 2023

2. Judgment criteria and accounting treatment for short-term leases and leases of low-value assets as a lessee forsimplified treatmentFor short-term leases with a lease term of no exceeding 12 months and leases where the brand-new value of asingle asset is less than RMB40,000, the Company has elected not to recognize right-of-use assets and leaseliabilities, and to charge the related rental expenses to current profit or loss or the cost of the related assets on astraight-line basis for each period during the lease term.

(2) Accounting treatment of leases as the lessor

The Company recognizes leases that transfer substantially all the risks and rewards associated with ownership ofthe leased asset as finance leases at the inception of the lease, and leases other than these are classified asoperating leases.

(1) Accounting treatment of operating leases

Rental income from operating leases is recognized on a straight-line basis over the lease term. Initial directexpenses are capitalized and recognized as current income in instalments over the lease term on the samerecognition basis as rental income, and variable rentals not included in lease receipts are recognized as rentalincome when they are actually incurred.

(2) Accounting treatment of financial lease

On the inception of a 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 and the finance lease asset is derecognized. Initialdirect costs are included in the initial recorded value of the finance lease receivable.

42. Other Significant Accounting Policies and Estimates

(1) Safety production expenses

Operating in the electrical machinery and equipment manufacturing industry, the Company has accrued safetyproduction expenses in accordance with the relevant provisions of the Management Measures for the Provisionand Use of Enterprise Production Safety Costs (C.Z. [2022] No. 136) jointly issued by the Ministry of Financeand the Ministry of Emergency Management on 21 November 2022. Safety production expenses, when accrued,are included in costs or current profit or loss of relevant products and in the "Special Reserve" account. Whensafety production expenses are used within the prescribed scope and are operating expenses, they are directly usedto offset the special reserves. If they form fixed assets, the expenses incurred are first aggregated under the"Construction in Progress" account, and when the safety projects are completed and reach the predeterminedusable state, they are recognised as fixed assets. Meanwhile, the special reserves are offset as per the cost offorming fixed assets, and an equivalent amount of accumulated depreciation is recognised. The aforesaid fixedassets will not be depreciated as accrued in the future period.

43. Changes in Main Accounting Policies and Estimates

(1) Change in accounting policies

? Applicable □ Not applicable

Unit: RMB

Changes to the accounting policies and whyName of statement item materially affectedAmount affected
Interpretation No. 16 of the Accounting Standards for Business Enterprises issued by the Ministry of Finance in 2022 stipulates that for single transactions that are not business combinations, that affect neitherDeferred income tax assets, deferred income tax liabilities, retained earnings, minority interest, income tax expense, net profit-101,779.19

Annual Report 2023

accounting profit nor taxable income (ordeductible losses) at the time thetransaction occurs, and where the initialrecognition of assets and liabilitiesresults in taxable temporary differencesand deductible temporary differences ofequal amounts (including leasetransactions in which the lesseerecognises the initial lease liability andincludes it in the right-of-use asset on thecommencement date of the lease term, aswell as transactions in which estimatedliabilities are recognised and included inthe costs of related assets due to fixedassets' retirement obligations), exemptionfrom initial recognition of deferredincome tax liabilities and deferredincome tax assets shall not apply.Enterprises shall recognise thecorresponding deferred income taxliabilities and deferred income tax assets,respectively, in accordance with No. 18of the Accounting Standards for BusinessEnterprises -- Income Taxes when thetransaction is affected. The Companyimplemented this provision on 1 January2023, and retrospectively adjusted thecomparative statements and cumulativeeffect numbers for taxable temporarydifferences and deductible temporarydifferences arising from lease liabilitiesand right-of-use assets at the date ofinitial implementation. For theseindividual transactions occurring prior to1 January 2022, if the temporarydifferences that result in the relatedassets and liabilities still exist as of 1January 2022, the Company recognizeddeferred tax assets and deferred taxliabilities as of 1 January 2022 andadjusted retained earnings as of 1January 2022 for the difference.

(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 applicableThe effect of this matter on the 31 December 2022 and financial statements for 2022 is described as follows:

Item of consolidated balance sheet31 December 2022 (before)31 December 2022 (after)Affected

Annual Report 2023

Assets:
Deferred income tax assets88,387,206.2590,244,005.411,856,799.16
Liabilities:
Deferred income tax liabilities202,469,697.60204,428,275.951,958,578.35
Shareholders’ equity:
Retained earnings3,296,490,575.523,296,435,828.50-54,747.02
Total equity attributable to owners of the Company as the parent5,173,066,095.765,173,011,348.74-54,747.02
Non-controlling interests3,427,280,735.853,427,233,703.68-47,032.17
Total owners’ equity8,600,346,831.618,600,245,052.42-101,779.19
Item of consolidated income statement2022 (before)2022 (after)Affected
Income tax expense30,874,328.0331,011,277.73136,949.70
Net profit350,843,355.72350,706,406.02-136,949.70
Net profit attributable to shareholders of the Company as the parent230,394,235.91230,320,570.67-73,665.24
Net profit attributable to non-controlling interests120,449,119.81120,385,835.35-63,284.46
Item of consolidated balance sheet of the Company as the parent31 December 2022 (before)31 December 2022 (after)Affected
Assets:
Deferred income tax assets30,158,303.0431,202,848.921,044,545.88
Liabilities:
Deferred income tax liabilities87,121,409.0488,165,954.921,044,545.88

44. Other

None

VI. Taxes

1. Main Taxes and Tax Rates

Category of taxesTax basisTax rate
VATSales volume from goods selling or taxable service3%, 6%, 9%, 13%

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Urban maintenance and construction taxTurnover tax payable7%, 5%
Enterprise income taxTaxable income11%, 15%, 25%
Education surchargeTurnover tax payable3%
Local educational surtaxTurnover tax payable2%

Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate

NameIncome tax rate
The Company, Zhida Company, Chanchang Company, Haolaite Company, Nanning Liaowang, Chongqing Guinuo, Liuzhou Lighting, Liuzhou Foreshine, Qingdao Lighting, NationStar Optoelectronics, NationStar Semiconductor, Germany NationStar, Fenghua Semiconductor15%
Indonesia Liaowang11%
Other subsidiaries25%

2. Tax Preference

1. The Company passed the review of high-tech enterprises in 2023 and obtained the certificate of high-techenterprise (Certificate No. GR202344003659) approved by the Guangdong Provincial Department of Science andTechnology, the Department of Finance of Guangdong Province, and the Guangdong Provincial Tax Service ofState Taxation Administration. According to relevant regulations, the Company is entitled to a reduced enterpriseincome tax rate of 15% for three years starting from 2023.

2. Subsidiary Zhida Company passed the review of high-tech enterprises in December 2022 and obtained thecertificate of high-tech enterprise (Certificate No.: GR202244009711) approved by the Guangdong ProvincialDepartment of Science and Technology, the Department of Finance of Guangdong Province, and the GuangdongProvincial Tax Service of State Taxation Administration. According to the relevant regulations, Zhida Company isentitled to a reduced enterprise income tax rate of 15% for three years starting from 2022.

3. Subsidiary Chanchang Company passed the audit of high-tech enterprises in December 2021 and obtained thecertificate of high-tech enterprise (Certificate No.: GR202144000342) approved by the Guangdong ProvincialDepartment of Science and Technology, the Department of Finance of Guangdong Province, and the GuangdongProvincial Tax Service of State Taxation Administration. According to the relevant regulations, ChanchangCompany is entitled to a reduced enterprise income tax rate of 15% for three years starting from 2021.

4. Subsidiary Haolaite Company passed the review of high-tech enterprises in 2022 and obtained the certificate ofhigh-tech enterprise (Certificate No. GR202244003711) approved by the Guangdong Provincial Department ofScience and Technology, the Department of Finance of Guangdong Province, and the Guangdong Provincial TaxService of State Taxation Administration. According to relevant regulations, Haolaite Company is entitled to areduced enterprise income tax rate of 15% for three years starting from 2022.

5. Subsidiary Nanning Liaowang passed the review of high-tech enterprises in 2023 and obtained the certificate ofhigh-tech enterprise (Certificate No. GR202345001098) approved by the Science and Technology Department ofthe Guangxi Zhuang Autonomous Region, the Department of Finance of Guangxi Zhuang Autonomous Region,and the Guangxi Zhuang Autonomous Region Tax Service of State Taxation Administration. According torelevant regulations, Nanning Liaowang is entitled to a reduced enterprise income tax rate of 15% for three yearsstarting from 2023.

6. Chongqing Guinuo, a wholly-owned subsidiary of Nanning Liaowang, enjoys the tax incentives of reducing

Annual Report 2023

and exempting enterprise income tax for the development of western China since 1 January 2019, and is entitledto a reduced enterprise income tax rate of 15% after examination by and filing with the tax authorities.

7. Liuzhou Lighting, a wholly-owned subsidiary of Nanning Liaowang, passed the review of high-tech enterprisein 2022 and obtained the certificate of high-tech enterprise (Certificate No.: GR202245001221). According torelevant regulations, Liuzhou Lighting will pay enterprise income tax at a reduced rate of 15% for three yearsstarting from 2022.

8. Liuzhou Fuxuan, a wholly-owned subsidiary of Nanning Liaowang, passed the review of high-tech enterpriseon 30 November 2021 and obtained the certificate of high-tech enterprise (Certificate No.: GR202145001045)approved by the Science and Technology Department of the Guangxi Zhuang Autonomous Region, theDepartment of Finance of Guangxi Zhuang Autonomous Region, and the Guangxi Zhuang Autonomous RegionTax Service of State Taxation Administration. According to relevant regulations, Liuzhou Fuxuan will payenterprise income tax at a reduced rate of 15% for three years starting from 2021.

9. Qingdao Lighting, a wholly-owned subsidiary of Nanning Liaowang, passed the review of high-tech enterpriseon 14 December 2022 and obtained the certificate of high-tech enterprise (Certificate No.: GR202237100785)approved by the Qingdao Municipal Science and Technology Bureau, the Qingdao Municipal Finance Bureau,and the Qingdao Municipal Tax Service of State Taxation Administration. According to relevant regulations,Qingdao Optoelectronics will pay enterprise income tax at a reduced rate of 15% for three years starting from2022.

10. Subsidiary NationStar Optoelectronics was recognized as a high-tech enterprise on 16 December 2008, and itscertificate number was GR200844000097. It was re-recognized as a high-tech enterprise in 2023, and its newcertificate number is GR202344017343. According to relevant regulations, NationStar Optoelectronics will payenterprise income tax at a reduced rate of 15% for three years starting from 2023.

11. NationStar Semiconductor, a wholly-owned subsidiary of NationStar Optoelectronics, was recognized as ahigh-tech enterprise on 10 October 2015, and its certificate number was GR201544001238. It was re-recognizedas a high-tech enterprise in 2021, and its new certificate number is GR202144008779. According to relevantregulations, NationStar Semiconductor will pay enterprise income tax at a reduced rate of 15% for three yearsstarting from 2021.

12. Fenghua Semiconductor, a majority-owned subsidiary of NationStar Optoelectronics, was recognized as ahigh-tech enterprise on 16 December 2008, and its certificate number was GR200844000295. It was re-recognizedas a high-tech enterprise in 2021, and its new certificate number is GR202144008851. According to relevantregulations, Fenghua Semiconductor will pay enterprise income tax at a reduced rate of 15% for three yearsstarting from 2021.

13. Indonesia Liaowang, a wholly-owned subsidiary of Nanning Liaowang, is located in the country whereIndonesia's statutory corporate income tax rate is 22%, and there are local incentives for medium, small and microenterprises to reduce or waive income tax by 50%, therefore, Indonesia Liaowang is subject to a preferential taxrate of 11% for the payment of enterprise income tax.

14. The subsidiary, Zhicheng Company, is a small and micro enterprise. From 1 January 2022 to 31 December2024, the people's governments of provinces, autonomous regions and municipalities directly under the CentralGovernment shall determine, in accordance with the actual situation in the region and the needs ofmacroeconomic regulation and control, that resource tax, urban maintenance and construction tax, property tax,urban land use tax, stamp duty (excluding stamp duty on securities transactions), arable land occupation tax andeducation surcharge and local education surcharge may be reduced within a tax range of 50% for small and microenterprises.

Annual Report 2023

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

ItemEnding balanceBeginning balance
Cash on hand42,466.7652,093.54
Bank deposits1,942,320,219.96766,180,952.79
Other monetary assets (note 1)466,064,741.94522,361,684.92
Money deposited in finance company (note 2)1,179,154,268.071,191,722,805.36
To-be-received interest (note 3)8,467,957.824,191,370.82
Total3,596,049,654.552,484,508,907.43
Of which: Total amount deposited overseas31,405,378.5634,169,227.46

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 “31. Assets with Restricted Ownership or Right of Use” inNote “VII Notes to Consolidated Financial Statements”).Note 2: Money deposited in finance company was those deposited in Guangdong Rising Finance Co., Ltd.Note 3: 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

ItemEnding balanceBeginning balance
Financial assets at fair value through profit or loss152,529,775.41261,541,896.45
Including:
Wealth management products151,550,477.63260,569,863.53
Equity instrument investments979,297.78972,032.92
Including:
Total152,529,775.41261,541,896.45

3. Derivative Financial Assets

Naught

Annual Report 2023

4. Notes Receivable

(1) Notes Receivable Listed by Category

Unit: RMB

ItemEnding balanceBeginning balance
Bank acceptance bill984,928,441.40786,244,513.66
Commercial acceptance bill72,423,826.2035,293,260.41
Total1,057,352,267.60821,537,774.07

(2) Disclosure by Withdrawal Methods for Bad Debts

Unit: RMB

CategoryEnding balanceBeginning balance
Carrying amountBad debt provisionCarrying valueCarrying amountBad debt provisionCarrying value
AmountProportionAmountWithdrawal proportionAmountProportionAmountWithdrawal proportion
Of which:
Notes receivable withdrawn bad debt provision by group1,058,830,304.87100.00%1,478,037.270.14%1,057,352,267.60822,258,044.69100.00%720,270.620.09%821,537,774.07
Of which:
Bank acceptance bill984,928,441.4093.02%0.000.00%984,928,441.40786,244,513.6695.62%0.000.00%786,244,513.66
Commercial acceptance bill73,901,863.476.98%1,478,037.272.00%72,423,826.2036,013,531.034.38%720,270.622.00%35,293,260.41
Total1,058,830,304.87100.00%1,478,037.270.14%1,057,352,267.60822,258,044.69100.00%720,270.620.09%821,537,774.07

Withdrawal of bad debt provision by group: RMB1,478,037.27

Unit: RMB

NameEnding balance
Carrying amountBad debt provisionWithdrawal proportion
Within 1 year73,901,863.471,478,037.272.00%
Total73,901,863.471,478,037.27

A description of the basis for determining the portfolio:

See Note V-13. Accounts Receivable.

Annual Report 2023

If adopting the general mode of expected credit loss to withdraw bad debt provision of notes receivable:

□Applicable ?Not applicable

(3) Bad Debt Provision Withdrawal, Reversed or Recovered in the Current PeriodWithdrawal of bad debt provision:

Unit: RMB

CategoryBeginning balanceChanges in the current periodEnding balance
WithdrawalReversed or recoveredVerificationOthers
Commercial acceptance bill720,270.62757,766.651,478,037.27
Total720,270.62757,766.651,478,037.27

Of which, bad debt provision collected or reversed with significant amount:

□Applicable ? Not applicable

(4) Notes Receivable Pledged by the Company at the Period-end

Unit: RMB

ItemEnding pledged amount
Bank acceptance bill734,739,569.87
Total734,739,569.87

(5) 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

ItemAmount of recognition termination at the period-endAmount of not terminated recognition at the period-end
Bank acceptance bill159,317,903.43138,535,986.93
Total159,317,903.43138,535,986.93

(6) Notes Receivable Written-off in Current Period

None

5. Accounts Receivable

(1) Disclosure by Aging

Unit: RMB

AgingEnding carrying amountBeginning carrying amount
Within 1 year (including 1 year)1,944,758,964.521,799,959,881.31
1 to 2 years151,569,005.90161,368,649.46
2 to 3 years99,249,444.3425,396,115.75
Over 3 years40,389,042.0257,529,219.10
3 to 4 years9,919,239.399,539,173.73

Annual Report 2023

4 to 5 years7,074,054.8230,412,705.43
Over 5 years23,395,747.8117,577,339.94
Total2,235,966,456.782,044,253,865.62

(2) Disclosure by Withdrawal Methods for Bad Debts

Unit: RMB

CategoryEnding balanceBeginning balance
Carrying amountBad debt provisionCarrying valueCarrying amountBad debt provisionCarrying value
AmountProportionAmountWithdrawal proportionAmountProportionAmountWithdrawal proportion
Accounts receivable withdrawn bad debt provision separately25,780,344.441.15%21,977,900.8585.25%3,802,443.5925,123,263.571.23%25,123,263.57100.00%0.00
Of which:
Accounts receivable withdrawn bad debt provision by group2,210,186,112.3498.85%120,489,275.535.45%2,089,696,836.812,019,130,602.0598.77%98,359,660.294.87%1,920,770,941.76
Of which:
(1) Business portfolio of general lighting and auto1,698,428,474.5675.96%109,583,622.276.45%1,588,844,852.291,499,783,089.8173.37%87,156,675.785.81%1,412,626,414.03

Annual Report 2023

lamps
(2) Business portfolio of LED packaging and components511,757,637.7822.89%10,905,653.262.13%500,851,984.52519,347,512.2425.40%11,202,984.512.16%508,144,527.73
Total2,235,966,456.78100.00%142,467,176.386.37%2,093,499,280.402,044,253,865.62100.00%123,482,923.866.04%1,920,770,941.76

Individual withdrawal of bad debt provision: RMB21,977,900.85There were no significant accounts receivable with bad debt provision separately accrued in the current period.Withdrawal of bad debt provision by group: RMB120,489,275.53

Unit: RMB

NameEnding balance
Carrying amountBad debt provisionWithdrawal proportion
(1) Business portfolio of general lighting and auto lamps1,698,428,474.56109,583,622.276.45%
(2) Business portfolio of LED packaging and components511,757,637.7810,905,653.262.13%
Total2,210,186,112.34120,489,275.53

Notes to the determination basis for the group:

See Note V-13. Accounts Receivable.If adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable:

□Applicable ?Not applicable

(3) Bad Debt Provision Withdrawal, Reversed or Recovered in the Current PeriodWithdrawal of bad debt provision:

Unit: RMB

CategoryBeginning balanceChanges in the current periodEnding balance
WithdrawnWrite-offs in prior periods and reversals in current periodsReversed or collectedVerifiedOther
Bad debt provision separately accrued25,123,263.5717,127,281.39573,448.9219,699,195.1921,977,900.85

Annual Report 2023

Bad debt provision withdrawn according to groups98,359,660.2932,550,591.11144,531.006,180,396.874,385,110.00120,489,275.53
Total123,482,923.8649,677,872.50144,531.00573,448.9225,879,592.064,385,110.00142,467,176.38

Of which, bad debt provision collected or reversed with significant amount: Naught.The amount of expected credit losses accrued in the current period was RMB49,677,872.50, the amount of priorperiod write-offs reversed in the current period was RMB144,531.00, the amount of expected credit lossesrecovered or reversed in the current period was RMB573,448.92, the amount of expected credit losses writtenoff in the current period was RMB25,879,592.06, and the amount of other reductions in the current period wasRMB4,385,110.00, which is RMB15,632.09 different from the amount of credit impairment loss accrued in thecurrent period of RMB49,088,791.49, which is due to the difference in translation of foreign currencystatements at the end of the period.

(4) Accounts Receivable Written-off in Current Period

Unit: RMB

ItemWritten-off amount
Accounts receivable actually written off25,968,850.45

Of which, verification of significant accounts receivable:

Unit: RMB

Name of the entityNatureAmountReasonProcedureWhether occurred because of related-party transactions
Customer 1Payment for goods11,170,827.14Final court judgment, no recovery expectedPerform the approval procedures in accordance with the Company’s bad debt management systemNot
Total11,170,827.14

Notes to verification of accounts receivable:

RMB25,968,850.45 of accounts receivable has been verified with the bad debt provision of RMB25,879,592.06,and the approval procedures have been performed in accordance with the Company’s bad debt managementsystem.

(5) Top 5 of the Ending Balance of the Accounts Receivable and the Contract Assets Collected accordingto Arrears Party

Unit: RMB

Name of the entityEnding balance of accounts receivableEnding balance of contract assetsEnding balance of accounts receivable and contract assetsProportion to total ending balance of accounts receivable andEnding balance of bad debt provision of accounts receivable and

Annual Report 2023

contract assetsimpairment provision for contract assets
No. 1152,154,428.66152,154,428.666.79%4,564,632.86
No. 2131,038,483.49131,038,483.495.84%3,931,154.50
No. 3117,177,579.94117,177,579.945.23%3,517,821.49
No. 4108,311,768.39108,311,768.394.83%3,249,353.05
No. 5103,803,612.42103,803,612.424.63%3,114,108.37
Total612,485,872.90612,485,872.9027.32%18,377,070.27

6. Contract Assets

(1) List of Contract Assets

Unit: RMB

ItemEnding balanceBeginning balance
Carrying amountBad debt provisionCarrying valueCarrying amountBad debt provisionCarrying value
Contract assets6,074,305.631,822,291.694,252,013.946,074,305.63607,430.565,466,875.07
Total6,074,305.631,822,291.694,252,013.946,074,305.63607,430.565,466,875.07

(2) Significant changes in the amount of carrying value and the reason in the Reporting PeriodThere was no significant change in carrying value in the Reporting Period.

(3) Disclosure by Withdrawal Methods for Bad Debts

Unit: RMB

CategoryEnding balanceBeginning balance
Carrying amountBad debt provisionCarrying valueCarrying amountBad debt provisionCarrying value
AmountProportionAmountWithdrawal proportionAmountProportionAmountWithdrawal proportion
Of which:
Bad debt provision withdrawn according to groups6,074,305.63100.00%1,822,291.6930.00%4,252,013.946,074,305.63100.00%607,430.5610.00%5,466,875.07
Of which:
Business portfolio of general lighting6,074,305.63100.00%1,822,291.6930.00%4,252,013.946,074,305.63100.00%607,430.5610.00%5,466,875.07

Annual Report 2023

and auto lamps
Total6,074,305.63100.00%1,822,291.6930.00%4,252,013.946,074,305.63100.00%607,430.5610.00%5,466,875.07

Withdrawal of bad debt provision by group: RMB1,822,291.69

Unit: RMB

NameEnding balance
Carrying amountBad debt provisionWithdrawal proportion
Business portfolio of general lighting and auto lamps6,074,305.631,822,291.6930.00%
Total6,074,305.631,822,291.69

Notes to the determination basis for the group:

See Note V-16. Contract Assets.Withdrawal of bad debt provision by adopting the general mode of expected credit loss

□Applicable ?Not applicable

(4) Bad Debt Provision Withdrawal, Reversed or Recovered in the Current Period

Unit: RMB

ItemWithdrawal of the current periodReversal or recovery in the Reporting PeriodWrite-off/verified for the current periodReason
Provision for impairment of contract assets1,214,861.13
Total1,214,861.13——

Of which significant amount of recovered or transferred-back bad debt provision for the current period: Naught.

(5) Contract Assets Written-off in Current Period

Naught.

7. Accounts Receivable Financing

(1) Accounts Receivable Financing Listed by Category

Unit: RMB

ItemEnding balanceBeginning balance
Bank acceptance bills443,201,960.02569,868,831.79
Total443,201,960.02569,868,831.79

(2) Disclosure by Withdrawal Methods for Bad Debts

None.The basis for the division of each stage and the withdrawal proportion of bad debt provisionSee Note V-13. Accounts Receivable.

Annual Report 2023

Notes to significant changes in the carrying amount of accounts receivable financing with amount changed ofloss provision in the current period:Naught

(3) Bad Debt Provision Withdrawal, Reversed or Recovered in the Current PeriodNone.

(4) Accounts Receivable Financing Pledged by the Company at the Period-end

Unit: RMB

ItemEnding pledged amount
Bank acceptance bills120,221,199.92
Total120,221,199.92

(5) Accounts Receivable Financing Which Had Endorsed by the Company or had Discounted and hadnot Due on the Balance Sheet Date at the Period-end

Unit: RMB

ItemAmount of recognition termination at the period-endAmount of not terminated recognition at the period-end
Bank acceptance bills382,666,660.54
Total382,666,660.54

(6) Accounts Receivable Financing with Actual Verification for the Current PeriodNone.

(7) The changes of accounts receivable financing in the Current Period and the changes in fair valueNone.

(8) Other Notes

None.

8. Other Receivables

Unit: RMB

ItemEnding balanceBeginning balance
Other receivables49,108,300.8532,902,865.98
Total49,108,300.8532,902,865.98

(1) Interest Receivable

1) Category of Interest Receivable

None.

Annual Report 2023

2) Significant Overdue Interest

None.

3) Disclosure by Withdrawal Methods for Bad Debts

□Applicable ?Not applicable

4) Bad Debt Provision Withdrawal, Reversed or Recovered in the Current PeriodNone.

5) Interest Receivable Written-off in Current Period

None.

(2) Dividend Receivable

1) Category of Dividend Receivable

None.

2) Significant Dividends Receivable Aging over 1 Year

None.

3) Disclosure by Withdrawal Methods for Bad Debts

□Applicable ?Not applicable

4) Bad Debt Provision Withdrawal, Reversed or Recovered in the Current Period: None.

5) Dividends Receivable Written-off in Current Period

None.

(3) Other Receivables

1) Category of Other Receivables by Account Nature

Unit: RMB

NatureEnding carrying amountBeginning carrying amount
Other current accounts65,389,794.8845,041,494.42
Performance bonds17,686,774.6814,472,948.78
Export VAT rebates4,708,061.8410,011,271.72
Staff loans and petty cash1,589,234.301,164,918.15
Rents and utilities817,043.941,220,591.91
Total90,190,909.6471,911,224.98

Annual Report 2023

2) Disclosure by Aging

Unit: RMB

AgingEnding carrying amountBeginning carrying amount
Within 1 year (including 1 year)46,054,067.5330,536,942.63
1 to 2 years7,676,026.752,955,796.80
2 to 3 years2,219,050.748,142,805.16
Over 3 years34,241,764.6230,275,680.39
3 to 4 years5,990,920.124,691,584.24
4 to 5 years4,583,526.141,234,886.46
Over 5 years23,667,318.3624,349,209.69
Total90,190,909.6471,911,224.98

3) Disclosure by Withdrawal Methods for Bad Debts

?Applicable □Not applicable

Unit: RMB

CategoryEnding balanceBeginning balance
Carrying amountBad debt provisionCarrying valueCarrying amountBad debt provisionCarrying value
AmountProportionAmountWithdrawal proportionAmountProportionAmountWithdrawal proportion
Bad debt provision separately accrued31,541,239.4734.97%31,541,239.47100.00%0.0030,105,899.4741.87%30,105,899.47100.00%0.00
Of which:
Withdrawal of bad debt provision by group58,649,670.1765.03%9,541,369.3216.27%49,108,300.8541,805,325.5158.13%8,902,459.5321.30%32,902,865.98
Of which:
Other receivables with bad debt provision based on a combination of credit risk characteristics58,649,670.1765.03%9,541,369.3216.27%49,108,300.8541,805,325.5158.13%8,902,459.5321.30%32,902,865.98
Total90,190,909.64100.00%41,082,608.7945.55%49,108,300.8571,911,224.98100.00%39,008,359.0054.25%32,902,865.98

Bad debt provision separately accrued: RMB31,541,239.47

Annual Report 2023

Unit: RMB

NameBeginning balanceEnding balance
Carrying amountBad debt provisionCarrying amountBad debt provisionWithdrawal proportionReason for withdraw
Customer A20,000,000.0020,000,000.0020,000,000.0020,000,000.00100.00%It is not expected that the money will be recovered
Total20,000,000.0020,000,000.0020,000,000.0020,000,000.00

Withdrawal of bad debt provision by group: RMB9,541,369.32

Unit: RMB

NameEnding balance
Carrying amountBad debt provisionWithdrawal proportion
Other receivables with bad debt provision based on a combination of credit risk characteristics58,649,670.179,541,369.3216.27%
Total58,649,670.179,541,369.32

Notes to the determination basis for the group:

See Note V-13. Accounts Receivable.Withdrawal of bad debt provision by adopting the general mode of expected credit loss:

Unit: RMB

Bad debt provisionFirst stageSecond stageThird stageTotal
Expected credit loss in the next 12 monthsExpected loss in the duration (credit impairment not occurred)Expected loss in the duration (credit impairment occurred)
Balance of 1 January 2023584,406.204,785,285.1333,638,667.6739,008,359.00
Balance of 1 January 2023 in the current period
Withdrawal of the current period758,317.723,418,394.08-1,881,025.742,295,686.06
Verification of the current period221,436.27221,436.27
Balance of 31 December 20231,342,723.927,982,242.9431,757,641.9341,082,608.79

The basis for the division of each stage and the withdrawal proportion of bad debt provisionSee Note V-13. Accounts Receivable.Changes of carrying amount with significant amount changed of loss provision in the current period

□Applicable ?Not applicable

4) Bad Debt Provision Withdrawn, Reversed or Recovered in the Current PeriodWithdrawal of bad debt provision:

Unit: RMB

CategoryBeginningChanges in the current periodEnding balance

Annual Report 2023

balanceWithdrawalReversed or recoveredCharged-off/Written-offOthers
Other receivables39,008,359.002,295,686.06221,436.2741,082,608.79
Total39,008,359.002,295,686.06221,436.2741,082,608.79

The amount of expected credit losses accrued during the current period was RMB2,295,686.06, 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 RMB221,436.27, which was RMB11,189.99different from the amount of credit impairment loss on other receivables accrued during the current period ofRMB2,284,496.07, which was due to the difference in translation of foreign currency statements at the end ofthe current period.

Of which the bad debt provision recovered or transferred-back with significant amount during the current period:

None.

5) Particulars of the Actual Verification of Other Receivables during the Current Period

Unit: RMB

ItemWritten-off amount
Customer A221,436.27

Of which the verification of significant other receivables: None.

6) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party

Unit: RMB

Name of the entityNatureEnding balanceAgingProportion to total ending balance of other receivables %Ending balance of bad debt provision
No. 1Other intercourse accounts20,000,000.00Within 5 years22.18%20,000,000.00
No. 2Other intercourse accounts15,883,375.00Within 1 year17.61%476,501.25
No. 3Other intercourse accounts5,000,000.001-2 years5.54%5,000,000.00
No. 4VAT export tax refunds4,708,061.84Within 1 years5.22%141,241.86
No. 5Other intercourse accounts4,289,457.983-4 years4.76%4,289,457.98
Total49,880,894.8255.31%29,907,201.09

7) Presentation in Other Receivables due to the Centralized Management of FundsNone.

9. Prepayment

(1) Prepayment Listed by Aging Analysis

Unit: RMB

Annual Report 2023

AgingEnding balanceBeginning balance
AmountProportionAmountProportion
Within 1 year27,750,424.9180.42%36,419,452.2180.00%
One to two years3,496,897.7210.13%3,345,048.707.35%
Two to three years665,594.011.93%3,313,296.207.28%
More than three years2,595,722.287.52%2,448,751.825.37%
Total34,508,638.9245,526,548.93

Notes of the reasons of the prepayment aging over 1 year with significant amount but failed settled in time:

None.

(2) Top 5 Prepayment in Ending Balance Collected according to the Prepayment TargetUnit: RMB

Name of unitsRelationship with the CompanyEnding balanceAgingProportion to total prepayments (%)
No. 1Non-Related Party7,000,000.00Within 1 year20.28%
No. 2Non-Related Party2,637,285.53Within 1 year7.64%
No. 3Non-Related Party2,502,468.00Within 1 year7.25%
No. 4Non-Related Party1,813,361.52Within 1 year5.25%
No. 5Non-Related Party1,479,646.01Within 1 year4.29%
Total15,432,761.0644.71%

10. Inventories

Whether the Company needs to comply with the disclosure requirements for the real estate industryNo

(1) Category of Inventory

Unit: RMB

ItemEnding balanceBeginning balance
Carrying amountDepreciation reserves of inventories or impairment provision for contract performance costsCarrying valueCarrying amountDepreciation reserves of inventories or impairment provision for contract performance costsCarrying value
Raw materials305,927,108.2813,862,774.27292,064,334.01414,134,452.556,893,242.38407,241,210.17
Goods in process247,880,117.38247,880,117.38239,412,167.33239,412,167.33
Inventory goods1,051,891,889.47146,951,222.27904,940,667.201,019,990,159.16139,368,445.90880,621,713.26
Goods in transit425,003,429.619,197,980.38415,805,449.23391,149,213.499,805,170.06381,344,043.43
Semi-finished96,957,960.114,480,118.2592,477,841.86113,621,240.54914,242.37112,706,998.17

Annual Report 2023

goods
Low-value consumables1,322,185.781,322,185.782,742,435.822,742,435.82
Others16,681,045.6816,681,045.687,568,833.697,568,833.69
Total2,145,663,736.31174,492,095.171,971,171,641.142,188,618,502.58156,981,100.712,031,637,401.87

(2) Falling Price Reserves of Inventory and Impairment Reserves for Contract Performance Costs

Unit: RMB

ItemBeginning balanceIncreased amount of the current periodDecreased amount for the current periodEnding balance
WithdrawalOthersTransferred-back or charged-offOthers
Raw materials6,893,242.3810,828,363.663,858,831.7713,862,774.27
Inventory goods139,368,445.9057,603,756.7750,020,980.40146,951,222.27
Goods in transit9,805,170.063,329,081.693,936,271.379,197,980.38
Semi-finished goods914,242.373,673,839.38107,963.504,480,118.25
Total156,981,100.7175,435,041.5057,924,047.04174,492,095.17

Provision for decline in value of inventories by portfolioNone.Criteria for making provision for decline in value of inventories by portfolioSee Note V-17. Inventory.

(3) Notes to the Ending Balance of Inventories Including Capitalized Borrowing ExpenseNaught

(4) Amortization Amount of Contract Performance Cost during the Reporting PeriodNaught

11. Held-for-sale Assets

Unit: RMB

ItemEnding carrying amountImpairment provisionEnding carrying amountFair valueEstimated disposal expenseEstimated disposal time
Houses, buildings and land involved in expropriation17,147,339.8417,147,339.84183,855,895.0055,718,333.9531 December 2024
Total17,147,339.8417,147,339.84183,855,895.0055,718,333.95

Other notes:

Annual Report 2023

Note: For details, see Part X-XVIII.Other Major Events-8.Other: "Demolition Matters of Nanjing Fozhao" ofthis Report. The estimated disposal costs include employee resettlement fees, compensation for the terminationof the 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

ItemEnding balanceBeginning balance
Input tax of VAT to be certified and deducted94,451,130.8072,851,826.53
Advance payment of enterprise income tax11,454,058.943,676,607.32
Others3,387,209.402,910,143.04
Total109,292,399.1479,438,576.89

14. Investments in debt obligations

Naught.

15. Other Investments in Debt Obligations

(1) List of Other Investments in Debt Obligations

Unit: RMB

ItemBeginning balanceAccrued interestInterest adjustmentChange in fair value in the reporting periodEnding balanceCostAccumulated changes in fair valueAccumulated impairment provision recognized in other comprehensive incomeNotes
Large Bank Certificates of Deposit4,822,905.25454,822,905.25450,000,000.00Large Bank Certificates of Deposit
Total4,822,905.25454,822,905.25450,000,000.00

Changes in the impairment provision for other investments in debt obligations during the current period: Naught.

(2) Significant Other Investments in Debt Obligations at the Period-end

Unit: RMB

ItemEnding balanceBeginning balance

Annual Report 2023

Par valueCoupon rateActual interest rateMaturity dateOverdue principalPar valueCoupon rateActual interest rateMaturity dateOverdue principal
Large bank certificates of deposit in China Everbright Bank100,000,000.003.30%3.30%6 January 2026
Large bank certificates of deposit in Bank of Communications50,000,000.002.90%2.90%31 August 2026
Large bank certificates of deposit in China Everbright Bank150,000,000.002.90%2.90%3 November 2026
Large bank certificates of deposit in Bank of Guangzhou150,000,000.002.95%2.95%1 December 2026
Total450,000,000.00

(3) Status of Accrued Depreciation Reserves

Naught.The basis for the division of each stage and the withdrawal proportion of bad debt provisionSee Note V-17. Other Investments in Debt Obligations.

(4) Status of Other Investments in Debt Obligations Written-off in Current PeriodNaught.

16. Other Equity Instrument Investment

Unit: RMB

Annual Report 2023

Project nameEnding balanceBeginning balanceGains recorded in other comprehensive income in the current periodLosses recorded in other comprehensive income in the current periodAccumulative gains recorded in other comprehensive income in the current periodAccumulative losses recorded in other comprehensive income in the current periodDividend income recognized in current yearReason for assigning to measure in fair value of which changes included other comprehensive income
Gotion High-tech Co., Ltd.368,376,506.50493,967,194.53125,590,688.03285,362,021.37Non-trading equity instruments
Xiamen Bank Co.,Ltd.290,807,671.05328,664,290.9537,856,619.90137,850,064.2216,633,969.35Non-trading equity instruments
Guangdong Rising Finance Co., Ltd.30,000,000.0030,000,000.00144,753.13Non-trading equity instruments
Beijing Guangrong Lianmeng Semiconductor lighting Industry Investment Center(L.P.)7,078,568.808,059,860.92394,575.79Non-trading equity instruments
Foshan Nanhai District United Guangdong New Light Source Industry Innovation Center3,000,000.003,000,000.00Non-trading equity instruments
China Guangfa Bank Co.,Ltd.500,000.00500,000.00Non-trading equity instruments
Total699,762,746.35864,191,346.40163,447,307.93423,212,085.5917,173,298.27

Non-trading equity instrument investment in the Current Period disclosed by items

Unit: RMB

Project nameDividend income recognizedAccumulative gainsAccumulative lossesAmount of other comprehensive income transferred to retained earningsReason for assigning to measure in fair value of which changes included other comprehensiveReason for other comprehensive income transferred to retained earnings

Annual Report 2023

income
Gotion High-tech Co., Ltd.285,362,021.37Not satisfied with the condition of trading equity instrumentN/A
Xiamen Bank Co.,Ltd.16,633,969.35137,850,064.22Not satisfied with the condition of trading equity instrumentN/A
Guangdong Rising Finance Co., Ltd.144,753.13148,834.09Not satisfied with the condition of trading equity instrumentN/A
Beijing Guangrong Lianmeng Semiconductor lighting Industry Investment Center(L.P.)394,575.79995,839.20Not satisfied with the condition of trading equity instrumentN/A
Total17,173,298.27424,356,758.88

17. Long-term Receivables

None.

18. Long-term Equity Investment

Unit: RMB

InvesteeBeginning balance (carrying value)Beginning balance of depreciation reserveIncrease/decrease for the current periodEnding balance (Carrying value)Ending balance of depreciation reserve
Additional investmentReduced investmentGains and losses recognized under the equity methodAdjustment of other comprehensive incomeChanges of other equityCash bonus or profits announced to issueWithdrawal of impairment provisionOthers
I. Joint ventures
II. Associated enterprises
Shenzhen Primatronix181,931,792.661,833,621.594,576,859.10179,188,555.15

Annual Report 2023

(Nanho) Electronics Ltd.
Subtotal181,931,792.661,833,621.594,576,859.10179,188,555.15
Total181,931,792.661,833,621.594,576,859.10179,188,555.15

The recoverable amount is determined based on the net amount of the fair value minus disposal costs

□Applicable ? Not applicable

The recoverable amount is determined by the present value of the forecasted future cash flow.

□Applicable ? Not applicable

The reason for the discrepancy between the foregoing information and the information used in the impairmenttests in prior years or external informationNone.The reason for the discrepancy between the information used in the Company's impairment tests in prior yearsand the actual situation of those yearsNone.Other notes:

None.

19. Other Non-current Financial Assets

None.

20. Investment Property

(1) Investment Property Adopting the Cost Measurement Mode

?Applicable □Not applicable

Unit: RMB

ItemHouses and buildingsLand use rightConstruction in progressTotal
I. Original carrying value
1. Beginning balance54,404,787.7854,404,787.78
2. Increased amount of the period150,591,407.72150,591,407.72
(1) Transfer from150,591,407.72150,591,407.72

Annual Report 2023

inventories/fixed assets/construction in progress
3. Decreased amount of the period36,927.8236,927.82
(1) Disposal
(2) Other transfer36,927.8236,927.82
4. Ending balance204,959,267.68204,959,267.68
II. Accumulative depreciation and accumulative amortization
1. Beginning balance9,792,905.349,792,905.34
2. Increased amount of the period31,537,532.3831,537,532.38
(1) Withdrawal or amortization2,646,740.402,646,740.40
(2) Transfer from inventories/fixed assets/construction in progress28,890,791.9828,890,791.98
3. Decreased amount of the period7,517.457,517.45
(1) Disposal
(2) Other transfer7,517.457,517.45
4. Ending balance41,322,920.2741,322,920.27
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 value163,636,347.41163,636,347.41
2. Beginning carrying value44,611,882.4444,611,882.44

The recoverable amount is determined based on the net amount of the fair value minus disposal costs

□Applicable ?Not applicable

Annual Report 2023

The recoverable amount is determined by the present value of the forecasted future cash flow.

□Applicable ?Not applicable

The reason for the discrepancy between the foregoing information and the information used in the impairmenttests in prior years or external informationNone.The reason for the discrepancy between the information used in the Company's impairment tests in prior yearsand the actual situation of those yearsNone.Other notes:

None.

(2) Investment Property Adopting the Fair Value Measurement Mode

□Applicable ?Not applicable

(3) Projects Converted to Investment Properties and Measured at Fair ValueNone.

(4) Investment Property Failed to Accomplish Certification of PropertyAs of 31 December 2023, the relevant property certificates for the LED workshop and R&D Workshop 18 arestill in progress. The Management believes that obtaining such property certificates is not subject to anysubstantive legal obstacles and has no significant adverse impact on the Company's normal operations.

21. Fixed Assets

Unit: RMB

ItemEnding balanceBeginning balance
Fixed assets3,451,760,127.913,505,729,627.80
Disposal of fixed assets1,454,458.562,364,654.61
Total3,453,214,586.473,508,094,282.41

(1) List of Fixed Assets

Unit: RMB

ItemHouses and buildingsMachinery equipmentTransportation equipmentElectronic equipmentOther (Note:1)Total
I. Original carrying value
1. Beginning balance1,945,505,958.755,026,525,744.0842,934,087.9471,546,378.9787,232,491.327,173,744,661.06

Annual Report 2023

2. Increased amount of the period369,265,899.26209,783,265.812,896,830.7910,768,640.757,350,983.81600,065,620.42
(1) Purchase2,788,391.1457,421,879.452,859,707.979,386,540.891,418,317.8673,874,837.31
(2) Transfer from construction in progress366,354,362.53152,003,021.7831,269.931,381,883.855,893,496.89525,664,034.98
(3) Others (note 2)123,145.59358,364.585,852.89216.0139,169.06526,748.13
3. Decreased amount of the period154,893,207.72105,816,523.057,316,862.649,434,277.872,817,763.13280,278,634.41
(1) Disposal or scrap4,301,800.00105,617,797.747,316,862.649,399,568.302,483,792.00129,119,820.68
(2) Equipment transformation198,725.3148,132.14246,857.45
(3) Others (note 2)150,591,407.7234,709.57285,838.99150,911,956.28
4. Ending balance2,159,878,650.295,130,492,486.8438,514,056.0972,880,741.8591,765,712.007,493,531,647.07
II. Accumulative depreciation
1. Beginning balance721,782,611.672,779,752,635.5333,394,916.4052,921,576.9368,688,348.723,656,540,089.25
2. Increased amount of the period83,404,382.14422,084,858.452,519,961.627,429,107.418,041,875.45523,480,185.07
(1) Withdrawal83,373,391.93419,658,581.832,514,167.257,255,898.578,016,526.36520,818,565.94
(2) Transfer from construction in progress2,156,252.87172,995.002,329,247.87
(3) Others (note 2)30,990.21270,023.755,794.37213.8425,349.09332,371.26
3. Decreased amount of the period32,977,501.9894,570,266.866,965,526.018,946,389.332,593,787.64146,053,471.82
(1) Disposal or scrap4,086,710.0094,420,760.306,965,526.018,925,455.212,314,279.72116,712,731.24
(2) Equipment transformation149,506.5647,553.86197,060.42

Annual Report 2023

(3) Others (note)28,890,791.9820,934.12231,954.0629,143,680.16
4. Ending balance772,209,491.833,107,267,227.1228,949,352.0151,404,295.0174,136,436.534,033,966,802.50
III. Depreciation reserves
1. Beginning balance11,129,431.9469.83343,855.061,587.1811,474,944.01
2. Increased amount of the period3,051,223.5517,954.0421,683.333,090,860.92
(1) Withdrawal3,051,223.5517,954.0421,683.333,090,860.92
3. Decreased amount of the period6,379,770.4118,023.87362,500.40793.596,761,088.27
(1) Disposal or scrap6,379,770.4118,023.87362,500.40793.596,761,088.27
4. Ending balance7,800,885.083,037.99793.597,804,716.66
IV. Carrying value
1. Ending carrying value1,387,669,158.462,015,424,374.649,564,704.0821,473,408.8517,628,481.883,451,760,127.91
2. Beginning carrying value1,223,723,347.082,235,643,676.619,539,101.7118,280,946.9818,542,555.423,505,729,627.80

Note 1: Fixed assets-Other refers to the cooling system and sewage treatment station of NationStarOptoelectronics and tools of Nanning Liaowang, etc.Note 2: Other increases or decreases in gross amount and accumulated depreciation are due to the addition ofbuilding accessories and classification of houses and buildings leased out to investment properties during thecurrent period.

(2) List of Temporarily Idle Fixed Assets

None.

(3) Fixed Assets Leased out by Operation Lease

None.

(4) Fixed Assets Failed to Accomplish Certification of Property

Other notes:

Annual Report 2023

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, R&D Workshop 11 to 14, and Kelian Building have been completed and put into useand carried forward fixed assets. As of 31 December 2023, the relevant real estate licenses are being processed.The management believed that there are no substantive legal barriers to the handling of these title certificates,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 (30) Othernon-current assets.

(5) Impairment Test of Fixed Assets

?Applicable □Not applicableThe recoverable amount is determined based on the net amount of the fair value minus disposal costs?Applicable □Not applicableThe recoverable amount is determined by the present value of the forecasted future cash flow?Applicable □Not applicableIn 2023, the Company accrued a total impairment provision for fixed assets of RMB3,090,860.92. Specifically,impairment tests were conducted on fixed assets that were severely worn due to prolonged use or becameobsolete due to product upgrades. Relevant assets were impaired, and their recoverable amount was estimatedbased on the fair value and disposal costs determined by reference to the recent disposal and recovery rate ofsimilar assets. The Company accrued an impairment provision of RMB3,090,860.92 based on the higherbetween the net amount of fair value less disposal costs and the present value of expected future cash flows forthe relevant asset groups.The reason for the discrepancy between the foregoing information and the information used in the impairmenttests in prior years or external informationNone.The reason for the discrepancy between the information used in the Company’s impairment tests in prior yearsand the actual situation of those yearsNone.Other notes:

None.

(6) Proceeds from Disposal of Fixed Assets

Unit: RMB

Annual Report 2023

ItemEnding balanceBeginning balance
Applying for scrapping up disposed equipment1,454,458.562,364,654.61
Total1,454,458.562,364,654.61

22. Construction in progress

Unit: RMB

ItemEnding balanceBeginning balance
Construction in progress1,174,533,505.111,282,780,335.14
Total1,174,533,505.111,282,780,335.14

(1) List of Construction in Progress

Unit: RMB

ItemEnding balanceBeginning balance
Carrying amountDepreciation reservesCarrying valueCarrying amountDepreciation reservesCarrying value
Construction in progress1,176,061,060.101,527,554.991,174,533,505.111,284,307,890.131,527,554.991,282,780,335.14
Total1,176,061,060.101,527,554.991,174,533,505.111,284,307,890.131,527,554.991,282,780,335.14

(2) Changes in Significant Construction in Progress during the Reporting Period

Unit: RMB

ItemBudgetBeginning balanceIncreased amountTransferred in fixed assetsOther decreased amountEnding balanceProportion of accumulative investment in constructions to budgetJob scheduleAccumulative amount of interest capitalizationOf which: amount of capitalized interests for the Reporting PeriodCapitalization rate of interests for the Reporting PeriodCapital resources
The Project of the Geely Industrial Park1,714,546,700.00421,308,508.5567,490,008.0720,843,008.94467,955,507.6831.31%31.31%562,363.10524,527.282.74%Self-financing and Borrowing
Kelian Building726,738,900.00566,254,746.6111,377,600.17311,813,594.94265,818,751.8489.82%93.00%36,640,953.02Self-financing and

Annual Report 2023

Borrowing
FSLHainan Industrial Park I310,400,000.0037,522,769.10127,615,662.62165,138,431.7257.99%61.00%Raised funds and self-financing (note)
Gaoming office building212,135,300.0073,222,239.6991,554,905.79164,777,145.4884.67%90.00%Self-financing
Total2,963,820,900.001,098,308,263.95298,038,176.65332,656,603.881,063,689,836.7237,203,316.12524,527.282.74%

Note: The Company pre-invested FSLHainan Industrial Park I Project with self-raised funds and replaced itwith raised funds in accordance with relevant regulations. For details, please refer to the Announcement onReplacing the Pre-invested Fund-raising Project with Raised Funds and the Self-raised Funds Paid for Issuancedisclosed by the Company on the website of Cninfo.

(3) List of the Withdrawal of the Depreciation Reserves for Construction in ProgressNone.

(4) Impairment Test of Construction in Progress

□Applicable ?Not applicable

(5) Engineering Materials

None.

23. Productive Living Assets

(1) Productive Living Assets Adopting Cost Measurement Mode

□Applicable ? Not applicable

(2) Impairment Test of Productive Living Assets Adopting Cost Measurement Mode

□Applicable ? Not applicable

(3) Productive Living Assets Adopting Fair Value Measurement Mode

□Applicable ? Not applicable

Annual Report 2023

24. Oil and Gas Assets

□Applicable ? Not applicable

25. Right-of-use Assets

(1) List of Right-of-use Assets

Unit: RMB

ItemHouses and buildingsLand use rightTotal
I. Original carrying value
1. Beginning balance21,717,402.9519,090,760.3840,808,163.33
2. Increased amount of the period3,188,849.133,188,849.13
(1) Leased in3,188,849.133,188,849.13
3. Decreased amount of the period8,094,667.9919,090,760.3827,185,428.37
(1) Disposal8,094,667.9919,090,760.3827,185,428.37
4. Ending balance16,811,584.0916,811,584.09
II. Accumulated amortization
1. Beginning balance9,106,242.6218,654,192.9827,760,435.60
2. Increased amount of the period6,972,330.58436,567.407,408,897.98
(1) Withdrawal6,972,330.58436,567.407,408,897.98
3. Decreased amount of the period8,079,309.7519,090,760.3827,170,070.13
(1) Disposal8,079,309.7519,090,760.3827,170,070.13
4. Ending balance7,999,263.457,999,263.45
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 value8,812,320.648,812,320.64
2. Beginning carrying value12,611,160.33436,567.4013,047,727.73

(2) Impairment Test of Right-of-use Assets

□Applicable ?Not applicable

Annual Report 2023

26. Intangible Assets

(1) List of Intangible Assets

Unit: RMB

ItemLand use rightPatentNon-patent technologySoftware use rightOthers (note 1)Total
I. Original carrying value
1. Beginning balance408,013,759.6924,198,472.7435,318,404.4449,109.90467,579,746.77
2. Increased amount of the period83,156,556.1029,504.9539,936,144.08123,122,205.13
(1) Purchase350,661.1029,504.9539,936,144.0840,316,310.13
(2) Transfer from construction in progress82,805,895.0082,805,895.00
3. Decreased amount of the period388,613.8749,109.90437,723.77
(1) Disposal388,613.8749,109.90437,723.77
4. Ending balance491,170,315.7924,227,977.6974,865,934.65590,264,228.13
II. Accumulated amortization
1. Beginning balance86,226,483.3324,002,566.6416,746,120.6649,109.90127,024,280.53
2. Increased amount of the period23,400,548.88182,585.295,156,009.3428,739,143.51
(1) Withdrawal8,800,845.96182,585.295,156,009.3414,139,440.59
(2) Transfer from construction in progress14,599,702.9214,599,702.92
3. Decreased amount of the period49,109.9049,109.90
(1) Withdrawal49,109.9049,109.90
4. Ending109,627,032.2124,185,151.9321,902,130.00155,714,314.14

Annual Report 2023

balance
III. Depreciation reserves
1. Beginning balance388,613.87388,613.87
2. Increased amount of the period
(1) Withdrawal
3. Decreased amount of the period388,613.87388,613.87
(1) Disposal388,613.87388,613.87
4. Ending balance
IV. Carrying value
1. Ending carrying value381,543,283.5842,825.7652,963,804.65434,549,913.99
2. Beginning carrying value321,787,276.36195,906.1018,183,669.91340,166,852.37

The proportion of intangible assets formed from the internal R&D of the Company at the period-end to theending balance of intangible assets was 0.00%.

(2) Land Use Right with Certificate of Title Uncompleted

None.

Othere notes:

Note 1: The intangible assets-other: mianly refer to the emission permit of Nanning Liaowang confirmed in2022.Note 2: The amortization of intangible assets in the current period amounted to RMB14,139,440.59, of whichRMB237,526.66 was included in the construction in progress.

(3) Impairment Test of Intangible Assets

□Applicable ?Not applicable

Annual Report 2023

27. Goodwill

(1) Original Carrying Value of Goodwill

Unit: RMB

Name of the invested units or events generating goodwillBeginning balanceIncreaseDecreaseEnding balance
Formed by business combinationDisposal
Nanning Liaowang Auto Lamp Co., Ltd.16,211,469.8216,211,469.82
Foshan NationStar Optoelectronics Co., Ltd.405,620,123.64405,620,123.64
Total421,831,593.46421,831,593.46

Note: As for the M&A of NationStar Optoelectronics in 2014 by Guangdong Electronics Information IndustryGroup Ltd., the wholly-owned subsidiary of Guangdong Rising Holdings Group Co., Ltd., the differencebetween the fair value and the net assets attributable to the shareholders of the listed company on the date ofacquisition of NationStar Optoelectronics formed goodwill of RMB405,620,123.64.

(2) Goodwill Impairment Provisions

None.

(3) Information on the Assets Groups or Combination of Assets Groups which Goodwill Belongs toThe Company's Management determines the asset group or combination of asset groups based on the minimumcombination of assets that can independently generate cash inflows under the management or monitoring ofproduction and operating activities. The criteria for determining asset groups or combinations of asset groupsare consistent with those of previous years.Other notesNone.

(4) Specific Method of Determining the Recoverable Amount

The recoverable amount is determined based on the net amount of the fair value minus disposal costs

□Applicable ?Not applicable

The recoverable amount is determined by the present value of the forecasted future cash flow?Applicable □Not applicable

1. Process and Key Parameters of Goodwill Impairment Test:

When conducting an impairment test on goodwill, the Company compares the book value of the relevant assetgroup (including goodwill) with its recoverable amount to determine whether goodwill impairment should beaccrued. The recoverable amount of the asset group is determined based on the present value of expected futurecash flows. The present value of the cash flow is estimated by the Company's Management based on the future

Annual Report 2023

cash flows over a five-year detailed forecast period and subsequent stable periods. The estimated future cashflows during the detailed forecast period are determined based on the business plan developed by theManagement. The estimated future cash flows during the subsequent stable period are determined based on thelevel of the last year of the detailed forecast period. The key assumptions used by the Company in estimatingthe present value of future cash flows include business volume growth rate and discount rate. The pre-taxdiscount rate used in 2023 was 9.83% and 11.07%, ,and the growth rate during the detailed forecast period wasbetween 5%-20.54%. When determining parameters related to each key assumption, the Company'sManagement referred to the Company's historical experience or external information sources.

2. Impact of the Goodwill Impairment Test

The goodwill impairment test conducted by the Company in this period has no impact on the financialstatements.The reason for the discrepancy between the foregoing information and the information used in the impairmenttests in prior years or external informationNone.The reason for the discrepancy between the information used in the Company’s impairment tests in prior yearsand the actual situation of those yearsNone.

(5) Completion of Commitments to Results and Corresponding Goodwill ImpairmentWhen goodwill is formed, there is a commitment to the results and the reporting period or the period precedingthe reporting period is within the commitment period

□Applicable ?Not applicable

28. Long-term Prepaid Expense

Unit: RMB

ItemBeginning balanceIncreased amount of the current periodAmortization amount of the current periodOther decreased amountEnding balance
Mould123,701,355.8481,670,138.2043,208,573.0531,833,330.25130,329,590.74
Expense on maintenance and decoration53,937,007.6817,253,561.6422,044,249.2849,146,320.04
Boarding box371,728.64604,711.36308,501.04667,938.96
Other12,116,535.756,318,284.908,215,971.1410,218,849.51
Total190,126,627.91105,846,696.1073,777,294.5131,833,330.25190,362,699.25

29. Deferred Income Tax Assets/Deferred Income Tax Liabilities

(1) Deferred Income Tax Assets that Had not Been Off-set

Unit: RMB

ItemEnding balanceBeginning balance
Deductible temporary differenceDeferred income tax assetsDeductible temporary differenceDeferred income tax assets

Annual Report 2023

Provision for impairment of assets390,622,029.7159,298,411.33355,634,218.1653,741,627.33
Unrealized profit of internal transactions37,737,392.895,660,608.9452,989,043.647,948,356.52
Deductible loss124,708,331.4922,015,171.6672,901,011.6512,503,679.82
Depreciation of fixed assets54,793,929.618,219,089.4457,459,943.558,618,991.55
Estimated cost46,135,701.476,920,355.2214,405,700.072,160,855.01
Accrued liabilities14,277,087.302,141,563.099,579,783.061,436,967.46
Change in fair value of trading financial assets751,107.32112,666.105,013,923.26752,088.49
Long-term deferred expenses3,888,860.58583,329.09
Lease liabilities and others12,750,617.721,915,901.1716,534,532.142,498,110.14
Total681,776,197.51106,283,766.95588,407,016.1190,244,005.41

(2) Deferred Income Tax Liabilities Had not Been Off-set

Unit: RMB

ItemEnding balanceBeginning balance
Taxable temporary differenceDeferred income tax liabilitiesTaxable temporary differenceDeferred income tax liabilities
Assets assessment appreciation from business consolidation not under the same control83,667,098.6012,550,064.7988,576,232.7313,286,434.92
Changes in fair value of other investments in equity instruments417,362,085.5962,604,312.84580,809,393.5187,121,409.03
One-off depreciation of fixed assets649,066,960.9897,598,859.53680,398,140.98102,059,721.15
Changes in the fair value of trading financial assets1,559,845.00233,976.7514,216.682,132.50
Right-of-use assets and others12,108,349.601,819,532.3412,943,263.711,958,578.35
Total1,163,764,339.77174,806,746.251,362,741,247.61204,428,275.95

(3) Deferred Income Tax Assets or Liabilities Listed by Net Amount after Off-set

Unit: RMB

ItemMutual set-off amount of deferred income tax assets and liabilities at the period-endAmount of deferred income tax assets or liabilities after off-set at the period-endMutual set-off amount of deferred income tax assets and liabilities at the period-beginAmount of deferred income tax assets or liabilities after off-set at the period-begin
Deferred income tax assets106,283,766.9590,244,005.41

Annual Report 2023

Deferred income tax liabilities174,806,746.25204,428,275.95

(4) List of Unrecognized Deferred Income Tax Assets

None.

(5) Deductible Losses of Unrecognized Deferred Income Tax Assets will Due in the Following YearsNone.

30. Other Non-current Assets

Unit: RMB

ItemEnding balanceBeginning balance
Carrying amountImpairment provisionCarrying valueCarrying amountImpairment provisionCarrying value
Long-term assets to be disposed (note 1)41,955,426.1741,955,426.1736,553,212.6436,553,212.64
Advance payment for equipment and project40,991,898.7340,991,898.7344,132,869.2644,132,869.26
Advance payment for long-term assets acquisition36,085,714.0036,085,714.00
Prepayments for equity acquisition10,000,000.0010,000,000.0010,000,000.0010,000,000.00
Assets of subsidiaries to be cleared and cancelled613,072.43613,072.43
Other294,664.28294,664.28244,358.52244,358.52
Total129,327,703.1810,000,000.00119,327,703.1891,543,512.8510,000,000.0081,543,512.85

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 governmentsuccessfully sells the plots through a public auction, the Company will be given the compensation for the landtransfer according to the policy. The buildings and constructions to be revitalized include the plant of LEDWorkshop 3, the added plant of LED Workshop 3, South Plant (single-end workshop), North Plant (4 buildings),spark plug workshop of energy-saving lamps warehouse, T8 Workshop 1 (Building 2), LED Workshop 2,Iodine Lamp Workshop 3155m (building 14), the Company's new finished goods warehouse 3662M2, materialswarehouse (east end of single-end workshop), North Zone LPG station , T5 warehouse in the North Zone, etc.

31. Assets with Restricted Ownership or Right of Use

Annual Report 2023

Unit: RMB

ItemPeriod-endPeriod-beginning
Carrying amountCarrying valueType of restrictionStatus of restrictionCarrying amountCarrying valueType of restrictionStatus of restriction
Monetary assets486,328,752.85486,328,752.85Restricted useNote deposits, bond deposits, pre-sale of properties, etc.534,826,528.99534,826,528.99Restricted useNote deposits, bond deposits, pre-sale of properties, etc.
Notes receivable873,275,556.80873,275,556.80Pledged, endorsed or discounted but not maturedPledge of note pool, notes receivable endorsed or discounted but not matured751,280,639.50751,280,639.50Pledged, endorsed or discounted but not maturedPledge of note pool, notes receivable endorsed or discounted but not matured
Fixed assets326,522,715.93219,746,331.38MortgagedRelated party mortgage guarantees213,180,568.23149,146,773.04MortgagedPledged for short-term borrowings from banks, mortgaged for borrowings from related-parties
Intangible assets15,551,408.0010,652,715.04MortgagedRelated party mortgage guarantees15,551,408.0010,963,743.21MortgagedLands mortgaged for short-term borrowings from banks
Accounts receivable financing120,221,199.92120,221,199.92PledgedPledge of note pool
Total1,821,899,633.501,710,224,555.991,514,839,144.721,446,217,684.74

32. Short-term Borrowings

(1) Category of Short-term Borrowings

Unit: RMB

ItemEnding balanceBeginning balance
Mortgage loans83,330,000.00100,000,000.00
Credit loans70,000,000.0037,596,526.02
Acceptance bill discount66,689,877.7320,000,000.00
Interest from short-term borrowings118,833.33
Total220,019,877.73157,715,359.35

Notes of the category for short-term loans: Notes receivable discounted but not yet due at the end of the period are all bankacceptances with recourse rights and do not meet the conditions for derecognition. Therefore, they are recognised as short-term

Annual Report 2023

borrowings.

(2) List of the Short-term Borrowings Overdue but not Returned

None.

33. Trading Financial Liabilities

Unit: RMB

ItemEnding balanceBeginning balance
Trading financial liabilities4,679,000.00
Including: