Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
FOSHAN ELECTRICAL AND LIGHTING CO., LTD.
INTERIM REPORT 2018
August 2018
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
Part I Important Notes, Table of Contents and Definitions
The 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. (hereinafter
referred to as the “Company”) hereby guarantee the factuality, accuracy and completeness of
the contents of this Report and its summary, and shall be jointly and severally liable for anymisrepresentations, misleading statements or material omissions therein.
He Yong, the Company’s legal representative, Liu Xingming, the Company’s GeneralManager, and Tang Qionglan, the Company’s Chief Financial Officer (CFO) hereby
guarantee that the Financial Statements carried in this Report are factual, accurate andcomplete.
All the Company’s directors have attended the Board meeting for the review of this Report
and its summary.Any plans for the future and other forward-looking statements mentioned in this Report andits summary shall NOT be considered as absolute promises of the Company to investors.Therefore, investors are reminded to exercise caution when making investment decisions.The Company has described in this Report the risks of fiercer market competition, risinglabor costs, raw material price fluctuations, inventory valuation loss, exchange rate
fluctuations and doubtful receivable accounts. Please refer to “X Risks Facing the Companyand Countermeasures” under “Part IV Operating Performance Discussion and Analysis” of
this Report.This Report have been prepared in both Chinese and English. Should there be anydiscrepancies or misunderstandings between the two versions, the Chinese versions shallprevail.The Company has no interim dividend plan, either in the form of cash or stock.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
Table of Contents
Interim Report 2018 ...... 1
Part I Important Notes, Table of Contents and Definitions ...... 2
Part II Corporate Information and Key Financial Information ...... 5
Part III Business Summary ...... 8
Part IV Operating Performance Discussion and Analysis ...... 12
Part V Significant Events ...... 29
Part VI Share Changes and Shareholder Information ...... 39
Part VII Preferred Shares ...... 45
Part VIII Directors, Supervisors and Senior Management ...... 46
Part IX Corporate Bonds ...... 48
Part X Financial Statements ...... 49
Part XI Documents Available for Reference ...... 164
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
Definitions
| Term | Definition |
| The “Company”, “FSL” or “we” | Foshan Electrical and Lighting Co., Ltd. and its consolidated subsidiaries, except where the context otherwise requires |
| CSRC | The China Securities Regulatory Commission |
| SZSE | The Shenzhen Stock Exchange |
| General meeting | General meeting of Foshan Electrical and Lighting Co., Ltd. |
| Board of Directors | The board of directors of Foshan Electrical and Lighting Co., Ltd. |
| The Supervisory Committee | The supervisory committee of Foshan Electrical and Lighting Co., Ltd. |
| RMB, RMB’0,000 | Expressed in the Chinese currency of Renminbi, expressed in ten thousand Renminbi |
| The “Reporting Period” or “Current Period” | The period from 1 January 2018 to 30 June 2018 |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
Part II Corporate Information and Key Financial Information
I Corporate Information
| Stock name | FSL, FSL-B | Stock code | 000541, 200541 |
| Stock exchange for stock listing | Shenzhen Stock Exchange | ||
| Company name in Chinese | 佛山电器照明股份有限公司 | ||
| Abbr. (if any) | 佛山照明 | ||
| Company name in English (if any) | FOSHAN ELECTRICAL AND LIGHTING CO., LTD. | ||
| Abbr. (if any) | FSL | ||
| Legal representative | He Yong | ||
II Contact Information
| Board Secretary | Securities Representative | |
| Name | Lin Yihui | Huang Yufen |
| Address | No. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, P.R.China | No. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, P.R.China |
| Tel. | 0757-82810239 | 0757-82966028 |
| Fax | 0757-82816276 | 0757-82816276 |
| Email address | fsl-yh@126.com | fslhyf@163.com |
III Other Information
1. Contact Information of the Company
Indicate by tick mark whether any change occurred to the registered address, office address and their zip codes,website address and email address of the Company in the Reporting Period.
□ Applicable √ Not applicable
No change occurred to the said information in the Reporting Period, which can be found in the 2017 AnnualReport.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
2. Media for Information Disclosure and Place where this Report is Kept
Indicate by tick mark whether any change occurred to the information disclosure media and the place for keeping
the Company’s periodic reports in the Reporting Period.□ Applicable √ Not applicable
The newspapers designated by the Company for information disclosure, the website designated by the CSRC for
disclosing the Company’s periodic reports and the place for keeping such reports did not change in the Reporting
Period. The said information can be found in the 2017 Annual Report.
IV Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
| H1 2018 | H1 2017 | Change (%) | |
| Operating revenue (RMB) | 2,064,779,289.99 | 2,023,925,582.84 | 2.02% |
| Net profit attributable to the listed company’s shareholders (RMB) | 229,277,455.82 | 228,494,660.57 | 0.34% |
| Net profit attributable to the listed company’s shareholders before exceptional items (RMB) | 228,028,236.71 | 227,184,233.70 | 0.37% |
| Net cash generated from/used in operating activities (RMB) | 144,723,778.38 | -31,063,187.22 | 565.90% |
| Basic earnings per share (RMB/share) | 0.1638 | 0.1633 | 0.31% |
| Diluted earnings per share (RMB/share) | 0.1638 | 0.1633 | 0.31% |
| Weighted average return on equity (%) | 5.32% | 4.99% | 0.33% |
| 30 June 2018 | 31 December 2017 | Change (%) | |
| Total assets (RMB) | 5,238,861,184.94 | 5,675,811,824.29 | -7.70% |
| Equity attributable to the listed company’s shareholders (RMB) | 4,266,885,850.25 | 4,779,115,459.39 | -10.72% |
V Accounting Data Differences under China’s Accounting Standards for Business Enterprises
(CAS) and International Financial Reporting Standards (IFRS) and Foreign AccountingStandards
1. Net Profit and Equity Differences under CAS and IFRS
□ Applicable √ Not applicable
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
No such differences for the Reporting Period.
2. Net Profit and Equity Differences under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No such differences for the Reporting Period.
XI Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
| Item | Reporting Period | Note |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | -70,182.97 | |
| Government subsidies charged to current profit or loss (exclusive of government subsidies given in the Company’s ordinary course of business at fixed quotas or amounts as per government’s uniform standards) | 914,699.96 | |
| Non-operating income and expense other than above | 633,590.02 | |
| Less: Income tax effects | 228,691.99 | |
| Non-controlling interests effects (net of tax) | 195.91 | |
| Total | 1,249,219.11 | -- |
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in theExplanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Exceptional Gain/Loss Items:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
Part III Business Summary
I Core Business Scope of the Company in Reporting Period
Is the Company subject to any disclosure requirements for special industries?No.
1. The Company’s Core Business Scope or Products
We design, manufacture and market high-quality, green and energy-efficient lighting products and electricalproducts, as well as provide comprehensive lighting and electrical solutions. Our products mainly includeelectrical products such as LED light sources and luminaries, traditional light sources and switches, which are
widely used for indoor and outdoor lighting, landscape lighting, motor vehicle lighting and buildings’ electrical
switch systems, among others. Currently, we have three major operating divisions, namely, lighting, electricalproducts and vehicle lighting. Upon years of development, we have won quite many honors such as the title of
“The King of Lamps in China”, and our “FSL” and “Fenjiang” brands have been certified as “Famous ChinaBrands”.
2. Main business models(1) Procurement modelWe mainly procure raw materials such as lamp beads, lamp holders, electronic components, aluminum substrate,plastic parts, metal materials, quartz tubes and fuel by way of bids invitation. A bids invitation supervisorycommittee consisting of personnel from several departments will be set up in the future. For every kind of ourmain raw materials, we usually have a few suppliers to choose from in procurement so that the procurement priceswould be fair, the supply of raw materials in time and the good quality of the raw materials ensured.(2) Production models
① Production of the conventional products
Concerning the conventional products, we analyze sales of every month and predict future market demand so as toformulate a production plan for the coming month. And our workshops produce according to the plan to avoidextra stock and at the same time ensure that there is enough for sale.
② Production according to orders
Different from the conventional lighting products which are of little variation in specifications, LED lightingproducts are at a fast pace of renewal and different customers often have different requirements regarding the
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
products’ appearances and performance indexes. Therefore, we have to organize individualized production for
some orders for LED lighting products, export orders in particular. For this kind of orders, we formulate ourproduction plans based on them and then make procurement plans according to the production plans, which willhelp effectively control the stock and the procurement prices of raw materials, reduce capital occupation andimprove our operating efficiency to the maximum.
③ Combination of independent production and outsourcing
With a high production capacity, we produce most of our products and parts on our own. Only a small portion ofparts and low-tech products is outsourced to sub-manufacturers, who will produce in strict accordance with ourrequirements. We will also tag along their production processes and examine carefully the quality of the productsfinished. In this way, our supply of products is guaranteed.(3) Sales modelDomestically, we mainly adopt a commercial agent model, selling our products to commercial agents throughvarious channels and setting up business divisions under the sales department to follow up the use of our productsby customers and provide relevant support. In terms of channels, besides consolidating wholesale, we will alsofocus on the development of franchised stores, illumination engineering & commercial lighting, e-commerce &retail sales and automotive lighting for a bigger market share.For overseas markets, we primarily adopt OEM/ODM models and also sell under our own brands (throughagents).3. Main driving forces for growth(1) Rapid development of the industry
As the emerging industry involved in the country’s strategies, LED industry rapidly developed in the world in
recent years due to its features of high efficiency and energy-saving, green environmental protection, as well aslong service life. Thanks to the rapid development of the LED industry, the Company achieved good businessperformance.
(2) The Company’s own advantagesBy right of the Company’s advantages in technology, brand, channel, and scale, the Company firmly grasped theopportunities brought by the industry’s rapid development, consistently pushed forward the technology upgrade of
main products, reinforced market development, and optimized the sales structure of products through sustainableR&D input and technology innovation. And at the same time, by means of effective control on procurement andmanufacturing cost, the Company raised the efficiency of management and products, improved its comprehensive
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
competitiveness, overcame the difficulties and challenges resulted from the serious market situation, and kept thesustainable growth of its operating revenue and profit.
II Material Changes in Major Assets
1. Material Changes in Major Assets
| Major assets | Main reason for material changes |
| Equity assets | No material change during the Reporting Period |
| Fixed assets | No material change during the Reporting Period |
| Intangible assets | No material change during the Reporting Period |
| Construction in progress | No material change during the Reporting Period |
| Available-for-sale financial assets | The ending amount was down by RMB379.9681 million, or 27.32%, from the beginning amount, primarily driven by fair value decreases in the Current Period |
2. Major Assets Overseas
□ Applicable √ Not applicable
III Core Competitiveness Analysis
Is the Company subject to any disclosure requirements for special industries?No.
The core competitiveness of the Company mainly reflects on fours aspects listed below:
Channel advantageThe Company has been sticking to the marketing strategy of deeply focusing and refining channels. Through yearsof development and experience accumulation, the Company currently has four major sales channels for thedomestic market, which contains the circulation and wholesales channel, the exclusive shop channel, the E-businessretail channel, and the engineering commercial lighting channel, forming a marketing network covering the wholecountry. And the Company primarily serves as an OEM partner for internationally famous lighting companies andoverseas supermarkets, and sells its own FSL-branded products on the overseas market. Replying on strong andperfect sales channels, products of the Company can rapidly enter the market, which has significantly improved the
Company’s market development capability and competitiveness.
Brand advantage
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
The Company keeps focusing on the positioning, core value, and features of FSL brand, and continually improvedthe brand recognition and reputation of FSL brand by product design, end sales, advertisement, special lightingexhibition, and so on. At present, FSL and Fen Jiang among the three brands of the Company are both famoustrademarks in China. The FSL brand has become one of the most influential and popular brands in China, and thepowerful brand influence has become the main driver for continuous sales growth of the Company.Technology advantageThe Company has always been attaching importance to R&D of new products and technologies, increasing the inputon independent innovation on technologies and products, and perfecting the improvement process for R&D andtechnique of all products. The Company absorbs and trains technical talents, set up innovative incentive mechanismand performance mechanism, and fully provides with supports in fund, talents, and mechanisms.Scale advantageThe Company is one of the first enterprises to step into the industry of producing and selling lighting products, withproduction bases in Foshan, Nanjing and Xinxiang. The Company possesses the manufacture culture of refiningproduction and the large-scale manufacturing capability by years of experience accumulation. Particularly in therecent years, the Company has greatly increased manufacturing efficiency and reduced costs through a higherlevel of automatic production and IT application. The large-scale and centralized production brings obviouseconomic benefits to the Company, which not only shows in manufacture cost of products, but also shows in aspectssuch as raw material procurement and product pricing.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
Part IV Operating Performance Discussion and Analysis
I Overview
The first half of 2018 saw changes in China’s economy with mounting pressure on foreign trade. Domestically, in
spite of a steady economy, growth in investment and consumption demand registered new lows amid deleveraging.Internationally, export growth was under greater pressure caused by the tightening monetary policies of developedeconomies, decreasing liquidity across the globe and rising trade frictions. In face of these economic changes and
the fierce competition industrywide, the Company’s management continued to focus on the strategic objectives of“Cutting-Edge Technologies, Internationally-Famous Brands and Large-Scale Production” the Board had put
forward, strengthening innovation, optimizing the product mix and improving manufacturing and management.As a result, the Company delivered a good operating performance for the Reporting Period. For this period, theCompany recorded operating revenue of RMB2.065 billion, up 2.02% compared to the same period of last year,
and net profit attributable to the listed company’s shareholders of RMB 0.229 billion, representing a year-on-year
growth of 0.34%.
The work that the Company has done in the first half of 2018 is summarized as follows:
1. Strengthening market expansion for better competitiveness(1) Domestically, the Company has made new changes to its distribution channels for better competitiveness.In light of changes in the industry, the Company has reformed its distribution channels, helping distributors shiftfrom passivity to initiative, adopting flat management on distribution channels, and strengthening control overchannel terminals. Additionally, the Company has adjusted and integrated its distribution channels, and has madeclear the priorities for all these channels, so as to increase competitiveness in this respect.(2) As for export, the Company continued to maintain good and stable cooperation with valued customers. Orderskept increasing as the Company further extended its product range, offered products with high added value andenhanced customer service. In addition, continuous effort was spent on attracting new customers to drive futuregrowth.2. Enhancing innovation and improving manufacturingThe Company has enhanced innovation in the Reporting Period. A greater focus was given on smart lighting,healthy lighting and smart electrical products. It also focused on product transitions and the development of newproducts, particularly high-end products. To do so, it brought in high-end R&D talent and reformed the
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
performance appraisal system for R&D personnel so as to further stimulate their creativity.To reduce marginal costs in procurement, manufacturing, equipment, etc., modularization, standardization andgeneralization were promoted in product design. Meanwhile, the Company continued to automate its productionlines in a deeper and faster manner. It was trying to improve manufacturing through lean management andautomation.3. Optimizing the product mix with smart lighting products being launched to the market one after anotherDuring the Reporting Period, the Company reinforced the development of smart lighting products andsuccessfully developed 129 specifications. And it also showed its strength in smart lighting and electrical productsto the market at large international and domestic lighting exhibitions and smart showrooms including the Light +
Building exhibition at Frankfurt, Germany and the Guangzhou International Lighting Exhibition. The Company’s
smart lighting products have started to generate sales revenue in the Reporting Period, and the Company willstrengthen the marketing of these products in the second half of the year.In addition to a greater investment in smart products, the Company also continued to promote the shift of itsproducts from light sources to luminaries through enriching the luminary portfolio with a higher proportion ofmedium- and high-end luminaries.4. Reinforcing control over costs and expenses for more economic benefitsThe Company got down to details in production management and enhanced control over process indexes. It keptmaterial consumption and product quality indexes well under control with a double-appraisal system. It alsoenhanced control over costs and expenses, seeking better economic benefits. Additionally, product cost estimatesand production analyses were made on a monthly basis and production summaries were given in a timely mannerto prevent risks.
II Analysis of Core Businesses
Year-on-year changes in key financial data:
Unit: RMB
| H1 2018 | H1 2017/Opening balance | Change (%) | Main reason for change | |
| Operating revenue | 2,064,779,289.99 | 2,023,925,582.84 | 2.02% | |
| Cost of sales | 1,579,291,867.89 | 1,546,931,779.85 | 2.09% | |
| Selling expense | 103,917,010.47 | 81,651,993.69 | 27.27% | |
| Administrative expense | 104,474,031.52 | 98,790,821.60 | 5.75% | |
| Finance costs | -13,085,476.61 | -7,115,907.36 | -83.89% | A rise in exchange income as a result of the |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
| depreciation of the Chinese yuan against the U.S. dollar | ||||
| Income tax expense | 47,044,145.70 | 42,597,501.35 | 10.44% | |
| R&D expense | 95,631,724.63 | 57,719,395.64 | 65.68% | A greater investment in R&D |
| Net cash generated from/used in operating activities | 144,723,778.38 | -31,063,187.22 | 565.90% | A decline in cash used in operating activities |
| Net cash generated from/used in investing activities | 600,534,333.44 | -112,026,375.71 | 636.07% | A lower investment in banks’ wealth management products |
| Net cash generated from/used in financing activities | -405,163,764.00 | -522,068,416.83 | 22.39% | |
| Net increase in cash and cash equivalents | 341,479,690.92 | -664,245,623.25 | 151.41% | Increases in net cash generated from operating and investing activities |
| Asset impairment loss | 16,006,869.83 | 24,059,719.35 | -33.47% | A decline in inventory valuation allowances |
| Investment income | 24,509,870.36 | 14,009,282.02 | 74.95% | A higher income from banks’ wealth management products |
| Other income | 1,018,385.17 | 3,302,994.36 | -69.17% | A decline in government subsidies that arose in the ordinary course of business |
| Non-operating income | 1,669,856.43 | 2,719,401.52 | -38.59% | A decline in income that arose outside the ordinary course of business |
| Non-operating expense | 191,749.42 | 4,758,983.01 | -95.97% | A decline in non-current asset disposal loss |
| Other comprehensive income, net of tax | -322,975,351.39 | 23,025,471.14 | -1,502.69% | A decline in the fair value of available-for-sale financial assets |
| Total comprehensive income | -90,800,665.90 | 254,910,447.38 | -135.62% | A decline in the fair value of available-for-sale financial assets |
| Monetary assets | 914,968,599.68 | 570,184,208.96 | 60.47% | Disinvestment of some banks’ wealth management products |
| Accounts receivable | 994,690,386.07 | 756,291,432.56 | 31.52% | A strong rise in export sales |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
| with longer days of sales outstanding | ||||
| Interest receivable | 1,589,090.91 | 12,428,451.86 | -87.21% | A decline in the principal amount |
| Other receivables | 37,100,965.10 | 21,215,215.15 | 74.88% | A rise in receivable export VAT rebates |
| Other current assets | 348,511,668.85 | 1,006,062,102.56 | -65.36% | Decreases in undue banks’ wealth management products and structured deposits |
| Notes payable | 2,652,485.00 | 0.00 | N/A | Mainly due to the increase in the settlement of payment by bank acceptance bills |
| Taxes payable | 46,542,385.81 | 27,350,670.40 | 70.17% | A higher corporate income tax as a result of higher profits |
| Deferred income tax liabilities | 69,465,031.60 | 126,460,250.96 | -45.07% | A decline in the fair value of available-for-sale financial assets |
| Total non-current liabilities | 81,245,862.13 | 138,318,581.45 | -41.26% | A decline in deferred income tax liabilities |
| Capital reserves | 158,608,173.07 | 285,821,459.07 | -44.51% | The payout of stock dividends from capital reserves |
| Other comprehensive income | 393,631,982.39 | 716,607,333.78 | -45.07% | A decline in the fair value of available-for-sale financial assets |
Material changes to the profit structure or sources of the Company in the Reporting Period:
□ Applicable √ Not applicable
No such changes in the Reporting Period.
Breakdown of core businesses:
Unit: RMB
| Operating revenue | Cost of sales | Gross profit margin | YoY change in operating revenue (%) | YoY change in cost of sales (%) | YoY change in gross profit margin (%) | |
| By operating division | ||||||
| Lighting products | 2,048,839,316.62 | 1,568,876,663.19 | 23.43% | 1.91% | 2.05% | -0.10% |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
| and luminaries | ||||||
| By product category | ||||||
| Traditional lighting products | 499,418,090.27 | 366,184,296.06 | 26.68% | -8.44% | -10.06% | 1.33% |
| LED lighting products | 1,492,862,750.59 | 1,165,722,527.98 | 21.91% | 6.76% | 7.61% | -0.62% |
| Electrical products | 56,558,475.76 | 36,969,839.15 | 34.63% | -15.25% | -21.23% | 4.96% |
| By operating segment | ||||||
| Domestic | 1,207,645,957.52 | 855,005,195.87 | 29.20% | -3.25% | -6.96% | 2.83% |
| Overseas | 841,193,359.10 | 713,871,467.32 | 15.14% | 10.34% | 15.44% | -3.74% |
III Analysis of Non-Core Businesses
√ Applicable □ Not applicable
Unit: RMB
| Amount | As % of total profit | Source/Reason | Exceptional or recurrent | |
| Investment income | 24,509,870.36 | 8.78% | Gains on banks’ wealth management products and bonuses from investees | Exceptional |
| Asset impairments | 16,006,869.83 | 5.73% | Allowances for doubtful accounts and inventory valuation allowances | Exceptional |
| Non-operating income | 1,669,856.43 | 0.60% | Government subsidies and other income that arose outside the ordinary course of business | Exceptional |
| Non-operating expense | 191,749.42 | 0.07% | Non-current asset disposal loss | Exceptional |
IV Analysis of Assets and Liabilities
1. Material Changes in Asset Composition
Unit: RMB
| 30 June 2018 | 30 June 2017 | Change in percentage (%) | Reason for material change | |||
| Amount | As % of total assets | Amount | As % of total assets | |||
| Monetary assets | 914,968,599.68 | 17.47% | 815,038,019.29 | 14.12% | 3.35% | |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
| Accounts receivable | 994,690,386.07 | 18.99% | 862,433,866.95 | 14.94% | 4.05% | A strong rise in export sales with longer days of sales outstanding |
| Inventories | 718,166,451.66 | 13.71% | 733,151,791.00 | 12.70% | 1.01% | |
| Long-term equity investments | 176,473,300.95 | 3.37% | 209,858,507.98 | 3.64% | -0.27% | |
| Fixed assets | 511,806,666.21 | 9.77% | 436,897,311.33 | 7.57% | 2.20% | |
| Construction in progress | 189,368,112.34 | 3.61% | 147,360,531.44 | 2.55% | 1.06% | |
| Available-for-sale financial assets | 1,010,613,407.54 | 19.29% | 1,758,739,646.36 | 30.46% | -11.17% | Mainly due to the sale of some Guoxuan Hi-Tech stocks in the third quarter of the previous period and the decrease in the fair value of available-for-sale financial assets in the current period. |
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
| Item | Beginning amount | Gain/loss on fair-value changes in Reporting Period | Cumulative fair-value changes charged to equity | Impairment allowance for Reporting Period | Purchased in Reporting Period | Sold in Reporting Period | Ending amount |
| Financial assets | |||||||
| 3. Available-for-sale financial assets | 1,086,953,227.20 | -379,968,129.06 | 706,985,098.14 | ||||
| Subtotal of financial assets | 1,086,953,227.20 | -379,968,129.06 | 706,985,098.14 | ||||
| Total of above | 1,086,953,227.20 | -379,968,129.06 | 706,985,098.14 | ||||
| Financial liabilities | 0.00 | 0.00 | |||||
Material changes in the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
3. Restricted Asset Rights as at Period-End
Unit: RMB
| Item | Ending carrying amount | Reason for restriction |
| Monetary assets | 3,304,699.80 | Security deposits for forward forex settlement and sale and quotas |
| Notes receivable | 3,500,000.00 | In pledge for the FSL note pool |
| Total | 6,804,699.80 |
V Investments Made
1. Total Investment Amount
√ Applicable □ Not applicable
| Total investment amount of Reporting Period (RMB) | Total investment amount of same period of last year (RMB) | Change (%) |
| 0.00 | 0.00 | 0.00% |
2. Significant Equity Investments Made in Reporting Period
□ Applicable √ Not applicable
3. Significant Non-Equity Investments Ongoing in Reporting Period
□ Applicable √ Not applicable
4. Financial Investments(1) Securities Investments
√ Applicable □ Not applicable
Unit: RMB
| Security type | Security code | Security name | Initial investment cost | Measurement method | Beginning carrying amount | Gain/Loss on fair-value changes in Reporting Period | Accumulated fair-value changes charged to equity | Purchased in Reporting Period | Sold in Reporting Period | Gain/loss in Reporting Period | Ending carrying amount | Accounting title | Funding source |
| Domestically/Overseas | 002074 | Guoxuan High-tech | 160,000,000.00 | Fair value method | 1,011,838,873.50 | -372,734,895.00 | 639,103,978.50 | Available-for-sale | The Company’s own |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
| listed stock | financial assets | money | |||||||||||
| Domestically/Overseas listed stock | 601818 | China Everbright Bank | 30,828,816.00 | Fair value method | 75,114,353.70 | -7,233,234.06 | 67,881,119.64 | Available-for-sale financial assets | The Company’s own money | ||||
| Domestically/Overseas listed stock | N/A | Xiamen Bank | 292,574,133.00 | Cost method | 292,574,133.00 | 10,971,417.60 | 292,574,133.00 | Available-for-sale financial assets | The Company’s own money | ||||
| Domestically/Overseas listed stock | N/A | Foshan branch of Guangdong Development Bank | 500,000.00 | Cost method | 500,000.00 | 500,000.00 | Available-for-sale financial assets | The Company’s own money | |||||
| Total | 483,902,949.00 | -- | 1,380,027,360.20 | 0.00 | -379,968,129.06 | 0.00 | 0.00 | 10,971,417.60 | 1,000,059,231.14 | ||||
| Disclosure date of announcement on Board’s consent for securities investments | |||||||||||||
| Disclosure date of announcement on general meeting’s consent for securities investments (if any) | |||||||||||||
(2) Investments in Derivative Financial Instruments
√ Applicable □ Not applicable
| Operating party | Relationship with the Company | Connected transaction | Type of derivative | Initial investment amount | Start date | End date | Beginning investment | Purchased in Reporting Period | Sold in Reporting Period | Impairment allowance (if any) | Ending investment | Ending investment as % of the Company’s ending | Actual gain/loss in Reporting Period |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
| net assets | |||||||||||||
| Foshan branch of Bank of China | Not connected | Not | Forward forex settlement portfolio | US$12 million | 29 May 2018 | 30 November 2018 | US$12 million | US$10 million | 1.54% | ||||
| Foshan branch of Industrial and Commercial Bank of China | Not connected | Not | Forward forex settlement portfolio | US$12 million | 19 June 2018 | 21 December 2018 | US$12 million | US$12 million | 1.85% | ||||
| Total | US$24 million | -- | -- | 0 | US$24 million | 0 | 0 | US$22 million | 3.39% | 0 | |||
| Funding source | All from the Company’s own money | ||||||||||||
| Legal matters involved (if applicable) | N/A | ||||||||||||
| Disclosure date of board announcement approving derivative investment (if any) | 23 May 2018 | ||||||||||||
| Disclosure date of general meeting announcement approving derivative investment (if any) | |||||||||||||
| Analysis of risks and control measures associated with derivative investments held in Reporting Period (including but not limited to market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) | Risk Analysis of Forward Exchange Settlement Business: 1. Risk of exchange rate fluctuations. In the case of large fluctuations in the exchange rate, the quoted price of the bank’s forward exchange rate may be lower than the Company’s quoted exchange rate to the customer, which will make the Company unable to lock the quoted exchange rate to the customer or the bank’s forward exchange rate may deviate from the exchange rate at the time of the Company’s actual receipt and payment, and causes exchange losses. 2. Risk of customer default. The customer’s accounts receivable may be overdue, and the payment for goods cannot be recovered within the predictable payback period, which will result in the loss of the Company due to the delayed forward settlement. 3. Risk of payback prediction. The marketing department shall made corresponding payback prediction based on customer orders and expected orders. However, during the actual implementation process, customers may adjust their orders and predictions, which will result in the Company’s incorrect payback prediction and cause the risk of delayed delivery of forward exchange settlement. 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 | ||||||||||||
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
| strategy in a timely manner to stabilize the export business and avoid exchange losses to the utmost. 2. The Management System for Forward Settlement and Sales of Foreign Exchanges reviewed and approved by the board of directors of the Company stipulates that all forward foreign exchange settlement businesses of the Company shall be based on the normal production and operation, and relied on specific business operations to avoid and prevent various exchange rate risks. However, speculative transaction and interest arbitrage are not allowed. At the same time, the system clearly defines the operating principles, approval authority, responsible department and responsible person, internal operation procedures, information isolation measures, internal risk reporting system, risk management procedures, and information disclosure related to the forward settlement business as well. In fact, the system is conducive to strengthen the management of the Company’s forward foreign exchange settlement business and prevent investment risks. 3. In order to prevent any delay in the forward exchange settlement, 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 forward foreign exchange settlement transactions must be based on the Company’s foreign exchange earnings prediction. Besides, the Company shall strictly control the scale of its forward foreign exchange settlement business, 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) | At present, the Company has invested various derivatives including Forward Exchange Settlement 3+3 Portfolio. This product portfolio is superior to other ordinary forward settlement products during the same period. The first three sessions of vesting conditions of this portfolio are: the spot exchange rate at maturity is lower than the agreed front-end exchange rate, and the exchange settlement shall be carried out based on the agreed front-end exchange rate; if the spot exchange rate at maturity is higher than the agreed front-end exchange rate, the Company can choose not to settle the exchange or choose to settle the exchange based on the spot exchange rate at maturity. The back-end three sessions of vesting conditions are: the spot exchange rate at maturity is lower than the agreed back-end exchange rate, and the Company can choose not to settle the exchange or choose to settle the exchange based on the spot exchange rate at maturity; if the spot exchange rate at maturity is higher than the agreed back-end exchange rate, the exchange settlement shall be carried out based on the agreed back-end exchange rate. At present, in terms of Forward Exchange Settlement 3+3 Portfolio purchased by the Company, the spot exchange rates at maturity are all higher than the agreed front-end exchange rates, and the Company chooses not to exercise the right. Therefore, the product’s fair value has not changed. |
| Major changes in accounting policies and specific accounting principles adopted for derivative investments in Reporting Period compared to last reporting period | N/A |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
| Opinion of independent directors on derivative investments and risk control | The independent directors of the Company are of the opinion that during the Reporting Period, the Company carried out forward forex settlement in strict compliance with the Company Law, the Regulations of the People’s Bank of China on Foreign Exchange Settlement, Sale and Payment and the Company’s Management Rules for Forward Foreign Exchange Settlement and Sale, among others, as well as within the Board’s authorization. Such trading is primarily aimed to prevent exchange rate fluctuations from impacting the Company’s export business and operating earnings, with no speculative trading involved. It is a necessity, and the risk is well under control. |
VI 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
VII Major Majority- and Minority-Owned Subsidiaries
√ Applicable □ Not applicable
Major majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on the
Company’s net profit:
Unit: RMB
| Name | Relationship with the Company | Core business | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Foshan Chansheng Electronic Ballast Co., Ltd. | Subsidiary | Manufacturing | 1,000,000.00 | 48,752,843.81 | 39,098,142.23 | 58,127,777.14 | 4,800,994.91 | 3,543,195.43 |
| FSL Chanchang Optoelectronics Co., Ltd. | Subsidiary | Manufacturing | 72,782,944.00 | 144,050,544.49 | 120,398,662.10 | 42,855,759.05 | 12,676,786.06 | 9,507,589.54 |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
| Foshan Taimei Times Luminaries Co., Ltd. | Subsidiary | Manufacturing | 500,000.00 | 74,421,738.83 | 25,521,131.46 | 73,606,152.87 | 5,155,744.92 | 3,544,952.10 |
| FSL New Light Source Technology Co., Ltd. | Subsidiary | Manufacturing | 50,000,000.00 | 57,318,734.75 | 55,239,940.46 | 10,244,292.40 | 556,013.45 | 417,010.09 |
| FSL (Xinxiang) Lighting Co., Ltd. | Subsidiary | Manufacturing | 35,418,439.76 | 53,882,960.16 | 48,947,360.24 | 36,485,086.33 | 2,441,965.86 | 1,831,807.32 |
| Guangdong Fozhao Financing Lease Co., Ltd. | Subsidiary | Finance | 200,000,000.00 | 232,595,632.53 | 232,046,258.60 | 3,599,940.97 | 2,699,955.74 | |
| FSL Lighting Equipment Co., Ltd. | Subsidiary | Manufacturing | 15,000,000.00 | 63,887,644.88 | 53,004,382.67 | 36,790,893.75 | 2,465,779.07 | 1,989,507.21 |
| Nanjing Fozhao Lighting Components Manufacturing Co., Ltd. | Subsidiary | Manufacturing | 41,683,200.00 | 58,494,154.01 | 53,718,298.45 | 30,844,358.73 | 8,749,230.09 | 4,195,784.75 |
| FSL Zhida Electric Technology Co., Ltd. | Subsidiary | Manufacturing | 50,000,000.00 | 98,490,502.83 | 47,256,225.77 | 56,884,635.54 | 4,981,466.73 | 3,742,334.78 |
| FSL Lighting GmbH | Subsidiary | Manufacturing | 195,812.50 | 334,199.31 | 64,257.99 | -128,357.82 | -128,357.82 |
Subsidiaries obtained or disposed in the Reporting Period:
□ Applicable √ Not applicable
Information about the major majority- and minority-owned subsidiaries:
—Foshan Chansheng Electronic Ballast Co., Ltd. was invested and established by the Company and Mr. Ma
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
Henglai and had set up and obtained license for business corporation on 26 August 2003. The Company holds75% equities of the said company; therefore the said subsidiary was included into the scope of the consolidatedfinancial statements since the date of foundation.On 24 December 2013, the Company and Mr. Ma Henglai signed the equity transfer agreement. The Companypurchased 25% equity of Foshan Chansheng Electronic Ballast Co., Ltd. held by Mr. Ma Henglai. After thepurchasing, the Company held 100% equity of Foshan Chansheng Electronic Ballast Co., Ltd.
—FSL Chanchang Optoelectronics Co., Ltd. (renamed in 19 June 2018 from “Foshan Chanchang ElectricAppliances (Gaoming) Co., Ltd.”), which is a Sino-foreign joint venture invested and established by the Company
and Prosperity Lamps and Components Ltd, had obtained license for business corporation on 23 August 2005through approval by Foreign Trade and Economic Cooperation Bureau of Gaoming District, Foshan with
document “MWJMY Zi [2005] No. 79”. The Company holds 70% equities of the said company; therefore the said
subsidiary was included into the scope of the consolidated financial statements since the date of foundation.On 23 August 2016, the Company and Prosperity Lamps and Components Ltd signed the equity transferagreement. The Company purchased 30% equity of Foshan Chanchang Electric Appliances (Gaoming) Co., Ltd.held by Prosperity Lamps and Components Ltd. After the purchasing, the Company held 100% equity of FoshanChanchang Electric Appliances (Gaoming) Co., Ltd.
—Foshan Taimei Times Luminaries Co., Ltd., which is a Sino-foreign joint venture invested and established by
the Company and Reback North America Investment Limited, had obtained license for Business Corporation on 5December 2005 through approval by Foreign Trade and Economic Cooperation Bureau of Gaoming District,
Foshan with document “MWJMY Zi [2005] No. 97”. The Company holds 70% equities of the said company;
therefore the said subsidiary was included into the scope of the consolidated financial statements since the date offoundation.
—FSL New Light Source Technology Co., Ltd. (its predecessor was “FSL Luminaries Co., Ltd.” and it changedits name to “FSL New Light Source Technology Co., Ltd.” on 17 December 2014), which is invested and
established by the Company together with Foshan Haozhiyuan Trading Co., Ltd., Shanghai Liangqi Electric Co.,Ltd, Changzhou Sanfeng Electrical & Lighting Co., Ltd., Henan Xingchen Electrical & Lighting Co., Ltd., FoshanHongbang Electrical & Lighting Co., Ltd., Hebei Jinfen Trading Co., Ltd., obtaining its license for BusinessCorporation on 27 September 2009. The Company holds 60% equities of this company. Therefore the saidsubsidiary was included into the scope of the consolidated financial statements since the date of foundation.On 25 September 2009 and 19 November 2010, the equity transfer agreement was signed between the Company
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
and the minority shareholders, in which the minority shareholders respectively transferred their equities of FSLLuminaries Co., Ltd. to the Company. After transfer, the Company holds 100% equities of FSL Luminaries Co.,Ltd.
—FSL (Xinxiang) Lighting Co., Ltd. is a limited liability company which is invested and established by the
Company, obtaining its license for Business Corporation on 17 April 2009. The Company holds 100% equities ofthe said company, therefore the said subsidiary was included into the scope of the consolidated financialstatements since date of foundation. On 27 August 2013, the 3rd Session of the 7th Board of Directors reviewedand approved to invest another RMB2 million (land in an industrial park in Xinxiang, Henan Province andmonetary funds) in FSL (Xinxiang) Lighting, increasing the registered capital of FSL (Xinxiang) Lighting toRMB 35,418,439.76.
—FSL Lighting Equipment Co., Ltd. is a limited liability company invested and established by the Company with
the registered capital of RMB15 million, which had obtained its license for Business Corporation on 8 May 2013.And the Company holds 100% equities of this company. Therefore the said subsidiary was included into the scopeof the consolidated financial statements since the date of foundation.
—In accordance with the equity transfer agreement signed between the Company and Prosperity Lamps and
Components Ltd. on 27 August 2008, Prosperity Lamps and Components Ltd. transferred 100% equities of
Nanjing Fozhao Lighting Components Manufacturing Co., Ltd. (formerly known as “Prosperity (Nanjing)Lighting Components Co., Ltd.”, and changed name to “Nanjing Fozhao Lighting Components ManufacturingCo., Ltd.” on 15 November 2010.) to the Company. Therefore, Nanjing Fozhao Lighting Components
Manufacturing Co., Ltd. became a wholly-owned subsidiary of the Company. The said subsidiary was includedinto the scope of the consolidated financial statements since the merger date.
—FSL Zhida Electric Technology Co., Ltd. (FSL Zhida) was incorporated by the Company, Foshan Zhibida
Enterprise Management Co., Ltd. and Dongguan Baida Semiconductor Material Co., Ltd. on a joint investmentbasis. FSL Zhida obtained its business license on 21 October 2016. Holding a stake of 51% in it, the Company has
included FSL Zhida in its consolidated financial statements since the date of FSL Zhida’s incorporation.—FSL Lighting GmbH is a limited liability company set up by the Company in Germany with a registered
capital of 25,000 euro. It got the business license on 30 November 2017 whose 100% stock equity is held by the
Company, and it is included into the scope of the Company’s consolidated financial statements from the date of its
establishment.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
VIII Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
IX Performance Forecast for January-September 2018
Warning of forecast negative net profit for January-September 2018 or considerable YoY change therein, as wellas the reasons:
□ Applicable √ Not applicable
X Risks Facing the Company and Countermeasures
1. Risk of intensified market competitionFrom the macro perspective, with the deleveraging campaign in the finance sector, declining growth in domesticinvestment and consumption, the implementation of real estate control policies, the conflicts caused byinternational trade protectionism and other factors, the industry may face the risk of lack of growth momentum.From the industry perspective, as a fully competitive industry, lighting applications are not only subject to thecompetition of companies in the field of original applications, but also the competition of LED upstream anddownstream chip companies as well as packaging companies that gradually extends to the lighting applicationfield. If the market competition intensifies further in the future, the profitability of the Company may benegatively impacted.Countermeasures: The Company will focus on main business. Through increasing research & developmentinvestment constantly, the Company will improve technical innovation ability and added value of products;continue to give play to the cost advantages in product manufacturing and improve supply ability of high-qualityproducts. At the same time, by optimizing marketing network, the Company will improve brand image, improveservice quality, intensify customer relationship management and increase core competitive capacity of thecompany constantly.2. Risk of rising labor costs and raw material price fluctuationsDue to the influence of domestic labor supply and demand as well as employment policies, labor costs keepincreasing, especially in the Pearl River Delta region with more developed economy. In addition, raw materials ofthe Company account for a high proportion of operation costs. As some raw material prices are associated withuncontrollable factors such as global market conditions and national macroeconomic policies, there is a risk ofprice fluctuation of raw materials.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
Countermeasures: By increasing quantity of qualified suppliers, expanding bidding and tendering range,perfecting supply chain management, paying attention to market dynamics, collecting information, analyzing andpre-judging supply of main raw materials and price trend, the Company can decrease procurement costs; byimproving automatic, intelligent production level and by implementing technical transformation, technologyimprovement and other measures, the Company can improve production efficiency and reduce product cost; byintensifying production technology and field management, the Company can control product costs.3. Risk of inventory valuation lossAs of the end of the Reporting Period, the inventory amount is high, and the inventory mainly includes rawmaterials, semi-finished products and finished products. Due to the large number of product types and models, theinventory amount of the Company is relatively high. Moreover, as the sales revenue of the Company increasesyear by year, the raw materials and inventories that are stored to meet production and sales will increasesimultaneously. It will lead to a higher inventory maintained in the Company. In case changes occur to productprices or demand in the future market, the Company may experience a risk of inventory depreciation.Countermeasures: The Company can intensify the analysis of sales and change in future market demand, on thebasis of assuring production and sales, the Company can control inventory scale reasonably.4. Risk of exchange rate fluctuationsThe RMB exchange rate in China is based on market supply and demand, with reference to a basket of currenciesfor regulation and a managed floating exchange rate system. Exchange rate fluctuations will happen with thefluctuations of global economy, simmering tension of some regions and the monetary policies of various countries.
Export accounts for around 40% of the Company’s business, and is mostly settled in the U.S. dollar. If the
exchange rate fluctuates significantly, business performance of the Company will be affected.Countermeasures: By intensifying settlement currency management, knowing exchange rate policies andfluctuation trend of settlement currencies in time, and carrying out forward forex settlement when the timing isright, the Company can weaken the risks brought by exchange rate fluctuations as much as possible.5. Risk of doubtful accounts receivableWith the expansion of sales scale of the Company, the amount of accounts receivable has increased. The maindebit customers of the Company are all long-term customers with good business reputations. Major adversechanges in the financial status of major debtors may result in the risk of uncollectible accounts receivable.Countermeasures: By perfecting credit file of customers, evaluating credit status of customers regularly, adopting
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
method of pledge of customers’ assets, and purchasing insurance on certain export sales, the Company can reduce
risks from bad debts of accounts receivable. By strengthening the management of approval of contract, theCompany can avoid legal risks incurred during implementation of contract. The Company can reinforce themanagement and collection efforts of accounts receivable, implement pre-warning treatment for accountsreceivable with upcoming deadline during implementation, and analyze and report accounts receivable regularly.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
Part V Significant Events
I Annual and Extraordinary General Meetings Convened during Reporting Period
1. General Meetings Convened during Reporting Period
| Meeting | Type | Investor participation ratio | Convened date | Date of resolution disclosure | Index to disclosed resolutions |
| 2017 Annual General Meeting | Annual | 38.37% | 26 April 2018 | 27 April 2018 | Announcement No. 2018-009 on the Resolutions of the 2017 Annual General Meeting disclosed on www.cninfo.com.cn |
2. Extraordinary General Meetings Convened at Request of Preferred Shareholders with Resumed VotingRights
□ Applicable √ Not applicable
II Interim Dividend Plan
□ Applicable √ Not applicable
The Company has no interim dividend plan, either in the form of cash or stock.
III Commitments of the Company’s Actual Controller, Shareholders, Related Parties and
Acquirers, as well as the Company Itself and Other Entities Fulfilled in Reporting Period orOngoing at Period-End
□ Applicable √ Not applicable
No such cases in the Reporting Period.
IV Engagement and Disengagement of Independent Auditor
Are the interim financial statements audited?
□Yes √ No
The interim financial statements are unaudited.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
V Explanations Given by Board of Directors and Supervisory Committee Regarding
Independent Auditor's “Modified Opinion” for Reporting Period
□ Applicable √ Not applicable
VI Explanations Given by Board of Directors Regarding Independent Auditor's “ModifiedOpinion” for Last Year
□ Applicable √ Not applicable
VII Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII Legal Matters
Material lawsuits or arbitrations:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Other legal matters:
√ Applicable □ Not applicable
| General information | Involved amount (RMB’0,000) | Provision | Progress | Decisions and effects | Execution of decisions | Disclosure date | Index to disclosed information |
| Suit and counter-suit between FSL and Dongguan Fozhao Linton Energy-Saving Technologies Co., Ltd. (hereinafter referred to as “Linton”) on a sales and purchase contract | The amount involved in the suit filed by FSL against Linton is RMB10.5158 million, while the amount of the counter-suite is RMB13.2791 million | None (uncertain before the court decision comes out) | First trial underway | Pending | N/A | ||
| Suit filed by FSL against Guangdong Hengyu | RMB8.9779 million | None (FSL is the plaintiff) | The defendant was ordered to pay RMB8.9779 | Second trial underway | N/A |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
| Construction Engineering Co., Ltd. on a sales and purchase contract | million and the overdue interest to FSL for construction service, as well as to cover all the court costs in the first trial. The defendant has applied for an appeal following FSL’s application for enforcement. | ||||||
| Suit filed by FSL against Beijing Zhongao Zhengshi Lighting Co., Ltd. and natural person Jiang Zhenghao on a sales and purchase contract | RMB19.2764 million | None (FSL is the plaintiff) | The defendant was ordered to pay RMB14.2208 million and the liquidated damages to FSL for product sales, with Jiang Zhenghao bearing the joint responsibility. The defendant has applied for an appeal. | Second trial underway | N/A | ||
| Suit filed by FSL against Guiyang Xingshuangying Trade Co., Ltd. on a sales and purchase contract | RMB0.7122 million | None (FSL is the plaintiff) | The defendant was ordered to pay RMB0.4878 million and the interest to FSL for product sales. | The decision of the first trial has come out | Enforcement underway | ||
| Suit filed by the insolvency administrator of Huangshan Hongchuan Lighting Co., Ltd. against FSL on an amount | RMB0.4999 million | None | FSL has agreed to pay RMB0.42 million in a settlement. | Closed | FSL is ready to pay |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
IX Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
X Credit Quality of the Company as well as Its Controlling Shareholder and ActualController
√ Applicable □ Not applicable
In 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.
XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures forEmployees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII Major Related-Party Transactions
1. Continuing Related-Party Transactions
√ Applicable □ Not applicable
receivable by theplaintiff
Related
party
| Related party | Relationship with the Company | Type of transaction | Specific transaction | Pricing principle | Transaction pric(RMB’0,000)e | Total value (RMB’0,000) | As % of total value of all same-type transactions | Approved transaction line (RMB’0,000) | Over approved line or not | Method of settlement | Obtainable market price for same-type transactions (RMB’0,000) | Disclosure date | Index to disclosed information |
| Prosperity Lamps & Components | Shareholder that holds over 5% shares of the | Purchasing products and receiving labor | Purchase of materials | Market price | 384.45 | 384.45 | 0.31% | 600 | Not | Remittance | 384.45 | 30 March 2018 | www.cninfo.com.cn |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
| Limited | Company | service from related party | |||||||||||
| Prosperity Electrical (China) Co., Ltd. | Enterprise controlled by related individual | Purchasing products and receiving labor service from related party | Purchase of materials | Market price | 72.99 | 72.99 | 0.06% | Remittance | 72.99 | N/A | |||
| Hangzhou Times Lighting and Electrical Co., Ltd. | Enterprise controlled by related individual | Purchasing products and receiving labor service from related party | Purchase of materials | Market price | 36.89 | 36.89 | 0.03% | 200 | Not | Remittance | 36.89 | 30 March 2018 | www.cninfo.com.cn |
| Foshan NationStar Optoelectronics Co., Ltd. | Under same actual controller | Purchasing products and receiving labor service from related party | Purchase of materials | Market price | 4,359.58 | 4,359.58 | 3.48% | 20,000 | Not | Remittance | 4,359.58 | 30 March 2018 | www.cninfo.com.cn |
| Guangdong Fenghua Advanced Holding Co., Ltd. | Under same actual controller | Purchasing products and receiving labor service from related | Purchase of materials | Market price | 517.29 | 517.29 | 0.41% | 1,100 | Not | Remittance | 517.29 | 30 March 2018 | www.cninfo.com.cn |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
| party | |||||||||||||
| Guangdong Electronic Technology Research Institute | Under same actual controller | Purchasing products and receiving labor service from related party | Purchase of equipment | Market price | 76.07 | 76.07 | 2.03% | 300 | Not | Remittance | 76.07 | www.cninfo.com.cn | |
| MTM Semiconductor Equipment Co., Ltd. | Under same actual controller | Purchasing products and receiving labor service from related party | Purchase of equipment | Market price | 32.33 | 32.33 | 0.86% | 100 | Not | Remittance | 32.33 | 30 March 2018 | www.cninfo.com.cn |
| Vollsun Ltd. | Under same actual controller | Purchasing products and receiving labor service from related party | Purchase of equipment | Market price | 160.00 | 160 | 4.26% | Remittance | 160.00 | N/A | |||
| Prosperity Lamps & Components Limited | Shareholder that holds over 5% shares of the Company | Selling products and providing labor service to related party | Selling products | Market price | 1,887.18 | 1,887.18 | 0.91% | 3,600 | Not | Remittance | 1,887.18 | 30 March 2018 | www.cninfo.com.cn |
| Prosperity (Hangzh | Enterprise controll | Selling products and | Selling products | Market price | 4.63 | 4.63 | 0.00% | 30 | Not | Remittance | 4.63 | 30 March 2018 | www.cninfo.com.cn |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
| ou) Lighting and Electrical Co., Ltd. | ed by related individual | providing labor service to related party | |||||||||||
| Prosperity Electrical (China) Co., Ltd. | Enterprise controlled by related individual | Selling products and providing labor service to related party | Selling products | Market price | 17.54 | 17.54 | 0.01% | 50 | Not | Remittance | 17.54 | 30 March 2018 | www.cninfo.com.cn |
| Guangdong Rising Optoelectronic Technology Co., Ltd. | Enterprise controlled by related individual | Selling products and providing labor service to related party | Selling products | Market price | 0.06 | 0.06 | 0.00% | Remittance | 0.06 | N/A | |||
| Total | -- | -- | 7,549.01 | -- | 25,980 | -- | -- | -- | -- | -- | |||
| Large-amount sales return in detail | N/A | ||||||||||||
| Give the actual situation in the Reporting Period (if any) where an estimate had been made for the total value of continuing related-party transactions by type to occur in the Reporting Period | In March 2018, the Company estimated the total value of its continuing transactions with related parties Foshan NationStar Optoelectronics Co., Ltd., Guangdong Fenghua Advanced Holding Co., Ltd., Prosperity Lamps & Components Limited, Prosperity Electrical (China) Co., Ltd., Prosperity (Hangzhou) Lighting and Electrical Co., Ltd. and Hangzhou Times Lighting and Electrical Co., Ltd. Concerning the purchases from its related parties, the actual amount in 2018 so far was RMB56.3959 million, accounting for 25.29% of the estimate. As for the sales to its related parties, the actual amount in 2018 so far was RMB19.0941 million, accounting for 51.89% of the estimate. | ||||||||||||
| Reason for significant difference between transaction price and market reference price (if applicable) | N/A | ||||||||||||
2. Related-Party Transactions Regarding Purchases or Sales of Assets or Equity Interests
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
3. Related-Party Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Credits and Liabilities with Related Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Other Major Related-Party Transactions
√ Applicable □ Not applicable
1. On 28 June 2017, the Company held the 15th meeting of the 8th Board of Directors, and the Proposal onRenewing the Financial Services Agreement with Guangdong Rising Finance Co., Ltd. was examined andapproved at the meeting. On the same day, the Company signed the Financial Services Agreement with
Guangdong Rising Finance Co., Ltd. (hereinafter referred to as “Rising Finance”), and Rising Finance would
provide deposit and settlement services for the Company for a term of one year. During the term of validity of theAgreement, the daily deposit balance of the Company in Rising Finance Company shall not exceed RMB150million. During the Reporting Period, the daily deposit balance of the Company in Rising Finance Company wasRMB148 million.2. On 26 June 2018, the Company held the 23rd meeting of the 8th Board of Directors, and the Proposal onSigning the Financial Services Agreement with Guangdong Rising Finance Co., Ltd. was examined and approvedat the meeting. On the same day, the Company signed the Financial Services Agreement with Guangdong Rising
Finance Co., Ltd. (hereinafter referred to as “Rising Finance”), and Rising Finance would provide deposit and
settlement services for the Company for a term of one year. During the term of validity of the Agreement, thedaily deposit balance of the Company in Rising Finance Company shall not exceed RMB150 million. During theReporting Period, the daily deposit balance of the Company in Rising Finance Company was RMB148 million.
Index to the current announcements about the said related-party transactions disclosed:
| Title of announcement | Disclosure date | Disclosure website |
| Announcement on Renewing Financial Service Agreement with Guangdong Rising Finance Co., Ltd. | 29 June 2017 | www.cninfo.com.cn |
| Announcement on Signing Financial Service Agreement with Guangdong Rising Finance Co., Ltd. | 27 June 2018 | www.cninfo.com.cn |
XIII Occupation of the Company’s Capital by Controlling Shareholder or Its Related Parties
for Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
XIV Major Contracts and Their Execution
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 applicable
No such cases in the Reporting Period.
2. Major Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Other Major Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XV Corporate Social Responsibility (CSR)
1. Material Environmental Issues
Is the Company or any of its subsidiaries is identified as a major polluter by the environmental protectionauthorities?No.Neither the Company nor any of its majority-owned subsidiaries is identified as a major polluter by theenvironmental protection authorities of China.
In strict accordance with the government’s requirements, the Company has been conscientiously carrying out
environment-related work, including establishing and improving various related systems, and continuouslyincreasing related expenditure. These environment improvement efforts have helped build a good image of the
Company in relation to environmental protection. Meanwhile, the Company’s environmental protecting facilities
have been running stably, with the discharge of waste gas and water in compliance with the relevant standards. Nopollution incidents have occurred.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
In addition to the environmental protection authorities’ quarterly examination and supervision, the Company hasalso entrusted, on a yearly basis, an independent institution to exam the Company’s waste gas treatment systems,
as well as waste water and noise discharges, so as to minimize environment risk. All the examinations and testshave been documented and released to the employees on the environmental protection and safety bulletin boardsat every workshop. Employees at all levels, with a strong awareness of environment protection, have been
cooperating closely with each other to implement the policy of “Save Energy, Reduce Consumption, LowerPollution and Increase Efficiency”. In all, the Company’s environment risk is controllable and its environment
management keeps improving.
2. Measures Taken for Targeted Poverty Alleviation
The Company took no such measures during the Reporting Period, nor does it have any such plan for now.
XVI Other Significant Events
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVII Significant Events of Subsidiaries
□ Applicable √ Not applicable
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
Part VI Share Changes and Shareholder Information
I Share Changes
1. Share Changes
Unit: share
| Before | Increase/decrease in Reporting Period (+/-) | After | |||||||
| Shares | Percentage (%) | New issues | Shares as dividend converted from profit | Shares as dividend converted from capital reserves | Other | Subtotal | Shares | Percentage (%) | |
| 1. Restricted shares | 12,582,003 | 0.99% | 1,258,200 | 128,451 | 1,386,651 | 13,968,654 | 1.00% | ||
| 1.3 Shares held by other domestic investors | 4,465,974 | 0.35% | 446,597 | 128,451 | 575,048 | 5,041,022 | 0.36% | ||
| Among which: Shares held by domestic legal persons | 3,860,675 | 0.30% | 386,067 | -9,661 | 376,406 | 4,237,081 | 0.30% | ||
| Shares held by domestic natural persons | 605,299 | 0.05% | 60,530 | 138,112 | 198,642 | 803,941 | 0.06% | ||
| 1.4 Shares held by foreign investors | 8,116,029 | 0.64% | 811,603 | 811,603 | 8,927,632 | 0.64% | |||
| Shares held by foreign natural persons | 8,116,029 | 0.64% | 811,603 | 811,603 | 8,927,632 | 0.64% | |||
| 2. Unrestricted shares | 1,259,550,865 | 99.01% | 125,955,086 | -128,451 | 125,826,635 | 1,385,377,500 | 99.00% | ||
| 2.1 RMB-denominated ordinary shares | 974,879,546 | 76.63% | 97,487,954 | -128,451 | 97,359,503 | 1,072,239,049 | 76.62% | ||
| 2.2 Domestically listed foreign shares | 284,671,319 | 22.39% | 28,467,132 | 28,467,132 | 313,138,451 | 22.38% | |||
| 3. Total shares | 1,272,132,868 | 100.00% | 127,213,286 | 127,213,286 | 1,399,346,154 | 100.00% | |||
Reasons for share changes:
√ Applicable □ Not applicable
1. As resolved at the 2017 Annual General Meeting, the Company completed a bonus issue of one additional share
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
for every 10 existing shares from capital reserves on 16 May 2018, representing an increment of 127,213,286
shares to the Company’s total shares.2. 9,661 restricted shares held by domestic legal persons became domestic natural persons’ holdings during the
Reporting Period.3. During the Reporting Period, some directors and supervisors, as well as all the senior management increasedtheir shareholdings in the Company, representing an increase of 128,451 restricted shares.
Approval of share changes:
√ Applicable □ Not applicable
According to the 2017 Final Dividend Plan, which was approved at the 2017 Annual General Meeting on 26 April
2018, based on the Company’s total shares of 1,272,132,868 at the end of 2017, a cash dividend of RMB3.29 (tax
inclusive, dividends for B-shareholders to be paid in the Hong Kong dollars) per 10 shares would be distributed tothe A- and B-shareholders, with a bonus issue of one additional share for every 10 existing shares from capital
reserves, representing an increment of 127,213,286 shares to the Company’s total shares.
Transfer of share ownership:
□ Applicable √ Not applicable
Effects of share changes on the basic earnings per share, diluted earnings per share, equity per share attributable to
the Company’s ordinary shareholders and other financial indicators of the prior year and the prior accounting
period, respectively:
√ Applicable □ Not applicable
The Company has completed the bonus issue of one additional share for every 10 existing shares from capitalreserves in the Reporting Period, with its total shares increasing from 1,272,132,868 to 1,399,346,154. This
change’s effects on the basic earnings per share, 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, are as follows:
| 2017 or as at 31 December 2017 | H1 2018 or as at 30 June 2018 | ||
| Item | Based on former total shares | Based on new total shares | Based on new total shares |
| Basic earnings per share (RMB/share) | 0.5819 | 0.5290 | 0.1638 |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
| Diluted earnings per share (RMB/share) | 0.5819 | 0.5290 | 0.1638 |
| Equity per share (RMB/share) | 3.76 | 3.42 | 3.05 |
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
√ Applicable □ Not applicable
Unit: share
| Shareholder | Beginning restricted shares | Released in Reporting Period | Increase in Reporting Period | Ending restricted shares | Reason for restriction/release from restriction | Date of release |
| Liu Xingming | 380,523 | 0 | 63,627 | 444,150 | Lock-up of senior management’s shares | Uncertain |
| Tang Qionglan | 12,150 | 0 | 17,880 | 30,030 | Lock-up of senior management’s shares | Uncertain |
| Wei Bin | 35,602 | 0 | 20,142 | 55,744 | Lock-up of senior management’s shares | Uncertain |
| Jiao Zhigang | 40,458 | 0 | 16,091 | 56,549 | Lock-up of senior management’s shares | Uncertain |
| Chen Yu | 20,370 | 0 | 14,329 | 34,699 | Lock-up of senior management’s shares | Uncertain |
| Zhang Yong | 25,995 | 0 | 15,552 | 41,547 | Lock-up of senior management’s shares | Uncertain |
| Zhang Xuequan | 20,033 | 0 | 18,256 | 38,289 | Lock-up of senior management’s shares | Uncertain |
| Xu Xiaoping | 7,575 | 0 | 11,152 | 18,727 | Lock-up of senior management’s shares | Uncertain |
| Ye Zhenghong | 39,321 | 0 | 9,625 | 48,946 | Lock-up of | Uncertain |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
| supervisor’s shares | ||||||
| Total | 582,027 | 0 | 186,654 | 768,681 | -- | -- |
II Issuance and Listing of Securities
□ Applicable √ Not applicable
III Shareholders and Their Holdings at Period-End
Unit: share
| Number of ordinary shareholders | 93,117 | Number of preferred shareholders with resumed voting rights (if any) (see note 8) | 0 | ||||||||
| 5% or greater ordinary shareholders or top 10 ordinary shareholders | |||||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Ordinary shares | Increase/decrease in Reporting Period | Restricted ordinary shares | Unrestricted ordinary shares | Pledged or frozen shares | ||||
| Status | Shares | ||||||||||
| Hong Kong Wah Shing Holding Company Limited | Foreign legal person | 13.47% | 188,496,430 | 188,496,430 | In pledge | 92,363,251 | |||||
| Prosperity Lamps & Components Limited | Foreign legal person | 10.50% | 146,934,857 | 146,934,857 | |||||||
| Shenzhen Rising Investment Development Co., Ltd. | State-owned legal person | 5.12% | 71,696,136 | 71,696,136 | In pledge | 25,300,000 | |||||
| Guangdong Electronics Information Industry Group Ltd. | State-owned legal person | 4.74% | 66,393,501 | 66,393,501 | In pledge | 32,532,815 | |||||
| Central Huijin Asset | State-owned | 2.42% | 33,878,900 | 33,878,900 | |||||||
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
| Management Co., Ltd. | legal person | ||||||||||
| Essence International Securities (Hong Kong) Co., Ltd. | Foreign legal person | 2.09% | 29,313,386 | 1,453,477 | 29,313,386 | ||||||
| Hong Kong Rising Investment Development Co., Ltd. | Foreign legal person | 1.82% | 25,482,252 | 25,482,252 | |||||||
| DBS Vickers (Hong Kong) Ltd A/C Clients | Foreign legal person | 1.70% | 23,811,009 | -2,199,321 | 23,811,009 | ||||||
| China Merchants Securities (Hong Kong) Co., Ltd | Foreign legal person | 0.88% | 12,322,811 | 282,914 | 12,322,811 | ||||||
| Peng Weiyan | Domestic natural person | 0.86% | 12,032,113 | 3,024,336 | 12,032,113 | ||||||
| Strategic investor or general legal person becoming top-10 ordinary shareholder due to rights issue (if any) (see note 3) | N/A | ||||||||||
| Related or acting-in-concert parties among shareholders above | Among the top 10 shareholders, Hong Kong Wah Shing Holding Company Limited, Shenzhen Rising Investment Development Co., Ltd., Guangdong Electronics Information Industry Group Ltd. and Hong Kong Rising Investment Development Co., Ltd. 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 unrestricted ordinary shareholders | |||||||||||
| Name of shareholder | Unrestricted ordinary shares | Type of shares | |||||||||
| Type | Shares | ||||||||||
| Hong Kong Wah Shing Holding Company Limited | 188,496,430 | RMB-denominated ordinary stock | 188,496,430 | ||||||||
| Prosperity Lamps & Components Limited | 146,934,857 | RMB-denominated ordinary stock | 146,934,857 | ||||||||
| Shenzhen Rising Investment | 71,696,136 | RMB-denominate | 71,696,136 | ||||||||
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
| Development Co., Ltd. | d ordinary stock | ||
| Guangdong Electronics Information Industry Group Ltd. | 66,393,501 | RMB-denominated ordinary stock | 66,393,501 |
| Central Huijin Asset Management Co., Ltd. | 33,878,900 | RMB-denominated ordinary stock | 33,878,900 |
| Essence International Securities (Hong Kong) Co., Ltd. | 29,313,386 | Domestically listed foreign stock | 29,313,386 |
| Hong Kong Rising Investment Development Co., Ltd. | 25,482,252 | Domestically listed foreign stock | 25,482,252 |
| DBS Vickers (Hong Kong) Ltd A/C Clients | 23,811,009 | Domestically listed foreign stock | 23,811,009 |
| China Merchants Securities (Hong Kong) Co., Ltd | 12,322,811 | Domestically listed foreign stock | 12,322,811 |
| Peng Weiyan | 12,032,113 | RMB-denominated ordinary stock | 12,032,113 |
| Related or acting-in-concert parties among top 10 unrestricted ordinary shareholders, as well as between top 10 unrestricted ordinary shareholders and top 10 ordinary shareholders | Among the top 10 unrestricted ordinary shareholders, Hong Kong Wah Shing Holding Company Limited, Shenzhen Rising Investment Development Co., Ltd., Guangdong Electronics Information Industry Group Ltd. and Hong Kong Rising Investment Development Co., Ltd. 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 conducting securities margin trading (if any) (see note 4) | Among the top 10 unrestricted shareholders, natural person Peng Weiyan holds 0 shares in the Company through her common stock accounts and 12,032,113 shares in the Company through her accounts of collateral securities for margin trading, representing a total holding of 12,032,113 shares in the Company. | ||
IV Change of Controlling Shareholder or Actual Controller in Reporting Period
Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
The controlling shareholder remained the same in the Reporting Period.
Change of the actual controller in the Reporting Period:
□ Applicable √ Not applicable
The actual controller remained the same in the Reporting Period.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
Part VII Preferred Shares
□ Applicable √ Not applicable
No preferred shares in the Reporting Period.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
Part VIII Directors, Supervisors and Senior Management
I Changes in Shareholdings of Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
| Name | Office title | Incumbent/Former | Beginning shareholding (share) | Increase in Reporting Period (share) | Decrease in Reporting Period (share) | Ending shareholding (share) | Beginning restricted shares (share) | Restricted shares granted in Reporting Period (share) | Ending restricted shares (share) |
| Liu Xingming | Director & General Manager | Incumbent | 507,364 | 31,000 | 0 | 592,200 | 0 | 0 | 0 |
| Lin Yihui | Board Secretary | Incumbent | 29,600 | 19,300 | 0 | 53,790 | 0 | 0 | 0 |
| Tang Qionglan | CFO | Incumbent | 16,200 | 20,200 | 0 | 40,040 | 0 | 0 | 0 |
| Wei Bin | Vice General Manager | Incumbent | 47,469 | 20,100 | 0 | 74,326 | 0 | 0 | 0 |
| Jiao Zhigang | Vice General Manager | Incumbent | 53,944 | 14,600 | 0 | 75,399 | 0 | 0 | 0 |
| Chen Yu | Vice General Manager | Incumbent | 27,160 | 14,900 | 0 | 46,266 | 0 | 0 | 0 |
| Zhang Xuequan | Vice General Manager | Incumbent | 26,711 | 19,700 | 0 | 51,052 | 0 | 0 | 0 |
| Zhang Yong | Vice General Manager | Incumbent | 34,660 | 15,700 | 0 | 55,396 | 0 | 0 | 0 |
| Xu Xiaoping | Vice General Manager | Incumbent | 10,100 | 12,600 | 0 | 24,970 | 0 | 0 | 0 |
| Ye Zhenghong | Supervisor | Incumbent | 52,428 | 6,900 | 0 | 65,261 | 0 | 0 | 0 |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
| Total | -- | -- | 805,636 | 175,000 | 0 | 1,078,700 | 0 | 0 | 0 |
Note: The ending shareholdings of the directors, supervisors and senior management in the table above equal theirbeginning holdings, plus their increases in the Current Period, and plus the stock dividends from capital reservesaccording to the 2017 final dividend plan.
II Change of Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
| Name | Office title | Type of change | Date of change | Reason for change |
| Liang Yuefei | Chairman of the Supervisory Committee | Outgoing | 8 June 2018 | Job change |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018
Part IX Corporate Bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were undue before
the date of this Report’s approval or were due but could not be redeemed in full?
No.
Part X Financial Statements
I Independent Auditor’s Report
Are these interim financial statements audited by an independent auditor?
□Yes √ No
They are unaudited by such an auditor.
II Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Foshan Electrical and Lighting Co., Ltd.
30 June 2018
Unit: RMB
| Item | 30 June 2018 | 31 December 2017 |
| Current assets: | ||
| Monetary assets | 914,968,599.68 | 570,184,208.96 |
| Settlement reserve | ||
| Interbank loans granted | ||
| Financial assets at fair value through profit or loss | ||
| Derivative financial assets | ||
| Notes receivable | 67,325,195.40 | 68,368,192.41 |
| Accounts receivable | 994,690,386.07 | 756,291,432.56 |
| Prepayments | 30,415,238.48 | 33,095,313.35 |
| Premiums receivable | ||
| Reinsurance receivables | ||
| Receivable reinsurance contract reserve | ||
| Interest receivable | 1,589,090.91 | 12,428,451.86 |
| Dividends receivable | ||
| Other receivables | 37,100,965.10 | 21,215,215.15 |
| Financial assets purchased under resale agreements |
| Inventories | 718,166,451.66 | 746,466,889.87 |
| Assets classified as held for sale | ||
| Current portion of non-current assets | ||
| Other current assets | 348,511,668.85 | 1,006,062,102.56 |
| Total current assets | 3,112,767,596.15 | 3,214,111,806.72 |
| Non-current assets: | ||
| Loans and advances to customers | ||
| Available-for-sale financial assets | 1,010,613,407.54 | 1,390,581,536.60 |
| Held-to-maturity investments | ||
| Long-term receivables | ||
| Long-term equity investments | 176,473,300.95 | 179,414,105.14 |
| Investment property | ||
| Fixed assets | 511,806,666.21 | 483,520,866.64 |
| Construction in progress | 189,368,112.34 | 162,814,991.68 |
| Engineering materials | ||
| Proceeds from disposal of fixed assets | ||
| Productive living assets | ||
| Oil and gas assets | ||
| Intangible assets | 153,387,711.51 | 155,544,720.36 |
| R&D expense | ||
| Goodwill | ||
| Long-term prepaid expense | 7,405,224.79 | 9,088,933.56 |
| Deferred income tax assets | 34,933,025.45 | 37,675,828.79 |
| Other non-current assets | 42,106,140.00 | 43,059,034.80 |
| Total non-current assets | 2,126,093,588.79 | 2,461,700,017.57 |
| Total assets | 5,238,861,184.94 | 5,675,811,824.29 |
| Current liabilities: | ||
| Short-term borrowings | ||
| Borrowings from central bank | ||
| Customer deposits and deposits from banks and other financial institutions | ||
| Interbank loans obtained | ||
| Financial liabilities at fair value through profit or loss |
| Derivative financial liabilities | ||
| Notes payable | 2,652,485.00 | |
| Accounts payable | 679,471,875.75 | 539,303,554.54 |
| Advances from customers | 39,197,246.65 | 48,706,778.49 |
| Financial assets sold under repurchase agreements | ||
| Handling charges and commissions payable | ||
| Payroll payable | 63,799,759.73 | 81,948,630.59 |
| Taxes payable | 46,542,385.81 | 27,350,670.40 |
| Interest payable | ||
| Dividends payable | ||
| Other payables | 35,648,829.55 | 40,548,489.03 |
| Reinsurance payables | ||
| Insurance contract reserve | ||
| Payables for acting trading of securities | ||
| Payables for underwriting of securities | ||
| Liabilities directly associated with assets classified as held for sale | ||
| Current portion of non-current liabilities | ||
| Other current liabilities | ||
| Total current liabilities | 867,312,582.49 | 737,858,123.05 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Long-term payables | ||
| Long-term payroll payable | ||
| Specific payables | ||
| Provisions | ||
| Deferred income | 11,780,830.53 | 11,858,330.49 |
| Deferred income tax liabilities | 69,465,031.60 | 126,460,250.96 |
| Other non-current liabilities |
| Total non-current liabilities | 81,245,862.13 | 138,318,581.45 |
| Total liabilities | 948,558,444.62 | 876,176,704.50 |
| Owners’ equity: | ||
| Share capital | 1,399,346,154.00 | 1,272,132,868.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 158,608,173.07 | 285,821,459.07 |
| Less: Treasury shares | ||
| Other comprehensive income | 393,631,982.39 | 716,607,333.78 |
| Specific reserve | ||
| Surplus reserves | 772,953,002.36 | 772,953,002.36 |
| General reserve | ||
| Retained earnings | 1,542,346,538.43 | 1,731,600,796.18 |
| Total equity attributable to owners of the Company as the parent | 4,266,885,850.25 | 4,779,115,459.39 |
| Non-controlling interests | 23,416,890.07 | 20,519,660.40 |
| Total owners’ equity | 4,290,302,740.32 | 4,799,635,119.79 |
| Total liabilities and owners’ equity | 5,238,861,184.94 | 5,675,811,824.29 |
Legal representative: He Yong General Manager: Liu XingmingChief Financial Officer: Tang Qionglan
2. Balance Sheet of the Company as the Parent
Unit: RMB
| Item | 30 June 2018 | 31 December 2017 |
| Current assets: | ||
| Monetary assets | 624,071,920.48 | 502,169,100.40 |
| Financial assets at fair value through profit or loss | ||
| Derivative financial assets | ||
| Notes receivable | 66,615,195.40 | 67,268,192.41 |
| Accounts receivable | 972,172,168.34 | 747,430,159.61 |
| Prepayments | 66,845,395.68 | 70,580,941.09 |
| Interest receivable | 1,589,090.91 | 9,744,035.20 |
| Dividends receivable | ||
| Other receivables | 72,164,535.91 | 42,174,877.89 |
| Inventories | 646,102,715.85 | 670,527,529.71 |
| Assets classified as held for sale | ||
| Current portion of non-current assets | ||
| Other current assets | 339,075,203.39 | 777,495,203.31 |
| Total current assets | 2,788,636,225.96 | 2,887,390,039.62 |
| Non-current assets: | ||
| Available-for-sale financial assets | 1,010,613,407.54 | 1,390,581,536.60 |
| Held-to-maturity investments | ||
| Long-term receivables | ||
| Long-term equity investments | 660,266,403.21 | 663,207,207.40 |
| Investment property | ||
| Fixed assets | 425,385,486.39 | 404,667,257.11 |
| Construction in progress | 187,700,809.13 | 161,024,975.28 |
| Engineering materials | ||
| Proceeds from disposal of fixed assets | ||
| Productive living assets | ||
| Oil and gas assets | ||
| Intangible assets | 109,868,785.34 | 112,251,734.86 |
| R&D expense | ||
| Goodwill | ||
| Long-term prepaid expense | 6,193,662.18 | 8,209,699.77 |
| Deferred income tax assets | 32,668,456.01 | 32,985,075.62 |
| Other non-current assets | 42,106,140.00 | 42,661,573.80 |
| Total non-current assets | 2,474,803,149.80 | 2,815,589,060.44 |
| Total assets | 5,263,439,375.76 | 5,702,979,100.06 |
| Current liabilities: | ||
| Short-term borrowings | ||
| Financial liabilities at fair value through profit or loss | ||
| Derivative financial liabilities | ||
| Notes payable | 2,652,485.00 | |
| Accounts payable | 877,507,812.49 | 719,912,246.75 |
| Advances from customers | 37,809,995.34 | 47,306,971.94 |
| Payroll payable | 43,953,007.55 | 60,345,714.81 |
| Taxes payable | 35,237,842.58 | 13,294,037.24 |
| Interest payable | ||
| Dividends payable | ||
| Other payables | 99,671,341.22 | 96,824,757.90 |
| Liabilities directly associated with assets classified as held for sale | ||
| Current portion of non-current liabilities | ||
| Other current liabilities | ||
| Total current liabilities | 1,096,832,484.18 | 937,683,728.64 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Long-term payables | ||
| Long-term payroll payable | ||
| Specific payables | ||
| Provisions | ||
| Deferred income | 11,548,330.26 | 11,548,330.26 |
| Deferred income tax liabilities | 69,465,031.60 | 126,460,250.96 |
| Other non-current liabilities | ||
| Total non-current liabilities | 81,013,361.86 | 138,008,581.22 |
| Total liabilities | 1,177,845,846.04 | 1,075,692,309.86 |
| Owners’ equity: | ||
| Share capital | 1,399,346,154.00 | 1,272,132,868.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 166,211,779.15 | 293,425,065.15 |
| Less: Treasury shares | ||
| Other comprehensive income | 393,635,179.08 | 716,608,088.78 |
| Specific reserve | ||
| Surplus reserves | 772,953,002.36 | 772,953,002.36 |
| Retained earnings | 1,353,447,415.13 | 1,572,167,765.91 |
| Total owners’ equity | 4,085,593,529.72 | 4,627,286,790.20 |
| Total liabilities and owners’ equity | 5,263,439,375.76 | 5,702,979,100.06 |
Legal representative: He Yong General Manager: Liu XingmingChief Financial Officer: Tang Qionglan
3. Consolidated Income Statement
Unit: RMB
| Item | H1 2018 | H1 2017 |
| 1. Revenue | 2,064,779,289.99 | 2,023,925,582.84 |
| Including: Operating revenue | 2,064,779,289.99 | 2,023,925,582.84 |
| Interest income | ||
| Premium income | ||
| Handling charge and commission income | ||
| 2. Operating costs and expenses | 1,812,566,821.34 | 1,764,705,009.46 |
| Including: Cost of sales | 1,579,291,867.89 | 1,546,931,779.85 |
| Interest expense | ||
| Handling charge and commission expense | ||
| Surrenders | ||
| Net claims paid | ||
| Net amount provided as insurance contract reserve | ||
| Expenditure on policy dividends | ||
| Reinsurance premium expense | ||
| Taxes and surtaxes | 21,962,518.24 | 20,386,602.33 |
| Selling expense | 103,917,010.47 | 81,651,993.69 |
| Administrative expense | 104,474,031.52 | 98,790,821.60 |
| Finance costs | -13,085,476.61 | -7,115,907.36 |
| Asset impairment loss | 16,006,869.83 | 24,059,719.35 |
| Add: Gain on changes in fair value (“-” for loss) | ||
| Investment income (“-” for loss) | 24,509,870.36 | 14,009,282.02 |
| Including: Share of profit or loss of joint ventures and associates | 179,781.56 | 1,543,965.79 |
| Foreign exchange gain (“-” for loss) | ||
| Asset disposal income (“-” for loss) | -10,790.68 |
| Other income | 1,018,385.17 | 3,302,994.36 |
| 3. Operating profit (“-” for loss) | 277,740,724.18 | 276,522,059.08 |
| Add: Non-operating income | 1,669,856.43 | 2,719,401.52 |
| Less: Non-operating expense | 191,749.42 | 4,758,983.01 |
| 4. Profit before taxation (“-” for loss) | 279,218,831.19 | 274,482,477.59 |
| Less: Income tax expense | 47,044,145.70 | 42,597,501.35 |
| 5. Net profit (“-” for net loss) | 232,174,685.49 | 231,884,976.24 |
| 5.1 Net profit from continuing operations (“-” for net loss) | 232,174,685.49 | 231,884,976.24 |
| 5.2 Net profit from discontinued operations (“-” for net loss) | ||
| Net profit attributable to owners of the Company as the parent | 229,277,455.82 | 228,494,660.57 |
| Net profit attributable to non-controlling interests | 2,897,229.67 | 3,390,315.67 |
| 6. Other comprehensive income, net of tax | -322,975,351.39 | 23,025,471.14 |
| Attributable to owners of the Company as the parent | -322,975,351.39 | 23,025,471.14 |
| 6.1 Items that will not be reclassified to profit or loss | ||
| 6.1.1 Changes in net liabilities or assets caused by remeasurements on defined benefit pension schemes | ||
| 6.1.2 Share of other comprehensive income of investees that will not be reclassified to profit or loss under equity method | ||
| 6.2 Items that may subsequently be reclassified to profit or loss | -322,975,351.39 | 23,025,471.14 |
| 6.2.1 Share of other comprehensive income of investees that will be reclassified to profit or loss under equity method | ||
| 6.2.2 Gain/Loss on changes in fair value of available-for-sale financial assets | -322,972,909.70 | 23,025,471.14 |
| 6.2.3 Gain/Loss arising from reclassification of held-to-maturity investments to available-for-sale financial assets |
| 6.2.4 Effective gain/loss on cash flow hedges | ||
| 6.2.5 Differences arising from translation of foreign currency-denominated financial statements | -2,441.69 | |
| 6.2.6 Other | ||
| Attributable to non-controlling interests | ||
| 7. Total comprehensive income | -90,800,665.90 | 254,910,447.38 |
| Attributable to owners of the Company as the parent | -93,697,895.57 | 251,520,131.71 |
| Attributable to non-controlling interests | 2,897,229.67 | 3,390,315.67 |
| 8. Earnings per share | ||
| 8.1 Basic earnings per share | 0.1638 | 0.1633 |
| 8.2 Diluted earnings per share | 0.1638 | 0.1633 |
Where business combinations under common control occurred in the Current Period, the net profit achieved by the acquirees beforethe combinations was RMB0.00, with the amount for the same period of last year being RMB0.00.Legal representative: He Yong General Manager: Liu XingmingChief Financial Officer: Tang Qionglan
4. Income Statement of the Company as the Parent
Unit: RMB
| Item | H1 2018 | H1 2017 |
| 1. Operating revenue | 2,004,288,444.76 | 1,980,196,404.29 |
| Less: Cost of sales | 1,587,394,320.53 | 1,549,957,656.10 |
| Taxes and surtaxes | 17,214,406.11 | 14,028,299.06 |
| Selling expense | 91,117,192.72 | 74,062,826.39 |
| Administrative expense | 96,241,158.47 | 98,398,538.37 |
| Finance costs | -12,655,059.12 | -4,474,253.64 |
| Asset impairment loss | 15,224,655.05 | 23,053,208.55 |
| Add: Gain on changes in fair value (“-” for loss) | ||
| Investment income (“-” for loss) | 21,037,840.32 | 12,903,476.48 |
| Including: Share of profit or loss of joint ventures and associates | 179,781.56 | 1,543,965.79 |
| Asset disposal income (“-” for |
| loss) | ||
| Other income | 561,343.06 | 3,285,240.00 |
| 2. Operating profit (“-” for loss) | 231,350,954.38 | 241,358,845.94 |
| Add: Non-operating income | 1,572,451.59 | 2,461,593.41 |
| Less: Non-operating expense | 164,104.09 | 2,041,377.50 |
| 3. Profit before taxation (“-” for loss) | 232,759,301.88 | 241,779,061.85 |
| Less: Income tax expense | 32,947,939.09 | 34,045,999.98 |
| 4. Net profit (“-” for net loss) | 199,811,362.79 | 207,733,061.87 |
| 4.1 Net profit from continuing operations (“-” for net loss) | 199,811,362.79 | 207,733,061.87 |
| 4.2 Net profit from discontinued operations (“-” for net loss) | ||
| 5. Other comprehensive income, net of tax | -322,972,909.70 | 23,025,471.14 |
| 5.1 Items that will not be reclassified to profit or loss | ||
| 5.1.1 Changes in net liabilities or assets caused by remeasurements on defined benefit pension schemes | ||
| 5.1.2 Share of other comprehensive income of investees that will not be reclassified into profit or loss under equity method | ||
| 5.2 Items that may subsequently be reclassified to profit or loss | -322,972,909.70 | 23,025,471.14 |
| 5.2.1 Share of other comprehensive income of investees that will be reclassified into profit or loss under equity method | ||
| 5.2.2 Gain/Loss on changes in fair value of available-for-sale financial assets | -322,972,909.70 | 23,025,471.14 |
| 5.2.3 Gain/Loss arising from reclassification of held-to-maturity investments to available-for-sale financial assets | ||
| 5.2.4 Effective gain/loss on cash flow hedges | ||
| 5.2.5 Differences arising from translation of foreign currency-denominated financial |
| statements | ||
| 5.2.6 Other | ||
| 6. Total comprehensive income | -123,161,546.91 | 230,758,533.01 |
| 7. Earnings per share | ||
| 7.1 Basic earnings per share | ||
| 7.2 Diluted earnings per share |
Legal representative: He Yong General Manager: Liu XingmingChief Financial Officer: Tang Qionglan
5. Consolidated Cash Flow Statement
Unit: RMB
| Item | H1 2018 | H1 2017 |
| 1. Cash flows from operating activities: | ||
| Proceeds from sale of commodities and rendering of services | 1,769,237,743.67 | 1,754,303,637.97 |
| Net increase in customer deposits and deposits from banks and other financial institutions | ||
| Net increase in loans from 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 | ||
| Net increase in proceeds from disposal of financial assets at fair value through profit or loss | ||
| Interest, handling charges and commissions received | ||
| Net increase in interbank loans obtained | ||
| Net increase in proceeds from repurchase transactions | ||
| Tax rebates | 47,287,499.42 | 42,499,505.18 |
| Cash generated from other operating activities | 33,545,832.35 | 28,893,716.10 |
| Subtotal of cash generated from | 1,850,071,075.44 | 1,825,696,859.25 |
| operating activities | ||
| Payments for commodities and services | 1,131,421,056.92 | 1,114,835,724.72 |
| Net increase in loans and advances to customers | ||
| Net increase in deposits in central bank and in interbank loans granted | ||
| Payments for claims on original insurance contracts | ||
| Interest, handling charges and commissions paid | ||
| Policy dividends paid | ||
| Cash paid to and for employees | 339,556,840.55 | 371,942,160.26 |
| Taxes paid | 137,020,623.78 | 262,092,182.25 |
| Cash used in other operating activities | 97,348,775.81 | 107,889,979.24 |
| Subtotal of cash used in operating activities | 1,705,347,297.06 | 1,856,760,046.47 |
| Net cash generated from/used in operating activities | 144,723,778.38 | -31,063,187.22 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disinvestment | 660,000,000.00 | |
| Investment income | 34,539,472.29 | 15,011,705.23 |
| Net proceeds from disposal of fixed assets, intangible assets and other long-lived assets | 1,626,000.00 | |
| Net proceeds from disposal of subsidiaries or other business units | ||
| Cash generated from other investing activities | ||
| Subtotal of cash generated from investing activities | 694,539,472.29 | 16,637,705.23 |
| Payments for acquisition of fixed assets, intangible assets and other long-lived assets | 90,700,439.05 | 108,664,080.94 |
| Payments for investments | 20,000,000.00 | |
| Net increase in pledged loans granted | ||
| Net payments for acquisition of subsidiaries and other business units | ||
| Cash used in other investing activities | 3,304,699.80 |
| Subtotal of cash used in investing activities | 94,005,138.85 | 128,664,080.94 |
| Net cash generated from/used in investing activities | 600,534,333.44 | -112,026,375.71 |
| 3. Cash flows from financing activities: | ||
| Capital contributions received | ||
| Including: Capital contributions by non-controlling interests to subsidiaries | ||
| Increase in borrowings obtained | ||
| Net proceeds from issuance of bonds | ||
| Cash generated from other financing activities | ||
| Subtotal of cash generated from financing activities | ||
| Repayment of borrowings | ||
| Payments for interest and dividends | 405,163,764.00 | 522,068,416.83 |
| Including: Dividends paid by subsidiaries to non-controlling interests | 5,660,290.78 | |
| Cash used in other financing activities | ||
| Subtotal of cash used in financing activities | 405,163,764.00 | 522,068,416.83 |
| Net cash generated from/used in financing activities | -405,163,764.00 | -522,068,416.83 |
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | 1,385,343.10 | 912,356.51 |
| 5. Net increase in cash and cash equivalents | 341,479,690.92 | -664,245,623.25 |
| Add: Cash and cash equivalents, beginning of the period | 570,184,208.96 | 1,479,283,642.54 |
| 6. Cash and cash equivalents, end of the period | 911,663,899.88 | 815,038,019.29 |
Legal representative: He Yong General Manager: Liu XingmingChief Financial Officer: Tang Qionglan
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
| Item | H1 2018 | H1 2017 |
| 1. Cash flows from operating activities: | ||
| Proceeds from sale of commodities and rendering of services | 1,712,676,401.03 | 1,700,716,001.72 |
| Tax rebates | 47,263,864.23 | 42,499,505.18 |
| Cash generated from other operating activities | 26,388,452.49 | 24,406,290.15 |
| Subtotal of cash generated from operating activities | 1,786,328,717.75 | 1,767,621,797.05 |
| Payments for commodities and services | 1,263,659,844.11 | 1,363,028,963.41 |
| Cash paid to and for employees | 209,185,383.63 | 167,453,782.97 |
| Taxes paid | 87,060,201.23 | 200,061,046.37 |
| Cash used in other operating activities | 85,851,338.88 | 101,737,482.16 |
| Subtotal of cash used in operating activities | 1,645,756,767.85 | 1,832,281,274.91 |
| Net cash generated from/used in operating activities | 140,571,949.90 | -64,659,477.86 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disinvestment | 440,000,000.00 | 35,000,000.00 |
| Investment income | 30,667,499.69 | 28,724,845.24 |
| Net proceeds from disposal of fixed assets, intangible assets and other long-lived assets | 1,580,000.00 | |
| Net proceeds from disposal of subsidiaries or other business units | ||
| Cash generated from other investing activities | ||
| Subtotal of cash generated from investing activities | 470,667,499.69 | 65,304,845.24 |
| Payments for acquisition of fixed assets, intangible assets and other long-lived assets | 85,557,155.41 | 99,538,768.93 |
| Payments for investments | ||
| Net payments for acquisition of subsidiaries and other business units | ||
| Cash used in other investing activities | 3,304,699.80 | |
| Subtotal of cash used in investing activities | 88,861,855.21 | 99,538,768.93 |
| Net cash generated from/used in investing activities | 381,805,644.48 | -34,233,923.69 |
| 3. Cash flows from financing activities: | ||
| Capital contributions received |
| Increase in borrowings obtained | ||
| Net proceeds from issuance of bonds | ||
| Cash generated from other financing activities | ||
| Subtotal of cash generated from financing activities | ||
| Repayment of borrowings | ||
| Payments for interest and dividends | 405,163,764.00 | 516,408,126.05 |
| Cash used in other financing activities | ||
| Sub-total of cash used in financing activities | 405,163,764.00 | 516,408,126.05 |
| Net cash generated from/used in financing activities | -405,163,764.00 | -516,408,126.05 |
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | 1,384,289.90 | 912,356.51 |
| 5. Net increase in cash and cash equivalents | 118,598,120.28 | -614,389,171.09 |
| Add: Cash and cash equivalents, beginning of the period | 502,169,100.40 | 1,235,417,964.88 |
| 6. Cash and cash equivalents, end of the period | 620,767,220.68 | 621,028,793.79 |
Legal representative: He Yong General Manager: Liu XingmingChief Financial Officer: Tang Qionglan
7. Consolidated Statements of Changes in Owners’ Equity
H1 2018
Unit: RMB
| Item | H1 2018 | ||||||||||||
| Equity attributable to owners of the Company as the parent | Non-controlling interests | Total owners’ equity | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Specific reserve | Surplus reserves | General reserve | Retained earnings | |||||
| Preferred shares | Perpetual bonds | Other | |||||||||||
| 1. Balances as of end of prior year | 1,272,132,868.00 | 285,821,459.07 | 716,607,333.78 | 772,953,002.36 | 1,731,600,796.18 | 20,519,660.40 | 4,799,635,119.79 | ||||||
| Add: Adjustments for changed accounting | |||||||||||||
| policies | |||||||||||||
| Adjustments for corrections of previous errors | |||||||||||||
| Adjustments for business combinations under common control | |||||||||||||
| Other adjustments | |||||||||||||
| 2. Balances as of beginning of the year | 1,272,132,868.00 | 285,821,459.07 | 716,607,333.78 | 772,953,002.36 | 1,731,600,796.18 | 20,519,660.40 | 4,799,635,119.79 | ||||||
| 3. Increase/ decrease in the period (“-” for decrease) | 127,213,286.00 | -127,213,286.00 | -322,975,351.39 | -189,254,257.75 | 2,897,229.67 | -509,332,379.47 | |||||||
| 3.1 Total comprehensive income | -322,975,351.39 | 229,277,455.82 | 2,897,229.67 | -90,800,665.90 | |||||||||
| 3.2 Capital increased and reduced by owners | |||||||||||||
| 3.2.1 Ordinary shares increased by shareholders | |||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | |||||||||||||
| 3.2.3 Share-based payments included in owners’ equity | |||||||||||||
| 3.2.4 Other | |||||||||||||
| 3.3 Profit distribution | -418,531,713.57 | -418,531,713.57 | |||||||||||
| 3.3.1 Appropriation to surplus reserves |
| 3.3.2 Appropriation to general reserve | |||||||||||||
| 3.3.3 Appropriation to owners (or shareholders) | -418,531,713.57 | -418,531,713.57 | |||||||||||
| 3.3.4 Other | |||||||||||||
| 3.4 Carryforwards within owners’ equity | 127,213,286.00 | -127,213,286.00 | |||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | 127,213,286.00 | -127,213,286.00 | |||||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves | |||||||||||||
| 3.4.3 Surplus reserves used to make up losses | |||||||||||||
| 3.4.4 Other | |||||||||||||
| 3.5 Specific reserve | |||||||||||||
| 3.5.1 Withdrawn for the period | |||||||||||||
| 3.5.2 Used during the period | |||||||||||||
| 3.6 Other | |||||||||||||
| 4. Balances as of end of the period | 1,399,346,154.00 | 158,608,173.07 | 393,631,982.39 | 772,953,002.36 | 1,542,346,538.43 | 23,416,890.07 | 4,290,302,740.32 |
31 December 2017
Unit: RMB
| Item | H1 2017 | ||||||||||
| Equity attributable to owners of the Company as the parent | Non-controlling | Total owners’ equity | |||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasur | Other compre | Specific reserve | Surplus reserves | General reserve | Retained | |||
| Preferred shares | Perpetual bonds | Other | y shares | hensive income | earnings | interests | |||||||
| 1. Balances as of end of prior year | 1,272,132,868.00 | 285,821,459.07 | 1,133,971,372.25 | 733,924,951.81 | 1,564,615,925.99 | 15,008,066.44 | 5,005,474,643.56 | ||||||
| Add: Adjustments for changed accounting policies | |||||||||||||
| Adjustments for corrections of previous errors | |||||||||||||
| Adjustments for business combinations under common control | |||||||||||||
| Other adjustments | |||||||||||||
| 2. Balances as of beginning of the year | 1,272,132,868.00 | 285,821,459.07 | 1,133,971,372.25 | 733,924,951.81 | 1,564,615,925.99 | 15,008,066.44 | 5,005,474,643.56 | ||||||
| 3. Increase/ decrease in the period (“-” for decrease) | -417,364,038.47 | 39,028,050.55 | 166,984,870.19 | 5,511,593.96 | -205,839,523.77 | ||||||||
| 3.1 Total comprehensive income | -417,364,038.47 | 740,308,725.30 | 5,511,593.96 | 328,456,280.79 | |||||||||
| 3.2 Capital increased and reduced by owners | |||||||||||||
| 3.2.1 Ordinary shares increased by shareholders | |||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | |||||||||||||
| 3.2.3 Share-based |
| payments included in owners’ equity | |||||||||||||
| 3.2.4 Other | |||||||||||||
| 3.3 Profit distribution | 39,028,050.55 | -573,323,855.11 | -534,295,804.56 | ||||||||||
| 3.3.1 Appropriation to surplus reserves | 39,028,050.55 | -39,028,050.55 | |||||||||||
| 3.3.2 Appropriation to general reserve | |||||||||||||
| 3.3.3 Appropriation to owners (or shareholders) | -534,295,804.56 | -534,295,804.56 | |||||||||||
| 3.3.4 Other | |||||||||||||
| 3.4 Carryforwards 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 Surplus reserves used to make up losses | |||||||||||||
| 3.4.4 Other | |||||||||||||
| 3.5 Specific reserve | |||||||||||||
| 3.5.1 Withdrawn for the period | |||||||||||||
| 3.5.2 Used during the period | |||||||||||||
| 3.6 Other | |||||||||||||
| 4. Balances as of | 1,272, | 285,821 | 716,607 | 772,953 | 1,731,6 | 20,519, | 4,799,6 |
| end of the period | 132,868.00 | ,459.07 | ,333.78 | ,002.36 | 00,796.18 | 660.40 | 35,119.79 |
Legal representative: He Yong General Manager: Liu XingmingChief Financial Officer: Tang Qionglan
8. Statements of Changes in Owners’ Equity of the Company as the Parent
H1 2018
Unit: RMB
| Item | H1 2018 | ||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Specific reserve | Surplus reserves | Retained earnings | Total owners’ equity | |||
| Preferred shares | Perpetual bonds | Other | |||||||||
| 1. Balances as of end of prior year | 1,272,132,868.00 | 293,425,065.15 | 716,608,088.78 | 772,953,002.36 | 1,572,167,765.91 | 4,627,286,790.20 | |||||
| Add: Adjustments for changed accounting policies | |||||||||||
| Adjustments for corrections of previous errors | |||||||||||
| Other adjustments | |||||||||||
| 2. Balances as of beginning of the year | 1,272,132,868.00 | 293,425,065.15 | 716,608,088.78 | 772,953,002.36 | 1,572,167,765.91 | 4,627,286,790.20 | |||||
| 3. Increase/ decrease in the period (“-” for decrease) | 127,213,286.00 | -127,213,286.00 | -322,972,909.70 | -218,720,350.78 | -541,693,260.48 | ||||||
| 3.1 Total comprehensive income | -322,972,909.70 | 199,811,362.79 | -123,161,546.91 | ||||||||
| 3.2 Capital increased and reduced by owners | |||||||||||
| 3.2.1 Ordinary shares increased by shareholders | |||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | |||||||||||
| 3.2.3 Share-based payments included in owners’ equity | |||||||||||
| 3.2.4 Other | |||||||||||
| 3.3 Profit distribution | -418,531,713.57 | -418,531,713.57 | |||||||||
| 3.3.1 Appropriation to surplus reserves | |||||||||||
| 3.3.2 Appropriation to owners (or shareholders) | -418,531,713.57 | -418,531,713.57 | |||||||||
| 3.3.3 Other | |||||||||||
| 3.4 Carryforwards within owners’ equity | 127,213,286.00 | -127,213,286.00 | |||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | 127,213,286.00 | -127,213,286.00 | |||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves | |||||||||||
| 3.4.3 Surplus reserves used to make up losses | |||||||||||
| 3.4.4 Other | |||||||||||
| 3.5 Specific reserve | |||||||||||
| 3.5.1 Withdrawn for the period | |||||||||||
| 3.5.2 Used during the period |
| 3.6 Other | |||||||||||
| 4. Balances as of end of the period | 1,399,346,154.00 | 166,211,779.15 | 393,635,179.08 | 772,953,002.36 | 1,353,447,415.13 | 4,085,593,529.72 |
31 December 2017
Unit: RMB
| Item | H1 2017 | ||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Specific reserve | Surplus reserves | Retained earnings | Total owners’ equity | |||
| Preferred shares | Perpetual bonds | Other | |||||||||
| 1. Balances as of end of prior year | 1,272,132,868.00 | 293,425,065.15 | 1,133,971,372.25 | 733,924,951.81 | 1,448,907,867.73 | 4,882,362,124.94 | |||||
| Add: Adjustments for changed accounting policies | |||||||||||
| Adjustments for corrections of previous errors | |||||||||||
| Other adjustments | |||||||||||
| 2. Balances as of beginning of the year | 1,272,132,868.00 | 293,425,065.15 | 1,133,971,372.25 | 733,924,951.81 | 1,448,907,867.73 | 4,882,362,124.94 | |||||
| 3. Increase/ decrease in the period (“-” for decrease) | -417,363,283.47 | 39,028,050.55 | 123,259,898.18 | -255,075,334.74 | |||||||
| 3.1 Total comprehensive income | -417,363,283.47 | 696,583,753.29 | 279,220,469.82 | ||||||||
| 3.2 Capital increased and reduced by owners | |||||||||||
| 3.2.1 Ordinary shares increased by shareholders | |||||||||||
| 3.2.2 Capital increased by | |||||||||||
| holders of other equity instruments | |||||||||||
| 3.2.3 Share-based payments included in owners’ equity | |||||||||||
| 3.2.4 Other | |||||||||||
| 3.3 Profit distribution | 39,028,050.55 | -573,323,855.11 | -534,295,804.56 | ||||||||
| 3.3.1 Appropriation to surplus reserves | 39,028,050.55 | -39,028,050.55 | |||||||||
| 3.3.2 Appropriation to owners (or shareholders) | -534,295,804.56 | -534,295,804.56 | |||||||||
| 3.3.3 Other | |||||||||||
| 3.4 Carryforwards 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 Surplus reserves used to make up losses | |||||||||||
| 3.4.4 Other | |||||||||||
| 3.5 Specific reserve | |||||||||||
| 3.5.1 Withdrawn for the period | |||||||||||
| 3.5.2 Used during the period | |||||||||||
| 3.6 Other |
| 4. Balances as of end of the period | 1,272,132,868.00 | 293,425,065.15 | 716,608,088.78 | 772,953,002.36 | 1,572,167,765.91 | 4,627,286,790.20 |
Legal representative: He Yong General Manager: Liu XingmingChief Financial Officer: Tang Qionglan
III Company Profile
Foshan Electrical and Lighting Co., Ltd. (hereinafter referred to as “the Company”), a joint-stock limited
company 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 of YGS(1992) No. 63 Document issued by the Joint Examination Group for Experimental Enterprises in Stock System ofGuangdong Province and the Economic System Reform Commission of Guangdong Province, is an enterprisewith its shares held by both the corporate and the natural persons. As approved by China Securities RegulatoryCommission with Document (1993) No. 33, the Company publicly issued 19.3 million shares of social publicshares (A shares) to the public in October 1993, and was listed in Shenzhen Stock Exchange for trade on 23November 1993. The Company was approved to issue 50,000,000 B shares on 23 July 1995. And, as approved tochange into a foreign-invested stock limited company on 26 August 1996 by (1996) WJMZEHZ No. 466
Document issued by the Ministry of Foreign Trade and Economic Cooperation of the People’s Republic of China.
On 11 December 2000, as approved by China Securities Regulatory Commission with ZJGS Zi [2000] No. 175Document, the Company additionally issued 55,000,000 A shares. At approved by the Annual General Meeting of2006, 2007, 2008, 2014, and 2017 the Company implemented the plan of capitalization of capital reserve, after the
transfer, the registered capital of the Company has increased to RMB1,399,346,154.00
Credibility code of the Company: 91440000190352575W.Legal representative: Mr. He YongAddress: No. 64, Fenjiang North Road, Foshan, Guangdong Province
Main business of the company and its subsidiaries (hereinafter referred to as “the Company”): lighting products
and electro technical products.The business term of the Company is long-term, which was calculated from the date of issuance of License ofBusiness Corporation.The Financial Report was approved and authorized for issue by the Board of Directors on 28 August 2018.(II). Scope of the Consolidated Financial StatementsThe consolidation scope of the financial statement during the Reporting Period including the Company and the 10
subordinate subsidiaries such as Foshan Lighting Chanchang Optoelectronics Co., Ltd.( referred to as “ChanchangCompany”), Foshan Chansheng Electronic Ballast Co., Ltd. ( referred to as “Chansheng Company”), FoshanTaimei Times Lamps and Lanterns Co., Ltd. ( referred to as “Taimei Company”), Nanjing Fozhao LightingComponents Co., Ltd. ( referred to as “Nanjing Fozhao”), FSL (Xinxiang) Lighting Co., Ltd. ( referred to as“Xinxiang Company”), Foshan Electrical and Lighting New Light Source Technology Co., Ltd. ( referred to as“New Light Source Company”), Guangdong Fozhao Leasing Co., Ltd. ( referred to as “Leasing Company”),Foshan Lighting Lamps & Components Co., Ltd. ( referred to as “Lamps & Components Company”) and FSLZhida Electric Technology Co., Ltd( referred to as “Zhida Electric Technology”), and FSL Lighting GmbH(referred to as “FSL Europe”).For details, see relevant contents in Note VIII “Changes in the consolidation scope”, and Note IX “Equities inother entities”
IV Basis for Preparation of Financial Statements
1. Preparation BasisThe financial statements of the Company are based on the continuing operation, and are confirmed and measuredaccording to the actual transactions and events, the Accounting Standards for Business Enterprises - Basic
Standards, other various specific accounting standards, the application guide, the interpretation of accountingstandards for business enterprises (hereinafter referred to as the Accounting Standards for Business Enterprises).And based on the following important accounting policies, and accounting estimations, they are preparedaccording to the relevant regulations of Rules for the Information Disclosure of Companies Publicly IssuingSecurities No. 15 - General Provisions on Financial Reporting of China Securities Regulatory Commission(Revised in 2014). Except the Cash Flow Statement prepared under the principle of cash basis, the rest of financialstatement of the Company are prepared under the principle of accrual basis.
The Company didn’t find anything like being suspicious of the ability of continuing operation within 12 months
from the end of the Reporting Period with all available information.2. Continuation
The Company has no matters affecting the continuing operation of the Company and is expected to have theability to continue to operate in the next 12 months. The financial statements of the Company are prepared on thebasis of continuing operation.
V Important Accounting Policies and Estimations
Reminders of the specific accounting policies and accounting estimations:
The Company confirmed the specific accounting policies and estimations according to production and operationfeatures, mainly reflecting in the method of provision for accounts receivables bad debt (Note 11. AccountReceivables), pricing method of inventory (Note 12. Inventory), depreciation of fixed assets and amortization ofintangible assets (Note 16. Fixed Assets and Note 21. Intangible Assets), and recognized time point of income(Note 28. Income), etc.
1. Statement of Compliance with the Accounting Standards for Business EnterprisesThe financial statements prepared by the Company are in compliance with the Accounting Standards for Business
Enterprises, which factually and completely present the Company’s and the consolidated financial positions,
business results and cash flows, as well as other relevant information.2. Fiscal Year
A fiscal year starts on January 1
st
and ends on December 31
st
according to the Gregorian calendar.3. Operating Cycle
An operating cycle for the Company is 12 months, which is also the classification criterion for the liquidity of itsassets and liabilities.
4. Recording CurrencyRenminbi is the recording currency for the statements of the Company, and the financial statements are listed andpresented by Renminbi.
5. Accounting Treatment Methods for Business Combinations under the Same Control or not under the SameControl
1. Business combinations under the same controlFor the merger of enterprises under the same control, if the consideration of the merging enterprise is that it makespayment in cash, transfers non-cash assets or bear its debts, it shall, on the date of merger, regard the share of the
book value among final controller’s consolidated financial statement of the owner's equity of the merged
enterprise as the initial cost of the long-term equity investment. The difference between the initial cost of thelong-term equity investment and the payment in cash, non-cash assets transferred as well as the book value of thedebts borne by the merging party shall offset against the capital reserve. If the capital reserve is insufficient todilute, the retained earnings shall be adjusted.If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of merger,
regard the share of the book value among final controller’s consolidated financial statement of the owner's equity
of the merged enterprise as the initial cost of the long-term equity investment. The total face value of the stocksissued shall be regarded as the capital stock, while the difference between the initial cost of the long-term equityinvestment and total face value of the shares issued shall offset against the capital reserve. If the capital reserve isinsufficient to dilute, the retained earnings shall be adjusted.2. Business combinations not under the same controlThe Company measured the paid assets as the consideration of business combination and liabilities happened orundertaken by fair value. The difference between fair value and its book value shall be included into the currentlosses and gains. The Company distributed combined cost on the purchasing date.The difference of the combination cost greater than the fair value of the identifiable net assets of the acquireeacquired is recognized as goodwill; the difference of the combination cost less than the fair value of theidentifiable net assets of the acquiree acquired is included into current losses and gains.As for the assets other than intangible assets acquired from the acquiree in a business combination (not limited tothe assets which have been recognized by the acquiree), if the economic benefits brought by them are likely toflow into the Company and their fair values can be measured reliably, they shall be separately recognized andmeasured in light of their fair values; intangible asset whose fair value can be measured reliably shall beseparately recognized as an intangible asset and shall measured in light of its fair value; As for the liabilities otherthan contingent liabilities acquired from the acquiree, if the performance of the relevant obligations is likely toresult in any out-flow of economic benefits from the Company, and their fair values can be measured reliably,they shall be separately recognized and measured in light of their fair values; As for the contingent liabilities ofthe acquiree, if their fair values can be measured reliably, they shall separately recognized as liabilities and shallbe measured in light of their fair values.
6. Methods for Preparing Consolidated Financial Statements1. Principle of determining the scope of consolidationThe scope of consolidation of the consolidated financial statements of the Company is determined on the basis ofcontrol. Control means that the investors has the right to invest in the investee and enjoy a variable return throughthe participation of the relevant activities of the investee, and has the ability to use the power over the investee toaffect the amount of its return. The Company includes the subsidiaries with actual right of control (includingseparate entity controlled by the Parent Company) into consolidated financial statements.2. Principles, procedures and methods for the preparation of consolidated statements(1) Principles, procedures and methods for the preparation of consolidated statementsAll subsidiaries included into the scope of consolidated financial statements adopted same accounting policies andfiscal year with the Company. If the accounting policies and fiscal year of the subsidiaries are different to the
Company’s, necessary adjustment should be made in accordance with the Company’s accounting policies and
fiscal year when consolidated financial statements are prepared.The consolidated financial statements are based on the financial statements of the Parent Company andsubsidiaries included into the consolidated scope. The consolidated financial statements are prepared by the
Company who makes adjustment to long-term equity investment to subsidiaries by equity method according toother relevant materials after the offset of the share held by the Parent Company in the equity capital investment
of the Parent Company and owner’s equity of subsidiaries and the significant transactions and intrabranch within
the Company.For the balance formed because the current loss shared by the minority shareholders of the subsidiary is more than
the share enjoyed by the minority shareholders of the subsidiary in the initial shareholders’ equity, if the Articlesof Corporation or Agreement didn’t stipulate that minority shareholders should be responsible for it, then thebalance need to offset the shareholders’ equity of the Company; if the Articles of Corporation or Agreement
stipulated that minority shareholders should be responsible for it, then the balance need to offset the minority
shareholders’ equity.
(2) Treatment method of increasing or disposing subsidiaries during the Reporting PeriodDuring the Reporting Period, if the subsidiaries were added due to Business combinations under the same control,then initial book balance of consolidated balance sheet need to be adjusted; the income, expenses, and profits of
subsidiaries from the combination’s period-begin to the end of the reporting period need to be included intoconsolidated income statement; the cash flow of subsidiaries from the combination’s period-begin to the end of
the reporting period need to be included into consolidated cash flow statement. if the subsidiaries were added dueto Business combinations not under the same control, then initial book balance of consolidated balance sheet
doesn’t need to be adjusted; the income, expenses, and profits of subsidiaries from the purchasing date to the end
of the reporting period need to be included into consolidated income statement; the cash flow of subsidiaries frompurchasing date to the end of the reporting period need to be included into consolidated cash flow statement.During the Reporting Period, if the Company disposed the subsidiaries, then the income, expenses, and profits ofsubsidiaries from period-begin to the disposal date need to be included into consolidated income statement; thecash flow of subsidiaries from period-begin to the disposal date need to be included into consolidated cash flowstatement.
7. Classification of Joint Arrangements and Accounting Treatment of Joint OperationsA joint arrangement refers to an arrangement jointly controlled by two participants or above and be divided intojoint operations and joint ventures.When the Company is the joint venture party of the joint operations, should recognize the following items relatedto the interests share of the joint operations:
(1) Recognize the assets individually held and the assets jointly held by recognizing according to the holdingshare;(2) Recognize the liabilities undertook individually and the liabilities jointly held by recognizing according to theholding share;(3) Recognize the revenues occurred from selling the output share of the joint operations enjoy by the Company;(4) Recognize the revenues occurred from selling the assets of the joint operations according to the holding share;(5) Recognize the expenses individually occurred and the expenses occurred from the joint operations accordingto the holding share of the Company.When the Company is the joint operation party of the joint ventures, should recognize the investment of the jointventures as the long-term equity investment and be measured according g to the said methods of the notes of thelong-term equity investment of the financial statement.
8. Recognition Standard for Cash and Cash Equivalents
In the Group’s understanding, cash and cash equivalents include cash on hand, any deposit that can be used for
cover, and short-term (usually due within 3 months since the day of purchase) and high circulating investments,
which are easily convertible into known amount of cash and whose risks in change of value are minimal.9. Foreign Currency and Accounting Method for Foreign Currency
1. Foreign currency businessForeign currency shall be recognized by employing systematic and reasonable methods, and shall be translatedinto the amount in the functional currency at the exchange rate which is approximate to the spot exchange rate ofthe transaction date. On the balance sheet date, the foreign currency monetary items shall be translated at the spotexchange rate. The balance of exchange arising from the difference between the spot exchange rate on the balancesheet date and the spot exchange rate at the time of initial recognition or prior to the balance sheet date shall berecorded into the profits and losses at the current period except that the balance of exchange arising from foreigncurrency borrowings for the purchase and construction or production of qualified assets shall be capitalized. Theforeign currency non-monetary items measured at the historical cost shall still be translated at the spot exchangerate on the transaction date.2. Translation of foreign currency financial statementsThe asset and liability items in the balance sheets shall be translated at a spot exchange rate on the balance sheet
date. Among the owner’s equity items, except for the items as “undistributed profits”, other items shall be
translated at the spot exchange rate at the time when they are incurred. The revenues and the expenses items of theincome statement should be translated according to the spot rate on the exchange date.The difference of the foreign currency financial statements occurred from the above translation should be listed
under the “other comprehensive income” item of the owners’ equity of the consolidated financial statement. As
for the foreign currency items which actually form into the net investment of the foreign operation, the exchange
difference occurred from the exchange rate changes should be listed under the “other comprehensive income” ofthe owners’ equity among the consolidated financial statement when compile the consolidated financial statement.
When disposing the foreign operation, as for the discounted difference of the foreign financial statement related tothe foreign operation should be transferred in the current gains and losses according to the proportion. The foreigncash flow adopts the spot exchange rate on the occurring date of the cash flow. And the influenced amount of theexchange rate changes should be individually listed among the cash flow statement.
10. Financial Instruments1. Classification, recognition and measurement of financial assetsFinancial assets shall be classified into the following four categories when they are initially recognized: financialassets measured at fair value and of which variations are recorded in the profits and losses for the current period,loans and the account receivables, financial assets available for sale and the investments which will be held totheir maturity.(1) Financial assets measured at fair value and of which variations are recorded in the profits and losses for thecurrent period refer to financial assets held by the Company for the purpose of selling in the near future, includingtransactional financial assets, or financial assets designated by the management in the initial recognition to bemeasured at fair value with variations recorded in the gains and losses for the current period. Financial assetsmeasured at fair value and of which variations are recorded in the profits and losses for the current period aresubsequently measured at their fair values. Interest or cash dividends arising from such assets during the holingperiod are recognized as investment gains. Gains or losses arising from fair value changes are recorded in thegains and losses for the current period at the end of the Reporting Period. When such assets are disposed, thedifference between their fair values and initially recognized amounts is recognized as investment gains and thegains and losses arising from fair value changes are adjusted accordingly.(2) Loan and accounts receivable: the non-derivative financial assets for which there is no quoted price in the
active market and of which the recoverable amount is fixed or determinable shall be classified as loan andaccounts receivable. The Company shall make subsequent measurement on its loan and accounts receivable on thebasis of the post-amortization costs by adopting the actual interest rate, from which gains and losses, when loanand accounts receivable are terminated from recognizing, or are impaired or amortized, shall be recorded into theprofits and losses of the current period.(3)Available-for-sale Financial Assets: the non-derivative financial assets which are designated asavailable-for-sale financial assets when they are initially recognized as well as the non-derivative financial assetsother than loans and accounts receivables, investments held until their maturity; and transaction financial assets.The Company shall make subsequent measurement on available-for-sale financial assets at fair value andrecognize the interests or the cash bonus acquired the holding period as the investment income, as well as directly
include the profits or losses formed by the changes of the fair value into the owners’ equity at the period-end, until
the said financial assets shall be transferred out when they are terminated from recognizing or are impaired, whichshall be recorded into the profits and losses of current period.(4) Held-to-maturity Investments: non-derivative financial asset with a fixed date of maturity, a fixed or
determinable recoverable amount and which the Company’s management holds for a definite purpose or theCompany’s management is able to hold until its maturity. The Company shall make subsequent measurement on
its Held-to-maturity Investments on the basis of the post-amortization costs by adopting the actual interest rate,from which gains and losses, when loan and accounts receivable are terminated from recognizing, or are impairedor amortized, shall be recorded into the profits and losses of the current period.2. Classification, Recognition and Measurement of Financial LiabilitiesFinancial liabilities shall be classified into the following two categories when they are initially recognized: thetransactional financial liabilities; and other financial liabilities. The financial liabilities initially recognized by theCompany shall be measured at their fair values. For the transactional financial liabilities, the transaction expensesthereof shall be directly recorded into the profits and losses of the current period; for other categories of financialliabilities, the transaction expenses thereof shall be included into the initially recognized amount.(1) As for the financial liabilities measured by fair value and its changes be included in the current gains andlosses, which including trading financial liabilities and the financial liabilities be appointed to be measured by fairvalue with the changes be included in the current gains and losses when being initially recognized, should beexecuted subsequent measurement according to the fair value with the profits or losses formed by the changes ofthe fair value be included in the current gains and losses.(2) Other financial liabilities: The Company shall make subsequent measurement on its other financial liabilitieson the basis of the post-amortization costs by adopting the actual interest rate, from which gains and losses, whenother financial liabilities are terminated from recognizing or amortized, shall be recorded into the profits andlosses of the current period.3. Recognition and measurement of financial asset transfersAs for the Company transferred nearly all of the risks and rewards related to the ownership of a financial asset tothe transferee, should derecognize the financial assets; as for maintained nearly all of the risks and rewards relatedto the ownership of a financial asset, should continue to recognize the transferred financial assets and recognizethe received counter price as a financial liability. Where the Company does not transfer or retain nearly all of therisks and rewards related to the ownership of a financial asset (that is to say, it is not under a circumstance asmentioned in Article 7 of these Standards), it shall deal with it according to the circumstances as follows,respectively: (1) If it gives up its control over the financial asset, it shall stop recognizing the financial asset; (2) Ifit does not give up its control over the financial asset, it shall, according to the extent of its continuousinvolvement in the transferred financial asset, recognize the related financial asset and recognize the relevant
liability accordingly.If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the difference betweenthe amounts of the following 2 items shall be recorded in the profits and losses of the current period: (1) The bookvalue of the transferred financial asset; (2) the sum of consideration received from the transfer, and theaccumulative amount of the changes of the fair value originally recorded in the owner's equities.If the transfer of partial financial asset satisfies the conditions to stop the recognition, the entire book value of thetransferred financial asset shall, between the portion whose recognition has been stopped and the portion whoserecognition has not been stopped, be apportioned according to their respective relative fair value, and thedifference between the amounts of the following two items shall be included into the profits and losses of thecurrent period: (1)The book value of the portion whose recognition has been stopped; (2)The sum of considerationof the portion whose recognition has been stopped, and the portion of the accumulative amount of the changes inthe fair value originally recorded in the owner's equities which is corresponding to the portion whose recognitionhas been stopped.4. De-recognition conditions of financial liabilitiesOnly when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of thefinancial liability be terminated in all or partly. Where the Group (debtor) enters into an agreement with a creditorso as to substitute the existing financial liabilities by way of any new financial liability, and if the contractualstipulations regarding the new financial liability is substantially different from that regarding the existing financialliability, it terminates the recognition of the existing financial liability, and at the same time recognizes the newfinancial liability. If executed practical modification on the whole or part of the contract regulations of the existingfinancial liabilities, should terminate to recognize the existing financial liabilities or certain part of it and at thesame time recognize the revised financial liabilities as a new financial liabilities.Where the recognition of a financial liability is totally or partially terminated, the enterprise concerned shallinclude into the profits and losses of the current period for the gap between the book value which has beenterminated from recognition and the considerations it has paid (including the non-cash assets it has transferred outand the new financial liabilities it has assumed).If the Company re-purchase part of the financial liabilities, should distribute the whole book value of the financialliabilities according to the comparatively fair value between the continued reorganization part and the terminatedreorganization part on the re-purchase date. And the difference between the book value distributed to theterminated recognition part and the counter price of the paid part (including the rolled out non-cash assets or thenew financial liabilities undertook) should be included in the current gains and losses.5. Recognition method of the fair value of the financial assets and the financial liabilitiesAs for the financial instruments for which there is an active market, the quoted prices in the active market shall beused to determine the fair values thereof. Where there is no active market for a financial instrument, the Companyconcerned shall adopt value appraisal techniques to determine its fair value. The value appraisal techniquesmainly include the prices adopted by the parties, who are familiar with the condition, in the latest markettransaction upon their own free will, the current fair value obtained by referring to other financial instruments ofthe same essential nature, the cash flow capitalization method and the option pricing model, etc.6. Impairment test of financial assets (excluding the accounts receivable) and withdrawal method of impairmentprovisionThe Company inspects the book value of the financial assets on the balance sheet date to judge whether there areevidences indicate that the financial assets had occurred impairment owning to the occurrence of one or multipleevents.As for the measurement for impairment of financial assets measured on the basis of the post-amortization costs,
where there is any objective evidence proving that a financial asset measured on the basis of post-amortizationcosts is impaired, should be recognized by the carrying amount of the difference between the said financial assetwhich shall be written down to the current value of the predicted future cash flow (excluding the loss of futurecredits not yet occurred) and the amount of the as written down which shall be recognized as loss of theimpairment of the asset. When calculating the current value of the estimated future cash flow, should adopt the
original effective interests’ rate of the financial assets as the discount rate. The book value of the assets should be
written down to the estimated recoverable amount through impairment provision items with the written downamount be included in the current gains and losses. As for the financial assets with individual significant amount,should adopt the individual assessment for ensure whether there are objective evidences indicate the impairmentprovision and as for the other assets with insignificant amount, should be inspected by individual or groupassessment for ensure whether there are objective evidences indicate the impairment provision.As for the financial assets measured by cost, if there are evidences indicate the impairment of the financialinstruments without market price which had not measured by fair value because the fair value could not bereliable measured, the amount of the impairment losses should be measured by the difference between the bookvalue of the financial assets and the current value of the estimated future cash flow acquired from the discountingmeasurement of the current market return rate of the similar financial assets.Where an available-for-sale financial asset is impaired, the accumulative losses arising from the decrease of the
fair value of the owner’s equity which was directly included shall be transferred out and recorded into the profits
and losses of the current period.7. Recognition method of fair valueFair value refers to the price that market participants got from the sale of an asset or the price paid for the transferof a liability among the orderly transactions happened on the measurement date. For a financial instrument withactive market, its fair value shall be determined by the quotes in the active market. For a financial instrument withno active market, its fair value shall be determined by adopting value appraisal techniques. When the value isappraised, by adopting the value appraisal techniques applying to the current situations with the support of enoughavailable data and other information, the Company chooses the same input value with features of assets andliabilities considered by market participants in the transactions of relevant assets and liabilities, and gives priorityin use of observable input value as far as possible. Unobservable input value shall be used when the relevantobservable input value cannot be obtained or the obtainment is not practical.
11. Receivables
(1) Accounts Receivable with Significant Single Amount for which the Bad Debt Provision is Made Individually
| Definition or amount criteria for an account receivable with a significant single amount | Top five accounts receivable with the largest balances or accounts accounting for over 10% of the total balance of receivables. |
| Making separate bad-debt provisions for accounts receivable with a significant single amount | For an account receivable with a significant single amount, the impairment test shall be carried out on it separately. If there is any objective evidence of impairment, the impairment loss is recognized and the bad-debt provision is made according to the difference between the present value of the account receivable’s future cash flows and its carrying amount. As for non-significant accounts receivable for which separate impairment provisions are |
(2) Accounts Receivable which the Bad Debt Provision is withdrawn by Credit Risk Characteristics
not necessary as proved by the impairment test, as well as othersignificant accounts receivable that have not been impaired asproved by a separate impairment test, they shall be groupedaccording to their credit risks and account ages, and then theimpairment test is carried out on a group basis.
Group name
| Group name | Withdrawal method of bad debt provision |
| Common transaction group | Aging analysis method |
| Internal transaction group | Other methods |
In the groups, those adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
| Aging | Withdrawal proportion of account receivables | Withdrawal proportion of other account receivables |
| Within 1 year (including 1 year) | 3.00% | 3.00% |
| 1 to 2 years | 10.00% | 10.00% |
| 2 to 3 years | 30.00% | 30.00% |
| 3 to 4 years | 50.00% | 50.00% |
| 4 to 5 years | 80.00% | 80.00% |
| Over 5 years | 100.00% | 100.00% |
In the groups, those adopting balance percentage method to withdraw bad debt provision
□ Applicable √ Not applicable
In the groups, those adopting other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
(3) Accounts Receivable with an Insignificant Single Amount but for which the Bad Debt Provision is MadeIndependently
| Reason of individually withdrawing bad debt provision | There are definite evidences indicate the obvious difference of thee return ability |
| Withdrawal method for bad debt provision | Withdraw the bad debt provision according to the difference of which the future cash flow lower than the book value. |
12. Inventory
Is the Company subject to any disclosure requirements for special industries?No.
1. Classification of inventoryInventory refers to finished products, goods in process, and materials consumed in the production process or theprovision of labor services held by the Company for sale in daily activities, mainly including raw materials, goodsin process, materials in transit, finished products, commodities, turnover materials, and commissioned processing
materials. Turnover materials include low-value consumables and packaging.2. Pricing method of inventory sent outThe inventory is valued at actual cost when acquired, and inventory costs include procurement costs, processingcosts and other costs. The weighted average method is used when receiving or sending out inventory.3. Basis for determining the net realizable value of inventory and the method of withdrawal for inventoryimpairmentNet realizable value refers to the estimated selling price of the inventory minus the estimated cost to be incurred atthe time of completion, the estimated selling expenses and the relevant taxes and fees in daily activities. Indetermining the net realizable value of inventory, the conclusive evidence obtained is used as the basis and thepurpose of holding the inventory and the impact of the events after the balance sheet date should be taken intoaccount.For finished products, the materials used for sale and other goods used for direct sale, the net realizable value isdetermined by the estimated selling price of the inventory minus the estimated selling expenses and related taxesin the process of normal production and operation.For materials inventory needs to be processed, the net realizable value is determined by the estimated selling priceof the finished products minus the estimated cost to be incurred, the estimated sales costs and the relevant taxesand fees in the process of normal production and operation.4. Inventory systemThe inventory system of the Company is perpetual inventory.5. Amortization method of turnover materialsLow-value consumables are amortized in one-off method.The packaging is amortized in one-off method.
13. Assets Held for Sale
1. Assets held for saleWhen a company relies mainly on selling (including the exchanges of non-monetary assets with commercialsubstance) instead of continuing to use a non-current asset or disposal group to recover its book value, thenon-current asset or disposal group is classified as asset held for sale. The non-current assets mentioned above donot include investment properties that are subsequently measured by the fair value model, biological assetsmeasured by fair value less net selling costs, assets formed from employee remuneration, financial assets, deferredincome tax assets and rights generated from insurance contracts.Disposal group refers to a group of assets that are disposed of together as a whole through sale or other means in atransaction, and the liabilities directly related to these assets transferred in the transaction. In certaincircumstances, the disposal group includes goodwill obtained in business combination.The Company recognizes non-current assets or disposal groups that meet both of the following conditions as held
for sale: ① Assets or disposal groups can be sold immediately under current conditions based on the practice ofselling such assets or disposal groups in similar transactions; ② Sales are highly likely to occur, that is, the
Company has already made a resolution on a sale plan and obtained a certain purchase commitment, and the saleis expected to will be completed within one year, and the sale has been approved if relevant regulations requirerelevant authority or regulatory authority of the Company to approve it.Non-current assets or disposal groups specifically obtained by the Company for resale will be classified by theCompany as a held-for-sale category on the acquisition date when they meet the stipulated conditions of
“expected to be sold within one year” on the acquisition date, and may well satisfy the category of held-for-sale
within a short time (which is usually 3 months).If one of the following circumstances cannot be controlled by the Company and the transaction betweennon-related parties fails to be completed within one year, and there is sufficient evidence that the Company stillpromises to sell the non-current assets or disposal groups, the Company should continue to classify the
non-current assets or disposal groups as held-for-sale: ①The purchaser or other party unexpectedly sets
conditions that lead to extension of the sale. The Company has already acted on these conditions in a timelymanner and it is expected to be able to successfully deal with the conditions that led to the extension of the sale
within one year after the conditions were set. ②Due to unusual circumstances, the non-current assets or disposal
groups held for sale failed to be sold within one year. In the first year, the Company has taken necessary measuresfor these new conditions and the assets or disposal groups meet the conditions of held-for-sale again.If the Company loses control of a subsidiary due to the sale of investments to its subsidiaries, whether or not theCompany retains part of the equity investment after the sale, when the proposed sale of the investment to thesubsidiary meets the conditions of held- for-sale, the investment to the subsidiary will be classified asheld-for-sale in the individual financial statement of the parent company, and all the assets and liabilities of thesubsidiary will be classified as held-for-sale in the consolidated financial statement.When the company initially measures or re-measures non-current assets or disposal groups held for sale on thebalance sheet date, if the book value is higher than the fair value minus the net amount of the sale costs, the bookvalue will be written down to the net amount of fair value minus the sale costs, and the amount written down willbe recognized as impairment loss of assets and included in the current profit and loss, and provision forimpairment of held-for-sale assets will be made. For the confirmed amount of impairment loss of assets of thedisposal groups held for sale, the book value of goodwill of the disposal groups will be offset first, and then thebook value of various non-current assets in the disposal groups will be offset according to the proportions.If the net amount that the fair value of the non-current assets or disposal groups held for sale on the follow-upbalance sheet date minus the sale costs increases, the previous written-down amount will be restored, and reversedto the asset impairment loss confirmed after the assets being classified as held-for-sale. The reversed amount willbe included in the current profit or loss. The book value of goodwill that has been deducted cannot be reversed.Non-current assets held for sale or non-current assets in the disposal group are not subject to depreciation oramortization. Interest and other expenses of liabilities in the disposal group held for sale will be confirmed asbefore.When a non-current asset or disposal group ceases be classified as held-for-sale or a non-current asset is removedout from the held-for-sale disposal group due to failure in meeting the classification conditions for the category ofheld-for-sale, it will be measured by one of the followings whichever is lower:
① The book value before being classified as held for sale will be adjusted according to the depreciation,
amortization or impairment that would have been recognized under the assumption that it was not classified asheld for sale;
② The recoverable amount.
2. Termination of operationTermination of operation refers to a separately identifiable constituent part that satisfies one of the followingconditions that has been disposed of by the Company or is classified as held-for-sale:
(1) This constituent part represents an independent main business or a separate main business area.(2) This constituent part is part of an associated plan that is intended to be disposed of in an independent mainbusiness or a separate major business area.(3) This constituent part is a subsidiary that is specifically acquired for resale.3. Presentation
In the balance sheet, the Company distinguishes the non-current assets held for sale or the assets in the disposalgroup held for sale separately from other assets, and distinguish the liabilities in the disposal group held for saleseparately from other liabilities. The non-current assets held for sale or the assets in the disposal group held forsale are not be offset against the liabilities in the disposal group held for sale. They are presented as current assetsand current liabilities respectively.The Company lists profit and loss from continuing operations and profit and loss from operating profits in theincome statement. For the termination of operations for the current period, the Company restates the informationoriginally presented as profit or loss of continuing operation in the current financial statements to profit or loss oftermination of the comparable accounting period. If the termination of operation no longer meets the conditions ofheld-for-sale, the Company restates the information originally presented as a profit and loss of termination in thecurrent financial statements to profit or loss of continuing operation of the comparable accounting period.
14. Long-term Equity Investments
Long-term equity investment refers to the Company’s long-term equity investment with control, joint control or
significant influence on the investee. The long-term equity investment of the Company which has no control, jointcontrol or significant influence on the investee is accounted for as financial assets available-for-sale or financialassets at fair value and changes recognized in profit or loss for the current period. For details of accountingpolicies, please refer to 10. Financial instruments in Notes V.Joint control refers to the control that is common to an arrangement in accordance with the relevant agreement,and the relevant activities of the arrangement must be agreed upon by the participant who has shared the control.Significant influence refers to the Company has the power to participate in decision-making on the financial and
operating policies of the investee, but can’t control or jointly control the formulation of these policies with other
parties.1. Investment cost recognition for long-term equity investments(1) For the merger of enterprises under the same control, it shall, on the date of merger, regard the share of thebook value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment,and the direct relevant expenses occurred for the merger of enterprises shall be included into the profits and lossesof the current period.(2) For the merger of enterprises not under the same control, The combination costs shall be the fair values, on theacquisition date, of the assets paid, the liabilities incurred or assumed and the equity securities issued by theCompany in exchange for the control on the acquiree, and all relevant direct costs incurred to the acquirer for thebusiness combination. Where any future event that is likely to affect the combination costs is stipulated in thecombination contract or agreement, if it is likely to occur and its effects on the combination costs can be measuredreliably, the Company shall record the said amount into the combination costs.(3) The cost of a long-term equity investment obtained by making payment in cash shall be the purchase costwhich is actually paid. The cost consists of the expenses directly relevant to the obtainment of the long-termequity investment, taxes and other necessary expenses.(4) The cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fairvalue of the equity securities issued.(5) The cost of a long-term investment obtained by the exchange of non-monetary assets (having commercialnature) shall be recognized base on taking the fair value and relevant payable taxes as the cost of the assetsreceived.(6) The cost of a long-term equity investment obtained by recombination of liabilities shall be recognized at the
fair value.2. Subsequent measurement of long-term equity investment and recognized method of profit/lossThe long-term equity investment with joint control (except for the common operator) or significant influence onthe investee is accounted by equity method. In addition, the Company's financial statements use cost method tocalculate long-term equity investments that can control the investee.(1) Long-term equity investment accounted by cost methodWhen the cost method is used for accounting, the long-term equity investment is priced at the initial investmentcost, and the cost of the long-term equity investment is adjusted according to additional investment or recoveredinvestment. Except the price actually paid when acquired investment or cash dividends or profits that have beendeclared but not yet paid included in the consideration, current investment income is recognized by the cashdividends or profits declared by the investee.(2) Long-term equity investment accounted by equity methodWhen the equity method is used for accounting, if the initial investment cost of the long-term equity investment is
greater than the fair value of the investee’s identifiable net assets, the initial investment cost of the long-termequity investment shall not be adjusted; if the initial investment cost is less than the fair value of the investee’s
identifiable net assets, the difference shall be recorded into the current profits and losses, and the cost of thelong-term equity investment shall be adjusted at the same time.When the equity method is used for accounting, the investment income and other comprehensive income shall berecognized separately according to the net profit or loss and other comprehensive income realized by the investee,and the book value of the long-term equity investment shall be adjusted at the same time. The part entitled shall becalculated according to the profits or cash dividends declared by the investee, and the book value of the long-term
equity investment shall be reduced accordingly. For other changes in the owner’s equity other than the net profit
or loss, other comprehensive income and profit distribution of the investee, the book value of the long-term equityinvestment shall be adjusted and included in the capital reserve. When the share of the net profit or loss of theinvestee is recognized, the net profit of the investee shall be adjusted and recognized according to the fair value ofthe identifiable assets of the investee when the investment is made. If the accounting policies and accountingperiods adopted by the investee are inconsistent with the Company, the financial statements of the investee shallbe adjusted according to the accounting policies and accounting periods of the Company and the investmentincome and other comprehensive income shall be recognized accordingly. For the transactions between the
Company and associates and joint ventures, if the assets made or sold don’t constitute business, the unrealized
gains and losses of the internal transactions are offset by the proportion attributable to the Company, and theinvestment gains and losses are recognized accordingly. However, the loss of unrealized internal transactionsincurred by the Company and the investee attributable to the impairment loss of the transferred assets shall not beoffset. If the assets made to associates or joint ventures constitute business, and the investor makes long-termequity investment but does not obtain the control, the fair value of the investment shall be taken as the initialinvestment cost of the new long-term equity investment, and the difference between initial investment and thebook value of the investment is fully recognized in profit or loss for the current period. If the assets sold by theCompany to joint ventures or associates constitute business, the difference between the consideration and the bookvalue of the business shall be fully credited to the current profits and losses. If the assets purchased by Companyfrom joint ventures or associates constitute business, conduct accounting treatment in accordance with theprovisions of Accounting Standard for Business Enterprises No. 20 - Business combination, and the profits orlosses related to the transaction shall be recognized in full.When the net loss incurred by the investee is recognized, the book value of the long-term equity investment and
other long-term equity that substantially constitute the net investment in the investee shall be written down to zero.In addition, if the Company has an obligation to bear additional losses to the investee, the estimated liabilities arerecognized in accordance with the obligations assumed and included in the current investment losses. If theinvestee has realized net profit in later period, the Company will resume the recognition of the income share afterthe income share has made up the unrecognized loss share.(3) Acquisition of minority interestsIn the preparation of the consolidated financial statements, capital reserve shall be adjusted according to thedifference between the long-term equity investment increased due to the purchase of minority interests and theshare of the net assets held by the subsidiary from the date of purchase (or the date of combination) calculatedaccording to the proportion of the new shareholding ratio, and retained earnings shall be adjusted if the capitalreserve is insufficient to offset.(4) Disposal of long-term equity investmentIn the consolidated financial statements, the parent company partially disposes of the long-term equity investmentin the subsidiary without the loss of control, and the difference between the disposal price and the net assets of the
subsidiary corresponding to the disposal of the long-term equity investment is included in the shareholders’ equity.
If the disposal of long-term equity investment in subsidiaries results in the loss of control over the subsidiaries,
handle in accordance with the relevant accounting policies described in 6. “Preparation method of consolidatedfinancial statements” in Notes V.
In other cases, the difference between the book value and the actual acquisition price shall be recorded into thecurrent profits and losses for the disposal of the long-term equity investment.For long-term equity investment accounted by the equity method and residual equity after disposal still accounted
by the equity method, other comprehensive income originally included in the shareholders’ equity shall be treated
in the same basis of the investee directly disposing related assets or liabilities by corresponding proportion. The
owner’s equity recognized by the change of the owner’s equity of the investee other than the net profit or loss,
other comprehensive income and profit distribution is carried forward proportionally into the current profits andlosses.For long-term equity investment accounted by the cost method and residual equity after disposal still accounted bythe cost method, other comprehensive income accounted by equity method or recognized by financial instrumentand accounted and recognized by measurement criteria before the acquisition of the control over the investee istreated in the same basis of the investee directly disposing related assets or liabilities, and carried forward
proportionately into the current profits and losses. Other changes of owner’s equity in net assets of the investee
accounted and recognized by the equity method other than the net profit or loss, other comprehensive income andprofit distribution are carried forward proportionally into the current profits and losses.3. Impairment provisions for long-term equity investmentsFor the relevant testing method and provision making method, see 22. Impairment of Long-term Assets in Notes Vherein.
15. Investment Real Estates
Measurement mode of investment real estatesNot applicable
16. Fixed Assets(1) Recognition Conditions
Fixed assets of the Company refers to the tangible assets that simultaneously possess the features as follows: they are held for thesake of producing commodities, rendering labor service, renting or business management; and their useful life is in excess of oneaccounting year and unit price is higher. No fixed assets may be recognized unless it simultaneously meets the conditions as follows:
① The economic benefits pertinent to the fixed asset are likely to flow into the Company; and ② The cost of the fixed asset can be
measured reliably.
(2) Depreciation Method
| Category of fixed assets | Method | Useful life | Expected net salvage value | Annual deprecation |
| Housing and building | Average method of useful life | 3—30 years | 5% | 31.67%-3.17% |
| Machinery equipments | Average method of useful life | 2—10 years | 5% | 47.50%-9.50% |
| Transportation vehicle | Average method of useful life | 5—10 years | 5% | 19.00%-9.50% |
| Electronic equipment | Average method of useful life | 2—8 years | 5% | 47.50%-11.88% |
(3) Recognition Basis, Pricing and Depreciation Method of Fixed Assets by Finance Lease
Not applicable
17. Construction in Progress
1. Pricing of construction in progressThe constructions are accounted according to the actual costs incurred. The constructions shall be carried forwardinto fixed assets at the actual cost when reach intended usable condition. The borrowing expenses eligible forcapitalization incurred before the delivery of the construction are included in the construction cost; after the delivery,the relevant interest expense shall be recorded into the current profits and losses.2. Standard and time of construction in progress carrying forward into fixed assets
The Company’s construction in progress is carried forward into fixed assets when the construction completes and
reaches intended usable condition. The criteria for determining the intended usable condition shall meet one of thefollowing:
(1) The physical construction (including installation) of fixed assets has been completed or substantially completed;(2) Has been produced or run for trial, and the results indicate that the assets can run normally or can produce stableproducts stably, or the results of the trial operation show that it can operate normally;(3) The amount of the expenditure on the fixed assets constructed is little or almost no longer occurring;(4) The fixed assets purchased have reached the design or contract requirements, or basically in line with the designor contract requirements.
3. Provision for impairment of construction in progressPlease refer to Note 22: Long-term Asset Impairment under Note V for the impairment test method and provisionfor impairment of construction in progress.
18. Borrowing Costs
The borrowing costs refer to interest and other related costs incurred by the Company as a result of borrowings,including interest on borrowings, amortization of discounts or premiums, ancillary expenses and exchangedifferences arising from foreign currency borrowings. The borrowing costs incurred by the Company directlyattributable to the acquisition, construction or production of assets eligible for capitalization are capitalized andincluded in the cost of the relevant assets. Other borrowing costs are recognized as expenses according to theamount at the time of occurrence, and are included in the current profits and losses.1. Principle of capitalization of borrowing costsBorrowing costs can be capitalized when all the following conditions are met: Asset expenditure has alreadyoccurred; borrowing costs have already occurred; construction or production activities necessary to bring theassets to the intended useable or sellable status have already begun.2. Capitalization period of borrowing costsCapitalization period refers to the period from the capitalization of borrowing costs starting to the end ofcapitalization, excluding the period when capitalization is suspended.If assets that meet the conditions of capitalization are interrupted abnormally in the course of construction orproduction, and the interruption time exceeds 3 consecutive months, the capitalization of borrowing costs shall besuspended. The borrowing costs incurred during the interruption are recognized as expenses and included incurrent profits and losses until the acquisition or construction of the assets is resumed. The capitalization of theborrowing costs continues if the interruption is a procedure necessary for the purchase or production of assetseligible for capitalization to meet the intended useable or sellable status.The borrowing costs shall cease to be capitalized when the purchased or produced assets that meet the conditionsof capitalization meet the intended useable or sellable status. The borrowing costs incurred after the assets eligiblefor capitalization meet the intended useable or sellable status can be included in the current profits and losseswhen incurred.3. Calculation method of capitalized amount of borrowing costsDuring the period of capitalization, the capitalization amount of interests (including amortization of discounts orpremiums) for each accounting period is determined in accordance with the following provisions:
(1) For special borrowings for the acquisition or construction of assets eligible for capitalization, the interestexpenses actually incurred in the current period of borrowings shall be recognized after deducting the interestincome obtained by depositing the unused borrowing funds into the bank or investment income obtained fromtemporary investment.(2) Where the general borrowing is occupied for the acquisition or construction of assets eligible for capitalization,the Company multiplies the weighted average of the asset expenditure of the accumulated asset expenditureexceeding the special borrowing by the capitalization rate of the general borrowing to calculate the amount ofinterest that should be capitalized for general borrowings. The capitalization rate is determined based on theweighted average interest rate of general borrowings.
19. Biological Assets
Not applicable
20. Oil-gas Assets
Not applicable
21. Intangible Assets(1) Pricing Method, Useful Life and Impairment Test
1. Recognition criteria of intangible assetsIntangible assets are identifiable non-monetary assets that are owned or controlled by the Company without physicalform. The intangible assets are recognized when all the following conditions are met: (1) Conform to the definitionof intangible assets; (2) Expected future economic benefits related to the assets are likely to flow into the Company;(3) The costs of the assets can be measured reliably.2. Initial measurement of intangible assetsIntangible assets are initially measured at cost. Actual costs are determined by the following principles:
(1) The cost of the acquisition of intangible assets, including the purchase price, relevant taxes and other expensesdirectly attributable to the intended use of the asset. The payment of purchase price of intangible assets exceedingnormal credit terms is deferred, and the cost of intangible assets having financing nature in essence shall berecognized based on the present value of the purchase price. The difference between the actual payment price andthe present value of the purchase price shall be recorded into the current profits and losses in the credit period exceptthat can be capitalized in accordance with the Accounting Standard for Business Enterprises No. 17 - BorrowingCost.(2) The cost of investing in intangible assets shall be recognized according to the value agreed upon in theinvestment contract or agreement, except that the value of the contract or agreement is unfair.3. Subsequent measurement of intangible assetsThe Company shall determine the useful life when it obtains intangible assets. The useful life of intangible assets islimited, and the years of the useful life or output that constitutes the useful life or similar measurement units shall beestimated. The intangible assets are regarded as intangible assets with uncertain useful life if the term that bringseconomic benefits to the Company is unforeseeableIntangible assets with limited useful life shall be amortized by straight line method from the time when the
intangible assets are available until can’t be recognized as intangible assets; intangible assets with uncertain useful
life shall not be amortized. The Company reviews the estimated useful life and amortization method of intangibleassets with limited useful life at the end of each year, and reviews the estimated useful life of intangible assets withuncertain useful life in each accounting period. For intangible assets that evidence shows the useful life is limited,the useful life shall be estimated and the intangible assets shall be amortized in the estimated useful life.4. Recognition criteria and withdrawal method of intangible asset impairment provisionThe impairment test method and withdrawal method for impairment provision of intangible assets are detailed inNote 22: Long-term asset impairment under Note V.
(2) Accounting Policy for Internal Research and Development Expenditures
The expenditures in internal research and development projects of the Company are classified into expenditures inresearch stage and expenditures in development stage. The expenditures in research stage are included in thecurrent profits and losses when incurred. The expenditures in development stage are recognized as intangibleassets when meeting the following conditions:
(1) The completion of the intangible assets makes it technically feasible for using or selling;(2) Having the intention to complete and use or sell the intangible assets;(3) The way in which an intangible asset generates economic benefits, including the proof that the productsproduced with the intangible asset have market or the proof of its usefulness if the intangible asset has market andwill 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 since meeting intangible assetsrecognition criterion until reaching intended use. Expenditures that have been expensed in previous periods are nolonger adjusted.Non-monetary assets exchange, debt restructuring, government subsidies and the cost of intangible assets acquiredby business combination are recognized according to relevant provisions of Accounting Standard for BusinessEnterprises No. 7 - Non-monetary assets exchange, Accounting Standard for Business Enterprises No. 12 - Debtrestructuring, Accounting Standards for Business Enterprises No. 16 - Government subsidies, AccountingStandard for Business Enterprises No. 20 - Business combination respectively.
22. Impairment of Long-term Assets
For non-current non-financial assets such as fixed assets, construction in progress, intangible assets with limiteduseful life, investment real estate measured in cost mode and long-term equity investments in subsidiaries, jointventures and associates, the Company determines whether there is indication of impairment at balance sheet date.If there is indication of impairment, then estimate the amount of its recoverable value and test the impairment.Goodwill, intangible assets with uncertain useful life and intangible assets that have not yet reached useable stateshall be tested for impairment every year, whether or not there is any indication of impairment.If the impairment test results indicate that the recoverable amount of the asset is lower than its book value, theimpairment provision shall be made at the difference and included in the impairment loss. The recoverableamount is the higher of the fair value of the asset minus the disposal cost and the present value of the expectedfuture cash flow of the asset. The fair value of the asset is recognized according to the price of the sales agreementin the fair trade; if there is no sales agreement but there is an active market, the fair value is recognized according
to the buyer’s bid of the asset; if there is no sales agreement or active market, the fair value of asset shall be
estimated based on the best information that can be obtained. Disposal costs include legal costs related to disposalof assets, related taxes, handling charges, and direct costs incurred to enable the asset reaching sellable status. Thepresent value of the expected future cash flows of the assets is recognized by the amount discounted at appropriatediscount rate according to the expected future cash flows arising from the continuing use of the asset and the finaldisposal. The provision for impairment of assets is calculated and recognized on the basis of individual assets. If itis difficult to estimate the recoverable amount of individual assets, the recoverable amount of the asset group shallbe recognized by the asset group to which the asset belongs. The asset group is the smallest portfolio of assets that
can generate cash inflows independently.The book value of the goodwill presented separately in the financial statements shall be apportioned to the assetgroup or portfolio of asset groups that is expected to benefit from the synergies of the business combination whenthe impairment test is conducted. The corresponding impairment loss is recognized if the test results indicate thatthe recoverable amount of the asset group or portfolio of asset groups containing the apportioned goodwill islower than its book value. The amount of the impairment loss shall offset the book value of the goodwillapportioned to the asset group or portfolio of asset groups, and offset the book value of other assets in proportionaccording to the proportion of the book value of other assets except the goodwill in the asset group or portfolio ofasset 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.
23. Amortization Method of Long-term Deferred Expenses
Long-term deferred expenses refer to general expenses with the apportioned period over one year (one yearexcluded) that have occurred but attributable to the current and future periods. Long-term deferred expense shallbe amortized averagely within benefit period. In case of no benefit in the future accounting period, the amortizedvalue of such project that fails to be amortized shall be transferred into the profits and losses of the current period.
24. Payroll(1) Accounting Treatment of Short-term Compensation
Short-term compensation mainly including salary, bonus, allowances and subsidies, employee services andbenefits, medical insurance premiums, birth insurance premium, industrial injury insurance premium, housingfund, labor union expenditure and personnel education fund, non-monetary benefits etc. The short-termcompensation actually happened during the accounting period when the active staff offering the service for theGroup should be recognized as liabilities and is included in the current gains and losses or relevant assets cost. Ofwhich the non-monetary benefits should be measured according to the fair value.
(2) Accounting Treatment of the Welfare after Demission
Welfare after demission mainly includes defined contribution plans and defined benefit plans. Of which definedcontribution plans mainly include basic endowment insurance, unemployment insurance, annuity funds, etc., andthe corresponding payable and deposit amount should be included into the relevant assets cost or the current gainsand losses when happen.
(3) Accounting Treatment of the Demission Welfare
If an enterprise cancels the labor relationship with any employee prior to the expiration of the relevant laborcontract or brings forward any compensation proposal for the purpose of encouraging the employee to accept alayoff, and should recognize the payroll liabilities occurred from the demission welfare base on the earlier datebetween the time when the Group could not one-sided withdraw the demission welfare which offered by the planor layoff proposal owning to relieve the labor relationship and the date the Group recognizes the cost related to thereorganization of the payment of the demission welfare and at the same time includes which into the current gains
and losses. But if the demission welfare is estimated that could not totally pay after the end of the annual reportwithin 12 months, should be disposed according to other long-term payroll payment.
(4) Accounting Treatment of the Welfare of Other Long-term Staffs
The inside employee retirement plan is treated by adopting the same principle with the above dismiss ion welfare.
The group would recorded the salary and the social security insurance fees paid and so on from the employee’s
service terminative date to normal retirement date into current profits and losses (dismiss ion welfare) under thecondition that they meet the recognition conditions of estimated liabilities.The other long-term welfare that the Group offers to the staffs, if met with the setting drawing plan, should beaccounting disposed according to the setting drawing plan, while the rest should be disposed according to thesetting revenue plan.
25. Estimated Liabilities
1. Recognition of estimated debtsThe obligation such as external guaranty, pending litigation or arbitration, product quality assurance, layoff plan,loss contract, restructuring and disposal of fixed assets, pertinent to a contingencies shall be recognized as an
estimated debts when the following conditions are satisfied simultaneously: ① That obligation is a currentobligation of the enterprise; ② It is likely to cause any economic benefit to flow out of the enterprise as a resultof performance of the obligation; and ③ The amount of the obligation can be measured in a reliable way
2. Measurement of estimated debtsThe estimated debts shall be initially measured in accordance with the best estimate of the necessary expenses forthe performance 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 middle estimate within the range. In other cases, the best estimate shall be conducted in accordance with the
following situations, respectively: ① If the Contingencies concern a single item, it shall be determined in thelight of the most likely outcome. ② If the Contingencies concern two or more items, the best estimate should becalculated and determined in accordance with all possible outcomes and the relevant probabilities. ③ When all
or some of the expenses necessary for the liquidation of an estimated debts of an enterprise is expected to becompensated by a third party, the compensation should be separately recognized as an asset only when it isvirtually certain that the reimbursement will be obtained. The Company shall check the book value of theestimated debts on the balance sheet date. The amount of compensation is not exceeding the book value of therecognized estimated liabilities.
26. Share-based Payment
Not applicable
27. Other Financial Instruments such as Preferred Shares and Perpetual Capital Securities
Not applicable
28. Revenue
Is the Company subject to any disclosure requirements for special industries?No
1. Sale of goods
No revenue from selling goods may be recognized unless the following conditions are met simultaneously: ① Thesignificant risks and rewards of ownership of the goods have been transferred to the buyer by the Company; ② The
Company retains neither continuous management right that usually keeps relation with the ownership nor effective
control over the sold goods; ③ The revenue amount could be reliably measured; and ④ The relevant economic
benefits may flow into the Company, and the relevant cost which had occurred or will occur could be reliablymeasured.
Specific principles for recognition of the “domestic sale and export” incomes of the Company:
(1) Method for recognition of the domestic sale income: According to the buyer’s requirements, the Company
delivers to the buyer the products that have been considered qualified upon examination. The amount of the incomehas been determined and the sales invoice has been issued. The payment for the delivered products has beenreceived in full or is expectedly recoverable.(2) Method for recognition of the export income: The Company produces the products according to the contractsigned with the buyer. After the products have been examined as qualified, the Company completes the customsclearing procedure for export. The shipping company loads the products for shipping. The amount of the income hasbeen determined and the export sales invoice has been issued. The payment for the delivered products has beenreceived in full or is expectedly recoverable.2. Provision of labor servicesIn the case that the results of the labor service transaction can be reliably estimated, the income from the provision oflabor services shall be recognized at the balance sheet date by the percentage of completion method according to theprogress of the labor transaction.The result of the provision of labor services can be reliably estimated refers that all the following conditions are met:
① The amount of income can be measured reliably; ②The relevant economic benefits are likely to inflow to theenterprise; ③ The progress of the transaction can be reliably determined; ④ The cost incurred and to be incurred in
the transaction can be measured reliably.
If the result of the provision of labor services can’t be reliably estimated, the income from the provision of labor
services shall be recognized according to the cost of labor services that have incurred and are expected to becompensated, and the cost of labor services that have incurred is recognized as the current expenses. If the cost of
labor services already incurred isn’t expected to be compensated, the income will not be recognized.
If the contract or agreement between the Company and other enterprises includes the sale of goods and the provisionof labor services, and the sale of goods and the provision of labor services can be distinguished and measuredseparately, the sale of goods and the provision of labor services shall be dealt with separately; if the sale of goods
and the provision of labor services can’t be distinguished or can’t be measured separately, the contract will be
treated as sale of goods.3. Income from transferring the right to use assetsThe operating income is calculated and recognized according to the time and method stipulated by relevantcontracts and agreements.4. Interest income
Recognized when all the following conditions are met: ① The amount of income can be measured reliably; ②
Economic benefits related to the transaction can inflow.
29. Government Subsidies(1) Judgment Basis and Accounting Treatment of Government Subsidies Related to Assets
The government subsidies related to assets refer to the government subsidies obtained for acquisition, constructionor otherwise formation of long-term assets. The government subsidies related to income refer to the governmentsubsidies except the government subsidies related to assets.The specific standard of classifying the government subsidies as subsidies related to assets: government subsidiesfor acquisition, construction or otherwise formation of long-term assets.If the government documents do not specify the subsidy object, the bases that the Company classified thegovernment subsidies as assets-related subsidies or income-related subsidies were as follows: (1) If the specificitems for which the subsidy is targeted are stipulated in government documents, divide according to the relativeproportion of the amount of expenditure that forms assets and the amount of expenditure included in the cost inthe budget for that particular project, and the proportion shall be reviewed at each balance sheet date and changedas necessary; (2) if the government documents only have a general statement of the purpose and do not specify aspecific project.If a government subsidy is a monetary asset, it shall be measured according to the amount received or receivable.If a government subsidy is a non-monetary asset, it shall be measured at its fair value, and shall be measured at anominal amount (RMB1) when the fair value cannot be obtained reliably.For confirmed government subsidies that need to be returned, if there is relevant deferred income, the bookbalance of related deferred income shall be written off and the excess shall be charged to profit or loss for theCurrent Period; for other circumstances, it shall be directly charged to profit or loss for the Current.The Company adopts the gross method to confirm government subsidies. The government subsidies related toassets are recognized as deferred income, and are charged to the current profit or loss in a reasonable andsystematic manner within the useful lives of the relevant assets (subsidies related to the daily activities of theCompany are included in other income; while subsidies unrelated to the daily activities of the Company areincluded in non-operating income). Government subsidies measured at nominal amounts are directly charged toprofit or loss for the Current Period. Where the relevant assets are sold, transferred, scrapped or damaged beforethe end of their useful lives, the balance of related undistributed deferred income shall be transferred to the profitor loss of the asset disposal in the Current Period.
(2) Judgment Basis and Accounting Treatment of Government Subsidies Pertinent to Incomes
The specific criteria that the Company classifies government subsidies as income related is: other governmentsubsidies other than asset-related government subsidies.Government subsidies related to income are treated as follows:
(1) government subsidies used to compensate the relevant costs, expenses or losses of the Company in thesubsequent period shall be recognized as deferred income, and shall be included in the current profit and lossduring the period of confirming the relevant costs, expenses or losses (subsidies related to the daily activities ofthe Company are included in other income; while subsidies unrelated to the daily activities of the Company areincluded in non-operating income);(2) government subsidies used to compensate the relevant costs, expenses or losses incurred by the Companyshall be directly included in the current profits and losses (subsidies related to the daily activities of the Companyare included in other income; while subsidies unrelated to the daily activities of the Company are included in
non-operating income).For government subsidies that include both assets-related and income-related parts, they should be distinguishedseparately for accounting treatment; for government subsidies that are difficult to be distinguished, they should beclassified as income-related.
30. Deferred Income Tax Assets/Deferred Income Tax Liabilities
The income tax of the Company includes the current income tax and deferred income tax. Both are recorded intothe current gains and losses as income tax expenses or revenue, except in the following circumstances:
(1) The income tax generated from the business combination shall be adjusted into goodwill;
(2) The income tax related to the transaction or event directly included in shareholders’ equity shall be recordedinto shareholders’ equity.
At the balance sheet date, the Company recognizes the deferred income tax assets or deferred income taxliabilities in accordance with the balance sheet liability method for the temporary difference between the bookvalue of assets or liabilities and its tax base.The Company recognizes all taxable temporary differences as deferred income tax liabilities unless taxabletemporary differences arise in the following transactions:
(1) The initial recognition of goodwill or the initial recognition of the assets or liabilities arising from a transactionwith the following characteristics: the transaction is not a business combination and neither the accounting profitnor the taxable income is incurred at the time of the transaction;(2) The time of write-back of taxable temporary differences related to the investments in subsidiaries, associatesand joint ventures can be controlled and the temporary differences are likely to not be written back in theforeseeable future.The Company recognizes the deferred income tax assets arising from deductible temporary differences, subject tothe amount of taxable income obtained to offset the deductible temporary differences, unless the deductibletemporary differences arise in the following transactions:
(1) The transaction is not a business combination, and the transaction does not affect the accounting profit or theamount of taxable income;(2) The deductible temporary differences related to the investments in subsidiaries, associates and joint venturesare not met simultaneously: Temporary differences are likely to be written back in the foreseeable future and arelikely to be used to offset the taxable income of deductible temporary differences in the future.At the balance sheet date, the Company measures the deferred income tax assets and deferred income taxliabilities at the applicable tax rate of the period expected to recover the asset or pay off the liabilities according totax law, and reflects the income tax effect of expected assets recovery or liabilities payoff method at the balancesheet date.At the balance sheet date, the Company reviews the book value of the deferred income tax assets. If it is likelythat sufficient taxable income will not be available to offset the benefit of the deferred income tax assets in thefuture period, the book value of the deferred income tax assets will be written down. If it is probable thatsufficient taxable income will be available, the amount of write-down will be written back.
31. Lease(1) Accounting Treatment of Operating Lease
(1) The lease fee paid by the Company for rented assets shall be apportioned using the straight-line method overthe entire lease term without deducting the rent-free period and shall be included in the current period expenses.The initial direct costs related to the lease transaction paid by the Company are included in current expenses.When the lessor of the asset assumes the lease-related expenses that should be borne by the Company, theCompany should deduct the part of the expenses from the total rental amount, and the deducted rental expensesare apportioned during the lease term and included in the current expenses.(2) The rental fees received by the company for leasing assets are apportioned on a straight-line basis over theentire lease term without deducting the rent-free period and are recognized as lease income. The initial directexpenses related to lease transactions paid by the company are included in the current expenses; if the amount islarger, they are capitalized and are recorded in the current period in stages on the same basis as the recognition oflease income during the entire lease period.When the company assumes the lease-related expenses that should be borne by the lessee, the company deductsthe expenses from the total amount of rental income and allocates the deducted rental expenses during the leaseperiod.
(2) Accounting Treatments of Financial Lease
(1) Financing leased assets: on the lease starting date, the Company recorded the lower one of the fair value of theleased asset and the present value of the minimum lease payments on the lease beginning date as the enteringvalue in an account, recognized the amount of the minimum lease payments as the entering value in an account oflong-term account payable, and treated the balance between the recorded amount of the leased asset and thelong-term account payable as unrecognized financing charges. The company adopted the effective interest methodto amortize the unrecognized financing expenses during the asset lease period and included it into financialexpenses.(2) Assets leased by finance: On the lease beginning date, the Company recognized the financial lease receivables,and the difference between the sum of unguaranteed residual values and its present value as unrealized financingincome. It is recognized as lease income during any lease period in the future. The initial direct costs incurred bythe Company in relation to the lease transaction, were included in the initial measurement of the financial leasereceivable and the amount of revenue recognized during the lease period shall be reduced.
32. Other Significant Accounting Policies and Estimates
Not applicable
33. Changes in Main Accounting Policies and Estimates(1) Change of Accounting Policies
□ Applicable √ Not applicable
(2) Significant Changes in Accounting Estimates
□ Applicable √ Not applicable
34. Other
None
VI Taxes
1. Main Taxes and Tax Rates
| Category of taxes | Tax basis | Tax rate |
| VAT | Sales volume from goods selling or taxable service | 3%, 6%, 10%, 11%, 16%, 17% |
| Urban maintenance and construction tax | Turnover tax payable | 7%, 5% |
| Enterprise income tax | Taxable income | 15%, 25% |
| Educational surtax | Turnover tax payable | 3% |
| Local educational surtax | Turnover tax payable | 2% |
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
| Taxpayer | Income tax rate |
| Foshan Electrical and Lighting Co., Ltd. | 15% |
| Foshan Lighting Chanchang Optoelectronics Co., Ltd. | 25% |
| Foshan Chansheng Electronic Ballast Co., Ltd. | 25% |
| Foshan Taimei Times Lamps and Lanterns Co., Ltd. | 25% |
| Nanjing Fozhao Lighting Components Manufacturing Co., Ltd. | 25% |
| Foshan Electrical & Lighting (Xinxiang) Co., Ltd. | 25% |
| FSL New Light Source Technology Co., Ltd. | 25% |
| Guangdong Fozhao Leasing Co., Ltd. | 25% |
| Foshan Lighting Lamps and Lanterns Co., Ltd. | 25% |
| FSL Zhida Electric Technology Co., Ltd. | 25% |
| FSL Lighting GMBH | 15% |
2. Tax Preference
The Company passed the re-examination for High-tech Enterprises in 2017, as well as won the “Certificate ofHigh-tech Enterprise” after approval by Department of Science and Technology of Guangdong Province,
Department of Finance of Guangdong Province, Guangdong Provincial Bureau of State Taxation and GuangdongProvincial Bureau of Local Taxation. In accordance with relevant provisions in Corporate Income Tax Law of the
People's Republic of China and the Administration Measures for Identification of High-tech Enterprisespromulgated in 2007, the Company paid the corporate income tax based on a tax rate of 15% within three yearssince 1 January 2017.
3. Other
Paid according to the relevant regulation of the tax law.
VII. Notes to Main Items of Consolidated Financial Statements
1. Monetary Funds
Unit: RMB
| Item | Ending balance | Beginning balance |
| Cash on hand | 53,998.39 | 52,031.79 |
| Bank deposits | 909,808,121.57 | 565,323,109.99 |
| Other monetary funds | 5,106,479.72 | 4,809,067.18 |
| Total | 914,968,599.68 | 570,184,208.96 |
| Of which: total amount deposited oversees | 334,199.31 | 183,066.93 |
Other notes:
The ending balance of other monetary funds in the Reporting Period was the refundable deposits saved in securities company, cashdeposits, and e-commerce balance, among which the using right of cash deposits of future foreign exchange settlement of RMB2,447,280.00 and margin of RMB 857,419.80 were restricted.
2. Financial Assets at Fair Value through Profit or Loss
Naught
3. Derivative Financial Assets
□ Applicable √ Not applicable
4. Notes Receivable(1) Notes Receivable Listed by Category
Unit: RMB
| Item | Ending balance | Beginning balance |
| Bank acceptance bill | 67,325,195.40 | 68,368,192.41 |
| Total | 67,325,195.40 | 68,368,192.41 |
(2) Notes Receivable Pledged by the Company at the Period-end
Unit: RMB
| Item | Amount |
| Bank acceptance bill | 3,500,000.00 |
| Total | 3,500,000.00 |
(3) Notes Receivable which Had Endorsed by the Company or Had Discounted and Had not Due on the BalanceSheet Date at the Period-end
Unit: RMB
| Item | Amount of recognition termination at the period-end | Amount of not terminated recognition at the period-end |
| Bank acceptance bill | 113,776,579.30 | |
| Total | 113,776,579.30 |
(4) Notes Transferred to Accounts Receivable because Drawer of the Notes Fails to Executed the Contract orAgreement
Naught
5. Accounts Receivable(1) Accounts Receivable Disclosed by Category
Unit: RMB
| Category | Ending balance | Beginning balance | ||||||||
| Carrying amount | Bad debt provision | Carrying value | Carrying amount | Bad debt provision | Carrying value | |||||
| Amount | Proportion | Amount | Withdrawal proportion | Amount | Proportion | Amount | Withdrawal proportion | |||
| Accounts receivable with significant single amount for which bad debt provision separately accrued | 9,975,968.91 | 0.95% | 9,975,968.91 | 100.00% | 10,061,641.64 | 1.25% | 10,061,641.64 | 100.00% | ||
| Accounts receivable withdrawn bad debt provision according | 1,042,311,223.06 | 99.05% | 47,620,836.99 | 4.57% | 994,690,386.07 | 795,800,674.49 | 98.75% | 39,509,241.93 | 4.96% | 756,291,432.56 |
| to credit risks characteristics | ||||||||||
| Total | 1,052,287,191.97 | 100.00% | 57,596,805.90 | 5.47% | 994,690,386.07 | 805,862,316.13 | 100.00% | 49,570,883.57 | 6.15% | 756,291,432.56 |
Accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end
√ Applicable □ Not applicable
Unit: RMB
| Accounts receivable（by unit） | Ending balance | |||
| Accounts receivable | Bad debt provision | Withdrawal proportion | Withdrawal reason | |
| Suzhou Mont Lighting Co., Ltd. | 9,975,968.91 | 9,975,968.91 | 100.00% | The debtor was at a continuous loss due to the scale and market and other reasons, so now it is not suitable to produce continuously. |
| Total | 9,975,968.91 | 9,975,968.91 | -- | -- |
In the groups, accounts receivable adopting aging analysis method to accrue bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
| Aging | Ending balance | ||
| Accounts receivable | Bad debt provision | Withdrawal proportion | |
| Subitem within 1 year | |||
| Within 1 year | 988,309,695.40 | 29,649,290.86 | 3.00% |
| Subtotal within 1 year | 988,309,695.40 | 29,649,290.86 | 3.00% |
| 1 to 2 years | 32,213,727.24 | 3,221,372.72 | 10.00% |
| 2 to 3 years | 5,878,621.63 | 1,763,586.49 | 30.00% |
| 3 to 4 years | 1,334,879.69 | 667,439.85 | 50.00% |
| 4 to 5 years | 11,275,760.17 | 9,020,608.14 | 80.00% |
| Over 5 years | 3,298,538.93 | 3,298,538.93 | 100.00% |
| Total | 1,042,311,223.06 | 47,620,836.99 | 4.57% |
Notes of confirming the basis of the groups:
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable √ Not applicable
In the groups, accounts receivable adopting other methods to withdraw bad debt provision:
Naught
(2) Accounts Receivable Withdraw, Reversed or Collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB 8,026,000.50; the amount of the reversedor collected part during the Reporting Period was of RMB 0.00.
(3) The Actual Write-off Accounts Receivable
Unit: RMB
| Item | Amount |
| Other retails accounts | 78.17 |
| Total | 78.17 |
(4) Top 5 of the Ending Balance of the Accounts Receivable Collected according to the Arrears Party
Unit: RMB
| Name of units | Relationship | Amount | Aging | Proportion of ending balance of the total accounts receivable | Ending balance of bad debt provision |
| No. 1 | Non-connected relationship | 191,461,593.37 | Within 1 year | 18.19% | 5,743,847.80 |
| No. 2 | Non-connected relationship | 20,747,221.00 | Within 2 years | 1.97% | 684,803.17 |
| No. 3 | Non-connected relationship | 20,371,305.32 | Within 1 year | 1.94% | 611,139.16 |
| No. 4 | Non-connected relationship | 19,409,126.02 | Within 1 year | 1.84% | 582,273.78 |
| No. 5 | Non-connected relationship | 15,148,133.08 | Within 1 year | 1.44% | 454,443.99 |
| Total | 267,137,378.79 | 25.39% | 8,076,507.90 |
(5) Account Receivable which Terminate the Recognition owning to the Transfer of the Financial Assets
Naught
(6) The Amount of the Assets and Liabilities Formed by the Transfer and the Continues Involvement ofAccounts Receivable
Naught
6. Prepayment(1) Listed by Aging Analysis
Unit: RMB
| Aging | Ending balance | Beginning balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 22,468,064.03 | 73.87% | 25,971,834.21 | 78.48% |
| 1 to 2 years | 3,604,426.17 | 11.85% | 2,782,505.53 | 8.41% |
| 2 to 3 years | 111,031.47 | 0.37% | 3,250,778.25 | 9.82% |
| Over 3 years | 4,231,716.81 | 13.91% | 1,090,195.36 | 3.29% |
| Total | 30,415,238.48 | -- | 33,095,313.35 | -- |
(2) Top 5 of the Ending Balance of the Prepayment Collected according to the Prepayment Target
Unit: RMB
| Name of units | Relationship | Ending balance | Aging | Proportion of the total number |
| No. 1 | Non-connected supplier | 2,900,000.00 | Over 3 years | 9.53% |
| No. 2 | Non-connected supplier | 2,152,731.21 | Within 1 year | 7.08% |
| No. 3 | Non-connected supplier | 1,556,175.80 | Within 1 year | 5.12% |
| No. 4 | Non-connected supplier | 1,463,911.36 | Within 1 year | 4.81% |
| No. 5 | Non-connected supplier | 1,318,800.00 | Within 2 year | 4.34% |
| Total | 9,391,618.37 | 30.88% |
7. Interest Receivable(1) Category of Interest Receivable
Unit: RMB
| Item | Ending balance | Beginning balance |
| Deposits on a regular basis | 222,714.96 | 1,726,993.91 |
| Bank financial products | 4,745,863.01 | |
| Structural deposits | 1,366,375.95 | 5,955,594.94 |
| Total | 1,589,090.91 | 12,428,451.86 |
(2) Significant Overdue Interest
Naught
8. Dividend Receivable
Naught
9. Other Accounts Receivable(1) Other Accounts Receivable Disclosed by Category
Unit: RMB
| Category | Ending balance | Beginning balance | ||||||||
| Carrying amount | Bad debt provision | Carrying value | Carrying amount | Bad debt provision | Carrying value | |||||
| Amount | Proportion | Amount | Withdrawal proportion | Amount | Proportion | Amount | Withdrawal proportion | |||
| Other accounts receivable withdrawn bad debt provision according to credit risks characteristics | 40,239,298.09 | 99.27% | 3,138,332.99 | 7.80% | 37,100,965.10 | 24,013,060.03 | 98.79% | 2,797,844.88 | 11.65% | 21,215,215.15 |
| Other accounts receivable with insignificant single amount for which bad debt provision separately accrued | 295,120.00 | 0.73% | 295,120.00 | 100.00% | 295,120.00 | 1.21% | 295,120.00 | 100.00% | ||
| Total | 40,534,418.09 | 100.00% | 3,433,452.99 | 8.47% | 37,100,965.10 | 24,308,180.03 | 100.00% | 3,092,964.88 | 12.72% | 21,215,215.15 |
Other receivable with single significant amount and withdrawal bad debt provision separately at the end of the Period
□ Applicable √ Not applicable
In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
| Aging | Ending balance | ||
| Other accounts receivable | Bad debt provision | Withdrawal proportion | |
| Subitem within 1 year | |||
| Within 1 year | 33,350,359.64 | 1,000,510.79 | 3.00% |
| Subtotal within 1 year | 33,350,359.64 | 1,000,510.79 | 3.00% |
| 1 to 2 years | 3,432,152.41 | 343,215.24 | 10.00% |
| 2 to 3 years | 167,542.81 | 50,262.84 | 30.00% |
| 3 to 4 years | 3,088,998.23 | 1,544,499.12 | 50.00% |
| 4 to 5 years | 2,000.00 | 1,600.00 | 80.00% |
| Over 5 years | 198,245.00 | 198,245.00 | 100.00% |
| Total | 40,239,298.09 | 3,138,332.99 | 7.80% |
Notes of confirming the basis of the groups:
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, other accounts receivable adopting other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
(2) Bad Debt Provision Withdrawal, Reversed or Recovered in the Reporting Period
The amount of bad debt provision was RMB 340,488.11, the amount of reversed or recovered bad debt provision in the ReportingPeriod RMB 0.00.
(3) Particulars of the Actual Verification of Other Accounts Receivable during the Reporting Period
Naught
(4) Other Account Receivable Classified by Account Nature
Unit: RMB
| Nature | Ending carrying amount | Beginning carrying amount |
| VAT export tax refunds | 18,007,536.67 | 5,712,812.04 |
| Performance bond | 4,671,837.37 | 4,377,639.20 |
| Staff borrow and deposit | 8,327,131.18 | 4,343,208.32 |
| Rent, water & electricity fees | 420,600.59 | 1,293,281.97 |
| Advance money for street light construction | 3,777,672.16 | 3,777,672.16 |
| Internal business group | 295,120.00 | 295,120.00 |
| Others | 5,034,520.12 | 4,508,446.34 |
| Total | 40,534,418.09 | 24,308,180.03 |
(5) Top 5 Other Accounts Receivable in Ending Balance Collected according to the Arrears Party
Unit: RMB
| Name of units | Nature | Ending balance | Aging | Proportion of ending balance of the total other accounts | Ending balance of bad debt provision |
| receivable | |||||
| No. 1 | Export rebates | 18,007,536.67 | Within 1 year | 44.43% | 540,226.10 |
| No. 2 | Advance money for street light construction | 3,777,672.16 | Within 4 years | 9.32% | 1,299,397.36 |
| No. 3 | Others | 2,122,656.00 | Within 1 year | 5.24% | 63,679.68 |
| No. 4 | Margin | 2,098,341.00 | 1-2 years | 5.18% | 209,834.10 |
| No. 5 | Reserved funds | 1,272,056.18 | Within 1 year | 3.14% | 38,161.69 |
| Total | -- | 27,278,262.01 | -- | 67.30% | 2,151,298.93 |
(6) Accounts Receivable Involved with Government Subsidies
Naught
(7) Other Account Receivable which Terminate the Recognition owning to the Transfer of the Financial Assets
Naught
(8) The Amount of the Assets and Liabilities Formed by the Transfer and the Continues Involvement of OtherAccounts Receivable
Naught
10. Inventory(1) Category of Inventory
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Falling price reserves | Carrying value | Carrying amount | Falling price reserves | Carrying value | |
| Raw materials | 131,750,416.99 | 2,109,125.27 | 129,641,291.72 | 104,733,828.43 | 2,513,798.75 | 102,220,029.68 |
| Goods in process | 55,616,044.37 | 55,616,044.37 | 39,662,967.77 | 39,662,967.77 | ||
| Inventory goods | 400,549,699.56 | 15,543,022.09 | 385,006,677.47 | 466,813,177.48 | 10,984,333.96 | 455,828,843.52 |
| Self-manufactured semi-finished product | 146,454,910.82 | 1,151,374.87 | 145,303,535.95 | 146,868,534.26 | 972,725.26 | 145,895,809.00 |
| Low-value fugitive items | 2,598,902.15 | 2,598,902.15 | 2,859,239.90 | 2,859,239.90 | ||
| Total | 736,969,973.89 | 18,803,522.23 | 718,166,451.66 | 760,937,747.84 | 14,470,857.97 | 746,466,889.87 |
Whether the Company needs to comply with the disclosure requirements of Shenzhen Stock Exchange Industry InformationDisclosure Guidelines No. 4 - Listed companies engaged in seed industry and planting businessNo
(2) Falling Price Reserves of Inventory
Unit: RMB
| Item | Beginning balance | Increased amount | Decreased amount | Ending balance | ||
| Withdrawal | Other | Reverse or write-off | Other | |||
| Raw materials | 2,513,798.75 | 89,155.54 | 493,829.02 | 2,109,125.27 | ||
| Inventory goods | 10,984,333.96 | 7,319,251.26 | 2,760,563.13 | 15,543,022.09 | ||
| Self-manufactured semi-finished product | 972,725.26 | 231,974.42 | 53,324.81 | 1,151,374.87 | ||
| Total | 14,470,857.97 | 7,640,381.22 | 3,307,716.96 | 18,803,522.23 | ||
Reason for the withdrawal and reverse of falling price reserves of inventory:
| Item | Basis for provision for falling price of inventory | Reasons for the reverse or write-off of falling price reserves of inventory of Reporting Period | Remark |
| Raw materials | According to the lower of inventory cost and net realizable value | Raw materials sales or scrapping | |
| Inventory goods | According to the lower of inventory cost and net realizable value | Products sales or scrapping |
Reason for the withdrawal of falling price reserves of inventory: withdrawn for non-circulation of a small numberof raw materials; some inventory goods were temporarily idle for product classification.
(3) Notes of the Ending Balance of the Inventory which Includes Capitalized Borrowing Expenses
Naught
(4) Completed Unsettled Assets Formed from the Construction Contact at the Period-end
Naught
11. Held-for-sale Assets
Naught
12. Non-current Assets Due within 1 Year
Naught
13. Other Current Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Deductible input tax of VAT | 28,511,668.85 | 25,823,261.05 |
| Advance payment of enterprise income tax | 238,841.51 | |
| Bank financial products (Note) | 470,000,000.00 | |
| Structural deposits (Note) | 320,000,000.00 | 510,000,000.00 |
| Total | 348,511,668.85 | 1,006,062,102.56 |
Other notes:
Note: the bank principal-guaranteed financial products with maturity date more than three months but investment cycle shorter than a
year and structural deposit products which cannot be terminated in advance.
14. Available-for-sale Financial Assets(1) List of Available-for-sale Financial Assets
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserves | Carrying value | Carrying amount | Depreciation reserves | Carrying value | |
| Available-for-sale equity instruments | 1,016,463,407.54 | 5,850,000.00 | 1,010,613,407.54 | 1,396,431,536.60 | 5,850,000.00 | 1,390,581,536.60 |
| Measured by fair value | 706,985,098.14 | 706,985,098.14 | 1,086,953,227.20 | 1,086,953,227.20 | ||
| Measured by cost | 309,478,309.40 | 5,850,000.00 | 303,628,309.40 | 309,478,309.40 | 5,850,000.00 | 303,628,309.40 |
| Total | 1,016,463,407.54 | 5,850,000.00 | 1,010,613,407.54 | 1,396,431,536.60 | 5,850,000.00 | 1,390,581,536.60 |
(2) Available-for-sale Financial Assets Measured by Fair Value at the Period-end
Unit: RMB
| Category of the available-for-sale financial assets | Available-for-sale equity instruments | Available-for-sale liabilities instruments | Total | |
| Cost of the equity instruments/amortized cost of the debt instruments | 243,884,887.46 | 243,884,887.46 | ||
| Fair value | 706,985,098.14 | 706,985,098.14 |
| Changed amount of the fair value that be accumulatively recorded in other comprehensive income | 463,100,210.68 | 463,100,210.68 |
(3) Available-for-sale Financial Assets Measured by Cost at the Period-end
Unit: RMB
| Investee | Carrying amount | Depreciation reserves | Shareholding proportion among the investees | Cash bonus of the Reporting Period | ||||||
| Period-begin | Increase | Decrease | Period-end | Period-begin | Increase | Decrease | Period-end | |||
| Shenzhen Zhonghao (Group) Ltd. | 5,850,000.00 | 5,850,000.00 | 5,850,000.00 | 5,850,000.00 | Less than 5.00% | |||||
| Chengdu Hongbo Industrial Co., Ltd. | 6,000,000.00 | 6,000,000.00 | 6.94% | |||||||
| Xiamen Bank | 292,574,133.00 | 292,574,133.00 | 4.62% | 10,971,417.60 | ||||||
| Guangdong Development Bank Co., Ltd. | 500,000.00 | 500,000.00 | Less than 5.00% | |||||||
| Foshan Fochen Road Development Company Limited | 4,554,176.40 | 4,554,176.40 | 7.66% | |||||||
| Total | 309,478,309.40 | 309,478,309.40 | 5,850,000.00 | 5,850,000.00 | -- | 10,971,417.60 | ||||
(4) Changes of the Impairment of the Available-for-sale Financial Assets during the Reporting Period
Unit: RMB
| Category of the available-for-sale financial assets | Available-for-sale equity instruments | Available-for-sale liabilities instruments | Total | |
| Withdrawn impairment balance at the period-begin | 5,850,000.00 | 5,850,000.00 | ||
| Withdrawn impairment balance at the period-end | 5,850,000.00 | 5,850,000.00 |
(5) Relevant Notes of the Fair Value of the Available-for-sale Equity Instruments which Seriously Fell orTemporarily Fell but not Withdrawn the Impairment Provision
Naught
15. Investment Held-to-maturity
Naught
16. Long-term Accounts Receivable
Naught
17. Long-term Equity Investment
Unit: RMB
| Investee | Beginning balance | Increase/decrease | Ending balance | Ending balance of impairment provision | |||||||
| Additional investment | Reduced investment | Gains and losses recognized under the equity method | Adjustment of other comprehensive income | Changes of other equity | Cash bonus or profits announced to issue | Withdrawal of impairment provision | Other | ||||
| I. Joint ventures | |||||||||||
| II. Associated enterprises | |||||||||||
| Shenzhen Primatronix (Nanho) Electronics Ltd. | 179,414,105.14 | 179,781.56 | 3,120,585.75 | 176,473,300.95 | |||||||
| Subtotal | 179,414,105.14 | 179,781.56 | 3,120,585.75 | 176,473,300.95 | |||||||
| Total | 179,414,105.14 | 179,781.56 | 3,120,585.75 | 176,473,300.95 |
Other notes:
The actual controller of Shenzhen Primatronix (Nanho) Electronics Ltd. is Guangdong Electronics Information Industrial (group)Corp.
18. Investment Property(1) Investment Property Adopting Cost Measurement Mode
□ Applicable √ Not applicable
(2) Investment Property Adopting Fair Value Measurement Mode
□ Applicable √ Not applicable
(3) List of the Investment Property Failed to Completed the Property Certificate
Naught
19. Fixed Assets(1) List of Fixed Assets
Unit: RMB
| Item | Houses and buildings | Machinery equipment | Transportation equipment | Electronic equipment | Total |
| I. Original carrying value | |||||
| 1. Beginning balance | 682,933,149.57 | 689,839,173.35 | 23,667,381.11 | 24,917,745.28 | 1,421,357,449.31 |
| 2. Increased amount of the period | 27,268,792.63 | 33,501,668.80 | 28,376.07 | 2,589,689.54 | 63,388,527.04 |
| (1) Purchase | 797,188.08 | 26,133,191.07 | 28,376.07 | 463,880.06 | 27,422,635.28 |
| (2) Transfer of project under construction | 26,471,604.55 | 7,368,477.73 | 2,125,809.48 | 35,965,891.76 | |
| (3) Enterprises combination increase | |||||
| 3. Decreased amount of the period | 827,279.14 | 547,960.00 | 28,165.00 | 1,403,404.14 |
| (1) Disposal or scrap | 787,806.01 | 547,960.00 | 28,165.00 | 1,363,931.01 | |
| (2) Equipment transformation | 39,473.13 | 39,473.13 | |||
| 4. Ending balance | 710,201,942.20 | 722,513,563.01 | 23,147,797.18 | 27,479,269.82 | 1,483,342,572.21 |
| II. Accumulated desperation | |||||
| 1. Beginning balance | 409,156,400.86 | 491,616,205.03 | 16,048,566.76 | 18,722,379.66 | 935,543,552.31 |
| 2. Increased amount of the period | 11,537,432.84 | 21,228,837.48 | 684,845.71 | 1,547,267.76 | 34,998,383.79 |
| (1) Withdrawal | 11,537,432.84 | 21,228,837.48 | 684,845.71 | 1,547,267.76 | 34,998,383.79 |
| 3. Decreased amount of the period | 751,551.71 | 520,562.00 | 26,946.75 | 1,299,060.46 | |
| (1) Disposal or scrap | 746,239.29 | 520,562.00 | 26,946.75 | 1,293,748.04 | |
| (2) Equipment transformation | 5,312.42 | 5,312.42 | |||
| 4. Ending balance | 420,693,833.70 | 512,093,490.80 | 16,212,850.47 | 20,242,700.67 | 969,242,875.64 |
| III. Depreciation reserves | |||||
| 1. Beginning balance | 2,292,602.33 | 428.03 | 2,293,030.36 | ||
| 2. Increased amount of the period | |||||
| (1) Withdrawal | |||||
| 3. Decreased amount of the period | |||||
| (1) Disposal or scrap | |||||
| 4. Ending balance | 2,292,602.33 | 428.03 | 2,293,030.36 | ||
| IV. Carrying value | |||||
| 1. Ending carrying value | 289,508,108.50 | 208,127,469.88 | 6,934,946.71 | 7,236,141.12 | 511,806,666.21 |
| 2. Beginning carrying value | 273,776,748.71 | 195,930,365.99 | 7,618,814.35 | 6,194,937.59 | 483,520,866.64 |
(2) List of Temporarily Idle Fixed Assets
Unit: RMB
| Item | Original carrying value | Accumulated depreciation | Depreciation reserves | Carrying value | Remark |
| T5, T8, energy-saving lamp production line | 7,987,825.52 | 5,990,334.69 | 1,945,921.54 | 51,569.29 | Name of the announcement: Announcement on Withdrawing the Preparation for the Assets Impairment on the Idle Equipments and Construction in Progress; the Announcement No.: 2015-030; disclosure website: www.cninfo.com.cn |
| Total | 7,987,825.52 | 5,990,334.69 | 1,945,921.54 | 51,569.29 |
(3) Fixed Assets Leased in from Financing Lease
Naught
(4) Fixed Assets Leased out from Operation Lease
Naught
(5) Details of Fixed Assets Failed to Accomplish Certificate of Property
Other notesThe standard workshop E of the Company had been completed and put into use as well as carried over to fixed assets in this year. Asof 30 June 2018, the related certificates of property were in progress. The management believed there were no substantial legalimpediments in proceeding with the certificates of property and no significant unfavorable effects to normal operation of theCompany.
20. Construction in Progress(1) List of Construction in Progress
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserves | Carrying value | Carrying amount | Depreciation reserves | Carrying value | |
| Construction in progress | 189,368,112.34 | 189,368,112.34 | 162,814,991.68 | 162,814,991.68 | ||
| Total | 189,368,112.34 | 189,368,112.34 | 162,814,991.68 | 162,814,991.68 | ||
(2) Changes of Significant Construction in Progress
Unit: RMB
| Name of item | Estimated number | Beginning balance | Increased amount | Amount that transferred to fixed assets of the period | Other decreased amount of the period | Ending balance | Proportion estimated of the project accumulative input | Project progress | Accumulative amount of capitalized interests | Of which: the amount of the capitalized interests of the period | Capitalization rate of the interests of the period | Capital resources |
| Fuwan intelligent workshop H | 51,500,000.00 | 25,715,029.09 | 9,608,307.84 | 35,323,336.93 | 68.59% | 75.00% | Other | |||||
| Fuwan standard workshop K3 | 24,500,000.00 | 14,115,345.92 | 4,909,412.88 | 19,024,758.80 | 77.65% | 85.00% | Other | |||||
| Fuwan standard workshop K2 | 24,500,000.00 | 13,281,620.60 | 5,009,432.38 | 18,291,052.98 | 74.66% | 85.00% | Other | |||||
| Fuwan standard workshop J3 | 23,000,000.00 | 12,491,825.29 | 4,057,472.64 | 16,549,297.93 | 71.95% | 75.00% | Other | |||||
| Fuwan standard workshop K1 | 23,000,000.00 | 12,652,955.32 | 4,065,493.50 | 16,718,448.82 | 72.69% | 75.00% | Other |
| Fuwan standard workshop J1 | 21,500,000.00 | 11,760,018.73 | 3,755,783.46 | 15,515,802.19 | 72.17% | 80.00% | Other | |||||
| Fuwan standard workshop J2 | 21,500,000.00 | 11,621,457.94 | 3,755,783.45 | 15,377,241.39 | 71.52% | 80.00% | Other | |||||
| Automatic system of intelligent production workshop (workshop H) | 21,920,000.00 | 8,479,333.21 | 8,479,333.21 | 38.68% | 60.00% | Other | ||||||
| LEDT8 automatic line transformation (16033) LED third workshop | 8,000,000.00 | 6,971,142.75 | 321,629.83 | 7,292,772.58 | 91.16% | 99.00% | Other | |||||
| 70,000 m2 factory constructed by Gao Ming | 7,500,000.00 | 6,026,386.72 | 6,026,386.72 | 80.35% | 85.00% | Other | ||||||
| Family housing of Gao Ming, Building 8# | 9,000,000.00 | 5,827,528.35 | 1,871,498.77 | 7,699,027.12 | 85.54% | 99.00% | Other |
| Fuwan standard workshop E | 30,000,000.00 | 24,045,444.08 | 1,781,059.03 | 25,826,503.11 | 0.00 | 86.09% | 100.00% | Other | ||||
| Total | 265,920,000.00 | 146,961,701.28 | 45,162,260.50 | 25,826,503.11 | 166,297,458.67 | -- | -- | -- |
(3) List of the Withdrawal of the Impairment Provision of the Construction in Progress
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21. Engineering Material
Naught
22. Liquidation of Fixed Assets
Naught
23. Productive Biological Assets(1) Productive Biological Assets Adopting Cost Measurement Mode
□ Applicable √ Not applicable
(2) Productive Biological Assets Adopting Fair Value Measurement Mode
□ Applicable √ Not applicable
24. Oil and Gas Assets
□ Applicable √ Not applicable
25. Intangible Assets(1) Information
Unit: RMB
| Item | Land use right | Patent | Non-patents | Using right of Software | Total |
| I. Original carrying value | |||||
| 1. Beginning balance | 211,719,938.60 | 200,000.00 | 2,773,651.87 | 214,693,590.47 | |
| 2. Increased amount of |
| the period | |||||
| (1) Purchase | |||||
| (2) Internal R &D | |||||
| (3) Increase from enterprise combination | |||||
| 3. Decrease in the Reporting Period | |||||
| (1) Disposal | |||||
| 4. Ending balance | 211,719,938.60 | 200,000.00 | 2,773,651.87 | 214,693,590.47 | |
| II. Total accrued amortization | |||||
| 1. Beginning balance | 57,449,354.58 | 200,000.00 | 1,499,515.53 | 59,148,870.11 | |
| 2. Increased amount of the period | 1,936,493.01 | 220,515.84 | 2,157,008.85 | ||
| (1) Withdrawal | 1,936,493.01 | 220,515.84 | 2,157,008.85 | ||
| 3. Decrease in the Reporting Period | |||||
| (1) Disposal | |||||
| 4. Ending balance | 59,385,847.59 | 200,000.00 | 1,720,031.37 | 61,305,878.96 | |
| III. Depreciation reserves | |||||
| 1. Beginning balance | |||||
| 2. Increased amount of the period | |||||
| (1) Withdrawal | |||||
| 3. Decrease in the Reporting Period | |||||
| (1) Disposal | |||||
| 4. Ending balance | |||||
| IV. Carrying value | |||||
| 1. Ending carrying value | 152,334,091.01 | 1,053,620.50 | 153,387,711.51 |
| 2. Beginning carrying value | 154,270,584.02 | 1,274,136.34 | 155,544,720.36 |
The proportion of the intangible assets formed from the internal R&D through the Company to the balance of the intangible assets atthe period-end was 0.00%.
(2) Details of Land Use Right Failed to Accomplish Certificate of Title
Naught
26. R&D Expenses
Naught
27. Goodwill(1) Original Carrying value of Goodwill
Naught
(2) Impairment Provision of Goodwill
Naught
28. Long-term Unamortized Expenses
Unit: RMB
| Item | Beginning balance | Increased amount | Amortization amount | Other decreased amount | Ending balance |
| Maintenance and decoration expenses | 9,088,933.56 | 1,176,201.48 | 2,859,910.25 | 7,405,224.79 | |
| Total | 9,088,933.56 | 1,176,201.48 | 2,859,910.25 | 7,405,224.79 |
29. Deferred Income Tax Assets/Deferred Income Tax Liabilities(1) Deferred Income Tax Assets Had not Been Off-set
Unit: RMB
| Item | Ending balance | Beginning balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Assets impairment provision | 112,256,028.63 | 17,243,788.29 | 99,556,953.91 | 15,311,430.81 |
| Unrealized profits of internal transactions | 1,324,545.88 | 198,681.88 | 1,795,625.87 | 269,343.88 |
| Deductible losses | 897,811.61 | 224,452.90 | 10,594,861.17 | 2,648,715.29 |
| Depreciation of fixed assets | 69,138,726.15 | 10,701,998.82 | 67,261,836.57 | 10,420,465.38 |
| Payroll payable | 43,760,690.41 | 6,564,103.56 | 60,172,489.55 | 9,025,873.43 |
| Total | 227,377,802.68 | 34,933,025.45 | 239,381,767.07 | 37,675,828.79 |
(2) Deferred Income Tax Liabilities Had not Been Off-set
Unit: RMB
| Item | Ending balance | Beginning balance | ||
| Taxable temporary difference | Deferred income tax liabilities | Taxable temporary difference | Deferred income tax liabilities | |
| Changes in fair value of available-for-sale financial assets | 463,100,210.68 | 69,465,031.60 | 843,068,339.74 | 126,460,250.96 |
| Total | 463,100,210.68 | 69,465,031.60 | 843,068,339.74 | 126,460,250.96 |
(3) Deferred Income Tax Assets or Liabilities Listed by Net Amount after Off-set
Unit: RMB
| Item | Mutual set-off amount of deferred income tax assets and liabilities at the period-end | Amount of deferred income tax assets or liabilities after off-set at the period-end | Mutual set-off amount of deferred income tax assets and liabilities at the period-begin | Amount of deferred income tax assets or liabilities after off-set at the period-begin |
| Deferred income tax assets | 34,933,025.45 | 37,675,828.79 | ||
| Deferred income tax liabilities | 69,465,031.60 | 126,460,250.96 |
(4) List of Unrecognized Deferred Income Tax Assets
Naught
(5) Deductible Losses of Unrecognized Deferred Income Tax Assets will Due in the Following Years
Naught
30. Other Non-current Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Land purchase and the ownership implicit of relevant items | 41,755,700.00 | 41,755,700.00 |
| Prepayments for business facilities | 350,440.00 | 1,303,334.80 |
| Total | 42,106,140.00 | 43,059,034.80 |
31. Short-term Loans
Naught
32. Financial Liabilities at Fair Value through Profit or Loss
Naught
33. Derivative Financial Liabilities
□ Applicable √ Not applicable
34. Notes Payable
Unit: RMB
| Category | Ending balance | Beginning balance |
| Bank acceptance bill | 2,652,485.00 | |
| Total | 2,652,485.00 |
The total unpaid notes payable due at the Period end was RMB0.00.
35. Accounts Payable(1) List of Accounts Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| Accounts payable | 679,471,875.75 | 539,303,554.54 |
| Total | 679,471,875.75 | 539,303,554.54 |
(2) Notes of the Accounts Payable Aging Over One Year
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36. Advance from Customers(1) List of Advance from Customers
Unit: RMB
| Item | Ending balance | Beginning balance |
| Advance from customers | 39,197,246.65 | 48,706,778.49 |
| Total | 39,197,246.65 | 48,706,778.49 |
(2) Significant Advance from Customers Aging Over One Year
Naught
(3) Particulars of Settled but Unfinished Projects Formed by Construction Contract at Period-end
Naught
37. Payroll Payable(1) List of Payroll Payable
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| I. Short-term salary | 81,948,630.59 | 301,930,908.07 | 320,079,778.93 | 63,799,759.73 |
| II. Welfare after demission - defined contribution plans | 19,477,061.62 | 19,477,061.62 | ||
| Total | 81,948,630.59 | 321,407,969.69 | 339,556,840.55 | 63,799,759.73 |
(2) List of Short-term Salary
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| 1. Salary, bonus, allowance, subsidy | 81,567,715.47 | 276,124,154.89 | 294,250,945.69 | 63,440,924.67 |
| 2. Employee welfare | 6,308,719.45 | 6,308,719.45 | ||
| 3. Social insurance | 12,488,143.47 | 12,488,143.47 |
| Including: Medical insurance premiums | 10,721,495.58 | 10,721,495.58 | ||
| Work-related injury insurance | 757,389.39 | 757,389.39 | ||
| Maternity insurance | 1,009,258.50 | 1,009,258.50 | ||
| 4. Housing fund | 4,841,241.50 | 4,841,241.50 | ||
| 5. Labor union budget and employee education budget | 380,915.12 | 2,168,648.76 | 2,190,728.82 | 358,835.06 |
| Total | 81,948,630.59 | 301,930,908.07 | 320,079,778.93 | 63,799,759.73 |
(3) List of Drawing Scheme
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| 1. Basic pension benefits | 18,665,445.40 | 18,665,445.40 | ||
| 2. Unemployment insurance | 811,616.22 | 811,616.22 | ||
| Total | 19,477,061.62 | 19,477,061.62 |
38. Taxes Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| VAT | 14,500,324.87 | 10,282,705.33 |
| Corporate income tax | 23,592,375.47 | 9,181,098.01 |
| Personal income tax | 1,782,936.65 | 1,591,053.45 |
| Urban maintenance and construction tax | 1,013,577.10 | 830,070.63 |
| Education surcharge | 723,983.65 | 596,707.51 |
| Property tax | 2,708,665.52 | 893,895.36 |
| Land use tax | 2,051,969.88 | 3,831,261.26 |
| Other taxes | 168,552.67 | 143,878.85 |
| Total | 46,542,385.81 | 27,350,670.40 |
39. Interest Payable
Naught
40. Dividends Payable
Naught
41. Other Accounts Payable(1) Other Accounts Payable Listed by Nature of the Account
Unit: RMB
| Item | Ending balance | Beginning balance |
| Compensation for lawsuit | 1,762,533.43 | 1,762,533.43 |
| Performance bond | 23,904,066.25 | 22,458,290.53 |
| Others | 9,982,229.87 | 16,327,665.07 |
| Total | 35,648,829.55 | 40,548,489.03 |
(2) Other Significant Accounts Payable with Aging Over One Year
Naught
42. Held-for-sale Liabilities
Naught
43. Non-current Liabilities Due within 1 Year
Naught
44. Other Current Liabilities
Naught
45. Long-term Borrowings
Naught
46. Bonds Payable
Naught
47. Long-term Accounts Payable
Naught
48. Long-term Payroll Payable
Naught
49. Specific Accounts Payable
Naught
50. Provisions
Naught
51. Deferred Income
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance | Reason for formation |
| Government subsidy | 11,858,330.49 | 77,499.96 | 11,780,830.53 | Government subsidy related to assets/income | |
| Total | 11,858,330.49 | 77,499.96 | 11,780,830.53 | -- |
Item involving government subsidies:
Unit: RMB
| Item | Beginning balance | Amount of newly subsidy | Amount recorded into non-operating income in the Reporting Period | Amount recorded into other income in the Reporting Period | Amount offset cost in the Reporting Period | Other changes | Ending balance | Related to assets/related income |
| LED production technical transformation project | 9,852,274.95 | 9,852,274.95 | Related to assets | |||||
| Production line of 50 million energy-saving fluorescent lamp | 310,000.23 | 77,499.96 | 232,500.27 | Related to assets | ||||
| Construction of | 1,000,000.00 | 1,000,000.00 | Related to income |
| Electro-optical Institute of Foshan Electrical and Lighting Co., Ltd. | ||||||||
| Standard optical components testing laboratory capacity construction | 272,669.78 | 272,669.78 | Related to income | |||||
| Overseas protection plan of intellectual property of FSL | 250,000.00 | 250,000.00 | Related to income | |||||
| Standard research on cool LED light with wide angle | 173,385.53 | 173,385.53 | Related to income | |||||
| Total | 11,858,330.49 | 77,499.96 | 11,780,830.53 | -- |
52. Other Non-current Liabilities
Naught
53. Share Capital
Unit: RMB
| Beginning balance | Increase/decrease (+/-) | Ending balance | |||||
| New shares issued | Bonus shares | Bonus issue from profit | Other | Subtotal | |||
| The sum of shares | 1,272,132,868.00 | 127,213,286.00 | 127,213,286.00 | 1,399,346,154.00 | |||
54. Other Equity Instrument
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55. Capital Reserves
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| Capital premium (premium on stock) | 278,575,487.53 | 127,213,286.00 | 151,362,201.53 | |
| Other capital reserves | 7,245,971.54 | 7,245,971.54 | ||
| Total | 285,821,459.07 | 127,213,286.00 | 158,608,173.07 |
Other notes, including changes and reason of change:
The decrease in capital premium (premium on stock) was mainly caused by the review and approval of the 2017 Profit Distributionand Bonus Issue from Profit Plan on the shareholders meeting held on 26 April 2018, in which, the Company issues one share forevery 10 share in capital reserves to the whole shareholders. The total bonus issue from profit was 127,213,286.00 shares. Theaforesaid profit distribution and bonus issue from profit plan has been carried out completely on 16 May 2018.
56. Treasury Shares
Naught
57. Other Comprehensive Income
Unit: RMB
| Item | Beginning balance | Reporting Period | Ending balance | ||||
| Income before taxation in the Current Period | Less: recorded in other comprehensive income in prior period and transferred in profit or loss in the Current Period | Less: Income tax expense | Attributable to owners of the Company as the parent after tax | Attributable to non-controlling interests after tax | |||
| II. Other comprehensive income that may subsequently be reclassified to profit or loss | 716,607,333.78 | -379,970,570.75 | -56,995,219.36 | -322,975,351.39 | 393,631,982.39 | ||
| Gains or losses from changes in fair value of available-for-sale financial assets | 716,608,088.78 | -379,968,129.06 | -56,995,219.36 | -322,972,909.70 | 393,635,179.08 | ||
| Differences arising from translation of foreign currency-denominated financial statements | -755.00 | -2,441.69 | -2,441.69 | -3,196.69 | |||
| Total of other comprehensive income | 716,607,333.78 | -379,970,570.75 | -56,995,219.36 | -322,975,351.39 | 393,631,982.39 |
58. Specific Reserve
Naught
59. Surplus Reserves
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| Statutory surplus reserves | 636,066,434.00 | 636,066,434.00 | ||
| Discretionary surplus reserves | 136,886,568.36 | 136,886,568.36 | ||
| Total | 772,953,002.36 | 772,953,002.36 |
60. Retained Profits
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Beginning balance of retained profits before adjustments | 1,731,600,796.18 | 1,564,615,925.99 |
| Beginning balance of retained profits after adjustments | 1,731,600,796.18 | 1,564,615,925.99 |
| Add: Net profit attributable to owners of the Company as the parent | 229,277,455.82 | 228,494,660.57 |
| Dividend of ordinary shares payable | 418,531,713.57 | 534,295,804.56 |
| Ending retained profits | 1,542,346,538.43 | 1,258,814,782.00 |
List of adjustment of beginning retained profits:
(1) RMB0.00 beginning retained profits was affected by retrospective adjustment conducted according to the Accounting Standards
for Business Enterprises and relevant new regulations.(2) RMB0.00 beginning retained profits was affected by changes in accounting policies.(3) RMB0.00 beginning retained profits was affected by correction of significant accounting errors.(4) RMB0.00 beginning retained profits was affected by changes in combination scope arising from same control.
(5) RMB0.00 beginning retained profits was affected totally by other adjustments.
61. Operating Revenue and Cost of Sales
Unit: RMB
| Item | Reporting Period | Same Period of last year | ||
| Operating revenue | Cost of sales | Operating revenue | Cost of sales | |
| Main operations | 2,048,839,316.62 | 1,568,876,663.19 | 2,010,535,149.65 | 1,537,416,165.51 |
| Other operations | 15,939,973.37 | 10,415,204.70 | 13,390,433.19 | 9,515,614.34 |
| Total | 2,064,779,289.99 | 1,579,291,867.89 | 2,023,925,582.84 | 1,546,931,779.85 |
62. Taxes and Surtaxes
Unit: RMB
| Item | Reporting Period | Same Period of last year |
| Urban maintenance and construction tax | 8,264,474.00 | 7,980,261.34 |
| Education Surcharge | 5,949,176.10 | 5,707,899.61 |
| Property tax | 4,231,277.07 | 3,045,704.60 |
| Land use tax | 2,590,984.95 | 2,621,884.53 |
| Vehicles and vessels use tax | 6,668.80 | 13,909.92 |
| Stamp duty | 906,543.92 | 1,016,936.24 |
| Embankment-protection fees | 6.09 | |
| Environmental protection tax | 13,393.40 | |
| Total | 21,962,518.24 | 20,386,602.33 |
63. Selling Expense
Unit: RMB
| Item | Reporting Period | Same Period of last year |
| Employee’s remuneration | 30,104,690.49 | 30,517,319.21 |
| Freight | 36,843,018.64 | 31,103,632.14 |
| Business travel charges | 4,436,361.10 | 5,183,499.37 |
| Business propagandize fees and advertizing fees | 9,922,450.58 | 3,408,430.38 |
| Dealer meeting expense | 2,444,484.12 | 857,144.15 |
| Sales promotion fees | 7,768,266.90 | 6,799,707.29 |
| Other | 12,397,738.64 | 3,782,261.15 |
| Total | 103,917,010.47 | 81,651,993.69 |
64. Administrative Expense
Unit: RMB
| Item | Reporting Period | Same Period of last year |
| Employee’s remuneration | 65,793,996.37 | 57,456,446.88 |
| Office expenses | 5,211,417.98 | 5,128,247.37 |
| Rent of land and management charge | 3,135,605.89 | 3,054,887.77 |
| Amortization of intangible assets | 2,157,008.85 | 2,157,808.85 |
| Depreciation charge | 7,850,977.37 | 9,552,900.65 |
| Other | 20,325,025.06 | 21,440,530.08 |
| Total | 104,474,031.52 | 98,790,821.60 |
65. Finance Costs
Unit: RMB
| Item | Reporting Period | Same Period of last year |
| Interest expense | ||
| Less: Interest income | 4,879,439.87 | 15,609,163.27 |
| Foreign exchange gains or losses | -9,341,097.44 | 6,502,463.05 |
| Other | 1,135,060.70 | 1,990,792.86 |
| Total | -13,085,476.61 | -7,115,907.36 |
66. Asset Impairment Loss
Unit: RMB
| Item | Reporting Period | Same Period of last year |
| I. Bad debt loss | 8,366,488.61 | 10,677,806.99 |
| II. Inventory falling price loss | 7,640,381.22 | 13,381,912.36 |
| Total | 16,006,869.83 | 24,059,719.35 |
67. Gain on Changes in Fair Value
Naught
68. Investment Income
Unit: RMB
| Item | Reporting Period | Same Period of last year |
| Long-term equity investment income accounted by equity method | 179,781.56 | 1,543,965.79 |
| Investment income received from holding of available-for-sale financial assets | 10,971,417.60 | 6,560,422.50 |
| Income received from financial products and structural deposits | 13,358,671.20 | 6,404,893.95 |
| Other | -500,000.22 | |
| Total | 24,509,870.36 | 14,009,282.02 |
69. Asset Disposal Income
Unit: RMB
| Sources | Reporting Period | Same period of last year |
| Income from disposal of fixed assets | -10,790.68 | |
| Total | -10,790.68 |
70. Other Income
Unit: RMB
| Sources | Reporting Period | Same period of last year |
| Subsidy for stabilizing posts | 792,403.17 | 17,754.36 |
| Supporting fund for import and export | 3,249,240.00 | |
| Other | 225,982.00 | 36,000.00 |
| Total | 1,018,385.17 | 3,302,994.36 |
71. Non-operating Income
Unit: RMB
| Item | Reporting Period | Same Period of last year | Amount recorded in the current non-recurring profit or loss |
| Government subsidy | 914,699.96 | 584,709.96 | 914,699.96 |
| Other | 755,156.47 | 2,134,691.56 | 755,156.47 |
| Total | 1,669,856.43 | 2,719,401.52 | 1,669,856.43 |
Government subsidies recorded into current profit or loss
Unit: RMB
| Item | Distribution entity | Distribution reason | Nature | Whether influence the profits or losses of the year or not | Special subsidy or not | Reporting Period | Same period of last year | Related to assets/related income |
| Production line of 50 million energy-saving fluorescent lamp | Subsidy | Due to engaged in special industry that the state encouraged and supported, gained subsidy (obtaining in line with the law and the regulations of national policy) | No | No | 77,499.96 | 77,499.96 | Related to assets | |
| Chancheng District Economy and Science Promotion Bureau Talent Subsidy | Award | Subsidy from R&D Technical updating and transformation, etc. | No | No | 300,000.00 | Related to income | ||
| Governmental reward fund | Award | Subsidy from R&D Technical updating and transformation, etc. | No | No | 20,000.00 | Related to income | ||
| Other odd government subsidies | Award | Subsidy from R&D Technical updating and transformation, etc. | No | No | 837,200.00 | 187,210.00 | Related to income | |
| Total | -- | -- | -- | -- | -- | 914,699.96 | 584,709.96 | -- |
72. Non-operating Expense
Unit: RMB
| Item | Reporting Period | Same Period of last year | Amount recorded in the current non-recurring profit or loss |
| Total losses from disposal of non-current assets | 70,182.97 | 4,244,373.75 | 70,182.97 |
| Of which: losses from disposal of fixed assets | 70,182.97 | 4,244,373.75 | 70,182.97 |
| Donations | 2,000.00 | ||
| Lawsuit compensation | 65,000.00 | 65,000.00 | |
| Other | 56,566.45 | 512,609.26 | 56,566.45 |
| Total | 191,749.42 | 4,758,983.01 | 191,749.42 |
73. Income Tax Expense(1) List of Income Tax Expense
Unit: RMB
| Item | Reporting Period | Same Period of last year |
| Current income tax expense | 44,301,342.36 | 39,780,075.57 |
| Deferred income tax expense | 2,742,803.34 | 2,817,425.78 |
| Total | 47,044,145.70 | 42,597,501.35 |
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
| Item | Reporting Period |
| Profit before taxation | 279,218,831.19 |
| Current income tax expense accounted at statutory/applicable tax rate | 41,671,742.41 |
| Influence of applying different tax rates by subsidiaries | 4,549,768.16 |
| Influence of income tax before adjustment | 2,495,315.01 |
| Influence of non-taxable income | -1,672,679.87 |
| Income tax expense | 47,044,145.70 |
74. Other Comprehensive Income
Refer to Note 57 for details.
75. Cash Flow Statement(1) Cash Generated from Other Operating Activities
Unit: RMB
| Item | Reporting Period | Same Period of last year |
| Deposit interest | 10,461,602.02 | 17,037,947.97 |
| Income from insurance compensation | 50,333.58 | 132,451.15 |
| Cash deposit income | 1,729,639.24 | -3,637,333.34 |
| Property and rental income | 2,110,828.30 | 1,737,139.33 |
| Income from subsidy | 1,911,331.54 | 5,010,204.36 |
| Income from waste | 8,814,180.41 | 5,756,171.75 |
| Other | 8,467,917.26 | 2,857,134.88 |
| Total | 33,545,832.35 | 28,893,716.10 |
(2) Cash Used in Other Operating Activities
Unit: RMB
| Item | Reporting Period | Same Period of last year |
| Administrative expense paid in cash | 20,080,875.34 | 25,668,559.80 |
| Selling expense paid in cash | 70,572,897.55 | 74,020,250.31 |
| Finance costs paid in cash | 343,210.94 | 237,632.16 |
| Other | 6,351,791.98 | 7,963,536.97 |
| Total | 97,348,775.81 | 107,889,979.24 |
(3) Cash Generated from Other Investing Activities
Naught
(4) Cash Used in Other Investing Activities
Unit: RMB
| Item | Reporting Period | Same Period of last year |
| The future foreign exchange settlement security deposit | 2,447,280.00 | |
| Security deposit on quota | 857,419.80 | |
| Total | 3,304,699.80 |
(5) Cash Generated from Other Financing Activities
Naught
(6) Cash Used in Other Financing Activities
Naught
76. Supplemental Information for Cash Flow Statement(1) Supplemental Information for Cash Flow Statement
Unit: RMB
| Supplemental information | Reporting Period | Same period of last year |
| 1. Reconciliation of net profit to net cash flows generated from operating activities | -- | -- |
| Net profit | 232,174,685.49 | 231,884,976.24 |
| Add: Provision for impairment of assets | 16,006,869.83 | 24,059,719.35 |
| Depreciation of fixed assets, oil-gas assets, and productive living assets | 34,998,383.79 | 36,399,142.47 |
| Amortization of intangible assets | 2,157,008.85 | 2,157,808.85 |
| Amortization of long-term prepaid expenses | 2,859,910.25 | 1,647,573.52 |
| Losses from disposal of fixed assets, intangible assets and other long-lived assets (gains: negative) | 166,326.42 | |
| Losses on scrap of fixed assets (gains: negative) | 70,182.97 | 4,088,838.01 |
| Investment loss (gains: negative) | -24,509,870.36 | -14,009,282.02 |
| Decrease in deferred income tax assets (gains: negative) | 2,742,803.34 | 2,817,425.78 |
| Decrease in inventory (gains: negative) | 23,967,773.95 | 17,780,154.35 |
| Decrease in accounts receivable generated from operating activities (gains: negative) | -280,200,774.50 | -214,104,001.05 |
| Increase in accounts payable used in operating activities (decrease: negative) | 134,456,804.77 | -123,951,869.14 |
| Net cash generated from/used in operating activities | 144,723,778.38 | -31,063,187.22 |
| 2. Significant investing and financing activities without involvement of cash receipts and payments | -- | -- |
| 3. Net increase/decrease of cash and cash equivalent: | -- | -- |
| Ending balance of cash | 911,663,899.88 | 815,038,019.29 |
| Less: beginning balance of cash | 570,184,208.96 | 1,479,283,642.54 |
| Net increase in cash and cash equivalents | 341,479,690.92 | -664,245,623.25 |
(2) Net Cash Paid For Acquisition of Subsidiaries
Naught
(3) Net Cash Receive from Disposal of the Subsidiaries
Naught
(4) Cash and Cash Equivalent
Unit: RMB
| Item | Ending balance | Beginning balance |
| I. Cash | 911,663,899.88 | 570,184,208.96 |
| Including: Cash on hand | 53,998.39 | 52,031.79 |
| Bank deposit on demand | 909,808,121.57 | 565,323,109.99 |
| Other monetary fund on demand | 1,801,779.92 | 4,809,067.18 |
| III. Ending balance of cash and cash equivalents | 911,663,899.88 | 570,184,208.96 |
77. Notes to Items of the Statements of Changes in Owners’ Equity
Notes to the name of “Other” of ending balance of the same period of last year adjusted and the amount adjusted:
Not applicable
78. Assets with Restricted Ownership or Right to Use
Unit: RMB
| Item | Ending carrying value | Reason for restriction |
| Monetary capital | 3,304,699.80 | Security deposit of future foreign exchange settlement and quota |
| Notes payable | 3,500,000.00 | Pledged for FSL Bank Notes Pool |
| Total | 6,804,699.80 | -- |
79. Foreign Currency Monetary Items(1) Foreign Currency Monetary Items
Unit: RMB
| Item | Ending foreign currency balance | Exchange rate | Ending balance converted to RMB |
| Monetary capital | -- | -- | 12,621,526.35 |
| Including: USD | 1,851,278.58 | 6.6166 | 12,249,169.85 |
| EUR | 48,664.51 | 7.6515 | 372,356.50 |
| Account receivable | -- | -- | 377,725,324.07 |
| Including: USD | 57,087,525.93 | 6.6166 | 377,725,324.07 |
| Advances from customers | 19,944,524.61 | ||
| Including: USD | 2,929,395.82 | 6.6166 | 19,382,640.38 |
| EUR | 73,434.52 | 7.6515 | 561,884.23 |
| Prepayments | 669,198.69 | ||
| Including: USD | 101,139.36 | 6.6166 | 669,198.69 |
| Accounts payable | 849,507.92 | ||
| Including: USD | 128,390.40 | 6.6166 | 849,507.92 |
| Other accounts payable | 463,625.16 | ||
| Including: USD | 70,070.00 | 6.6166 | 463,625.16 |
(2) Notes to Overseas Entities Including: for Significant Oversea Entities, Main Operating Place, RecordingCurrency and Selection Basis Shall Be Disclosed; if there Are Changes in Recording Currency, Relevant ReasonsShall Be Disclosed.
□ Applicable √ not applicable
80. Arbitrage
Qualitative and quantitative information of relevant arbitrage instruments, hedged risk in line with the type of arbitrage to disclose:
81. Other
VIII. Changes of Consolidation Scope
1. Business Combination Not under the Same Control(1) Business Combination Not under the Same Control during the Reporting Period
Naught
(2) Combination Cost and Goodwill
Naught
(3) The Identifiable Assets and Liabilities of Acquiree on Purchase Date
Naught
(4) Gains or losses from Re-measurement of Equity Held before the Purchase Date at Fair Value
Whether there is a transaction that through multiple transaction step by step to realize business combination and gaining the controlduring the Reporting Period
□ Yes √ No
(5) Notes to Reasonable Consideration or Fair Value of Identifiable Assets and Liabilities of the Acquiree thatCannot Be Determined on the Acquisition Date or during the Period-end of the Merger
Naught
(6) Other Notes
Naught
2. Business Combination under the Same Control(1) Business Combination under the Same Control during the Reporting Period
Naught
(2) Combination Cost
Naught
(3) The Carrying Value of Assets and Liabilities of the Combined Party on the Combination Date
Naught
3. Counter Purchase
Naught
4. The Disposal of Subsidiary
Whether there is a single disposal of the investment to the subsidiary and lost control?
□ Yes √ No
Whether there are several disposals of the investment to the subsidiary and lost controls?
□ Yes √ No
5. Changes in Combination Scope for Other Reasons
Note to changes in combination scope for other reasons (such as newly establishment or liquidation of subsidiaries, etc.) and relevantinformation:
Naught
6. Other
Naught
IX. Equity in Other Entities
1. Equity in Subsidiary(1) Subsidiaries
| Name | Main operating place | Registration place | Nature of business | Holding percentage (%) | Way of gaining | |
| Directly | Indirectly | |||||
| Foshan Chansheng Electronic Ballast Co., Ltd. | Foshan | Foshan | Production and sales | 100.00% | Newly established | |
| Foshan Lighting Lamps & Components Co., Ltd. | Foshan | Foshan | Production and sales | 100.00% | Newly established | |
| Guangdong Fozhao New Light Sources Technology Co., | Foshan | Foshan | Production and sales | 100.00% | Newly established | |
| Ltd. | ||||||
| FSL Chanchang Optoelectronics Co., Ltd. | Foshan | Foshan | Production and sales | 100.00% | Newly established | |
| Foshan Taimei Times Lamps and Lanterns Co., Ltd. | Foshan | Foshan | Production and sales | 70.00% | Newly established | |
| Foshan Electrical & Lighting (Xinxiang) Co., Ltd. | Xinxiang) | Xinxiang) | Production and sales | 100.00% | Newly established | |
| Guangdong Fozhao Leasing Co., Ltd. | Foshan | Foshan | Finance lease | 100.00% | Newly established | |
| Nanjing Fozhao Lighting Components Manufacturing Co., Ltd. | Nanjing | Nanjing | Production and sales | 100.00% | Acquired | |
| FSL Zhida Electric Technology Co., Ltd. | Foshan | Foshan | Production and sales | 51.00% | Newly established | |
| FSL Lighting GmbH） | Germany | Germany | Production and sales | 100.00% | Newly established |
(2) Significant Non-wholly-owned Subsidiary
Unit: RMB
| Name | Shareholding proportion of non-controlling shareholders | The profit or loss attributable to the non-controlling shareholders | Declaring dividends distributed to non-controlling shareholders | Balance of non-controlling shareholders at the period-end |
| Foshan Taimei Times Lamps and Lanterns Co., Ltd. | 30.00% | 1,063,485.63 | 7,656,339.44 | |
| FSL Zhida Electric Technology Co., Ltd. | 49.00% | 1,833,744.04 | 15,760,550.63 |
(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary
Unit: RMB
| Name | Ending balance | Beginning balance | ||||||||||
| Current | Non-curr | Total | Current | Non-curr | Total | Current | Non-curr | Total | Current | Non-curr | Total | |
| assets | ent assets | assets | liabilities | ent liability | liabilities | assets | ent assets | assets | liabilities | ent liability | liabilities | |
| Foshan Taimei Times Lamps and Lanterns Co., Ltd. | 57,511,714.36 | 16,910,024.47 | 74,421,738.83 | 48,900,607.37 | 48,900,607.37 | 74,373,986.81 | 15,493,351.95 | 89,867,338.76 | 67,891,159.40 | 67,891,159.40 | ||
| FSL Zhida Electric Technology Co., Ltd. | 87,826,882.64 | 10,663,620.19 | 98,490,502.83 | 51,234,277.06 | 51,234,277.06 | 89,763,066.89 | 10,457,849.42 | 100,220,916.31 | 56,707,025.32 | 56,707,025.32 |
Unit: RMB
| Name | Reporting Period | Same period of last year | ||||||
| Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | |
| Foshan Taimei Times Lamps and Lanterns Co., Ltd. | 73,606,152.87 | 3,544,952.10 | 3,544,952.10 | 11,967,649.42 | 82,641,917.32 | 2,008,910.10 | 2,008,910.10 | 23,327,544.49 |
| FSL Zhida Electric Technology Co., Ltd. | 56,884,635.54 | 3,742,334.78 | 3,742,334.78 | -6,170,821.36 | 66,773,802.15 | 5,689,066.62 | 5,689,066.62 | -3,415,460.17 |
(4) Significant Restrictions on Using the Assets and Liquidating the Liabilities of the Company
Naught
(5) Financial Support or Other Supports Provided to Structural Entities Incorporated into the Scope ofConsolidated Financial Statements
Naught
2. The Transaction of the Company with Its Owner’s Equity Share Changed but Still Controlling the Subsidiary(1) Note to the Owner’s Equity Share Changed in Subsidiary
Naught
(2) The Transaction’s Influence on the Equity of Non-controlling Shareholders and the Owner's Equity
Attributable to the Company as the Parent
Naught
3. Equity in Joint Ventures or Associated Enterprises(1) Significant Joint Ventures or Associated Enterprises
Naught
(2) Main Financial Information of Significant Joint Ventures
Naught
(3) Main Financial Information of Significant Associated Enterprise
Naught
(4) Summary Financial Information of Insignificant Joint Ventures or Associated Enterprises
Unit: RMB
| Ending balance/Reporting Period | Beginning balance/The same period of last year | |
| Joint venture: | -- | -- |
| The total of following items according to the shareholding proportions | -- | -- |
| Associated enterprise: | -- | -- |
| Total carrying value of investments | 176,473,300.95 | 179,414,105.14 |
| The total of following items according to the shareholding proportions | -- | -- |
| --net profit | 179,781.56 | 1,543,965.79 |
| --total comprehensive income | 179,781.56 | 1,543,965.79 |
(5) Note to the Significant Restrictions on the Ability of Joint Ventures or Associated Enterprises to TransferFunds to the Company
Naught
(6) The Excess Loss of Joint Ventures or Associated Enterprises
Naught
(7) The Unrecognized Commitment Related to Investment to Joint Ventures
Naught
(8) Contingent Liabilities Related to Investment to Joint Ventures or Associated Enterprises
Naught
4. Significant Common Operation
Naught
5. Equity in the Structured Entity Excluded in the Scope of Consolidated Financial Statements
Naught
6. Other
Naught
X. The Risk Related to Financial Instruments
The financial instruments of the Company included: monetary funds, accounts receivable, notes receivable,
accounts payable, etc. The details of each financial instrument see relevant items of note Ⅶ.
The main risks of the Company due to financial instruments were credit risk, liquidity risk and market risk. Theoperating management of the Company was responsible for the risk management target and the recognition of thepolicies.(I) Credit riskCredit risk was one party of the contract failed to fulfill the obligations and causes loss of financial assets of theother party. The credit risk the Company faced was selling on credit which leads to customer credit risk.The Company will evaluate credit risk of new customer, and set credit limit, once the balance of accountreceivable over credit limit, require the customer to pay or producing and delivering goods shall be approved bythe management of the Company.The Company through monthly aging analysis of account receivable and monitoring the collection situation of thecustomer ensured the overall credit risk of the Company was in control scope. Once appear abnormal situation,the Company should conduct necessary measures to requesting the payment timely.
(II) Liquidity RiskLiquidity risk is referred to their risk of incurring capital shortage when performing settlement obligation in theway of cash payment or other financial assets. The policies of the Company are to ensure that there was sufficientcash to pay the due liabilities. The liquidity risk is centralized controlled by the Financial Department of theCompany. The financial department through supervising the balance of the cash and securities can be convert tocash at any time and the rolling prediction of cash flow in future 12 months to ensure the Company have sufficientcash to pay the liabilities under the case of all reasonable prediction, Each financial liability of the Company wasestimated due within 1 year.(III) Market riskMarket risk was referred to risk of the fair value or future cash flow of financial instrument changed due to thechange of market price, including: exchange rate risk, interest rate risk and other price risk.1. Exchange rate riskExchange rate risk was referred to risk of possible losses due to changes of exchange rate. The exchange rate riskundertaken by the Company was mainly generated from USD and EUR. On 30 June 2018, all assets and liabilitiesof the Company were balances in RMB except that the balances of assets and liabilities presented in the Note VII(79) Foreign Currency Monetary Items were in USD and EUR. The exchange rate risk generated from thosebalance of assets and liabilities in foreign currency might influence the running performance of the Company tosome extent.The Company made efforts to avoid exchange rate risk through forward exchange settlement, improving operationmanagement and promoting the international competitiveness of the Company, etc.2. Interest rate riskInterest rate risk is refers to fluctuation risk of the fair value or future cash flow of financial instrument change due tothe change of market price. There was no bank loan in the Company, thus no RMB benchmark interest rate changes3. Other price riskNaught
XI. The Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
| Item | Ending fair value | |||
| Fair value measurement items at level 1 | Fair value measurement items at level 2 | Fair value measurement items at level 3 | Total | |
| I. Consistent fair value measurement | -- | -- | -- | -- |
| (I)Available-for-sale financial assets | 706,985,098.14 | 706,985,098.14 | ||
| (1) equity instrument investment | 706,985,098.14 | 706,985,098.14 | ||
| The total amount of assets consistently measured at | 706,985,098.14 | 706,985,098.14 | ||
| fair value | ||||
| II. Inconsistent fair value measurement | -- | -- | -- | -- |
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level 1
In line with the market price of shares on the balance sheet date
3. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters forConsistent and Inconsistent Fair Value Measurement Items at Level 2
Naught
4. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters forConsistent and Inconsistent Fair Value Measurement Items at Level 3
Naught
5. Sensitiveness Analysis on Unobservable Parameters and Adjustment Information between Beginning andEnding Carrying Value of Consistent Fair Value Measurement Items at Level 3
Naught
6. Explain the Reason for Conversion and the Governing Policy when the Conversion Happens if ConversionHappens among Consistent Fair Value Measurement Items at Different Levels
Naught
7. Changes in the Valuation Technique in the Current Period and the Reason for Such Changes
Naught
8. Fair Value of Financial Assets and Liabilities Not Measured at Fair Value
Naught
9. Other
Naught
XII. Connected Party and Connected Transaction
1. Information Related to the Company as the Parent of the Company
| Name | Registration place | Nature of business | Registered capital | Proportion of share held by the Company as the parent against the Company (%) | Proportion of voting rights owned by the Company as the parent against the Company (%) |
| Hong Kong Wah Shing Holding Company Limited | Hong Kong | Investment | HKD110,000 | 13.47% | 13.47% |
| Shenzhen Rising Investment Development Co., Ltd. | Shenzhen | Investment | RMB120 million | 5.12% | 5.12% |
| Guangdong Electronics Information Industry Group Ltd. | Guangzhou | Sales & Production | RMB462 million | 4.74% | 4.74% |
| Rising Investment Development Co., Ltd. | Hong Kong | Investment | HKD1 million | 1.82% | 1.82% |
| Guangdong Rising Finance Holding Co., Ltd. | Zhuhai | Investment | RMB1393 million | 0.54% | 0.54% |
| Total | 25.70% | 25.70% |
Notes: Information on the Company as the parent of the Company:
The largest shareholder of the Company, Hong Kong Wah Shing Holding Co., Ltd., was the wholly-ownedsubsidiary of Electronics Group, and Electronics Group, Shenzhen Rising Investment Development Co., Ltd.( Hereinafter referred to as " Shenzhen Rising " ), Guangdong Rising Finance Holding Co., Ltd. ( Hereinafterreferred to as GD Rising Finance) and Rising Investment Development Co., Ltd. ( Hereinafter referred to as "Rising Investment" ) were the wholly-owned subsidiaries of Guangdong Rising Assets Management Co., Ltd.
(Hereinafter referred to as “Rising Company”). In line with the relevant stipulation of Corporation Law and Rules
on Listed Companies Acquisition, Electronics Group, Shenzhen Rising and Rising Investment were personsacting in concert, and the Rising Company was the actual controller of the Company. As of 30 June 2018, theaforesaid persons acting in concert holding total A, B share of the Company 359,632,344 shares, 25.70 % of totalshare equity of the Company. Guangdong Rising Assets Management Co., Ltd. became the actual controller of theCompany.The final controller of the Company was Guangdong Rising Assets Management Co., Ltd.
2. Subsidiaries of the Company
Refer to Note IX Equity in Other Entities-1. Equity in Subsidiary for details.
3. Information on the Joint Ventures and Associated Enterprises of the Company
Refer to Note IX Equity in Other Entities-1. Equity in Joint Ventures or Associated Enterprises for details of significant jointventures or associated enterprises of the Company.
4. Information on Other Connected Parties
| Name | Relationship with the Company |
| PROSPERITY LAMPS & COMPONENTS LTD | Shareholder owning over 5% shares |
| Foshan NationStar Optoelectronics Co. Ltd. | Under same actual controller |
| Guangdong Fenghua Advanced Technology Holding Co., Ltd. | Under same actual controller |
| Guangdong Rising Optoelectronics Co., Ltd. | Under same actual controller |
| Guangdong Rising Data Solid State Disk Co., Ltd. | Under same actual controller |
| Guangdong Huayuebao New Energy Co., Ltd. | Under same actual controller |
| Guangdong Rising Finance Limited | Under same actual controller |
| Guangdong Zhongke Hongwei Semiconductor Equipment Co., Ltd. | Under same actual controller |
| Hangzhou Times Lighting and Electrical Co., Ltd. | Company controlled by related natural person |
| Henan Rising Technology Investment Co., Ltd. | Under same actual controller |
| Prosperity (Hangzhou) Lighting and Electrical Co., Ltd. | Company controlled by related natural person |
| Prosperity Electrical (China) Co., Ltd. | Company controlled by related natural person |
| OSRAM (China) Lighting Co., Ltd. | Company controlled by related natural person with significant influence |
| Guangdong Electronic Technology Research Institute | Under same actual controller |
5. List of Connected Transactions(1) Information on Acquisition of Goods and Reception of Labor Service
Information on acquisition of goods and reception of labor service
Unit: RMB
| Connected party | Content | Reporting Period | The approval trade credit | Whether exceed trade credit or not | Same period of last year |
| Prosperity Lamps and Components | Purchase of materials | 3,844,498.14 | 6,000,000.00 | No | 670,457.93 |
| Ltd. | |||||
| Prosperity Electrical (China) Co., Ltd. | Purchase of materials | 729,882.89 | 0.00 | -32,104.28 | |
| Hangzhou Times Lighting and Electrical Co., Ltd. | Purchase of materials | 368,916.04 | 2,000,000.00 | No | 1,138,676.40 |
| Foshan Nation Star Optoelectronics Co., Ltd. | Purchase of materials | 43,595,754.55 | 200,000,000.00 | No | 38,972,909.25 |
| Guangdong Fenghua Advanced Technology Holding Co., Ltd. | Purchase of materials | 5,172,863.77 | 11,000,000.00 | No | 4,100,354.77 |
| Guangdong HYB New Energy Co., Ltd. | Purchase of materials | 0.00 | 933,432.24 | ||
| Guangdong Electronic Technology Research Institute | Purchase of equipment | 760,683.76 | 3,000,000.00 | No | |
| MTM Semiconductor Equipment Co., Ltd. | Purchase of equipment | 323,282.05 | 1,000,000.00 | No | 164,400.00 |
| Guangdong Rising Data Solid State Disk Co., Ltd. | Purchase of equipment | 1,600,000.00 | 0.00 | ||
| Total | 56,395,881.20 | No | 45,948,126.31 |
Information of sales of goods and provision of labor service
Unit: RMB
| Connected party | Content | Reporting Period | Same period of last year |
| Prosperity Lamps and Components Ltd. | Sale of products | 18,871,809.73 | 14,820,551.42 |
| Prosperity (Hangzhou) Lighting and Electrical Co., Ltd. | Sale of products | 46,299.15 | 38,649.58 |
| Prosperity Electrical (China) Co., Ltd. | Sale of products | 175,397.67 | 177,652.13 |
| Foshan Nation Star Optoelectronics Co., Ltd. | Sale of products | 3,353.85 | |
| Hangzhou Times Lighting and | Sale of products | 25,852.99 |
| Electrical Co., Ltd. | |||
| Guangdong Rising Optoelectronics Co., Ltd. | Sale of products | 568.97 | |
| Total | 19,094,075.52 | 15,066,059.97 |
(2) Information on Connected Trusteeship/Contract
Naught
(3) Information on Connected Lease
The Company was lessor:
Naught
The Company was lessee:
Unit: RMB
| Name of lessor | Category of leased assets | The lease fee confirmed in the Reporting Period | The lease fee confirmed in the same period of last year |
| Guangdong Electronics Information Industry Group Ltd. | Vehicles | 8,333.31 |
(4) Information on Connected Guarantee
Naught
(5) Information on Inter-bank Lending of Capital of Related Parties
Naught
(6) Information on Assets Transfer and Debt Restructuring by Connected Party
Naught
(7) Information on Remuneration for Key Management Personnel
Unit: RMB
| Item | Reporting period | Same period of last year |
| Chairman of the Board | 0.00 | 0.00 |
| Director & GM | 700,000.00 | 700,000.00 |
| Chairman of the Supervisor | 0.00 | 0.00 |
| Secretary of the Board | 400,000.00 | 400,000.00 |
| CFO | 400,000.00 | 400,000.00 |
| Other | 2,695,000.00 | 2,671,500.00 |
| Total | 4,195,000.00 | 4,171,500.00 |
(8) Other Connected Transactions
Naught
6. Accounts Receivable and Payable of Connected Party(1) Accounts Receivable
Unit: RMB
| Item | Connected party | Ending balance | Beginning balance | ||
| Carrying amount | Bad debt provision | Carrying amount | Bad debt provision | ||
| Interest receivable | Guangdong Rising Finance Co., Ltd. | 1,622,133.34 | |||
| Accounts receivable | Prosperity (Hangzhou) Lighting and Electrical Co., Ltd. | 86,367.27 | 68,983.64 | 86,367.27 | 43,183.64 |
| Accounts receivable | Guangzhou Diansheng Property Management Co., Ltd. | 660.00 | 19.80 | ||
| Accounts receivable | Prosperity Lamps and Components Ltd. | 8,037,364.18 | 241,120.93 | 4,487,199.01 | 134,615.97 |
| Accounts receivable | OSRAM (China) Lighting Co., Ltd. | 117,554.16 | 19,740.45 | 117,554.16 | 11,755.42 |
| Other accounts receivable | Henan Rising High-tech Investment Co., Ltd. | 117,000.00 | 117,000.00 | ||
| Other accounts receivable | Guangdong Electronics Information Industry Group Ltd. | 5,000.00 | 150.00 | 5,000.00 | 500.00 |
| Prepayment | MTM Semiconductor | 221,368.00 | 141,840.00 | ||
| Equipment Co., Ltd. | |||||
| Prepayment | Prosperity Electrical (China) Co., Ltd. | 7,521.37 | 7,521.37 | ||
| Total | 8,475,834.98 | 330,014.82 | 6,584,615.15 | 307,055.03 |
(2) Accounts Payable
Unit: RMB
| Item | Connected party | Ending carrying amount | Beginning carrying amount |
| Accounts payable | Prosperity Lamps and Components Ltd. | 3,359,930.74 | 529,296.77 |
| Accounts payable | Prosperity Electrical (China) Co., Ltd. | 1,026,400.70 | 204,381.06 |
| Accounts payable | Foshan Nation Star Optoelectronics Co., Ltd. | 22,430,878.36 | 27,606,272.62 |
| Accounts payable | Hangzhou Times Lighting and Electrical Co., Ltd. | 138,597.54 | 467,927.45 |
| Accounts payable | Guangdong Fenghua Advanced Technology Holding Co., Ltd. | 2,035,725.44 | 1,806,876.22 |
| Other accounts payable | Prosperity Lamps and Components Ltd. | 463,625.16 | 438,666.14 |
| Other accounts payable | Prosperity Electrical (China) Co., Ltd. | 100,000.00 | 100,000.00 |
| Other accounts payable | MTM Semiconductor Equipment Co., Ltd. | 54,624.00 | 102,484.00 |
| Other accounts payable | Guangdong Electronic Technology Research Institute | 89,000.00 | |
| Other accounts payable | Guangdong Electronics Information Industry Group Ltd. | 2,777.76 | 11,111.12 |
| Advances from customers | Prosperity Electrical (China) Co., Ltd. | 40,279.46 | 45,694.74 |
| Total | 29,741,839.16 | 31,312,710.12 |
7. Commitments of Connected Party
(1)Commitment: commitments made in acquisition documents or shareholding alteration documentsCommitment maker: Controlling shareholderType of commitment: About avoidance of horizontal competition
Contents: Electronics Group and its acting-in-concert parties Shenzhen Rising Investment and Hong Kong RisingInvestment have made a commitment that the elimination of the horizontal competition between FoshanNationStar Optoelectronics Co., Ltd. and the Company through business integration or other ways orarrangements shall be completed before December 4, 2019.Date of commitment making: 4 December 2017Term of commitment: 24 monthsFulfillment: In execution(2)Commitment: commitments made in acquisition documents or shareholding alteration documentsCommitment maker: Controlling shareholderType of commitment: About avoidance of horizontal competitionElectronics Group and its acting-in-concert parties Shenzhen Rising Investment and Hong Kong RisingInvestment have made more commitments as follows to avoid horizontal competition with the Company: 1. Theyshall conduct supervision and restraint on the production and operation activities of themselves and their relevantenterprises so that besides the enterprise above that is in horizontal competition with the Company for now, if theproducts or business of them or their relevant enterprises become the same with or similar to those of theCompany or its subsidiaries in the future, they shall take the following measures: (1) If the Company thinksnecessary, 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 relevantassets and business of them and their relevant enterprises. 2. All the commitments made by them to eliminate oravoid horizontal competition with the Company are also applicable to their directly or indirectly controlled
subsidiaries. They are obliged to urge and make sure that other subsidiaries execute what’s prescribed in the
relevant document and faithfully honor all the relevant commitments. 3. If they or their directly or indirectlycontrolled subsidiaries break the aforesaid commitments and thus cause a loss for the Company, they shallcompensate the Company on a rational basis.Date of commitment making: 4 December 2015Term of commitment: Long-standingFulfillment: In execution(3)Commitment: commitments made in acquisition documents or shareholding alteration documentsCommitment maker: Controlling shareholderType of commitment: About reduction and regulation of related-party transactionsContent: Electronics Group and its acting-in-concert parties Shenzhen Rising Investment and Hong Kong Rising
Investment have made a commitment that during their direct or indirect holding of the Company’s shares, theyshall 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 theirproduction and operation activities by taking advantage of their position as the controlling shareholder and actualcontroller; 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 transactionswith 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 RelevantEnterprises and the Company, and withdraw from voting when a related-party transaction with them or theirRelevant Enterprises is being voted on at a general meeting or a board meeting, and execute the relevant approvalprocedure 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.
Date of commitment making: 4 December 2015Term of commitment: Long-standingFulfillment: In execution(4)Commitment: commitments made in acquisition documents or shareholding alteration documentsCommitment maker: Controlling shareholderType of commitment: About independenceIn order to ensure the independence of the Company in business, personnel, asset, organization and finance,Electronics Group and its acting-in-concert parties Shenzhen Rising Investment and Hong Kong RisingInvestment have made the following commitments: 1. They will ensure the independence of the Company inbusiness: (1) They promise that the Company will have the assets, personnel, qualifications and capabilities for itto 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 theCompany’s shareholders. (3) They promise that they and their related parties will not be engaged in business thatis 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 andunavoidable related-party transactions, they promise to operate fairly following the market-oriented principle andat fair prices, and execute the transaction procedure and the duty of information disclosure pursuant to theapplicable laws, regulations and regulatory documents. 2.They will ensure the independence of the Company in
personnel: (1) They promise that the Company’s GM, deputy GMs, CFO, Company Secretary and other senior
management personnel will work only for and receive remuneration from the Company, not holding any positions
in them or their other controlled subsidiaries other than director and supervisor. (2) They promise the Company’s
absolute independence from their related parties in labor, human resource and salary management. And (3) Theypromise to follow the legal procedure in their recommendation of directors, supervisors and senior management
personnel to the Company and not to hire or dismiss employees beyond the Company’s Board of Directors and
General Meeting. 3. They will ensure the independence and completeness of the Company in asset: (1) Theypromise that the Company will have a production system, an auxiliary production system and supporting facilitiesfor its operation; legally have the ownership or use rights of the land, plants, machines, trademarks, patents andnon-patented technology in relation to its production and operation; and have independent systems for theprocurement of raw materials and the sale of its products. (2) They promise that the Company will have
independent and complete assets all under the Company’s control and independently owned and operated by the
Company. And (3) They promise that they and their other controlled subsidiaries will not illegally occupy the
Company’s funds and assets in any way, or use the Company’s assets to provide guarantees for the debts of
themselves or their other controlled subsidiaries with. 4. They will ensure the independence of the Company inorganization: (1) They promise that the Company has a sound corporate governance structure as a joint-stockcompany with an independent and complete organization structure. (2) They promise that the operational andmanagement organs within the Company will independently execute their functions according to laws, regulations
and the Company’s Articles of Association. 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 systemwith normative, independent financial accounting rules. (2) They promise that the Company will haveindependent 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.
Date of commitment making: 4 December 2015Term of commitment: Long-standingFulfillment: In execution
8. Other
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XIII. Stock Payment
1. The Overall Situation of Stock Payment
□ Applicable □ Not applicable
2. The Stock Payment Settled in Equity
□ Applicable □ Not applicable
3. The Stock Payment Settled in Cash
□ Applicable □ Not applicable
4. Modification and Termination of the Stock Payment
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5. Other
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XIV. Commitments and Contingency
1. Significant Commitments
Significant commitments on the balance sheet dateNaught
2. Contingency(1) Significant Contingency on Balance Sheet Date
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(2) In Despite of no Significant Contingency to Disclose, the Company Shall Also Make Relevant Statements
There was no significant contingency in the Company.
3. Other
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XV. Events after Balance Sheet Date
1. Significant Non-adjusted Events
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2. Profit Distribution
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3. Sales Return
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4. Notes to Other Events after Balance Sheet Date
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XVI. Other Significant Events
1. The Accounting Errors Correction in Previous Period
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2. Debt Restructuring
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3. Assets Replacement
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4. Pension Plan
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5. Discontinued Operations
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6. Segment Information
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7. Other Significant Transactions and Events with Influence on Investors’ Decision-making
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8. Other
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XVII. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable(1) Accounts Receivable Disclosed by Category
Unit: RMB
| Category | Ending balance | Beginning balance | ||||||||
| Carrying amount | Bad debt provision | Carrying value | Carrying amount | Bad debt provision | Carrying value | |||||
| Amount | Proportion | Amount | Withdrawal proportion | Amount | Proportion | Amount | Withdrawal proportion | |||
| Accounts receivable with significant single amount for which bad debt provision separately accrued | 9,975,968.91 | 0.97% | 9,975,968.91 | 100.00% | 10,061,641.64 | 1.26% | 10,061,641.64 | 100.00% | ||
| Accounts receivable withdrawal of bad debt provision of by credit risks characteristics: | 1,017,592,180.55 | 99.03% | 45,420,012.21 | 4.46% | 972,172,168.34 | 785,497,260.78 | 98.74% | 38,067,101.17 | 4.85% | 747,430,159.61 |
| Total | 1,027,568,149.46 | 100.00% | 55,395,981.12 | 5.39% | 972,172,168.34 | 795,558,902.42 | 100.00% | 48,128,742.81 | 6.05% | 747,430,159.61 |
Accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end:
√ Applicable □ Not applicable
Unit: RMB
| Accounts receivable（by unit） | Ending balance | |||
| Accounts receivable | Bad debt provision | Withdrawal proportion | Withdrawal reason | |
| Suzhou Mont Lighting Co., Ltd. | 9,975,968.91 | 9,975,968.91 | 100.00% | The debtor is not qualified to continuously produce for the time being for continuing losses caused by the scale and market. |
| Total | 9,975,968.91 | 9,975,968.91 | -- | -- |
In the groups, accounts receivable adopted aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
| Aging | Ending balance | ||
| Accounts receivable | Bad debt provision | Withdrawal proportion | |
| Subentry within 1 year | |||
| Within 1 year | 939,833,869.32 | 28,195,016.08 | 3.00% |
| Subtotal of within 1 year | 939,833,869.32 | 28,195,016.08 | 3.00% |
| 1 to 2 years | 31,496,786.31 | 3,149,678.63 | 10.00% |
| 2 to 3 years | 5,826,031.83 | 1,747,809.55 | 30.00% |
| 3 to 4 years | 795,562.73 | 397,781.36 | 50.00% |
| 4 to 5 years | 11,179,760.17 | 8,943,808.14 | 80.00% |
| Over 5 years | 2,985,918.45 | 2,985,918.45 | 100.00% |
| Total | 992,117,928.81 | 45,420,012.21 | 4.58% |
Notes to the determination basis for the group:
In the groups, accounts receivable adopted balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, accounts receivable adopted other methods to withdraw bad debt provision:
Unit: RMB
| Name of the group | Ending balance | ||
| Accounts receivable | Bad debt provision | Withdrawal reason | |
| Internal business group | 25,474,251.74 | 0.00 | Intercourse fund among subsidiaries was not withdrawn |
| Total | 25,474,251.74 | 0.00 | |
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB7,267,309.90; the amount of the reversed
or collected part during the Reporting Period was of RMB 0.00.
(3) Accounts Receivable with Actual Verification during the Reporting Period
Unit: RMB
| Item | Amount verified |
| Other driblet small amount | 71.59 |
| Total | 71.59 |
(4) Top 5 Accounts Receivable in Ending Balance Collected according to the Arrears Party
Unit: RMB
| Name | Relationship with the Company | Ending balance | Aging | Proportion to the ending balance of accounts receivable (%) | Ending balance of bad debt provision |
| No. 1 | Non-connected party | 191,461,593.37 | Within 1 year | 18.63% | 5,743,847.80 |
| No. 2 | Non-connected party | 20,371,305.32 | Within 1 year | 1.98% | 611,139.16 |
| No. 3 | Non-connected party | 19,409,126.02 | Within 1 year | 1.89% | 582,273.78 |
| No. 4 | Non-connected party | 18,329,030.59 | Within 2 years | 1.78% | 612,257.46 |
| No. 5 | Non-connected party | 15,148,133.08 | Within 1 year | 1.47% | 454,443.99 |
| Total | -- | 264,719,188,.38 | -- | 25.76% | 8,003,962.19 |
(5) Accounts Receivable Derecognized due to the Transfer of Financial Assets
Naught
(6) The Amount of Assets and Liabilities Generated from the Transfer and the Continued Involvement ofAccounts Receivable
Naught
2. Other Accounts Receivable(1) Other Accounts Receivable Disclosed by Category
Unit: RMB
| Category | Ending balance | Beginning balance | ||||||||
| Carrying amount | Bad debt provision | Carrying value | Carrying amount | Bad debt provision | Carrying value | |||||
| Amount | Proportion | Amount | Withdrawal | Amount | Proportion | Amount | Withdrawal proportion | |||
| proportion | ||||||||||
| Other accounts receivable withdrawn bad debt provision according to credit risks characteristics | 75,245,816.55 | 99.61% | 3,081,280.64 | 4.09% | 72,164,535.91 | 44,939,194.60 | 99.35% | 2,764,316.71 | 6.15% | 42,174,877.89 |
| Other accounts receivable with insignificant single amount for which bad debt provision separately accrued | 295,120.00 | 0.39% | 295,120.00 | 100.00% | 295,120.00 | 0.65% | 295,120.00 | 100.00% | ||
| Total | 75,540,936.55 | 100.00% | 3,376,400.64 | 4.47% | 72,164,535.91 | 45,234,314.60 | 100.00% | 3,059,436.71 | 6.76% | 42,174,877.89 |
Other accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end:
□ Applicable √ not applicable
In the groups, other accounts receivable adopted aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
| Aging | Ending balance | ||
| Other accounts receivable | Bad debt provision | Withdrawal proportion | |
| Subentry within 1 year | |||
| Within 1 year | 31,953,716.08 | 958,611.48 | 3.00% |
| Subtotal of within 1 year | 31,953,716.08 | 958,611.48 | 3.00% |
| 1 to 2 years | 3,353,071.99 | 335,307.20 | 10.00% |
| 2 to 3 years | 167,542.81 | 50,262.84 | 30.00% |
| 3 to 4 years | 3,088,998.23 | 1,544,499.12 | 50.00% |
| 4 to 5 years | 2,000.00 | 1,600.00 | 80.00% |
| Over 5 years | 191,000.00 | 191,000.00 | 100.00% |
| Total | 38,756,329.11 | 3,081,280.64 | 7.95% |
Notes to the determination basis for the Group:
In the groups, other accounts receivable adopted balance percentage method to withdraw bad debt provision
□ Applicable √ Not applicable
In the groups, other accounts receivable adopted other methods to withdraw bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
| Name of the group | Ending balance |
| Other accounts receivable | Bad debt provision | Withdrawal reason | |
| Internal business group | 36,489,487.44 | 0.00 | Intercourse fund among subsidiaries was not withdrawn |
| Total | 36,489,487.44 | 0.00 |
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB 316,963.93; the amount of the reversedor collected part during the Reporting Period was of RMB0.00.Naught
(3) Other Account Receivable Classified by Account Nature
Unit: RMB
| Nature | Ending carrying amount | Beginning carrying amount |
| Internal business group | 36,784,607.44 | 21,987,838.89 |
| VAT export tax refunds | 18,007,536.67 | 5,712,812.04 |
| Performance bond | 4,007,646.20 | 4,377,639.20 |
| Staff borrowings and petty cash | 8,029,988.61 | 4,142,205.92 |
| Rental fees and Water & electricity fees | 420,000.59 | 1,293,281.97 |
| Advance money for street light construction | 3,777,672.16 | 3,777,672.16 |
| Other | 4,513,484.88 | 3,942,864.42 |
| Total | 75,540,936.55 | 45,234,314.60 |
(4) The Top Five Other Account Receivable Classified by Debtor at Period-end
Unit: RMB
| Name of the entity | Nature | Ending balance | Aging | Proportion to total ending balance of other accounts receivable | Ending balance of bad debt provision |
| No. 1 | VAT export tax refunds | 18,007,536.67 | Within 1 year | 23.84% | 540,226.10 |
| No. 2 | Advance money for street light construction | 3,777,672.16 | Within 4 years | 5.00% | 1,299,397.36 |
| No. 3 | Others | 2,122,656.00 | Within 1 year | 2.81% | 63,679.68 |
| No. 4 | Margin | 2,098,341.00 | 1 to 2 years | 2.78% | 209,834.10 |
| No. 5 | Provident fund | 1,270,550.18 | Within 1 year | 1.68% | 38,116.51 |
| Total | -- | 27,276,756.01 | -- | 36.11% | 2,151,253.75 |
(5) Account Receivable Involving Government Subsidies
Naught
(6) Other Accounts Receivable Derecognized due to the Transfer of Financial Assets
Naught
(7) Amount of Assets and Liabilities Generated from the Transfer and Continuous Involvement of OtherAccounts Receivable
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3. Long-term Equity Investment
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserve | Carrying value | Carrying amount | Depreciation reserve | Carrying value | |
| Investment to subsidiaries | 508,153,102.26 | 24,360,000.00 | 483,793,102.26 | 508,153,102.26 | 24,360,000.00 | 483,793,102.26 |
| Investment to joint ventures and associated enterprises | 176,473,300.95 | 176,473,300.95 | 179,414,105.14 | 179,414,105.14 | ||
| Total | 684,626,403.21 | 24,360,000.00 | 660,266,403.21 | 687,567,207.40 | 24,360,000.00 | 663,207,207.40 |
(1) Investment to the Subsidiary
Unit: RMB
| Investee | Beginning balance | Increase | Decrease | Ending balance | Depreciation reserve withdrawn | Ending balance of depreciation reserve |
| Foshan Chansheng Electronic Ballast Co., Ltd. | 2,744,500.00 | 2,744,500.00 | ||||
| FSL Chanchang Optoelectronics Co., Ltd. | 82,507,350.00 | 82,507,350.00 |
| Foshan Taimei Times Lamps and Lanterns Co., Ltd. | 350,000.00 | 350,000.00 | ||||
| Nanjing Fozhao Lighting Components Manufacturing Co., Ltd. | 72,000,000.00 | 72,000,000.00 | ||||
| Foshan Electrical & Lighting (Xinxiang) Co., Ltd. | 35,418,439.76 | 35,418,439.76 | ||||
| Guangdong Fozhao New Light Sources Technology Co., Ltd. | 50,077,000.00 | 50,077,000.00 | ||||
| Guangdong Fozhao Financing Leasing Co., Ltd. | 200,000,000.00 | 200,000,000.00 | ||||
| Foshan Lighting Lamps & Components Co., Ltd. | 15,000,000.00 | 15,000,000.00 | ||||
| FSL Zhida Electric Technology Co., Ltd. | 25,500,000.00 | 25,500,000.00 | ||||
| FSL Lighting GMBH | 195,812.50 | 195,812.50 | ||||
| Suzhou Mont Lighting Co., Ltd. | 24,360,000.00 | 24,360,000.00 | 24,360,000.00 | |||
| Total | 508,153,102.26 | 508,153,102.26 | 24,360,000.00 |
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
| Investee | Beginning balance | Increase/decrease | Ending balance | Ending balance of depreciation | |||||||
| Additional investment | Reduced investment | Gains and losses recognized under | Adjustment of other comprehe | Changes of other equity | Cash bonus or profits announce | Withdrawal of impairment | Other | ||||
| the equity method | nsive income | d to issue | provision | reserve | |||||||
| I. Joint ventures | |||||||||||
| II. Associated enterprises | |||||||||||
| Shenzhen Primatronix (Nanho) Electronics Ltd. | 179,414,105.14 | 179,781.56 | 3,120,585.75 | 176,473,300.95 | |||||||
| Subtotal | 179,414,105.14 | 179,781.56 | 3,120,585.75 | 176,473,300.95 | |||||||
| Total | 179,414,105.14 | 179,781.56 | 3,120,585.75 | 176,473,300.95 | |||||||
(3)Other Notes
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4. Operating Revenue and Cost of Sales
Unit: RMB
| Item | Reporting Period | Same period of last year | ||
| Operating revenue | Cost of sales | Operating revenue | Cost of sales | |
| Main operations | 1,951,987,821.57 | 1,545,234,231.64 | 1,932,419,061.23 | 1,513,940,853.47 |
| Other operations | 52,300,623.19 | 42,160,088.89 | 47,777,343.06 | 36,016,802.63 |
| Total | 2,004,288,444.76 | 1,587,394,320.53 | 1,980,196,404.29 | 1,549,957,656.10 |
5. Investment Income
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Long-term equity investment income accounted by equity method | 179,781.56 | 1,543,965.79 |
| Investment income from the holding of available-for-sale financial assets | 10,971,417.60 | 6,560,422.50 |
| Income received from financial products and structural deposits | 9,886,641.16 | 5,299,088.41 |
| Other | -500,000.22 |
| Total | 21,037,840.32 | 12,903,476.48 |
6. Other
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XVIII. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
√ Applicable □ Not applicable
Unit: RMB
| Item | Amount | Note |
| Gains/losses on the disposal of non-current assets | -70,182.97 | |
| Government subsidies recorded into the current gains and losses (excluding the government subsidies that are closely relative to business and enjoyed in normed way or quantitatively in accordance with the national standards) | 914,699.96 | |
| Other non-operating income and expense other than the above | 633,590.02 | |
| Less: Income tax effects | 228,691.99 | |
| Non-controlling interests effects | 195.91 | |
| Total | 1,249,219.11 | -- |
Explain the reasons if the Company classifies an item as an non-recurring gain/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Non-recurring Gains and
Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item
□ Applicable √ Not applicable
2. Return on Equity and Earnings Per Share
| Profit as of Reporting Period | Weighted average ROE (%) | EPS (Yuan/share) | |
| EPS-basic | EPS-diluted | ||
| Net profit attributable to ordinary shareholders of the Company | 5.32% | 0.1638 | 0.1638 |
| Net profit attributable to ordinary shareholders of the Company after deduction of non-recurring profit | 5.29% | 0.1630 | 0.1630 |
3. Differences between Accounting Data under Domestic and Overseas Accounting Standards(1) Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under International and
Chinese Accounting Standards
□ Applicable √ Not applicable
(2) Differences of Net profit and Net assets Disclosed in Financial Reports Prepared under Overseas and ChineseAccounting Standards
□ Applicable √ Not applicable
(3) Explain Reasons for the Differences between Accounting Data under Domestic and Overseas AccountingStandards; for any Adjustment Made to the Difference Existing in the Data Audited by the Foreign Auditing
Agent, Such Foreign Auditing Agent’s Name Shall Be Clearly Stated
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4. Other
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Part XI Documents Available for Reference
1. The financial statements signed and stamped by the Company’s legal representative, General
Manager and Chief Financial Officer.
2. The originals of all the Company’s announcements and documents disclosed to the public during
the Reporting Period on the media designated by the CSRC for information disclosure.
The Board of DirectorsFoshan Electrical and Lighting Co., Ltd.28 August 2018