粤照明B:2017年半年度报告(英文版)

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

FOSHAN ELECTRICAL AND LIGHTING CO., LTD.

SEMI-ANNUAL REPORT 2017

August 2017

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Section I Important Statements, Contents and Definitions

The board of directors (the “Board”), the supervisory board (the “Supervisory Board”) as

well as the directors, supervisors and senior management of Foshan Electrical and Lighting

Co., Ltd. (the “Company”) hereby guarantee the factuality, accuracy and completeness of the

contents of this Report, and shall be jointly and severally liable for any false representation,

misleading statements or material omissions in this Report.

He Yong, head of the Company, Liu Xingming, accounting head for this Report, and Tang

Qionglan, head of the accounting department (head of accounting), hereby guarantee that the

Financial Report carried in this Report is factual, accurate and complete.

All the directors attended the board meeting for the review of this Report.

This Report involves futures plans and other forward-looking statements, which shall not be

considered as virtual promises to investors. Investors are kindly reminded to pay attention to

possible risks.

The Company has described in this Report the risks of fiercer market competition,

fluctuations in raw material prices, falling prices of inventories, exchange rate fluctuations

and bad debts on accounts receivable. Please refer to “X Risks Facing the Company and

Countermeasures” under “Section IV Performance Discussion and Analysis” of this Report.

The Company plans not to distribute cash dividends or bonus shares or convert capital

reserve into share capital.

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Table of Contents

Semi-Annual Report 2017 ................................................................................................................. 1

Section I Important Statements, Contents and Definitions ........................................................... 2

Section II Corporate Profile and Key Operating Results............................................................... 5

Section III Business Profile ............................................................................................................... 8

Section IV Performance Discussion and Analysis ......................................................................... 11

Section V Significant Events ........................................................................................................... 24

Section VI Share Changes and Shareholders’ Profile ................................................................... 32

Section VII Preference Shares ........................................................................................................ 38

Section VIII Directors, Supervisors and Senior Management ..................................................... 39

Section IX Corporate Bonds ........................................................................................................... 41

Section X Financial Report ............................................................................................................. 42

Section XI Documents Available for Reference ........................................................................... 155

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Definitions

Term Definition

The Company, Company, FSL Foshan Electrical and Lighting Co., Ltd.

CSRC The China Securities Regulatory Commission

SZSE The Shenzhen Stock Exchange

Meeting of Shareholders of Foshan Electrical and Lighting Co.,

Meeting of Shareholders

Ltd.

Board The Board of Directors of Foshan Electrical and Lighting Co., Ltd.

Supervisory Board The Supervisory Board of Foshan Electrical and Lighting Co., Ltd.

RMB, RMB’0,000 RMB yuan, RMB ten thousand yuan

Reporting Period January 1, 2017-June 30, 2017

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Section II Corporate Profile and Key Operating Results

I Corporate Information

Stock name FSL / FSL B Stock code 000541/200541

Stock exchange Shenzhen Stock Exchange

Company name in

佛山电器照明股份有限公司

Chinese

Abbr. (if any) 佛山照明

Company name in

FOSHAN ELECTRICAL AND LIGHTING CO.,LTD

English (if any)

Abbr. (if any) FSL

Legal representative He Yong

II Contact Information

Board Secretary Securities Representative

Name Lin Yihui Huang Yufen

No. 64, Fenjiang North Road, No. 64, Fenjiang North Road,

Address Chancheng District, Foshan City, Chancheng District, Foshan City,

Guangdong Province, P.R.China Guangdong Province, P.R.China

Tel. (0757)82810239 (0757)82966028

Fax (0757)82816276 (0757)82816276

E-mail fsl-yh@126.com fslhyf@163.com

III Other Information

1. Ways to Contact the Company

Indicate by tick mark whether any changes occur to the registered address, office address and their postal codes,

website address and email address of the Company during the Reporting Period.

□ Applicable √ Not applicable

No changes occurred to the said information during the Reporting Period, which can be found in the 2016 Annual

Report.

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

2. Information Disclosure Media and Place where this Report is Kept

Indicate by tick mark whether any changes occurred to the information disclosure media and the place where this

Report was kept during the Reporting Period.

□ Applicable √ Not applicable

The newspapers designated by the Company for information disclosure, the website designated by the CSRC for

disclosing this Report and the location where this Report was placed did not change during the Reporting Period.

The said information can be found in the 2016 Annual Report.

IV Key Operating Results

Indicate by tick mark whether the Company needs to retroactively restate any of its accounting data.

□ Yes √ No

Reporting Period Same period of last year +/- (%)

Operating revenues (RMB) 2,023,925,582.84 1,755,670,927.44 15.28%

Net profit attributable to

228,494,660.57 206,925,812.72 10.42%

shareholders of the Company (RMB)

Net profit attributable to

shareholders of the Company before 227,184,233.70 206,637,093.68 9.94%

exceptional profit and loss (RMB)

Net cash from operating activities

-31,063,187.22 291,628,307.06 -110.65%

(RMB)

Basic earnings per share

0.1796 0.1627 10.39%

(RMB/share)

Diluted earnings per share

0.1796 0.1627 10.39%

(RMB/share)

Weighted average return on equity

4.99% 3.94% 1.05%

(%)

End of Reporting Period End of last year +/- (%)

Total assets (RMB) 5,773,132,610.86 6,100,169,400.30 -5.36%

Net assets attributable to

4,707,690,904.27 4,990,466,577.12 -5.67%

shareholders of the Company (RMB)

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

V Differences in Accounting Data under Domestic and Foreign Accounting Standards

1. Differences in Net Profit and Net Assets Disclosed in Financial Reports Prepared under Chinese and

International Accounting Standards

□ Applicable √ Not applicable

No such differences for the Reporting Period.

2. Differences in Net Profit and Net Assets Disclosed in Financial Reports Prepared under Chinese and

Foreign Accounting Standards

□ Applicable √ Not applicable

No such differences for the Reporting Period.

VI Exceptional Gains/Losses

√ Applicable □ Not applicable

Unit: RMB

Item Reporting Period Note

Gains/Losses on disposal of non-current assets

-4,255,164.43

(including offset asset impairment provisions)

Government subsidies charged to gains/losses for

Reporting Period (except for government grants closely

related to business of the Company and given at a fixed 3,869,949.96

quota or amount in accordance with government’s

uniform standards)

Non-operating income and expense other than above 1,637,836.66

Less: Income tax effects -57,390.05

Minority interests effects (after tax) -414.63

Total 1,310,426.87 --

Explanation of why the Company classified an item as exceptional gain/loss according to the definition in the

Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the

Public—Exceptional Gains and Losses, or reclassified any exceptional gain/loss item given as an example in the

said explanatory announcement to recurrent gain/loss

□ Applicable √ Not applicable

No such cases in the Reporting Period.

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Section III Business Profile

I Main Business Scope for the Reporting Period

Is the Company subject to any disclosure requirements for special industries?

No.

1. Main business and products

We have been engaged in production, R&D and sale of lighting products since our listing. Our products mainly

include LED lighting products and conventional lighting products . We have a wide variety of products with a

complete range of specifications, including LED light source, LED lamps, fluorescent lamps, halogen lamps,

energy saving lamps, motor vehicle lamps, conventional lamps, etc. With the most specifications in the lighting

industry, our products are widely used for indoor and outdoor lighting, landscape lighting, motor vehicle lighting

and so on. 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 China Brands”.

While pushing diversified strategies, the Company set the electrical engineering business as the new engine for its

rapid development in 2016. Based on the existing electrical engineering equipment, the Company strived to

develop electrical engineering equipment covering lots of series of electrical engineering equipment and sockets.

In future, the Company would make efforts to create a strategic layout where the development of lighting products

keeping pace with electrical engineering equipment.

2. Main business model

(1) Procurement model

We 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 supervisory

committee consisting of personnel from several departments will be set up in the future. For every kind of our

main raw materials, we usually have a few suppliers to choose from in procurement so that the procurement prices

would 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 to

formulate a production plan for the coming month. And our workshops produce according to the plan to avoid

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

extra 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 lighting

products are at a fast pace of renewal and different customers often have different requirements regarding the

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 our

production plans based on them and then make procurement plans according to the production plans, which will

help effectively control the stock and the procurement prices of raw materials, reduce capital occupation and

improve 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 of

parts and low-tech products is outsourced to sub-manufacturers, who will produce in strict accordance with our

requirements. We will also tag along their production processes and examine carefully the quality of the products

finished. In this way, our supply of products is guaranteed.

(3) Sales model

We mainly adopt a commercial agent model, selling our products to commercial agents through various channels

and setting up business divisions under the sales department to follow up the use of our products by customers and

provide relevant support. In terms of channels, besides consolidating wholesale, we will also focus on the

development of franchised stores, illumination engineering & commercial lighting, e-commerce & retail sales and

automotive lighting to minimize our weaknesses in this respect and increase our market share.

3. Main driving force for business performance

(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 as

long service life. Thanks to the rapid development of the LED industry, the Company achieved good business

performance.

(2) The Company’s own advantages

By right of the Company’s advantages in technology, brand, channel, and scale, the Company firmly grasped the

opportunities 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 sustainable

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

R&D input and technology innovation. And at the same time, by means of effective control on procurement and

manufacturing cost, the Company raised the efficiency of management and products, improved its comprehensive

competitiveness, overcame the difficulties and challenges resulted from the serious market situation, and kept the

sustainable growth of its operating revenue and profit.

II Significant Changes in Main Assets

1. Significant Changes in Main Assets

Main assets Reason for significant change

Equity assets No significant changes in Reporting Period

Fixed assets No significant changes in Reporting Period

Intangible assets No significant changes in Reporting Period

Up 106.16% from the opening amount mainly due to increase in ongoing

Construction in progress

construction projects

2. Main Assets Overseas

□ Applicable √ Not applicable

III Core Competitiveness Analysis

Is the Company subject to any disclosure requirements for special industries?

No.

No significant changes occurred to the Company’s core competitiveness in the Reporting Period. Please refer to

the 2016 Annual Report for details about the Company’s core competitiveness.

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Section IV Performance Discussion and Analysis

I Summary

The first half of 2017 saw China’s economy running smoothly and the U.S. and European economies in gradual

recovery. Such a stable and positive macro-economic environment provided a sound basis for growth in the

lighting industry. However, the unveiling of the most stringent ever real estate control policies in China, the rise

of trade protectionism across the world, heavier costs caused by rising raw material prices, wilder exchange rate

fluctuations and fiercer market competition posed quite many challenges to lighting companies. In face of the

complicated and changeable environment at home and abroad, the Company closely adhered to the strategic

objectives of “Cutting-Edge Technologies, Internationally-Famous Brands and Large-Scale Production” the Board

had put forward at the beginning of the year, focused on its main business, kept improving its ability to innovate,

strengthened the execution of its overseas expansion strategy and continued to increase its lean management level.

As a result, these efforts have been rewarded by strong operating results. For the Reporting Period, the Company

achieved, on a consolidated basis, operating revenues of RMB 2,023.9256million, up 15.28% compared to the

same period of last year; and net profit attributable to shareholders of the Company of RMB228million,

representing a year-on-year growth of 10.42%.

In the first half of 2017, main work arrangement of the Company was as below:

1. Strengthened the capability of innovation, and improved products and technology of the Company

The Company input more on R&D, continuously strengthened the capability of innovation, which included the

acceleration of innovation on new products, the principal of product design, materials, appearance, and smart

lighting. At the same time, the Company reserved for basic and perspective technological work, researched and

developed new products which were user-friendly and adapted to the market while introducing new technology

and ideas, and sustainably improved the Company’s competitive power in the market.

2. Optimized product structure, and improved marketing capability

The Company continuously optimized product structure. In the reporting period, sales revenue of the Company’s

LED products and lamps achieved rapid growth,LED products accounted for 69.55% of the Company’s main

products in sales revenue while LED lamps took up 45.75% of LED products in sales revenue. and new products

launched rapidly won recognition by the market, rapidly and well ensuring the growth of the Company’s business

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

revenue.

Marketing was the fountain for the Company’s business growth. The Company always valued channel

construction. In domestic marketing, the Company gave play to the synergy between the traditional and emerging

channels, as well as explored a new model of offline sharing and online development to realize sharing in

throughput, experience, consumption, service and benefits. The Company took advantage of the platform of

E-commerce resources, implemented differentiated promotion, adopted the marketing pattern focusing on stylish

shops and oriented by products, so as to avoid homogeneous competitions among shops. Advantaged markets

were consolidated and weak markets were broken through via integration of different resources. In respect of

overseas seas sales, the Company reinforced the execution of overseas development strategy, continuously

explored overseas market by relying on its own leading brands in the industry, excellent product quality, as well

as professional service, and as a result, realized fast growth of sales revenue in overseas market. In the Reporting

Period, business revenues of the Company in overseas market reached RMB762.3427million, representing a

year-on-year increase of 30.89%.

3. Positively explored new businesses, and rapidly developed electrical technology

The Company has positively enlarged new business of electrical technology ever since the subsidiary for electrical

technology was founded in October of last year. By means of sustainably enriching product series, stably

enlarging production scale, enlarging sales channels, and strengthening brand promotion, the brand of FSL

Electrical Technology won more and more recognition from consumers. In the Reporting Period, products of

electrical technology achieved business revenue of RMB 66.7346million, showing the remarkable development of

electrical technology business.

4. Strengthened cost control, and improved profitability

With the rise of material cost, the Company faced with serious cost pressure. Only by keeping and enlarging cost

advantages can the Company keep improving competitive power. Via taking a hard look and analysis on the raw

material market, the Company increased qualified suppliers, established perfect procurement database, expanded

the bidding range, improved the timeliness ratio of material delivery, and cut down procurement cost; The

Company cut down product cost and improved production ratio by means of improving the level of automation,

intellectualization, and informatization, as well as technology transformation and technique upgrade. The

Company as well found out advantages and disadvantages of every workshop and department and strengthened

the crisis awareness towards cost in every workshop and department by comparing and analyzing internal and

external cost competitions.

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

II Analysis of Main Business

Year-on-year changes of key financial data:

Unit: RMB

Reporting Same period of last

+/-% Main reason for change

Period/Period-End year/Period-Beginning

Operating revenues 2,023,925,582.84 1,755,670,927.44 15.28%

Operating costs 1,546,931,779.85 1,322,982,560.70 16.93%

Selling expense 81,651,993.69 73,251,807.41 11.47%

Administrative expense 98,790,821.60 82,117,827.94 20.30%

Finance costs -7,115,907.36 -6,445,753.04 -10.40%

Income taxes 42,597,501.35 39,425,977.29 8.04%

R&D expense 57,719,395.64 60,464,243.71 -4.54%

Payment of taxes and

expenses on gains from

Guoxuan High-tech

Net cash from operating

-31,063,187.22 291,628,307.06 -110.65% shareholdings sold in fourth

activities

quarter of 2016, as well as

payment of year-end bonuses

and expenses for 2016

Smaller increment in banks’

Net cash from investing

-112,026,375.71 -429,601,884.64 73.92% wealth management products

activities

purchased

Significant increase in cash

Net cash from financing

-522,068,416.83 -15,935,708.57 -3,176.09% dividends distributed in this

activities

year than last year

Decrease in net cash

Net increase in cash and

-664,245,623.25 -152,952,917.79 -334.28% generated by both operating

cash equivalents

and financing activities

Distribution of cash

Monetary funds 815,038,019.29 1,479,283,642.54 -44.90%

dividends in this year

More banker’s acceptance

bills received were endorsed

Notes receivable 26,434,680.74 67,925,843.74 -61.08%

and used to pay to suppliers

in the Reporting Period

Increased operating revenues

Accounts receivable 862,433,866.95 595,257,954.00 44.88% and adjustments to credit

terms of domestic customers

Interest receivable 3,217,917.15 4,612,406.80 -30.23% Decrease in undue interest

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

receivable from bank

VAT and export tax rebates

Other accounts

36,016,476.65 11,977,660.58 200.70% receivable in the Reporting

receivable

Period

Increased investment in

Construction in progress 147,360,531.44 71,479,325.91 106.16% expansion of plants in

Gaoming

The income tax payable on

the gains on the sale of the

Company’s shareholdings in

Taxes and fares payable 24,371,207.42 138,282,644.72 -82.38%

Guoxuan High-tech in

4Q2016 was paid in the

Reporting Period

Distribution of dividends by

Dividends payable 6,287,923.09 -100.00% subsidiaries in the Reporting

Period

Decrease in other current

Other accounts payable 32,185,577.54 50,104,338.81 -35.76%

accounts payable

The vehicle and vessel use

tax, etc. have been included

in the item of taxes and

Taxes and surtaxes 20,386,602.33 12,251,578.46 66.40%

surtaxes since May 1, 2016

as per the CS [2016] No. 22

Document

Decrease in inventory falling

Asset impairment losses 24,059,719.35 35,853,373.83 -32.89%

price provisions

Increase in governmental

Non-operating revenue 6,022,395.88 1,575,016.58 282.37%

subsidies received

Minority interest income 3,390,315.67 -313,550.46 1,181.27% Earnings of new subsidiary

Decreased shareholdings in

Guoxuan High-tech due to

Other comprehensive

23,025,471.14 140,317,778.68 -83.59% the sale of some such

income, net of tax

shareholdings at the end of

last year

Major changes to the profit structure or sources of the Company in the Reporting Period:

□ Applicable √ Not applicable

No such cases in the Reporting Period.

Breakdown of main business:

Unit: RMB

Operating Operating cost Gross profit Operating Operating cost: Gross profit

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

revenue margin revenue: YoY YoY +/-% margin: YoY

+/-% +/-%

By business segment

Lighting fixtures

2,010,535,149.65 1,537,416,165.51 23.53% 15.34% 16.89% -1.01%

and lamps

By product

Traditional

545,447,386.30 407,164,404.38 25.35% -20.29% -17.88% -2.19%

lighting products

LED 1,398,353,192.60 1,083,319,624.12 22.53% 32.07% 32.20% -0.07%

Electrical

66,734,570.75 46,932,137.01 29.67% 29.67%

equipment

By geographic segment

Domestic 1,248,192,434.54 919,009,019.04 26.37% 7.54% 6.17% 0.95%

Overseas 762,342,715.11 618,407,146.47 18.88% 30.89% 37.54% -3.92%

III Non-Core Business Analysis

√ Applicable □ Not applicable

Unit: RMB

As a percentage of

Amount Source/reason Recurring (yes/no)

total profit (%)

Gains on purchased bank’s wealth

Investment income 14,009,282.02 5.10% management products & receipt of No

bonuses from investees

Bad-debt and inventory falling price

Asset impairment 24,059,719.35 8.77% No

provisions

Non-operating Government subsidies received and

6,022,395.88 2.19% No

revenue others

Disposal of certain old equipment

Non-operating

4,769,773.69 1.74% for producing traditional lighting No

expense

products

IV Analysis of Assets and Liabilities

1. Significant Changes in Asset Composition

Unit: RMB

End of Reporting Period End of same period of last year Change in

percentage Main reason for significant change

Amount As a Amount As a

(%)

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

percentage percentage of

of total total assets

assets (%) (%)

Monetary funds 815,038,019.29 14.12% 788,093,190.58 12.92% 1.20%

Increased operating revenues and

Accounts

862,433,866.95 14.94% 636,149,148.03 10.43% 4.51% adjustments to credit terms of

receivable

domestic customers

Inventories 733,151,791.00 12.70% 467,975,082.84 7.67% 5.03% Stocks for expected growth in sales

The Company acquired a 32.85%

Long-term equity stake in Primatronix (Nanho)

209,858,507.98 3.64% 362,997.40 0.01% 3.63%

investments Electronics Ltd. at RMB0.18

billion in September 2016

Fixed assets 436,897,311.33 7.57% 454,154,610.43 7.44% 0.13%

Construction in Increased investment in expansion

147,360,531.44 2.55% 59,026,683.56 0.97% 1.58%

progress of plants in Gaoming

2. Assets and Liabilities Measured at Fair Value

√ Applicable □ Not applicable

Unit: RMB

Gains/Losses

Impairment

on fair value Cumulative fair Purchased in Sold in

provided in

Item Opening balance changes in value changes Reporting Reporting Closing balance

Reporting

Reporting charged to equity Period Period

Period

Period

Financial assets

3.

Available-for-s

1,427,901,096.63 1,335,488,158.79 1,454,989,886.20

ale financial

assets

Subtotal of

1,427,901,096.63 1,335,488,158.79 1,454,989,886.20

financial assets

Total of above 1,427,901,096.63 1,335,488,158.79 1,454,989,886.20

Financial

0.00 0.00

liabilities

Significant changes in the measurement attributes of the main assets in the Reporting Period:

□ Yes √ No

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

3. Restricted Asset Rights as of End of the Reporting Period

None.

V Investments Made

1. Total Investments Made

√ Applicable □ Not applicable

Investments made in Reporting Period Investments made in same period of last

+/-%

(RMB) year (RMB)

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

Gains/L

osses on Cumulat Source

Variety Account fair ive fair Purchas Gains/lo

Code of Name of Initial Sold in of

of ing Opening value value ed in sses in Closing Account

Reporti

securitie securitie investm measure book changes changes Reporti Reporti book investm

securitie ng

ment value in charged ng ng value ing title

s s ent cost Period ent

s model Reporti to Period Period

ng equity funds

Period

Availabl

Guoxua The

Domesti Fair 1,355,3 1,284,0 1,379,8 e-for-sal

n 160,000 6,560,4 Compan

c/overse 002074 value 83,288. 23,552. 75,532. e

High-tec ,000.00 22.50 y’s own

as stock method 49 91 50 financia

h funds

l asset

Availabl

The

Domesti China Fair e-for-sal

30,828, 72,517, 51,464, 75,114,3 Compan

c/overse 601818 Everbrig value e

816.00 808.14 605.88 53.70 y’s own

as stock ht Bank method financia

funds

l asset

Domesti N/A Xiamen 292,574 Cost 292,574 292,574 Availabl The

17

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

c/overse Bank ,133.00 method ,133.00 ,133.00 e-for-sal Compan

as stock e y’s own

financia funds

l asset

Foshan

branch

Availabl

of The

Domesti e-for-sal

Guangd 500,000 Cost 500,000 500,000 Compan

c/overse N/A e

ong .00 method .00 .00 y’s own

as stock financia

Develop funds

l asset

ment

Bank

1,720,9 1,335,4 1,748,0

483,902 6,560,4

Total -- 75,229. 0.00 88,158. 0.00 0.00 64,019. -- --

,949.00 22.50

63 79 20

Disclosure date of

announcement about

Board’s consent for

securities investment

Disclosure date of

announcement about

shareholders’ meeting’s

consent for securities

investment (if any)

(2) Investments in Derivative Financial Instruments

□ Applicable √ Not applicable

No such cases in the Reporting Period.

VI Sale of Major Assets and Equity Interests

1. Sale of Major Assets

□ Applicable √ Not applicable

No such cases in the Reporting Period.

2. Sale of Major Equity Interests

□ Applicable √ Not applicable

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

VII Main Controlled and Joint Stock Companies

√ Applicable □ Not applicable

Main subsidiaries and joint stock companies with an over 10% influence on the Company’s net profit

Unit: RMB

Relationship Main

Company business Industry Registered Operating Operating

with the Total assets Net assets Net profit

name scope capital revenues profit

Company

Foshan

Chansheng

Production Manufactur 1,000,000.0 49,096,096. 27,773,852. 94,306,931. 4,281,244

Electronic Subsidiary 3,202,584.42

and sale ing 0 50 21 11 .13

Ballast Co.,

Ltd.

Foshan

Chanchang

Electric Production Manufactur 72,782,944. 117,233,75 105,493,95 33,103,172. -396,774.

Subsidiary -469,196.52

Appliances and sale ing 00 3.56 6.88 26 48

(Gaoming)

Co., Ltd.

Foshan

Taimei

Production Manufactur 76,944,367. 18,767,030. 82,641,917. 2,672,291

Times Subsidiary 500,000.00 2,008,910.10

and sale ing 45 70 32 .32

Lamps Co.,

Ltd.

FSL New

Light

Production Manufactur 50,000,000. 56,156,822. 54,286,950. 10,896,024. 616,824.6

Source Subsidiary 462,618.52

and sale ing 00 20 64 16 9

Technology

Co., Ltd.

FSL

(Xinxiang) Production Manufactur 35,418,439. 53,443,977. 46,831,237. 34,493,532. 3,261,603

Subsidiary 2,460,437.77

Lighting and sale ing 76 33 13 79 .94

Co., Ltd.

Guangdong

Fozhao

Finance 200,000,00 226,514,30 226,054,87 3,513,522

Financing Subsidiary Finance 2,635,142.21

lease 0.00 6.85 8.31 .95

Lease Co.,

Ltd.

FSL

Production Manufactur 15,000,000. 59,572,326. 48,857,908. 67,134,518. 8,073,552

Lighting Subsidiary 3,774,392.16

and sale ing 00 75 17 91 .47

Equipment

19

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Co., Ltd.

Nanjing

Fozhao

Lighting

Production Manufactur 41,683,200. 74,488,836. 48,486,156. 20,772,449. 4,050,560

Component Subsidiary 3,021,091.70

and sale ing 00 01 75 65 .72

s

Manufacturi

ng Co., Ltd.

FSL Zhida

Electric Production Manufactur 50,000,000. 101,535,54 41,149,536. 66,773,802. 7,584,601

Subsidiary 5,689,066.62

Technology and sale ing 00 1.93 53 15 .88

Co., Ltd.

Subsidiaries obtained or disposed in the Reporting Period:

□ Applicable √ Not applicable

Information about the main controlled and joint stock companies:

—Foshan Chansheng Electronic Ballast Co., Ltd. was invested and established by the Company and Mr. Ma

Henglai and had set up and obtained license for business corporation on 26 Aug. 2003. The Company holds 75%

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 24 Dec. 2013, the Company and Mr. Ma Henglai signed the equity transfer agreement. The Company

purchased 25% equity of Foshan Chansheng Electronic Ballast Co., Ltd. held by Mr. Ma Henglai. After the

purchasing, the Company held 100% equity of Foshan Chansheng Electronic Ballast Co., Ltd.

—Foshan Chanchang Electric Appliances (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 Aug. 2005 through 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 Aug. 2016, the Company and Prosperity Lamps and Components Ltd signed the equity transfer agreement.

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 Foshan

Chanchang Electric Appliances (Gaoming) Co., Ltd.

—Foshan Taimei Times Lamps 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 5

Dec. 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 of

foundation.

—FSL New Light Source Technology Co., Ltd. (its predecessor was “Foshan Lighting Lamps and Lanterns Co.,

20

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Ltd.” and it changed its name to “FSL New Light Source Technology Co., Ltd.” on 17 Dec. 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., Foshan Hongbang Electrical & Lighting Co., Ltd., Hebei Jinfen Trading Co., Ltd., obtaining its license for

Business Corporation on 27 Sept. 2009. The Company holds 60% equities of this company. Therefore the said

subsidiary was included into the scope of the consolidated financial statements since the date of foundation.

On 25 Sep. 2009 and 19 Nov. 2010, the equity transfer agreement was signed between the Company and the

minority shareholders, in which the minority shareholders respectively transferred their equities of Foshan

Lighting Lamps and Lanterns Co., Ltd. to the Company. After transfer, the Company holds 100% equities of

Foshan Lighting Lamps and Lanterns 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 Apr. 2009. The Company holds 100% equities of

the said company, therefore the said subsidiary was included into the scope of the consolidated financial

statements since date of foundation. On 27 Aug. 2013, the 3rd Session of the 7th Board of Directors reviewed and

approved to invest another RMB 2 million (land in an industrial park in Xinxiang, Henan Province and monetary

funds) in FSL (Xinxiang) Lighting, increasing the registered capital of FSL (Xinxiang) Lighting to RMB

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 RMB 15 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 scope

of 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 Aug. 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 Manufacturing Co., Ltd.”

on 15 Nov. 2010.) to the Company. Therefore, Nanjing Fozhao Lighting Components Manufacturing Co., Ltd.

became a wholly-owned subsidiary of the Company. The said subsidiary was included into 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 investment

basis. FSL Zhida obtained its business license on October 21, 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.

VIII Structured Bodies Controlled by the Company

□ Applicable √ Not applicable

IX Performance Forecast for January-September 2017

Warning of possible loss or considerable YoY change in the accumulative net profit made during the

period-beginning to the end of the next reporting period, as well as the reasons:

□ Applicable √ Not applicable

21

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

X Risks Facing the Company and Countermeasures

1. Risks from intensified market competition

From macroscopic aspects, with the descending of speed increase of domestic investment, release of property

tightening policies, international trade protectionism and turmoil of political pattern, as well as the influences of

other factors, the industry may face the risk of insufficient growth momentum. From industry aspects, as an

industry with sufficient competitions, lighting application field is not only under the competitions from companies

of original application field, but also under the competitions from LED upstream and midstream core companies

and packaging enterprises gradually extending to lighting application field, in future, if market competition further

gets increased, negative influences on the Company’s profitability may be generated.

Solutions: The Company will focus on main business. Through increasing research & development investment

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-quality products. At the

same time, by optimizing marketing network, the Company will improve brand image, improve service quality,

intensify customer relationship management and increase core competitive capacity of the company constantly.

2. Risks from price fluctuation of raw materials

The raw material cost of the Company’s products accounts for about 67.98% of the operating cost, main raw

materials include lamp beads, electronic parts and components, aluminum substrates, metal materials, lamp holder,

packing materials, chemical materials and fuel etc., which means the price fluctuation of main raw materials will

cause significant impact on the Company’s production costs. In future, if price of raw materials has fluctuation by

a large margin, the Company’s profitability may have fluctuation as well.

Solutions: By increasing quantity of qualified suppliers, expanding bidding and tendering range, perfecting supply

chain management, paying attention to market dynamics, collecting information, analyzing and pre-judging

supply of main raw materials and price trend, the Company can decrease procurement costs; by improving

automatic, intelligent production level and by implementing technical transformation, technology improvement

and other measures, the Company can improve production efficiency and reduce product cost; by intensifying

production technology and field management, the Company can control product costs.

3. Risks of loss from falling inventory price

At the end of the Reporting Period, the net value of the Company’s inventory was RMB733.1518million,

accounting for 24.68% of the current assets, the inventory mainly contains raw materials, semi-finished products

22

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

and finished products etc. As there’re plenty of product categories and models in the Company, the amount of

inventory value is relatively high. With the increase of the Company’s sales revenue year by year, the raw

materials and inventory commodities reserved for production and sales will simultaneously increase, leading to

higher level of the Company’s inventory. If there’re changes in price or demand in raw material market and

product sales market, the risks of loss from falling inventory price of the Company may happen.

Solutions: The Company can intensify the analysis of sales and change in future market demand, on the basis of

assuring production and sales, the Company can control inventory scale reasonably.

4. Risks from fluctuation of the exchange rate

The RMB exchange rate in China is based on market supply and demand, a basket of currencies for adjustment

and managed floating exchange rate system as reference. With the fluctuation of the world economy, the tense

upgrade of some hot spots, as well as the currency policies in different countries, the fluctuation of exchange rate

will be caused. The export business of the Company accounts for 37% of the Company’s whole business and the

scale is enlarging year by year. If there’s large fluctuation of the exchange rate, the Company’s business

performance will be affected.

Solutions: By intensifying settlement currency management, knowing the changes in economic policies of the

area, exchange rate policies and fluctuation trend of settlement currencies in time, choosing to use good settlement

currencies, the Company can weaken the risks brought by fluctuation of exchange rate as much as possible.

5. Risks from bad debts of accounts receivable

With the enlargement of the Company’s sales volume, the amount of accounts receivable has increased. The main

debit customers of the Company are long-term high-quality customers with many years of cooperation and good

business reputation. If financial status of main debtors has major unfavorable changes, risks from bad debts of

accounts receivable may be caused.

Solutions: By perfecting credit file of customers, evaluating credit status of customers regularly, adopting method

of pledge of customers’ assets, the Company can reduce risks from bad debts of accounts receivable. By

strengthening the management of approval of contract, the Company can avoid legal risks incurred during

implementation of contract. The Company can reinforce the management and collection efforts of accounts

receivable, implement pre-warning treatment for accounts receivable with upcoming deadline during

implementation, and analyze and report accounts receivable regularly.

23

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Section V Significant Events

I Annual and Special Meetings of Shareholders Convened during the Reporting Period

1. Meetings of Shareholders Convened during the Reporting Period

Investor Index to disclosed

Meeting Type Convened date Disclosure date

participation ratio information

Announcement No.

2017-016 on

2016 Annual Resolutions of 2016

Meeting of Annual 38.71% 04/26/2017 04/27/2017 Annual Meeting of

Shareholders Shareholders

disclosed on

www.cninfo.com.cn

2. Special Meetings of Shareholders Convened at Request of Preference Shareholders with Resumed Voting

Rights

□ Applicable √ Not applicable

II Proposal for Profit Distribution and Converting Capital Reserve into Share Capital for the

Reporting Period

□ Applicable √ Not applicable

For the Reporting Period, the Company plans not to distribute cash dividends or bonus shares or convert capital

reserve into share capital.

III Commitments of the Company’s Actual Controller, Shareholders, Related Parties and

Acquirer, as well as the Company and Other Commitment Makers, Fulfilled in the Reporting

Period or still Ongoing at Period-End

□ Applicable √ Not applicable

No such cases in the Reporting Period.

IV Engagement and Disengagement of CPAs Firm

Has the semi-annual financial report been audited?

□Yes √ No

This Semi-Annual Report is unaudited.

24

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

V Explanations Given by Board of Directors and Supervisory Board Regarding “Modified

Auditor’s Report” Issued by CPAs Firm for the Reporting Period

□ Applicable √ Not applicable

VI Explanations Given by Board of Directors Regarding “Modified Auditor’s Report” Issued

for Last Year

□ Applicable √ Not applicable

VII Bankruptcy and Restructuring

□ Applicable √ Not applicable

No such cases in the Reporting Period.

VIII Legal Matters

Significant lawsuits or arbitrations:

□ Applicable √ Not applicable

No such cases in the Reporting Period.

Other legal matters:

□ Applicable √ Not applicable

IX Punishments and Rectifications

□ Applicable √ Not applicable

No such cases in the Reporting Period.

X Credit Conditions of the Company as well as its Controlling Shareholder and Actual

Controller

√ Applicable □ Not applicable

In the Reporting Period, the controlling shareholder and actual controller of the Company were in a good credit

position, without unsatisfied court judgments, large-amount overdue liabilities or the like.

XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for

Employees

□ Applicable √ Not applicable

No such cases in the Reporting Period.

25

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

XII Significant Related Transactions

1. Related Transactions Relevant to Routine Operations

√ Applicable □ Not applicable

Obtaina

As a

ble

percenta

Approve market Index

ge of

Relation Content d Over Method price for to

Related Type of Pricing Price total

with the s of Transact transacti approve of same-ty Disclosu disclos

transacti transacti principl (RMB’0 value of

Compan transacti ion price on line d line or settleme pe re date ed

on party on e ,000) same-ty

y on (RMB’0 not nt transacti inform

pe

,000) on ation

transacti

(RMB’0

ons

,000)

Purchasi

Shareho ng

Prosperi

lder that products

ty

holds and Purchas

Lamps www.c

over 5% receivin e of Market Remitta 03/30/2

& 67.05 67.05 0.06% 200 Not 67.05 ninfo.c

shares g labor material price nce 017

Compon om.cn

of the service s

ents

Compan from

Limited

y related

party

Purchasi

ng

Prosperi Enterpri

products

ty se

and Purchas

Electric controll www.c

receivin e of Market Remitta 03/30/2

al ed by -3.21 -3.21 0.00% 600 Not -3.21 ninfo.c

g labor material price nce 017

(China) related om.cn

service s

Co., individu

from

Ltd. al

related

party

Hangzh Purchasi

Enterpri

ou ng

se

Times products Purchas

controll www.c

Lighting and e of Market Remitta 03/30/2

ed by 113.87 113.87 0.09% 300 Not 113.87 ninfo.c

and receivin material price nce 017

related om.cn

Electric g labor s

individu

al Co., service

al

Ltd. from

26

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

related

party

Purchasi

ng

Foshan

products

NationS Under

and Purchas

tar same www.c

receivin e of Market Remitta 03/30/2

Optoele actual 3,897.29 3.22% 20,000 Not ninfo.c

g labor material price 3,897.29 nce 3,897.29 017

ctronics controll om.cn

service s

Co., er

from

Ltd.

related

party

Purchasi

Guangd ng

ong products

Under

Fenghua and Purchas

same www.c

Advanc receivin e of Market Remitta 03/30/2

actual 410.04 410.04 0.34% 900 Not 410.04 ninfo.c

ed g labor material price nce 017

controll om.cn

Holding service s

er

Co., from

Ltd. related

party

Purchasi

Guangd ng

ong products

Under

Huayue and Purchas

same

bao receivin e of Market Remitta

actual 93.34 93.34 0.08% Not 93.34 N/A

New g labor material price nce

controll

Energy service s

er

Co., from

Ltd. related

party

Selling

Shareho

Prosperi products

lder that

ty and

holds

Lamps providin www.c

over 5% Selling Market Remitta 03/30/2

& g labor 1,482.06 0.73% 3,000 Not ninfo.c

shares products price 1,482.06 nce 1,482.06 017

Compon service om.cn

of the

ents to

Compan

Limited related

y

party

Prosperi Enterpri Selling Selling Market Remitta 03/30/2 www.c

3.86 3.86 0.00% 50 Not 3.86

ty se products products price nce 017 ninfo.c

27

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

(Hangzh controll and om.cn

ou) ed by providin

Lighting related g labor

and individu service

Electric al to

al Co., related

Ltd. party

Selling

Prosperi Enterpri products

ty se and

Electric controll providin www.c

Selling Market Remitta 03/30/2

al ed by g labor 17.77 17.77 0.01% 50 Not 17.77 ninfo.c

products price nce 017

(China) related service om.cn

Co., individu to

Ltd. al related

party

Selling

Foshan products

NationS Under and

tar same providin www.c

Selling Market Remitta 03/30/2

Optoele actual g labor 0.34 0.34 0.00% 50 Not 0.34 ninfo.c

products price nce 017

ctronics controll service om.cn

Co., er to

Ltd. related

party

Selling

Hangzh

Enterpri products

ou

se and

Times

controll providin

Lighting Selling Market Remitta

ed by g labor 2.59 2.59 0.00% Not 2.59 N/A

and products price nce

related service

Electric

individu to

al Co.,

al related

Ltd.

party

Total -- -- 6,085 -- 25,150 -- -- -- -- --

Details of large-amount sales return N/A

Give the actual situation in the In March 2017, the Company predicted the total value of its routine transactions with related

Reporting Period (if any) where a parties Foshan NationStar Optoelectronics Co., Ltd., Guangdong Fenghua Advanced Holding

forecast had been made for the total Co., Ltd., Prosperity Lamps & Components Limited, Prosperity Electrical (China) Co., Ltd.,

value of routine related transactions Prosperity (Hangzhou) Lighting and Electrical Co., Ltd. and Hangzhou Times Lighting and

by type to occur in the Reporting Electrical Co., Ltd. Concerning the purchases from its related parties, the actual amount in

Period 2017 was RMB 45.7837million, accounting for 20.81% of the predicted. As for the sales to

28

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

its related parties, the actual amount in 2017 was RMB15.0661million, accounting for

47.83% of the predicted.

Reason for significant difference

between transaction price and market N/A

reference price (if applicable)

2. Related Transactions Regarding Purchase or Sales of Assets or Equity Interests

□ Applicable √ Not applicable

No such cases in the Reporting Period.

3. Related Transactions Regarding Joint Investments in Third Parties

□ Applicable √ Not applicable

No such cases in the Reporting Period.

4. Credits and Liabilities with Related Parties

□ Applicable √ Not applicable

No such cases in the Reporting Period.

5. Other Significant Related Transactions

√ Applicable □ Not applicable

On December 23, 2016, the Company held the 11th meeting of the 8th Board of Directors, and the Proposal on

Signing the Financial Services Agreement with Guangdong Rising Finance Co., Ltd. was examined and approved

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. During the term of validity of the Agreement, the daily deposit balance of

the Company in Rising Finance Company shall not exceed RMB150 million. The Agreement has expired on June

22, 2017.

On June 28, 2017, the Company held the 15th meeting of the 8th Board of Directors, and the Proposal on Signing

the Financial Services Agreement with Guangdong Rising Finance Co., Ltd. was examined and approved at the

meeting. As such, the Company renewed the Financial Services Agreement with Rising Finance, and Rising

Finance would provide deposit and settlement services for the Company for a term of one year, during which the

daily deposit balance of the Company in Rising Finance Company shall not exceed RMB150 million.

29

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Index to the current announcements about the said related transactions disclosed:

Title of announcement Disclosure date Disclosure website

Announcement on Signing Financial Service

Agreement with Guangdong Rising Finance 12/24/2016 www.cninfo.com.cn

Co., Ltd.

Announcement on Renewing Financial Service

Agreement with Guangdong Rising Finance 06/29/2017 www.cninfo.com.cn

Co., Ltd.

XIII Occupation of the Company’s Funds by Controlling Shareholder or Its Related Parties

for Non-Operating Purposes

□ Applicable √ Not applicable

No such cases in the Reporting Period.

XIV Significant Contracts and Their Execution

1. Entrustment, Contracting and Leasing

(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) Leasing

□ Applicable √ Not applicable

No such cases in the Reporting Period.

2. Significant Guarantees

□ Applicable √ Not applicable

No such cases in the Reporting Period.

3. Other Significant Contracts

□ Applicable √ Not applicable

30

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

No such cases in the Reporting Period.

XV Social Responsibilities

1. Targeted Measures Taken to Help People Lift Themselves out of Poverty

The Company did not take such measures in the first half of the year and has no such plans for now.

2. Material Environmental Issues

Is the Company or any of its subsidiaries a heavily polluting business declared by environmental protection

authorities?

No.

XVI Other Significant Events

√ Applicable □ Not applicable

On June 27, 2017, the Company signed an Equity Transfer Agreement with KEDA Clean Energy Co., Ltd.,

transferring the Company’s 38% stake in Qinghai Fozhao Lithium Energy Exploitation Co., Ltd. to the latter for

RMB189.8176 million. After the transfer, the Company would no longer hold equity interest in Qinghai Fozhao

Lithium Energy Exploitation Co., Ltd. As of the end of the first half of 2017, the Company had neither received

the transfer payment nor started the transfer formalities with the competent authority, which is in compliance with

the Equity Transfer Agreement.

XVII Significant Events of Subsidiaries

□ Applicable √ Not applicable

31

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Section VI Share Changes and Shareholders’ Profile

I Share Changes

1. Share Changes

Unit: share

Before Increase/decrease (+/-) After

Increase

Percentag New Bonus from Percentag

Number Other Subtotal Number

e (%) issues shares capital e (%)

reserve

12,522,47 12,582,00

1. Restricted shares 0.98% 59,524 59,524 0.99%

9 3

1.3 Shares held by other

4,406,450 0.34% 59,524 59,524 4,465,974 0.35%

domestic investors

Among which: Shares held

3,860,675 0.30% 3,860,675 0.30%

by domestic corporations

Shares held

545,775 0.04% 59,524 59,524 605,299 0.05%

by domestic individuals

1.4 Shares held by foreign

8,116,029 0.64% 8,116,029 0.64%

investors

Shares held

8,116,029 0.64% 8,116,029 0.64%

by foreign individuals

1,259,610, 1,259,550

99.02% -59,524 -59,524 99.01%

2. Non-restricted shares 389 ,865

974,940,0 974,879,5

2.1 RMB common shares 76.64% -60,499 -60,499 76.63%

45 46

2.2 Domestically listed 284,670,3 284,671,3

22.38% 975 975 22.38%

foreign shares 44 19

1,272,132, 1,272,132

3. Total shares 100.00% 100.00%

868 ,868

Reasons for any share changes:

√ Applicable □ Not applicable

1. During the Reporting Period, some supervisors and executive officers increased their shareholdings in the

Company, representing an increase of 91049 restricted shares.

32

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

2. During the Reporting Period, the Company’s shares held by some former executive officers who had stayed

unemployed by the Company for six months were unlocked, resulting in an increment of 31525 non-restricted

shares.

3. Due to Item 1 and 2 above, the Company’s restricted shares increased by 59524 shares in the Reporting Period.

Approval of share changes:

□ Applicable √ Not applicable

Transfer of share ownership:

□ Applicable √ Not applicable

Effects of share changes on the basic EPS, diluted EPS, net assets per share attributable to common shareholders

of the Company and other financial indexes of the prior year and the prior period:

□ Applicable √ Not applicable

Other contents that the Company considers necessary or is required by the securities regulatory authorities to

disclose:

□ Applicable √ Not applicable

2. Changes in Restricted Shares

√ Applicable □ Not applicable

Unit: share

Reason for

Name of Opening Unlocked in Increased in Closing restricted

lock-up/unlockin Date of unlocking

shareholder restricted shares Reporting Period Reporting Period shares

g

Lock-up of

Liu Xingming 359,073 0 21,450 380,523 executive Uncertain

officer’s shares

Lock-up of

Tang Qionglan 0 0 12,150 12,150 executive Uncertain

officer’s shares

Lock-up of

Wei Bin 25,627 0 9,975 35,602 Uncertain

executive

33

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

officer’s shares

Lock-up of

Chen Yu 12,870 0 7,500 20,370 executive Uncertain

officer’s shares

Lock-up of

Jiao Zhigang 31,083 0 9,375 40,458 executive Uncertain

officer’s shares

Lock-up of

Xu Xiaoping 0 0 7,575 7,575 executive Uncertain

officer’s shares

Lock-up of

Zhang Yong 18,720 0 7,275 25,995 executive Uncertain

officer’s shares

Lock-up of

Zhang Xuequan 9,908 0 10,125 20,033 executive Uncertain

officer’s shares

Lock-up of

Ye Zhenghong 33,696 0 5,625 39,321 supervisor’s Uncertain

shares

Expiration of

lock-up of

Xie Qing 31,525 31,525 0 0 outgoing 05/24/2017

executive

officer’s shares

Total 522,502 31,525 91,050 582,027 -- --

II Issuance and Listing of Securities

□ Applicable √ Not applicable

III Shareholders and Their Holdings at Period-End

Unit: share

Total number of preference

Total number of common shareholders with resumed

93,117 0

shareholders at period-end voting rights at period-end (if

any) (see note 8)

5% or greater common shareholders or top 10 common shareholders

Name of Nature of Shareholdin Total Increase/de Restricted Non-restricted Pledged or frozen shares

shareholder shareholder g percentage common crease in common common Status Number

34

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

shares held at Reporting shares shares held at

period-end Period held at period-end

period-en

d

Hong Kong

Wah Shing

Foreign

Holding 13.47% 171,360,391 171,360,391 Pledged 83,966,592

corporation

Company

Limited

Prosperity

Lamps & Foreign

10.50% 133,577,143 133,577,143

Components corporation

Limited

Shenzhen

Rising

State-owned

Investment 5.12% 65,178,305 65,178,305

corporation

Development

Co., Ltd.

Guangdong

Electronics

State-owned

Information 4.74% 60,357,728 60,357,728 Pledged 29,575,287

corporation

Industry Group

Ltd.

Central Huijin

Asset State-owned

2.42% 30,799,000 30,799,000

Management corporation

Co., Ltd.

Essence

International

Foreign

Securities 1.91% 24,277,429 24,277,429

corporation

(Hong Kong)

Co., Ltd.

DBS Vickers

Foreign

(Hong Kong) 1.86% 23,645,755 23,645,755

corporation

Ltd A/C Clients

Hong Kong

Rising

Foreign

Investment 1.82% 23,165,684 23,165,684

corporation

Development

Co., Ltd.

Zhuang Jianyi Foreign 0.85% 10,821,372 8,116,029 2,705,343

35

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

individual

China

Merchants Foreign

0.84% 10,686,856 10,686,856

Securities (HK) corporation

Co., Limited

Strategic investors or general

corporations becoming top-10

common shareholders due to N/A

placing of new shares (if any)

(see Note 3)

Among the top 10 shareholders, Hong Kong Wah Shing Holding Company Limited, Shenzhen

Rising Investment Development Co., Ltd., Guangdong Electronics Information Industry Group

Related or acting-in-concert Ltd. and Hong Kong Rising Investment Development Co., Ltd. are acting-in-concert parties; and

parties among shareholders Prosperity Lamps & Components Limited and Zhuang Jianyi are acting-in-concert parties. Apart

above 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 non-restricted common shareholders

Type of shares

Name of shareholder Non-restricted common shares held at period-end

Type Number

Hong Kong Wah Shing Holding RMB common

171,360,391 171,360,391

Company Limited share

Prosperity Lamps & Components RMB common

133,577,143 133,577,143

Limited share

Shenzhen Rising Investment RMB common

65,178,305 65,178,305

Development Co., Ltd. share

Guangdong Electronics Information RMB common

60,357,728 60,357,728

Industry Group Ltd. share

Central Huijin Asset Management RMB common

30,799,000 30,799,000

Co., Ltd. share

Domestically

Essence International Securities

24,277,429 listed foreign 24,277,429

(Hong Kong) Co., Ltd.

share

Domestically

DBS Vickers (Hong Kong) Ltd A/C

23,645,755 listed foreign 23,645,755

Clients

share

Domestically

Hong Kong Rising Investment

23,165,684 listed foreign 23,165,684

Development Co., Ltd.

share

China Merchants Securities (HK) 10,686,856 Domestically 10,686,856

36

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Co., Limited listed foreign

share

Guangdong Rising Finance Holding RMB common

6,876,386 6,876,386

Co., Ltd. share

Among the top 10 non-restricted common shareholders, Hong Kong Wah Shing Holding

Related or acting-in-concert parties

Company Limited, Shenzhen Rising Investment Development Co., Ltd., Guangdong

among top 10 non-restricted

Electronics Information Industry Group Ltd., Hong Kong Rising Investment Development

common shareholders, as well as

Co., Ltd. and Guangdong Rising Finance Holding Co., Ltd. are acting-in-concert parties.

between top 10 non-restricted

Apart from that, it is unknown whether there is among the top 10 shareholders any other

common shareholders and top 10

related parties or acting-in-concert parties as defined in the Administrative Measures for the

common shareholders

Acquisition of Listed Companies.

Top 10 common shareholders

conducting securities margin trading N/A

(if any) (see note 4)

Indicate by tick mark whether any of the top 10 common shareholders or the top 10 non-restricted common

shareholders of the Company conducted any promissory repo during the Reporting Period.

□ Yea √ No

No such cases in the Reporting Period.

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.

37

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Section VII Preference Shares

□ Applicable √ Not applicable

No preference shares in the Reporting Period.

38

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Section VIII Directors, Supervisors and Senior Management

I Changes in Shareholdings of Directors, Supervisors and Senior Management

√ Applicable □ Not applicable

Restricted

Decrease Granted

Increase in shares Granted

Opening in Closing restricted

Incumbent Reporting granted in restricted shares

Name Office title shareholdi Reporting shareholdi shares at

/Former Period Reporting at period-end

ng (share) Period ng (share) period-begin

(share) Period (share)

(share) ning (share)

(share)

Director &

Liu

General Incumbent 478,764 28,600 507,364

Xingming

Manager

Board

Lin Yihui Incumbent 13,000 16,600 29,600

Secretary

Tang

CFO Incumbent 0 16,200 16,200

Qionglan

Vice

Wei Bin General Incumbent 34,169 13,300 47,469

Manager

Vice

Jiao

General Incumbent 41,444 12,500 53,944

Zhigang

Manager

Vice

Chen Yu General Incumbent 17,160 10,000 27,160

Manager

Vice

Xu

General Incumbent 0 10,100 10,100

Xiaoping

Manager

Vice

Zhang

General Incumbent 24,960 9,700 34,660

Yong

Manager

Vice

Zhang

General Incumbent 13,211 13,500 26,711

Xuequan

Manager

Ye

Zhenghon Supervisor Incumbent 44,928 7,500 52,428

g

39

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Total -- -- 667,636 138,000 0 805,636 0 0 0

II Changes in Directors, Supervisors and Senior Management

□ Applicable √ Not applicable

The Company’s directors, supervisors and senior management remained unchanged in the Reporting Period.

Please refer to the 2016 Annual Report for details about them.

40

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Section IX Corporate Bonds

Does the Company have any corporate bonds publicly offered and listed on the stock exchange, which were undue

before the approval date of this Report or were due but could not be redeemed in full?

No.

41

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Section X Financial Report

I Auditor’s Report

Has this semi-annual financial report been audited?

□ Yes √ No

This semi-annual financial report is unaudited.

II Financial Statements

Currency unit for the statements in the notes to these financial statements: RMB

1. Consolidated Balance Sheet

Prepared by Foshan Electrical and Lighting Co., Ltd.

June 30, 2017

Unit: RMB

Item Closing balance Opening balance

Current assets:

Monetary funds 815,038,019.29 1,479,283,642.54

Settlement reserve

Interbank lendings

Financial assets at fair value through

gains/losses

Derivative financial assets

Notes receivable 26,434,680.74 67,925,843.74

Accounts receivable 862,433,866.95 595,257,954.00

Accounts paid in advance 27,685,018.96 30,292,007.11

Premiums receivable

Reinsurance premiums receivable

Receivable reinsurance contract

reserve

Interest receivable 3,217,917.15 4,612,406.80

Dividends receivable

Other accounts receivable 36,016,476.65 11,977,660.58

Financial assets purchased under

agreements to resell

Inventories 733,151,791.00 753,681,605.19

42

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Assets held for sale

Non-current assets due within one

year

Other current assets 466,262,718.17 441,205,461.72

Total current assets 2,970,240,488.91 3,384,236,581.68

Non-current assets:

Loans and advances to customers

Available-for-sale financial assets 1,758,739,646.36 1,732,150,857.01

Held-to-maturity investments

Long-term accounts receivable

Long-term equity investments 209,858,507.98 210,394,932.69

Investment property

Fixed assets 436,897,311.33 446,006,929.66

Construction in progress 147,360,531.44 71,479,325.91

Engineering materials

Disposal of fixed assets

Productive living assets

Oil-gas assets

Intangible assets 158,172,586.28 160,330,395.13

R&D expense

Goodwill

Long-term deferred expense 6,932,911.30 6,897,119.78

Deferred income tax assets 40,730,492.66 43,547,918.44

Other non-current assets 44,200,134.60 45,125,340.00

Total non-current assets 2,802,892,121.95 2,715,932,818.62

Total assets 5,773,132,610.86 6,100,169,400.30

Current liabilities:

Short-term borrowings

Borrowings from Central Bank

Money deposits accepted and

inter-bank deposits

Interbank borrowings

Financial liabilities at fair value

through gains/losses

Derivative financial liabilities

43

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Notes payable

Accounts payable 673,397,021.27 552,255,512.33

Accounts received in advance 32,657,976.85 41,180,818.13

Financial assets sold for repurchase

Fees and commissions payable

Payroll payable 68,383,359.33 96,021,156.06

Taxes payable 24,371,207.42 138,282,644.72

Interest payable

Dividends payable 6,287,923.09

Other accounts payable 32,185,577.54 50,104,338.81

Reinsurance premiums payable

Insurance contract reserve

Payables for acting trading of

securities

Payables for acting underwriting of

securities

Liabilities held for sale

Non-current liabilities due within one

year

Other current liabilities

Total current liabilities 830,995,142.41 884,132,393.14

Non-current liabilities:

Long-term borrowings

Bonds payable

Of which: Preference shares

Perpetual bonds

Long-term accounts payable

Long-term payroll payable

Special payables

Provisions

Deferred income 11,872,268.53 10,449,768.49

Deferred income tax liabilities 204,175,913.54 200,112,595.11

Other non-current liabilities

Total non-current liabilities 216,048,182.07 210,562,363.60

Total liabilities 1,047,043,324.48 1,094,694,756.74

44

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Owners’ equity:

Share capital 1,272,132,868.00 1,272,132,868.00

Other equity instruments

Of which: Preference shares

Perpetual bonds

Capital reserve 285,821,459.07 285,821,459.07

Less: Treasury shares

Other comprehensive income 1,156,996,843.39 1,133,971,372.25

Special reserve

Surplus reserve 733,924,951.81 733,924,951.81

Provisions for general risks

Retained earnings 1,258,814,782.00 1,564,615,925.99

Equity attributable to owners of the

4,707,690,904.27 4,990,466,577.12

Company (as parent company)

Minority interests 18,398,382.11 15,008,066.44

Total owners’ equity 4,726,089,286.38 5,005,474,643.56

Total liabilities and owners’ equity 5,773,132,610.86 6,100,169,400.30

Legal representative: He Yong Accounting head for this Report: Liu Xingming

Head of the accounting department: Tang Qionglan

2. Balance Sheet of the Company (as Parent Company)

Unit: RMB

Item Closing balance Opening balance

Current assets:

Monetary funds 621,028,793.79 1,235,417,964.88

Financial assets at fair value through

gains/losses

Derivative financial assets

Notes receivable 25,648,653.72 66,222,840.44

Accounts receivable 865,936,526.24 611,855,496.90

Accounts paid in advance 78,575,487.30 117,217,953.23

Interest receivable 2,187,889.37 3,590,629.01

Dividends receivable 14,671,820.57

Other accounts receivable 63,730,648.45 56,714,849.84

Inventories 665,648,682.97 717,097,516.25

Assets held for sale

45

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Non-current assets due within one

year

Other current assets 349,066,845.84 379,932,325.87

Total current assets 2,671,823,527.68 3,202,721,396.99

Non-current assets:

Available-for-sale financial assets 1,758,739,646.36 1,732,150,857.01

Held-to-maturity investments

Long-term accounts receivable

Long-term equity investments 693,455,797.74 693,992,222.45

Investment property

Fixed assets 361,704,762.30 375,075,102.44

Construction in progress 145,061,164.42 69,589,510.14

Engineering materials

Disposal of fixed assets

Productive living assets

Oil-gas assets

Intangible assets 114,634,684.40 117,017,633.92

R&D expenses

Goodwill

Long-term deferred expense 6,932,911.30 6,897,119.78

Deferred income tax assets 35,219,760.73 37,790,043.38

Other non-current assets 43,580,346.60 44,519,790.00

Total non-current assets 3,159,329,073.85 3,077,032,279.12

Total assets 5,831,152,601.53 6,279,753,676.11

Current liabilities:

Short-term borrowings

Financial liabilities at fair value

through gains/losses

Derivative financial liabilities

Notes payable

Accounts payable 844,733,659.24 701,814,818.26

Accounts received in advance 31,405,141.81 38,406,798.91

Payroll payable 36,517,295.06 66,764,581.34

Taxes payable 11,957,006.39 121,939,572.62

Interest payable

46

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Dividends payable

Other accounts payable 112,053,963.76 258,368,416.59

Liabilities held for sale

Non-current liabilities due within one

year

Other current liabilities

Total current liabilities 1,036,667,066.26 1,187,294,187.72

Non-current liabilities:

Long-term borrowings

Bonds payable

Of which: Preference shares

Perpetual bonds

Long-term payables

Long-term payroll payable

Special payables

Provisions

Deferred income 11,484,768.34 9,984,768.34

Deferred income tax liabilities 204,175,913.54 200,112,595.11

Other non-current liabilities

Total non-current liabilities 215,660,681.88 210,097,363.45

Total liabilities 1,252,327,748.14 1,397,391,551.17

Owners’ equity:

Share capital 1,272,132,868.00 1,272,132,868.00

Other equity instruments

Of which: Preference shares

Perpetual bonds

Capital reserve 293,425,065.15 293,425,065.15

Less: Treasury shares

Other comprehensive income 1,156,996,843.39 1,133,971,372.25

Special reserve

Surplus reserve 733,924,951.81 733,924,951.81

Retained earnings 1,122,345,125.04 1,448,907,867.73

Total owners’ equity 4,578,824,853.39 4,882,362,124.94

Total liabilities and owners’ equity 5,831,152,601.53 6,279,753,676.11

Legal representative: He Yong Accounting head for this Report: Liu Xingming

47

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Head of the accounting department: Tang Qionglan

3. Consolidated Income Statement

Unit: RMB

Item Reporting Period Same period of last year

1. Operating revenues 2,023,925,582.84 1,755,670,927.44

Including: Sales revenue 2,023,925,582.84 1,755,670,927.44

Interest revenue

Premium revenue

Fee and commission revenue

2. Operating costs 1,764,705,009.46 1,520,011,395.30

Including: Cost of sales 1,546,931,779.85 1,322,982,560.70

Interest expense

Fee and commission expense

Surrenders

Net claims paid

Net amount provided as insurance

contract reserve

Expenditure on policy dividends

Reinsurance premium expense

Taxes and surtaxes 20,386,602.33 12,251,578.46

Selling expense 81,651,993.69 73,251,807.41

Administrative expense 98,790,821.60 82,117,827.94

Finance costs -7,115,907.36 -6,445,753.04

Asset impairment losses 24,059,719.35 35,853,373.83

Add: Gains on fair value changes (“-”

means losses)

Investment income (“-” means

14,009,282.02 13,720,747.77

losses)

Including: Share of gains/losses of

1,543,965.79 -19,640.12

associates and joint ventures

Exchange gains (“-” means losses)

Other gains

3. Operating profit (“-” means loss) 273,229,855.40 249,380,279.91

Add: Non-operating income 6,022,395.88 1,575,016.58

Including: Gains on disposal of

20,253.97

non-current assets

48

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Less: Non-operating expense 4,769,773.69 4,917,056.94

Including: Losses on disposal of

4,255,164.43 223,092.25

non-current assets

4. Total profit (“-” means loss) 274,482,477.59 246,038,239.55

Less: Income taxes 42,597,501.35 39,425,977.29

5. Net profit (“-” means net loss) 231,884,976.24 206,612,262.26

Net profit attributable to owners of

228,494,660.57 206,925,812.72

the Company (as parent company)

Minority interests income 3,390,315.67 -313,550.46

6. Other comprehensive income, net of

23,025,471.14 140,317,778.68

tax

Other comprehensive income, net of

tax, attributable to owners of the 23,025,471.14 140,317,778.68

Company (as parent company)

6.1 Other comprehensive income

that will not be reclassified into

gains/losses

6.1.1 Changes in net liabilities

or assets with a defined benefit plan upon

re-measurement

6.1.2 Share of other

comprehensive income of investees that

cannot be reclassified into gains/losses

under equity method

6.2 Other comprehensive income

to be subsequently reclassified into 23,025,471.14 140,317,778.68

gains/losses

6.2.1 Share of other

comprehensive income of investees that

will be reclassified into gains/losses

under equity method

6.2.2 Gains/Losses on fair

value changes of available-for-sale 23,025,471.14 139,503,813.54

financial assets

6.2.3 Gains/Losses on

reclassifying held-to-maturity

investments into available-for-sale

financial assets

6.2.4 Effective gains/losses on

cash flow hedges

6.2.5 Currency translation

differences

49

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

6.2.6 Other 813,965.14

Other comprehensive income, net of

tax, attributable to minority interests

7. Total comprehensive income 254,910,447.38 346,930,040.94

Attributable to owners of the

251,520,131.71 347,243,591.40

Company (as parent company)

Attributable to minority interests 3,390,315.67 -313,550.46

8. Earnings per share

8.1 Basic earnings per share 0.1796 0.1627

8.2 Diluted earnings per share 0.1796 0.1627

Where business mergers under the same control occurred in the Reporting Period, the net profit achieved by the merged parties

before the business mergers was RMB0.00, with the amount for the same period of last year being RMB0.00.

Legal representative: He Yong Accounting head for this Report: Liu Xingming

Head of the accounting department: Tang Qionglan

4. Income Statement of the Company (as Parent Company)

Unit: RMB

Item Reporting Period Same period of last year

1. Operating revenues 1,980,196,404.29 1,782,457,216.14

Less: Operating costs 1,549,957,656.10 1,355,707,509.94

Taxes and surtaxes 14,028,299.06 7,825,502.47

Selling expense 74,062,826.39 72,636,241.42

Administrative expense 98,398,538.37 82,409,260.52

Finance costs -4,474,253.64 -3,798,619.84

Asset impairment losses 23,053,208.55 35,788,227.78

Add: Gains on fair value changes (“-”

means losses)

Investment income (“-” means

12,903,476.48 13,720,747.77

loss)

Including: Share of gains/losses of

1,543,965.79 -19,640.12

associates and joint ventures

Other gains

2. Operating profit (“-” means loss) 238,073,605.94 245,609,841.62

Add: Non-operating income 5,746,833.41 1,389,423.13

Including: Gains on disposal of

9,401.71

non-current assets

Less: Non-operating expense 2,041,377.50 3,736,581.73

50

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Including: Losses on disposal of

1,528,785.79 193,011.74

non-current assets

3. Total profit (“-” means loss) 241,779,061.85 243,262,683.02

Less: Income taxes 34,045,999.98 37,862,188.03

4. Net profit (“-” means net loss) 207,733,061.87 205,400,494.99

5. Other comprehensive income, net of

23,025,471.14 139,503,813.54

tax

5.1 Other comprehensive income that

will not be reclassified into gains and

losses

5.1.1 Changes in net liabilities or

assets with a defined benefit plan upon

re-measurement

5.1.2 Share of other

comprehensive income of investees that

cannot be reclassified into gains/losses

under equity method

5.2 Other comprehensive income to

be subsequently reclassified into 23,025,471.14 139,503,813.54

gains/losses

5.2.1 Share of other

comprehensive income of investees that

will be reclassified into gains/losses

under equity method

5.2.2 Gains/Losses on fair value

changes of available-for-sale financial 23,025,471.14 139,503,813.54

assets

5.2.3 Gains/Losses on

reclassifying held-to-maturity

investments into available-for-sale

financial assets

5.2.4 Effective gains/losses on

cash flow hedges

5.2.5 Currency translation

differences

5.2.6 Other

6. Total comprehensive income 230,758,533.01 344,904,308.53

7. Earnings per share

7.1 Basic earnings per share

7.2 Diluted earnings per share

Legal representative: He Yong Accounting head for this Report: Liu Xingming

51

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Head of the accounting department: Tang Qionglan

5. Consolidated Cash Flow Statement

Unit: RMB

Item Reporting Period Same period of last year

1. Cash generated by or used in

operating activities:

Cash generated by sale of

1,754,303,637.97 1,547,557,182.88

commodities and rendering of service

Net increase in money deposits from

customers and interbank placements

Net increase in loans from Central

Bank

Net increase in funds borrowed from

other financial institutions

Cash received as premiums of

original insurance contracts

Net cash generated by reinsurance

business

Net increase in deposits of policy

holders and investment fund

Net increase in disposal of financial

assets at fair value through gains/losses

Interest, fees and commissions

received

Net increase in interbank borrowings

Net increase in funds in repurchase

business

Tax rebates received 42,499,505.18 44,239,351.38

Cash generated by other operating

28,893,716.10 15,057,708.67

activities

Subtotal of cash generated by operating

1,825,696,859.25 1,606,854,242.93

activities

Cash paid for goods and services 1,114,835,724.72 850,216,733.93

Net increase in loans and advances to

customers

Net increase in funds deposited in

Central Bank and interbank placements

Cash paid for claims of original

insurance contracts

Interest, fees and commissions paid

Cash paid as policy dividends

52

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Cash paid to and for employees 371,942,160.26 290,038,390.79

Taxes paid 262,092,182.25 92,793,562.26

Cash used in other operating

107,889,979.24 82,177,248.89

activities

Subtotal of cash used in operating

1,856,760,046.47 1,315,225,935.87

activities

Net cash from operating activities -31,063,187.22 291,628,307.06

2. Cash generated by or used in

investing activities:

Cash generated by disinvestments 7,005.00

Cash received as investment income 15,011,705.23 11,852,333.55

Net cash generated by disposal of

fixed assets, intangible assets and other 1,626,000.00 73,000.00

long-term assets

Net cash generated by disposal of

subsidiaries or other business units

Cash generated by other investing

activities

Subtotal of cash generated by investing

16,637,705.23 11,932,338.55

activities

Cash paid to acquire fixed assets,

intangible assets and other long-term 108,664,080.94 33,994,345.07

assets

Cash paid for investments 20,000,000.00 400,000,000.00

Net increase in pledged loans

Net cash paid to acquire subsidiaries

and other business units

Cash used in other investing

7,539,878.12

activities

Subtotal of cash used in investing

128,664,080.94 441,534,223.19

activities

Net cash from investing activities -112,026,375.71 -429,601,884.64

3. Cash generated by or used in

financing activities:

Cash received as capital

contributions

Including: Cash received from

minority shareholder investments by

subsidiaries

Cash received as borrowings

Cash generated by issuance of

53

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

bonds

Cash generated by other financing

activities

Subtotal of cash generated by financing

activities

Repayment of borrowings

Cash paid for interest expenses and

522,068,416.83 15,935,708.57

distribution of dividends or profit

Including: dividends or profit paid

5,660,290.78

by subsidiaries to minority interests

Cash used in other financing

activities

Sub-total of cash used in financing

522,068,416.83 15,935,708.57

activities

Net cash from financing activities -522,068,416.83 -15,935,708.57

4. Effect of foreign exchange rate

912,356.51 956,368.36

changes on cash and cash equivalents

5. Net increase in cash and cash

-664,245,623.25 -152,952,917.79

equivalents

Add: Opening balance of cash and

1,479,283,642.54 933,546,108.37

cash equivalents

6. Closing balance of cash and cash

815,038,019.29 780,593,190.58

equivalents

Legal representative: He Yong Accounting head for this Report: Liu Xingming

Head of the accounting department: Tang Qionglan

6. Cash Flow Statement of the Company (as Parent Company)

Unit: RMB

Item Reporting Period Same period of last year

1. Cash generated by or used in

operating activities:

Cash generated by sale of

1,700,716,001.72 1,583,633,686.90

commodities and rendering of service

Tax rebates received 42,499,505.18 44,239,351.38

Cash generated by other operating

24,406,290.15 11,425,998.07

activities

Subtotal of cash generated by operating

1,767,621,797.05 1,639,299,036.35

activities

Cash paid for goods and services 1,363,028,963.41 1,070,690,628.68

Cash paid to and for employees 167,453,782.97 118,971,583.13

Taxes paid 200,061,046.37 42,416,995.71

54

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Cash used in other operating

101,737,482.16 80,203,151.06

activities

Subtotal of cash used in operating

1,832,281,274.91 1,312,282,358.58

activities

Net cash from operating activities -64,659,477.86 327,016,677.77

2. Cash generated by or used in

investing activities:

Cash generated by disinvestments 35,000,000.00 7,005.00

Cash received as investment income 28,724,845.24 11,852,333.55

Net cash generated by disposal of

fixed assets, intangible assets and other 1,580,000.00 14,000.00

long-term assets

Net cash generated by disposal of

subsidiaries or other business units

Cash generated by other investing

activities

Subtotal of cash generated by investing

65,304,845.24 11,873,338.55

activities

Cash paid to acquire fixed assets,

intangible assets and other long-term 99,538,768.93 31,293,478.92

assets

Cash paid for investments 400,000,000.00

Net cash paid to acquire subsidiaries

and other business units

Cash used in other investing

7,500,000.00

activities

Subtotal of cash used in investing

99,538,768.93 438,793,478.92

activities

Net cash from investing activities -34,233,923.69 -426,920,140.37

3. Cash generated by or used in

financing activities:

Cash received as capital

contributions

Cash received as borrowings

Cash generated by issuance of

bonds

Cash generated by other financing

activities

Subtotal of cash generated by financing

activities

Repayment of borrowings

55

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Cash paid for interest expenses and

516,408,126.05 15,935,708.57

distribution of dividends or profit

Cash used in other financing

activities

Sub-total of cash used in financing

516,408,126.05 15,935,708.57

activities

Net cash from financing activities -516,408,126.05 -15,935,708.57

4. Effect of foreign exchange rate

912,356.51 956,368.17

changes on cash and cash equivalents

5. Net increase in cash and cash

-614,389,171.09 -114,882,803.00

equivalents

Add: Opening balance of cash and

1,235,417,964.88 633,291,177.30

cash equivalents

6. Closing balance of cash and cash

621,028,793.79 518,408,374.30

equivalents

Legal representative: He Yong Accounting head for this Report: Liu Xingming

Head of the accounting department: Tang Qionglan

7. Consolidated Statement of Changes in Owners’ Equity

Reporting Period

Unit: RMB

Reporting period

Equity attributable to owners of the Company (as parent company)

Other equity

Item Other Provisio Retaine Minorit Total

instruments Less:

Share Capital compre Special Surplus ns for d y owners’

Prefer Perpet Treasur

capital reserve hensive reserve reserve general earning interests equity

ence ual Other y shares

income risks s

shares bonds

1,272, 1,133,9 1,564,6 5,005,4

1. Balance at prior 285,821 733,924 15,008,

132,86 71,372. 15,925. 74,643.

year-end ,459.07 ,951.81 066.44

8.00 25 99 56

Add: Changes

in accounting

policies

Corrections

of previous errors

Business

mergers under

same control

Other

2. Balance at 1,272, 285,821 1,133,9 733,924 1,564,6 15,008, 5,005,4

56

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

beginning of the 132,86 ,459.07 71,372. ,951.81 15,925. 066.44 74,643.

year 8.00 25 99 56

3. Increase/

-305,80 -279,38

decrease in the 23,025, 3,390,3

1,143.9 5,357.1

period (“-” means 471.14 15.67

9 8

decrease)

3.1 Total

23,025, 228,494 3,390,3 254,910

comprehensive

471.14 ,660.57 15.67 ,447.38

income

3.2 Capital

increased and

reduced by owners

3.2.1

Common shares

increased by

shareholders

3.2.2 Capital

increased by

holders of other

equity instruments

3.2.3

Share-based

payments charged

to owners’ equity

3.2.4 Other

-534,29 -534,29

3.3 Profit

5,804.5 5,804.5

distribution

6 6

3.3.1

Appropriation to

surplus reserve

3.3.2

Appropriation to

provisions for

general risks

3.3.3

-534,29 -534,29

Appropriation to

5,804.5 5,804.5

owners (or

6 6

shareholders)

3.3.4 Other

3.4 Internal

carry-forward of

owners’ equity

57

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

3.4.1 New

increase of capital

(or share capital)

from capital

reserve

3.4.2 New

increase of capital

(or share capital)

from surplus

reserve

3.4.3 Surplus

reserve for making

up loss

3.4.4 Other

3.5 Special reserve

3.5.1

Withdrawn for the

period

3.5.2 Used in

the period

3.6 Other

1,272, 1,156,9 1,258,8 4,726,0

285,821 733,924 18,398,

4. Closing balance 132,86 96,843. 14,782. 89,286.

,459.07 ,951.81 382.11

8.00 39 00 38

Amount last year:

Unit: RMB

Same period of last year

Equity attributable to owners of the Company (as parent company)

Other equity Minorit

Other Provisio Total

Item instruments y

Less: Retaine

Share Capital compre Specific Surplus ns for owners’

Treasur d interest

Prefer Perpet equity

capital reserve hensive reserve reserve general

y shares earnings s

ence ual Other

income risks

shares bonds

1,272, 2,212,9 5,057,7

1. Balance at prior 296,324 628,439 613,661 34,193,

132,86 89,156. 40,219.

year-end ,375.58 ,107.12 ,381.40 330.93

8.00 02 05

Add: Changes

in accounting

policies

Corrections

of previous errors

58

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Business

mergers under

same control

Other

2. Balance at 1,272, 2,212,9 5,057,7

296,324 628,439 613,661 34,193,

beginning of the 132,86 89,156. 40,219.

,375.58 ,107.12 ,381.40 330.93

year 8.00 02 05

3. Increase/

-1,079,0

decrease in the -10,502, 105,485 950,954 -19,185 -52,265,

17,783.

period (“-” means 916.51 ,844.69 ,544.59 ,264.49 575.49

77

decrease)

3.1 Total -1,079,0 1,072,3

914,343 -5,761,3

comprehensive 17,783. 42,050.

.61 90.03

income 77 13

3.2 Capital

-10,508, -13,811, -24,320,

increased and

536.76 685.01 221.77

reduced by owners

3.2.1

Common shares 10,000, 10,000,

increased by 000.00 000.00

shareholders

3.2.2 Capital

increased by

holders of other

equity instruments

3.2.3

Share-based

payments charged

to owners’ equity

-10,508, -23,811, -34,320,

3.2.4 Other

536.76 685.01 221.77

-121,38

3.3 Profit 5,620.2 105,485 -6,287, -22,183,

7,505.5

distribution 5 ,844.69 923.09 963.69

4

3.3.1 -105,48

105,485

Appropriation to 5,844.6

,844.69

surplus reserve 9

3.3.2

Appropriation to

provisions for

general risks

3.3.3 -15,901, -6,287, -22,189,

59

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Appropriation to 660.85 923.09 583.94

owners (or

shareholders)

5,620.2 5,620.2

3.3.4 Other

5 5

3.4 Internal

carry-forward of

owners’ equity

3.4.1 New

increase of capital

(or share capital)

from capital

reserve

3.4.2 New

increase of capital

(or share capital)

from surplus

reserve

3.4.3 Surplus

reserve for making

up loss

3.4.4 Other

3.5 Special reserve

3.5.1

Withdrawn for the

period

3.5.2 Used in

the period

3.6 Other

1,272, 1,133,9 1,564,6 5,005,4

285,821 733,924 15,008,

4. Closing balance 132,86 71,372. 15,925. 74,643.

,459.07 ,951.81 066.44

8.00 25 99 56

Legal representative: He Yong Accounting head for this Report: Liu Xingming

Head of the accounting department: Tang Qionglan

8. Statement of Changes in Owners’ Equity of the Company (as Parent Company)

Reporting Period:

Unit: RMB

Reporting Period

Item Share Other equity instruments Capital Less: Other Special Surplus Retaine Total

capital Prefere Perpetu Other reserve Treasury comprehe reserve reserve d owners’

60

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

nce al bonds shares nsive earnings equity

shares income

1,448,9

1. Balance at prior 1,272,13 293,425,0 1,133,971 733,924,9 4,882,362

07,867.

year-end 2,868.00 65.15 ,372.25 51.81 ,124.94

73

Add: Changes

in accounting

policies

Corrections

of previous errors

Other

2. Balance at 1,448,9

1,272,13 293,425,0 1,133,971 733,924,9 4,882,362

beginning of the 07,867.

2,868.00 65.15 ,372.25 51.81 ,124.94

year 73

3. Increase/

-326,56

decrease in the 23,025,47 -303,537,

2,742.6

period (“-” means 1.14 271.55

9

decrease)

3.1 Total

23,025,47 207,733 230,758,5

comprehensive

1.14 ,061.87 33.01

income

3.2 Capital

increased and

reduced by owners

3.2.1

Common shares

increased by

shareholders

3.2.2 Capital

increased by

holders of other

equity instruments

3.2.3

Share-based

payments charged

to owners’ equity

3.2.4 Other

-534,29

3.3 Profit -534,295,

5,804.5

distribution 804.56

6

3.3.1

Appropriation to

61

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

surplus reserve

3.3.2

-534,29

Appropriation to -534,295,

5,804.5

owners (or 804.56

6

shareholders)

3.3.3 Other

3.4 Internal

carry-forward of

owners’ equity

3.4.1 New

increase of capital

(or share capital)

from capital

reserve

3.4.2 New

increase of capital

(or share capital)

from surplus

reserve

3.4.3 Surplus

reserve for making

up loss

3.4.4 Other

3.5 Special reserve

3.5.1

Withdrawn for the

period

3.5.2 Used in

the period

3.6 Other

1,122,3

1,272,13 293,425,0 1,156,996 733,924,9 4,578,824

4. Closing balance 45,125.

2,868.00 65.15 ,843.39 51.81 ,853.39

04

Amount last year:

Unit: RMB

Same period of last year

Other equity instruments Other

Less: Retaine Total

Item Share Prefere Capital comprehe Special Surplus

Perpetu Treasury d owners’

capital nce Other reserve nsive reserve reserve

al bonds shares earnings equity

shares income

1. Balance at prior 1,272,13 293,419,4 2,212,989 628,439,1 515,436 4,922,417

62

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

year-end 2,868.00 44.90 ,156.02 07.12 ,926.40 ,502.44

Add: Changes

in accounting

policies

Corrections

of previous errors

Other

2. Balance at

1,272,13 293,419,4 2,212,989 628,439,1 515,436 4,922,417

beginning of the

2,868.00 44.90 ,156.02 07.12 ,926.40 ,502.44

year

3. Increase/

decrease in the -1,079,01 105,485,8 933,470 -40,055,3

5,620.25

period (“-” means 7,783.77 44.69 ,941.33 77.50

decrease)

3.1 Total 1,054,8

-1,079,01 -24,159,3

comprehensive 58,446.

7,783.77 36.90

income 87

3.2 Capital

increased and

reduced by owners

3.2.1

Common shares

increased by

shareholders

3.2.2 Capital

increased by

holders of other

equity instruments

3.2.3

Share-based

payments charged

to owners’ equity

3.2.4 Other

-121,38

3.3 Profit 105,485,8 -15,896,0

5,620.25 7,505.5

distribution 44.69 40.60

4

3.3.1 -105,48

105,485,8

Appropriation to 5,844.6

44.69

surplus reserve 9

3.3.2

-15,901, -15,901,6

Appropriation to

660.85 60.85

owners (or

63

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

shareholders)

3.3.3 Other 5,620.25 5,620.25

3.4 Internal

carry-forward of

owners’ equity

3.4.1 New

increase of capital

(or share capital)

from capital

reserve

3.4.2 New

increase of capital

(or share capital)

from surplus

reserve

3.4.3 Surplus

reserve for making

up loss

3.4.4 Other

3.5 Special reserve

3.5.1

Withdrawn for the

period

3.5.2 Used in

the period

3.6 Other

1,448,9

1,272,13 293,425,0 1,133,971 733,924,9 4,882,362

4. Closing balance 07,867.

2,868.00 65.15 ,372.25 51.81 ,124.94

73

Legal representative: He Yong Accounting head for this Report: Liu Xingming

Head of the accounting department: Tang Qionglan

64

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

III Company profile

(I). Overview of the Company

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 Brick

Field, and Foshan Poyang Printing Industrial Co. on October 20, 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 of

Guangdong Province and the Economic System Reform Commission of Guangdong Province, is an enterprise

with its shares held by both the corporate and the natural persons. As approved by China Securities Regulatory

Commission with Document (1993) No. 33, the Company publicly issued 19.3 million shares of social public

shares (A shares) to the public in October 1993, and was listed in Shenzhen Stock Exchange for trade on

November 23, 1993. The Company was approved to issue 50,000,000 B shares on July 23, 1995. And, as

approved to change into a foreign-invested stock limited company on August 26, 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 December 11, 2000, as approved by China Securities Regulatory Commission with ZJGS Zi [2000] No.

175 Document, the Company additionally issued 55,000,000 A shares. At approved by the Shareholders’ General

Meeting 2006, 2007, 2008 and 2014 the Company implemented the plan of capitalization of capital reserve, after

the transfer, the registered capital of the Company has increased to RMB1,272,132,868.00.

Credibility code of the Company: 91440000190352575W

Legal representative: Mr. He Yong

Address: No. 64, Fenjiang North Road, Foshan, Guangdong Province

(II). Business nature and main operating activities

R&D and production of electro-optical source products, electro-optical source equipment and electro-optical

accessories, raw materials of electric light sources, lamps & fittings, electrical materials, motorcycle components,

household appliances, electric switches, electrical outlets, fire control products, ventilation devices, LED products,

lithium ion batteries and relevant materials; domestic and overseas sale of the aforesaid products; relevant

engineering consulting services. (Where a license is required, it must be obtained according to the government’s

rules before operation.)

(III). Approval and Issue of the Financial Report

The Financial Report was approved and authorized for issue by the Board of Directors on August 23, 2017.

65

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

(IV). Scope of the consolidated financial statements and changes

The consolidation scope of the financial statement including the Company and the 9 subordinate subsidiaries such

as Foshan Chanchang Electric Appliance (Gaoming) Co., Ltd., Foshan Chansheng Electronic Ballast Co., Ltd.,

Foshan Taimei Times Lamps and Lanterns Co., Ltd., Nanjing Fozhao Lighting Components Co., Ltd., FSL

(Xinxiang) Lighting Co., Ltd., Foshan Electrical and Lighting New Light Source Technology Co., Ltd.,

Guangdong Fozhao Leasing Co., Ltd., Foshan Lighting Lamps & Components Co., Ltd. and FSL Zhida Electric

Technology Co., Ltd.

IV Basis for preparation of financial statements

1. Preparation basis

The financial statements of the Company are based on the assumption of continuing operation, and are prepared

according to the actual transactions and events, the Accounting Standards for Business Enterprises - Basic

Standards issued by the Ministry of Finance (Decree No. 33 of the Ministry of Finance, revised by Decree No. 76

of the Ministry of Finance) , 41 specific accounting standards, the guidelines on the application of accounting

standards for business enterprises, the interpretation of accounting standards for business enterprises and other

relevant provisions (hereinafter referred to as the Accounting Standards for Business Enterprises) promulgated

and revised on and after February 15, 2006, as well as the disclosure requirements of Rules for the Information

Disclosure of Companies Publicly Issuing Securities No. 15 - General Provisions on Financial Reporting of China

Securities Regulatory Commission (Revised 2014).

According to the relevant provisions of the Accounting Standards for Business Enterprises, the Company’s

accounting is based on accrual basis. Except certain financial instruments, these financial statements are based on

historical costs. The amount of non-current assets held for sale is valuated at fair value less the estimated amount

and the original book value at the time when the conditions for sale are satisfied, whichever is lower. If the asset is

impaired, the corresponding provision for impairment shall be made in accordance with the relevant provisions.

2. Continuation

The Company has no matters affecting the continuing operation of the Company and is expected to have the

ability to continue to operate in the next 12 months. The financial statements of the Company are prepared on the

basis of continuing operation.

V Important accounting policies and estimations

Reminders of the specific accounting policies and accounting estimations:

Naught

1. Statement of Compliance with the Accounting Standards for Business Enterprises

The financial statements prepared by the Group are in compliance with 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 and ends on December 31 according to the Gregorian calendar.

66

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

3. Operating cycle

A normal operating cycle refers to a period from the Group purchasing assets for processing to realizing cash or

cash equivalents. An operating cycle for the Group is 12 months, which is also the classification criterion for the

liquidity of its assets and liabilities.

4. Recording Currency

Renminbi is the recording currency for the statements of the Company and its subsidiaries, as well as for the

consolidated financial statements.

5. Accounting treatment methods for business combinations under the same control or not under the same

control

A business combination refers to a transaction or event that combines two or more separate businesses to form a

reporting entity. Business combinations are divided into the combination under the same control and the

combination under different controls.

(1) Business combinations under the same control

A business combination under the same control is a business combination in which all of the combining

enterprises are ultimately controlled by the same party or the same parties both before and after the business

combination and on which the control is not temporary. For the combination under the same control, the party

obtaining control over other companies involved in the combination on the combination day is the combining

party, and other companies are combined parties. Combination day is the date on which the obtaining party

actually obtains control over the combined parties.

The assets and liabilities acquired by the combining party are measured at the book value of the combined parties

at the date of combination. The capital reserve (share premium) is adjusted by the difference between the book

value of the net assets obtained by the combining party and the book value of the paid combination consideration

(or total nominal value of the issued shares); if the capital reserve (share premium) is insufficient to offset, adjust

the retained earnings.

The direct costs incurred by the combining party in the conduct of the business combination shall be recorded into

the current profits and losses when incurred.

(2) Business combinations not under the same control

It is business combination under different controls if the companies involved in the combination are not subject to

the final control of the same party or same multiple parties before and after the combination. For the combination

under different controls, the party obtaining control over other companies involved in the combination on the

combination day is the combining party, and other companies are combined parties. Combination day is the date

on which the obtaining party actually obtains control over the combined parties.

For the combination under different controls, the costs of combination include the assets paid, liabilities incurred

or assumed by the purchaser and the fair value of the equity securities issued by the purchaser for the acquisition

of the acquiree, and the audit fees, legal services, assessment consulting and other intermediary service fees and

other management fees incurred for the business combination are included in the current profits and losses. The

transaction costs of the equity securities or debt securities issued by the purchaser as combination consideration

shall be included in the initial recognized amount of the equity securities or the debt securities. The involved

contingent consideration shall be included in the combination cost at the fair value at the purchase date, and if

contingent consideration should be adjusted due to new or further evidence within 12 months after the purchase

date, the consolidated goodwill should be adjusted accordingly. The combination costs incurred by the acquirer

67

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

and the identifiable net assets acquired in the combination are measured at the fair value at the acquisition date.

The difference of the combination cost greater than the fair value of the identifiable net assets of the acquiree

acquired at the acquisition date is recognized as goodwill. If the combination cost is less than the fair value of the

identifiable net assets of the acquiree acquired in the combination, the fair value of the identifiable assets,

liabilities and contingent liabilities of the acquiree and the measurement of the combination costs shall be

reviewed first. If the combination cost is still less than the fair value of the identifiable net assets of the acquiree

acquired in the combination, the difference shall be recorded into the current profits and losses.

If the deductible temporary difference obtained by the purchaser from the acquiree has not been confirmed on the

date of purchase due to the non-compliance with the recognition criteria of deferred income tax assets, the

relevant deferred income tax assets shall be recognized and the goodwill shall be reduced if new or further

information is obtained within 12 months after the date of purchase showing that the relevant circumstances are

already present and it is expected that the economic benefits brought by the deductible temporary difference of the

acquiree on the date of purchase may be realized. If the goodwill is insufficient to offset, the difference shall be

recognized as profit or loss for the current period. Except for the above, the deferred income tax assets related to

the business combination shall be recognized and included in the current profits and losses.

6. Methods for preparing consolidated financial statements

(1) Principle of determining the scope of consolidation

The scope of consolidation of the consolidated financial statements of the Company is determined on the basis of

control. Control means that the Company has the right to invest in the investee and enjoy a variable return through

the participation of the relevant activities of the investee, and has the ability to use the power over the investee to

affect the amount of its return. The scope of consolidation includes the Company and all subsidiaries. Subsidiary

means the subject controlled by the Company.

The Company will conduct a reassessment once the changes in the relevant facts and circumstances result in the

changes to the relevant elements of aforesaid control definition.

(2) Principles, procedures and methods for the preparation of consolidated statements

The Company starts to incorporate it into the scope of consolidation from the date of obtaining the actual control

over the net assets and decision-making of production and operation of the subsidiaries, and ceases to incorporate

it in the scope of consolidation from the date of losing the actual control. For the disposed subsidiaries, the

operating results and cash flow before the date of disposal have been properly included in the consolidated income

statement and consolidated cash flow statement; for the subsidiaries disposed in current period, the beginning

amount of the consolidated balance sheet isn’t adjusted. For the subsidiaries added due to the business

combination under different controls, the operating results and cash flow after the date of purchase have been

properly included in the consolidated income statement and the consolidated cash flow statement, and the

beginning amount and the contrast amount of the consolidated financial statements are not adjusted. For the

subsidiaries added due to the business combination under same control, the operating results and cash flow from

the period begin of the combination to the date of combination have been properly included in the consolidated

income statement and the consolidated cash flow statement, and the contrast amount of the consolidated financial

statements is adjusted at the same time.

In the preparation of the consolidated financial statements, if the subsidiaries are inconsistent with the accounting

policies or accounting periods adopted by the Company, the necessary adjustments shall be made to the financial

statements of the subsidiaries in accordance with the Company’s accounting policies and accounting periods. For

subsidiaries acquired by business combination under different controls, the financial statements shall be adjusted

on the basis of the fair value of the identifiable net assets at the acquisition date.

68

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

As for the subsidiaries acquired from the enterprise combine not under the same control, the individual financial

statement should be adjusted based on the fair value of the identifiable net assets on the purchase date when

compiling the consolidated financial statements; as for the subsidiaries acquired from the enterprise combine

under the same control, should be regarded as exist as the current state when each involved combine party starting

to execute the control in the ultimate control party, and should include the assets, liabilities, operating results and

the cash flow in the consolidated financial statements since the year-begin of the combine period and to adjust the

previous compared financial statement according to the above principles.

All significant balances, transactions and unrealized profits in the Company are set off at the time of preparation

of the consolidated financial statements.

The part of shareholders’ equity and the net profit or loss for the current period of the subsidiaries that are not of

the Company are listed in shareholders’ equity and net profits in the consolidated financial statements as the

minority interests and minority gains and losses separately. The share of minority interests in the current net profit

or loss of the subsidiaries is presented under the item “Minority gains and losses” under the net profit item of the

consolidated income statement. The losses shared by the minority shareholders of the subsidiary exceeding its

share in the shareholders’ equity at the period beginning still off set the minority shareholders' equity.

7. Classification of joint arrangements and accounting treatment of joint operations

A joint arrangement refers to an arrangement jointly controlled by two participants or above and be divided into

joint operations and joint ventures.

When the Company is the joint venture party of the joint operations, should recognize the following items related

to the interests share of the joint operations:

(1) Recognize the assets individually held and the assets jointly held by recognizing according to the holding

share;

(2) Recognize the liabilities undertook individually and the liabilities jointly held by recognizing according to the

holding 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 according

to the holding share of the Company.

When the Company is the joint operation party of the joint ventures, should recognize the investment of the joint

ventures as the long-term equity investment and be measured according g to the said methods of the notes of the

long-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 business

Foreign currency shall be recognized by employing systematic and reasonable methods, and shall be translated

into the amount in the functional currency at the exchange rate which is approximate to the spot exchange rate of

the transaction date. On the balance sheet date, the foreign currency monetary items shall be translated at the spot

exchange rate. The balance of exchange arising from the difference between the spot exchange rate on the balance

sheet date and the spot exchange rate at the time of initial recognition or prior to the balance sheet date shall be

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

recorded into the profits and losses at the current period except that the balance of exchange arising from foreign

currency borrowings for the purchase and construction or production of qualified assets shall be capitalized. The

foreign currency non-monetary items measured at the historical cost shall still be translated at the spot exchange

rate on the transaction date.

(2) Translation of foreign currency financial statements

The 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 the

income 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” of

the 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 to

the foreign operation should be transferred in the current gains and losses according to the proportion. The foreign

cash flow adopts the spot exchange rate on the occurring date of the cash flow. And the influenced amount of the

exchange rate changes should be individually listed among the cash flow statement.

10. Financial instruments

(1) Classification, recognition and measurement of financial assets

Financial assets shall be classified into the following four categories when they are initially recognized: financial

assets 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 to

their maturity.

① Financial assets measured at fair value and of which variations are recorded in the profits and losses for the

current period refer to financial assets held by the Company for the purpose of selling in the near future, including

transactional financial assets, or financial assets designated by the management in the initial recognition to be

measured at fair value with variations recorded in the gains and losses for the current period. Financial assets

measured at fair value and of which variations are recorded in the profits and losses for the current period are

subsequently measured at their fair values. Interest or cash dividends arising from such assets during the holing

period are recognized as investment gains. Gains or losses arising from fair value changes are recorded in the

gains and losses for the current period at the end of the Reporting Period. When such assets are disposed, the

difference between their fair values and initially recognized amounts is recognized as investment gains and the

gains 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 and

accounts receivable. The Company shall make subsequent measurement on its loan and accounts receivable 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 impaired or amortized, shall be recorded into the

profits and losses of the current period.

③Available-for-sale Financial Assets: the non-derivative financial assets which are designated as

available-for-sale financial assets when they are initially recognized as well as the non-derivative financial assets

other 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 and

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

recognize 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, which

shall 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 the

Company’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 impaired

or amortized, shall be recorded into the profits and losses of the current period.

(2) Classification, Recognition and Measurement of Financial Liabilities

Financial liabilities shall be classified into the following two categories when they are initially recognized: (1) the

transactional financial liabilities; and (2) other financial liabilities. The financial liabilities initially recognized by

the Company shall be measured at their fair values. For the transactional financial liabilities, the transaction

expenses thereof shall be directly recorded into the profits and losses of the current period; for other categories of

financial liabilities, 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 and losses,

which including trading financial liabilities and the financial liabilities be appointed to be measured by fair value

with the changes be included in the current gains and losses when being initially recognized, should be executed

subsequent measurement according to the fair value with the profits or losses formed by the changes of the fair

value be included in the current gains and losses.

② Other financial liabilities: The Company shall make subsequent measurement on its other financial liabilities

on the basis of the post-amortization costs by adopting the actual interest rate, from which gains and losses, when

other financial liabilities are terminated from recognizing or amortized, shall be recorded into the profits and

losses of the current period.

(3) Recognition and measurement of financial asset transfers

As for the Company transferred nearly all of the risks and rewards related to the ownership of a financial asset to

the transferee, should derecognize the financial assets; as for maintained nearly all of the risks and rewards related

to the ownership of a financial asset, should continue to recognize the transferred financial assets and recognize

the received counter price as a financial liability. Where the Company does not transfer or retain nearly all of the

risks and rewards related to the ownership of a financial asset (that is to say, it is not under a circumstance as

mentioned 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)If

it does not give up its control over the financial asset, it shall, according to the extent of its continuous

involvement 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 between

the amounts of the following 2 items shall be recorded in the profits and losses of the current period: (1) The book

value of the transferred financial asset; (2) the sum of consideration received from the transfer, and the

accumulative 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 the

transferred financial asset shall, between the portion whose recognition has been stopped and the portion whose

recognition has not been stopped, be apportioned according to their respective relative fair value, and the

difference between the amounts of the following 2 items shall be included into the profits and losses of the current

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

period: (1)The book value of the portion whose recognition has been stopped; (2)The sum of consideration of the

portion whose recognition has been stopped, and the portion of the accumulative amount of the changes in the fair

value originally recorded in the owner's equities which is corresponding to the portion whose recognition has been

stopped.

(4) De-recognition conditions of financial liabilities

Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of the

financial liability be terminated in all or partly. Where the Group (debtor) enters into an agreement with a creditor

so as to substitute the existing financial liabilities by way of any new financial liability, and if the contractual

stipulations regarding the new financial liability is substantially different from that regarding the existing financial

liability, it terminates the recognition of the existing financial liability, and at the same time recognizes the new

financial liability. If executed practical modification on the whole or part of the contract regulations of the existing

financial liabilities, should terminate to recognize the existing financial liabilities or certain part of it and at the

same 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 shall

include into the profits and losses of the current period for the gap between the book value which has been

terminated from recognition and the considerations it has paid (including the non-cash assets it has transferred out

and 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 financial

liabilities according to the comparatively fair value between the continued reorganization part and the terminated

reorganization part on the re-purchase date. And the difference between the book value distributed to the

terminated recognition part and the counter price of the paid part (including the rolled out non-cash assets or the

new 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 liabilities

As for the financial instruments for which there is an active market, the quoted prices in the active market shall be

used to determine the fair values thereof. Where there is no active market for a financial instrument, the Company

concerned shall adopt value appraisal techniques to determine its fair value. The value appraisal techniques

mainly include the prices adopted by the parties, who are familiar with the condition, in the latest market

transaction upon their own free will, the current fair value obtained by referring to other financial instruments of

the 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 impairment

provision

The Company inspects the book value of the financial assets on the balance sheet date to judge whether there are

evidences indicate that the financial assets had occurred impairment owning to the occurrence of one or multiple

events.

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-amortization

costs is impaired, should be recognized by the carrying amount of the difference between the said financial asset

which shall be written down to the current value of the predicted future cash flow (excluding the loss of future

credits not yet occurred) and the amount of the as written down which shall be recognized as loss of the

impairment 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 down

amount 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 impairment

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

provision and as for the other assets with insignificant amount, should be inspected by individual or group

assessment 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 financial

instruments without market price which had not measured by fair value because the fair value could not be

reliable measured, the amount of the impairment losses should be measured by the difference between the book

value of the financial assets and the current value of the estimated future cash flow acquired from the discounting

measurement 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.

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 Top five accounts receivable with the largest balances or

significant single amount accounts accounting for over 10% of the total balance of

receivables.

Making separate bad-debt provisions for accounts receivable For an account receivable with a significant single amount, the

with a significant single amount 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

not necessary as proved by the impairment test, as well as other

significant accounts receivable that have not been impaired as

proved by a separate impairment test, they shall be grouped

according to their credit risks and account ages, and then the

impairment test is carried out on a group basis.

(2) Accounts receivable which the bad debt provision is withdrawn by credit risk characteristics

Group name Withdrawal method of bad debt provision

Common transaction group Aging analysis

Internal transaction group Age analysis method

In the groups, those adopting aging analysis method to withdraw bad debt provision:

√ Applicable □ Not applicable

Withdrawal proportion of account Withdrawal proportion of other account

Aging

receivables receivables

Within 1 year (including 1 year) 3.00% 3.00%

1 to 2 years 10.00% 10.00%

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

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 made

independently

Reason of individually withdrawing bad debt provision There are definite evidences indicate the obvious difference of

thee returnability

Withdraw the bad debt provision according to the difference of

Withdrawal method for bad debt provision

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 inventory

Inventory refers to finished products, goods in process, and materials consumed in the production process or the

provision of labor services held by the Company for sale in daily activities, mainly including raw materials, goods

in 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 out

The inventory is valued at actual cost when acquired, and inventory costs include procurement costs, processing

costs 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 inventory

impairment

Net realizable value refers to the estimated selling price of the inventory minus the estimated cost to be incurred at

the time of completion, the estimated selling expenses and the relevant taxes and fees in daily activities. In

determining the net realizable value of inventory, the conclusive evidence obtained is used as the basis and the

purpose of holding the inventory and the impact of the events after the balance sheet date should be taken into

account.

For finished products, the materials used for sale and other goods used for direct sale, the net realizable value is

determined by the estimated selling price of the inventory minus the estimated selling expenses and related taxes

in the process of normal production and operation.

For materials inventory needs to be processed, the net realizable value is determined by the estimated selling price

of the finished products minus the estimated cost to be incurred, the estimated sales costs and the relevant taxes

and fees in the process of normal production and operation.

(4) Inventory system

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

The inventory system of the Company is perpetual inventory.

(5) Amortization method of turnover materials

Low-value consumables are amortized in one-off method.

The packaging is amortized in one-off method.

13. Divided as assets held for sale

The Company divides the non-current financial assets which simultaneously meet with the following conditions

(excluding financial assets) as the assets held for sale: ① the composition part should and could be immediately

sold only according to the usual and idiomatic clauses of selling such composition part under the current

circumstance; ② had made a solution on the disposing of the composition part;③ had signed a irrevocable

transfer agreement with the transferee; ④ the transfer probably be completed within 1 year.

The assets classified as separate non-current assets and disposal groups held for sale are presented separately in

the current assets of the balance sheet; liabilities classified as associated with the transferred assets in the disposal

group held for sale are presented separately in the current liabilities of the balance sheet.

For an asset or disposal group classified as held for sale but no longer meets the conditions for recognition of

non-current assets held for sale, the Company ceases to classify it as held for sale and measure according to the

amount of the following two items, whichever is lower:

1. The book value of the asset or disposal group before being classified as held for sale is measured by the amount

adjusted according to the depreciation, amortization or impairment that should be recognized as it isn’t classified

as held for sale.

2. The recoverable amount at the date decided not to sell.

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, joint

control or significant influence on the investee is accounted for as financial assets available-for-sale or financial

assets at fair value and changes recognized in profit or loss for the current period. For details of accounting

policies, please refer to Note 5: Important accounting policies and accounting estimates, and Note 10: Financial

instruments.

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 the

book 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 losses

of the current period.

(2) For the merger of enterprises not under the same control, The combination costs shall be the fair values, on the

acquisition date, of the assets paid, the liabilities incurred or assumed and the equity securities issued by the

Company in exchange for the control on the acquiree, and all relevant direct costs incurred to the acquirer for the

business combination. Where any future event that is likely to affect the combination costs is stipulated in the

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

combination contract or agreement, if it is likely to occur and its effects on the combination costs can be measured

reliably, 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 cost

which is actually paid. The cost consists of the expenses directly relevant to the obtainment of the long-term

equity 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 fair

value of the equity securities issued.

(5) The cost of a long-term investment obtained by the exchange of non-monetary assets (having commercial

nature) shall be recognized base on taking the fair value and relevant payable taxes as the cost of the assets

received.

(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/loss

The long-term equity investment with joint control (except for the common operator) or significant influence on

the investee is accounted by equity method. In addition, the Company's financial statements use cost method to

calculate long-term equity investments that can control the investee.

(1) Long-term equity investment accounted by cost method

When the cost method is used for accounting, the long-term equity investment is priced at the initial investment

cost, and the cost of the long-term equity investment is adjusted according to additional investment or recovered

investment. Except the price actually paid when acquired investment or cash dividends or profits that have been

declared but not yet paid included in the consideration, current investment income is recognized by the cash

dividends or profits declared by the investee.

(2) Long-term equity investment accounted by equity method

When 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-term

equity 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 the

long-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 be

recognized 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 be

calculated 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 equity

investment shall be adjusted and included in the capital reserve. When the share of the net profit or loss of the

investee is recognized, the net profit of the investee shall be adjusted and recognized according to the fair value of

the identifiable assets of the investee when the investment is made. If the accounting policies and accounting

periods adopted by the investee are inconsistent with the Company, the financial statements of the investee shall

be adjusted according to the accounting policies and accounting periods of the Company and the investment

income 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 the

investment gains and losses are recognized accordingly. However, the loss of unrealized internal transactions

incurred by the Company and the investee attributable to the impairment loss of the transferred assets shall not be

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

offset. If the assets made to associates or joint ventures constitute business, and the investor makes long-term

equity investment but does not obtain the control, the fair value of the investment shall be taken as the initial

investment cost of the new long-term equity investment, and the difference between initial investment and the

book value of the investment is fully recognized in profit or loss for the current period. If the assets sold by the

Company to joint ventures or associates constitute business, the difference between the consideration and the book

value of the business shall be fully credited to the current profits and losses. If the assets purchased by Company

from joint ventures or associates constitute business, conduct accounting treatment in accordance with the

provisions of Accounting Standard for Business Enterprises No. 20 - Business combination, and the profits or

losses 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 are

recognized in accordance with the obligations assumed and included in the current investment losses. If the

investee has realized net profit in later period, the Company will resume the recognition of the income share after

the income share has made up the unrecognized loss share.

(3) Acquisition of minority interests

In the preparation of the consolidated financial statements, capital reserve shall be adjusted according to the

difference between the long-term equity investment increased due to the purchase of minority interests and the

share of the net assets held by the subsidiary from the date of purchase (or the date of combination) calculated

according to the proportion of the new shareholding ratio, and retained earnings shall be adjusted if the capital

reserve is insufficient to offset.

(4) Disposal of long-term equity investment

In the consolidated financial statements, the parent company partially disposes of the long-term equity investment

in 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 Note 5: Important accounting policies and

accounting estimates, and Note 6: Preparation method of consolidated financial statements.

In other cases, the difference between the book value and the actual acquisition price shall be recorded into the

current 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 and

losses.

For long-term equity investment accounted by the cost method and residual equity after disposal still accounted by

the cost method, other comprehensive income accounted by equity method or recognized by financial instrument

and accounted and recognized by measurement criteria before the acquisition of the control over the investee is

treated 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 and

profit distribution are carried forward proportionally into the current profits and losses.

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

3. Impairment provisions for long-term equity investments

For the relevant testing method and provision making method, see “22. Impairment of long-term assets” herein.

15. Investment real estates

Measurement mode of investment real estates

Not 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 the

sake of producing commodities, rendering labor service, renting or business management; and their useful life is in excess of one

accounting 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

Expected net salvage

Category of fixed assets Method Useful life Annual deprecation

value

Housing and building Average method of

3—30 years 5% 31.67%-3.17%

useful life

Machinery equipments Average method of

2—10 years 5% 47.50%-9.50%

useful life

Transportation vehicle Average method of

5—10 years 5% 19.00%-9.50%

useful life

Average method of

Electronic equipment 2—8 years 5% 47.50%-11.88%

useful life

(3) Recognition basis, pricing and depreciation method of fixed assets by finance lease

Not applicable

17. Construction in Progress

1. Pricing of construction in progress

The constructions are accounted according to the actual costs incurred. The constructions shall be carried forward

into fixed assets at the actual cost when reach intended usable condition. The borrowing expenses eligible for

capitalization 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 the

following:

(1) The physical construction (including installation) of fixed assets has been completed or substantially

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

completed;

(2) Has been produced or run for trial, and the results indicate that the assets can run normally or can produce

stable products 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

design or contract requirements.

3. Provision for impairment of construction in progress

Please refer to Note 5: Important accounting policies and accounting estimates and Note 22: Long-term deferred

expenses for the impairment test method and provision for 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 exchange

differences arising from foreign currency borrowings. The borrowing costs incurred by the Company directly

attributable to the acquisition, construction or production of assets eligible for capitalization are capitalized and

included in the cost of the relevant assets. Other borrowing costs are recognized as expenses according to the

amount at the time of occurrence, and are included in the current profits and losses.

1. Principle of capitalization of borrowing costs

Borrowing costs can be capitalized when all the following conditions are met: Asset expenditure has already

occurred; borrowing costs have already occurred; construction or production activities necessary to bring the

assets to the intended useable or sellable status have already begun.

2. Capitalization period of borrowing costs

Capitalization period refers to the period from the capitalization of borrowing costs starting to the end of

capitalization, excluding the period when capitalization is suspended.

If assets that meet the conditions of capitalization are interrupted abnormally in the course of construction or

production, and the interruption time exceeds 3 consecutive months, the capitalization of borrowing costs shall be

suspended. The borrowing costs incurred during the interruption are recognized as expenses and included in

current profits and losses until the acquisition or construction of the assets is resumed. The capitalization of the

borrowing costs continues if the interruption is a procedure necessary for the purchase or production of assets

eligible 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 conditions

of capitalization meet the intended useable or sellable status. The borrowing costs incurred after the assets eligible

for capitalization meet the intended useable or sellable status can be included in the current profits and losses

when incurred.

3. Calculation method of capitalized amount of borrowing costs

During the period of capitalization, the capitalization amount of interests (including amortization of discounts or

premiums) 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 interest

expenses actually incurred in the current period of borrowings shall be recognized after deducting the interest

income obtained by depositing the unused borrowing funds into the bank or investment income obtained from

temporary 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 expenditure

79

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

exceeding the special borrowing by the capitalization rate of the general borrowing to calculate the amount of

interest that should be capitalized for general borrowings. The capitalization rate is determined based on the

weighted 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 assets

Intangible assets are identifiable non-monetary assets that are owned or controlled by the Company without

physical form. The intangible assets are recognized when all the following conditions are met: (1) Conform to the

definition of 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 assets

Intangible assets are initially measured at cost. Actual costs are determined by the following principles:

(1) The cost of the acquisition of intangible assets, including the purchase price, relevant taxes and other expenses

directly attributable to the intended use of the asset. The payment of purchase price of intangible assets exceeding

normal credit terms is deferred, and the cost of intangible assets having financing nature in essence shall be

recognized based on the present value of the purchase price. The difference between the actual payment price and

the present value of the purchase price shall be recorded into the current profits and losses in the credit period

except that can be capitalized in accordance with the Accounting Standard for Business Enterprises No. 17 -

Borrowing Cost.

(2) The cost of investing in intangible assets shall be recognized according to the value agreed upon in the

investment contract or agreement, except that the value of the contract or agreement is unfair.

3. Subsequent measurement of intangible assets

The Company shall determine the useful life when it obtains intangible assets. The useful life of intangible assets

is limited, and the years of the useful life or output that constitutes the useful life or similar measurement units

shall be estimated. The intangible assets are regarded as intangible assets with uncertain useful life if the term that

brings economic benefits to the Company is unforeseeable

Intangible 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 intangible

assets with limited useful life at the end of each year, and reviews the estimated useful life of intangible assets

with uncertain 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 provision

The impairment test method and withdrawal method for impairment provision of intangible assets are detailed in

Note 5: Significant accounting policies and accounting estimates, and Note 22: Long-term asset impairment.

(2) Accounting policy for internal research and development expenditures

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

The expenditures in internal research and development projects of the Company are classified into expenditures in

research stage and expenditures in development stage. The expenditures in research stage are included in the

current profits and losses when incurred. The expenditures in development stage are recognized as intangible

assets when meeting the following conditions:

(1) The completion of the intangible assets makes it technically feasible for using or selling;

(2) Having the intention to complete and use or sell the intangible assets;

(3) The way in which an intangible asset generates economic benefits, including the proof that the products

produced with the intangible asset have market or the proof of its usefulness if the intangible asset has market and

will be used internally;

(4) Have sufficient technical, financial resources and other resources to support the development of the intangible

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 assets

recognition criterion until reaching intended use. Expenditures that have been expensed in previous periods are no

longer adjusted.

Non-monetary assets exchange, debt restructuring, government subsidies and the cost of intangible assets acquired

by business combination are recognized according to relevant provisions of Accounting Standard for Business

Enterprises No. 7 - Non-monetary assets exchange, Accounting Standard for Business Enterprises No. 12 - Debt

restructuring, Accounting Standards for Business Enterprises No. 16 - Government subsidies, Accounting

Standard 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 limited

useful life, investment real estate measured in cost mode and long-term equity investments in subsidiaries, joint

ventures 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 state

shall 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, the

impairment provision shall be made at the difference and included in the impairment loss. The recoverable amount

is the higher of the fair value of the asset minus the disposal cost and the present value of the expected future cash

flow of the asset. The fair value of the asset is recognized according to the price of the sales agreement in 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 disposal of assets,

related taxes, handling charges, and direct costs incurred to enable the asset reaching sellable status. The present

value of the expected future cash flows of the assets is recognized by the amount discounted at appropriate

discount rate according to the expected future cash flows arising from the continuing use of the asset and the final

disposal. The provision for impairment of assets is calculated and recognized on the basis of individual assets. If it

is difficult to estimate the recoverable amount of individual assets, the recoverable amount of the asset group shall

be 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 asset

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

group or portfolio of asset groups that is expected to benefit from the synergies of the business combination when

the impairment test is conducted. The corresponding impairment loss is recognized if the test results indicate that

the recoverable amount of the asset group or portfolio of asset groups containing the apportioned goodwill is

lower than its book value. The amount of the impairment loss shall offset the book value of the goodwill

apportioned to the asset group or portfolio of asset groups, and offset the book value of other assets in proportion

according to the proportion of the book value of other assets except the goodwill in the asset group or portfolio of

asset groups. Once the impairment loss of the above asset is recognized, the portion that the value is restored will

not be written back 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 year

excluded) that have occurred but attributable to the current and future periods. Long-term deferred expense shall

be amortized averagely within benefit period. In case of no benefit in the future accounting period, the amortized

value 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 and

benefits, medical insurance premiums, birth insurance premium, industrial injury insurance premium, housing

fund, labor union expenditure and personnel education fund, non-monetary benefits etc. The short-term

compensation actually happened during the accounting period when the active staff offering the service for the

Group should be recognized as liabilities and is included in the current gains and losses or relevant assets cost. Of

which 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 defined

contribution plans mainly include basic endowment insurance, unemployment insurance, annuity funds, etc., and

the corresponding payable and deposit amount should be included into the relevant assets cost or the current gains

and 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 labor

contract or brings forward any compensation proposal for the purpose of encouraging the employee to accept a

layoff, and should recognize the payroll liabilities occurred from the demission welfare base on the earlier date

between the time when the Group could not one-sided withdraw the demission welfare which offered by the plan

or layoff proposal owning to relieve the labor relationship and the date the Group recognizes the cost related to the

reorganization 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 report

within 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 the

condition that they meet the recognition conditions of estimated liabilities.

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

The other long-term welfare that the Group offers to the staffs, if met with the setting drawing plan, should be

accounting disposed according to the setting drawing plan, while the rest should be disposed according to the

setting revenue plan.

25. Estimated liabilities

(1) Recognition of estimated debts

The 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 current

obligation of the enterprise; ② It is likely to cause any economic benefit to flow out of the enterprise as a result of

performance of the obligation; and ③ The amount of the obligation can be measured in a reliable way.

(2) Measurement of estimated debts

The estimated debts shall be initially measured in accordance with the best estimate of the necessary expenses for

the performance of the current obligation. If there is a sequent range for the necessary expenses and if all the

outcomes within this range are equally likely to occur, the best estimate shall be determined in accordance with

the 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 the light

of the most likely outcome. ② If the Contingencies concern two or more items, the best estimate should be

calculated 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 be

compensated by a third party, the compensation should be separately recognized as an asset only when it is

virtually certain that the reimbursement will be obtained. The Company shall check the book value of the

estimated debts on the balance sheet date. The amount of compensation is not exceeding the book value of the

recognized 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 The

significant 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

reliably measured.

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

83

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

income has been determined and the sales invoice has been issued. The payment for the delivered products has

been received in full or is expectedly recoverable.

② Method for recognition of the export income: The Company produces the products according to the contract

signed with the buyer. After the products have been examined as qualified, the Company completes the customs

clearing procedure for export. The shipping company loads the products for shipping. The amount of the income

has been determined and the export sales invoice has been issued. The payment for the delivered products has

been received in full or is expectedly recoverable.

2. Provision of labor services

In the case that the results of the labor service transaction can be reliably estimated, the income from the provision

of labor services shall be recognized at the balance sheet date by the percentage of completion method according

to the progress 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

the enterprise; 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 be

compensated, 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

provision of labor services, and the sale of goods and the provision of labor services can be distinguished and

measured separately, 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 assets

The operating income is calculated and recognized according to the time and method stipulated by relevant

contracts 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 Company defines government subsidies obtained for acquisition, construction or otherwise formation of

long-term assets as government subsidies related to assets. If the government documents do not specify the

subsidy object, the subsidies are divided into income-related subsidies and assets-related subsidies in the

following method: (1) If the specific items for which the subsidy is targeted are stipulated in government

documents, divide according to the relative proportion of the amount of expenditure that forms assets and the

amount of expenditure included in the cost in the budget for that particular project, and the proportion shall be

reviewed at each balance sheet date and changed as necessary; (2) it is income-related government subsidies if the

government documents only have a general statement of the purpose and do not specify a specific project.

The government subsidies pertinent to assets shall be recognized as deferred income, equally distributed within

the useful lives of the relevant assets, and included in the current profits and losses. But the government subsidies

84

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

measured at their nominal amounts shall be directly included in the current profits and losses.

(2) Judgment basis and accounting treatment of government subsidies pertinent to incomes

Other government subsidies than those recognized as government subsidies pertinent to assets in (1) above are

government subsidies pertinent to incomes.

The government subsidies pertinent to incomes shall be treated respectively in accordance with the circumstances

as follows: those subsidies used for compensating the related future expenses or losses of the enterprise shall be

recognized as deferred income and shall included in the current profits and losses during the period when the

relevant expenses are recognized; or those subsidies used for compensating the related expenses or losses incurred

to the enterprise shall be directly included in the current profits and losses.

30. Deferred income tax assets/deferred income tax liabilities

At the balance sheet date, the Company recognizes the deferred income tax assets or deferred income tax

liabilities in accordance with the balance sheet liability method for the temporary difference between the book

value of assets or liabilities and its tax base.

The Company recognizes all taxable temporary differences as deferred income tax liabilities unless taxable

temporary differences arise in the following transactions:

(1) The initial recognition of goodwill or the initial recognition of the assets or liabilities arising from a transaction

with the following characteristics: the transaction is not a business combination and neither the accounting profit

nor 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, associates

and joint ventures can be controlled and the temporary differences are likely to not be written back in the

foreseeable future.

The Company recognizes the deferred income tax assets arising from deductible temporary differences, subject to

the amount of taxable income obtained to offset the deductible temporary differences, unless the deductible

temporary differences arise in the following transactions:

(1) The transaction is not a business combination, and the transaction does not affect the accounting profit or the

amount of taxable income;

(2) The deductible temporary differences related to the investments in subsidiaries, associates and joint ventures

are not met simultaneously: Temporary differences are likely to be written back in the foreseeable future and are

likely 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 tax

liabilities at the applicable tax rate of the period expected to recover the asset or pay off the liabilities according to

tax law, and reflects the income tax effect of expected assets recovery or liabilities payoff method at the balance

sheet date.

At the balance sheet date, the Company reviews the book value of the deferred income tax assets. If it is likely

that sufficient taxable income will not be available to offset the benefit of the deferred income tax assets in the

future period, the book value of the deferred income tax assets will be written down. If it is probable that

sufficient taxable income will be available, the amount of write-down will be written back.

31. Lease

(1) Accounting treatment of operating lease

For the leasee of the operating lease, the rent expenses from operating leases shall be recorded by the lessee in the

relevant asset costs or the profits and losses of the current period by using the straight-line method over each

85

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

period of the lease term. The initial direct costs shall be recognized as the profits and losses of the current period;

the contingent rents shall be recorded into the profits and losses of the current period in which they actually arise.

A lessor shall include the assets subject to operating leases in relevant items of its balance sheets in light of the

nature of the asset;The rents from operating leases shall be recorded in the profits and losses of the current period

by using the straight-line method over each period of the lease term;the initial direct costs incurred to a lessor

shall be recorded into the profits and losses of the current period. As for the fixed assets subject to operating

leases, the lessor shall calculate the depreciation of it by adopting depreciation policy for similar assets; as for

other leased assets, systematic and reasonable methods shall be adopted for its amortization; the contingent rents

shall be recorded in the profits and losses of the period in which they actually arise.

(2) Accounting treatments of financial lease

On the lease beginning date, a lessee shall record the lower one of the fair value of the leased asset and the present

value of the minimum lease payments on the lease beginning date as the entering value in an account, recognize

the amount of the minimum lease payments as the entering value in an account of long-term account payable, and

treat the balance between the recorded amount of the leased asset and the long-term account payable as

unrecognized financing charges; the initial direct costs such as commissions, attorney's fees and traveling

expenses, stamp duties directly attributable to the leased item incurred during the process of lease negotiating and

signing the leasing agreement shall be recorded in the asset value of the current period; when amortizing the

unrecognized financial charges during each period within the lease term, should recognize the current financial

expenses by the actual interests rate; and the contingent rental should be included the current gains and losses

when actually arise When a lessee calculates the present value of the minimum lease payments, if it can obtain the

lessor's interest rate implicit in the lease, it shall adopt the interest rate implicit in the lease as the discount rate.

Otherwise, it shall adopt the interest rate provided in the lease agreement as the discount rate. In case the lessee

cannot obtain the lessor's interest rate implicit in the lease and no interest rate is provided in the lease agreement,

the lessee shall adopt the borrowing interest rate of the bank for the same period as the discount rate. If it is

reasonable to be certain that the lessee will obtain the ownership of the leased asset when the lease term expires,

the leased asset shall be fully depreciated over its useful life. If it is not reasonable to be certain that the lessee will

obtain the ownership of the leased asset at the expiry of the lease term, the leased asset shall be fully depreciated

over the shorter one of the lease term or its useful life. On the beginning date of the lease term, a lessor shall

recognize the sum of the minimum lease receipts on the lease beginning date and the initial direct costs as the

entering value in an account of the financing lease values receivable, and record the unguaranteed residual value

at the same time; the balance between the sums of the minimum lease receipts, the initial direct costs and the

unguaranteed residual value, and the sum of their present values shall be recognized as unrealized financing

income; the unrealized financing income shall be allocated to each period during the lease term; the lessor shall

calculate the financing income at the current period by adopting the effective interest rate method; contingent

rents shall be recognized as an expense in the period in which they are actually incurred.

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

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

(2) Significant changes in accounting estimates

□ Applicable √ Not applicable

34. Other

Naught

VI Taxes

1. Main taxes and tax rates

Category of tax Taxable amount Tax rate

Balance after the offset of output and input

VAT 11%、17%

VAT

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 Chanchang Electric Appliance (Gaoming) 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%

2. Tax preference

The Company passed the re-examination for the First Batch High-tech Enterprise in 2014 on March 17, 2015, as

well as won the “Certificate of High-tech Enterprise” with serial number GR201444001411 after approval by

Department of Science and Technology of Guangdong Province, Department of Finance of Guangdong Province,

Guangdong Provincial Bureau of State Taxation and Guangdong Provincial 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 Enterprises promulgated in 2007, the Company paid the

corporate income tax based on a tax rate of 15% within three years since January 1, 2014.

87

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 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 Closing balance Opening balance

Cash on hand 53,479.90 13,058.91

Bank deposits 806,670,784.99 1,477,005,924.93

Other currency funds 8,313,754.40 2,264,658.70

Total 815,038,019.29 1,479,283,642.54

Other notes

2. Financial assets measured by fair value and the changes be included in the current gains and losses

Naught

3. Derivative financial assets

□ Applicable √ Not applicable

4. Notes receivable

(1) Notes receivable listed by category

Unit: RMB

Item Closing balance Opening balance

Bank acceptance bill 26,434,680.74 67,925,843.74

Total 26,434,680.74 67,925,843.74

(2) Notes receivable pledged by the Company at the period-end

Naught

(3) Notes receivable which had endorsed by the Company or had discounted and had not due on the

balance sheet date at the period-end

Unit: RMB

Item Amount of recognition termination at the Amount of not terminated recognition at

88

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

period-end the period-end

Bank acceptance bill 120,858,754.05

Total 120,858,754.05

(4) Notes transferred to accounts receivable because drawer of the notes fails to executed the contract or

agreement

Naught

Other notes

The closing balance of the notes receivable decreased of RMB 41,491,163.00yuan by 61.08 % over the

period-begin, which was mainly due to the increase of payment for goods by endorsing the received bank

acceptance bill.

5. Accounts receivable

(1) Accounts receivable disclosed by category

Unit: RMB

Closing balance Opening balance

Book balance Bad debt provision Book balance Bad debt provision

Category Withdra

Book

Proportio wal Proportio Withdrawal Book value

Amount Amount value Amount Amount

n proportio n proportion

n

Accounts receivable

with significant

single amount for 10,062,3 10,062,3 10,064, 10,064,66

1.11% 100.00% 1.59% 100.00%

which bad debt 78.10 78.10 664.92 4.92

provision separately

accrued

Accounts receivable

withdrawn bad debt

899,878, 37,444,5 862,433,8 624,003 28,745,59 595,257,95

provision according 98.89% 4.16% 98.41% 4.61%

370.83 03.88 66.95 ,551.87 7.87 4.00

to credit risks

characteristics

909,940, 47,506,8 862,433,8 634,068 38,810,26 595,257,95

Total 100.00% 5.22% 100.00% 6.12%

748.93 81.98 66.95 ,216.79 2.79 4.00

Accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end

√ Applicable □ Not applicable

Unit: RMB

89

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Accounts receivable(by Closing balance

units) Accounts receivable Bad debt provision Withdrawal proportion Withdrawal reasons

The debtor was at a

continuous loss due to

Suzhou Mont Lighting the scale and market and

10,062,378.10 10,062,378.10 100.00%

Co., Ltd. other reasons, so now it

is not suitable to produce

continuously.

Total 10,062,378.10 10,062,378.10 -- --

In the groups, accounts receivable adopting aging analysis method to accrue bad debt provision:

√ Applicable □ Not applicable

Unit: RMB

Closing balance

Aging

Accounts receivable Bad debt provision Withdrawal proportion

Subitem within 1 year

Within 1 year 865,599,141.43 25,967,974.24 3.00%

Subtotal within 1 year 865,599,141.43 25,967,974.24 3.00%

1 to 2 years 16,117,550.89 1,611,755.08 10.00%

2 to 3 years 2,434,424.81 730,327.45 30.00%

Over 3 years 15,727,253.70 9,134,447.11 58.08%

3 to 4 years 11,627,150.17 5,813,575.09 50.00%

4 to 5 years 3,896,157.57 3,116,926.06 80.00%

Over 5 years 203,945.96 203,945.96 100.00%

Total 899,878,370.83 37,444,503.88 4.16%

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 9,788,103.48yuan; the amount of the

reversed or collected part during the Reporting Period was of RMB 0.00.

(3) The actual write-off accounts receivable

Unit: RMB

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Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Item Amount

Beijing Senjiyuan Electronic Components Sales Center 339,032.24

Nanjing Weiyiming Photoelectric Technology Co., Ltd 303,567.17

TEERA-MONGKOL INDUSTRY PUBLIC 213,202.93

Chenzhou Wangshengda Materials Co., Ltd 99,999.82

Panjin Panfeng Hardware Sales Co., Ltd 17,018.73

Bureau in Finance in 2013 14,703.90

Other retails accounts 103,959.50

Total 1,091,484.29

Notes of accounts receivable write-off:

The write-off process had been performed for the accounts receivable write-off of the Reporting Period in accordance with the

provisions of the Company’s bad debt management system.

(4) Top 5 of the closing balance of the accounts receivable collected according to the arrears party

Unit: RMB

Name of units Nature Amount Aging

First Payment for goods 86,950,173.28 Within1 year

Second Payment for goods 31,389,810.51 Within 1 year

Third Payment for goods 25,.078,424.52 Within 1 year

Fourth Payment for goods 18,267,713.00 Within 1 year

Fifth Payment for goods 14,737,760.00 Within 1 year

Total 176,423,881.31

(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 of

accounts receivable

Naught

6. Prepayment

(1) List by aging analysis

Unit: RMB

91

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Closing balance Opening balance

Aging

Amount Proportion Amount Proportion

Within 1 year 22,472,029.30 81.17% 25,191,421.39 83.16%

1 to 2 years 742,018.33 2.68% 3,788,046.20 12.51%

2 to 3 years 3,545,685.81 12.81% 616,046.47 2.03%

Over 3 years 925,285.52 3.34% 696,493.05 2.30%

Total 27,685,018.96 -- 30,292,007.11 --

(2) Top 5 of the closing balance of the prepayment collected according to the prepayment target

Unit: RMB

Name of units Closing balance Aging Percentage of total

Relationship

amount(%)

First Non-related relationship 2,900,000.00 2 to 3 years 10.47%

Second Non-related relationship 2,094,715.75 Within 1 year 7.57%

Third Non-related relationship 1,996,800.00 Within 1 year 7.21%

Fourth Non-related relationship 1,199,640.00 Within 1 year 4.33%

Fifth Non-related relationship 935,476.71 Within 1 year 3.38%

Total 9,126,632.46 32.97%

7. Interest receivable

(1) Category of interest receivable

Unit: RMB

Item Closing balance Opening balance

Deposits on a regular basis 2,209,500.00 2,555,260.82

Finance products 1,008,417.15 2,057,145.98

Total 3,217,917.15 4,612,406.80

(2) Significant overdue interest

Naught

8. Dividend receivable

Naught

92

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

9. Other accounts receivable

(1) Other accounts receivable disclosed by category

Unit: RMB

Closing balance Opening balance

Book balance Bad debt provision Book balance Bad debt provision

Category Withdra

Book Book

Proportio wal Proportio Withdrawal

Amount Amount value Amount Amount value

n proportio n proportion

n

Other accounts

receivable withdrawn

38,455,6 2,439,18 36,016,47 13,527, 1,549,488 11,977,660

bad debt provision 99.24% 6.34% 97.86% 11.45%

62.27 5.62 6.65 149.04 .46 .58

according to credit

risks characteristics

Other accounts

receivable with

insignificant single 295,120. 295,120. 295,120 295,120.0

0.76% 100.00% 2.14% 100.00%

amount for which 00 00 .00 0

bad debt provision

separately accrued

38,750,7 2,734,30 36,016,47 13,822, 1,844,608 11,977,660

Total 100.00% 7.06% 100.00% 13.35%

82.27 5.62 6.65 269.04 .46 .58

Other receivable with single significant amount and withdrawal bad debt provision separately at end of period

□ Applicable √ Not applicable

In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:

√ Applicable □ Not applicable

Unit: RMB

Closing balance

Aging

Other accounts receivable Bad debt provision Withdrawal proportion

Subitem within 1 year

Within 1 year 33,054,794.93 991,643.84 3.00%

Subtotal within 1 year 33,054,794.93 991,643.84 3.00%

1 to 2 years 1,972,699.38 197,269.94 10.00%

2 to 3 years 3,107,684.06 932,305.22 30.00%

Over 3 years 320,483.90 317,966.62 99.21%

3 to 4 years 2,233.32 1,116.66 50.00%

4 to 5 years 7,003.10 5,602.48 80.00%

93

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Over 5 years 311,247.48 311,247.48 100.00%

Total 38,455,662.27 2,439,185.62 6.34%

Notes:

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 report period

The amount of bad debt provision was RMB 889,703.51yuan, the amount of reversed or recovered bad debt provision in the

Reporting Period RMB 000.

(3) Particulars of the actual verification of other accounts receivable during the Reporting Period

Unit: RMB

Item Amount

Other retails accounts 6.35

Total 6.35

Of which: other significant write-off accounts receivable:

Naught

(4) Other account receivable classified by account nature

Unit: RMB

Nature Closing book balance Opening book balance

VAT export tax refunds 15,120,172.36

Performance bond 3,095,428.94 1,959,752.60

Staff borrow and deposit 11,854,983.51 5,767,808.81

Water & electricity fees 874,384.16 955,738.35

Advance money for street light

3,777,672.16 2,523,547.23

construction

Internal business group 295,120.00 295,120.00

Other 3,733,021.14 2,320,302.05

Total 38,750,782.27 13,822,269.04

(5) The top five other account receivable classified by debtor at period-end

Unit: RMB

94

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Closing balance of

Name of units Nature Closing balance Aging Proportion%

bad debt provision

VAT export tax

First 15,120,172.36 Within 1 year 39.02% 453,605.17

refunds

Advance money for

Second street light 3,777,672.16 2 to 3 years 9.75% 794,687.92

construction

Third Other 1,801,136.00 Within 1 year 4.65% 54,034.08

Application fees for

Fourth 1,382,012.61 Within 1 year 3.57% 41,460.38

certification

Fifth Performance bond 1,332,058.60 Within 1 year 3.44% 39,961.76

Total -- 23,413,051.73 -- 60.42% 1,383,749.31

(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 other

accounts receivable

Naught

10. Inventory

Whether the Company needs to comply with the disclosure requirements of the real estate industry

No

(1) Category of inventory

Unit: RMB

Closing balance Opening balance

Item Falling price Falling price

Book balance Book value Book balance Book value

reserves reserves

Raw materials 91,904,445.39 5,289,467.13 86,614,978.26 116,197,403.06 1,635,294.87 114,562,108.19

Goods in process 52,788,483.44 52,788,483.44 28,522,590.52 28,522,590.52

Inventory goods 472,426,724.68 13,423,926.27 459,002,798.41 443,843,318.14 14,938,179.05 428,905,139.09

Self-manufacture 133,746,869.72 1,189,614.35 132,557,255.37 179,867,083.78 579,873.99 179,287,209.79

95

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

d semi-finished

product

Low-value

2,188,275.52 2,188,275.52 2,404,557.60 2,404,557.60

fugitive items

Total 753,054,798.75 19,903,007.75 733,151,791.00 770,834,953.10 17,153,347.91 753,681,605.19

Whether the Company needs to comply with the disclosure requirements of Shenzhen Stock Exchange Industry Information

Disclosure Guidelines No. 4 - Listed companies engaged in seed industry and planting business

No

(2) Falling price reserves of inventory

Unit: RMB

Increased amount Decreased amount

Item Opening balance Reverse or Closing balance

Withdrawal Other Other

write-off

Raw materials 1,635,294.87 5,299,351.65 1,645,179.39 5,289,467.13

Inventory goods 14,938,179.05 7,306,926.80 8,821,179.58 13,423,926.27

Self-manufacture

d semi-finished 579,873.99 775,633.91 165,893.55 1,189,614.35

product

Total 17,153,347.91 13,381,912.36 10,632,252.52 19,903,007.75

(3) Notes of the closing 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. Assets divided as held-to-sold

Naught

12. Non-current assets due within 1 year

Naught

13. Other current assets

Unit: RMB

96

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Item Closing balance Opening balance

Deductible input tax of VAT 46,262,718.17 41,181,826.53

Advance payment of enterprise income tax 23,635.19

Bank financial products 420,000,000.00 400,000,000.00

Total 466,262,718.17 441,205,461.72

14. Available-for-sale financial assets

(1) List of available-for-sale financial assets

Unit: RMB

Closing balance Opening balance

Item Depreciation Depreciation

Book balance Book value Book balance Book value

reserves reserves

Available-for-sale equity 1,764,589,646. 1,758,739,646. 1,738,000,857.0

5,850,000.00 5,850,000.00 1,732,150,857.01

instruments 36 36 1

Measured by fair 1,454,989,886. 1,454,989,886. 1,427,901,096.6

1,427,901,096.63

value 20 20 3

Measured by cost 309,599,760.16 5,850,000.00 303,749,760.16 310,099,760.38 5,850,000.00 304,249,760.38

1,764,589,646. 1,758,739,646. 1,738,000,857.0

Total 5,850,000.00 5,850,000.00 1,732,150,857.01

36 36 1

(2) Available-for-sale financial assets measured by fair value at the period-end

Unit: RMB

Category of the

Available-for-sale equity Available-for-sale

available-for-sale Total

instruments liabilities instruments

financial assets

Cost of the equity

instruments/amortized

119,501,727.41 119,501,727.41

cost of the debt

instruments

Fair value 1,454,989,886.20 1,454,989,886.20

Changed amount of the

fair value that be

accumulatively recorded 1,335,488,158.79 1,335,488,158.79

in other comprehensive

income

97

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

(3) Available-for-sale financial assets measured by cost at the period-end

Unit: RMB

Book balance Depreciation reserves Shareholdi Cash

ng bonus of

Investee Period-beg Period-beg proportion the

Increase Decrease Period-end Increase Decrease Period-end

in in among the Reporting

investees Period

Shenzhen

Zhonghao 5,850,000. 5,850,000. 5,850,000. 5,850,000. Less than

(Group) 00 00 00 00 5.00%

Ltd.

Chengdu

Hongbo 6,000,000. 6,000,000.

6.94%

Industrial 00 00

Co., Ltd.

Xiamen 292,574,13 292,574,13

5.85%

Bank 3.00 3.00

Guangdon

g

Less than

Developm 500,000.00 500,000.00

5.00%

ent Bank

Co., Ltd.

Foshan

Fochen

Road

5,175,627. 4,675,627.

Developm 500,000.22 7.66%

38 16

ent

Company

Limited

310,099,76 309,599,76 5,850,000. 5,850,000.

Total 500,000.22 --

0.38 0.16 00 00

(4) Changes of the impairment of the available-for-sale financial assets during the Reporting Period

Unit: RMB

Category of the

Available-for-sale equity Available-for-sale

available-for-sale Total

instruments liabilities instruments

financial assets

Withdrawn impairment

5,850,000.00 5,850,000.00

balance at the

98

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

period-begin

Withdrawn impairment

5,850,000.00 5,850,000.00

balance at the period-end

(5) Relevant notes of the fair value of the available-for-sale equity instruments which seriously fell or

temporarily fell but not withdrawn the impairment provision

Other notes

—The revenue of the investee company, Foshan Fochen Road Development Company Limited had be included in the unified

collection distribution system of Foshan road and bridge tolls, and the Company had executed amortization within the remained

planting duration by regarding the investment balance as the usufruct and the amortized investment cost of the Reporting Period was

of RMB 500,000.22yuan.

15. Investment held-to-maturity

Naught

16. Long-term accounts receivable

Naught

17. Long-term equity investment

Unit: RMB

Increase/decrease

Closing

Gains and Adjustme

Cash Withdraw balance

Additiona losses nt of

Opening Reduced Changes bonus or al of Closing of

Investee l recognize other

balance investmen of other profits impairme Other balance impairme

investmen d under comprehe

t equity announce nt nt

t the equity nsive

d to issue provision provision

method income

I. Joint ventures

II. Associated enterprises

Qinghai

FSL

Lithium

29,836,24 1,286,376 31,122,62

Energy

6.62 .00 2.62

Exploitati

on Co.,

Ltd.

Shenzhen 180,558,6 257,589.7 2,080,390 178,735,8

Primatron 86.07 9 .50 85.36

99

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

ix

(Nanho)

Electronic

s Ltd.

210,394,9 1,543,965 2,080,390 209,858,5

Subtotal

32.69 .79 .50 07.98

210,394,9 1,543,965 2,080,390 209,858,5

Total

32.69 .79 .50 07.98

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

Houses and Machinery Transportation Electronic

Item Total

buildings equipment equipment equipment

I. Original book

value:

1. Opening

643,574,297.79 810,592,982.55 22,120,160.45 23,976,160.84 1,500,263,601.63

balance

2. Increased

4,589,391.32 28,207,291.04 992,312.85 994,921.51 34,783,916.72

amount of the period

(1) Purchase 1,296,522.30 20,846,321.47 992,312.85 994,921.51 24,130,078.13

(2) Transfer of

project under 3,292,869.02 7,360,969.57 10,653,838.59

construction

(3) Enterprises

combination increase

100

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

3. Decreased

1,970,199.57 67,346,113.02 406,278.29 68,214.56 69,790,805.44

amount of the period

(1) Disposal or

1,970,199.57 61,308,043.53 406,278.29 68,214.56 63,752,735.95

scrap

(2) Equipment

6,038,069.49 6,038,069.49

transformation

4. Closing balance 646,193,489.54 771,454,160.57 22,706,195.01 24,902,867.79 1,465,256,712.91

II. Accumulated

desperation

1. Opening

385,133,462.44 597,616,093.63 15,094,925.78 16,342,970.63 1,014,187,452.48

balance

2. Increased

12,231,418.42 21,710,315.76 702,193.40 1,755,214.89 36,399,142.47

amount of the period

(1) Withdrawal 12,231,418.42 21,710,315.76 702,193.40 1,755,214.89 36,399,142.47

3. Decreased

412,154.52 57,224,217.64 385,964.37 60,042.55 58,082,379.08

amount of the period

(1) Disposal or

412,154.52 53,078,764.67 385,964.37 60,042.55 53,936,926.11

scrap

(2) Equipment

4,145,452.97 4,145,452.97

transformation

4. Closing balance 396,952,726.34 562,102,191.75 15,411,154.81 18,038,142.97 992,504,215.87

III. Depreciation

reserves

1. Opening

40,068,791.46 428.03 40,069,219.49

balance

2. Increased

amount of the period

(1) Withdrawal

3. Decreased

4,214,033.78 4,214,033.78

amount of the period

(1) Disposal or

4,165,026.73 4,165,026.73

scrap

(2) Equipment

49,007.05 49,007.05

transformation

4. Closing balance 35,854,757.68 428.03 35,855,185.71

101

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

IV. Book value

1. Closing book

249,240,763.20 173,497,211.14 7,295,040.20 6,864,296.79 436,897,311.33

value

2. Opening book

258,440,835.35 172,908,097.46 7,025,234.67 7,632,762.18 446,006,929.66

value

(2) List of temporarily idle fixed assets

Unit: RMB

Accumulated Depreciation

Item Original book value Book value Remark

depreciation reserves

Name of the

announcement:

Announcement on

Withdrawing the

Preparation for the

Assets Impairment

T5, T8,

on the Idle

energy-saving lamp 95,099,861.20 60,999,110.87 33,801,743.65 299,006.68

Equipments and

production line

Construction in

Progress; the

Announcement No.:

2015-030; disclosure

website:

www.cninfo.com.cn

(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 certification of property

Naught

20. Construction in progress

(1) List of construction in progress

Unit: RMB

102

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Closing balance Opening balance

Item Depreciation Depreciation

Book balance Book value Book balance Book value

reserves reserves

Construction in

147,360,531.44 147,360,531.44 71,479,325.91 71,479,325.91

progress

Total 147,360,531.44 147,360,531.44 71,479,325.91 71,479,325.91

(2) Changes of significant construction in progress

Unit: RMB

Of

Amount Proporti which:

Accumul

that on the Capitaliz

Other ative

transferr estimate amount ation rate

Estimate decrease amount

Name of Opening Increase ed to Closing d of the Project of the of the Capital

d d amount of

item balance d amount fixed balance project progress capitaliz interests resources

number of the capitaliz

assets of accumul ed of the

period ed

the ative interests period

interests

period input of the

period

Fuwan

intellige

49,000,0 12,977,7 12,977,7

nt 26.49% 30.00% Other

00.00 41.38 41.38

worksho

pH

D project

of

Gaoming 30,000,0 18,949,6 2,753,74 21,703,3

72.34% 95.00% Other

standard 00.00 19.56 5.95 65.51

worksho

p

Fuwan

standard 30,000,0 16,567,3 6,656,84 23,224,1

77.41% 95.00% Other

worksho 00.00 14.48 3.69 58.17

pE

Fuwan

standard 26,400,0 7,786,23 7,786,23

29.49% 35.00% Other

worksho 00.00 0.10 0.10

p K2

Fuwan 26,400,0 7,949,14 7,949,14

30.11% 35.00% Other

standard 00.00 7.56 7.56

103

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

worksho

p K3

Fuwan

standard 22,400,0 6,941,59 6,941,59

30.99% 32.00% Other

worksho 00.00 3.11 3.11

p J1

Fuwan

standard 22,400,0 6,803,03 6,803,03

30.37% 32.00% Other

worksho 00.00 2.32 2.32

p J2

Automat

ion

equipme

nt

system

of 22,000,0 5,533,33 5,533,33

25.15% 30.00% Other

intellige 00.00 3.21 3.21

nt

worksho

p

(worksh

op H)

9

assembly

11,000,0 7,981,04 2,019,64 10,000,6

lines of 90.92% 95.00% Other

00.00 4.20 8.42 92.62

LED

(16005)

LEDT8

automati

c line 6,500,00 2,907,39 3,110,43 6,017,83

92.58% 99.00% Other

transfor 0.00 8.19 7.44 5.63

mation

(16033)

246,100, 46,405,3 62,531,7 108,937,

Total -- -- --

000.00 76.43 53.18 129.61

(3) List of the withdrawal of the impairment provision of the construction in progress

Naught

21. Engineering material

Naught

104

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

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 Software use right Total

I. Original book

value

1. Opening

211,719,938.60 200,000.00 2,773,651.87 214,693,590.47

balance

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. Closing 211,719,938.60 200,000.00 2,773,651.87 214,693,590.47

105

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

balance

II. Total accrued

amortization

1. Opening

53,104,711.50 200,000.00 1,058,483.84 54,363,195.34

balance

2. Increased

1,937,293.01 220,515.84 2,157,808.85

amount of the period

(1) Withdrawal 1,937,293.01 220,515.84 2,157,808.85

3. Decrease in

the Reporting Period

(1) Disposal

4. Closing

55,042,004.51 200,000.00 1,278,999.68 56,521,004.19

balance

III. Depreciation

reserves

1. Opening

balance

2. Increased

amount of the period

(1) Withdrawal

3. Decrease in the

Reporting Period

(1) Disposal

4. Closing

balance

IV. Book value

1. Book value of the

156,677,934.09 1,494,652.19 158,172,586.28

period-end

2. Book value of the

158,615,227.10 1,715,168.03 160,330,395.13

period-begin

The proportion the intangible assets formed from the internal R&D through the Company amount the balance of the intangible assets

at the period-end was 0.00%.

106

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

(2) Details of fixed assets failed to accomplish certification of land use right

Naught

26. R&D expenses

Naught

27. Goodwill

(1) Original book value of goodwill

Naught

(2) Impairment provision of goodwill

Naught

28. Long-term unamortized expenses

Unit: RMB

Amortization

Item Opening balance Increased amount Decrease Closing balance

amount

Maintenance and

6,897,119.78 1,683,365.04 1,647,573.52 6,932,911.30

decoration expenses

Total 6,897,119.78 1,683,365.04 1,647,573.52 6,932,911.30

29. Deferred income tax assets/deferred income tax liabilities

(1) Deferred income tax assets had not been off-set

Unit: RMB

Closing balance Opening balance

Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax

difference assets difference assets

Assets impairment

136,128,598.22 20,625,526.93 128,070,435.31 19,448,040.38

provision

Unrealized profits of

476,596.87 71,489.53 1,356,293.17 203,443.98

internal transactions

Deductible losses 16,382,698.72 4,095,674.68 16,435,405.51 4,108,851.38

Depreciation of fixed

67,654,979.71 10,479,436.86 65,682,019.37 10,183,492.79

assets

107

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Payroll payable 36,389,097.70 5,458,364.66 63,987,177.61 9,604,089.91

Total 257,031,971.22 40,730,492.66 275,531,330.97 43,547,918.44

(2) Deferred income tax liabilities had not been off-set

Unit: RMB

Closing balance Opening balance

Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax

difference liabilities difference liabilities

Changes of the fair value

of the available-for-sale 1,335,488,158.79 200,323,223.82 1,308,399,369.22 196,259,905.39

financial assets

Share of other

comprehensive income

of investees that cannot

25,684,598.14 3,852,689.72 25,684,598.14 3,852,689.72

be reclassified into

profit/loss under the

equity method

Total 1,361,172,756.93 204,175,913.54 1,334,083,967.36 200,112,595.11

(3) Deferred income tax assets or liabilities listed by net amount after off-set

Unit: RMB

Mutual set-off amount of Amount of deferred Mutual set-off amount of Amount of deferred

deferred income tax income tax assets or deferred income tax income tax assets or

Item

assets and liabilities at liabilities after off-set at assets and liabilities at liabilities after off-set at

the period-end the period-end the period-begin the period-begin

Deferred income tax

40,730,492.66 43,547,918.44

assets

Deferred income tax

204,175,913.54 200,112,595.11

liabilities

(4) List of unrecognized deferred income tax assets

Naught

(5) Deductible losses of unrecognized deferred income tax assets will due the following years

Naught

108

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

30. Other non-current assets

Unit: RMB

Item Closing balance Opening balance

Land purchase and the ownership implicit

41,755,700.00 41,755,700.00

of relevant items

Prepayments for business facilities 2,444,434.60 3,369,640.00

Total 44,200,134.60 45,125,340.00

31. Short-term loans

Naught

32. Financial liabilities measured by fair value and the changes included in the current gains and losses

Naught

33. Derivative financial liabilities

□ Applicable √ Not applicable

34. Notes payable

The total unpaid notes payable due at the period end was RMB 0.00.

35. Accounts payable

(1) List of accounts payable

Unit: RMB

Item Closing balance Opening balance

Accounts payable 673,397,021.27 552,255,512.33

Total 673,397,021.27 552,255,512.33

(2) Notes of the accounts payable aging over one year

Naught

36. Advance from customers

(1) List of advance from customers

Unit: RMB

109

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Item Closing balance Opening balance

Prepayments 32,657,976.85 41,180,818.13

Total 32,657,976.85 41,180,818.13

(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 Opening balance Increase Decrease Closing balance

I. Short-term salary 96,021,156.06 319,106,399.00 346,744,195.73 68,383,359.33

II. Welfare after

demission - defined 25,197,964.53 25,197,964.53

contribution plans

Total 96,021,156.06 344,304,363.53 371,942,160.26 68,383,359.33

(2) List of Short-term Salary

Unit: RMB

Item Opening balance Increase Decrease Closing balance

1. Salary, bonus, allowance,

95,595,393.49 282,014,781.96 309,691,654.41 67,918,521.04

subsidy

2. Employee welfare 12,695,704.13 12,695,704.13

3. Social insurance 15,681,813.55 15,681,813.55

Including: Medical insurance

12,905,594.63 12,905,594.63

premiums

Work-related

1,561,453.07 1,561,453.07

injury insurance

Maternity insurance 1,214,765.85 1,214,765.85

4. Housing fund 5,987,908.00 5,987,908.00

5. Labor union budget and

425,762.57 2,726,191.36 2,687,115.64 464,838.29

employee education budget

110

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Total 96,021,156.06 319,106,399.00 346,744,195.73 68,383,359.33

(3) List of Drawing Scheme

Unit: RMB

Item Opening balance Increase Decrease Closing balance

1. Basic pension benefits 24,306,411.37 24,306,411.37

2. Unemployment

891,553.16 891,553.16

insurance

Total 25,197,964.53 25,197,964.53

38. Taxes Payable

Unit: RMB

Item Closing balance Opening balance

VAT 18,160,385.85 9,504,368.23

Corporate income tax -171,758.70 121,469,524.92

Personal income tax 610,225.20 452,181.32

Urban maintenance and construction tax 1,262,089.71 947,172.36

Education Surcharge 904,746.30 680,460.70

Property tax 1,104,316.04 4,259,219.31

Land use tax 2,334,756.55 804,737.31

Other taxes 166,446.47 164,980.57

Total 24,371,207.42 138,282,644.72

Other notes:

The closing balance of taxes payable drops 82.38%, RMB113,911,437.30yuan. compared to that of the beginning of the period,

which is from the payment of increase of corporate income tax caused by revenues generated from sales of shares of Guoxuan

High-tech Co., Ltd. in the fourth quarter of the same period of last year.

39. Interest Payable

Naught

40. Dividends Payable

Unit: RMB

Item Closing balance Opening balance

Common stock dividends 6,287,923.09

111

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Total 6,287,923.09

Other notes: including the significant dividends payable unpaid for more than one year, the reason for unpayment shall be disclosed:

The subsidiary Foshan Taimei Times Lamps and Lanterns Co., Ltd. has distributed and paid in the reporting period the profits of

2013 and 2014 allocated at the beginning of the year.

41. Other Accounts Payable

(1) Other Accounts Payable Listed by Nature of the Account

Unit: RMB

Item Closing balance Opening balance

Compensation for lawsuit 1,762,533.43 1,762,533.43

performance bond 18,404,130.82 20,564,161.28

Relevant fees of sale 1,327,650.91 15,634,331.32

Escrow of housing provident fund,

damages, default money and down 8,076,410.52 8,076,410.52

payment

Others 2,614,851.86 4,066,902.26

Total 32,185,577.54 50,104,338.81

(2) Other Significant Accounts Payable with Aging over One Year

Unit: RMB

Item Closing balance Unpaid/ Un-carry-over reason

Escrow of housing provident fund,

damages, default money and down 8,076,410.52

payment

Total 8,076,410.52 --

42. Liabilities Classified as Holding for Sale

Naught

43. Non-current Liabilities Due within 1 Year

Naught

44. Other Current Liabilities

Naught

112

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

45. Long-term Loan

Naught

46. Bonds Payable

Naught

47. Long-term Payable

Naught

48. Long-term Payroll Payable

Naught

49. Special Payable

Naught

50. Accrued Liabilities

Naught

51. Deferred Revenue

Unit: RMB

Item Opening balance Increase Decrease Closing balance Reason

Government

Government

10,449,768.49 1,500,000.00 77,499.96 11,872,268.53 subsidies related to

subsidies

assets/revenues

Total 10,449,768.49 1,500,000.00 77,499.96 11,872,268.53 --

Item involving government subsidies:

Unit: RMB

Amount recorded

into Related to

Amount of newly

Item Opening balance non-operating Other changes Closing balance assets/related

subsidy

income in report income

period

LED production

technical Related to the

9,852,274.95 9,852,274.95

transformation assets

project

113

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Production line of

50 million Related to the

465,000.15 77,499.96 387,500.19

energy-saving assets

fluorescent lamp

New type of low

cost silicon

substrate LED Related to the

29,668.32 29,668.32

light source income

module

technology

Standard optical

components

testing laboratory

capacity Related to the

102,825.07 102,825.07

construction and income

products quality

guarantee

engineering

Suggestion from

the

Electro-optical

Institute of Related to the

1,000,000.00 1,000,000.00

Foshan income

Electrical and

Lighting Co.,

Ltd.

Overseas

protection plan of Related to the

500,000.00 500,000.00

intellectual income

property of FSL

Total 10,449,768.49 1,500,000.00 77,499.96 11,872,268.53 --

52. Other Non-current Liabilities

Naught

53. Share Capital

Unit: RMB

Increase/decrease (+/-)

Opening Closing

New shares Capitalized

balance Bonus shares Others Subtotal balance

issued Capital

114

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

reserves

The sum of 1,272,132,868. 1,272,132,868.

shares 00 00

Other notes:

54. Other Equity Instruments

Naught

55. Capital Surplus

Unit: RMB

Item Opening balance Increase Decrease Closing balance

Capital premium 278,575,487.53 278,575,487.53

Other capital reserves 7,245,971.54 7,245,971.54

Total 285,821,459.07 285,821,459.07

56. Treasury Stock

Naught

57. Other Comprehensive Income

Unit: RMB

Reporting period

Less: recorded

in other

Amount comprehensive Attributable

Opening before income in Less: to owners Attributable Closing

Item

balance income tax prior period Income tax of the to minority balance

in current and transferred expense Company shareholder

period to profit or after tax s after tax

loss in current

period

II. Other comprehensive income 1,133,971,37 27,088,789. 4,063,318.4 23,025,471. 1,156,996

reclassify into profits and losses 2.25 57 3 14 ,843.39

Including: shares enjoyed in the other

comprehensive income reclassified 21,831,908.4 21,831,90

into profits and losses under the 2 8.42

equity method

115

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Profits or losses from the

1,112,139,46 27,088,789. 4,063,318.4 23,025,471. 1,135,164

change of fair value of available for

3.83 57 3 14 ,934.97

sale financial assets

1,133,971,37 27,088,789. 4,063,318.4 23,025,471. 1,156,996

Total of other comprehensive income

2.25 57 3 14 ,843.39

58. Special Reserves

Naught

59. Surplus Reserves

Unit: RMB

Item Opening balance Increase Decrease Closing balance

Statutory surplus

597,038,383.45 597,038,383.45

reserves

Discretionary surplus

136,886,568.36 136,886,568.36

reserves

Total 733,924,951.81 733,924,951.81

60. Retained Earnings

Unit: RMB

Item Reporting Period Last period

Opening balance of retained profits before

1,564,615,925.99 613,661,381.40

adjustments

Opening balance of retained profits after

1,564,615,925.99 613,661,381.40

adjustments

Add: Net profit attributable to owners of the

228,494,660.57 206,925,812.72

Company

Dividend of common stock payable 534,295,804.56 15,901,660.85

Closing retained profits 1,258,814,782.00 804,685,533.27

List of adjustment of opening retained profits:

1) RMB0.00yuan opening retained profits was affected by retrospective adjustment conducted according to the Accounting Standards

for Business Enterprises and relevant new regulations.

2) RMB0.00yuan opening retained profits was affected by changes on accounting policies.

3) RMB0.00 yuanopening retained profits was affected by correction of significant accounting errors.

4) RMB0.00yuan opening retained profits was affected by changes in combination scope arising from same control.

5) RMB0.00yuan opening retained profits was affected totally by other adjustments.

116

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

61. Revenues and Operating Costs

Unit: RMB

Reporting Period Same period of last year

Item

Sales revenue Cost of sales Sales revenue Cost of sales

Main operations 2,010,535,149.65 1,537,416,165.51 1,743,092,467.69 1,315,261,790.95

Other operations 13,390,433.19 9,515,614.34 12,578,459.75 7,720,769.75

Total 2,023,925,582.84 1,546,931,779.85 1,755,670,927.44 1,322,982,560.70

62. Business Tax and Surcharges

Unit: RMB

Item Reporting Period Same period of last year

Urban maintenance and construction tax 7,980,261.34 7,002,504.08

Education Surcharge 5,707,899.61 5,015,667.87

Property tax 3,045,704.60

Land use tax 2,621,884.53

Vehicles and vessels use tax 13,909.92

Stamp duty 1,016,936.24

Business tax 233,406.51

Embankment-protection fees 6.09

Total 20,386,602.33 12,251,578.46

Other notes: the five increased tax items are reclassified from administration expenses in accordance with the No. 22 stipulation of

Finance & Accounting [2016].

63. Sale Expenses

Unit: RMB

Item Reporting Period Same period of last year

Transport fees 31,103,632.14 26,988,943.15

Salary 30,517,319.21 23,124,058.32

Business propagandize fee 3,408,430.38 5,771,832.24

Business travel charges 5,183,499.37 3,730,926.88

Sales promotion fee& dealer meeting

7,656,851.44 8,919,049.44

expense

Street light project maintenance fee 40,600.00

Others 3,782,261.15 4,676,397.38

117

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Total 81,651,993.69 73,251,807.41

64. Administration Expenses

Unit: RMB

Item Reporting Period Same period of last year

Employee’s remuneration 41,767,426.90 25,133,604.07

Depreciation charge 9,552,900.65 9,506,297.68

Tax expenses 7,387,142.35

Office expenses 5,129,871.30 4,466,075.16

Amortization of intangible assets 2,157,808.85 2,100,959.51

R&D expenses 5,467,714.83 3,198,358.61

Testing expense 1,046,717.25 680,292.67

Others 33,668,381.82 29,645,097.89

Total 98,790,821.60 82,117,827.94

65. Financial Expenses

Unit: RMB

Item Reporting Period Same period of last year

Interest expenses

Less: interest income 15,609,163.27 6,489,563.72

Exchange gains and losses 6,502,463.05 -556,267.25

Others 1,990,792.86 600,077.93

Total -7,115,907.36 -6,445,753.04

Other notes:

66. Asset Impairment Loss

Unit: RMB

Item Reporting Period Same period of last year

I. Bad debt loss 10,677,806.99 14,692,768.91

II. Inventory falling price loss 13,381,912.36 21,160,604.92

Total 24,059,719.35 35,853,373.83

67. Gains and Losses from Changes in Fair Value

Naught

118

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

68. Investment Income

Unit: RMB

Item Reporting Period Same period of last year

Long-term equity investment income

1,543,965.79 -19,640.12

accounted by equity method

Investment income received from disposal of

financial assets measured by fair value and the

261,818.10

changes be included in the current profits and

losses during holding period

Investment income received from holding of

6,560,422.50 10,950,922.50

available-for-sale financial assets

Investment income received from financial

6,404,893.95 2,659,136.99

products

Others -500,000.22 -131,489.70

Total 14,009,282.02 13,720,747.77

69. Other Income

Naught

70. Non-operating Gains

Unit: RMB

Recorded in the amount of the

Item Reporting Period Same period of last year

non-recurring gains and losses

Total gains from disposal of

20,253.97

non-current assets

Including: Gains from disposal

20,253.97

of fixed assets

Government subsidies 3,869,949.96 505,099.96 3,869,949.96

Others 2,152,445.92 1,049,662.65 2,152,445.92

Total 6,022,395.88 1,575,016.58 6,022,395.88

Government subsidies recorded into current profits and losses

Unit: RMB

Whether

subsidies Special Related to

Distribution Distribution Reporting Same period

Item Nature influence the subsidy or assets/related

entity reason Period of last year

current not income

profits and

119

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

losses or not

Due to

engaged in

special

industry that

the state

Production encouraged

line of 50 and

million supported, Related to

Subsidy No No 77,499.96 77,499.96

energy-savin gained assets

g fluorescent subsidy

lamp (obtaining in

line with the

law and the

regulations of

national

policy)

Special funds Subsidy from

for export R&D

enterprises Technical Related to

Award No No 26,000.00 69,000.00

exploiting the updating and income

international transformatio

market n, etc.

Subsidy from

Award for

R&D

adopting

Technical Related to

international Award No No 150,000.00

updating and income

standard

transformatio

products

n, etc.

Chancheng

Subsidy from

District

R&D

Economy and

Technical Related to

Science Award No No 300,000.00 66,000.00

updating and income

Promotion

transformatio

Bureau Talent

n, etc.

Subsidy

Subsidy from

R&D

Support fund

Technical Related to

for import Award No No 3,249,240.00

updating and income

and export

transformatio

n, etc.

120

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Subsidy from

Project grants

R&D

from

Technical Related to

National Award No No 10,000.00

updating and income

Spark

transformatio

Program

n, etc.

Subsidy from

R&D

Governmenta Technical Related to

Award No No 20,000.00

l reward fund updating and income

transformatio

n, etc.

The

Subsidy from

development

R&D

of science

Technical Related to

and Award No No 93,600.00

updating and income

technology

transformatio

plan project

n, etc.

funds

Subsidy from

R&D

Other odd

Technical Related to

government Award No No 187,210.00 49,000.00

updating and income

subsidies

transformatio

n, etc.

Total -- -- -- -- -- 3,869,949.96 505,099.96 --

71. Non-operating Expenses

Unit: RMB

Recorded in the amount of the

Item Reporting Period Same period of last year

non-recurring gains and losses

Loss on disposal of non-current

4,255,164.43 223,092.25 4,255,164.43

assets

Including: Loss on disposal of

4,255,164.43 223,092.25 4,255,164.43

fixed assets

Outward donation 2,000.00 2,000.00

The inventory scrap loss 3,403,353.00

Lawsuit compensation 100,000.00

Others 512,609.26 1,190,611.69 512,609.26

121

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Total 4,769,773.69 4,917,056.94 4,769,773.69

72. Income Tax Expense

(1) Lists of Income Tax Expense

Unit: RMB

Item Reporting Period Same period of last year

Current income tax expense 39,780,075.57 44,968,418.65

Deferred income tax expense 2,817,425.78 -5,542,441.36

Total 42,597,501.35 39,425,977.29

(2) Adjustment Process of Accounting Profit and Income Tax Expense

Unit: RMB

Item Reporting Period

Total profits 274,482,477.59

Current income tax expense accounted by tax and relevant

41,055,651.79

regulations

Influence of different tax rate suitable to subsidiary 3,120,459.39

Influence of income tax before adjustment -362,951.59

Influence of non taxable income -1,215,658.24

Income tax expense 42,597,501.35

73. Other Comprehensive Income

For details, please refer to Notes on major items in consolidated financial statements of the Company, 57.

74. Information of Cash Flow Statement

(1) Other Cash Received Relevant to Operating Activities

Unit: RMB

Item Reporting Period Same period of last year

Deposit interest 17,037,947.97 5,465,229.02

Income from insurance compensation 132,451.15 2,217,602.70

Guaranteed income -3,637,333.34 2,428,184.00

Property and rental income 1,737,139.33 1,058,343.21

Income from subsidy 5,010,204.36 939,625.32

122

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Income from waste 5,756,171.75 1,910,274.50

Others 2,857,134.88 1,038,449.92

Total 28,893,716.10 15,057,708.67

(2) Other Cash Paid Relevant to Operating Activities

Unit: RMB

Item Reporting Period Same period of last year

Transport fees 50,931,038.88 32,535,287.92

Donations, punishment, lawsuit

63,859.62 12,680,691.76

compensation

Advertising expense 10,719,132.28 9,850,522.41

Audit fees, attorney fees, appraisal cost

7,686,184.18 6,382,707.08

and detect cost

Business office expenses 7,272,319.87 4,324,091.36

The spare parts, maintenance, and service

6,530,959.82 1,076,002.69

charge

Margin 2,955,498.60 864,301.00

Business travel charges 7,085,185.69 4,541,469.24

Energy-saving promotion fee 368,987.65

Street light project construction and

1,378,623.48 1,677,736.31

maintenance

Land rent and management fee 3,301,887.73 3,311,454.39

Trademark fee& patent fee 1,396,336.23 442,693.00

Others 8,568,952.86 4,121,304.08

Total 107,889,979.24 82,177,248.89

(3) Other Cash Received Relevant to Investment Activities

Naught

(4) Other Cash Paid Relevant to Investment Activity

Unit: RMB

Item Reporting Period Same period of last year

Others 39,878.12

The future foreign exchange settlement

7,500,000.00

guarantee deposit

123

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Total 7,539,878.12

(5) Other Cash Received Relevant to Financing Activities

Naught

(6) Other Cash Paid Relevant to Financing Activities

Naught

75. 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 231,884,976.24 206,612,262.26

Add: Provision for impairment of assets 24,059,719.35 35,853,373.83

Depreciation of fixed assets, of oil-gas

36,399,142.47 37,519,048.12

assets, of productive biological assets

Amortization of intangible assets 2,157,808.85 2,100,959.51

Long-term unamortized expenses 1,647,573.52 84,671.95

Losses on disposal of fixed assets, intangible

assets and other long-term assets (gains: 166,326.42 -20,253.97

negative)

Loss on retirement of fixed assets (gains:

4,088,838.01 223,092.25

negative)

Financial cost (gains: negative) -956,368.36

Investment loss (gains: negative) -14,009,282.02 -13,720,747.77

Decrease in deferred income tax assets

2,817,425.78 -5,535,752.11

(gains: negative)

Increase in deferred income tax liabilities

-6,689.25

(“-” means decrease)

Decrease in inventory (gains: negative) 17,780,154.35 84,829,939.85

Decrease in accounts receivable from

-214,104,001.05 -161,829,594.02

operating activities (gains: negative)

Increase in payables from operating -123,951,869.14 106,474,364.77

124

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

activities (decrease: negative)

Net cash flows generated from operating

-31,063,187.22 291,628,307.06

activities

2. Significant investing and financing

activities without involvement of cash -- --

receipts and payments

3. Change of cash and cash equivalent: -- --

Closing balance of cash 815,038,019.29 780,593,190.58

Less: Opening balance of cash 1,479,283,642.54 933,546,108.37

Net increase in cash and cash equivalents -664,245,623.25 -152,952,917.79

(2) Net Cash Paid of Obtaining the Subsidiary

Naught

(3) Net Cash Receive from Disposal of the Subsidiary

Naught

(4) Cash and Cash Equivalents

Unit: RMB

Item Closing balance Opening balance

I. Cash 815,038,019.29 1,479,283,642.54

Including: Cash on hand 53,479.90 13,058.91

Bank deposit on demand 806,670,784.99 1,477,005,924.93

Other monetary funds on demand 8,313,754.40 2,264,658.70

III. Closing balance of cash and cash

815,038,019.29 1,479,283,642.54

equivalents

76. Note to Items in the Statement of Change in Equity

Note to name of "other" item adjusted closing balance and the adjustment amount:

Not applicable

77. Assets with Restricted Ownership and Right to Use

Naught

125

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

78. Foreign Currency Monetary Items

(1) Foreign Currency Monetary Items

Unit: RMB

Closing foreign currency Closing convert to RMB

Item Exchange rate

balance balance

Monetary capital -- -- 18,611,366.01

Including: USD 2,735,685.92 6.7744 18,532,630.69

EUR 10,159.92 7.7496 78,735.32

Account receivable -- -- 279,015,390.10

Including: USD 41,186,730.94 6.7744 279,015,390.10

Prepayments 1,416,270.15

Including: USD 209,062.08 6.7744 1,416,270.15

Deposit received 12,497,338.74

Including: USD 1,844,789.01 6.7744 12,497,338.74

Other notes:

(2) Note to Oversea Entities Including: for Significant Oversea Entities, Shall Disclose Main Operating

Place, Recording Currency and Selection Basis, if there Are Changes into Recording Currency, Shall Also

Disclose the Reason.

□ Applicable √ Not applicable

79. Arbitrage

Qualitative and quantitative information of relevant arbitrage instruments, hedged risk in line with the type of arbitrage to disclose:

Not applicable

80. Other

Not applicable

VIII. Change of Consolidation Scope

1. Business Combination Not under the Same Control

(1) Business Combination Not under the Same Control during the Reporting Period

Naught

126

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

(2) Combination Cost and Goodwill

Naught

(3) The Identifiable Assets and Liabilities of Acquiree at Purchase Date

Naught

(4) The Profit or Loss from Equity Held by the Date before Acquisition in Accordance with the Fair Value

Measured Again

Whether there is a transaction that through multiple transaction step by step to realize enterprises merger and gaining the control

during the Reporting Period

□ Yes √ No

(5) The Explanations on the Situation in which the Merger Price Cannot Be determined Rationally at the

Date of Acquisition or the End of the Period of Merger and Explanations on the Fair Value of the

Acquiree’s Recognizable Assets and Liabilities

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 Book Value of the Assets and Liabilities of the Combined Party at Combining Date

Naught

3. Counter Purchase

Naught

127

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

4. The Disposal of Subsidiary

Whether there is a single disposal of the investment to subsidiary and lost control

□ Yes √ No

Whether there are multiple transactions step by step dispose the investment to subsidiary and lost control in Reporting Period

□ Yes √ No

5. Other Reasons for the Changes in Combination Scope

Note to reasons for the changes in combination scope (Newly established subsidiary and subsidiary of liquidation) and relevant

information:

Naught

6. Other

Naught

IX. Equity in Other Entities

1. Equity in Subsidiary

(1) The Structure of the Enterprise Group

Main operating Nature of Holding percentage (%)

Name Registration place Way of gaining

place business Directly Indirectly

Foshan

Chansheng Production and Newly

Foshan Foshan 100.00%

Electronic Ballast sales established

Co., Ltd.

Foshan Lighting

Lamps & Production and Newly

Foshan Foshan 100.00%

Components Co., sales established

Ltd.

Guangdong

Fozhao New

Production and Newly

Light Sources Foshan Foshan 100.00%

sales established

Technology Co.,

Ltd.

Foshan

Chanchang Production and Newly

Foshan Foshan 100.00%

Electric sales established

Appliance

128

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

(Gaoming) Co.,

Ltd.

Foshan Taimei

Production and Newly

Times Lamps and Foshan Foshan 70.00%

sales established

Lanterns Co., Ltd.

Foshan Electrical

& Lighting Production and Newly

Xinxiang) Xinxiang) 100.00%

(Xinxiang) Co., sales established

Ltd.

Guangdong

Newly

Fozhao Leasing Foshan Foshan Finance lease 100.00%

established

Co., Ltd.

Nanjing Fozhao

Lighting

Production and

Components Nanjing Nanjing 100.00% Purchase

sales

Manufacturing

Co., Ltd.

FSL Zhida

Electric Production and Newly

Foshan Foshan 51.00%

Technology Co., sales established

Ltd.

(2) Significant Not Wholly Owned Subsidiary

Unit: RMB

The profits and losses Declaring dividends Balance of minority

Shareholding proportion

Name arbitrate to the minority distribute to minority shareholder at closing

of minority shareholder

shareholders shareholder period

Foshan Taimei Times

Lamps and Lanterns Co., 30.00% 602,673.03 5,630,109.21

Ltd.

FSL Zhida Electric

49.00% 2,787,642.64 12,768,272.90

Technology Co., Ltd.

(3) The Main Financial Information of Significant Not Wholly Owned Subsidiary

Unit: RMB

Closing balance Opening balance

Non-curr Non-curr Non-curr Non-curr

Name Current Total Current Total Current Total Current Total

ent ent ent ent

assets assets liabilities liabilities assets assets liabilities liabilities

assets liabilities assets liabilities

129

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Foshan

Taimei

Times 67,603, 9,341,04 76,944,3 58,177,3 58,177,3 66,911,9 7,126,97 74,038,9 57,280,8 57,280,8

Lamps and 322.46 4.99 67.45 36.75 36.75 91.61 9.81 71.42 50.82 50.82

Lanterns

Co., Ltd.

FSL Zhida

Electric 93,769, 7,765,83 101,535, 60,386,0 60,386,0 38,927,7 13,176.7 38,940,9 3,480,45 3,480,45

Technolog 706.82 5.11 541.93 05.40 05.40 48.34 0 25.04 5.13 5.13

y Co., Ltd.

Unit: RMB

Reporting period The same period of last year

Cash flow Cash flow

Total Total

Name Operation from Operation from

Net profit consolidated Net profit consolidated

revenue operating revenue operating

income income

activities activities

Foshan

Taimei Times

82,641,917.3 23,327,544.4 51,763,010.9

Lamps and 2,008,910.10 2,008,910.10 1,570,356.09 1,570,356.09 301,174.27

2 9 4

Lanterns Co.,

Ltd.

FSL Zhida

Electric 66,773,802.1

5,689,066.62 5,689,066.62 -3,415,460.17

Technology 5

Co., Ltd.

(4) Significant Restrictions of Using Enterprise Group Assets and Paying Off Enterprise Group Debt

Naught

(5) Provide Financial Support or Other Support for Structure Entities Incorporate into the Scope of

Consolidated Financial Statements

Naught

2. The Transaction of the Company with Its Owner’s Equity Share Changed but Still Controlling the

Subsidiary

(1) Explanations on Changes of Owner’s Equity in the Subsidiary

Naught

130

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

(2) The Effects of Transactions on Minority Equity and Owner’s Equity Attributable to the Parent

Company

Naught

3. Equity in Joint Venture Arrangement or Associated Enterprise

(1) List of Significant Joint Ventures or Associated Enterprises

Naught

(2) The Main Financial Information of Significant Joint Ventures

Naught

(3) The Main Financial Information of Significant Associated Enterprises

Naught

(4) The Summarized Financial Information of Unimportant Joint Ventures and Associated Enterprises

Unit: RMB

Closing balance/amount incurred in the Opening balance/amount incurred in last

current period period

Joint venture: -- --

The total of following items according to the

-- --

shareholding proportions

Associated enterprise: -- --

The total of following items according to the

-- --

shareholding proportions

Total investment book value 209,858,507.98 210,394,932.69

The total of following items according to the

-- --

shareholding proportions

--Net profits 1,543,965.79 432,767.03

--Other comprehensive income 21,831,908.42

--Total comprehensive income 1,543,965.79 26,159,605.45

(5) Explanations on Great Limitation of the Ability to Transfer Funds to the Company by Joint Ventures

or Associated Enterprises

Naught

131

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

(6) Excess Loss Incurred in Joint Ventures or Associated Enterprises

Naught

(7) The Unrecognized Commitment Related to the Investment of Joint Ventures

Naught

(8) The Contingent Liabilities Related to the Investment of Joint Ventures or Associated Enterprises

Naught

4. Significant Joint Operation

Naught

5. Equity of Structure Entity Not Including in the Scope of Consolidated Financial Statements

Naught

6. Other

Naught

X. The Risk Related Financial Instruments

The financial instruments of the Company included: equity investment, accounts receivable, accounts payable, etc.

The details of each financial instrument see relevant items of note V.

The main risks of the Company due to financial instruments were credit risk, liquidity risk and market risk. The

operating management of the Company was responsible for the risk management target and the recognition of the

policies.

I. Credit Risk

Credit risk was one party of the contract failed to fulfill the obligations and causes loss of financial assets of the

other 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 account

receivable over credit limit, require the customer to pay or producing and delivering goods shall be approved by

the management of the Company.

The Company through monthly aging analysis of account receivable and monitoring the collection situation of the

customer 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 Risk

Liquidity risk is referred to their risk of incurring capital shortage when performing settlement obligation in the

way of cash payment or other financial assets. The policies of the Company are to ensure that there was sufficient

132

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

cash to pay the due liabilities. The liquidity risk is centralized controlled by the Financial Department of the

Company. The financial department through supervising the balance of the cash and securities can be convert to

cash at any time and the rolling prediction of cash flow in future 12 months to ensure the Company have sufficient

cash to pay the liabilities under the case of all reasonable prediction, Each financial liability of the Company was

estimated due within 1 year.

III. Market Risk

Market risk was referred to risk of the fair value or future cash flow of financial instrument changed due to the

change of market price, including: exchange rate risk, interest rate risk and other price risk.

1. Exchange Rate Risk

Exchange rate risk was referred to the possible loss due to changes of exchange rate in the financial activities that

economic agents held or used the foreign exchange. The Company’s export business was settled by USD which

avoided exchange risk the Company faced in transaction.

2. Interest Rate Risk

Interest rate risk is refers to fluctuation risk of the fair value or future cash flow of financial instrument change due

to the change of market price. There was no bank loan in the Company, thus no RMB benchmark interest rate

changes

3. Other Price Risk

N/A

XI. The Disclosure of the Fair Value

1. Closing Fair Value of Assets and Liabilities Calculated by Fair Value

Unit: RMB

Fair value at the end of the reporting period

Item First level Second level Third level

Total

Fair value measurement Fair value measurement Fair value measurement

I. Consistent fair value

-- -- -- --

measurement

(II) Available-for-sale

1,454,989,886.20 1,454,989,886.20

financial assets

(1) Equity tool investment 1,454,989,886.20 1,454,989,886.20

Total assets of consistent

1,454,989,886.20 1,454,989,886.20

fair value measurement

II. Inconsistent fair value

-- -- -- --

measurement

133

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level

1

The recognition judgment of the fair value measurement items at level 1 was the stock price on the balance sheet date

3. Consistent and Inconsistent Fair value Measurement Items at Level 2, Valuation Techniques Adopted,

the Qualitative and Quantitative Information of Important Parameters

Naught

4. Consistent and Inconsistent Fair Value Measurement Items at Level 3, Valuation Techniques Adopted,

the Qualitative and Quantitative Information of Important Parameters

Naught

5. Consistent Fair Value Measurement Items at Level 3, the Adjustment Information of the Opening and

Closing Book Value, and the Sensitivity Analysis of Unobservable Parameters

Naught

6. Consistent Fair Value Measurement Items, Conversion between All Levels during the Reporting Period,

the Reasons for Conversion and Policies at the Time of Determination of Conversion

Naught

7. Change and Change Reason of Valuation Techniques in the Reporting Period

Naught

8. Particulars about the Fair Value of the Financial Assets and Financial Liabilities Not Measured at Fair

Value

Naught

9. Other

Naught

XII. Related Party and Related Transaction

1. Information Related to Parent Company of the Company

Proportion of share Proportion of voting

Registration Nature of

Name of parent company Registered capital held by parent rights owned by

place business

company against the parent company

134

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Company (%) against the Company

(%)

Hong Kong Wah Shing

Hong Kong / / 13.47% 13.47%

Holding Company Limited

Shenzhen Rising Investment

Shenzhen Investment RMB120,000,000 5.12% 5.12%

Development Co., Ltd.

Guangdong Electronics

Sales &

Information Industry Group Guangzhou RMB462,000,000 4.74% 4.74%

Production

Ltd.

Rising Investment

Hong Kong / / 1.82% 1.82%

Development Co., Ltd.

Guangdong Rising Finance

Zhuhai Investment RMB1,393,000,000 0.54% 0.54%

Holding Co., Ltd.

25.70% 25.70%

Notes: Information on the parent company:

September 9, 2015, the Company’s original first majority shareholder OSRAM Holding Company Limited signed

Equity Transfer Agreement with Guangdong Electronics Information Industry Group Co., Ltd. (Hereinafter

referred to as "Electronics Group”) Germany OSRAM Company Limited transfer its 100% share equity to

Electronics Group. The relevant transaction was completed on December 4, 2015. Electronics Group became only

controlling shareholder of OSRAM Holding (Renamed as Hong Kong Wah Shing Holding Company Limited

(hereinafter referred to as “Hong Kong Wah Shing Holding”) and indirectly became the first majority shareholder

of the Company.

The first majority shareholder of the Company, Hong Kong Wah Shing Holding Co., Ltd. was the wholly owned

subsidiary of Electronics Group, and Electronics Group, Shenzhen Rising Investment Development Co., Ltd.

( Hereinafter referred to as " Shenzhen Rising " ), Guangdong Rising Finance Holding Co., Ltd. ( Hereinafter

referred 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. In

line with the relevant stipulation of Corporation Law and Rules on Listed Companies Acquisition, Electronics

Group, Shenzhen Rising and Rising Investment were persons acting in concert. As of June 30, 2017, the aforesaid

persons acting in concert holding total A, B share of the Company 000 shares, 000 % of total share equity of the

Company. Guangdong Rising Assets Management Co., Ltd. became the actual controller of the Company.

The final controller of the Company is Guangdong Rising Assets Management Co., Ltd. (GRAM)

2. Subsidiaries of the Company

For more details, please refer to Notes IX. Equity in other entities 1. Equity in subsidiary.

3. Information on the Joint Ventures and Associated Enterprises of the Company

The details of significant joint venture and associated enterprise of the Company, please refer to Notes IX. Equity in other entities 3.

Equity in the joint venture arrangement or associated enterprise

135

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

4. Information on Other Related Parties of the Company

Name Relationship

PROSPERITY LAMPS & COMPONENTS LTD Shareholder owning over 5% shares

Prosperity (Hangzhou) Lighting and Electrical Co., Ltd. Company controlled by related natural person

Hangzhou Times Lighting and Electrical Co., Ltd. Company controlled by related natural person

Prosperity Electrical (China) Co., Ltd. Company controlled by related natural person

Prosperity (Xinxiang) Electro-optic Machinery Co., Ltd. Company controlled by related natural person

Prosperity (Xinxiang) Lighting Machinery Co., Ltd. Company controlled by related natural person

Foshan Nation Star Optoelectronics Co. Ltd. Under same actual controller

Guangdong Fenghua Advanced Technology Holding Co., Ltd. Under same actual controller

Henan Rising High-Tech Investment Co., Ltd. Under same actual controller

Guangdong Rising Finance Co., Ltd. Under same actual controller

MTM Semiconductor Equipment Co., Ltd. Under same actual controller

Guangdong HYB New Energy Co., Ltd. Under same actual controller

5. List of Related-party Transactions

(1) Information on Acquisition of Goods and Reception of Labor Service (Unit: Ten Thousand Yuan)

Information on acquisition of goods and reception of labor service

Unit: RMB

The approval trade Whether exceed trade Same period of last

Related-party Content Reporting Period

credit credit or not year

Prosperity Lamps

Purchase of

and Components 670,457.93 2,000,000.00 No 1,205,832.30

materials

Ltd.

Prosperity Electrical Purchase of

-32,104.28 6,000,000.00 No 4,670,025.04

(China) Co., Ltd. materials

Hangzhou Times

Purchase of

Lighting and 1,138,676.40 3,000,000.00 No 978,074.43

materials

Electrical Co., Ltd.

Foshan Nation Star

Purchase of

Optoelectronics 38,972,909.25 200,000,000.00 No 50,935,351.13

materials

Co., Ltd.

Guangdong

Fenghua Advanced Purchase of

4,100,354.77 9,000,000.00 No 2,950,368.03

Technology Holding materials

Co., Ltd.

136

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Guangdong HYB

Purchase of

New Energy Co., 933,432.24 No

materials

Ltd.

MTM

Purchase of

Semiconductor 164,400.00 2,000,000.00 No

equipment

Equipment Co., Ltd.

Information of sales of goods and provision of labor service

Unit: RMB

Related-party Content Reporting Period Same period of last year

Prosperity Lamps and

Sale of products 14,820,551.42 13,828,671.26

Components Ltd.

Prosperity (Hangzhou) Lighting

Sale of products 38,649.58 63,364.11

and Electrical Co., Ltd.

Prosperity Electrical (China)

Sale of products 177,652.13 127,799.81

Co., Ltd.

Foshan Nation Star

Sale of products 3,353.85 139,981.43

Optoelectronics Co., Ltd.

Hangzhou Times Lighting and

Sale of products 25,852.99

Electrical Co., Ltd.

(2) Relating Commissioned Management/Contract and Entrusted Management/Outsourcing

Naught

(3) Information of Related Lease

The Company serves as the lessor:

Unit: RMB

Rental income confirmed in the Rental income confirmed in the

Name of leasee Type of leased assets

Report period same period of last year

The Company serves as the leasee:

Unit: RMB

Rental expense confirmed in the Rental expense confirmed in the

Name of lessor Type of leased assets

report period same period of last year

Guangdong Electronics

Information Industry Group Vehicles 24,500.00

Ltd.

137

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

(4) Related-party Guarantee

Naught

(5) Borrowing and Lending of Related Parties

Naught

(6) Related Party Asset Transfer and Debt Restructuring

Naught

(7) Rewards for the Key Management Personnel

Unit: RMB

Item Reporting period Same period of last year

Chairman of the Board 0.00 0.00

Director & GM 700,000.00 496,125.00

Chairman of the Supervisor 0.00 0.00

Secretary of the Board 400,000.00 358,314.00

CFO 400,000.00 298,595.00

Others 2,671,500.00 2,099,970.00

Total 4,171,500.00 3,253,004.00

(8) Other Related-party Transactions

Naught

6. Receivables and Payables of Related Parties

(1) Receivables

Unit: RMB

Closing balance Opening balance

Name o f item Related-party

Book balance Bad debt provision Book balance Bad debt provision

Prosperity

(Hangzhou) Lighting

Accounts receivable 86,367.27 43,110.18 86,367.27 25,910.18

and Electrical Co.,

Ltd.

Prosperity Electrical

Accounts receivable 104,626.70 3,138.80 26,156.80 784.70

(China) Co., Ltd.

138

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Prosperity Lamps

Accounts receivable and Components 5,987,859.76 179,635.79 4,121,642.27 123,649.27

Ltd.

Henan Rising

Other accounts

High-tech 117,000.00 117,000.00 117,000.00 93,600.00

receivable

Investment Co., Ltd.

Guangdong

Other accounts Electronics

5,000.00 500.00 5,000.00 150.00

receivable Information Industry

Group Ltd.

MTM

Prepayment Semiconductor 164,400.00

Equipment Co., Ltd.

Prosperity Electrical

Prepayment 7,521.37 92,424.45

(China) Co., Ltd.

Guangdong Rising

Interest receivable 42,222.22

Finance Co., Ltd.

(2) Payables

Unit: RMB

Name o f item Related-party Closing book balance Opening book balance

Prosperity Lamps and

Accounts payable 608,772.61 331,774.70

Components Ltd.

Prosperity Electrical (China)

Accounts payable 366,125.94 1,286,052.41

Co., Ltd.

Foshan Nation Star

Accounts payable 18,377,867.72 19,840,379.88

Optoelectronics Co., Ltd.

Hangzhou Times Lighting and

Accounts payable 879,884.85 243,897.33

Electrical Co., Ltd.

Guangdong Fenghua Advanced

Accounts payable 2,038,015.43 2,492,269.85

Technology Holding Co., Ltd.

Guangdong HYB New Energy

Accounts payable 1,391,666.63

Co., Ltd.

Prosperity Lamps and

Other accounts payable 448,258.77

Components Ltd.

Prosperity Electrical (China)

Other accounts payable 100,000.00 100,000.00

Co., Ltd.

MTM Semiconductor

Other accounts payable 47,860.00 47,860.00

Equipment Co., Ltd.

139

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

7. Related Party Commitment

(1)

Commitment: commitments made in acquisition documents or shareholding alteration documents

Commitment maker: Controlling shareholder

Type of commitment: About avoidance of horizontal competition

Content: Electronics Group and its acting-in-concert parties Shenzhen Rising Investment and Hong Kong Rising

Investment have made a commitment that the business of Foshan Nation Star Optoelectronics Co., Ltd. that is in

competition with the business of the Company takes up only a small part in Nation Star’s total business, they shall

gradually reduce or eliminate the horizontal competition as planned through business integration or other ways or

arrangements within the coming 24 months.

Date of commitment making: 2015-12-04

Term of commitment: 24 months

Fulfillment: In execution

(2)

Commitment: commitments made in acquisition documents or shareholding alteration documents

Commitment maker: Controlling shareholder

Type of commitment: About avoidance of horizontal competition

Electronics Group and its acting-in-concert parties Shenzhen Rising Investment and Hong Kong Rising

Investment have made more commitments as follows to avoid horizontal competition with the Company: 1. They

shall conduct supervision and restraint on the production and operation activities of themselves and their relevant

enterprises so that besides the enterprise above that is in horizontal competition with the Company for now, if the

products or business of them or their relevant enterprises become the same with or similar to those of the

Company or its subsidiaries in the future, they shall take the following measures: (1) If the Company thinks

necessary, they and their relevant enterprises shall reduce and wholly transfer their relevant assets and business;

and (2) If the Company thinks necessary, it is given the priority to acquire first, by proper means, the relevant

assets and business of them and their relevant enterprises. 2. All the commitments made by them to eliminate or

avoid horizontal competition with the Company are also applicable to their directly or indirectly controlled

subsidiaries. They are obliged to urge and make sure that other subsidiaries execute what’s prescribed in the

relevant document and faithfully honor all the relevant commitments. 3. If they or their directly or indirectly

controlled subsidiaries break the aforesaid commitments and thus cause a loss for the Company, they shall

compensate the Company on a rational basis.

Date of commitment making: 2015-12-04

Term of commitment: Long-standing

Fulfillment: In execution

(3)

Commitment: commitments made in acquisition documents or shareholding alteration documents

Commitment maker: Controlling shareholder

Type of commitment: About reduction and regulation of related-party transactions

Content: 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, they

shall 1. Strictly abide by the regulatory documents of the CSRC and the SZSE, the Company’s Articles of

140

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Association, etc. and not harm the interests of the Company or other shareholders of the Company in their

production and operation activities by taking advantage of their position as the controlling shareholder and actual

controller; 2. make sure that they or their other controlled subsidiaries, branch offices, jointly-run or associated

companies (the “Relevant Enterprises” for short) will try their best to avoid or reduce related-party transactions

with the Company or the Company’s subsidiaries; 3. strictly follow the market principle of justness, fairness and

equal value exchange for necessary and unavoidable related-party transactions between them and their Relevant

Enterprises and the Company, and withdraw from voting when a related-party transaction with them or their

Relevant Enterprises is being voted on at a general meeting or a board meeting, and execute the relevant approval

procedure and information disclosure duties pursuant to the applicable laws, regulations and regulatory documents.

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: 2015-12-04

Term of commitment: Long-standing

Fulfillment: In execution

(4)

Commitment: commitments made in acquisition documents or shareholding alteration documents

Commitment maker: Controlling shareholder

Type of commitment: About independence

In 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 Rising

Investment have made the following commitments: 1. They will ensure the independence of the Company in

business: (1) They promise that the Company will have the assets, personnel, qualifications and capabilities for it

to operate independently as well as the ability of independent, sustainable operation in the market. (2) They

promise not to intervene in the Company’s business activities other than the execution of their rights as the

Company’s shareholders. (3) They promise that they and their related parties will not be engaged in business that

is substantially in competition with the Company’s business. And (4) They promise that they and their related

parties will try their best to reduce related-party transactions between them and the Company; for necessary and

unavoidable related-party transactions, they promise to operate fairly following the market-oriented principle and

at fair prices, and execute the transaction procedure and the duty of information disclosure pursuant to the

applicable 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) They promise 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) They promise that the Company will have a production system, a auxiliary production system and supporting

facilities for its operation; legally have the ownership or use rights of the land, plants, machines, trademarks,

patents and non-patented technology in relation to its production and operation; and have independent systems for

the procurement 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

141

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Company’s funds and assets in any way, or use the Company’s assets to provide guarantees for the debts of

themselves or their other controlled subsidiaries with. 4. They will ensure the independence of the Company in

organization: (1) They promise that the Company has a sound corporate governance structure as a joint-stock

company with an independent and complete organization structure. (2) They promise that the operational and

management organs within the Company will independently execute their functions according to laws, regulations

and the Company’s Articles of Association. 5. They will ensure the independence of the Company in finance: (1)

They promise that the Company will have an independent financial department and financial accounting system

with normative, independent financial accounting rules. (2) They promise that the Company will have

independent bank accounts and not share bank accounts with its related parties. (3) They promise that the

Company’s financial personnel do not hold concurrent positions in its related parties. (4) They promise that the

Company will independently pay its tax according to law. And (5) They promise that the Company can make

financial decisions independently and that they will not illegally intervene in the Company’s use of its funds.

Date of commitment making: 2015-12-04

Term of commitment: Long-standing

Fulfillment: In execution

8. Other

Naught

XIII. Share-based Payment

1. General Share-based Payment

□ Applicable √ Not applicable

2. Shared-based Payment Settled by Equity

□ Applicable √ Not applicable

3. Shared-based Payment Settled by Cash

□ Applicable √ Not applicable

4. Modification and Termination on Share-based Payment

Naught

5. Other

Naught

142

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

XIV. Commitments and Contingencies

1. Significant Commitments

Significant commitments at balance sheet date

Naught

2. Contingencies

(1) Significant Contingencies at Balance Sheet Date

Naught

(2) If the Company Has No Significant Contingency to Disclose, Relevant Explanations Should Also Be

Given

The company has no significant contingency to disclose.

3. Other

Naught

XV. Events after Balance Sheet Date

1. Significant Non-adjusting Events

Naught

2. Profit Distribution

Naught

3. Sales Return

Naught

4. Notes of Other Events after Balance Sheet Date

Naught

XVI. Other Significant Events

1. The Accounting Errors Correction in Previous Period

Naught

143

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

2. Debt Restructuring

Naught

3. Assets Replacement

Naught

4. Annuity Plan

Naught

5. Discontinued Operation

Naught

6. Segment Information

Naught

7. Other Important Transactions and Events that Have an Impact on Investors’ Decision-making

Naught

8. Other

Naught

XVII. Notes of Main Items in the Financial Statements of the Company

1. Accounts Receivable

(1) Accounts Receivable Classified by Category

Unit: RMB

Closing balance Opening balance

Book balance Bad debt provision Book balance Bad debt provision

Category Withdra

Book

Proportio wal Proportio Withdrawal Book value

Amount Amount value Amount Amount

n proportio n proportion

n

Accounts receivable

10,062,3 10,062,3 10,064, 10,064,66

with significant 1.10% 100.00% 1.55% 100.00%

78.10 78.10 664.92 4.92

single amount for

144

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

which bad debt

provision separately

accrued

Accounts receivable

withdrawal of bad

902,068, 36,131,9 865,936,5 640,256 28,400,67 611,855,49

debt provision of by 98.90% 4.01% 98.45% 4.44%

469.45 43.21 26.24 ,170.33 3.43 6.90

credit risks

characteristics:

912,130, 46,194,3 865,936,5 650,320 38,465,33 611,855,49

Total 100.00% 5.06% 100.00% 5.91%

847.55 21.31 26.24 ,835.25 8.35 6.90

Accounts receivable with single significant amount and withdrawal bad debt provision separately at end of period

√ Applicable □ Not applicable

Unit: RMB

Accounts receivable Closing balance

(Unit) Accounts receivable Bad-debt provision Withdrawal proportion Reason for withdrawal

The debtor is not

qualified to continuously

Suzhou Mont Lighting produce for the time

10,062,378.10 10,062,378.10 100.00%

Co., Ltd. being for continuing

losses caused by the

scale and market.

Total 10,062,378.10 10,062,378.10 -- --

In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:

√ Applicable □ Not applicable

Unit: RMB

Closing balance

Aging

Accounts receivable Bad-debt provision Withdrawal proportion

Subentry within 1 year

Within 1 year 838,284,736.17 25,148,542.09 3.00%

Subtotal of within 1 year 838,284,736.17 25,148,542.09 3.00%

1 to 2 years 16,064,941.39 1,606,494.14 10.00%

2 to 3 years 1,845,107.85 553,532.36 30.00%

Over 3 years 15,318,633.22 8,823,374.62 57.60%

3 to 4 years 11,531,150.17 5,765,575.08 50.00%

4 to 5 years 3,648,417.57 2,918,734.06 80.00%

Over 5 years 139,065.48 139,065.48 100.00%

Total 871,513,418.63 36,131,943.21 4.15%

Notes:

145

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

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 RMB8,820,467.25yuan; the amount of the

reversed or collected part during the Reporting Period was of RMB0.00.

(3) Particulars about Other Accounts Receivable Actually Verified during the Reporting Period

Unit: RMB

Item Amount of verification

Beijing Senjiyuan Electronic Components Sales Center 339,032.24

Nanjing Weiyiming Photoelectric Technology Co., Ltd. 303,567.17

TEERA-MONGKOL INDUSTRY PUBLIC 213,202.93

Chenzhou Wangshengda Materials Co., Ltd. 99,999.82

Panjin Panfeng Hardware & Electric Materials Sales Co., Ltd. 17,018.73

2013 Finance Bureau 14,703.90

Other driblet small amount 103,959.50

Total 1,091,484.29

(4) Accounts Receivable of the Top 5 of the Closing Balance Collected According to the Arrears Party

Unit: RMB

Name of the entity Nature Closing balance Aging

No. 1 Loan 86,950,173.28 Within 1 year

No. 2 Loan 27,597,102.14 Within 1 year

No. 3 Loan 25,.078,424.52 Within 1 year

No. 4 Loan 17,190,715.74 Within 1 year

No. 5 Loan 14,046,026.43 1 to 2 years

Total 172,862,442.11

(5) Accounts Receivable Derecognized for the Transfer of Financial Assets

Naught

146

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

(6) Amount of Assets and Liabilities Generated from the Transfer of Accounts Receivable and Continued

Involvement

Naught

2. Other Accounts Receivable

(1) Other Accounts Receivable Classified by Category

Unit: RMB

Closing balance Opening balance

Book balance Bad debt provision Book balance Bad debt provision

Category Withdra

Book

Proportio wal Proportio Withdrawal Book value

Amount Amount value Amount Amount

n proportio n proportion

n

Other accounts

receivable withdrawn

66,104,3 2,373,67 63,730,64 58,237, 1,522,852 56,714,849.

bad debt provision 99.56% 3.59% 99.50% 2.61%

23.42 4.97 8.45 702.22 .38 84

according to credit

risks characteristics

Other accounts

receivable with

insignificant single 295,120. 295,120. 295,120 295,120.0

0.44% 100.00% 0.50% 100.00%

amount for which 00 00 .00 0

bad debt provision

separately accrued

66,399,4 2,668,79 63,730,64 58,532, 1,817,972 56,714,849.

Total 100.00% 4.02% 100.00% 3.11%

43.42 4.97 8.45 822.22 .38 84

Other receivable with single significant amount and withdrawal bad debt provision separately at end of period:

□ Applicable √ Not applicable

In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:

√ Applicable □ Not applicable

Unit: RMB

Closing balance

Aging

Other accounts receivable Bad debt provision Withdrawal proportion

Subentry within 1 year

Within 1 year 31,298,666.50 938,959.99 3.00%

Subtotal of within 1 year 31,298,666.50 938,959.99 3.00%

1 to 2 years 1,916,881.38 191,688.14 10.00%

147

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

2 to 3 years 3,107,684.06 932,305.22 30.00%

Over 3 years 313,238.90 310,721.62 99.20%

3 to 4 years 2,233.32 1,116.66 50.00%

4 to 5 years 7,003.10 5,602.48 80.00%

Over 5 years 304,002.48 304,002.48 100.00%

Total 36,636,470.84 2,373,674.97 6.48%

Notes:

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) The Bad-debt Provision Withdrew, Reversed or Collected during the Reporting Period

The withdrawal amount of the bad debt provision during the Reporting Period was of RMB850,828.94yuan; the amount of the

reversed or collected part during the Reporting Period was of RMB0.00.

(3) Other Accounts Receivable Actually Verified during the Reporting Period

Unit: RMB

Item Amount of verification

Other driblet small amount 6.35

(4) Other Accounts Receivable Classified by Account Nature

Unit: RMB

Nature of accounts Closing book balance Opening book balance

Internal business group 29,762,972.58 45,581,148.85

VAT export tax refunds 15,120,172.36

Performance bond 2,805,428.94 1,959,752.60

Staff borrow and deposit 10,792,685.93 5,587,226.25

Water & electricity fees 870,716.06 936,834.08

Advance money for street light construction 3,777,672.16 2,523,547.23

Other 3,269,795.39 1,944,313.21

Total 66,399,443.42 58,532,822.22

(5) The Top Five Other Account Receivable Classified by Debtor at Period-end

Unit: RMB

148

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Proportion to the

Account-age at the total of closing Closing balance of

Name of unit Nature of accounts Closing balance

end of the period balance of other bad-debt provision

accounts receivable

VAT export tax

No. 1 15,120,172.36 Within 1 year 22.77% 453,605.17

refunds

Internal business

No. 2 10,852,345.81 Within 1 year 16.34%

group

Internal business

No. 3 6,125,510.62 1 to 2 years 9.23%

group

Internal business

No. 4 4,395,981.86 2 to 3 years 6.62%

group

Internal business

No. 5 4,026,908.74 Within 1 year 6.06%

group

Total -- 40,520,919.39 -- 61.03% 453,605.17

(6) Account Receivable Involving Government Subsidies

Naught

(7) Other Account Receivable Derecognized Due To the Transfer of Financial Assets

Naught

(8) Amount of Assets and Liabilities Generated from the Transfer of Other Accounts Receivable and

Continued Involvement

Naught

3. Long-term Equity Investment

Unit: RMB

Closing balance Opening balance

Item Impairment Impairment

Book balance Book value Book balance Book value

provision provision

Investment to the

507,957,289.76 24,360,000.00 483,597,289.76 507,957,289.76 24,360,000.00 483,597,289.76

subsidiary

Investment to

joint ventures and

209,858,507.98 209,858,507.98 210,394,932.69 210,394,932.69

associated

enterprises

149

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Total 717,815,797.74 24,360,000.00 693,455,797.74 718,352,222.45 24,360,000.00 693,992,222.45

(1) Investment to the Subsidiary

Unit: RMB

Withdrawn

Closing balance

impairment

Investee Opening balance Increase Decrease Closing balance of impairment

provision in the

provision

Reporting Period

Foshan Chansheng

Electronic Ballast 2,744,500.00 2,744,500.00

Co., Ltd.

Foshan Chanchang

Electric Appliance

82,507,350.00 82,507,350.00

(Gaoming) Co.,

Ltd.

Foshan Taimei

Times Lamps and 350,000.00 350,000.00

Lanterns Co., Ltd.

Nanjing Fozhao

Lighting

Components 72,000,000.00 72,000,000.00

Manufacturing

Co., Ltd.

Foshan Electrical

& Lighting

35,418,439.76 35,418,439.76

(Xinxiang) Co.,

Ltd.

Guangdong

Fozhao New Light

Sources 50,077,000.00 50,077,000.00

Technology Co.,

Ltd.

Guangdong

Fozhao Leasing 200,000,000.00 200,000,000.00

Co., Ltd.

Foshan Lighting

Lamps &

15,000,000.00 15,000,000.00

Components Co.,

Ltd.

FSL Zhida Electric 25,500,000.00 25,500,000.00

150

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Technology Co.,

Ltd.

Suzhou Mont

24,360,000.00 24,360,000.00 24,360,000.00

Lighting Co., Ltd.

Total 507,957,289.76 507,957,289.76 24,360,000.00

(2) Investment to Joint Ventures and Associated Enterprises

Unit: RMB

Increase/decrease

Profit and Closing

loss on Adjustme Cash, balance

Additiona investmen nt of dividends Impairme for

The Opening Reduced Changes Closing

l ts other and nt impairme

investor balance investmen in other Others balance

investmen confirmed comprehe profits provision nt

ts equity

ts according nsive declared s provision

to equity income to issue s

law

I. Joint ventures

II. Associated enterprises

Qinghai

FSL

Lithium 29,836,24 1,286,376 31,122,62

Develop 6.62 .00 2.62

ment Co.,

Ltd.

Primatro

nix

180,558,6 257,589.7 2,080,390 178,735,8

(Nanho)

86.07 9 .50 85.36

Electron

ics Ltd.

210,394,9 1,543,965 2,080,390 209,858,5

Subtotal

32.69 .79 .50 07.98

210,394,9 1,543,965 2,080,390 209,858,5

Total

32.69 .79 .50 07.98

(3) Other Notes

Naught

151

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

4. Revenues and Operating Costs

Unit: RMB

Reporting Period Same period of last year

Item

Sales revenue Cost of sales Sales revenue Cost of sales

Main operations 1,932,419,061.23 1,513,940,853.47 1,734,702,749.77 1,312,995,991.44

Other operations 47,777,343.06 36,016,802.63 47,754,466.37 42,711,518.50

Total 1,980,196,404.29 1,549,957,656.10 1,782,457,216.14 1,355,707,509.94

5. Investment Income

Unit: RMB

Item Reporting Period Same period of last year

Long-term equity investment income

1,543,965.79 -19,640.12

accounted by equity method

Investment income received from disposal of

financial assets measured by fair value and

261,818.10

the changes be included in the current profits

and losses during holding period

Investment income received from holding of

6,560,422.50 10,950,922.50

available-for-sale financial assets

Investment income received from bank

5,299,088.41 2,659,136.99

financial products

Others -500,000.22 -131,489.70

Total 12,903,476.48 13,720,747.77

6. Other

Nought

XVIII. Supplementary Materials

1. Items and Amounts of Extraordinary Gains and Losses

√ Applicable □ Not applicable

Unit: RMB

Item Amount Explanation

Gains/losses on the disposal of non-current

-4,255,164.43

assets

Government subsidies recorded into the 3,869,949.96

152

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

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)

Other non-operating income and expenses

1,637,836.66

other than the above

Less: amount affected of income tax -57,390.05

Amount affected of minority equity -414.63

Total 1,310,426.87 --

Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory

Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Extraordinary 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 Net Equity and Earnings Per Share

EPS(Yuan/share)

Profit as of Reporting Period Weighted average ROE (%)

EPS-basic EPS-diluted

Net profit attributable to common

4.99% 0.1796 0.1796

shareholders of the Company

Net profit attributable to common

shareholders of the Company after

4.96% 0.1786 0.1786

deduction of non-recurring profit

and loss

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

Chinese Accounting Standards

□ Applicable √ Not applicable

153

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

(3) Explain Reasons for the Differences between Accounting Data under Domestic and Overseas

Accounting Standards, for Audit Data Adjusting Differences Had Been Foreign Audited, Should Indicate

the Name of the Foreign Institutions

Naught

4. Other

Naught

154

Foshan Electrical and Lighting Co., Ltd. Semi-Annual Report 2017

Section XI Documents Available for Reference

Investors and relevant departments may refer to the following materials placed in the Board

Secretariat in the office building of the Company:

1. Financial statements signed and sealed by the legal representative, the accounting head for the

Report and the manager of the finance department; and

2. All originals of the Company’s documents and announcements disclosed on China Securities

Journal, Securities Times, and Ta Kung Pao in the Reporting Period.

The Board of Directors

Foshan Electrical and Lighting Co., Ltd

August 23, 2017

155

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