Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
FOSHAN ELECTRICAL AND LIGHTING CO., LTD.
INTERIM REPORT 2021
August 2021
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
Part I Important Notes, Table of Contents and DefinitionsThe Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,supervisors and senior management of Foshan Electrical and Lighting Co., Ltd. (hereinafterreferred to as the “Company”) hereby guarantee the factuality, accuracy and completeness ofthe contents of this Report and its summary, and shall be jointly and severally liable for anymisrepresentations, misleading statements or material omissions therein.Wu Shenghui, the Company’s legal representative, Tang Qionglan, the Company’s ChiefFinancial Officer (CFO), and Peng Fentao, the person-in-charge of the Company’s accountingorgan (equivalent to accounting manager) hereby guarantee that the Financial Statementscarried in this Report are factual, accurate and complete.All the Company’s directors have attended the Board meeting for the review of this Reportand its summary.Any plans for the future and other forward-looking statements mentioned in this Report andits summary shall NOT be considered as absolute promises of the Company to investors.Therefore, investors are reminded to exercise caution when making investment decisions.The Company has described in detail in this Report the risk of macro-economy fluctuationsand fiercer market competition, the risk of rising raw material prices, and the risk ofexchange rate fluctuations. Please refer to the section headed “Risks Facing the Company andCountermeasures” in Item X of Part III of this Report.The Company has no interim dividend plan, either in the form of cash or stock.This Report and its summary have been prepared in both Chinese and English. Should therebe any discrepancies or misunderstandings between the two versions, the Chinese versionsshall prevail.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
Table of Contents
Part I Important Notes, Table of Contents and Definitions ...... 2
Part II Corporate Information and Key Financial Information ...... 6
Part III Management Discussion and Analysis ...... 9
Part IV Corporate Governance ...... 34
Part V Environmental and Social Responsibility ...... 35
Part VI Significant Events ...... 40
Part VII Share Changes and Shareholder Information ...... 56
Part VIII Preferred Shares ...... 62
Part IX Corporate Bonds ...... 63
Part X Financial Statements ...... 64
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
Documents Available for Reference
1. The financial statements signed and stamped by the Company’s legal representative, ChiefFinancial Officer, and the person-in-charge of the Company’s accounting organ.
2. The originals of all the Company’s announcements and documents disclosed to the public duringthe Reporting Period on the media designated by the CSRC for information disclosure.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
Definitions
| Term | Definition |
| The “Company”, “FSL” or “we” | Foshan Electrical and Lighting Co., Ltd. and its consolidated subsidiaries, except where the context otherwise requires |
| Rising Group | Guangdong Rising Holdings Group Co., Ltd. |
| Electronics Group | Guangdong Electronics Information Industry Group Ltd. |
| GD Rising Finance | Guangdong Rising Finance Holding Co., Ltd. |
| Shenzhen Rising Investment | Shenzhen Rising Investment Development Co., Ltd. |
| Hong Kong Rising Investment | Rising Investment Development Limited |
| Nanning Liaowang | Nanning Liaowang Auto Lamp Co., Ltd. |
| CSRC | China Securities Regulatory Commission |
| SZSE | Shenzhen Stock Exchange |
| General meeting | General meeting of Foshan Electrical and Lighting Co., Ltd. |
| Board of Directors | The board of directors of Foshan Electrical and Lighting Co., Ltd. |
| Supervisory Committee | The supervisory committee of Foshan Electrical and Lighting Co., Ltd. |
| RMB, RMB’0,000 | Expressed in the Chinese currency of Renminbi, expressed in ten thousand Renminbi |
| The “Reporting Period” or “Current Period” | The period from 1 January 2021 to 30 June 2021 |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
Part II Corporate Information and Key Financial InformationI Corporate Information
| Stock name | FSL, FSL-B | Stock code | 000541, 200541 |
| Stock exchange for stock listing | Shenzhen Stock Exchange | ||
| Company name in Chinese | 佛山电器照明股份有限公司 | ||
| Abbr. (if any) | 佛山照明 | ||
| Company name in English (if any) | FOSHAN ELECTRICAL AND LIGHTING CO.,LTD | ||
| Abbr. (if any) | FSL | ||
| Legal representative | Wu Shenghui | ||
II Contact Information
| Board Secretary | Securities Representative | |
| Name | Huang Zhenhuan | Huang Yufen |
| Address | No. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, P.R.China | No. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, P.R.China |
| Tel. | 0757-82810239 | 0757-82966028 |
| Fax | 0757-82816276 | 0757-82816276 |
| Email address | fsldsh@chinafsl.com | fslhyf@163.com |
III Other Information
1. Contact Information of the Company
Indicate by tick mark whether any change occurred to the registered address, office address and their zip codes,website address and email address of the Company in the Reporting Period.
□ Applicable √ Not applicable
No change occurred to the said information in the Reporting Period, which can be found in the 2020 AnnualReport.
2. Media for Information Disclosure and Place where this Report is KeptIndicate by tick mark whether any change occurred to the information disclosure media and the place for keepingthe Company’s periodic reports in the Reporting Period.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
□ Applicable √ Not applicable
The newspapers designated by the Company for information disclosure, the website designated by the CSRC fordisclosing the Company’s periodic reports and the place for keeping such reports did not change in the ReportingPeriod. The said information can be found in the 2020 Annual Report.
IV Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
√ Yes □ No
Reason for retrospective restatement:
Business combination involving entities under common control.
| H1 2021 | H1 2020 | Change (%) | ||
| Before | Restated | Restated | ||
| Operating revenue (RMB) | 1,955,342,116.20 | 1,522,884,127.04 | 1,522,884,127.04 | 28.40% |
| Net profit attributable to the listed company’s shareholders (RMB) | 110,555,542.93 | 151,061,447.83 | 148,896,274.55 | -25.75% |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | 98,950,507.51 | 150,434,836.00 | 150,434,836.00 | -34.22% |
| Net cash generated from/used in operating activities (RMB) | 45,779,640.52 | 201,077,703.45 | 206,334,880.07 | -77.81% |
| Basic earnings per share (RMB/share) | 0.0802 | 0.1095 | 0.1080 | -25.74% |
| Diluted earnings per share (RMB/share) | 0.0802 | 0.1095 | 0.1080 | -25.74% |
| Weighted average return on equity (%) | 1.82% | 2.94% | 2.86% | -1.04% |
| 30 June 2021 | 31 December 2020 | Change (%) | ||
| Before | Restated | Restated | ||
| Total assets (RMB) | 8,257,852,503.96 | 8,519,336,914.11 | 8,519,336,914.11 | -3.07% |
| Equity attributable to the listed company’s shareholders (RMB) | 5,910,583,239.23 | 6,263,921,304.54 | 6,263,921,304.54 | -5.64% |
V Accounting Data Differences under China’s Accounting Standards for Business Enterprises(CAS) and International Financial Reporting Standards (IFRS) and Foreign AccountingStandards
1. Net Profit and Equity Differences under CAS and IFRS
□ Applicable √ Not applicable
No such differences for the Reporting Period.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
2. Net Profit and Equity Differences under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No such differences for the Reporting Period.XI Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
| Item | Amount | Note |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | 3,037,823.13 | |
| Government subsidies charged to current profit or loss (exclusive of government subsidies given in the Company’s ordinary course of business at fixed quotas or amounts as per the government’s uniform standards) | 7,791,032.60 | |
| Capital occupation charges on non-financial enterprises that are recognized in profit or loss | 516,895.46 | |
| Gain or loss on fair-value changes on held-for-trading and derivative financial assets and liabilities & income from disposal of held-for-trading and derivative financial assets and liabilities and other debt investments (exclusive of the effective portion of hedges that arise in the Company’s ordinary course of business) | 2,356,050.00 | |
| Non-operating income and expense other than the above | 189,648.11 | |
| Less: Income tax effects | 1,969,325.03 | |
| Non-controlling interests effects (net of tax) | 317,088.85 | |
| Total | 11,605,035.42 | -- |
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in theExplanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Exceptional Gain/Loss Items:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
Part III Management Discussion and AnalysisI Principal Activity of the Company in the Reporting Period
1. The Company’s Principal Activities or Products
We design, manufacture and market high-quality, green and energy-efficient lighting products and electricalproducts, as well as provide complete lighting and electrical solutions. Our products mainly include electricalproducts such as LED light sources and luminaries, automotive LED luminaries, traditional light sources switchesand socket. Currently, we have three major operating divisions, namely, lighting, electrical products and vehiclelighting. Upon years of development, we have won quite many honors, and our “FSL” and “Fenjiang” brandshave been certified as “Famous China Brands”.
2. Main business models
(1) Procurement model
We mainly procure raw materials such as LED lamp beads, electronic components, aluminum substrate, plasticparts, metal materials, and fuel by way of bids invitation. A bids invitation supervisory committee consisting ofpersonnel from several departments will be set up in the future. For every kind of our main raw materials, weusually have a few suppliers to choose from in procurement so that the procurement prices would be fair, thesupply of raw materials in time and the good quality of the raw materials ensured.
(2) Production models
① Production of the conventional products
Concerning the conventional products, we analyze sales of every month and predict future market demand so as toformulate a production plan for the coming month. And our workshops produce according to the plan to avoidextra stock and at the same time ensure that there is enough for sale.
② Production according to orders
Different from the conventional lighting products which are of little variation in specifications, LED lightingproducts are at a fast pace of renewal and different customers often have different requirements regarding theproducts’ appearances and performance indexes. Therefore, we have to organize individualized production forsome orders for LED lighting products, export orders in particular. For this kind of orders, we formulate ourproduction plans based on them and then make procurement plans according to the production plans, which will
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
help effectively control the stock and the procurement prices of raw materials, reduce capital occupation andimprove our operating efficiency to the maximum.
③ Combination of independent production and outsourcing
With a high production capacity, we produce most of our products and parts on our own. Only a small portion ofparts and low-tech products is outsourced to sub-manufacturers, who will produce in strict accordance with ourrequirements. We will also tag along their production processes and examine carefully the quality of the productsfinished. In this way, our supply of products is guaranteed.
(3) Sales model
Domestically, we mainly adopt a commercial agent model. In terms of channels, we have wholesale, franchisedstore, illumination engineering & commercial lighting, industrial and mining outdoor channels, e-commerce &retail sales and automotive lighting channels.For overseas markets, we primarily adopt OEM/ODM models and also sell under our own brands (throughagents).
3. Main driving forces for growth
During the Reporting Period, the Covid-19 pandemic was not entirely under control across the world, and thedownward pressure on the economy kept mounting. However, China’s policies of “Carbon Emission Peak andCarbon Neutrality”, new infrastructure, new urbanization, major construction projects, etc. have brought newdevelopment opportunities for the country’s lighting industry, healthy lighting and smart lighting in particular.While maintaining its major markets, the Company vigorously explored segment markets, which has created newgrowth points for its development. Meanwhile, with the evolution of the industrial competition model, consumersare getting increasingly concerned with product quality and brand. As a result, companies with weakcompetitiveness will be gradually elbowed out of the market while large enterprises or enterprises with corecompetitiveness will have more market opportunities. By virtue of its advantages in technology, brand, channeland scale, the Company has continued to promote the technical upgrading of main products, improve productquality, beef up market expansion and optimize and upgrade the product sales structure through sustainedspending on R&D and technical innovation. Meanwhile, it has gained an advantageous position in the process ofenhancing market concentration by increasing the level of production automation, effectively controlling purchasecosts and ramping up production efficiency.
4. Development stage and periodicity of the lighting industry as well as our position in the market
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
At present, the lighting industry has transitioned from a high-speed development period, which occurred a fewyears ago, to a stable development period and is suffering significant structural overcapacity. With rigidlyincreasing operating costs, the profit margins of lighting enterprises have been squeezed to a certain extent. Fromthe perspective of the global market, with the emergence of the anti-globalization movement, the fluctuations inthe RMB-to-USD exchange rate and the Covid-19 pandemic not entirely under control across the world, thelighting industry is facing many uncertainties in export, and many export-oriented enterprises are turning to thedomestic market, exacerbating the competition in the domestic market. Under the dual pressures from marketdemand and fierce competition, large enterprises are seeking expansion through merger and restructuring whileimproving their market competitiveness through transformation and upgrading, thereby continuously improvingtheir market position.Generally speaking, China’s lighting industry is insufficiently centralized with no overwhelmingly superiorenterprises despite an enlarging market share of competitive brands. Upon years of development, we have becomea leading and quite competitive lighting enterprise with strong competitiveness in brand, production scale, channel,R&D, etc.
II Core Competitiveness AnalysisThe core competitiveness of the Company mainly reflects on fours aspects listed below:
Channel advantageThe Company has been sticking to the market strategy of deeply cultivating and refining channels. Over years ofdevelopment and experience, the Company has been equipped with five major sales channels in domestic market(wholesale, franchised store, e-commerce & retail sales, illumination engineering & commercial lighting andindustrial and mining outdoor channels), forming a marketing network covering the whole country; in foreignmarket, the Company has made active steps to develop international market business, sold products to more than120 countries and regions in North America, Europe, Southeast Asia, Africa and Oceania, and kept improvingoverseas sales channel. By virtue of its powerful and comprehensive sales channels, the Company has enabled itsproducts to enter market rapidly, substantially enhancing its market development abilities and competitiveness.Brand advantageThe Company has accumulated more than 60 years’ experience in the lighting industry and enjoyed continuouslyincreasing influence and brand value for its “FSL”. In recent years, with the enhancement of its development
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
positioning, product design and user experience, the Company has initiated the strategy of brand upgrading andcarried out promotion by centering around the new “Professional, Healthy, Fashionable and Intelligent”. Inaddition, it has driven the transition of “FSL” from an industrial brand to a popular brand to maintain the brandvitality and competitiveness. Among the Company’s brands, both “FSL” and “Fenjiang” are China FamousTrademarks. The brand “FSL” has become one of the most influential and popular industrial brands in China, andthe powerful brand influence has played a key role in driving the sustained growth of the Company’s sales.R&D technical advantageThe Company has been valuing the R&D of new products and the development of innovation and R&D teams. Ithas further increased spending on technology and independent product innovation. The company is a certifiedhigh-tech company, it has its own testing center (national CNAS-Certified laboratory), Guangdong EngineeringTechnology Development Center, Guangdong Industrial Design Center, Guangdong Enterprise TechnologyCenter, and Lighting Research Institute (municipal-level). It has won the titles of “National IP AdvantagedEnterprise” and “Guangdong IP Demonstration Enterprise”. Additionally, its doctoral workstation, the R&Dplatform of its technology center have both been certified by the authorities of the Guangdong Province, and itstesting center has been granted “Energy Star” by governmental authorities in the U.S. It has been cumulativelygranted 715 valid patents. In terms of the development of the R&D team, the Company has formulated acomprehensive R&D personnel management policy and appraisal system, intensified the introduction of highcalibre talents, and reinforced cooperation with colleges and universities in industry-university-research projects,which has created a smooth path for the development of R&D professionals and provided strong support for it tomaintain a technology-leading position and to further carry out product innovation.Scale advantageAs one of the enterprises to first step into the industry of producing and selling lighting products, the Companyform a capability of mass manufacturing by years of experience accumulation. The Company has productionbases in Foshan, Nanjing and Xinxiang. The large-scale and centralized production brings obvious economicbenefits to the Company, which not only shows in manufacture cost of products, but also shows in aspects such asraw material procurement and product pricing.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
III Analysis of Principal Operations
（一）Overview:
In the Reporting Period, as adversely affected by a price increase in raw materials, a shortage of keyelectronic materials, and the RMB appreciation, enterprises faced tremendous business pressure and challenges.Nevertheless, all the employees of the Company rose to challenges, adhered to the general tone of "stabilizing thefundamentals and expanding new businesses", optimized industry presence, and made innovation. Therefore, theCompany's production and operations generally remained stable. In the Reporting Period, the Company recordedoperating revenue of RMB1955.3421 million, up by 28.40 % year-on-year (YoY) and a net profit attributable toshareholders of the listed company of RMB110.5555 million, down by 25.75 % YoY.In the Reporting Period, the Company mainly focused on the following tasks:
1. Made systematic improvement and constantly improved R&D and innovationIn the Reporting Period, the Company continued to center on technology innovation and kept raising R&Dinput. It developed 283 new products, obtained 96 patents, and addressed technical difficulties in the industry inprojects like North American luminaries with brackets and black strip lights. Meanwhile, it actively participated inthe formulation of four international and 10 group standards. Its Industrial Internet demonstration project wasaccepted by Foshan City. It's "Doctor Workstation" and "Corporate Technology Central R&D Platform" wereapproved by Guangdong Province. Additionally, its Testing Center was accredited by US Energy Star, proving theconstant progress in the Company's R&D strength.
2. Pertinent measures were adopted to keep improving production operation and managementThe Company vigorously responded to the shortage of raw materials. It alleviated the shortage of keymaterials, to the maximum extent, by reserving such materials in advance, establishing a Joint Work Team, andenhanced the refined management of the supply chain. Besides, the Company downsized staff and improvedefficiency by transforming and upgrading its automation, optimizing its layout of production lines, perfectedproduct design and processes, and cut production costs. In the meantime, it adjusted the sales prices of productsand exerted more efforts for forward settlement of exchange to hedge against the negative influence of priceincrease in raw materials and the RMB appreciation on itself.
3. Made constant efforts to expand new customers and major projects
Since the beginning of this year, the Company has continuously developed new customers, won new majorproperty and metro projects, and expanded a series of car light module projects. In addition, we made great efforts
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
in expanding overseas market. We have established a cooperation relationship with many mainstream Europeansupermarkets, and our product pipelines have been launched on multiple e-commerce platforms.
4. Highlighted key points and kept developing new businesses
In terms of marine lighting, the Company and the Institute of Deep-sea Science and Engineering (IDSSE),CAS established a joint lab. By leveraging the scientific research strength of the latter, the Company researchedand developed marine lighting products industrialized the R&D results, and expanded its presence in this field. Inthe Reporting Period, the joint lab developed five series of deep-sea lighting products and has started tocommunicate with relevant potential customers. In intelligent lighting and electronic FMCG (fast movingconsumer goods) lighting products, new products, including seating position correction, intelligent sensors,ultra-fast charging series, and portable and entertainment products, were launched. The "Fozhao Smart Home" IoTCloud Platform has gone live. Lighting system solutions for smart home and smart education have been releasedsuccessively.
5. Accelerated capital operation to obtain substantial progress
In order to build up the automobile lighting sector and drive the transformation from light source andmodules to car luminaries, the Company held a meeting of the Board of Directors in the Reporting Period toreview and pass the acquisition of Nanning Liaowang Auto Lamp Co., Ltd. (Nanning Liaowang). Through theacquisition, the Company can utilize its current technology, capacity, and customer channel to exert a synergisticeffect of both sides, complement each other's advantages, and raise its overall profitability and competitiveness.Upon completion of the acquisition, the Company will hold 53.79% of the equity in Nanning Liaowang whichwill be included in the Company’s consolidated statements.
（二）Year-on-year changes in key financial data:
Unit: RMB
| H1 2021/30 June 2021 | H1 2020/31 December 2020 | Change (%) | Main reason for change | |
| Operating revenue | 1,955,342,116.20 | 1,522,884,127.04 | 28.40% | |
| Cost of sales | 1,587,364,854.81 | 1,195,026,224.34 | 32.83% | Cost of sales increased accordingly when operating revenue increased in the period; and the Company has adopted the new accounting standard governing revenue since 1 January 2020, transferring transportation expense related to contract performance to cost of sales, and cost of sales of H1 2020 was |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
| adjusted accordingly. | ||||
| Selling expense | 68,001,600.32 | 62,274,331.94 | 9.20% | |
| Administrative expense | 85,383,016.00 | 65,964,756.76 | 29.44% | |
| Finance costs | -3,934,739.68 | -19,342,644.84 | 79.66% | Decrease in interest on deposits and exchange rate fluctuations in the period |
| Income tax expense | 22,789,901.28 | 23,050,722.70 | -1.13% | |
| R&D expense | 108,214,925.14 | 64,960,847.79 | 66.58% | This is mainly because the Company kept strengthening investment in R&D in the current period. The R&D team was larger and R&D projects were more than the previous period. |
| Net cash generated from/used in operating activities | 45,779,640.52 | 206,334,880.07 | -77.81% | Increase in payments for goods as a result of rising material prices in the period |
| Net cash generated from/used in investing activities | 652,393,252.89 | 236,373,965.65 | 176.00% | Sale of the Gotion High-tech shares in the period, resulting in an increase in cash generated from investing activities |
| Net cash generated from/used in financing activities | -220,895,890.55 | -258,879,038.49 | 14.67% | |
| Net increase in cash and cash equivalents | 469,603,270.12 | 183,726,223.47 | 155.60% | Increase in net cash generated from investing activities in the period |
| Monetary assets | 1,504,280,372.52 | 981,249,699.49 | 53.30% | Sale of the Gotion High-tech shares in the period, resulting in an increase in monetary assets |
| Notes receivable | 218,524,886.92 | 140,972,143.00 | 55.01% | Increase in bank acceptance notes received in the period |
| Prepayments | 18,855,359.01 | 11,994,745.05 | 57.20% | Increase in prepayments as a way to lock material prices considering the rising trends in the period |
| Other current assets | 68,064,174.23 | 175,090,368.85 | -61.13% | Redemption of large bank deposit receipt upon maturity in the period |
| Investments in other equity instruments | 2,548,457,792.00 | 3,305,501,030.06 | -22.90% | This mainly resulted from the sales of Gotion High-tech shares. |
| Right-of-use assets | 4,581,415.21 | N/A | The Company has adopted the new accounting standard governing leases since 1 January 2021 | |
| Long-term prepaid expense | 22,845,684.60 | 13,411,226.23 | 70.35% | High decoration expenditure on new construction project in the period |
| Notes payable | 730,544,569.15 | 480,971,214.80 | 51.89% | increase in bank acceptance notes used in payments in the period |
| Advances from | 1,911,948.59 | 1,285,357.28 | 48.75% | Increase in advances of rentals in the |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
| customers | period | |||
| Employee benefits payable | 45,405,982.12 | 82,485,090.47 | -44.95% | The 31 December 2020 balance comprised year-end bonuses payable, which were paid in the period |
| Taxes and levies payable | 104,436,868.34 | 18,876,657.51 | 453.26% | Sale of the Gotion High-tech shares in the period, resulting in an increase in taxes and levies payable |
| Current portion of non-current assets | 3,382,701.30 | N/A | The Company has adopted the new accounting standard governing leases since 1 January 2021 | |
| Lease liabilities | 2,397,312.18 | N/A | The Company has adopted the new accounting standard governing leases since 1 January 2021 | |
| Other non-current liabilities | 1,244,064.84 | -100.00% | Clearing of liabilities of subsidiary to be liquidated and deregistered | |
| Treasury shares | 220,708,001.24 | N/A | Repurchase of treasury shares in the period | |
| Other income | 7,801,032.60 | 3,028,003.10 | 157.63% | Increase in continuing government grants received in the period |
| Return on investment | 5,209,830.57 | 36,143,255.71 | -85.59% | Receipt of dividends from Xiamen Bank and China Everbright Bank in the same period of last year |
| Gain on changes in fair value | 1,940,000.00 | -1,532,350.00 | -226.60% | Changes in the fair value of forward FX settlement contracts as a result of exchange rate fluctuations |
| Credit impairment loss | 623,460.82 | -3,379,210.38 | 118.45% | Reversal of allowances for expected credit losses due to a decrease in accounts receivable |
| Asset impairment loss | -10,995,234.63 | -3,200,793.69 | -243.52% | Increase in inventory valuation allowances in the period |
| Asset disposal income | 1,781,700.24 | 7,489.02 | 23,690.83% | Increase in disposal of assets in the period |
| Non-operating income | 2,059,638.05 | 662,887.00 | 210.71% | Increase in gains on the disposal of fixed assets in the period |
| Non-operating expense | 613,867.05 | 1,024,568.14 | -40.09% | Decrease in losses on the disposal of fixed assets in the period |
| Other comprehensive income, net of tax | -242,997,717.69 | 461,748,801.29 | -152.63% | Decrease in price of shares held in listed company in the period |
| Other comprehensive income, net of tax attributable to owners of the Company as the parent | -242,997,717.69 | 461,748,801.29 | -152.63% | Decrease in price of shares held in listed company in the period |
| Changes in fair value of | -242,940,301.27 | 461,765,884.65 | -152.61% | Decrease in price of shares held in listed |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
| investments in other equity instruments | company in the period | |||
| Differences arising from the translation of foreign currency-denominated financial statements | -57,416.42 | -17,083.36 | -236.10% | Fluctuation of euro against RMB |
| Total comprehensive income | -130,191,210.67 | 613,414,495.26 | -121.22% | Decrease in price of shares held in listed company in the period |
Material changes to the profit structure or sources of the Company in the Reporting Period:
□ Applicable √ Not applicable
No such changes in the Reporting Period.
Breakdown of operating revenue:
Unit: RMB
| H1 2021 | H1 2020 | Change (%) | |||
| Operating revenue | As % of total operating revenue (%) | Operating revenue | As % of total operating revenue (%) | ||
| Total | 1,955,342,116.20 | 100% | 1,522,884,127.04 | 100% | 28.40% |
| By operating division | |||||
| Lighting products and luminaries | 1,955,342,116.20 | 100.00% | 1,522,884,127.04 | 100.00% | 28.40% |
| By product category | |||||
| LED lighting products | 1,532,904,155.86 | 78.40% | 1,165,303,011.92 | 76.52% | 31.55% |
| Traditional lighting products | 333,455,215.22 | 17.05% | 300,738,547.81 | 19.75% | 10.88% |
| Electrical products | 57,895,902.10 | 2.96% | 38,883,211.69 | 2.55% | 48.90% |
| Other | 31,086,843.02 | 1.59% | 17,959,355.62 | 1.18% | 73.10% |
| By operating segment | |||||
| Domestic | 1,296,316,249.38 | 66.30% | 944,602,854.41 | 62.03% | 37.23% |
| Overseas | 659,025,866.82 | 33.70% | 578,281,272.63 | 37.97% | 13.96% |
Operating Division, Product Category or Operating Segment Contributing over 10% of Operating Revenue orOperating Profit
√ Applicable □ Not applicable
Unit: RMB
| Operating revenue | Cost of sales | Gross profit margin | YoY change in operating revenue (%) | YoY change in cost of sales (%) | YoY change in gross profit margin (%) | |
| By operating division | ||||||
| Lighting products and luminaries | 1,955,342,116.20 | 1,587,364,854.81 | 18.82% | 28.40% | 32.83% | -2.71% |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
| By product category | ||||||
| LED lighting products | 1,532,904,155.86 | 1,278,232,320.37 | 16.61% | 31.55% | 36.03% | -2.75% |
| Traditional lighting products | 333,455,215.22 | 250,208,347.98 | 24.96% | 10.88% | 15.43% | -2.96% |
| Electrical products | 57,895,902.10 | 38,536,417.18 | 33.44% | 48.90% | 53.16% | -1.85% |
| Other | 31,086,843.02 | 20,387,769.28 | 34.42% | 73.10% | 51.44% | 9.38% |
| By operating segment | ||||||
| Domestic | 1,296,316,249.38 | 987,026,282.02 | 23.86% | 37.23% | 39.30% | -1.13% |
| Overseas | 659,025,866.82 | 600,338,572.79 | 8.91% | 13.96% | 23.41% | -6.97% |
Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:
□ Applicable √ Not applicable
Any over 30% YoY movements in the data above and why:
□ Applicable √ Not applicable
IV Analysis of Non-Principal Operations
√ Applicable □ Not applicable
Unit: RMB
| Amount | As % of profit before tax | Source/Reason | Recurrent or not | |
| Return on investment | 5,209,830.57 | 3.84% | Income from investments in low-risk wealth management products of bank | Not |
| Gain/loss on changes in fair value | 1,940,000.00 | 1.43% | Gain/loss on changes in fair value of derivative financial instruments | Not |
| Asset impairments | -10,995,234.63 | -8.11% | Inventory valuation allowances | Not |
| Non-operating income | 2,059,638.05 | 1.52% | Gains on the disposal of non-current assets | Not |
| Non-operating expense | 613,867.05 | 0.45% | Loss on retirement of non-current assets | Not |
| Other income | 7,801,032.60 | 5.75% | Receipt of continuing government grants | Not |
| Credit impairment loss | 623,460.82 | 0.46% | Allowances for doubtful accounts | Not |
| Asset disposal income | 1,781,700.24 | 1.31% | Disposal of immovable properties | Not |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
V Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
| 30 June 2021 | 31 December 2020 | Change in percentage (%) | Reason for significant change | |||
| Amount | As % of total assets | Amount | As % of total assets | |||
| Monetary assets | 1,504,280,372.52 | 18.22% | 981,249,699.49 | 11.51% | 6.71% | Sale of the Gotion High-tech shares in the period, resulting in an increase in monetary assets |
| Accounts receivable | 1,092,252,515.66 | 13.23% | 1,134,233,235.70 | 13.30% | -0.07% | |
| Inventories | 851,859,895.73 | 10.32% | 735,685,116.91 | 8.63% | 1.69% | |
| Long-term equity investments | 179,322,086.81 | 2.17% | 181,365,016.32 | 2.13% | 0.04% | |
| Fixed assets | 677,082,730.82 | 8.20% | 685,707,548.55 | 8.04% | 0.16% | |
| Construction in progress | 537,612,907.97 | 6.51% | 503,941,120.31 | 5.91% | 0.60% | |
| Right-of-use assets | 4,581,415.21 | 0.06% | 0.00% | 0.06% | ||
| Contract liabilities | 71,380,411.53 | 0.86% | 65,777,726.45 | 0.77% | 0.09% | |
| Lease liabilities | 2,397,312.18 | 0.03% | 0.00% | 0.03% | ||
2. Major Assets Overseas
□ Applicable √ Not applicable
3. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
| Item | Beginning amount | Gain/loss on fair-value changes in the Reporting Period | Cumulative fair-value changes charged to equity | Impairment allowance for the Reporting Period | Purchased in the Reporting Period | Sold in the Reporting Period | Other changes | Ending amount |
| Financial assets | ||||||||
| 2. Derivative financial | 6,332,900.00 | 1,940,000.00 | 6,332,900.00 | 1,940,000.00 | ||||
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
| assets | ||||||||
| 4. Investments in other equity instruments | 3,305,501,030.06 | -262,503,999.52 | 9,402,110.68 | 503,941,349.22 | 2,548,457,792.00 | |||
| Subtotal of financial assets | 3,311,833,930.06 | 1,940,000.00 | -262,503,999.52 | 9,402,110.68 | 510,274,249.22 | 2,550,397,792.00 | ||
| Total of the above | 3,311,833,930.06 | 1,940,000.00 | -262,503,999.52 | 9,402,110.68 | 510,274,249.22 | 2,550,397,792.00 | ||
| Financial liabilities | 0.00 | 0.00 |
Details about other changes:
Investments in wealth management products and structured deposits are not included in the item of “otherchanges”. For further information, see “XII Major Contracts and Execution thereof ” in Part VI of this Report.Cumulative changes in fair value recognized in equity in the current period included value-added tax payable dueto the sale of Guoxuan High-tech shares.
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
4. Restricted Asset Rights as at the Period-End
Unit: RMB
| Item | Ending carrying value | Reason for restriction |
| Monetary assets | 159,619,895.39 | Security deposits for notes and forward forex settlement |
| Notes receivable | 80,709,869.38 | In pledge for notes pool |
| Total | 240,329,764.77 |
VI Investments Made
1. Total Investment Amount
√ Applicable □ Not applicable
| Investment amount in the Reporting Period (RMB) | Investment amount in the same period of last year (RMB) | Change (%) |
| 50,000,000.00 | 0.00 | N/A |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
2. Major Equity Investments Made in the Reporting Period
√ Applicable □ Not applicable
Unit: RMB
| Name of investee enterprise | Main businesses | Investment methods | Invested amount | Shareholding percentage | Funding Resources | Partners | Investment Duration | Product type | Status as on the date of the balance sheet | Predicted return | Investment return in the current period | Whether involved in any legal actions | Date of disclosure (if any) | Disclosure index (if any) |
| Fozhao (Hainan) Technology Co., Ltd.（Note 1） | Manufacturing and marketing of luminaries, lighting devices, household electrical appliances, hardware, sanitary ware, electric wires, electric cables, and distribution switches control devices | Newly established | 50,000,000.00 | 100.00% | Self-funded | None | Long-term | Wholly-owned subsidiary | Incorporated | 0.00 | 0.00 | No | ||
| Total | -- | 50,000,000.00 | -- | -- | -- | -- | -- | 0.00 | 0.00 | -- | -- | -- |
Notes:
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
Note 1: In May 2021, the Company invested and established Fozhao (Hainan) Technology Co., Ltd. in Hainan,with a registered capital of RMB50 million. The Company owns 100% of its equity. As at the end of thisReporting Period, the Company has not conducted asset injection.
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
Unit: RMB
| Security type | Security code | Security name | Initial investment cost | Measurement method | Beginning carrying value | Gain/Loss on fair-value changes in Reporting Period | Accumulated fair-value changes charged to equity | Purchased in Reporting Period | Sold in Reporting Period | Gain/loss in Reporting Period | Ending carrying value | Accounting title | Funding source |
| Domestically/Overseas listed stock | 002074 | Gotion High-tech | 160,000,000.00 | Fair value method | 1,778,218,182.00 | 148,679,174.22 | 1,264,684,034.12 | 503,941,349.22 | 1,422,956,007.00 | Investments in other equity instruments | Self-funded | ||
| Domestically/Overseas listed stock | 601818 | China Everbright Bank | 30,828,816.00 | Fair value method | 74,001,548.46 | -3,894,818.34 | 46,456,982.30 | 70,106,730.12 | Investments in other equity instruments | Self-funded | |||
| Domestically/Overseas listed stock | 601187 | Xiamen Bank | 292,574,133.00 | Fair value method | 1,448,227,123.20 | -408,136,734.72 | 747,516,255.48 | 1,040,090,388.48 | Investments in other equity instruments | Self-funded | |||
| Domestically/Overseas listed | 002449 | Nationstar Optoelectronics | 9,402,110.68 | Fair value method | 0.00 | 848,379.32 | 848,379.32 | 9,402,110.68 | 10,250,490.00 | Investments in other equity | Self-funded |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
| stock | instruments | ||||||||||||
| Domestically/Overseas listed stock | N/A | Foshan branch of Guangdong Development Bank | 500,000.00 | Fair value method | 500,000.00 | 500,000.00 | Investments in other equity instruments | Self-funded | |||||
| Total | 493,305,059.68 | -- | 3,300,946,853.66 | -262,503,999.52 | 2,059,505,651.22 | 9,402,110.68 | 503,941,349.22 | 0.00 | 2,543,903,615.60 | -- | -- | ||
| Disclosure date of announcement on Board’s consent for securities investments | |||||||||||||
| Disclosure date of announcement on general meeting’s consent for securities investments (if any) | |||||||||||||
(2) Investments in Derivative Financial Instruments
√ Applicable □ Not applicable
Unit: USD’0,000
| Operating party | Relationship with the Company | Related-party transaction or not | Type of derivative | Initial investment amount | Beginning date | Ending date | Beginning investment | Purchased in Reporting Period | Sold in Reporting Period | Impairment allowance (if any) | Ending investment | Ending investment as % of the Company’s ending net assets | Actual gain/loss in Reporting Period |
| Foshan branch of the Agricultural Bank of China | Not related | Not | General forward | 600 | 25 August 2020 | 29 March 2021 | 600 | 600 | 48.59 | ||||
| Foshan | Not | Not | General | 300 | 30 | 23 | 300 | 300 | 19.51 |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
| branch of the Industrial and Commercial Bank of China | related | forward | September 2020 | February 2021 | |||||||||
| Foshan branch of the Industrial and Commercial Bank of China | Not related | Not | General forward | 600 | 20 October 2020 | 23 April 2021 | 600 | 600 | 22.39 | ||||
| Foshan branch of the Industrial and Commercial Bank of China | Not related | Not | General forward | 300 | 28 October 2020 | 29 January 2021 | 300 | 300 | 10.4 | ||||
| Foshan branch of the Industrial and Commercial Bank of China | Not related | Not | General forward | 200 | 3 December 2020 | 29 January 2021 | 200 | 200 | 1.45 | ||||
| Foshan branch of Bank of Communications | Not related | Not | General forward | 300 | 15 January 2021 | 25 February 2021 | 300 | 300 | 1.1 | ||||
| Foshan branch | Not related | Not | General forward | 200 | 21 January | 25 Februar | 200 | 200 | 0.49 |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
| of the Industrial and Commercial Bank of China | 2021 | y 2021 | |||||||||||
| Foshan branch of the Agricultural Bank of China | Not related | Not | General forward | 400 | 8 March 2021 | 29 April 2021 | 400 | 400 | -1.18 | ||||
| Foshan branch of the Industrial and Commercial Bank of China | Not related | Not | General forward | 300 | 25 March 2021 | 29 April 2021 | 300 | 300 | -0.38 | ||||
| Foshan branch of Bank of China | Not related | Not | General forward | 400 | 23 April 2021 | 27 May 2021 | 400 | 400 | 1.57 | ||||
| Foshan branch of the Industrial and Commercial Bank of China | Not related | Not | General forward | 800 | 4 June 2021 | 8 December 2021 | 800 | 800 | 0.87% | ||||
| Foshan branch of the Industrial and Commercial Bank of | Not related | Not | General forward | 800 | 11 June 2021 | 16 November 2021 | 800 | 800 | 0.87% |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
| China | |||||||||||||
| Foshan branch of Bank of China | Not related | Not | General forward | 2,000 | 30 June 2021 | 22 December 2021 | 2,000 | 2,000 | 2.17% | ||||
| Total | 7,200 | -- | -- | 2,000 | 5,200 | 3,600 | 3,600 | 3.91% | 103.94 | ||||
| Funding source | All self-funded | ||||||||||||
| Legal matters involved (if applicable) | N/A | ||||||||||||
| Disclosure date of board announcement approving derivative investment (if any) | 28 January 2021 | ||||||||||||
| Disclosure date of general meeting announcement approving derivative investment (if any) | |||||||||||||
| Analysis of risks and control measures associated with derivative investments held in Reporting Period (including but not limited to market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) | Risk Analysis of Forward Exchange Settlement Business: 1. Risk of exchange rate fluctuations. In the case of large fluctuations in the exchange rate, the quoted price of the bank’s forward exchange rate may be lower than the Company’s quoted exchange rate to the customer, which will make the Company unable to lock the quoted exchange rate to the customer or the bank’s forward exchange rate may deviate from the exchange rate at the time of the Company’s actual receipt and payment, and causes exchange losses. 2. Risk of customer default. The customer’s accounts receivable may be overdue, and the payment for goods cannot be recovered within the predictable payback period, which will result in the loss of the Company due to the delayed forward settlement. 3. Risk of payback prediction. The marketing department shall made corresponding payback prediction based on customer orders and expected orders. However, during the actual implementation process, customers may adjust their orders and predictions, which will result in the Company’s incorrect payback prediction and cause the risk of delayed delivery of forward exchange settlement. Adopted Risk Control Measures: 1. The Company will strengthen the research and analysis of the exchange rate. When the exchange rate fluctuates greatly, it will adjust the business strategy in a timely manner to stabilize the export business and avoid exchange losses to the utmost. 2. The Management System for Forward Settlement and Sales of Foreign Exchanges of the Company stipulates that all forward foreign exchange settlement businesses of the Company shall be based on the normal production and operation, and relied on specific business operations to avoid and prevent various exchange rate risks. However, speculative transaction and interest arbitrage are not allowed. At the same time, the system clearly defines the operating principles, approval authority, responsible department and responsible person, internal operation procedures, information isolation measures, internal risk reporting system, risk management procedures, and information disclosure related to the forward settlement business as well. In fact, the system is conducive to strengthen the management of the Company’s forward foreign exchange settlement business and prevent investment risks. 3. In order to prevent any delay in the forward exchange settlement, the Company will strengthen the management of accounts receivable, actively collect receivables, and avoid any overdue receivables. In the meantime, the Company plans to increase the export purchases and purchase corresponding credit insurance so as to reduce the risk of default and | ||||||||||||
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
| customer default. 4. The Company’s forward foreign exchange settlement transactions must be based on the Company’s foreign exchange earnings prediction. Besides, the Company shall strictly control the scale of its forward foreign exchange settlement business, and manage all risks that the Company may face within a controllable range. 5. The internal audit department of the Company shall check the actual signing and execution situation of all trading contracts on a regular or irregular basis. | |
| Changes in market prices or fair value of derivative investments in Reporting Period (fair value analysis should include measurement method and related assumptions and parameters) | The Company carries out recognition and measurement in accordance with the Accounting Standard for Business Enterprises No. 22—Recognition and Measurement of Financial Instruments, the Accounting Standard for Business Enterprises No. 24—Hedges, the Accounting Standard for Business Enterprises No. 37—Presentation of Financial Instrument and other applicable regulations. Fair value is arrived at based on the price provided by pricing service providers such as banks or the price obtained. Fair value measurement and recognition are carried out on a monthly basis. Changes in the fair value of forward exchange settlement contracts entered into by the Company are mainly attributable to difference arising from exchange rate fluctuations. |
| Major changes in accounting policies and specific accounting principles adopted for derivative investments in Reporting Period compared to last reporting period | N/A |
| Opinion of independent directors on derivative investments and risk control | Opinions of the Independent Directors: The forward foreign exchange settlement transactions conducted by the Company are based on normal production and operation, are supported by specific businesses, aim to avoid and prevent foreign exchange risks associated with export businesses, do not involve speculative operations and are consistent with the needs of the Company's operation and development. The Company has established relevant business management policies and risk control and prevention measures. The risk is controllable. The proposal was passed following a lawful, valid decision-making procedure, has no negative impact on the Company's normal operation and business development and does not undermine the interest of the Company and its shareholders. Therefore, the Company's conducting forward foreign exchange settlement transactions is approved. |
VII Sale of Major Assets and Equity Interests
1. Sale of Major Assets
√ Applicable □ Not applicable
| Transaction party | Asset sold | Date of sale | Transaction price (RMB’0,000) | Net profit contributed to the Company from the | Effect on the Company (see note 3) | Ratio of the net profit contributed by the sale of the | Pricing principle | Related-party transaction or not | Relationship between the transaction party and the | Ownership of the asset involved has been all transfer | Creditor’s rights and liabilities involved have | Executed as scheduled or not; if not, give reasons | Disclosure date | Index to disclosed information |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
| period-begin to the date of sale (RMB’0,000) | asset to the Company’s total profit (%) | Company (applicable for related-party transactions) | red or not | been all transferred or not | and measures taken | |||||||||
| Centralized bidding on the secondary market | Part of the Company’s shareholdings in Gotion High-tech Co., Ltd. | June 2021 | 50,394.13 | 0 | The sale of the shares would not affect the Company’s business continuity or management stability. | 0.00% | Market price of the Gotion High-tech stock when reducing the shareholdings | Not | N/A | Yes | Yes | N/A | N/A | N/A |
Note: As the Company has adopted the new accounting standard governing financial instruments since 1 January2019, the Company’s investment in Guoxuan High-tech was recognized as a designated investment innot-held-for-trading equity instruments at fair value through other comprehensive income. This reduction in theCompany’s shareholding in Guoxuan High-tech had no impact on the current profit of the Company.
2. Sale of Major Equity Interests
□ Applicable √ Not applicable
VIII Major Subsidiaries
√ Applicable □ Not applicable
Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on theCompany’s net profit:
Unit: RMB
| Name | Relationship | Principal | Registered | Total assets | Net assets | Operating | Operating | Net profit |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
| with the Company | activity | capital | revenue | profit | ||||
| FSL Chanchang Optoelectronics Co., Ltd. | Subsidiary | Manufacturing | 72,782,944.00 | 323,397,566.03 | 155,919,228.77 | 149,045,673.68 | 10,494,231.82 | 7,596,142.93 |
| Foshan Taimei Times Lamps Co., Ltd. | Subsidiary | Manufacturing | 500,000.00 | 131,216,431.04 | 35,757,452.73 | 72,063,898.77 | 10,144.37 | 63,872.30 |
| FSL New Light Source Technology Co., Ltd. | Subsidiary | Manufacturing | 50,000,000.00 | 671,011.56 | 671,011.56 | 1,494,329.66 | -341,891.66 | -341,891.61 |
| FSL (Xinxiang) Lighting Co., Ltd. | Subsidiary | Manufacturing | 35,418,439.76 | 70,309,270.62 | 53,904,430.70 | 17,681,537.70 | 199,944.59 | 158,506.67 |
| FSL Lighting Equipment Co., Ltd. | Subsidiary | Manufacturing | 15,000,000.00 | 63,692,283.67 | 58,291,757.27 | 18,034,992.46 | 685,116.06 | 352,440.32 |
| Nanjing Fozhao Lighting Components Manufacturing Co., Ltd. | Subsidiary | Manufacturing | 41,683,200.00 | 101,605,089.70 | 71,888,871.44 | 14,033,796.59 | 4,072,079.93 | 2,916,645.40 |
| FSL Zhida Electric Technology Co., Ltd. | Subsidiary | Manufacturing | 50,000,000.00 | 139,008,980.85 | 60,726,230.22 | 79,244,539.01 | 3,948,422.18 | 3,263,540.44 |
| FSL Lighting GmbH | Subsidiary | Manufacturing | 195,812.50 | 1,276,239.48 | 21,442.04 | 905,388.74 | 14,711.81 | 14,711.81 |
| Foshan Hortilite Optoelectronics Co.,Ltd. | Subsidiary | Manufacturing | 17,158,000.00 | 73,121,925.95 | 32,797,062.97 | 41,436,035.13 | 1,726,829.77 | 1,291,186.52 |
| Hunan Keda New Energy Investment and Development Co., Ltd. | Subsidiary | Investment and technology development | 170,000,000.00 | 512,702,955.95 | 96,051,537.17 | 4,643.09 | -2,395,847.56 | -1,799,155.98 |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
Subsidiaries obtained or disposed in the Reporting Period:
√Applicable □ Not applicable
| Name | How the subsidiary was obtained or disposed of in the Reporting Period | Impact on overall operations and performance |
| Fozhao (Hainan) Technology Co., Ltd. | Newly established | No significant impact |
Information about major majority- and minority-owned subsidiaries:
—FSL Chanchang Optoelectronics Co., Ltd. (renamed on 19 June 2018 from “Foshan Chanchang ElectricAppliances (Gaoming) Co., Ltd.”), which is a Sino-foreign joint venture invested and established by the Companyand Prosperity Lamps and Components Ltd, had obtained license for business corporation on 23 August 2005through approval by Foreign Trade and Economic Cooperation Bureau of Gaoming District, Foshan withdocument “MWJMY Zi [2005] No. 79”. The Company holds 70% equities of the said company; therefore the saidsubsidiary was included into the scope of the consolidated financial statements since the date of foundation.On 23 August 2016, the Company and Prosperity Lamps and Components Ltd signed the equity transferagreement. The Company purchased 30% equity of Foshan Chanchang Electric Appliances (Gaoming) Co., Ltd.held by Prosperity Lamps and Components Ltd. After the purchasing, the Company held 100% equity of FoshanChanchang Electric Appliances (Gaoming) Co., Ltd.—Foshan Taimei Times Lamps Co., Ltd., which is a Sino-foreign joint venture invested and established by theCompany and Reback North America Investment Limited, had obtained license for Business Corporation on 5December 2005 through approval by Foreign Trade and Economic Cooperation Bureau of Gaoming District,Foshan with document “MWJMY Zi [2005] No. 97”. The Company holds 70% equities of the said company;therefore the said subsidiary was included into the scope of the consolidated financial statements since the date offoundation.—FSL New Light Source Technology Co., Ltd. (its predecessor was “Foshan Lighting Lamps and Lanterns Co.,Ltd.” and it changed its name to “FSL New Light Source Technology Co., Ltd.” on 17 December 2014), which isinvested and established by the Company together with Foshan Haozhiyuan Trading Co., Ltd., Shanghai LiangqiElectric 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 forBusiness Corporation on 27 September 2009. The Company holds 60% equities of this company. Therefore thesaid subsidiary was included into the scope of the consolidated financial statements since the date of foundation.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
The company is going through liquidation and deregistration process. For more details, see Chapter 6 of the report:
XIIII. Major Events of the Company and Subsidiaries.On 25 September 2009 and 19 November 2010, the equity transfer agreement was signed between the Companyand the minority shareholders, in which the minority shareholders respectively transferred their equities of FoshanLighting Lamps and Lanterns Co., Ltd. to the Company. After transfer, the Company holds 100% equities ofFoshan Lighting Lamps and Lanterns Co., Ltd. The company is going through liquidation and deregistrationprocess. For more details, see Chapter 6 of the report: XIIII. Major Events of the Company and Subsidiaries.—FSL (Xinxiang) Lighting Co., Ltd. is a limited liability company which is invested and established by theCompany, obtaining its license for Business Corporation on 17 April 2009. The Company holds 100% equities ofthe said company, therefore the said subsidiary was included into the scope of the consolidated financialstatements since date of foundation.On 27 August 2013, the 3rd Meeting of the 7th Board of Directors reviewed and approved to invest anotherRMB2 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 RMB35,418,439.76.—Foshan Lighting Lamps and Lanterns Co., Ltd. is a limited liability company invested and established by theCompany with the registered capital of RMB15 million, which had obtained its license for Business Corporationon 8 May 2013. And the Company holds 100% equities of this company. Therefore the said subsidiary wasincluded 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 andComponents Ltd. on 27 August 2008, Prosperity Lamps and Components Ltd. transferred 100% equities ofNanjing Fozhao Lighting Components Manufacturing Co., Ltd. (formerly known as “Prosperity (Nanjing)Lighting Components Co., Ltd.”, and changed name to “Nanjing Fozhao Lighting Components ManufacturingCo., Ltd.” on 15 November 2010.) to the Company. Therefore, Nanjing Fozhao Lighting ComponentsManufacturing Co., Ltd. became a wholly-owned subsidiary of the Company. The said subsidiary was includedinto the scope of the consolidated financial statements since the merger date.—FSL Zhida Electric Technology Co., Ltd. (FSL Zhida) was incorporated by the Company, Foshan ZhibidaEnterprise Management Co., Ltd. and Dongguan Baida Semiconductor Material Co., Ltd. on a joint investmentbasis. FSL Zhida obtained its business license on 21 October 2016. Holding a stake of 51% in it, the Company hasincluded FSL Zhida in its consolidated financial statements since the date of FSL Zhida’s incorporation.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
—FSL Lighting GmbH is a Limited Liability company invested and set up in German with registered capitalEuro25,000. It got the business license on 30 November 2017 whose 100% stock equity is held by the Company,and it is included into the scope of consolidated financial statement from the date of establishment.—Foshan Haolaite was incorporated by the Company and Foshan NationStar, with a registered capital ofRMB17,158,000 contributed by the Company and Foshan NationStar and the corporate business license grantedon 30 July 2020. The Company owns 51 percent of the equity of Foshan Haolaite, which has been included in thescope of the consolidated financial statements of the Company since its day of incorporation.—The 100 percent of the equity of Hunan Keda was transferred from Guangdong Huajian to the Company underan equity transfer agreement between the Company and Guangdong Huajian signed on 21 December 2020,whereby Hunan Keda has become a wholly owned subsidiary of the Company. Hunan Keda has been included inthe scope of the consolidated financial statements of the Company since the day the Company assumed actualcontrol over Hunan Keda.—Fozhao (Hainan) Technology Co., Ltd. is a company of limited liability invested and established in Hainan bythe Company, with a registered capital of RMB50 million. It obtained the business license for enterprise legalperson on May 27, 2021. The Company owns 100% of its equity, and it has been included in the scope of theconsolidated financial statements of the Company since its day of incorporation.IX Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
X Risks Facing the Company and Countermeasures
1. Risks of macro economic fluctuations and fiercer market competition
At present, the global Covid-19 pandemic has not been entirely controlled, global economic growth is stillunder great pressure and uncertainty, which may have an adverse impact on the development of the industry.Meanwhile, the lighting industry is an industry with global competition. In particular, domestic enterprises in thedownstream lighting application sector face not only the competition from international lighting companies withwell-known brands but also the competition from home appliances enterprises, electronics enterprises and ICenterprises in the midstream and upstream of the LED industry as these enterprises keep expanding into thelighting application sector. The Company will be facing a market environment with increasingly fiercecompetition.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
Countermeasures: The Company will continue to increase R&D investments in a bid to develop newproducts and enter new segment markets. It will also accelerate the introduction of new manufacturing processes,technologies and products to the market for more market share and higher added value on its products. At the sametime, by optimizing marketing network and strengthening the business focus and expansion on domestic and foreignmajor customers, the Company will improve service quality, increase core competitive capacity of the Companyconstantly.
2. Risk of raw material price fluctuations
The Company's raw material costs account for a high proportion of the operating costs. Because the price ofsome raw materials is significantly related to uncontrollable factors such as the global market conditions andnational macro policies, the raw material price fluctuations pose a risk to the Company.
Countermeasures: The Company will pay attention to market dynamics, collect information, analyze andpre-judge supply of main raw materials and price trends, so as to make excellent sourcing plans. By increasingquantity of qualified suppliers, expanding bidding range, perfecting supply chain management, and promotingalternative materials, the Company is able to decrease procurement costs.
3. Risk of exchange rate fluctuations
The fluctuating global economy, the escalating tensions in local hotspots and changes in the monetarypolicies of various countries may lead to exchange rate fluctuations. Export accounts for a large proportion of theCompany's revenue. A significant appreciation of the RMB will negatively impact the Company's performance.Countermeasures: By knowing and analyzing exchange rate policies and fluctuation trend of settlement currenciesin time, intensifying settlement currency management, ,and carrying out foreign exchange hedging business whenthe timing is right, the Company can relatively lock in exchange rates and minimize the risks brought by exchangerate fluctuations.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
Part IV Corporate Governance
I Annual and Extraordinary General Meeting Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
| Meeting | Type | Investor participation ratio | Convened date | Disclosure date | Resolutions of the meeting |
| The 2020 Annual General Meeting | Annual General Meeting | 44.37% | 21 May 2021 | 22 May 2021 | Announcement on Resolutions of the 2020 Annual General Meeting (Announcement No.: 2021-033) disclosed on www.cninfo.com.cn |
2. Extraordinary General Meetings Convened at the Request of Preference Shareholders with ResumedVoting Rights
□ Applicable √ Not applicable
II Change of Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
| Name | Office title | Type of change | Date of change | Reason for change |
| Huang Zhenhuan | Board Secretary | Appointed | 19 May 2021 | Appointed by the Board of Directors |
III Interim Dividend Plan
□ Applicable √ Not applicable
The Company has no interim dividend plan, either in the form of cash or stock.IV Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures forEmployees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
Part V Environmental and Social ResponsibilityI Major Environmental IssuesIndicate by tick mark whether the Company or any of its subsidiaries is identified as a major polluter by theenvironmental protection authorities.
√ Yes □ No
| Name of Company or Subsidiary Company | Major and Characteristic Pollutants | Discharge Method | Outlet Quantity | Outlet Distribution | Discharge Concentration | Pollutant Discharge Standards | Total Actual Discharge | Total Discharge Approved | Excessive Discharge |
| Foshan Electrical and Lighting Co., Ltd. Gaoming Branch (hereinafter referred to as Gaoming Branch) | SO2 | Discharge upon processing | 1 | In the plant | SO2: 289 mg/m3 | Emission Standards for Air Pollutants in Glass Industry (DB44/2159-2019) | SO2: 18.01449 t/y | SO2: 39.937 t/y | None |
| Gaoming Branch | Oxynitride | Discharge upon processing | 1 | In the plant | Oxynitride: 550mg/m3 | Emission Standards for Air Pollutants in Glass Industry (DB44/2159-2019) | Oxynitride: 75.30435 t/y | Oxynitride: 83.549 t/y | None |
Construction and operation of pollution control facilities
| No. | Facility | Total Investment (RMB0,000) | Date of Construction (MM/YYYY) | Date of Operation (MM/YYYY) | Operator | Processes | Design Capacity (m3/h) | Actual Capacity (m3/h) | Operation Hours (h/d) |
| 1 | Desulfurization, denitration, and dust removal system | 500 | November 2015 | December 2015 | Independent operations | Semi-dry flue gas desulphurization (SDFGD) + electric precipitation + SCR denitration | 60,000 | 60,000 | 24 |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
Assessment of the environmental impact of construction projects and other administrative licenses ofenvironmental protection
| No. | Document Name of Administrative License of Environmental Protection | Approver | Date of Approval | Approval No. |
| 1 | Approval for Environmental Impact Report on New Project of Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | Environmental Protection Bureau of Gaoming District, Foshan City | 3 November 2004 | / |
| 2 | Environmental Protection Acceptance Opinions on Phase I of Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | Environmental Protection Bureau of Gaoming District, Foshan City | 28 August 2008 | MHY [2008] No. 26 |
| 3 | Acceptance Opinions on Flue Gas Emission Continuous Monitoring System of Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | Environmental Protection Bureau of Gaoming District, Foshan City | 22 February 2010 | MHY [2010] No. 8 |
| 4 | Approval for Environmental Impact Report on Energy-saving Lamp Expansion Project of Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | Environmental Protection Bureau of Gaoming District, Foshan City | 30 August 2013 | MHGYB [2013] No. 030 |
| 5 | Letter of Environmental Protection Acceptance Opinions on Energy-saving Lamp Expansion Project of Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | Environmental Transport and Urban Management Bureau of Gaoming District (Environmental Protection) | 19 February 2014 | MGY [2014] No. 2 |
| 6 | Approval from Environmental Protection Bureau of Gaoming District, Foshan City, of Environmental Impact Report on Expansion Project of Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | Environmental Protection Bureau of Gaoming District, Foshan City | 13 February 2015 | MHS [2015] No. 14 |
| 7 |
| Environmental Protection Bureau of Gaoming District, Foshan City | 26 November 2015 | MHS [2015] No. 157 | ||
| 8 | Letter from Environmental Protection Bureau of Gaoming District, Foshan City of Environmental Protection Acceptance Opinions on Kiln Expansion and Flue Gas Control and Remediation Project of Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | Environmental Protection Bureau of Gaoming District, Foshan City | 24 December 2015 | MHY [2015] No. 83 |
| 9 | Approval from Environmental Protection Bureau of Gaoming District, Foshan City, of Environmental Impact Report on New LED Luminaries R&D Production Base Construction Project of Foshan Electrical and Lighting Co., | Environmental Protection Bureau of Gaoming District, Foshan City | 30 September 2017 | MHS [2017] No. 138 |
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
| Ltd. Gaoming Branch | ||||
| 10 | Approval from Environmental Protection Bureau of Gaoming District, Foshan City, of Environmental Impact Report on Glass Kiln (Change) Construction Project of Foshan Electrical and Lighting Co., Ltd. Gaoming Branch | Environmental Protection Bureau of Gaoming District, Foshan City | 14 January 2019 | MHS [2019] No. 11 |
| 11 | Letter from Foshan Municipal Ecology and Environment Bureau of Environmental Protection Acceptance Opinions on Solid Waste Pollution Prevention and Control Facility for New LED Luminaries R&D Production Base Construction Project (Phase I) of Foshan Electrical and Lighting Co., Ltd. | Ecology and Environment Bureau of Foshan City | 12 September 2019 | FMHY [2019] No. 126 |
| 12 | Sewage Discharge License | Ecology and Environment Bureau of Foshan City | 1 June 2020 | 91440600784850061B001U |
Contingency plan for environmental emergencies
The Company formulated the Contingency Plan for Environmental Emergencies of Foshan Electrical andLighting Co., Ltd. Gaoming Branch (Including Risk Assessment Report and Material Survey of EnvironmentalEmergencies in August 2017, had it reviewed by experts on 13 September 2017, and had it filed with the FoshanMunicipal Ecology and Environment Bureau Gaoming Sub-bureau (Filing No.: 440608-2017-094-L) on 24October 2017.
This document was revised in August 2020, reviewed by experts again on 7 September 2020, and filed with theFoshan Municipal Ecology and Environment Bureau Gaoming Sub-bureau (Filing No.: 440608-2020-056-M) on 25September 2020.Environmental self-monitoring plan
Foshan Electrical and Lighting Co., Ltd. Gaoming Branch developed an environmental self-monitoring plan,numbered: FSLFMF001, at the beginning of the year. It entrusted a third-party environmental testing agency, GDVeizhong Testing Technique Co., Ltd. (Veizhong Testing), to perform the annual inspection of the exhaust outlet.All the inspection results were lower than the standard limits. Meanwhile, it accepted the annual supervision andmonitoring by local environmental protection departments. All the monitoring results were lower than thestandard limits.Administrative punishments received with respect to environmental issues in the Reporting Period:
None.Other environment-related information that should be disclosed:
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
None.Other relevant information:
None.II Social ResponsibilityWe have always attached importance to the accomplishment of our social value. With “provide returns forshareholders, provide a platform for employees, create value for customers and create prosperity for the society”as our mission, we take on the social responsibilities to protect the interests of our creditors, employees, customers,suppliers and community. We have been utilizing resources in a scientific, rational way, effectively protecting thenatural environment and safeguarding social safety so as to promote common, harmonious and sustainabledevelopment of the Company and the society.
1. Protection of the rights and interests of our shareholders and creditorsWe continuously improve our corporate governance structure, regulate our operation and enhance our management on information disclosure and investor relations. We treat all our investors fairly and justly, ensure their rights to know about, participate in and vote on the significant events of the Company, and safeguard the legal rights and interests of all our shareholders, especially our minority shareholders.
2. Protection of the rights and interests of our employees
Considering employees the most valuable resource for our survival and development, we constantly improve our employment system, improve the compensation packages for our employees and attach importance to talent cultivation so as to provide opportunities and space for the sustainable development of our employees as well as realize the common development of the employees and the Company. We also pay attention to the health of our employees, attach importance to production safety and labor protection, and improve the working and living conditions for our employees so as to formulate harmonious and stable labor relations.
3. Protection of the rights and interests of our customers and consumersWe have been upholding the “Customer First” principle in our provision of quality products and services to customers. We operate honestly and disallow any unfair trade practice against commercial ethics, market rules and the fair competition principle. We also improve our product quality and after-sales servicesand try to build a win-win relationship with our customers.
4. Protection of the rights and interests of our suppliers
Foshan Electrical and Lighting Co., Ltd. Interim Report 2021
We respect and protect the legal rights and interests of our suppliers, carefully protect their secret and proprietary information, encourage and push them to continuously improve the quality of their products and services through creating an environment for open and fair competition among them so as to realizemutual benefits and mutual development of the suppliers and the Company.
5. Production Safety, Environmental Protection and Sustainable DevelopmentThe Company sees production safety, environmental protection and energy conservation as an important part of its strategy of sustainable development. It implements accountability systems in relation environmental protection and production safety in strict accordance with the applicable laws and regulations. In addition, it is ISO9001-(a quality management system), IATF16949-(a quality management system), ISO14001-(an environment management system), ISO45001-(a management system for occupational health and safety) and ISO50001-(an energy management system) certified. In 2018, upon the review and publication by the Ministry of Industry and Information Technology, the Company was certified as one of the secondbatch of National Demonstration Entity of Green Factory.
6. Public relations and welfare
We attach importance to the realization of our social value and see creating a prosperous society as a commitment that we should take on, trying to boost the local economy through our own development. We have been granted by the local government the title of “Foshan Over-100-Million Tax Payer” for many years due to our contributions in boosting the harmonious development of the Company and the community.
Part VI Significant EventsI Commitments of the Company’s De Facto Controller, Shareholders, Related Parties andAcquirers, as well as the Company Itself and Other Entities Fulfilled in the Reporting Periodor Ongoing at the Period-End
□ Applicable √ Not applicable
No such cases in the Reporting Period.II Occupation of the Company’s Capital by the Controlling Shareholder or any of Its RelatedParties for Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
III Irregularities in the Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.IV Engagement and Disengagement of Independent Auditor
Are the interim financial statements audited?
□Yes √ No
These interim financial statements are unaudited.V Explanations Given by the Board of Directors and the Supervisory Committee Regardingthe Independent Auditor's “Modified Opinion” on the Financial Statements of the ReportingPeriod
□ Applicable √ Not applicable
VI Explanations Given by the Board of Directors Regarding the Independent Auditor's“Modified Opinion” on the Financial Statements of Last Year
□ Applicable √ Not applicable
VII Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII Legal MattersSignificant lawsuits and arbitrations
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Other legal matters
√ Applicable □ Not applicable
| Basic information on lawsuit (arbitration) | Amount involved (RMB’0,000) | Whether there are accrued liabilities | Lawsuit (arbitration) progress | Lawsuit (arbitration) results and influences | Execution of lawsuit (arbitration) judgment | Date of disclosure | Disclosure index |
| Foshan Electrical and Lighting Co., Ltd. sued Shenzhen Kaichuang Industrial Co., Ltd. and Chen Xiaodong for a dispute over a purchase and sales contract | 112.89 | No | The court decided to terminate the execution | The first instance judgment reads that the defendant should pay RMB1,128,900 and interest to the company. Chen Xiaodong should be jointly and severally liable for the debt. On 13 November, 2020, the company applied for compulsory execution with the Foshan Chancheng District People's Court. On 23 March, 2021, the court decided to terminate the execution. | The defendant had no properties for execution, so the court decided to terminate the execution | ||
| Foshan Electrical and Lighting Co., Ltd. sued Beijing Zhong'ao Zhengshi Lighting Co., Ltd. for a dispute over a purchase and sales contract | 1,422.08 | No | The second instance is in progress | The first instance judgment reads the defendant should pay RMB14,220,800 and liquidated damages to the company. Jiang Zhenghao should be jointly and severally liable for the debt. The defendant refused to accept the judgment and instituted an appeal. | N/A |
| Foshan Electrical and Lighting Co., Ltd. sued Jianyue Construction Group Limited for a dispute over a construction project contract | 778.61 | No | The first instance is in progress | No trial results yet | N/A | ||
| Foshan Electrical and Lighting Co., Ltd. sued Chongqing Yufo Lighting and Electrical Co., Ltd. for a dispute over a purchase and sales contract | 178.92 | No | The first instance is in progress | No trial results yet | N/A | ||
| Foshan Electrical and Lighting Co., Ltd. sued Guangdong Yanjingshe Industrial Co., Ltd. for appearance infringement, involving a dispute over a patent right | 6 | No | The second instance is in progress | The first instance judgment reads that the company should pay compensation of RMB60,000 to Guangdong Yanjingshe Industrial Co., Ltd. The company refused to accept the judgment and instituted an appeal with the High People's Court of Guangdong Province in January 2021. | N/A | ||
| TOPLITE sued Foshan Electrical and Lighting Co., Ltd. for a dispute over a purchase and sales contract; the latter filed a counterclaim against the former for the same reason | 241.11 | No | The first instance is in progress | No trial results yet | N/A | ||
| Guangdong Yanjingshe Industrial Co., Ltd. sued Foshan Electrical and Lighting Co., Ltd. for an appearance | 250 | No | The High People's Court of Guangdong Province rejected the | The Guangzhou Intellectual Property Court rejected all the claims of the plaintiff. The plaintiff rejected the judgment and | N/A |
| infringement and a dispute over a patent right | application for retrial | applied for retrial with the High People's Court of Guangdong Province which rejected such application. | |||||
| Ma Hongwei sued Jinggong Industrial Building System Co., Ltd. (JG-IBS) and Foshan Electrical and Lighting Co., Ltd. for a dispute over a construction project contract | 141.2 | No | The first instance is in progress | No trial results yet | N/A | ||
| Liang Jian sued Jianyue Construction Group Limited, He Yixing, the third party—Dongguan Lihe Construction Co., Ltd., Foshan Electrical and Lighting Co., Ltd., and Liang Guangjin for a dispute over a labor contract | 8.85 | No | The first instance is in progress | No trial results yet | N/A | ||
| Bixi Economic Cooperative in Bitang Village, Zhangcha Sub-district, Chancheng District, Foshan City sued Foshan Electrical and Lighting Co., Ltd. for a dispute over a lease contract | 50 | No | The second instance is in progress | The first instance judgment reads that the company should return the land for construction north to Foshigongli and east to the Xihua Hotel and the building(s) on the land to the Bixi Economic Cooperative after moving out. Other claims of Bixi Economic Cooperative were rejected. The company refused to accept the first instance judgment and instituted | N/A |
| an appeal in June 2021. | |||||||
| Mudanjiang Huaguang Lighting Co., Ltd. sued Foshan Electrical and Lighting Co., Ltd. for a dispute over a purchase and sales contract | 77.53 | No | The first instance is in progress | No trial results yet | N/A | ||
| Wu Zhuohui sued Dongguan Zhonggong Building Materials Co., Ltd., Jianyue Construction Group Limited, and Foshan Electrical and Lighting Co., Ltd. for a dispute over an undertaking contract | 41.31 | No | The first instance is in progress | No trial results yet | N/A |
IX Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.X Credit Quality of the Company as well as its Controlling Shareholder and De FactoController
√ Applicable □ Not applicable
In the Reporting Period, the Company and its controlling shareholder and de facto controller were not involved inany unsatisfied court judgments, large-amount overdue liabilities or the like.XI Major Related-Party Transactions
1. Continuing Related-Party Transactions
√Applicable □ Not applicable
| Related party | Relationship with the Company | Type of transaction | Specific transaction | Pricing principle | Transaction price(RMB’0,000) | Total value (RMB’0,000) | As % of total value of all same-type transacti | Approved transaction line (RMB’0,000) | Over the approved line or not | Method of settlement | Obtainable market price for same-type transacti | Disclosure date | Index to disclosed information |
| ons | ons(RMB’0,000) | ||||||||||||
| Foshan NationStar Optoelectronics Co., Ltd. | Under same actual controller | Purchasing products and receiving labor service from related party | Purchase of materials | Market price | 2,669.66 | 2,669.66 | 1.91% | 12,000 | Not | Bank transfers or bank acceptance notes | 2,669.66 | 28 January 2021 | www.cninfo.com.cn |
| Guangdong Fenghua Advanced Technology Holding Co., Ltd. | Under same actual controller | Purchasing products and receiving labor service from related party | Purchase of materials | Market price | 580.61 | 580.61 | 0.42% | 1,500 | Not | Bank transfers or bank acceptance notes | 580.61 | 28 January 2021 | www.cninfo.com.cn |
| Prosperity Lamps & Components Limited | Shareholder that holds over 5% shares of the Company | Purchasing products and receiving labor service from related party | Purchase of materials | Market price | 131.71 | 131.71 | 0.09% | 1,300 | Not | Bank transfers or bank acceptance notes | 131.71 | 28 January 2021 | www.cninfo.com.cn |
| Hangzhou Times Lighting and Electrical Co., Ltd. | Acting-in-concert party of a 5% greater shareholder of the Company | Purchasing products and receiving labor service from related party | Purchase of materials | Market price | 21.86 | 21.86 | 0.02% | Bank transfers or bank acceptance notes | 21.86 | N/A |
| Guangdong Electronic Technology Research Institute | Under same actual controller | Purchasing products and receiving labor service from related party | Purchase of equipment | Market price | 14.23 | 14.23 | 0.31% | 300 | Not | Bank transfers or bank acceptance notes | 14.23 | 28 January 2021 | www.cninfo.com.cn |
| Jiangmen Dongjiang Environmental Technology Co, Ltd. | Under same actual controller | Purchasing products and receiving labor service from related party | receiving labor service | Market price | 14.39 | 14.39 | 23.52% | Bank transfers or bank acceptance notes | 14.39 | N/A | |||
| Foshan Fulong Environmental Technology Co., Ltd. | Under same actual controller | Purchasing products and receiving labor service from related party | receiving labor service | Market price | 2.55 | 2.55 | 4.16% | Bank transfers or bank acceptance notes | 2.55 | N/A | |||
| Zhuhai Doumen District Yongxingsheng Environmental Industrial Wastes Recycling Comprehensive | Under same actual controller | Purchasing products and receiving labor service from related party | receiving labor service | Market price | 0.57 | 0.57 | 0.92% | Bank transfers or bank acceptance notes | 0.57 | N/A |
| Treatment Co., Ltd. | |||||||||||||
| Guangdong Electronic Technology Research Institute | Under same actual controller | Purchasing products and receiving labor service from related party | receiving labor service | Market price | 0.27 | 0.27 | 0.06% | Bank transfers or bank acceptance notes | 0.27 | N/A | |||
| Guangdong New Electronics Information Import&Export Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 2,819.72 | 2,819.72 | 1.44% | 3,800 | Not | Bank transfers or bank acceptance notes | 2,819.72 | 28 January 2021 | www.cninfo.com.cn |
| Prosperity Lamps & Components Limited | Shareholder that holds over 5% shares of the Company | Selling products and providing labor service to related party | Selling products | Market price | 1,171.91 | 1,171.91 | 0.60% | 3,600 | Not | Bank transfers or bank acceptance notes | 1,171.91 | 28 January 2021 | www.cninfo.com.cn |
| Guangdong Rising Rare Metals-EO Materials Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 799.02 | 799.02 | 0.41% | 1,500 | Not | Bank transfers or bank acceptance notes | 799.02 | 28 January 2021 | www.cninfo.com.cn |
| Guangdong Yixin | Under same actual | Selling products and | Selling products | Market price | 288.17 | 288.17 | 0.15% | 3,000 | Not | Bank transfers or bank | 288.17 | 28 January 2021 | www.cninfo.com.cn |
| Changcheng Construction Group | controller | providing labor service to related party | acceptance notes | ||||||||||
| Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 95.14 | 95.14 | 0.05% | 1,000 | Not | Bank transfers or bank acceptance notes | 95.14 | 28 January 2021 | www.cninfo.com.cn |
| Guangdong Heshun Property Management Co., Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 69.27 | 69.27 | 0.04% | Bank transfers or bank acceptance notes | 69.27 | N/A | |||
| Guangdong Zhongjin Lingnan Equipment Technology Co., Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 10.87 | 10.87 | 0.01% | Bank transfers or bank acceptance notes | 10.87 | N/A | |||
| Guangdong Zhongjin Construction Installation Engineering Co. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 10.86 | 10.86 | 0.01% | Bank transfers or bank acceptance notes | 10.86 | N/A |
| Guangdong Rising Holdings Group Co., Ltd. | Actual controller | Selling products and providing labor service to related party | Selling products | Market price | 2.12 | 2.12 | 0.00% | Bank transfers or bank acceptance notes | 2.12 | N/A | |||
| Prosperity Electrical (China) Co., Ltd. | Acting-in-concert party of a 5% greater shareholder of the Company | Selling products and providing labor service to related party | Selling products | Market price | 2.11 | 2.11 | 0.00% | Bank transfers or bank acceptance notes | 2.11 | N/A | |||
| Guangdong Electronics Information Industry Group Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 0.8 | 0.8 | 0.00% | Bank transfers or bank acceptance notes | 0.8 | N/A | |||
| Guangzhou Huajian Engineering Construction Co.,Ltd. | Under same actual controller | Selling products and providing labor service to related party | Selling products | Market price | 0.61 | 0.61 | 0.00% | 3,600 | Not | Bank transfers or bank acceptance notes | 0.61 | 28 January 2021 | www.cninfo.com.cn |
| Total | -- | -- | 8,706.45 | -- | 31,600 | -- | -- | -- | -- | ||||
| Large-amount sales return in detail | N/A | ||||||||||||
| Give the actual situation in the Reporting Period (if any) where an estimate had been made for the total value of continuing related-party | In January 2021, the Company estimated the total value of its continuing transactions with related parties Foshan NationStar Optoelectronics Co., Ltd., Guangdong Fenghua Advanced Technology Holding Co., Ltd., Rising Investment Development Limited and its majority-owned subsidiaries, Prosperity Lamps & Components Limited and its | ||||||||||||
| transactions by type to occur in the Reporting Period | majority-owned subsidiaries, Guangdong Electronic Technology Research Institute, Guangdong New Electronics Information Import&Export Ltd., Guangdong Huajian Enterprise Group Co., Ltd. and its majority-owned subsidiaries, Guangdong Rising Real Estate Group Co., Ltd. and its majority-owned subsidiaries, Guangzhou Rising Non-ferrous Metal Group Co., Ltd. and its majority-owned subsidiaries, Guangdong Rising Property Group Co., Ltd. and its majority-owned subsidiaries, Guangdong Rising Investment Group and its majority-owned subsidiaries, Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd. and its majority-owned subsidiaries. Concerning the purchases from its related parties, the actual amount in H1 2021 was RMB34.3585 million, accounting for 18.98% of the estimate for 2021. As for the sales to its related parties, the actual amount in H1 2021 was RMB52.7060 million, accounting for 22.43% of the estimate for 2021. |
| Reason for any significant difference between the transaction price and the market reference price (if applicable) | N/A |
2. Related-Party Transactions Regarding Purchase or Disposal of Assets or Equity Investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Related-Party Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Amounts Due to and from Related Parties
√ Applicable □ Not applicable
Non-operating amounts due to and from related parties or not
□ Yes √ No
No such cases in the Reporting Period.
5. Transactions with Related Finance Companies, or Finance Companies Controlled by the Company
√ Applicable □ Not applicable
Deposit business
| Related party | Relationship | Daily maximum limits (RMB’0,000) | Interest rate range | Beginning balance (RMB’0,000) | Actual amount (RMB’0,000) | Ending balance (RMB’0,000) |
| Guangdong Rising Finance | Controlled by the same controlling | 30,000.00 | 2.45%-3.3% | 30,000.00 | 30,000.00 | 30,000.00 |
| Co., Ltd. | shareholder |
6. Other Major Related-Party Transactions
√ Applicable □ Not applicable
1. Upon review and approval at the Shareholders' General Meeting for 2020, the Company will use its equity fund ofno more than RMB300 million to purchase shares of no more than 5% of the current total share capital of FoshanNationStar Optoelectronics Co., Ltd. (NationStar) in the secondary market (including but not limited to the wayspermitted by laws and regulations like call auction and bulk commodity trading), when appropriate. On 16 June2021, the Company purchased 1,014,900 shares of NationStar at the cost of RMB9,402,100. As of the date ofdisclosure of this Report, it held 1,014,900 shares in NationStar in total.
2. The Company bid for the Phase II office building project of the production base at Gaoming Headquarters inMarch 2021. Upon bidding, review, and announcement, the consortium composed of Guangdong YixinChangcheng Construction Group Co., Ltd. (primary) and Guangdong Architectural Design & Research Institute Co.,Ltd. (member) won the project at RMB175,025,600. Guangdong Yixin Changcheng Construction Group Co., Ltd.is a tier-2 wholly owned subsidiary of Guangdong Rising Holdings Group Co., Ltd. which is the controllershareholder of the Company. The Company had a connected transaction regarding the "General Contracting ofDesign and Construction of Phase II Office Building Project of Production Base at Gaoming Headquarters ofFoshan Electrical and Lighting Co., Ltd. (FSL)" won by the consortium of Guangdong Yixin ChangchengConstruction Group Co., Ltd., in accordance with relevant regulations.
3. The Company bid for the general contracting of design and construction of the decoration engineering project ofFoshan Kelian Building in April 2021. Upon bidding, review, and announcement, the consortium composed ofGuangdong Zhongnan Construction Co., Ltd. (primary) and Guangdong Architectural Design & Research InstituteCo., Ltd. (member) won the project at the offer of RMB189,070,200. Guangdong Zhongnan Construction Co., Ltd.is a tier-2 wholly owned subsidiary of Guangdong Rising Holdings Group Co., Ltd. which is the controllershareholder of the Company. The Company had a connected transaction regarding the "General Contracting ofDesign and Construction of Decoration Engineering Project of Foshan Kelian Building" won by the consortium ofGuangdong Zhongnan Construction Co., Ltd., in accordance with relevant regulations.
Index to the current announcement about the said related-party transaction disclosed:
| Title of announcement | Disclosure date | Disclosure website |
| Announcement on the Related-Party Transaction regarding Purchase of Some | 26 April 2021 | www.cninfo.com.cn |
| Shares of Nationstar Optoelectronics | ||
| Announcement on a Related-Party Transaction Due to Public Bidding | 6 May 2021 | www.cninfo.com.cn |
| Announcement on a Related-Party Transaction Due to Public Bidding | 9 July 2021 | www.cninfo.com.cn |
XII Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Major guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Cash Entrusted for Wealth Management
√ Applicable □ Not applicable
Unit: RMB’0,000
| Type | Funding source | Amount | Undue amount | Unrecovered overdue amount | Provision for impairment on unrecovered overdue amount |
| Bank financial products | Self-owned funds | 20,000 | 5,918.96 | 0 | 0 |
| Others | Self-owned funds | 23,000 | 23,000 | 0 | 0 |
| Total | 43,000 | 28,918.96 | 0 | 0 |
High-risk wealth management transactions with a significant single amount, or with low security, low liquidity orno principal protection:
√ Applicable □ Not applicable
Unit: RMB’0,000
| Trustee | Type of trustee | Type of wealth management product | Principal | Source of principal | Beginning date | Ending date | Use of principal | Determination of yield | Annualized yield rate for reference | Expected yield (if any) | Actual gain/loss in Reporting Period | Receipt/payment of such gain/loss | Allowance for impairment (if any) | Prescribed procedure executed or not | Plan for more transaction or not | Index to transaction summary and other information (if any) |
| China Merchants Bank, Foshan sub-branch | Bank | Not principal-protected with floating yield | 5,918.96 | Self-owned funds | 17 September 2020 | 17 September 2021 | Investment | Repayment of principal with yield | 4.30% | 254.52 | 88.36 | To be received | Yes | Yes | www.cninfo.com.cn | |
| China Guangfa Bank, Guangzhou development area sub-branch | Bank | Principal-protected with floating yield | 3,000 | Self-owned funds | 9 April 2021 | 8 July 2021 | Investment | Repayment of principal with yield | 3.50% | 25.89 | 23.88 | To be received | Yes | Yes | www.cninfo.com.cn | |
| Industrial and Commercial Bank of China, | Bank | Principal-protected with floating yield | 20,000 | Self-owned funds | 29 June 2021 | 1 September 2021 | Investment | Repayment of principal with yield | 3.80% | 133.26 | 4.16 | To be received | Yes | Yes | www.cninfo.com.cn |
| Foshan sub-branch | |||||||||||||||
| Total | 28,918.96 | -- | -- | -- | -- | -- | 413.67 | 116.40 | -- | -- | -- | -- | |||
Situation where the principal is expectedly irrecoverable or an impairment may be incurred:
□ Applicable √ Not applicable
4. Significant Contracts Arising in the Ordinary Course of Business
□ Applicable √ Not applicable
5. Other Significant Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.XIII Other Significant Events
√ Applicable □ Not applicable
1. Share repurchase
The Third Extraordinary Shareholders’ General Meeting for 2020 of the Company reviewed and passed theProposal on Repurchasing Some A and B Shares of the Company on 18 December 2020 The Company formulatedand disclosed the repurchase report in line with relevant regulations. See the Report on Repurchasing Some A and BShares of the Company published on Cninfo (www.cninfo.com.cn) on 24 December 2020. As of 30 June 2021, theCompany accumulatively repurchased 31,070,300 A-Shares and 9,199, 272 B-Shares, respectively, through callauction, representing 2.88% of the total share capital. RMB196,959,000 (excluding the transaction cost) andHKD29,807,200 (excluding the transaction cost) were spent for the repurchase of the A and B Shares, respectively.
2. Sales of shares of Gotion High-tech
In June 2021, the Company sold 12,787,100 shares of Gotion High-tech at the price of RMB503.9413 million (withtaxes and fees not deducted yet). Upon the decrease, it held 32,666,575 shares of Gotion High-tech, representing
2.55% of the total share capital. In conformity with the new financial instrument standards effective on 1 January2019, the Company recorded the investment in Gotion High-tech as non-trading equity instrument investment at fairvalue through other comprehensive income. The decrease did not affect the Company's profit in the current period.
3. Acquisition of Nanning Liaowang
On 23 June 2021, the 14th Meeting of the Ninth Board of Directors of the Company reviewed and passed theProposal on Acquisition of Nanning Liaowang Auto Lamp Co., Ltd., which allowed the Company to acquire theunderlying asset with the equity fund of RMB487.52 million (the total investment does not exceed RMB500 millionand is subject to the actual amount incurred), through equity acquisition, capital increase, and share expansion.Upon completion of the transaction, the Company will hold 53.79% of the shares of Nanning Liaowang. Besides,the latter will become a holding subsidiary of the former. For further information, see the Announcement onAcquisition of Nanning Liaowang Auto Lamp Co., Ltd. published by the Company on Cninfo (www.cninfo.com.cn)on 24 June 2021.XIV Significant Events of Subsidiaries
√ Applicable □ Not applicable
On July 17, 2020, the Company convened the 41st Meeting of the Eighth Board of Directors, where the Proposal onDeregistration of Wholly Owned Subsidiaries was deliberated and approved, and the Board of Directors agreed toderegister Foshan Electrical and Lighting Co., Ltd., a wholly owned subsidiary. So far, the liquidation andderegistration of Foshan Electrical and Lighting Co., Ltd. has entered the tax review stage.
Part VII Share Changes and Shareholder Information
I Share Changes
1. Share Changes
Unit: share
| Before | Increase/decrease in the Reporting Period (+/-) | After | |||||||
| Shares | Percentage (%) | New issues | Shares as dividend converted from profit | Shares as dividend converted from capital reserves | Other | Subtotal | Shares | Percentage (%) | |
| 1. Restricted shares | 13,169,196 | 0.94% | 0 | 13,169,196 | 0.94% | ||||
| 1.2 Shares held by state-owned legal persons | 1 | 0.00% | 0 | 1 | 0.00% | ||||
| 1.3 Shares held by other domestic investors | 4,241,563 | 0.30% | 0 | 4,241,563 | 0.30% | ||||
| Among which: Shares held by domestic legal persons | 3,753,972 | 0.27% | 0 | 3,753,972 | 0.27% | ||||
| Shares held by domestic natural persons | 487,591 | 0.07% | 0 | 487,591 | 0.07% | ||||
| 1.4 Shares held by foreign investors | 8,927,632 | 0.64% | 0 | 8,927,632 | 0.64% | ||||
| Shares held by foreign natural persons | 8,927,632 | 0.64% | 0 | 8,927,632 | 0.64% | ||||
| 2. Unrestricted shares | 1,386,176,958 | 99.06% | 0 | 1,386,176,958 | 99.06% | ||||
| 2.1 RMB-denominated ordinary shares | 1,073,038,507 | 76.68% | 0 | 1,073,038,507 | 76.68% | ||||
| 2.2 Domestically listed foreign shares | 313,138,451 | 22.38% | 0 | 313,138,451 | 22.38% | ||||
| 3. Total shares | 1,399,346,154 | 100.00% | 0 | 1,399,346,154 | 100.00% | ||||
Reasons for share changes:
□ Applicable √ Not applicable
Approval of share changes:
□ Applicable √ Not applicable
Transfer of share ownership:
□ Applicable √ Not applicable
Progress on any share repurchases:
√ Applicable □ Not applicable
On 18 December 2020, the Company called the third extraordinary general meeting of 2020, at which theProposal on the Repurchase of Part of the Company's Renminbi-Denominated Ordinary Shares (A-Shares) andDomestic Listed Foreign Investment Shares (B-Shares) was examined and approved. For details, see theAnnouncement on the Repurchase of Part of the Company's Renminbi-Denominated Ordinary Shares (A-Shares)and Domestic Listed Foreign Investment Shares (B-Shares) published on the China Securities Journal, theSecurities Times, the Securities Daily, Ta Kung Pao and Cninfo (cninfo.com.cn). As of 30 June 2021, theCompany had accumulatively repurchased a total of 31,070,300 A-Shares and 9,199,272 B-shares of theCompany through centralized bidding. The repurchased shares account for 2.88% of the Company's total sharecapital. The A-shares were repurchased at a highest price of RMB6.70 per share (not exceeding the priceupper-limit for repurchasing A-shares defined in this repurchase plan: RMB8.52 per share) and a lowest price ofRMB6.03 per share, with a total cost of RMB 196.959 million (excluding transaction costs). The B-shares wererepurchased at a highest price of HKD3.40 per share (not exceeding the price upper-limit for repurchasingB-shares defined in this repurchase plan: HKD 3.84 per share) and a lowest price of HKD3.14 per share, with atotal cost of HKD 29.8072 million(excluding transaction costs).Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to theCompany’s ordinary shareholders and other financial indicators of the prior year and the prior accounting period,respectively:
□ Applicable √ Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
□ Applicable √ Not applicable
II Issuance and Listing of Securities
□ Applicable √ Not applicable
III Shareholders and Their Holdings as at the Period-End
Unit: share
| Number of ordinary shareholders | 72,339 | Number of preference shareholders with resumed voting rights (if any) (see note 8) | 0 | |||||||
| 5% or greater ordinary shareholders or the top 10 ordinary shareholders | ||||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Ordinary shares held | Increase/decrease in the Reporting Period | Restricted ordinary shares held | Unrestricted ordinary shares held | Shares in pledge, marked or frozen | |||
| Status | Shares | |||||||||
| Hongkong Wah Shing Holding Company Limited | Foreign legal person | 13.47% | 188,496,430 | 0 | 0 | 188,496,430 | In pledge | 92,363,251 | ||
| Prosperity Lamps & Components Limited | Foreign legal person | 10.50% | 146,934,857 | 0 | 0 | 146,934,857 | ||||
| Guangdong Electronics Information Industry Group Ltd. | State-owned legal person | 8.77% | 122,694,246 | 0 | 0 | 122,694,246 | In pledge | 32,532,815 | ||
| Shenzhen Rising Investment Development Co., Ltd. | State-owned legal person | 5.12% | 71,696,136 | 0 | 0 | 71,696,136 | ||||
| Essence International Securities (Hong Kong) Co., Ltd. | Foreign legal person | 2.45% | 34,219,384 | 0 | 0 | 34,219,384 | ||||
| Central Huijin Asset Management Co., Ltd. | State-owned legal person | 2.42% | 33,878,900 | 33,878,900 | ||||||
| Rising | Foreign legal | 1.82% | 25,482,252 | 25,482,252 | ||||||
| Investment Development Co., Ltd. | person | |||||||||
| China Merchants Securities (Hong Kong) Co., Ltd | State-owned legal person | 1.04% | 14,504,423 | 14,504,423 | ||||||
| Zhuang Jianyi | Foreign natural person | 0.85% | 11,903,509 | 8,927,632 | 2,975,877 | |||||
| DBS VICKERS (HONG KONG) LTD A/C CLIENTS | Foreign legal person | 0.84% | 11,790,873 | 11,790,873 | ||||||
| Strategic investors or general corporations becoming top-ten shareholders due to placing of new shares (if any) (see Note 3) | Naught | |||||||||
| Related or acting-in-concert parties among the shareholders above | Among the top 10 shareholders, Hongkong Wah Shing Holding Company Limited, Shenzhen Rising Investment Development Co., Ltd., Guangdong Electronics Information Industry Group Ltd. and Rising Investment Development Co., Ltd. are acting-in-concert parties; and Prosperity Lamps & Components Limited and Zhuang Jianyi are acting-in-concert parties. Apart from that, it is unknown whether there is among the top 10 shareholders any other related parties or acting-in-concert parties as defined in the Administrative Measures for the Acquisition of Listed Companies. | |||||||||
| Above shareholders involved in entrusting/being entrusted with voting rights and giving up voting rights | Naught | |||||||||
| Special account for share repurchases (if any) among the top 10 shareholders (see note 11) | As of the period-end, the Company had repurchased a total of 31,070,300 A-Shares and 9,199,272 B-shares of the Company through centralized bidding. The repurchased shares account for 2.88% of the Company's total share capital. | |||||||||
| Top 10 unrestricted ordinary shareholders | ||||||||||
| Name of shareholder | Unrestricted ordinary shares held | Type of shares | ||||||||
| Type | Shares | |||||||||
| Hong Kong Wah Shing Holding Company Limited | 188,496,430 | RMB-denominated ordinary stock | 188,496,430 | |||||||
| Prosperity Lamps & Components Limited | 146,934,857 | RMB-denominated ordinary stock | 146,934,857 | |||||||
| Guangdong Electronics Information Industry Group Ltd. | 122,694,246 | RMB-denominated ordinary stock | 122,694,246 | |||||||
| Shenzhen Rising Investment Development Co., Ltd. | 71,696,136 | RMB-denominated ordinary stock | 71,696,136 | |||||||
| Central Huijin Asset Management Co., Ltd. | 33,878,900 | RMB-denominated ordinary stock | 33,878,900 |
| Essence International Securities (Hong Kong) Co., Ltd. | 34,219,384 | Domestically listed foreign stock | 34,219,384 |
| Rising Investment Development Co., Ltd. | 25,482,252 | Domestically listed foreign stock | 25,482,252 |
| China Merchants Securities (Hong Kong) Co., Ltd | 14,504,423 | Domestically listed foreign stock | 14,504,423 |
| DBS VICKERS (HONG KONG) LTD A/C CLIENTS | 11,790,873 | Domestically listed foreign stock | 11,790,873 |
| Guangdong Rising Finance Holding Co., Ltd. | 11,434,762 | RMB-denominated ordinary stock | 11,434,762 |
| Related or acting-in-concert parties among the top 10 unrestricted ordinary shareholders, as well as between the top 10 unrestricted ordinary shareholders and the top 10 ordinary shareholders | Among the top 10 unrestricted ordinary shareholders, Hong Kong Wah Shing Holding Company Limited, Shenzhen Rising Investment Development Co., Ltd., Guangdong Electronics Information Industry Group Ltd., Guangdong Rising Finance Holding Co., Ltd. and Rising Investment Development Co., Ltd. are acting-in-concert parties; Apart from that, it is unknown whether there is among the top 10 shareholders any other related parties or acting-in-concert parties as defined in the Administrative Measures for the Acquisition of Listed Companies. | ||
| Top 10 ordinary shareholders involved in securities margin trading (if any) (see note 4) | None | ||
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinaryshareholders of the Company conducted any promissory repo during the Reporting Period.
□ Yes √ No
No such cases in the Reporting Period.IV Change in Shareholdings of Directors, Supervisors and Senior Management
□ Applicable √ Not applicable
No changes occurred to the shareholdings of the directors, supervisors and senior management in the ReportingPeriod. See the 2020 Annual Report for more details.
V Change of the Controlling Shareholder or the De Facto ControllerChange of the controlling shareholder in the Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.Change of the de facto controller in the Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Part VIII Preference Shares
□ Applicable √ Not applicable
No preference shares in the Reporting Period.
Part IX Bonds
□ Applicable √ Not applicable
Part X Financial StatementsI Auditor’s Report
Whether the interim report has been audited?
□Yes √ No
The interim report of the Company has not been audited.
II Financial StatementsCurrency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Foshan Electrical and Lighting Co., Ltd.
30 June 2021
Unit: RMB
| Item | 30 June 2021 | 31 December 2020 |
| Current assets: | ||
| Monetary assets | 1,504,280,372.52 | 981,249,699.49 |
| Settlement reserve | ||
| Interbank loans granted | ||
| Held-for-trading financial assets | 293,530,525.04 | 407,619,201.36 |
| Derivative financial assets | ||
| Notes receivable | 218,524,886.92 | 140,972,143.00 |
| Accounts receivable | 1,092,252,515.66 | 1,134,233,235.70 |
| Accounts receivable financing | ||
| Prepayments | 18,855,359.01 | 11,994,745.05 |
| Premiums receivable | ||
| Reinsurance receivables | ||
| Receivable reinsurance contract reserve | ||
| Other receivables | 22,845,333.42 | 20,194,968.19 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Financial assets purchased under resale agreements | ||
| Inventories | 851,859,895.73 | 735,685,116.91 |
| Contract assets | ||
| Assets held for sale |
| Current portion of non-current assets | ||
| Other current assets | 68,064,174.23 | 175,090,368.85 |
| Total current assets | 4,070,213,062.53 | 3,607,039,478.55 |
| Non-current assets: | ||
| Loans and advances to customers | ||
| Investments in debt obligations | ||
| Investments in other debt obligations | ||
| Long-term receivables | ||
| Long-term equity investments | 179,322,086.81 | 181,365,016.32 |
| Investments in other equity instruments | 2,548,457,792.00 | 3,305,501,030.06 |
| Other non-current financial assets | ||
| Investment property | ||
| Fixed assets | 677,082,730.82 | 685,707,548.55 |
| Construction in progress | 537,612,907.97 | 503,941,120.31 |
| Productive living assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 4,581,415.21 | |
| Intangible assets | 169,048,369.41 | 170,693,873.30 |
| Development costs | ||
| Goodwill | ||
| Long-term prepaid expense | 22,845,684.60 | 13,411,226.23 |
| Deferred income tax assets | 38,021,673.91 | 40,253,777.17 |
| Other non-current assets | 10,666,780.70 | 11,423,843.62 |
| Total non-current assets | 4,187,639,441.43 | 4,912,297,435.56 |
| Total assets | 8,257,852,503.96 | 8,519,336,914.11 |
| Current liabilities: | ||
| Short-term borrowings | ||
| Borrowings from the central bank | ||
| Interbank loans obtained | ||
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 730,544,569.15 | 480,971,214.80 |
| Accounts payable | 936,126,208.78 | 1,059,674,020.99 |
| Advances from customers | 1,911,948.59 | 1,285,357.28 |
| Contract liabilities | 71,380,411.53 | 65,777,726.45 |
| Financial assets sold under repurchase agreements | ||
| Customer deposits and interbank deposits | ||
| Payables for acting trading of securities | ||
| Payables for underwriting of |
| securities | ||
| Employee benefits payable | 45,405,982.12 | 82,485,090.47 |
| Taxes payable | 104,436,868.34 | 18,876,657.51 |
| Other payables | 87,027,744.37 | 76,668,330.66 |
| Including: Interest payable | ||
| Dividends payable | ||
| Handling charges and commissions payable | ||
| Reinsurance payables | ||
| Liabilities directly associated with assets held for sale | ||
| Current portion of non-current liabilities | 3,382,701.30 | |
| Other current liabilities | 5,806,372.07 | 5,503,702.07 |
| Total current liabilities | 1,986,022,806.25 | 1,791,242,100.23 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 2,397,312.18 | |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | ||
| Deferred income tax liabilities | 308,339,347.68 | 414,670,609.97 |
| Other non-current liabilities | 1,244,064.84 | |
| Total non-current liabilities | 310,736,659.86 | 415,914,674.81 |
| Total liabilities | 2,296,759,466.11 | 2,207,156,775.04 |
| Owners’ equity: | ||
| Share capital | 1,399,346,154.00 | 1,399,346,154.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 15,157,514.90 | 15,157,514.90 |
| Less: Treasury stock | 220,708,001.24 | |
| Other comprehensive income | 1,750,521,262.50 | 2,349,388,533.61 |
| Specific reserve | ||
| Surplus reserves | 741,379,150.24 | 741,567,039.55 |
| General reserve | ||
| Retained earnings | 2,224,887,158.83 | 1,758,462,062.48 |
| Total equity attributable to owners of the Company as the parent | 5,910,583,239.23 | 6,263,921,304.54 |
| Non-controlling interests | 50,509,798.62 | 48,258,834.53 |
| Total owners’ equity | 5,961,093,037.85 | 6,312,180,139.07 |
| Total liabilities and owners’ equity | 8,257,852,503.96 | 8,519,336,914.11 |
Legal representative: Wu Shenghui Chief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Peng Fentao
2. Balance Sheet of the Company as the Parent
Unit: RMB
| Item | 30 June 2021 | 31 December 2020 |
| Current assets: | ||
| Monetary assets | 1,407,852,727.39 | 896,261,882.77 |
| Held-for-trading financial assets | 293,530,525.04 | 407,619,201.36 |
| Derivative financial assets | ||
| Notes receivable | 215,699,886.92 | 137,477,199.21 |
| Accounts receivable | 994,619,842.60 | 1,030,713,074.22 |
| Accounts receivable financing | ||
| Prepayments | 15,653,260.84 | 9,581,302.45 |
| Other receivables | 493,080,363.83 | 462,284,585.09 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Inventories | 697,864,062.95 | 615,106,650.81 |
| Contract assets | ||
| Assets held for sale | ||
| Current portion of non-current assets | ||
| Other current assets | 36,546,010.75 | 139,275,518.71 |
| Total current assets | 4,154,846,680.32 | 3,698,319,414.62 |
| Non-current assets: | ||
| Investments in debt obligations | ||
| Investments in other debt obligations | ||
| Long-term receivables | ||
| Long-term equity investments | 524,829,382.22 | 536,949,311.73 |
| Investments in other equity instruments | 2,548,457,792.00 | 3,305,501,030.06 |
| Other non-current financial assets | ||
| Investment property | ||
| Fixed assets | 618,705,844.19 | 628,174,755.88 |
| Construction in progress | 73,563,429.75 | 54,652,119.14 |
| Productive living assets |
| Oil and gas assets | ||
| Right-of-use assets | 4,581,415.21 | |
| Intangible assets | 121,502,187.04 | 122,391,701.60 |
| Development costs | ||
| Goodwill | ||
| Long-term prepaid expense | 19,902,615.59 | 11,651,100.48 |
| Deferred income tax assets | 27,728,882.07 | 31,403,727.94 |
| Other non-current assets | 7,058,767.14 | 7,548,885.47 |
| Total non-current assets | 3,946,330,315.21 | 4,698,272,632.30 |
| Total assets | 8,101,176,995.53 | 8,396,592,046.92 |
| Current liabilities: | ||
| Short-term borrowings | ||
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 719,448,925.17 | 484,230,566.21 |
| Accounts payable | 1,010,939,815.22 | 1,108,208,382.75 |
| Advances from customers | ||
| Contract liabilities | 54,047,480.87 | 53,572,800.70 |
| Employee benefits payable | 36,290,726.53 | 62,075,512.08 |
| Taxes payable | 97,635,911.44 | 7,819,839.48 |
| Other payables | 131,959,972.41 | 171,916,835.73 |
| Including: Interest payable | ||
| Dividends payable | ||
| Liabilities directly associated with assets held for sale | ||
| Current portion of non-current liabilities | 3,382,701.30 | |
| Other current liabilities | 4,196,320.38 | 4,483,279.11 |
| Total current liabilities | 2,057,901,853.32 | 1,892,307,216.06 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 2,397,312.18 | |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | ||
| Deferred income tax liabilities | 308,339,347.68 | 414,670,609.97 |
| Other non-current liabilities | ||
| Total non-current liabilities | 310,736,659.86 | 414,670,609.97 |
| Total liabilities | 2,368,638,513.18 | 2,306,977,826.03 |
| Owners’ equity: | ||
| Share capital | 1,399,346,154.00 | 1,399,346,154.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 7,426,635.62 | 7,426,635.62 |
| Less: Treasury stock | 220,708,001.24 | |
| Other comprehensive income | 1,750,579,803.54 | 2,349,389,658.23 |
| Specific reserve | ||
| Surplus reserves | 741,379,150.24 | 741,567,039.55 |
| Retained earnings | 2,054,514,740.19 | 1,591,884,733.49 |
| Total owners’ equity | 5,732,538,482.35 | 6,089,614,220.89 |
| Total liabilities and owners’ equity | 8,101,176,995.53 | 8,396,592,046.92 |
Legal representative: Wu Shenghui Chief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Peng Fentao
3. Consolidated Income Statement
Unit: RMB
| Item | H1 2021 | H1 2020 |
| 1. Revenue | 1,955,342,116.20 | 1,522,884,127.04 |
| Including: Operating revenue | 1,955,342,116.20 | 1,522,884,127.04 |
| Interest income | ||
| Insurance premium income | ||
| Handling charge and commission income | ||
| 2. Costs and expenses | 1,827,552,268.50 | 1,378,872,422.99 |
| Including: Cost of sales | 1,587,364,854.81 | 1,195,026,224.34 |
| Interest expense | ||
| Handling charge and commission expense | ||
| Surrenders | ||
| Net insurance claims paid | ||
| Net amount provided as insurance contract reserve | ||
| Expenditure on policy dividends | ||
| Reinsurance premium expense | ||
| Taxes and surcharges | 13,964,802.67 | 15,851,673.06 |
| Selling expense | 68,001,600.32 | 62,274,331.94 |
| Administrative expense | 85,383,016.00 | 65,964,756.76 |
| R&D expense | 76,772,734.38 | 59,098,081.73 |
| Finance costs | -3,934,739.68 | -19,342,644.84 |
| Including: Interest expense | ||
| Interest income | 8,247,486.69 | 17,500,666.35 |
| Add: Other income | 7,801,032.60 | 3,028,003.10 |
| Return on investment (“-” for loss) | 5,209,830.57 | 36,143,255.71 |
| Including: Share of profit or loss of joint ventures and associates | 37,460.99 | 4,725,081.89 |
| Income from the derecognition of financial assets at amortized cost (“-” for loss) | ||
| Exchange gain (“-” for loss) | ||
| Net gain on exposure hedges (“-” for loss) | ||
| Gain on changes in fair value (“-” for loss) | 1,940,000.00 | -1,532,350.00 |
| Credit impairment loss (“-” for loss) | 623,460.82 | -3,379,210.38 |
| Asset impairment loss (“-” for loss) | -10,995,234.63 | -3,200,793.69 |
| Asset disposal income (“-” for loss) | 1,781,700.24 | 7,489.02 |
| 3. Operating profit (“-” for loss) | 134,150,637.30 | 175,078,097.81 |
| Add: Non-operating income | 2,059,638.05 | 662,887.00 |
| Less: Non-operating expense | 613,867.05 | 1,024,568.14 |
| 4. Profit before tax (“-” for loss) | 135,596,408.30 | 174,716,416.67 |
| Less: Income tax expense | 22,789,901.28 | 23,050,722.70 |
| 5. Net profit (“-” for net loss) | 112,806,507.02 | 151,665,693.97 |
| 5.1 By operating continuity | ||
| 5.1.1 Net profit from continuing operations (“-” for net loss) | 112,806,507.02 | 151,665,693.97 |
| 5.1.2 Net profit from discontinued operations (“-” for net loss) | ||
| 5.2 By ownership | ||
| 5.2.1 Net profit attributable to owners of the Company as the parent | 110,555,542.93 | 148,896,274.55 |
| 5.2.1 Net profit attributable to non-controlling interests | 2,250,964.09 | 2,769,419.42 |
| 6. Other comprehensive income, net of tax | -242,997,717.69 | 461,748,801.29 |
| Attributable to owners of the Company as the parent | -242,997,717.69 | 461,748,801.29 |
| 6.1 Items that will not be | -242,940,301.27 | 461,765,884.65 |
| reclassified to profit or loss | ||
| 6.1.1 Changes caused by remeasurements on defined benefit schemes | ||
| 6.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method | ||
| 6.1.3 Changes in the fair value of investments in other equity instruments | -242,940,301.27 | 461,765,884.65 |
| 6.1.4 Changes in the fair value arising from changes in own credit risk | ||
| 6.1.5 Other | ||
| 6.2 Items that will be reclassified to profit or loss | -57,416.42 | -17,083.36 |
| 6.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method | ||
| 6.2.2 Changes in the fair value of investments in other debt obligations | ||
| 6.2.3 Other comprehensive income arising from the reclassification of financial assets | ||
| 6.2.4 Credit impairment allowance for investments in other debt obligations | ||
| 6.2.5 Reserve for cash flow hedges | ||
| 6.2.6 Differences arising from the translation of foreign currency-denominated financial statements | -57,416.42 | -17,083.36 |
| 6.2.7 Other | ||
| Attributable to non-controlling interests | ||
| 7. Total comprehensive income | -130,191,210.67 | 613,414,495.26 |
| Attributable to owners of the Company as the parent | -132,442,174.76 | 610,645,075.84 |
| Attributable to non-controlling interests | 2,250,964.09 | 2,769,419.42 |
| 8. Earnings per share | ||
| 8.1 Basic earnings per share | 0.0802 | 0.1080 |
| 8.2 Diluted earnings per share | 0.0802 | 0.1080 |
Legal representative: Wu Shenghui Chief Financial Officer: Tang Qionglan
Person-in-charge of the Company’s accounting organ: Peng Fentao
4. Income Statement of the Company as the Parent
Unit: RMB
| Item | H1 2021 | H1 2020 |
| 1. Operating revenue | 1,797,795,292.73 | 1,422,984,075.84 |
| Less: Cost of sales | 1,485,965,900.74 | 1,144,706,314.40 |
| Taxes and surcharges | 11,528,913.49 | 12,796,090.44 |
| Selling expense | 58,577,327.98 | 56,693,272.24 |
| Administrative expense | 69,674,599.21 | 56,438,900.74 |
| R&D expense | 66,804,608.38 | 53,411,931.20 |
| Finance costs | -3,595,436.39 | -19,059,613.45 |
| Including: Interest expense | ||
| Interest income | 7,925,093.81 | 17,198,883.00 |
| Add: Other income | 5,739,842.06 | 2,807,028.00 |
| Return on investment (“-” for loss) | 11,964,194.51 | 36,143,255.71 |
| Including: Share of profit or loss of joint ventures and associates | 37,460.99 | 4,725,081.89 |
| Income from the derecognition of financial assets at amortized cost (“-” for loss) | ||
| Net gain on exposure hedges (“-” for loss) | ||
| Gain on changes in fair value (“-” for loss) | 1,940,000.00 | -1,532,350.00 |
| Credit impairment loss (“-” for loss) | 2,978,976.42 | -1,548,956.28 |
| Asset impairment loss (“-” for loss) | -9,907,597.40 | -2,500,432.51 |
| Asset disposal income (“-” for loss) | 1,781,700.24 | 7,489.02 |
| 2. Operating profit (“-” for loss) | 123,336,495.15 | 151,373,214.21 |
| Add: Non-operating income | 2,012,089.62 | 527,849.42 |
| Less: Non-operating expense | 226,124.51 | 268,377.64 |
| 3. Profit before tax (“-” for loss) | 125,122,460.26 | 151,632,685.99 |
| Less: Income tax expense | 18,362,006.98 | 16,915,430.83 |
| 4. Net profit (“-” for net loss) | 106,760,453.28 | 134,717,255.16 |
| 4.1 Net profit from continuing operations (“-” for net loss) | 106,760,453.28 | 134,717,255.16 |
| 4.2 Net profit from discontinued operations (“-” for net loss) | ||
| 5. Other comprehensive income, net of | -242,940,301.27 | 461,765,884.65 |
| tax | ||
| 5.1 Items that will not be reclassified to profit or loss | -242,940,301.27 | 461,765,884.65 |
| 5.1.1 Changes caused by remeasurements on defined benefit schemes | ||
| 5.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method | ||
| 5.1.3 Changes in the fair value of investments in other equity instruments | -242,940,301.27 | 461,765,884.65 |
| 5.1.4 Changes in the fair value arising from changes in own credit risk | ||
| 5.1.5 Other | ||
| 5.2 Items that will be reclassified to profit or loss | ||
| 5.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method | ||
| 5.2.2 Changes in the fair value of investments in other debt obligations | ||
| 5.2.3 Other comprehensive income arising from the reclassification of financial assets | ||
| 5.2.4 Credit impairment allowance for investments in other debt obligations | ||
| 5.2.5 Reserve for cash flow hedges | ||
| 5.2.6 Differences arising from the translation of foreign currency-denominated financial statements | ||
| 5.2.7 Other | ||
| 6. Total comprehensive income | -136,179,847.99 | 596,483,139.81 |
| 7. Earnings per share | ||
| 7.1 Basic earnings per share | ||
| 7.2 Diluted earnings per share |
Legal representative: Wu Shenghui Chief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Peng Fentao
5. Consolidated Cash Flow Statement
Unit: RMB
| Item | H1 2021 | H1 2020 |
| 1. Cash flows from operating activities: | ||
| Proceeds from sale of commodities and rendering of services | 2,010,485,455.83 | 1,519,739,200.16 |
| Net increase in customer deposits and interbank deposits | ||
| Net increase in borrowings from the central bank | ||
| Net increase in loans from other financial institutions | ||
| Premiums received on original insurance contracts | ||
| Net proceeds from reinsurance | ||
| Net increase in deposits and investments of policy holders | ||
| Interest, handling charges and commissions received | ||
| Net increase in interbank loans obtained | ||
| Net increase in proceeds from repurchase transactions | ||
| Net proceeds from acting trading of securities | ||
| Tax rebates | 63,217,676.32 | 41,505,723.58 |
| Cash generated from other operating activities | 61,895,067.46 | 83,471,287.35 |
| Subtotal of cash generated from operating activities | 2,135,598,199.61 | 1,644,716,211.09 |
| Payments for commodities and services | 1,503,582,431.15 | 975,832,087.93 |
| Net increase in loans and advances to customers | ||
| Net increase in deposits in the central bank and in interbank loans granted | ||
| Payments for claims on original insurance contracts | ||
| Net increase in interbank loans granted | ||
| Interest, handling charges and commissions paid | ||
| Policy dividends paid |
| Cash paid to and for employees | 402,765,434.63 | 311,766,650.73 |
| Taxes paid | 47,727,810.06 | 58,571,681.14 |
| Cash used in other operating activities | 135,742,883.25 | 92,210,911.22 |
| Subtotal of cash used in operating activities | 2,089,818,559.09 | 1,438,381,331.02 |
| Net cash generated from/used in operating activities | 45,779,640.52 | 206,334,880.07 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disinvestment | 262,773,600.62 | 245,000,000.00 |
| Return on investment | 454,663,109.72 | 35,020,943.18 |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets | 1,762,424.68 | 131,978.12 |
| Net proceeds from the disposal of subsidiaries and other business units | ||
| Cash generated from other investing activities | ||
| Subtotal of cash generated from investing activities | 719,199,135.02 | 280,152,921.30 |
| Payments for the acquisition of fixed assets, intangible assets and other long-lived assets | 57,403,771.45 | 43,778,955.65 |
| Payments for investments | 9,402,110.68 | |
| Net increase in pledged loans granted | ||
| Net payments for the acquisition of subsidiaries and other business units | ||
| Cash used in other investing activities | ||
| Subtotal of cash used in investing activities | 66,805,882.13 | 43,778,955.65 |
| Net cash generated from/used in investing activities | 652,393,252.89 | 236,373,965.65 |
| 3. Cash flows from financing activities: | ||
| Capital contributions received | ||
| Including: Capital contributions by non-controlling interests to subsidiaries | ||
| Borrowings raised | ||
| Cash generated from other financing activities | ||
| Subtotal of cash generated from financing activities | ||
| Repayment of borrowings |
| Interest and dividends paid | 258,879,038.49 | |
| Including: Dividends paid by subsidiaries to non-controlling interests | ||
| Cash used in other financing activities | 220,895,890.55 | |
| Subtotal of cash used in financing activities | 220,895,890.55 | 258,879,038.49 |
| Net cash generated from/used in financing activities | -220,895,890.55 | -258,879,038.49 |
| 4. Effect of foreign exchange rates changes on cash and cash equivalents | -7,673,732.74 | -103,583.76 |
| 5. Net increase in cash and cash equivalents | 469,603,270.12 | 183,726,223.47 |
| Add: Cash and cash equivalents, beginning of the period | 875,728,218.57 | 1,051,079,042.41 |
| 6. Cash and cash equivalents, end of the period | 1,345,331,488.69 | 1,234,805,265.88 |
Legal representative: Wu Shenghui Chief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Peng Fentao
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
| Item | H1 2021 | H1 2020 |
| 1. Cash flows from operating activities: | ||
| Proceeds from sale of commodities and rendering of services | 1,850,655,815.39 | 1,439,542,964.28 |
| Tax rebates | 63,217,537.03 | 41,500,167.87 |
| Cash generated from other operating activities | 51,058,701.35 | 36,847,098.74 |
| Subtotal of cash generated from operating activities | 1,964,932,053.77 | 1,517,890,230.89 |
| Payments for commodities and services | 1,436,749,486.58 | 958,739,460.46 |
| Cash paid to and for employees | 314,880,615.57 | 237,328,269.38 |
| Taxes paid | 24,295,009.50 | 37,998,771.62 |
| Cash used in other operating activities | 110,890,242.14 | 84,878,540.95 |
| Subtotal of cash used in operating activities | 1,886,815,353.79 | 1,318,945,042.41 |
| Net cash generated from/used in operating activities | 78,116,699.98 | 198,945,188.48 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disinvestment | 262,773,600.62 | 245,000,000.00 |
| Return on investment | 454,663,109.72 | 35,020,943.18 |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets | 1,720,784.40 | 125,361.02 |
| Net proceeds from the disposal of subsidiaries and other business units | ||
| Cash generated from other investing activities | ||
| Subtotal of cash generated from investing activities | 719,157,494.74 | 280,146,304.20 |
| Payments for the acquisition of fixed assets, intangible assets and other long-lived assets | 53,582,153.85 | 42,331,728.97 |
| Payments for investments | 49,402,110.68 | |
| Net payments for the acquisition of subsidiaries and other business units | ||
| Cash used in other investing activities | ||
| Subtotal of cash used in investing activities | 102,984,264.53 | 42,331,728.97 |
| Net cash generated from/used in investing activities | 616,173,230.21 | 237,814,575.23 |
| 3. Cash flows from financing activities: | ||
| Capital contributions received | ||
| Borrowings raised | ||
| Cash generated from other financing activities | ||
| Subtotal of cash generated from financing activities | ||
| Repayment of borrowings | ||
| Interest and dividends paid | 258,879,038.49 | |
| Cash used in other financing activities | 220,895,890.55 | |
| Subtotal of cash used in financing activities | 220,895,890.55 | 258,879,038.49 |
| Net cash generated from/used in financing activities | -220,895,890.55 | -258,879,038.49 |
| 4. Effect of foreign exchange rates changes on cash and cash equivalents | -7,632,408.62 | -92,218.76 |
| 5. Net increase in cash and cash equivalents | 465,761,631.02 | 177,788,506.46 |
| Add: Cash and cash equivalents, beginning of the period | 803,264,792.72 | 983,378,125.66 |
| 6. Cash and cash equivalents, end of the period | 1,269,026,423.74 | 1,161,166,632.12 |
Legal representative: Wu Shenghui Chief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Peng Fentao
7. Consolidated Statements of Changes in Owners’ Equity
H1 2021
Unit: RMB
| Item | H1 2021 | ||||||||||||||
| Equity attributable to owners of the Company as the parent | Non-controlling interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | General reserve | Retained earnings | Other | Subtotal | |||||
| Preferred shares | Perpetual bonds | Other | |||||||||||||
| 1. Balance as at the end of the period of prior year | 1,399,346,154.00 | 15,157,514.90 | 2,349,388,533.61 | 741,567,039.55 | 1,758,462,062.48 | 6,263,921,304.54 | 48,258,834.53 | 6,312,180,139.07 | |||||||
| Add: Adjustment for change in accounting policy | |||||||||||||||
| Adjustment for correction of previous error | |||||||||||||||
| Adjustment for business combination under common control | |||||||||||||||
| Other adjustments | |||||||||||||||
| 2. Balance as at the beginning of the Reporting Period | 1,399,346,154.00 | 15,157,514.90 | 2,349,388,533.61 | 741,567,039.55 | 1,758,462,062.48 | 6,263,921,304.54 | 48,258,834.53 | 6,312,180,139.07 | |||||||
| 3. Increase/ decrease in the period (“-” for decrease) | 220,708,001.24 | -598,867,271.11 | -187,889.31 | 466,425,096.35 | -353,338,065.31 | 2,250,964.09 | -351,087,101.22 | ||||||||
| 3.1 Total comprehensive income | -242,997,717.69 | 110,555,542.93 | -132,442,174.76 | 2,250,964.09 | -130,191,210.67 | ||||||||||
| 3.2 Capital increased and reduced by owners | 220,708,001.24 | -187,889.31 | -220,895,890.55 | -220,895,890.55 | |||||||||||
| 3.2.1 Ordinary shares increased by owners | |||||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | |||||||||||||||
| 3.2.3 Share-based payments included in owners’ equity | |||||||||||||||
| 3.2.4 Other | 220,708,001.24 | -187,889.31 | -220,895,890.55 | -220,895,890.55 | |||||||||||
| 3.3 Profit distribution | |||||||||||||||
| 3.3.1 Appropriation to surplus reserves | |||||||||||||||
| 3.3.2 Appropriation to general reserve | |||||||||||||||
| 3.3.3 Appropriation to owners (or shareholders) | |||||||||||||||
| 3.3.4 Other |
| 3.4 Transfers within owners’ equity | -355,869,553.42 | 355,869,553.42 | 0.00 | 0.00 | |||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | |||||||||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves | |||||||||||||||
| 3.4.3 Loss offset by surplus reserves | |||||||||||||||
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | |||||||||||||||
| 3.4.5 Other comprehensive income transferred to retained earnings | -355,869,553.42 | 355,869,553.42 | 0.00 | 0.00 | |||||||||||
| 3.4.6 Other | |||||||||||||||
| 3.5 Specific reserve | |||||||||||||||
| 3.5.1 Increase in the period | |||||||||||||||
| 3.5.2 Used in the period | |||||||||||||||
| 3.6 Other | |||||||||||||||
| 4. Balance as at the end of the Reporting Period | 1,399,346,154.00 | 15,157,514.90 | 220,708,001.24 | 1,750,521,262.50 | 741,379,150.24 | 2,224,887,158.83 | 5,910,583,239.23 | 50,509,798.62 | 5,961,093,037.85 |
H1 2020
Unit: RMB
| Item | H1 2020 | ||||||||||||||
| Equity attributable to owners of the Company as the parent | Non-controlling interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | General reserve | Retained earnings | Other | Subtotal | |||||
| Preferred shares | Perpetual bonds | Other | |||||||||||||
| 1. Balance as at the end of the period of prior year | 1,399,346,154.00 | 231,608,173.07 | 776,260,348.19 | 836,559,645.36 | 1,700,426,915.63 | 4,944,201,236.25 | 26,674,428.08 | 4,970,875,664.33 | |||||||
| Add: Adjustment for change in accounting policy | |||||||||||||||
| Adjustment for correction of previous error | |||||||||||||||
| Adjustment for business combination under common control | |||||||||||||||
| Other adjustments | |||||||||||||||
| 2. Balance as at the beginning of the Reporting Period | 1,399,346,154.00 | 231,608,173.07 | 776,260,348.19 | 836,559,645.36 | 1,700,426,915.63 | 4,944,201,236.25 | 26,674,428.08 | 4,970,875,664.33 | |||||||
| 3. Increase/ decrease in the period (“-” for decrease) | 461,748,801.29 | -109,982,763.94 | 351,766,037.35 | 2,769,419.42 | 354,535,456.77 | ||||||||||
| 3.1 Total comprehensive income | 461,748,801.29 | 148,896,274.55 | 610,645,075.84 | 2,769,419.42 | 613,414,495.26 | ||||||||||
| 3.2 Capital increased and reduced by owners | |||||||||||||||
| 3.2.1 Ordinary shares increased by owners | |||||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | |||||||||||||||
| 3.2.3 Share-based payments included in owners’ equity | |||||||||||||||
| 3.2.4 Other | |||||||||||||||
| 3.3 Profit distribution | -258,879,038.49 | -258,879,038.49 | -258,879,038.49 | ||||||||||||
| 3.3.1 Appropriation to surplus reserves | |||||||||||||||
| 3.3.2 Appropriation to general reserve | |||||||||||||||
| 3.3.3 Appropriation to owners (or shareholders) | -258,879,038.49 | -258,879,038.49 | -258,879,038.49 | ||||||||||||
| 3.3.4 Other | |||||||||||||||
| 3.4 Transfers within owners’ equity | |||||||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | |||||||||||||||
| 3.4.2 |
| Increase in capital (or share capital) from surplus reserves | |||||||||||||||
| 3.4.3 Loss offset by surplus reserves | |||||||||||||||
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | |||||||||||||||
| 3.4.5 Other comprehensive income transferred to retained earnings | |||||||||||||||
| 3.4.6 Other | |||||||||||||||
| 3.5 Specific reserve | |||||||||||||||
| 3.5.1 Increase in the period | |||||||||||||||
| 3.5.2 Used in the period | |||||||||||||||
| 3.6 Other | |||||||||||||||
| 4. Balance as at the end of the Reporting Period | 1,399,346,154.00 | 231,608,173.07 | 1,238,009,149.48 | 836,559,645.36 | 1,590,444,151.69 | 5,295,967,273.60 | 29,443,847.50 | 5,325,411,121.10 |
Legal representative: Wu Shenghui Chief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Peng Fentao
8. Statements of Changes in Owners’ Equity of the Company as the Parent
H1 2021
Unit: RMB
| Item | H1 2021 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | Retained earnings | Other | Total owners’ equity | |||
| Preferred shares | Perpetual bonds | Other | ||||||||||
| 1. Balance as at the end of the period of prior year | 1,399,346,154.00 | 7,426,635.62 | 2,349,389,658.23 | 741,567,039.55 | 1,591,884,733.49 | 6,089,614,220.89 | ||||||
| Add: Adjustment for change in accounting policy | ||||||||||||
| Adjustment for correction of previous error | ||||||||||||
| Other adjustments | ||||||||||||
| 2. Balance as at the beginning of the Reporting Period | 1,399,346,154.00 | 7,426,635.62 | 2,349,389,658.23 | 741,567,039.55 | 1,591,884,733.49 | 6,089,614,220.89 | ||||||
| 3. Increase/ decrease in the period (“-” for decrease) | 220,708,001.24 | -598,809,854.69 | -187,889.31 | 462,630,006.70 | -357,075,738.54 | |||||||
| 3.1 Total comprehensive income | -242,940,301.27 | 106,760,453.28 | -136,179,847.99 | |||||||||
| 3.2 Capital increased and reduced by owners | 220,708,001.24 | -187,889.31 | -220,895,890.55 | |||||||||
| 3.2.1 Ordinary shares increased by owners | ||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | ||||||||||||
| 3.2.3 Share-based payments included in owners’ equity | ||||||||||||
| 3.2.4 Other | 220,708,001.24 | -187,889.31 | -220,895,890.55 | |||||||||
| 3.3 Profit distribution | ||||||||||||
| 3.3.1 Appropriation to surplus reserves | ||||||||||||
| 3.3.2 Appropriation to owners (or shareholders) | ||||||||||||
| 3.3.3 Other | ||||||||||||
| 3.4 Transfers within owners’ equity | -355,869,553.42 | 355,869,553.42 | 0.00 | |||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | ||||||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves | ||||||||||||
| 3.4.3 Loss offset by surplus reserves | ||||||||||||
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | ||||||||||||
| 3.4.5 Other comprehensive income transferred to retained earnings | -355,869,553.42 | 355,869,553.42 | 0.00 |
| 3.4.6 Other | ||||||||||||
| 3.5 Specific reserve | ||||||||||||
| 3.5.1 Increase in the period | ||||||||||||
| 3.5.2 Used in the period | ||||||||||||
| 3.6 Other | ||||||||||||
| 4. Balance as at the end of the Reporting Period | 1,399,346,154.00 | 7,426,635.62 | 220,708,001.24 | 1,750,579,803.54 | 741,379,150.24 | 2,054,514,740.19 | 5,732,538,482.35 |
H1 2020
Unit: RMB
| Item | H1 2020 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | Retained earnings | Other | Total owners’ equity | |||
| Preferred shares | Perpetual bonds | Other | ||||||||||
| 1. Balance as at the end of the period of prior year | 1,399,346,154.00 | 166,211,779.15 | 776,242,987.90 | 836,559,645.36 | 1,523,507,818.11 | 4,701,868,384.52 | ||||||
| Add: Adjustment for change in accounting policy | ||||||||||||
| Adjustment for correction of previous error | ||||||||||||
| Other adjustments | ||||||||||||
| 2. Balance as at the beginning of the Reporting Period | 1,399,346,154.00 | 166,211,779.15 | 776,242,987.90 | 836,559,645.36 | 1,523,507,818.11 | 4,701,868,384.52 | ||||||
| 3. Increase/ decrease in the period (“-” for | 461,765,884.65 | -124,161,783.33 | 337,604,101.32 | |||||||||
| decrease) | ||||||||||||
| 3.1 Total comprehensive income | 461,765,884.65 | 134,717,255.16 | 596,483,139.81 | |||||||||
| 3.2 Capital increased and reduced by owners | ||||||||||||
| 3.2.1 Ordinary shares increased by owners | ||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | ||||||||||||
| 3.2.3 Share-based payments included in owners’ equity | ||||||||||||
| 3.2.4 Other | ||||||||||||
| 3.3 Profit distribution | -258,879,038.49 | -258,879,038.49 | ||||||||||
| 3.3.1 Appropriation to surplus reserves | ||||||||||||
| 3.3.2 Appropriation to owners (or shareholders) | -258,879,038.49 | -258,879,038.49 | ||||||||||
| 3.3.3 Other | ||||||||||||
| 3.4 Transfers within owners’ equity | ||||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | ||||||||||||
| 3.4.2 |
| Increase in capital (or share capital) from surplus reserves | ||||||||||||
| 3.4.3 Loss offset by surplus reserves | ||||||||||||
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | ||||||||||||
| 3.4.5 Other comprehensive income transferred to retained earnings | ||||||||||||
| 3.4.6 Other | ||||||||||||
| 3.5 Specific reserve | ||||||||||||
| 3.5.1 Increase in the period | ||||||||||||
| 3.5.2 Used in the period | ||||||||||||
| 3.6 Other | ||||||||||||
| 4. Balance as at the end of the Reporting Period | 1,399,346,154.00 | 166,211,779.15 | 1,238,008,872.55 | 836,559,645.36 | 1,399,346,034.78 | 5,039,472,485.84 |
Legal representative: Wu Shenghui Chief Financial Officer: Tang QionglanPerson-in-charge of the Company’s accounting organ: Peng Fentao
III Company profile
(I) Basic InformationFoshan Electrical and Lighting Co., Ltd. (hereinafter referred to as “the Company”), a joint-stock limitedcompany jointly founded by Foshan Electrical and Lighting Company, Nanhai Wuzhuang Color Glazed BrickField, and Foshan Poyang Printing Industrial Co. on 20 October 1992 by raising funds under the approval of YGS(1992) No. 63 Document issued by the Joint Examination Group for Experimental Enterprises in Stock System ofGuangdong Province and the Economic System Reform Commission of Guangdong Province, is an enterprisewith its shares held by both the corporate and the natural persons. As approved by China Securities RegulatoryCommission with Document (1993) No. 33, the Company publicly issued 19.3 million shares of social publicshares (A shares) to the public in October 1993, and was listed in Shenzhen Stock Exchange for trade on 23November 1993. The Company was approved to issue 50,000,000 B shares on 23 July 1995. And, as approved tochange into a foreign-invested stock limited company on 26 August 1996 by (1996) WJMZEHZ No. 466Document issued by the Ministry of Foreign Trade and Economic Cooperation of the People’s Republic of China.On 11 December 2000, as approved by China Securities Regulatory Commission with ZJGS Zi [2000] No. 175Document, the Company additionally issued 55,000,000 A shares. At approved by the Shareholders’ GeneralMeeting 2006, 2007, 2008, 2014 and 2017 the Company implemented the plan of capitalization of capital reserve,after the transfer, the registered capital of the Company has increased to RMB1,399,346,154.00.Credibility code of the Company: 91440000190352575W.Legal representative: Mr. Wu ShenghuiAddress: No. 64, Fenjiang North Road, Foshan, Guangdong ProvinceMain business of the company and its subsidiaries (hereinafter referred to as “the Company”): lighting productsand electro technical products.The business term of the Company is long-term, which was calculated from the date of issuance of License ofBusiness Corporation.The Financial Report was approved and authorized for issue by the Board of Directors on August 25,2021.
The consolidation scope of the financial statement during the Reporting Period including the Company and FSLChanchang Optoelectronics Co., Ltd. ( referred to as “Chanchang Company”), Foshan Taimei Times Lamps andLanterns Co., Ltd. ( referred to as “Taimei Company”), Nanjing Fozhao Lighting Components Co., Ltd. ( referredto as “Nanjing Fozhao”), FSL (Xinxiang) Lighting Co., Ltd. ( referred to as “Xinxiang Company”), FoshanElectrical and Lighting New Light Source Technology Co., Ltd. ( referred to as “New Light Source Company”),Foshan Lighting Lamps & Components Co., Ltd. ( referred to as “Lamps & Components Company”) and FSLZhida Electric Technology Co., Ltd ( referred to as “Zhida Company”), FSL LIGHTING GmbH (referred to as“FSL LIGHTING”), Foshan Hortilite Optoelectronics Co.,Ltd. (referred to as “Hortilite Company”), Hunan Keda NewEnergy Investment and Development Co., Ltd. (referred to as “Hunan Keda”), Fozhao (Hainan) Technology Co.,Ltd. (referred to as “Hainan Company”) in total 11 subsidiaries and one sub-subsidiary Foshan Kelian NewEnergy Technology Co., Ltd. (referred to as “Foshan Kelian”) .There is a new subsidiary - Hainan Company in the consolidation scope of financial statements for the ReportingPeriod compared with the previous period. For details, see relevant contents in Note VIII “Changes in theconsolidation scope”, and Note IX “Equities in other entities”.
IV Basis for Preparation of Financial Statements
1. Preparation Basis
The financial statements of the Company are based on the continuing operation, and are confirmed and measuredaccording to the actual transactions and events, the Accounting Standards for Business Enterprises - BasicStandards, other various specific accounting standards, the application guide, the interpretation of accountingstandards for business enterprises (hereinafter referred to as the Accounting Standards for Business Enterprises).And based on the following important accounting policies, and accounting estimations, they are preparedaccording to the relevant regulations of Rules for the Information Disclosure of Companies Publicly IssuingSecurities No. 15 - General Provisions on Financial Reporting of China Securities Regulatory Commission(Revised in 2014). Except the Cash Flow Statement prepared under the principle of cash basis, the rest of financialstatement of the Company are prepared under the principle of accrual basis.The Company didn’t find anything like being suspicious of the ability of continuing operation within 12 monthsfrom the end of the Reporting Period with all available information.
2. Continuation
The Company has no matters affecting the continuing operation of the Company and is expected to have theability to continue to operate in the next 12 months. The financial statements of the Company are prepared on thebasis of continuing operation.V Important Accounting Policies and Estimations
Reminders of the specific accounting policies and accounting estimations:
The Company confirmed the specific accounting policies and estimations according to production and operationfeatures, mainly reflecting in the method of provision for expected credit loss of accounts receivables (Note 12.Accounts Receivable), depreciation of fixed assets and amortization of intangible assets (Note 24. Fixed Assetsand Note 30. Intangible Assets), and recognition of revenue (Note 39. Revenue), etc.
1. Statement of Compliance with the Accounting Standards for Business EnterprisesThe financial statements prepared by the Company are in compliance with the Accounting Standards for BusinessEnterprises, which factually and completely present the Company’s and the consolidated financial positions,business results and cash flows, as well as other relevant information.
2. Fiscal Year
A fiscal year starts on January 1
st and ends on December 31
staccording to the Gregorian calendar.
3. Operating Cycle
An operating cycle for the Company is 12 months, which is also the classification criterion for the liquidity of itsassets and liabilities.
4. Recording Currency
Renminbi is the recording currency for the statements of the Company, and the financial statements are listed andpresented by Renminbi.
5. Accounting Treatment Methods for Business Combinations under the Same Control or not under theSame Control
1. Business Combinations under the Same Control
For the merger of enterprises under the same control, if the consideration of the merging enterprise is that it makespayment in cash, transfers non-cash assets or bear its debts, it shall, on the date of merger, regard the share of thebook value among final controller’s consolidated financial statement of the owner's equity of the mergedenterprise as the initial cost of the long-term equity investment. The difference between the initial cost of thelong-term equity investment and the payment in cash, non-cash assets transferred as well as the book value of thedebts borne by the merging party shall offset against the capital reserve. If the capital reserve is insufficient todilute, the retained earnings shall be adjusted.If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of merger,regard the share of the book value among final controller’s consolidated financial statement of the owner's equityof the merged enterprise as the initial cost of the long-term equity investment. The total face value of the stocksissued shall be regarded as the capital stock, while the difference between the initial cost of the long-term equityinvestment and total face value of the shares issued shall offset against the capital reserve. If the capital reserve isinsufficient to dilute, the retained earnings shall be adjusted.
2. Business Combinations not under the Same Control
The Company measured the paid assets as the consideration of business combination and liabilities happened orundertaken by fair value. The difference between fair value and its book value shall be included into the currentlosses and gains. The Company distributed combined cost on the purchasing date.The difference of the combination cost greater than the fair value of the identifiable net assets of the acquireeacquired is recognized as goodwill; the difference of the combination cost less than the fair value of theidentifiable net assets of the acquiree acquired is included into current losses and gains.As for the assets other than intangible assets acquired from the acquiree in a business combination (not limited tothe assets which have been recognized by the acquiree), if the economic benefits brought by them are likely toflow into the Company and their fair values can be measured reliably, they shall be separately recognized andmeasured in light of their fair values; intangible asset whose fair value can be measured reliably shall beseparately recognized as an intangible asset and shall measured in light of its fair value; As for the liabilities otherthan contingent liabilities acquired from the acquiree, if the performance of the relevant obligations is likely toresult in any out-flow of economic benefits from the Company, and their fair values can be measured reliably,they shall be separately recognized and measured in light of their fair values; As for the contingent liabilities ofthe acquiree, if their fair values can be measured reliably, they shall separately recognized as liabilities and shallbe measured in light of their fair values.
6. Methods for Preparing Consolidated Financial 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 ofcontrol. Control means that the investors 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 toaffect the amount of its return. The Company includes the subsidiaries with actual right of control (includingseparate entity controlled by the Parent Company) into consolidated financial statements.
2. Principles, Procedures and Methods for the Preparation of Consolidated Statements
(1) Principles, Procedures and Methods for the Preparation of Consolidated StatementsAll subsidiaries included into the scope of consolidated financial statements adopted same accounting policies andfiscal year with the Company. If the accounting policies and fiscal year of the subsidiaries are different to theCompany’s, necessary adjustment should be made in accordance with the Company’s accounting policies andfiscal year when consolidated financial statements are prepared.The consolidated financial statements are based on the financial statements of the Parent Company andsubsidiaries included into the consolidated scope. The consolidated financial statements are prepared by theCompany who makes adjustment to long-term equity investment to subsidiaries by equity method according toother relevant materials after the offset of the share held by the Parent Company in the equity capital investmentof the Parent Company and owner’s equity of subsidiaries and the significant transactions and intrabranch withinthe Company.For the balance formed because the current loss shared by the minority shareholders of the subsidiary is more thanthe share enjoyed by the minority shareholders of the subsidiary in the initial shareholders’ equity, if the Articlesof Corporation or Agreement didn’t stipulate that minority shareholders should be responsible for it, then thebalance need to offset the shareholders’ equity of the Company; if the Articles of Corporation or Agreementstipulated that minority shareholders should be responsible for it, then the balance need to offset the minorityshareholders’ equity.
(2) Treatment Method of Increasing or Disposing Subsidiaries during the Reporting PeriodDuring the Reporting Period, if the subsidiaries were added due to Business combinations under the same control,then initial book balance of consolidated balance sheet need to be adjusted; the income, expenses, and profits ofsubsidiaries from the combination’s period-begin to the end of the reporting period need to be included intoconsolidated income statement; the cash flow of subsidiaries from the combination’s period-begin to the end ofthe reporting period need to be included into consolidated cash flow statement. if the subsidiaries were added dueto Business combinations not under the same control, then initial book balance of consolidated balance sheetdoesn’t need to be adjusted; the income, expenses, and profits of subsidiaries from the purchasing date to the endof the reporting period need to be included into consolidated income statement; the cash flow of subsidiaries frompurchasing date to the end of the reporting period need to be included into consolidated cash flow statement.During the Reporting Period, if the Company disposed the subsidiaries, then the income, expenses, and profits ofsubsidiaries from period-begin to the disposal date need to be included into consolidated income statement; thecash flow of subsidiaries from period-begin to the disposal date need to be included into consolidated cash flowstatement.
7. Classification of Joint Arrangements and Accounting Treatment of Joint OperationsA joint arrangement refers to an arrangement jointly controlled by two participants or above and be divided intojoint operations and joint ventures.When the Company is the joint venture party of the joint operations, should recognize the following items relatedto the interests share of the joint operations:
(1) Recognize the assets individually held and the assets jointly held by recognizing according to the holdingshare;
(2) Recognize the liabilities undertook individually and the liabilities jointly held by recognizing according to theholding share;
(3) Recognize the revenues occurred from selling the output share of the joint operations enjoy by the Company;
(4) Recognize the revenues occurred from selling the assets of the joint operations according to the holding share;
(5) Recognize the expenses individually occurred and the expenses occurred from the joint operations accordingto the holding share of the Company.When the Company is the joint operation party of the joint ventures, should recognize the investment of the jointventures as the long-term equity investment and be measured according g to the said methods of the notes of thelong-term equity investment of the financial statement.
8. Recognition Standard for Cash and Cash Equivalents
In the Company’s understanding, cash and cash equivalents include cash on hand, any deposit that can be used forcover, 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 translatedinto the amount in the functional currency at the exchange rate which is approximate to the spot exchange rate ofthe transaction date. On the balance sheet date, the foreign currency monetary items shall be translated at the spotexchange rate. The balance of exchange arising from the difference between the spot exchange rate on the balancesheet date and the spot exchange rate at the time of initial recognition or prior to the balance sheet date shall berecorded into the profits and losses at the current period except that the balance of exchange arising from foreigncurrency borrowings for the purchase and construction or production of qualified assets shall be capitalized. Theforeign currency non-monetary items measured at the historical cost shall still be translated at the spot exchangerate on the transaction date.
2. Translation of Foreign Currency Financial Statements
The asset and liability items in the balance sheets shall be translated at a spot exchange rate on the balance sheetdate. Among the owner’s equity items, except for the items as “undistributed profits”, other items shall betranslated at the spot exchange rate at the time when they are incurred. The revenues and the expenses items of theincome statement should be translated according to the spot rate on the exchange date.The difference of the foreign currency financial statements occurred from the above translation should be listedunder the “other comprehensive income” item of the owners’ equity of the consolidated financial statement. Asfor the foreign currency items which actually form into the net investment of the foreign operation, the exchangedifference occurred from the exchange rate changes should be listed under the “other comprehensive income” ofthe owners’ equity among the consolidated financial statement when compile the consolidated financial statement.When disposing the foreign operation, as for the discounted difference of the foreign financial statement related tothe foreign operation should be transferred in the current gains and losses according to the proportion. The foreigncash flow adopts the spot exchange rate on the occurring date of the cash flow. And the influenced amount of theexchange rate changes should be individually listed among the cash flow statement.
10. Financial Instruments
Financial instruments refer to the contracts that constitute a company’s financial assets and the financial liabilitiesor equity instruments of other units.
1. Recognition and derecognition of financial instruments
When the Company becomes a party to a financial instrument, it shall recognize a financial asset or financialliability.A financial asset (or part of a financial asset or part of a group of similar financial assets) that meets the followingconditions should be derecognized, or in other words, be written off from its account and balance sheet:
1) The right to receive cash flow from the financial asset has expired;
2) The right to receive cash flow from the financial asset has been transferred, or the “transfer” agreementspecifies the obligation to duly pay the full amount of cash flow received to a third party; and (a) has transferredsubstantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all therisks and rewards of the asset, but has transferred control of the asset.A financial liability that has been fulfilled, canceled or expired should be derecognized. If a financial liability isreplaced with another financial liability by the same creditor on almost entirely different terms materially, or theterms for an existing liability have been almost fully revised materially, such replacement or revision should betreated as derecognition of the original liability and recognition of the new liability, and the difference should beincluded into current profits/losses.A financial asset traded in a conventional manner should be recognized and derecognized by trade-dateaccounting. The trading of financial assets in a conventional manner means that financial assets are received ordelivered by the deadline as specified in regulations or general practice according to contract provisions. Tradedate refers to the date committed by the Company to buy or sell a financial asset.
2. Classification and measurement of financial assets
The Company classifies the financial assets when initially recognized into financial assets measured at amortizedcost, financial assets measured by the fair value and the changes recorded in other comprehensive income andfinancial assets at fair value through profit or loss based on the business model for financial assets managementand characteristics of contractual cash flow of financial assets. Financial assets initially recognized shall bemeasured at their fair values. For accounts receivable and notes receivable excluding major financing or withoutregard to financing over one year generated from ales of commodities or provision of labor services, the initialmeasurement shall be conducted based on the transaction price.For financial assets at fair value through profit or loss, the transaction expenses thereof shall be directly includedinto the current profit or loss; for other financial assets, the transaction expenses thereof shall be included into theinitially recognized amount.The subsequent measurement of financial assets depends on the classification thereof:
(1) Debt instrument investments measured at amortized cost
Financial assets meeting the following conditions at the same time shall be classified as financial assets measuredat amortized cost: the business mode of the Company to manage such financial assets targets at collecting thecontractual cash flow. The contract of such financial assets stipulates that the cash flow generated in the specificdate is the payment of the interest based on the principal and outstanding principal amount. The interest incomefor this kind of financial assets shall be recognized by effective interest method, and the gains or losses generatedfrom the derecognition, modification or impairment shall all be included into the current profit or loss. This kindof financial assets mainly consist of monetary capital, accounts receivable and notes receivable, other receivables,investments in debt obligations and long-term receivables. The Company presents the investments in debt
obligations due within one year since the balance sheet date and long-term receivables as current portion ofnon-current assets and the original investments in debt obligations with maturity date within one year as othercurrent assets.
(2) Investments in debt instruments measured at fair value and changes thereof recorded into other comprehensiveincomeFinancial assets meeting the following conditions at the same time shall be classified as financial assets measuredat fair value and changes thereof recorded into other comprehensive income: the business mode of the Companyto manage such financial assets takes contract cash flow collected as target and selling as target. The contract ofsuch financial assets stipulates that the cash flow generated in the specific date is the payment of the interest basedon the principal and outstanding principal amount. The interest income for this kind of financial assets shall berecognized by effective interest method. All changes in fair value should be included into other comprehensiveincome except for interest income, impairment losses and exchange differences, which should be recognized ascurrent profits/losses. When a financial asset is derecognized, the cumulative gains or losses included into othercomprehensive income previously should be transferred out and included into current profits/losses. Suchfinancial assets should be presented as other credit investments. Other credit investments that will mature withinone year from the date of balance sheet should be presented as non-current assets due within one year, and othercredit investments with the original maturity date coming within one year should be presented as other currentassets.
(3) Equity instrument investment measured at fair value with changes included into other comprehensive incomeThe Company irrevocably chooses to designate part of non-trading equity instrument investments as financialassets measured at fair value with changes included into other comprehensive income. Only related dividendincome (excluding the dividend income confirmed to be recovered as part of investment costs) will be recognizedinto current profits/losses, while subsequent changes in fair value will be recognized into other comprehensiveincome without the withdrawal of impairment provisions required. When a financial asset is derecognized, thecumulative gains or losses included into other comprehensive income previously should be recognized intoretained earnings. Such financial assets should be presented as other equity investments.A financial asset that meets one of the following conditions is classified as a trading financial asset: The financialasset has been acquired in order to be sold or repurchased in the near future; the financial asset is part of anidentifiable financial instrument portfolio under centralized management, and there is evidence proving that thecompany has recently adopted a short-term profit model; it is a derivative instrument, but derivative instrumentsthat are designated as and are effective hedging instruments and those conforming with financial guaranteecontracts are excluded.
(4) Financial assets at fair value through profit or loss
The Company classifies financial assets except for above-mentioned financial assets measured with amortizedcost and financial assets measured with fair value whose change is included into other comprehensive income intofinancial assets at fair value through profit or loss. The subsequent measurement of such kind of financial assetsshall be conducted by fair value method and all changes in fair value shall be recorded into the current profit orloss. Such financial assets shall be presented as trading financial assets, and those will due over one year since thebalance sheet date and expectedly held over one year shall be presented as other non-current financial assets.
3. Classification and measurement of financial liabilities
The Company’s financial liabilities are, on initial recognition, classified into financial liabilities at fair valuethrough profit or loss, other financial liabilities and derivative instruments designated as effective hedginginstruments. For financial liabilities at fair value through profit or loss, relevant transaction costs are immediately
recognized in profit or loss for the current period, and transaction costs relating to other financial liabilities areincluded in the initial recognition amounts.The subsequent measurement of financial liabilities depends on the classification thereof:
(1) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include trading financial liabilities (including the derivativeinstruments belonging to financial liabilities) and financial liabilities designated at the initial recognition to bemeasured by the fair value and their changes are recorded in the current profit or loss.A financial liability that meets one of the following conditions is classified as a trading financial liability: Thefinancial liability has been undertaken in order to be sold or repurchased in the near future; the financial liability ispart of an identifiable financial instrument portfolio under centralized management, and there is evidence provingthat the company has recently adopted a short-term profit model; it is a derivative instrument, but derivativeinstruments that are designated as and are effective hedging instruments and those conforming with financialguarantee contracts are excluded. Trading financial liabilities (including derivative instruments classified asfinancial liabilities) should be subsequently measured at fair value, and all changes in fair value should berecorded into current profits/losses, except for those related to hedging accounting.
(2) Other financial liabilities
For such kind of financial liabilities, the subsequent measurement shall be conducted by effective interest methodbased on the amortized cost.
4. Impairment of financial instruments
Based on expected credit losses, the Company carries out impairment treatment on financial assets measured atamortized cost and debt instrument investments measured at fair value with changes included into othercomprehensive income, rental receivables, contract assets and financial assets and recognizes bad debt provision.Credit losses refer to the difference between all contract cash flows discounted by the original actual interest ratereceivable according to contracts and all cash flows expected to be received by the Company, which is the presentvalue of all cash shortfalls. The financial assets purchased by or originating from the Company with creditimpairment should be discounted by the actual interest rate of the financial assets after credit adjustment.In respect of receivable accounts that do not contain significant financing components, the Company uses thesimplified measurement method to measure bad debt provision by the amount equivalent to the expected creditlosses of the whole duration.In respect of receivable accounts that contain significant financing components, the Company opts to use thesimplified measurement method to measure bad debt provision by the amount equivalent to the expected creditlosses for the whole duration.For other financial assets and financial guarantee contracts than the above using the simplified measurementmethod, the Company on the balance sheet date assesses whether their credit risks have increased substantiallysince the initial recognition. If the credit risks have not increased substantially since the initial recognition and arein the first stage, the Company will measure bad debt provision by the amount equivalent to the expected creditlosses for the next 12 months and calculate interest income by the book balance and the actual interest rate; if thecredit risks have increased obviously without credit impairment since the initial recognition and are in the secondstage, the Company will measure bad debt provision by the amount equivalent to the expected credit losses for thewhole duration and calculate interest income by the book balance and the actual interest rate; if the credit riskshave increased substantially with credit impairment since the initial recognition and are in the third stage, theCompany will measure bad debt provision by the amount equivalent to the expected credit losses for the wholeduration and calculate interest income by the amortized cost and the actual interest rate. For financial instruments
with only low credit risks on the balance sheet date, the Company assumes that their credit risks have notincreased substantially since the initial recognition.The Company 1) assesses expected credit losses of financial assets with credit impairment based on individualitems; 2) assesses expected credit losses of financial assets that are not derecognized but with changes in contractcash flows due to revision of or renegotiation on contracts by the Company and the counterparty, based onindividual items; 3) assesses expected credit losses of other financial assets based on age combination.The Company considers related past matters, current conditions, the reasonableness of the forecast on futureeconomic conditions and well-founded information when assessing expected credit losses.The Company’s information of the judgment standards for remarkable increase in credit risks, definition of assetswith incurred credit impairment and assumption of measurement on expected credit losses is disclosed in thisNote 12 Accounts Receivable.When no longer reasonably expects to recover all or partial contractual cash flow of financial assets, the Companydirectly writes down the carrying amount of the financial assets.
5. Financial instruments offset
a financial asset and a financial liability shall be offset and the net amount is presented in the balance sheet whenthe following conditions are met at the same time: When the Company has a legal right that is currentlyenforceable to set off the recognized financial assets and financial liabilities, and intends either to settle on a netbasis, or to realize the financial asset and settle the financial liability simultaneously.
6. Financial guarantee contract
A financial guarantee contract refers to a contract in which a specific debtor shall compensate the contract holdersuffering the losses when the debtor is unable to repay the debt in due course according to the debt instrumentterms. Financial guarantee contracts are measured at fair value at the initial recognition. After the initialrecognition, all financial guarantee contracts should be subsequently measured by the higher amount between theamount of bad debt provision for expected credit losses recognized on the balance sheet date and the balance ofthe initially recognized amount deducting the cumulative amortization recognized according to the incomerecognition principle, except for the financial guarantee contracts designated as financial liabilities measured atfair value with changes recorded into current profits/losses.
7. Derivative financial instruments
The Company uses derivative financial instruments, which are initially measured at the fair value on the signaturedate of the derivative transaction contract and subsequently measured at their fair value. A derivative financialinstrument with a positive fair value is recognized as an asset and that with a negative fair value is recognized as aliability. Gains or losses from changes in the fair value of derivative instruments are directly recognized intocurrent profits/losses.For the financial assets that are not derecognized but with changes in contract cash flows due to revision of orrenegotiation on contracts by the Company and the counterparty, the Company recalculates the book balance ofthe financial assets according to the renegotiated or revised contract cash flows by the discounted value of theoriginal actual interest rate (or the actual interest rate after credit adjustment). Relevant gains or losses arerecorded into current profits/losses. Costs or expenses for the revision of financial assets are adjusted to therevised book balance of financial assets and amortized in the remaining period of the revised financial assets.
8. Transfer of financial assets
As for the Company transferred nearly all of the risks and rewards related to the ownership of a financial asset tothe transferee, should derecognize the financial assets; as for maintained nearly all of the risks and rewards relatedto the ownership of a financial asset, should continue to recognize the transferred financial assets.
Where the Company does not transfer or retain nearly all of the risks and rewards related to the ownership of afinancial asset, it shall deal with it according to the circumstances as follows, respectively: (1) If it gives up itscontrol over the financial asset, it shall stop recognizing the financial asset and recognize the assets and liabilitiesgenerated; (2) If it does not give up its control over the financial asset, it shall, according to the extent of itscontinuous involvement in the transferred financial asset, recognize the related financial asset and recognize therelevant liability accordingly.
11. Notes Receivable
| Category | Accounting estimate policy |
| Bank’s acceptance bill | The Company evaluates that the portfolio has relatively low credit risks, and generally no provision for impairment is made. |
12. Accounts Receivable
The Company withdraws the impairment loss for accounts receivable excluding significant financing componentwith the simplified method.
1. Accounts Receivable with Significant Single Amount for which the Expected Credit Loss is Made Individually
| Definition or amount criteria for an account receivable with a significant single amount | Making separate expected credit loss for accounts receivable with a significant single amount |
| Making separate expected credit loss for accounts receivable with a significant single amount | For an account receivable with a significant single amount, the impairment test shall be carried out on it separately. If there is any objective evidence of impairment, the impairment loss is recognized and the expected credit loss is made according to the difference between the present value of the account receivable’s future cash flows and its carrying amount. |
2. Accounts Receivable for which the Expected Credit Loss is Withdrawn by Credit Risk Characteristics
| Group name | Withdrawal method of expected credit loss |
| Common transaction group | Aging analysis method |
| Internal transaction group | Other methods |
In the groups, those adopting aging analysis method to withdraw expected credit loss:
| Aging | Withdrawal proportion of accounts receivable |
| Within 1 year (including 1 year) | 3% |
| 1 to 2 years | 10% |
| 2 to 3 years | 30% |
| 3 to 4 years | 50% |
| 4 to 5 years | 80% |
| Over 5 years | 100% |
3. Accounts Receivable with an Insignificant Single Amount but for which the Expected Credit Loss is MadeIndependently
| Reason of individually withdrawing expected credit loss | There are definite evidences indicate the obvious difference of thee return ability |
| Withdrawal method for expected credit loss | Recognizing the impairment loss and withdrawing the expected credit loss according to the difference between the present value of the account receivable’s future cash flows and its carrying amount. |
13. Accounts Receivable Financing
Not applicable
14. Other Receivables
Recognition method and accounting treatment for expected credit losses of other receivablesRecognition method and accounting treatment for expected credit losses of other receivablesRefer to Note 12 Accounts Receivable for details about the recognition method and accounting treatment forexpected credit losses of other receivables which is the same as that of accounts receivable.
15. Inventories
1. Classification of Inventory
Inventory refers to finished products, goods in process, and materials consumed in the production process or theprovision of labor services held by the Company for sale in daily activities, mainly including raw materials, goodsin process, materials in transit, finished products, commodities, turnover materials, and commissioned processingmaterials. 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, processingcosts and other costs. The weighted average method is used when receiving or sending out inventory.
3. Basis for Determining the Net Realizable Value of Inventory and the Method of Withdrawal for InventoryImpairmentNet realizable value refers to the estimated selling price of the inventory minus the estimated cost to be incurred atthe time of completion, the estimated selling expenses and the relevant taxes and fees in daily activities. Indetermining the net realizable value of inventory, the conclusive evidence obtained is used as the basis and thepurpose of holding the inventory and the impact of the events after the balance sheet date should be taken intoaccount.For finished products, the materials used for sale and other goods used for direct sale, the net realizable value isdetermined by the estimated selling price of the inventory minus the estimated selling expenses and related taxesin the process of normal production and operation.For materials inventory needs to be processed, the net realizable value is determined by the estimated selling priceof the finished products minus the estimated cost to be incurred, the estimated sales costs and the relevant taxesand fees in the process of normal production and operation.
4. Inventory System
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.
16. Contract Assets
The Company presents the right possessed to collect consideration from customers unconditionally (onlydepending on the passing of time) as accounts receivable, and the right to charge the consideration throughtransferring any commodity to clients which depends on other factors except the passing of time as contract assets.As for the recognition method and accounting treatment for expected losses of contract assets, please refer to Note
12. Accounts Receivable.
17. Contract Cost
Not applicable
18. Assets Held for Sale
1. Assets Held for Sale
When a company relies mainly on selling (including the exchanges of non-monetary assets with commercialsubstance) instead of continuing to use a non-current asset or disposal group to recover its book value, thenon-current asset or disposal group is classified as asset held for sale. The non-current assets mentioned above donot include investment properties that are subsequently measured by the fair value model, biological assetsmeasured by fair value less net selling costs, assets formed from employee remuneration, financial assets, deferredincome tax assets and rights generated from insurance contracts.Disposal group refers to a group of assets that are disposed of together as a whole through sale or other means in atransaction, and the liabilities directly related to these assets transferred in the transaction. In certaincircumstances, the disposal group includes goodwill obtained in business combination.The Company recognizes non-current assets or disposal groups that meet both of the following conditions as heldfor sale: ① Assets or disposal groups can be sold immediately under current conditions based on the practice ofselling such assets or disposal groups in similar transactions; ② Sales are highly likely to occur, that is, theCompany has already made a resolution on a sale plan and obtained a certain purchase commitment, and the saleis expected to will be completed within one year, and the sale has been approved if relevant regulations requirerelevant authority or regulatory authority of the Company to approve it.Non-current assets or disposal groups specifically obtained by the Company for resale will be classified by theCompany as a held-for-sale category on the acquisition date when they meet the stipulated conditions of“expected to be sold within one year” on the acquisition date, and may well satisfy the category of held-for-salewithin a short time (which is usually 3 months).If one of the following circumstances cannot be controlled by the Company and the transaction betweennon-related parties fails to be completed within one year, and there is sufficient evidence that the Company stillpromises to sell the non-current assets or disposal groups, the Company should continue to classify thenon-current assets or disposal groups as held-for-sale: ①The purchaser or other party unexpectedly setsconditions that lead to extension of the sale. The Company has already acted on these conditions in a timely
manner and it is expected to be able to successfully deal with the conditions that led to the extension of the salewithin one year after the conditions were set. ②Due to unusual circumstances, the non-current assets or disposalgroups held for sale failed to be sold within one year. In the first year, the Company has taken necessary measuresfor these new conditions and the assets or disposal groups meet the conditions of held-for-sale again.If the Company loses control of a subsidiary due to the sale of investments to its subsidiaries, whether or not theCompany retains part of the equity investment after the sale, when the proposed sale of the investment to thesubsidiary meets the conditions of held- for-sale, the investment to the subsidiary will be classified asheld-for-sale in the individual financial statement of the parent company, and all the assets and liabilities of thesubsidiary will be classified as held-for-sale in the consolidated financial statement.When the company initially measures or re-measures non-current assets or disposal groups held for sale on thebalance sheet date, if the book value is higher than the fair value minus the net amount of the sale costs, the bookvalue will be written down to the net amount of fair value minus the sale costs, and the amount written down willbe recognized as impairment loss of assets and included in the current profit and loss, and provision forimpairment of held-for-sale assets will be made. For the confirmed amount of impairment loss of assets of thedisposal groups held for sale, the book value of goodwill of the disposal groups will be offset first, and then thebook value of various non-current assets in the disposal groups will be offset according to the proportions.If the net amount that the fair value of the non-current assets or disposal groups held for sale on the follow-upbalance sheet date minus the sale costs increases, the previous written-down amount will be restored, and reversedto the asset impairment loss confirmed after the assets being classified as held-for-sale. The reversed amount willbe included in the current profit or loss. The book value of goodwill that has been deducted cannot be reversed.Non-current assets held for sale or non-current assets in the disposal group are not subject to depreciation oramortization. Interest and other expenses of liabilities in the disposal group held for sale will be confirmed asbefore.When a non-current asset or disposal group ceases be classified as held-for-sale or a non-current asset is removedout from the held-for-sale disposal group due to failure in meeting the classification conditions for the category ofheld-for-sale, it will be measured by one of the followings whichever is lower:
① The book value before being classified as held for sale will be adjusted according to the depreciation,amortization or impairment that would have been recognized under the assumption that it was not classified asheld for sale;
② The recoverable amount.
2. Termination of Operation
Termination of operation refers to a separately identifiable constituent part that satisfies one of the followingconditions that has been disposed of by the Company or is classified as held-for-sale:
(1) This constituent part represents an independent main business or a separate main business area.
(2) This constituent part is part of an associated plan that is intended to be disposed of in an independent mainbusiness or a separate major business area.
(3) This constituent part is a subsidiary that is specifically acquired for resale.
3. Presentation
In the balance sheet, the Company distinguishes the non-current assets held for sale or the assets in the disposalgroup held for sale separately from other assets, and distinguish the liabilities in the disposal group held for saleseparately from other liabilities. The non-current assets held for sale or the assets in the disposal group held forsale are not be offset against the liabilities in the disposal group held for sale. They are presented as current assetsand current liabilities respectively.
The Company lists profit and loss from continuing operations and profit and loss from operating profits in theincome statement. For the termination of operations for the current period, the Company restates the informationoriginally presented as profit or loss of continuing operation in the current financial statements to profit or loss oftermination of the comparable accounting period. If the termination of operation no longer meets the conditions ofheld-for-sale, the Company restates the information originally presented as a profit and loss of termination in thecurrent financial statements to profit or loss of continuing operation of the comparable accounting period.
19. Investments in Debt Obligations
Not applicable
20. Other Investments in Debt Obligations
Not applicable
21. Long-term Receivables
Not applicable
22. Long-term Equity Investments
Long-term equity investment refers to the Company’s long-term equity investment with control, joint control orsignificant influence on the investee. The long-term equity investment of the Company which has no control, jointcontrol or significant influence on the investee is accounted for as financial assets available-for-sale or financialassets at fair value and changes recognized in profit or loss for the current period. For details of accountingpolicies, please refer to 10. Financial instrumentsJoint 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 andoperating policies of the investee, but can’t control or jointly control the formulation of these policies with otherparties.
1. Investment Cost Recognition for Long-term Equity Investments
(1) For the merger of enterprises under the same control, it shall, on the date of merger, regard the share of thebook value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment,and the direct relevant expenses occurred for the merger of enterprises shall be included into the profits and lossesof the current period.
(2) For the merger of enterprises not under the same control, The combination costs shall be the fair values, on theacquisition date, of the assets paid, the liabilities incurred or assumed and the equity securities issued by theCompany in exchange for the control on the acquiree, and all relevant direct costs incurred to the acquirer for thebusiness combination. Where any future event that is likely to affect the combination costs is stipulated in thecombination contract or agreement, if it is likely to occur and its effects on the combination costs can be measuredreliably, the Company shall record the said amount into the combination costs.
(3) The cost of a long-term equity investment obtained by making payment in cash shall be the purchase costwhich is actually paid. The cost consists of the expenses directly relevant to the obtainment of the long-termequity investment, taxes and other necessary expenses.
(4) The cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fairvalue of the equity securities issued.
(5) The cost of a long-term investment obtained by the exchange of non-monetary assets (having commercialnature) shall be recognized base on taking the fair value and relevant payable taxes as the cost of the assetsreceived.
(6) The cost of a long-term equity investment obtained by recombination of liabilities shall be recognized at thefair value.
2. Subsequent Measurement of Long-term Equity Investment and Recognized Method of Profit/LossThe long-term equity investment with joint control (except for the common operator) or significant influence onthe investee is accounted by equity method. In addition, the Company's financial statements use cost method tocalculate long-term equity investments that can control the investee.
(1) Long-term Equity Investment Accounted by Cost Method
When the cost method is used for accounting, the long-term equity investment is priced at the initial investmentcost, and the cost of the long-term equity investment is adjusted according to additional investment or recoveredinvestment. Except the price actually paid when acquired investment or cash dividends or profits that have beendeclared but not yet paid included in the consideration, current investment income is recognized by the cashdividends or profits declared by the investee.
(2) Long-term Equity Investment Accounted by Equity Method
When the equity method is used for accounting, if the initial investment cost of the long-term equity investment isgreater than the fair value of the investee’s identifiable net assets, the initial investment cost of the long-termequity investment shall not be adjusted; if the initial investment cost is less than the fair value of the investee’sidentifiable net assets, the difference shall be recorded into the current profits and losses, and the cost of thelong-term equity investment shall be adjusted at the same time.When the equity method is used for accounting, the investment income and other comprehensive income shall berecognized separately according to the net profit or loss and other comprehensive income realized by the investee,and the book value of the long-term equity investment shall be adjusted at the same time. The part entitled shall becalculated according to the profits or cash dividends declared by the investee, and the book value of the long-termequity investment shall be reduced accordingly. For other changes in the owner’s equity other than the net profitor loss, other comprehensive income and profit distribution of the investee, the book value of the long-term equityinvestment shall be adjusted and included in the capital reserve. When the share of the net profit or loss of theinvestee is recognized, the net profit of the investee shall be adjusted and recognized according to the fair value ofthe identifiable assets of the investee when the investment is made. If the accounting policies and accountingperiods adopted by the investee are inconsistent with the Company, the financial statements of the investee shallbe adjusted according to the accounting policies and accounting periods of the Company and the investmentincome and other comprehensive income shall be recognized accordingly. For the transactions between theCompany and associates and joint ventures, if the assets made or sold don’t constitute business, the unrealizedgains and losses of the internal transactions are offset by the proportion attributable to the Company, and theinvestment gains and losses are recognized accordingly. However, the loss of unrealized internal transactionsincurred by the Company and the investee attributable to the impairment loss of the transferred assets shall not beoffset. If the assets made to associates or joint ventures constitute business, and the investor makes long-termequity investment but does not obtain the control, the fair value of the investment shall be taken as the initialinvestment cost of the new long-term equity investment, and the difference between initial investment and thebook value of the investment is fully recognized in profit or loss for the current period. If the assets sold by theCompany to joint ventures or associates constitute business, the difference between the consideration and the book
value of the business shall be fully credited to the current profits and losses. If the assets purchased by Companyfrom joint ventures or associates constitute business, conduct accounting treatment in accordance with theprovisions of Accounting Standard for Business Enterprises No. 20 - Business combination, and the profits orlosses related to the transaction shall be recognized in full.When the net loss incurred by the investee is recognized, the book value of the long-term equity investment andother long-term equity that substantially constitute the net investment in the investee shall be written down to zero.In addition, if the Company has an obligation to bear additional losses to the investee, the estimated liabilities arerecognized in accordance with the obligations assumed and included in the current investment losses. If theinvestee has realized net profit in later period, the Company will resume the recognition of the income share afterthe income share has made up the unrecognized loss share.
(3) Acquisition of Minority Interests
In the preparation of the consolidated financial statements, capital reserve shall be adjusted according to thedifference between the long-term equity investment increased due to the purchase of minority interests and theshare of the net assets held by the subsidiary from the date of purchase (or the date of combination) calculatedaccording to the proportion of the new shareholding ratio, and retained earnings shall be adjusted if the capitalreserve is insufficient to offset.
(4) Disposal of Long-term Equity Investment
In the consolidated financial statements, the parent company partially disposes of the long-term equity investmentin the subsidiary without the loss of control, and the difference between the disposal price and the net assets of thesubsidiary 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 NotesⅥ. “Principles, Procedures andMethods for the Preparation of Consolidated Statements” .In other cases, the difference between the book value and the actual acquisition price shall be recorded into thecurrent profits and losses for the disposal of the long-term equity investment.For long-term equity investment accounted by the equity method and residual equity after disposal still accountedby the equity method, other comprehensive income originally included in the shareholders’ equity shall be treatedin the same basis of the investee directly disposing related assets or liabilities by corresponding proportion. Theowner’s equity recognized by the change of the owner’s equity of the investee other than the net profit or loss,other comprehensive income and profit distribution is carried forward proportionally into the current profits andlosses.For long-term equity investment accounted by the cost method and residual equity after disposal still accounted bythe cost method, other comprehensive income accounted by equity method or recognized by financial instrumentand accounted and recognized by measurement criteria before the acquisition of the control over the investee istreated in the same basis of the investee directly disposing related assets or liabilities, and carried forwardproportionately into the current profits and losses. Other changes of owner’s equity in net assets of the investeeaccounted and recognized by the equity method other than the net profit or loss, other comprehensive income andprofit distribution are carried forward proportionally into the current profits and losses.
3. Impairment Provisions for Long-term Equity Investments
For the relevant testing method and provision making method, see Notes 31. Impairment of Long-term Assets.
23. Investment Property
Measurement model for investment property
Not applicable
24. Fixed Assets
(1) Recognition Conditions
Fixed assets of the Company refers to the tangible assets that simultaneously possess the features as follows: theyare held for the sake of producing commodities, rendering labor service, renting or business management; andtheir useful life is in excess of one accounting year and unit price is higher. No fixed assets may be recognizedunless it simultaneously meets the conditions as follows: ① The economic benefits pertinent to the fixed assetare likely to flow into the Company; and ② The cost of the fixed asset can be measured reliably. 1. Initialrecognition of fixed assets The Company's fixed assets are initially measured at cost. Specifically, the costs ofpurchased fixed assets include the purchase price, relevant taxes and fees, and other expenditures incurred beforethe fixed assets reach the pre-determined serviceable condition that can be directly attributable to the assets. Thecosts of self-built fixed assets contain the necessary expenditures incurred before the assets built reach theirpre-determined serviceable condition. If the amount paid for the purchase of fixed assets witnesses postponedpayment due to that the normal credit conditions are exceeded and is actually financing in nature, the costs of suchfixed assets shall be determined on the basis of the present value of the purchase price. The difference between theactual amount paid and the present value of the purchase price, except for the difference that should be capitalized,shall be recognized as profit and loss of the current period during the credit period.
(2) Depreciation Method
| Category of fixed assets | Method | Useful life | Expected net salvage value | Annual deprecation |
| Housing and building | Average method of useful life | 3—30 years | 5% | 31.67%-3.17% |
| Machinery equipments | Average method of useful life | 2—10 years | 5% | 47.50%-9.50% |
| Transportation vehicle | Average method of useful life | 5—10 years | 5% | 19.00%-9.50% |
| Electronic equipment | Average method of useful life | 2—8 years | 5% | 47.50%-11.88% |
(3) Recognition Basis, Pricing and Depreciation Method of Fixed Assets by Finance LeaseNot applicable
25. Construction in Progress
1. Pricing of Construction in Progress
The constructions are accounted according to the actual costs incurred. The constructions shall be carried forwardinto fixed assets at the actual cost when reach intended usable condition. The borrowing expenses eligible for
capitalization incurred before the delivery of the construction are included in the construction cost; after thedelivery, 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 AssetsThe Company’s construction in progress is carried forward into fixed assets when the construction completes andreaches intended usable condition. The criteria for determining the intended usable condition shall meet one of thefollowing:
(1) The physical construction (including installation) of fixed assets has been completed or substantiallycompleted;
(2) Has been produced or run for trial, and the results indicate that the assets can run normally or can producestable 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 thedesign or contract requirements.
3. Provision for Impairment of Construction in Progress
Please refer to Note 31: Long-term Asset Impairment under Note V for the impairment test method and provisionfor impairment of construction in progress.
26. Borrowing Costs
The borrowing costs refer to interest and other related costs incurred by the Company as a result of borrowings,including interest on borrowings, amortization of discounts or premiums, ancillary expenses and exchangedifferences arising from foreign currency borrowings. The borrowing costs incurred by the Company directlyattributable to the acquisition, construction or production of assets eligible for capitalization are capitalized andincluded in the cost of the relevant assets. Other borrowing costs are recognized as expenses according to theamount at the time of occurrence, and are included in the current profits and losses.
1. Principle of capitalization of borrowing costs
Borrowing costs can be capitalized when all the following conditions are met: Asset expenditure has alreadyoccurred; borrowing costs have already occurred; construction or production activities necessary to bring theassets to the intended useable or sellable status have already begun.
2. Capitalization period of borrowing costs
Capitalization period refers to the period from the capitalization of borrowing costs starting to the end ofcapitalization, excluding the period when capitalization is suspended.If assets that meet the conditions of capitalization are interrupted abnormally in the course of construction orproduction, and the interruption time exceeds 3 consecutive months, the capitalization of borrowing costs shall besuspended. The borrowing costs incurred during the interruption are recognized as expenses and included incurrent profits and losses until the acquisition or construction of the assets is resumed. The capitalization of theborrowing costs continues if the interruption is a procedure necessary for the purchase or production of assetseligible for capitalization to meet the intended useable or sellable status.The borrowing costs shall cease to be capitalized when the purchased or produced assets that meet the conditionsof capitalization meet the intended useable or sellable status. The borrowing costs incurred after the assets eligiblefor capitalization meet the intended useable or sellable status can be included in the current profits and losseswhen incurred.
3. Calculation method of capitalized amount of borrowing costs
During the period of capitalization, the capitalization amount of interests (including amortization of discounts orpremiums) for each accounting period is determined in accordance with the following provisions:
(1) For special borrowings for the acquisition or construction of assets eligible for capitalization, the interestexpenses actually incurred in the current period of borrowings shall be recognized after deducting the interestincome obtained by depositing the unused borrowing funds into the bank or investment income obtained fromtemporary investment.
(2) Where the general borrowing is occupied for the acquisition or construction of assets eligible for capitalization,the Company multiplies the weighted average of the asset expenditure of the accumulated asset expenditureexceeding the special borrowing by the capitalization rate of the general borrowing to calculate the amount ofinterest that should be capitalized for general borrowings. The capitalization rate is determined based on theweighted average interest rate of general borrowings.
27. Living Assets
Not applicable
28. Oil and Gas Assets
Not applicable
29. Right-of-use Assets
On the start date of the lease term, the Company recognizes its right to use the leasehold property in the lease termas right-of-use assets, including: The initial measurement amount of the lease obligation; the lease payment paidon or before the start date of the lease term. If there is a lease incentive, the amount related to the lease incentivetaken should be deducted. the initial direct cost incurred by the lessee; the estimated cost that the lessee will use topull down and remove the leasehold property, and restore the site of the leasehold property or restore theleasehold property to the state agreed in the lease clauses. Then, the Company will depreciate the right-of-useassets with the straight-line method. If it is reasonably certain that the ownership of the leasehold property will beobtained at the end of the lease term, the Company will depreciate the leasehold property over its remainingservice life. If it is not reasonably certain that the ownership of the leasehold property will be obtained at the endof the lease term, the Company will depreciate the leasehold property over the lease term or the remaining servicelife, whichever is shorter.When the Company re-calculates the lease obligation using the present value (PV) of the changed lease paymentand correspondingly adjusts the book value of the right-of-use assets, if the book value is already reduced to zero,yet the lease obligation still needs to be reduced further, the Company will include the remaining amount in thecurrent profit or loss.
30. Intangible Assets
(1) Pricing Method, Useful Life and Impairment Test
1. Recognition Criteria of Intangible Assets
Intangible assets are identifiable non-monetary assets that are owned or controlled by the Company withoutphysical form. The intangible assets are recognized when all the following conditions are met: (1) Conform to the
definition of intangible assets; (2) Expected future economic benefits related to the assets are likely to flow intothe Company; (3) The costs of the assets can be measured reliably.
2. Initial Measurement of Intangible Assets
Intangible assets are initially measured at cost. Actual costs are determined by the following principles:
(1) The cost of the acquisition of intangible assets, including the purchase price, relevant taxes and other expensesdirectly attributable to the intended use of the asset. The payment of purchase price of intangible assets exceedingnormal credit terms is deferred, and the cost of intangible assets having financing nature in essence shall berecognized based on the present value of the purchase price. The difference between the actual payment price andthe present value of the purchase price shall be recorded into the current profits and losses in the credit periodexcept 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 theinvestment contract or agreement, except that the value of the contract or agreement is unfair.
3. Subsequent Measurement of Intangible Assets
The Company shall determine the useful life when it obtains intangible assets. The useful life of intangible assetsis limited, and the years of the useful life or output that constitutes the useful life or similar measurement unitsshall be estimated. The intangible assets are regarded as intangible assets with uncertain useful life if the term thatbrings economic benefits to the Company is unforeseeableIntangible assets with limited useful life shall be amortized by straight line method from the time when theintangible assets are available until can’t be recognized as intangible assets; intangible assets with uncertain usefullife shall not be amortized. The Company reviews the estimated useful life and amortization method of intangibleassets with limited useful life at the end of each year, and reviews the estimated useful life of intangible assetswith uncertain useful life in each accounting period. For intangible assets that evidence shows the useful life islimited, the useful life shall be estimated and the intangible assets shall be amortized in the estimated useful life.
4. Recognition Criteria and Withdrawal Method of Intangible Asset Impairment ProvisionThe impairment test method and withdrawal method for impairment provision of intangible assets are detailed inNote 31: Long-term asset impairment under Note V.
(2) Accounting Policy for Internal Research and Development ExpendituresThe expenditures in internal research and development projects of the Company are classified into expenditures inresearch stage and expenditures in development stage. The expenditures in research stage are included in thecurrent profits and losses when incurred. The expenditures in development stage are recognized as intangibleassets when meeting the following conditions:
(1) The completion of the intangible assets makes it technically feasible for using or selling;
(2) Having the intention to complete and use or sell the intangible assets;
(3) The way in which an intangible asset generates economic benefits, including the proof that the productsproduced with the intangible asset have market or the proof of its usefulness if the intangible asset has market andwill be used internally;
(4) Having sufficient technical, financial resources and other resources to support the development of theintangible assets and the ability to use or sell the intangible assets;
(5) Expenditure attributable to the development stage of intangible assets can be measured reliably.
The cost of self-developed intangible assets includes the total expenditure incurred since meeting intangible assetsrecognition criterion until reaching intended use. Expenditures that have been expensed in previous periods are nolonger adjusted.Non-monetary assets exchange, debt restructuring, government subsidies and the cost of intangible assets acquiredby business combination are recognized according to relevant provisions of Accounting Standard for BusinessEnterprises No. 7 - Non-monetary assets exchange, Accounting Standard for Business Enterprises No. 12 - Debtrestructuring, Accounting Standards for Business Enterprises No. 16 - Government subsidies, AccountingStandard for Business Enterprises No. 20 - Business combination respectively.
31. Impairment of Long-term Assets
For non-current non-financial assets such as fixed assets, construction in progress, intangible assets with limiteduseful life, investment real estate measured in cost mode and long-term equity investments in subsidiaries, jointventures and associates, the Company determines whether there is indication of impairment at balance sheet date.If there is indication of impairment, then estimate the amount of its recoverable value and test the impairment.Goodwill, intangible assets with uncertain useful life and intangible assets that have not yet reached useable stateshall be tested for impairment every year, whether or not there is any indication of impairment.If the impairment test results indicate that the recoverable amount of the asset is lower than its book value, theimpairment provision shall be made at the difference and included in the impairment loss. The recoverableamount is the higher of the fair value of the asset minus the disposal cost and the present value of the expectedfuture cash flow of the asset. The fair value of the asset is recognized according to the price of the sales agreementin the fair trade; if there is no sales agreement but there is an active market, the fair value is recognized accordingto the buyer’s bid of the asset; if there is no sales agreement or active market, the fair value of asset shall beestimated based on the best information that can be obtained. Disposal costs include legal costs related to disposalof assets, related taxes, handling charges, and direct costs incurred to enable the asset reaching sellable status. Thepresent value of the expected future cash flows of the assets is recognized by the amount discounted at appropriatediscount rate according to the expected future cash flows arising from the continuing use of the asset and the finaldisposal. The provision for impairment of assets is calculated and recognized on the basis of individual assets. If itis difficult to estimate the recoverable amount of individual assets, the recoverable amount of the asset group shallbe recognized by the asset group to which the asset belongs. The asset group is the smallest portfolio of assets thatcan generate cash inflows independently.The book value of the goodwill presented separately in the financial statements shall be apportioned to the assetgroup or portfolio of asset groups that is expected to benefit from the synergies of the business combination whenthe impairment test is conducted. The corresponding impairment loss is recognized if the test results indicate thatthe recoverable amount of the asset group or portfolio of asset groups containing the apportioned goodwill islower than its book value. The amount of the impairment loss shall offset the book value of the goodwillapportioned to the asset group or portfolio of asset groups, and offset the book value of other assets in proportionaccording to the proportion of the book value of other assets except the goodwill in the asset group or portfolio ofasset groups.Once the impairment loss of the above asset is recognized, the portion that the value is restored will not be writtenback in subsequent periods.
32. Long-term Prepaid Expense
Long-term prepaid expense refers to general expenses with the apportioned period over one year (one yearexcluded) that have occurred but attributable to the current and future periods. Long-term deferred expense shallbe amortized averagely within benefit period. In case of no benefit in the future accounting period, the amortizedvalue of such project that fails to be amortized shall be transferred into the profits and losses of the current period.
33. Contract Liabilities
The Company’s obligation of transferring commodities to customers due to consideration received or receivablefrom clients. If the client has paid the contract consideration or the Company has obtained the unconditional rightof collection before the Company transfers commodities to the customer, the Company shall present the accountsreceived or receivable as contract liabilities at the earlier time between the time when the client actually conductspayment and the deadline of payment. Contract assets and contract liabilities under the same contract shall bepresented based on the net amount, while those not under the same contract shall not be offset.
34. Payroll
(1) Accounting Treatment of Short-term Compensation
Short-term compensation mainly including salary, bonus, allowances and subsidies, employee services andbenefits, medical insurance premiums, birth insurance premium, industrial injury insurance premium, housingfund, labor union expenditure and personnel education fund, non-monetary benefits etc. The short-termcompensation actually happened during the accounting period when the active staff offering the service for theGroup should be recognized as liabilities and is included in the current gains and losses or relevant assets cost. Ofwhich the non-monetary benefits should be measured according to the fair value.
(2) Accounting Treatment of the Welfare after Demission
Welfare after demission mainly includes defined contribution plans and defined benefit plans. Of which definedcontribution plans mainly include basic endowment insurance, unemployment insurance, annuity funds, etc., andthe corresponding payable and deposit amount should be included into the relevant assets cost or the current gainsand losses when happen.
(3) Accounting Treatment of the Demission Welfare
If an enterprise cancels the labor relationship with any employee prior to the expiration of the relevant laborcontract or brings forward any compensation proposal for the purpose of encouraging the employee to accept alayoff, and should recognize the payroll liabilities occurred from the demission welfare base on the earlier datebetween the time when the Group could not one-sided withdraw the demission welfare which offered by the planor layoff proposal owning to relieve the labor relationship and the date the Group recognizes the cost related to thereorganization of the payment of the demission welfare and at the same time includes which into the current gainsand losses. But if the demission welfare is estimated that could not totally pay after the end of the annual reportwithin 12 months, should be disposed according to other long-term payroll payment.
(4) Accounting Treatment of the Welfare of Other Long-term Staffs
The inside employee retirement plan is treated by adopting the same principle with the above dismiss ion welfare.The group would recorded the salary and the social security insurance fees paid and so on from the employee’sservice terminative date to normal retirement date into current profits and losses (dismiss ion welfare) under thecondition that they meet the recognition conditions of estimated liabilities.The other long-term welfare that the Group offers to the staffs, if met with the setting drawing plan, should beaccounting disposed according to the setting drawing plan, while the rest should be disposed according to thesetting revenue plan.
35. Lease Liabilities
On the start date of the lease term, the Company recognizes the PV of the unpaid lease payment as a leaseobligation, except for the short-term and low-value asset leases. It will regard the interest rate implicit in lease asthe rate of discount, when calculating the PV of the lease payment. The incremental lending rate of the lessee willbe deemed as the rate of discount, if the interest rate implicit in lease cannot be confirmed. The Companycalculates the interest charge of the lease obligation in each period in the lease term at a fixed periodic interest rateand includes it in the current profit or loss, unless such interest charge is stipulated to be included in theunderlying asset cost. Variable lease payments that are not included in the measurement of the lease obligationshould be included in the current profit or loss when they are actually incurred, unless such payments arestipulated to be included in the underlying asset cost.The Company will re-calculate the lease obligation using the PV of the changed lease payment, if the actual fixedpayment, the estimated payable of the residual value of the guarantee, the index or rate used to confirm the leasepayment, or the assessment result of the call option, the renewal option, or the termination option, or the actualexercise changes, after the start date of the lease term.
36. Provisions
1. Recognition of Provisions
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 anprovisions when the following conditions are satisfied simultaneously: ① That obligation is a current obligationof the enterprise; ② It is likely to cause any economic benefit to flow out of the enterprise as a result ofperformance of the obligation; and ③ The amount of the obligation can be measured in a reliable way
2. Measurement of Provisions
The provisions shall be initially measured in accordance with the best estimate of the necessary expenses for theperformance of the current obligation. If there is a sequent range for the necessary expenses and if all theoutcomes within this range are equally likely to occur, the best estimate shall be determined in accordance withthe middle estimate within the range. In other cases, the best estimate shall be conducted in accordance with thefollowing situations, respectively: ① If the Contingencies concern a single item, it shall be determined in thelight of the most likely outcome. ② If the Contingencies concern two or more items, the best estimate should becalculated and determined in accordance with all possible outcomes and the relevant probabilities. ③ When allor some of the expenses necessary for the liquidation of an provisions of an enterprise is expected to becompensated 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 theprovisions on the balance sheet date. The amount of compensation is not exceeding the book value of therecognized provisions.
37. Share-based Payment
Not applicable
38. Other Financial Instruments such as Preferred Shares and Perpetual BondsNot applicable
39. Revenue
The Accounting Policy Adopted for Recognition and Measurement of Revenue
1. Accounting policies adopted in revenue recognition and measurement
The Company recognizes revenue when it has satisfied its performance obligations under the contract, i.e., when thecustomer has obtained control of relevant goods or services. Obtaining control of relevant goods or services meansbeing able to direct the use of them and obtain substantially all of the benefits from them.Where the contract contains two or more performance obligations, the Company, at the inception date of thecontract, allocates the transaction price to each performance obligation in accordance with the relative proportion ofthe stand-alone selling price of the goods or services promised by each performance obligation. The Companymeasures revenue on the basis of the transaction price allocated to each performance obligation.Transaction price is the amount of consideration to which the Company expects to be entitled in exchange fortransferring goods or services to a customer, excluding amounts collected on behalf of third parties and amountsexpected to be returned to the customer. The Company determines the transaction price in accordance with the termsof the contract, with past business practices taken into account. When determining the transaction price, it considersthe impact of variable consideration, the existence of a significant financing component in the contract, non-cashconsideration, consideration payable to a customer and other factors. The transaction price is recognized only to theextent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will notoccur when the relevant uncertainty is resolved. Where a contract contains a significant financing component, theCompany determines the transaction price on the basis of the amount presumably payable in cash when thecustomer obtains control of the goods or services, and uses the actual interest method to amortize the differencebetween the transaction price and the contract consideration during the contract period.A performance obligation is satisfied over time if one of the following conditions is met; otherwise, it is treated assatisfied at a point in time:
(1) The customer simultaneously receives and consumes the benefits provided by the Company's performance as theCompany performs.
(2) The customer can control the goods as they are created during the Company's performance.
(3) The goods produced by the Company's performance have no alternative use, and the Company has the right tocollect payment for performance completed to date during the entire contract period.Where a performance obligation is to be satisfied over time, the Company recognizes revenue in accordance withthe progress of performance during that period, except when the progress cannot be reasonably determined. Indetermining the progress of performance, the Company takes into account the nature of the goods or services andadopts the output methods or the input methods.
Where the performance progress cannot be reasonably determined, and the costs incurred are expected to berecovered, the Company recognizes revenue according to the amount of the costs incurred until the progress can bereasonably determined.Where the performance obligation is to be satisfied at a certain point in time, the Company recognizes revenue at thepoint when the customer obtains control of the relevant goods or services. When judging whether the customer hasobtained control of goods or services, the Company considers the following indicators:
(1) The Company has a present right to receive payment for the goods or services, i.e., the customer has a presentobligation to pay for the goods or services.
(2) The Company has transferred the legal ownership of the goods to the customer, i.e., the customer has obtainedthe legal ownership of the goods.
(3) The Company has transferred physical possession of the goods to the customer, i.e., the customer has takenphysical possession of the goods.
(4) The Company has transferred significant risks and rewards of ownership of the goods to the customer, i.e., thecustomer has obtained significant risks and rewards of ownership of the goods.
(5) The customer has accepted the goods or services.
2. Specific methods
(1) Recognition of domestic sales revenue: The Company has delivered goods that have passed inspection to thepurchaser as required by the purchaser; the amount of revenue has been determined, a sales invoice has been issuedand the payment has been received or is expected to be recovered.
(2) Recognition of export sales revenue: The Company has produced goods according to the requirements stipulatedin the sales contract, and completed the export declaration procedures after the goods have passed inspection; thefreight company has shipped the goods, the amount of revenue has been determined, an export sales invoice hasbeen issued, and the payment has been received or is expected to be recovered.
Differences in accounting policies for the recognition of revenue caused by different business models for the sametype of business
40. Government Subsidies
1. Category of Government Subsidies
Government subsidies refer to the monetary assets and non-monetary assets obtained by the Company from thegovernment, which mainly include government subsidies related to assets and government subsidies related toincome.
2. Distinction Standard of Government Subsidies Related to Assets with Government Subsidies Related to IncomeThe government subsidies related to assets refer to the government subsidies obtained for acquisition, constructionor otherwise formation of long-term assets. The government subsidies related to income refer to the governmentsubsidies except the government subsidies related to assets.The specific standard of classifying the government subsidies as subsidies related to assets: government subsidiesfor acquisition, construction or otherwise formation of long-term assets.The specific criteria that the Company classifies government subsidies as income related is: other governmentsubsidies other than asset-related government subsidies.If the government documents do not specify the subsidy object, the bases that the Company classified thegovernment subsidies as assets-related subsidies or income-related subsidies were as follows: (1) If the specificitems for which the subsidy is targeted are stipulated in government documents, divide according to the relative
proportion of the amount of expenditure that forms assets and the amount of expenditure included in the cost inthe budget for that particular project, and the proportion shall be reviewed at each balance sheet date and changedas necessary; (2) if the government documents only have a general statement of the purpose and do not specify aspecific project, the subsidy is recognized as government subsidy related to income.
3. Measurement of Government Subsidies
If a government subsidy is a monetary asset, it shall be measured according to the amount received or receivable.If a government subsidy is a non-monetary asset, it shall be measured at its fair value, and shall be measured at anominal amount (RMB1) when the fair value cannot be obtained reliably.For confirmed government subsidies that need to be returned, if there is relevant deferred income, the bookbalance of related deferred income shall be written off and the excess shall be charged to profit or loss for theCurrent Period; for other circumstances, it shall be directly charged to profit or loss for the Current.
4. Accounting Treatment for Government Subsidies
The Company adopts the gross method to confirm government subsidies.The government subsidies related to assets are recognized as deferred income, and are charged to the currentprofit or loss in a reasonable and systematic manner within the useful lives of the relevant assets (subsidies relatedto the daily activities of the Company are included in other income; while subsidies unrelated to the dailyactivities of the Company are included in non-operating income). Government subsidies measured at nominalamounts are directly charged to profit or loss for the Current Period. Where the relevant assets are sold,transferred, scrapped or damaged before the end of their useful lives, the balance of related undistributed deferredincome shall be transferred to the profit or loss of the asset disposal in the Current Period.Government subsidies related to income shall be treated as follows:
(1) government subsidies used to compensate the relevant costs, expenses or losses of the Company in thesubsequent period shall be recognized as deferred income, and shall be included in the current profit and lossduring the period of confirming the relevant costs, expenses or losses (subsidies related to the daily activities ofthe Company are included in other income; while subsidies unrelated to the daily activities of the Company areincluded in non-operating income);
(2) government subsidies used to compensate the relevant costs, expenses or losses incurred by the Companyshall be directly included in the current profits and losses (subsidies related to the daily activities of the Companyare included in other income; while subsidies unrelated to the daily activities of the Company are included innon-operating income).For government subsidies that include both assets-related and income-related parts, they should be distinguishedseparately for accounting treatment; for government subsidies that are difficult to be distinguished, they should beclassified as income-related.
41. Deferred Income Tax Assets/Deferred Income Tax Liabilities
The income tax of the Company includes the current income tax and deferred income tax. Both are recorded intothe current gains and losses as income tax expenses or revenue, except in the following circumstances:
(1) The income tax generated from the business combination shall be adjusted into goodwill;
(2) The income tax related to the transaction or event directly included in shareholders’ equity shall be recordedinto shareholders’ equity.At the balance sheet date, the Company recognizes the deferred income tax assets or deferred income taxliabilities in accordance with the balance sheet liability method for the temporary difference between the bookvalue of assets or liabilities and its tax base.
The Company recognizes all taxable temporary differences as deferred income tax liabilities unless taxabletemporary differences arise in the following transactions:
(1) The initial recognition of goodwill or the initial recognition of the assets or liabilities arising from a transactionwith the following characteristics: the transaction is not a business combination and neither the accounting profitnor the taxable income is incurred at the time of the transaction;
(2) The time of write-back of taxable temporary differences related to the investments in subsidiaries, associatesand joint ventures can be controlled and the temporary differences are likely to not be written back in theforeseeable future.The Company recognizes the deferred income tax assets arising from deductible temporary differences, subject tothe amount of taxable income obtained to offset the deductible temporary differences, unless the deductibletemporary differences arise in the following transactions:
(1) The transaction is not a business combination, and the transaction does not affect the accounting profit or theamount of taxable income;
(2) The deductible temporary differences related to the investments in subsidiaries, associates and joint venturesare not met simultaneously: Temporary differences are likely to be written back in the foreseeable future and arelikely to be used to offset the taxable income of deductible temporary differences in the future.At the balance sheet date, the Company measures the deferred income tax assets and deferred income taxliabilities at the applicable tax rate of the period expected to recover the asset or pay off the liabilities according totax law, and reflects the income tax effect of expected assets recovery or liabilities payoff method at the balancesheet date.At the balance sheet date, the Company reviews the book value of the deferred income tax assets. If it is likelythat sufficient taxable income will not be available to offset the benefit of the deferred income tax assets in thefuture period, the book value of the deferred income tax assets will be written down. If it is probable thatsufficient taxable income will be available, the amount of write-down will be written back.
42. Lease
(1) Accounting Treatment of Operating Lease
As the lessee:
On the start date of the lease term, the Company deems the right-of-use assets and lease obligations of all theoperating leases, except for the simplified short-term lease and low-value leases. See Footnote V 29 and 35 for thegeneral accounting treatment of the Company as the lessee.Lease changeA lease change refers to a change in the scope, consideration, and term of lease outside the original contractclauses, including the addition or termination of the one or several rights to use lease assets, and the extension orreduction of the lease term specified in the contract.When the lease changes and the following conditions are met, the Company will regard the lease charge as aseparate lease for accounting treatment:
(1) The lease change expands the scope of lease through the increase of one or several rights to use the leaseassets;
(2) The increased consideration and the separate price of the expanded part of the scope of lease are the same,upon adjustment, according to the contract.
If the lease change is not deemed as a separate lease for accounting treatment, the Company will re-amortize theconsideration of the changed contract, re-confirm the lease term, and re-calculate the PV of the lease obligationusing the changed lease payment and the revised rate of discount, on the date when the lease change takes effect.The Company will correspondingly reduce the book value of the right-of-use assets and include the profit or lossof the lease terminated in part or whole in the current profit or loss, if the lease change narrows the scope of leaseor shortens the lease term. The Company will correspondingly adjust the book value of the right-of-use assets, ifother lease changes result in the re-calculation of the lease obligation.Short-term and low-value asset leasesThe Company chooses not to confirm the right-of-use assets and lease obligations of the short-term and low-valueasset leases, and include the relevant lease payment in each period in the lease term in the current profit or loss orthe underlying asset cost on a straight-line basis. A short-term lease refers to the lease whose lease term does notexceed 12 months and that does not include the call option on the start date of the lease term. A low-value assetlease refers to the lease where the value will be low when the single lease asset is the new asset. For the leaseholdproperty that is underleased or expected to be underleased, the original lease does not belong to low-value assetlease.As the lessor:
The Company classifies lease into finance and operating leases on the start date of the lease term. A finance leaserefers to the lease where almost all the risks and remuneration, related to the ownership of the leasehold property,is transferred, no matter whether the ownership is finally transferred or not. An operating lease refers to all leasesother than finance leases.The lease receivable of the operating lease in each period in the lease term is deemed as a rental on a straight-linebasis. The Company capitalizes the initial direct cost related to the operating finance, amortize and include it inthe current profit or loss on the basis same as the recognition of rentals in the lease term. Variable lease paymentsthat are not included in the lease receivable are included in the current profit or loss when they are actuallyincurred. If an operating lease changes, the Company will regard it as a new lease for accounting treatment fromthe effective date of the change. The advance receipt or the lease receivable related to the lease prior to the changeis recognized as the payment receivable of the new lease.
(2) Accounting Treatments of Financial Lease
As the lessee:
See Footnote V 29 and 35 for the general accounting treatment of the Company as the lessee.As the lessor:
The Company confirms the finance lease receivable of the finance lease and finally confirms the finance leaseholdproperty on the start date of the lease term. It recognizes the net investment in the lease as the entry value of thefinance lease, when initially calculating the finance lease receivable. The net investment in the lease is the sum ofthe net value of the unguaranteed residual value and the lease receivable not received on the start date of the leaseterm at the interest rate implicit in lease. The Company calculates and confirms the interest income at a fixedperiodic interest rate in each period in the lease term.
43. Other Significant Accounting Policies and Estimates
Not applicable
44. Changes in Main Accounting Policies and Estimates
(1) Change of Accounting Policies
√ Applicable □ Not applicable
| Contents of and reasons for the changes to accounting policies | Approval procedure | Remarks |
| On December 7, 2018, the Ministry of Finance (MOF) issued Revision and Issuance of the Accounting Standard for Business Enterprises No. 21: Lease (C.K. [2018] No. 35) (hereinafter referred to as "new lease standards"). According to the requirements of the Ministry of Finance, those enterprises that are listed both at home and abroad and those enterprises that are listed overseas and adopt the International Financial Reporting Standards or the Accounting Standards for Business Enterprises for preparation of financial statements should implement the standards from January 1, 2019; the other enterprises that adopt the Accounting Standards for Business Enterprises should implement the standards from January 1, 2021. Thereby, the Company started to implement the revised new lease standards from January 1, 2020 and followed the relevant transitional requirements. | Deliberated and approved by the 16th meeting of the Nine Board of Directors of the company | For details, see 44. Changes in important accounting policy and accounting estimates (3). |
(2) Changes in Accounting Estimates
□ Applicable √ Not applicable
(3) Adjustments to the Financial Statements at the Beginning of the First Execution Year of any NewStandards Governing Leases since 2021ApplicableWhether items of balance sheets at the beginning of the year need adjustment
√ Yes □ No
Consolidated Balance Sheet
Unit: RMB
| Item | 31 December 2020 | 1 January 2021 | Adjusted |
| Current assets: | |||
| Monetary assets | 981,249,699.49 | 981,249,699.49 | |
| Settlement reserve | |||
| Interbank loans granted | |||
| Held-for-trading financial assets | 407,619,201.36 | 407,619,201.36 | |
| Derivative financial assets | |||
| Notes receivable | 140,972,143.00 | 140,972,143.00 | |
| Accounts receivable | 1,134,233,235.70 | 1,134,233,235.70 | |
| Accounts receivable financing | |||
| Prepayments | 11,994,745.05 | 11,994,745.05 | |
| Premiums receivable | |||
| Reinsurance receivables | |||
| Receivable reinsurance contract reserve | |||
| Other receivables | 20,194,968.19 | 20,194,968.19 | |
| Including: Interest receivable | |||
| Dividends receivable | |||
| Financial assets purchased under resale agreements | |||
| Inventories | 735,685,116.91 | 735,685,116.91 | |
| Contract assets | |||
| Assets held for sale | |||
| Current portion of non-current assets | |||
| Other current assets | 175,090,368.85 | 175,090,368.85 | |
| Total current assets | 3,607,039,478.55 | 3,607,039,478.55 | |
| Non-current assets: | |||
| Loans and advances to customers | |||
| Investments in debt obligations | |||
| Investments in other debt obligations | |||
| Long-term receivables | |||
| Long-term equity investments | 181,365,016.32 | 181,365,016.32 | |
| Investments in other equity instruments | 3,305,501,030.06 | 3,305,501,030.06 | |
| Other non-current financial |
| assets | |||
| Investment property | |||
| Fixed assets | 685,707,548.55 | 685,707,548.55 | |
| Construction in progress | 503,941,120.31 | 503,941,120.31 | |
| Productive living assets | |||
| Oil and gas assets | |||
| Right-of-use assets | 6,229,690.85 | 6,229,690.85 | |
| Intangible assets | 170,693,873.30 | 170,693,873.30 | |
| Development costs | |||
| Goodwill | |||
| Long-term prepaid expense | 13,411,226.23 | 13,411,226.23 | |
| Deferred income tax assets | 40,253,777.17 | 40,253,777.17 | |
| Other non-current assets | 11,423,843.62 | 11,423,843.62 | |
| Total non-current assets | 4,912,297,435.56 | 4,918,527,126.41 | 6,229,690.85 |
| Total assets | 8,519,336,914.11 | 8,525,566,604.96 | 6,229,690.85 |
| Current liabilities: | |||
| Short-term borrowings | |||
| Borrowings from the central bank | |||
| Interbank loans obtained | |||
| Held-for-trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | 480,971,214.80 | 480,971,214.80 | |
| Accounts payable | 1,059,674,020.99 | 1,059,674,020.99 | |
| Advances from customers | 1,285,357.28 | 1,285,357.28 | |
| Contract liabilities | 65,777,726.45 | 65,777,726.45 | |
| Financial assets sold under repurchase agreements | |||
| Customer deposits and interbank deposits | |||
| Payables for acting trading of securities | |||
| Payables for underwriting of securities | |||
| Employee benefits payable | 82,485,090.47 | 82,485,090.47 | |
| Taxes payable | 18,876,657.51 | 18,876,657.51 | |
| Other payables | 76,668,330.66 | 76,668,330.66 | |
| Including: Interest payable | |||
| Dividends |
| payable | |||
| Handling charges and commissions payable | |||
| Reinsurance payables | |||
| Liabilities directly associated with assets held for sale | |||
| Current portion of non-current liabilities | 2,812,729.51 | 2,812,729.51 | |
| Other current liabilities | 5,503,702.07 | 5,503,702.07 | |
| Total current liabilities | 1,791,242,100.23 | 1,794,054,829.74 | 2,812,729.51 |
| Non-current liabilities: | |||
| Insurance contract reserve | |||
| Long-term borrowings | |||
| Bonds payable | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Lease liabilities | 3,416,961.34 | 3,416,961.34 | |
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Provisions | |||
| Deferred income | |||
| Deferred income tax liabilities | 414,670,609.97 | 414,670,609.97 | |
| Other non-current liabilities | 1,244,064.84 | 1,244,064.84 | |
| Total non-current liabilities | 415,914,674.81 | 419,331,636.15 | 3,416,961.34 |
| Total liabilities | 2,207,156,775.04 | 2,213,386,465.89 | 6,229,690.85 |
| Owners’ equity: | |||
| Share capital | 1,399,346,154.00 | 1,399,346,154.00 | |
| Other equity instruments | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Capital reserves | 15,157,514.90 | 15,157,514.90 | |
| Less: Treasury stock | |||
| Other comprehensive income | 2,349,388,533.61 | 2,349,388,533.61 | |
| Specific reserve |
| Surplus reserves | 741,567,039.55 | 741,567,039.55 | |
| General reserve | |||
| Retained earnings | 1,758,462,062.48 | 1,758,462,062.48 | |
| Total equity attributable to owners of the Company as the parent | 6,263,921,304.54 | 6,263,921,304.54 | |
| Non-controlling interests | 48,258,834.53 | 48,258,834.53 | |
| Total owners’ equity | 6,312,180,139.07 | 6,312,180,139.07 | |
| Total liabilities and owners’ equity | 8,519,336,914.11 | 8,525,566,604.96 | 6,229,690.85 |
Balance Sheet of the Company as the Parent
Unit: RMB
| Item | 31 December 2020 | 1 January 2021 | Adjusted |
| Current assets: | |||
| Monetary assets | 896,261,882.77 | 896,261,882.77 | |
| Held-for-trading financial assets | 407,619,201.36 | 407,619,201.36 | |
| Derivative financial assets | |||
| Notes receivable | 137,477,199.21 | 137,477,199.21 | |
| Accounts receivable | 1,030,713,074.22 | 1,030,713,074.22 | |
| Accounts receivable financing | |||
| Prepayments | 9,581,302.45 | 9,581,302.45 | |
| Other receivables | 462,284,585.09 | 462,284,585.09 | |
| Including: Interest receivable | |||
| Dividends receivable | |||
| Inventories | 615,106,650.81 | 615,106,650.81 | |
| Contract assets | |||
| Assets held for sale | |||
| Current portion of non-current assets | |||
| Other current assets | 139,275,518.71 | 139,275,518.71 | |
| Total current assets | 3,698,319,414.62 | 3,698,319,414.62 | |
| Non-current assets: | |||
| Investments in debt obligations | |||
| Investments in other debt obligations | |||
| Long-term receivables | |||
| Long-term equity | 536,949,311.73 | 536,949,311.73 |
| investments | |||
| Investments in other equity instruments | 3,305,501,030.06 | 3,305,501,030.06 | |
| Other non-current financial assets | |||
| Investment property | |||
| Fixed assets | 628,174,755.88 | 628,174,755.88 | |
| Construction in progress | 54,652,119.14 | 54,652,119.14 | |
| Productive living assets | |||
| Oil and gas assets | |||
| Right-of-use assets | 6,229,690.85 | 6,229,690.85 | |
| Intangible assets | 122,391,701.60 | 122,391,701.60 | |
| Development costs | |||
| Goodwill | |||
| Long-term prepaid expense | 11,651,100.48 | 11,651,100.48 | |
| Deferred income tax assets | 31,403,727.94 | 31,403,727.94 | |
| Other non-current assets | 7,548,885.47 | 7,548,885.47 | |
| Total non-current assets | 4,698,272,632.30 | 4,704,502,323.15 | 6,229,690.85 |
| Total assets | 8,396,592,046.92 | 8,402,821,737.77 | 6,229,690.85 |
| Current liabilities: | |||
| Short-term borrowings | |||
| Held-for-trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | 484,230,566.21 | 484,230,566.21 | |
| Accounts payable | 1,108,208,382.75 | 1,108,208,382.75 | |
| Advances from customers | |||
| Contract liabilities | 53,572,800.70 | 53,572,800.70 | |
| Employee benefits payable | 62,075,512.08 | 62,075,512.08 | |
| Taxes payable | 7,819,839.48 | 7,819,839.48 | |
| Other payables | 171,916,835.73 | 171,916,835.73 | |
| Including: Interest payable | |||
| Dividends payable | |||
| Liabilities directly associated with assets held for sale | |||
| Current portion of non-current liabilities | 2,812,729.51 | 2,812,729.51 | |
| Other current liabilities | 4,483,279.11 | 4,483,279.11 |
| Total current liabilities | 1,892,307,216.06 | 1,895,119,945.57 | 2,812,729.51 |
| Non-current liabilities: | |||
| Long-term borrowings | |||
| Bonds payable | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Lease liabilities | 3,416,961.34 | 3,416,961.34 | |
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Provisions | |||
| Deferred income | |||
| Deferred income tax liabilities | 414,670,609.97 | 414,670,609.97 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 414,670,609.97 | 418,087,571.31 | 3,416,961.34 |
| Total liabilities | 2,306,977,826.03 | 2,313,207,516.88 | 6,229,690.85 |
| Owners’ equity: | |||
| Share capital | 1,399,346,154.00 | 1,399,346,154.00 | |
| Other equity instruments | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Capital reserves | 7,426,635.62 | 7,426,635.62 | |
| Less: Treasury stock | |||
| Other comprehensive income | 2,349,389,658.23 | 2,349,389,658.23 | |
| Specific reserve | |||
| Surplus reserves | 741,567,039.55 | 741,567,039.55 | |
| Retained earnings | 1,591,884,733.49 | 1,591,884,733.49 | |
| Total owners’ equity | 6,089,614,220.89 | 6,089,614,220.89 | |
| Total liabilities and owners’ equity | 8,396,592,046.92 | 8,402,821,737.77 | 6,229,690.85 |
(4) Retroactive Adjustments to Comparative Data of Prior Years when First Execution of any NewStandards Governing Leases since 2021
□ Applicable √ Not applicable
45. Other
VI. Taxes
1. Main Taxes and Tax Rates
| Category of taxes | Tax basis | Tax rate |
| VAT | Sales volume from goods selling or taxable service | 3%, 6%, 9%, 13% |
| Urban maintenance and construction tax | Turnover tax payable | 7%, 5% |
| Enterprise income tax | Taxable income | 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
| Name | Income tax rate |
| The Company, Zhida Company | 15% |
| FSL Lighting GmbH | 15% |
| Other subsidiaries | 25% |
2. Tax Preference
The Company passed the re-examination for High-tech Enterprises in 2020, as well as won the “Certificate ofHigh-tech Enterprise” after approval by Department of Science and Technology of Guangdong Province,Department of Finance of Guangdong Province, Guangdong Provincial Bureau of State Taxation and GuangdongProvincial Bureau of Local Taxation. In accordance with relevant provisions in Corporate Income Tax Law of thePeople’s Republic of China and the Administration Measures for Identification of High-tech Enterprisespromulgated in 2007, the Company paid the corporate income tax based on a tax rate of 15% within three yearssince 1 January 2020.Zhida Company passed the examination for High-tech Enterprises in December 2019, and thus Zhida Companypaid the corporate income tax based on a tax rate of 15% within three years since 1 January 2019 in accordancewith relevant provisions in Corporate Income Tax Law of the People’s Republic of China and the AdministrationMeasures for Identification of High-tech Enterprises promulgated in 2007.
3. Other
Paid according to the relevant regulation of the tax law.
VII. Notes to Main Items of Consolidated Financial Statements
1. Monetary Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Cash on hand | 9,119.25 | 14,800.25 |
| Bank deposits | 1,249,024,091.56 | 883,112,636.02 |
| Other monetary assets(Note 1) | 255,247,161.71 | 96,541,013.22 |
| Unexpired interest(Note 2) | 1,581,250.00 | |
| Total | 1,504,280,372.52 | 981,249,699.49 |
| Of which: Total amount deposited overseas | 1,251,515.66 | 1,127,886.79 |
Other notesNote 1: Other monetary assets were security deposits for notes and performance bonds, as well as investmentsplaced with security firm and the balance with e-commerce platforms, of which the security deposits for notes andperformance bonds were restricted assets (see “81. Assets with Restricted Ownership or Right of Use” in Note“VII Notes to Consolidated Financial Statements”).Note 2: Unexpired interest did not belong to cash and cash equivalents.
2. Trading Financial Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Financial assets at fair value through profit or loss | 293,530,525.04 | 407,619,201.36 |
| Including: | ||
| Wealth management products | 61,310,114.09 | 401,286,301.36 |
| Structural deposits | 230,280,410.95 | |
| Others | 1,940,000.00 | 6,332,900.00 |
| Including: | ||
| Total | 293,530,525.04 | 407,619,201.36 |
3. Derivative Financial Assets
Naught
4. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
| Item | Ending balance | Beginning balance |
| Bank acceptance bill | 218,524,886.92 | 140,972,143.00 |
| Total | 218,524,886.92 | 140,972,143.00 |
Please refer to the relevant information of disclosure of bad debt provision of other receivables if adopting thegeneral mode of expected credit loss to withdraw bad debt provision of notes receivable.
□ Applicable √ Not applicable
(2) Bad Debt Provision Withdrawn, Reversed or Collected during the Reporting PeriodNaughtOf which, the bad debt provision reversed or collected with significant amount during the Reporting Period:
□ Applicable √ Not applicable
(3) Notes Receivable Pledged at the Period-end
Unit: RMB
| Item | Amount pledged at the period-end |
| Bank acceptance bill | 80,709,869.38 |
| Total | 80,709,869.38 |
(4) Notes Receivable which Had Endorsed by the Company or Had Discounted and Had not Due on theBalance Sheet Date at the Period-end
Unit: RMB
| Item | Amount of recognition termination at the period-end | Amount of not recognition termination at the period-end |
| Bank acceptance bill | 43,992,188.82 | |
| Total | 43,992,188.82 |
(5) Notes Transferred to Accounts Receivable because Drawer of the Notes Fails to Executed the Contractor AgreementNaught
(6) The Actual Write-off Notes Receivable
Naught
5. Accounts Receivable
(1) Accounts Receivable Disclosed by Category
Unit: RMB
| Category | Ending balance | Beginning balance | ||||||||
| Carrying amount | Bad debt provision | Carrying value | Carrying amount | Bad debt provision | Carrying value | |||||
| Amount | Proportion | Amount | Withdrawal proportion | Amount | Proportion | Amount | Withdrawal proportion | |||
| Accounts receivable withdrawn bad debt | 15,257,662.85 | 1.32% | 9,569,331.99 | 62.72% | 5,688,330.86 | 15,257,662.85 | 1.27% | 9,569,331.99 | 62.72% | 5,688,330.86 |
| provision separately | ||||||||||
| Of which: | ||||||||||
| Accounts receivable withdrawn bad debt provision by group | 1,142,103,043.09 | 98.68% | 55,538,858.29 | 4.86% | 1,086,564,184.80 | 1,185,342,187.03 | 98.73% | 56,797,282.19 | 4.79% | 1,128,544,904.84 |
| Of which: | ||||||||||
| Total | 1,157,360,705.94 | 100.00% | 65,108,190.28 | 5.63% | 1,092,252,515.66 | 1,200,599,849.88 | 100.00% | 66,366,614.18 | 5.53% | 1,134,233,235.70 |
Individual withdrawal of bad debt provision:
Unit: RMB
| Name | Ending balance | |||
| Carrying amount | Bad debt provision | Withdrawal proportion | Withdrawal reason | |
| Customer A | 14,220,827.14 | 8,532,496.28 | 60.00% | Involved in the lawsuit, the Company won the lawsuit in the first instance, and the other side has appealed. |
| Customer B | 1,036,835.71 | 1,036,835.71 | 100.00% | Involved in the lawsuit, the Company won the case, but the counterpart had no property for repayment |
| Total | 15,257,662.85 | 9,569,331.99 | -- | -- |
Withdrawal of bad debt provision by group:
Unit: RMB
| Name | Ending balance | ||
| Carrying amount | Bad debt provision | Withdrawal proportion | |
| Credit risk group | 1,142,103,043.09 | 55,538,858.29 | 4.86% |
| Total | 1,142,103,043.09 | 55,538,858.29 | -- |
Please refer to the relevant information of disclosure of bad debt provision of other receivables if adopting thegeneral mode of expected credit loss to withdraw bad debt provision of accounts receivable.
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
| Aging | Ending balance |
| Within 1 year (including 1 year) | 1,069,952,328.32 |
| 1 to 2 years | 27,900,320.46 |
| 2 to 3 years | 29,355,007.62 |
| Over 3 years | 30,153,049.54 |
| 3 to 4 years | 10,861,737.24 |
| 4 to 5 years | 14,104,509.72 |
| Over 5 years | 5,186,802.58 |
| Total | 1,157,360,705.94 |
(2) Bad Debt Provision Withdrawn, Reversed or Collected during the Reporting PeriodInformation of withdrawal of bad debt provision:
Unit: RMB
| Category | Beginning amount | Changes in the Reporting Period | Ending balance | |||
| Withdrawal | Reversal or recovery | Write-off | Other | |||
| Accounts receivable | 66,366,614.18 | -1,258,347.12 | 76.78 | 65,108,190.28 | ||
| Total | 66,366,614.18 | -1,258,347.12 | 76.78 | 65,108,190.28 | ||
(3) Particulars of the Actual Verification of Accounts Receivable during the Reporting Period
Unit: RMB
| Item | Amount |
| Other retails accounts | 76.78 |
Note:
The approval procedure for the verification of accounts receivable during the Reporting Period had beenperformed in accordance with provisions of the bad debt management system of the Company.
(4) Top 5 of the Ending Balance of the Accounts Receivable Collected according to the Arrears Party
Unit: RMB
| Name of units | Ending balance of accounts receivable | Proportion to total ending balance of accounts receivable (%) | Ending balance of bad debt provision |
| No. 1 | 130,321,324.71 | 11.26% | 3,909,639.74 |
| No. 2 | 55,072,539.33 | 4.76% | 1,652,176.18 |
| No. 3 | 28,736,896.36 | 2.48% | 862,106.89 |
| No. 4 | 18,109,974.59 | 1.56% | 543,299.24 |
| No. 5 | 17,654,601.13 | 1.53% | 529,638.03 |
| Total | 249,895,336.12 | 21.59% |
(5) Derecognition of Accounts Receivable due to the Transfer of Financial AssetsNaught
(6) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement ofAccounts ReceivableNaught
6. Accounts Receivable Financing
Naught
7. Prepayment
(1) Listed by Aging
Unit: RMB
| Aging | Ending balance | Beginning balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 15,959,112.57 | 84.64% | 9,193,885.82 | 76.65% |
| 1 to 2 years | 405,422.40 | 2.15% | 355,870.31 | 2.97% |
| 2 to 3 years | 312,375.58 | 1.66% | 1,081,261.45 | 9.01% |
| Over 3 years | 2,178,448.46 | 11.55% | 1,363,727.47 | 11.37% |
| Total | 18,855,359.01 | -- | 11,994,745.05 | -- |
(2) Top 5 of the Ending Balance of the Prepayments Collected according to the Prepayment Target
Unit: RMB
| Name of units | Relationship with the Company | Ending balance | Proportion to total prepayments (%) | Aging |
| No. 1 | Non-related supplier | 4,127,623.16 | 21.89% | Within 1 year |
| No. 2 | Non-related supplier | 2,471,998.45 | 13.11% | Within 1 year |
| No. 3 | Non-related supplier | 1,327,340.00 | 7.04% | Within 1 year |
| No. 4 | Non-related supplier | 1,248,844.08 | 6.62% | Within 1 year |
| No. 5 | Non-related supplier | 1,005,349.38 | 5.33% | Within 1 year |
| Total | 10,181,155.07 | 53.99% |
8. Other Receivables
Unit: RMB
| Item | Ending balance | Beginning balance |
| Other receivables | 22,845,333.42 | 20,194,968.19 |
| Total | 22,845,333.42 | 20,194,968.19 |
(1) Interest Receivable
Naught
(2) Dividends Receivable
Naught
(3) Other Receivables
1) Other Receivables Classified by Account Nature
Unit: RMB
| Nature | Ending carrying amount | Beginning carrying amount |
| VAT export tax refunds | 12,627.03 | 195,141.85 |
| Bidding and performance bond | 6,628,413.06 | 4,166,580.10 |
| Staff borrow and petty cash | 5,742,450.16 | 7,866,311.07 |
| Rent, water & electricity fees | 3,951,691.77 | 3,389,778.15 |
| Other | 9,588,320.13 | 7,020,439.45 |
| Total | 25,923,502.15 | 22,638,250.62 |
2) Information of Withdrawal of Bad Debt Provision
Unit: RMB
| Bad debt provision | First stage | Second stage | Third stage | Total |
| Expected credit loss of the next 12 months | Expected loss in the duration (credit impairment not occurred) | Expected loss in the duration (credit impairment occurred) | ||
| Balance of 1 January 2021 | 499,462.41 | 1,943,820.02 | 2,443,282.43 | |
| Balance of 1 January 2021 in the Current Period | —— | —— | —— | —— |
| Withdrawal of the Current Period | 67,697.84 | 567,188.46 | 634,886.30 | |
| Balance of 30 June 2021 | 567,160.25 | 2,511,008.48 | 3,078,168.73 |
Changes of carrying amount with significant amount changed of loss provision in the current period
□Applicable √Not applicable
Disclosure by aging
Unit: RMB
| Aging | Ending balance |
| Within 1 year (including 1 year) | 18,905,342.17 |
| 1 to 2 years | 2,224,998.52 |
| 2 to 3 years | 1,816,298.52 |
| Over 3 years | 2,976,862.94 |
| 3 to 4 years | 2,418,437.84 |
| 4 to 5 years | 120,124.80 |
| Over 5 years | 438,300.30 |
| Total | 25,923,502.15 |
3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting PeriodInformation of withdrawal of bad debt provision:
Unit: RMB
| Category | Beginning balance | Changes in the Reporting Period | Ending balance | |||
| Withdrawal | Reversal or recovery | Write-off | Other | |||
| Other receivables | 2,443,282.43 | 634,886.30 | 3,078,168.73 | |||
| Total | 2,443,282.43 | 634,886.30 | 3,078,168.73 | |||
4) Particulars of the Actual Verification of Other Receivables during the Reporting PeriodNaught
5) Top 5 of the Ending Balance of the Other Receivables Collected according to the Arrears Party
Unit: RMB
| Name of the entity | Nature | Ending balance | Aging | Proportion to total ending balance of other receivables (%) | Ending balance of bad debt provision |
| No. 1 | Social insurance | 1,894,461.32 | Within 3 years | 7.31% | 69,155.86 |
| No. 2 | Other | 1,844,511.90 | Within 1 year | 7.12% | 62,884.08 |
| No. 3 | Other | 1,296,947.31 | Within 4 years | 5.00% | 49,368.19 |
| No. 4 | Rent, water & electricity fees | 1,252,616.64 | Within 2 years | 4.83% | 41,608.21 |
| No. 5 | Rent, water & electricity fees | 1,174,200.14 | Within 3 years | 4.53% | 598,956.46 |
| Total | -- | 7,462,737.31 | -- | 28.79% | 821,972.80 |
6) Accounts Receivable Involving Government Grants
Naught
7) Derecognition of Other Receivables due to the Transfer of Financial AssetsNaught
8) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement ofOther ReceivablesNaught
9. Inventory
Whether the Company needs to comply with disclosure requirements for real estate industryNo
(1) Category of Inventory
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Falling price reserves of inventory or depreciation reserves of contract performance cost | Carrying value | Carrying amount | Falling price reserves of inventory or depreciation reserves of contract performance cost | Carrying value | |
| Raw materials | 217,609,158.31 | 2,749,188.94 | 214,859,969.37 | 177,234,228.73 | 2,901,800.45 | 174,332,428.28 |
| Goods in process | 41,829,585.86 | 41,829,585.86 | 40,969,288.80 | 40,969,288.80 | ||
| Inventory goods | 476,192,689.01 | 22,329,841.08 | 453,862,847.93 | 387,194,563.02 | 13,992,901.12 | 373,201,661.90 |
| Semi-finished goods | 139,363,771.13 | 725,535.91 | 138,638,235.22 | 145,960,270.11 | 1,013,387.91 | 144,946,882.20 |
| Low priced and easily worn articles | 2,669,257.35 | 2,669,257.35 | 2,234,855.73 | 2,234,855.73 | ||
| Total | 877,664,461.66 | 25,804,565.93 | 851,859,895.73 | 753,593,206.39 | 17,908,089.48 | 735,685,116.91 |
(2)Falling Price Reserves of Inventory and Depreciation Reserves of Contract Performance Cost
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance | ||
| Withdrawal | Other | Reversal or write-off | Other | |||
| Raw materials | 2,901,800.45 | 276,383.19 | 428,994.70 | 2,749,188.94 | ||
| Inventory goods | 13,992,901.12 | 10,677,164.71 | 2,340,224.75 | 22,329,841.08 | ||
| Semi-finished goods | 1,013,387.91 | 41,686.73 | 329,538.73 | 725,535.91 | ||
| Total | 17,908,089.48 | 10,995,234.63 | 3,098,758.18 | 25,804,565.93 | ||
| Item | Basis for withdrawal of falling price reserves of inventory | Reasons for reversal or write-off of falling price reserves of inventory | Note |
| Raw materials | The lower one between the inventory cost and net realizable value | Sales or scrap of raw materials |
| Inventory goods | The lower one between the inventory cost and net realizable value | Sales or scrap of products |
Reasons for the provision for inventory depreciation: Provisions are set for the stagnancy of a few raw materials;some inventory products become temporarily idle due to classification.
(3) Notes to the Ending Balance of Inventories Including Capitalized Borrowing ExpenseNaught
(4) Amortization Amount of Contract Performance Cost during the Reporting PeriodNaught
10. Contract Assets
Naught
11. Held-for-Sale Assets
Naught
12. Current Portion of Non-current Assets
Naught
13. Other Current Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Deductible input tax of VAT | 68,064,174.23 | 84,673,053.78 |
| Large bank deposit certificate (note) | 90,417,315.07 | |
| Total | 68,064,174.23 | 175,090,368.85 |
Other notes;Bank deposit receipts of large amounts with a maturity of over three months which were transferable but notredeemable until maturity.
14. Creditor’s Rights Investment
Naught
15. Other Creditor’s Rights Investment
Naught
16. Long-term Accounts Receivable
Naught
17. Long-term Equity Investment
Unit: RMB
| Investees | Beginning balance (carrying value) | Increase/decrease | Ending balance (carrying value) | Ending balance of depreciation reserves | |||||||
| Additional investment | Reduced investment | Gains and losses recognized under the equity method | Adjustment of other comprehensive income | Changes of other equity | Cash bonus or profits announced to issue | Withdrawal of impairment provision | Other | ||||
| I. Joint ventures | |||||||||||
| II. Associated enterprises | |||||||||||
| Shenzhen Primatronix (Nanho) Electronics Ltd. | 181,365,016.32 | 37,460.99 | 2,080,390.50 | 179,322,086.81 | |||||||
| Subtotal | 181,365,016.32 | 37,460.99 | 2,080,390.50 | 179,322,086.81 | |||||||
| Total | 181,365,016.32 | 37,460.99 | 2,080,390.50 | 179,322,086.81 | |||||||
18. Other Equity Instrument Investment
Unit: RMB
| Item | Ending balance | Beginning balance |
| Non-listed equity investment | 5,054,176.40 | 5,054,176.40 |
| Listed equity investment | 2,543,403,615.60 | 3,300,446,853.66 |
| Total | 2,548,457,792.00 | 3,305,501,030.06 |
Disclosure of non-trading equity instrument investment by items
Unit: RMB
| Item | Dividend income recognized | Accumulative gains | Accumulative losses | Amount of other comprehensive income transferred to retained earnings | Reason for assigning to measure in fair value and the changes included in the current gains and losses | Reason for other comprehensive income transferred to retained earnings |
| Stock of Gotion | 1,264,684,034.12 | 355,869,553.42 | Not satisfied with | Sales of some |
| High-tech | the condition of trading equity instrument | stocks of Gotion High-tech | ||||
| Stock of Xiamen Bank | 747,516,255.48 | Not satisfied with the condition of trading equity instrument | ||||
| Stock of Everbright Bank | 46,456,982.30 | Not satisfied with the condition of trading equity instrument | ||||
| Stock of Nationstar Optoelectronics | 848,379.32 | Not satisfied with the condition of trading equity instrument | ||||
| Total | 2,059,505,651.22 | 355,869,553.42 |
19. Other Non-current Financial Assets
Naught
20. Investment Property
Naught
21. Fixed Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Fixed assets | 677,082,730.82 | 685,707,548.55 |
| Total | 677,082,730.82 | 685,707,548.55 |
(1) List of Fixed Assets
Unit: RMB
| Item | Houses and buildings | Machinery equipment | Transportation equipment | Electronic equipment | Total |
| I. Original carrying value | |||||
| 1. Beginning balance | 949,016,860.88 | 758,424,898.71 | 21,812,402.45 | 31,973,759.69 | 1,761,227,921.73 |
| 2. Increased amount of the period | 441,221.19 | 22,452,358.79 | 983,133.63 | 1,515,359.76 | 25,392,073.37 |
| (1) Purchase | 52,841.33 | 20,311,827.77 | 983,133.63 | 1,495,271.27 | 22,843,074.00 |
| (2) Transfer from construction in progress | 388,379.86 | 2,140,531.02 | 20,088.49 | 2,548,999.37 | |
| 3. Decreased amount of the period | 513,771.55 | 4,914,032.94 | 1,667,967.76 | 75,883.28 | 7,171,655.53 |
| (1) Disposal or scrap | 513,771.55 | 4,914,032.94 | 1,667,967.76 | 75,883.28 | 7,171,655.53 |
| 4. Ending balance | 948,944,310.52 | 775,963,224.56 | 21,127,568.32 | 33,413,236.17 | 1,779,448,339.57 |
| II. Accumulative depreciation | |||||
| 1. Beginning balance | 485,466,988.27 | 544,961,514.42 | 16,641,194.44 | 26,409,762.43 | 1,073,479,459.56 |
| 2. Increased amount of the period | 13,774,013.65 | 18,210,326.38 | 610,627.83 | 899,227.11 | 33,494,194.97 |
| (1) Withdrawal | 13,774,013.65 | 18,210,326.38 | 610,627.83 | 899,227.11 | 33,494,194.97 |
| 3. Decreased amount of the period | 488,082.97 | 4,305,246.48 | 1,584,569.37 | 73,293.07 | 6,451,191.89 |
| (1) Disposal or scrap | 488,082.97 | 4,305,246.48 | 1,584,569.37 | 73,293.07 | 6,451,191.89 |
| 4. Ending balance | 498,752,918.95 | 558,866,594.32 | 15,667,252.90 | 27,235,696.47 | 1,100,522,462.64 |
| III. Depreciation reserves | |||||
| 1. Beginning balance | 2,040,485.59 | 428.03 | 2,040,913.62 | ||
| 3. Decreased amount of the period | 197,767.51 | 197,767.51 | |||
| (1) Disposal or scrap | 197,767.51 | 197,767.51 | |||
| 4. Ending balance | 1,842,718.08 | 428.03 | 1,843,146.11 | ||
| IV. Carrying value | |||||
| 1. Ending carrying value | 450,191,391.57 | 215,253,912.16 | 5,460,315.42 | 6,177,111.67 | 677,082,730.82 |
| 2. Beginning carrying value | 463,549,872.61 | 211,422,898.70 | 5,171,208.01 | 5,563,569.23 | 685,707,548.55 |
(2) List of Temporarily Idle Fixed Assets
Unit: RMB
| Item | Original carrying value | Accumulated depreciation | Depreciation reserves | Carrying value | Note |
| T5, T8, energy-saving lamp production line | 7,060,868.56 | 5,449,603.12 | 1,565,685.43 | 45,580.01 |
(3) Fixed Assets Leased out by Operation Lease
Naught
(4) Fixed Assets Failed to Accomplish Certification of Property
Other notesFuwan standard workshop J3 and K1, Gaoming Family Housing Building Eight and Fuwan Employee DormitorySeven have been put into use and carried over fixed assets. As of 30 June 2021, relevant certificates of propertywere in procedure. The management layer is of the opinion that there is no substantial legal impediment in theprocedure of certificates as well as no significant negative influence to the normal operation of the Company.
(5) Disposal of Fixed Assets
Naught
22. Construction in Progress
Unit: RMB
| Item | Ending balance | Beginning balance |
| Construction in progress | 537,612,907.97 | 503,941,120.31 |
| Total | 537,612,907.97 | 503,941,120.31 |
(1) List of Construction in Progress
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserves | Carrying value | Carrying amount | Depreciation reserves | Carrying value | |
| Construction in progress | 537,612,907.97 | 537,612,907.97 | 503,941,120.31 | 503,941,120.31 | ||
| Total | 537,612,907.97 | 537,612,907.97 | 503,941,120.31 | 503,941,120.31 | ||
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB
| Item | Budget | Beginning balance | Increased amount | Transferred in fixed assets | Other decreased amount | Ending balance | Proportion of accumulative investment in constructions to | Job schedule | Accumulative amount of interest capitalization | Of which: amount of capitalized interests for the | Capitalization rate of interests for the Reporting Period | Capital resources |
| budget | Reporting Period | |||||||||||
| Foshan Kelian Building | 726,738,900.00 | 448,595,364.96 | 14,209,854.32 | 462,805,219.28 | 69.41% | 95.0% | Other | |||||
| Gaoming R&D workshop 11, 12, 13, 14 and 18 | 45,000,000.00 | 31,610,809.51 | 173,656.15 | 31,784,465.66 | 70.63% | 85.0% | Other | |||||
| Gaoming Office Building | 115,530,000.00 | 5,236,801.98 | 127,451.97 | 5,364,253.95 | 4.64% | 0.0% | Other | |||||
| 48 tons electric melting furnace (18025) Gaoming tank furnace | 11,650,000.00 | 4,721,119.09 | 4,643,527.44 | 9,364,646.53 | 80.38% | 95.0% | Other | |||||
| APS System Project | 2,990,000.00 | 877,679.42 | 1,639,435.30 | 2,517,114.72 | 84.18% | 90.0% | Other | |||||
| Overhaul of the No.8 furnace in the Gaoming tank furnace | 10,890,000.00 | 6,257,871.19 | 6,257,871.19 | 57.46% | 50.0% | Other | ||||||
| Relocation and transformation project of the classictone workshop (original | 6,542,600.00 | 1,555,654.36 | 1,555,654.36 | 23.78% | 30.0% | Other |
| T8 I) | ||||||||||||
| Relocation of the workshop of Gaoming LED T8 | 4,170,000.00 | 2,257,569.55 | 2,257,569.55 | 54.14% | 50.0% | Other | ||||||
| Total | 923,511,500.00 | 491,041,774.96 | 30,865,020.28 | 521,906,795.24 | -- | -- | -- |
(3) List of the Withdrawal of the Depreciation Reserves for Construction in ProgressNaught
(4) Engineering Materials
Naught
23. Productive Living Assets
(1) Productive Living Assets Adopting Cost Measurement Model
□ Applicable √ Not applicable
(1) Productive Living Assets Adopting Fair Value Measurement Model
□ Applicable √ Not applicable
24. Oil and Gas Assets
□ Applicable √ Not applicable
25. Right-of-use Assets
Unit: RMB
| Item | Right-of-use assets | Total |
| I. Original carrying value | ||
| 1. Beginning balance | 6,229,690.85 | 6,229,690.85 |
| (1) Disposal | 399,359.43 | 399,359.43 |
| 4. Ending balance | 5,830,331.42 | 5,830,331.42 |
| II.Accumulated depreciation | ||
| 1. Beginning balance | ||
| 2. Increased amount of the period | 1,290,954.05 | 1,290,954.05 |
| (1) Withdrawal | 1,290,954.05 | 1,290,954.05 |
| 3. Decreased amount of the period | 42,037.84 | 42,037.84 |
| (1) Disposal | 42,037.84 | 42,037.84 |
| 4. Ending balance | 1,248,916.21 | 1,248,916.21 |
| IV. Carrying value | ||
| 1. Ending carrying value | 4,581,415.21 | 4,581,415.21 |
| 2. Beginning carrying value | 6,229,690.85 | 6,229,690.85 |
26. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
| Item | Land use right | Patent | Non-patent technology | Others | Using right of software | Total |
| I. Original carrying value | ||||||
| 1. Beginning balance | 232,199,092.68 | 7,622,600.00 | 4,597,419.45 | 244,419,112.13 | ||
| 2. Increased amount of the period | 1,055,363.15 | 1,055,363.15 | ||||
| (1) Purchase | 1,055,363.15 | 1,055,363.15 | ||||
| (2) Internal R&D | ||||||
| (3) Business combination increase | ||||||
| 3. Decreased amount of the period | ||||||
| (1) Disposal | ||||||
| 4. Ending balance | 232,199,092.68 | 7,622,600.00 | 5,652,782.60 | 245,474,475.28 | ||
| II. Accumulated amortization | ||||||
| 1. Beginning balance | 71,255,724.77 | 254,086.67 | 2,215,427.39 | 73,725,238.83 | ||
| 2. Increased amount of the period | 2,142,084.55 | 381,130.00 | 177,652.49 | 2,700,867.04 | ||
| (1) Withdrawal | 2,142,084.55 | 381,130.00 | 177,652.49 | 2,700,867.04 | ||
| 3. Decreased amount of the |
| period | ||||||
| (1) Disposal | ||||||
| 4. Ending balance | 73,397,809.32 | 635,216.67 | 2,393,079.88 | 76,426,105.87 | ||
| III. Depreciation reserves | ||||||
| 1. Beginning balance | ||||||
| 2. Increased amount of the period | ||||||
| (1) Withdrawal | ||||||
| 3. Decreased amount of the period | ||||||
| (1) Disposal | ||||||
| 4. Ending balance | ||||||
| IV. Carrying value | ||||||
| 1. Ending carrying value | 158,801,283.36 | 6,987,383.33 | 3,259,702.72 | 169,048,369.41 | ||
| 2. Beginning carrying value | 160,943,367.91 | 7,368,513.33 | 2,381,992.06 | 170,693,873.30 |
The proportion of intangible assets contributed by internal R&D in the balance of intangible assetsat the end of the period is 0%.
(2) Land Use Right with Certificate of Title Uncompleted
Naught
27. Development Costs
Naught
28. Goodwill
Naught
29. Long-term Prepaid Expense
Unit: RMB
| Item | Beginning balance | Increased amount | Amortization amount of the period | Other decreased amount | Ending balance |
| Maintenance and decoration expenses | 10,828,775.09 | 5,519,048.30 | 3,898,861.38 | 12,448,962.01 | |
| Other | 2,582,451.14 | 9,513,085.33 | 1,698,813.88 | 10,396,722.59 | |
| Total | 13,411,226.23 | 15,032,133.63 | 5,597,675.26 | 22,845,684.60 |
30. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets that Had not Been Off-set
Unit: RMB
| Item | Ending balance | Beginning balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Provision for impairment of assets | 95,834,071.05 | 15,415,929.41 | 88,758,899.69 | 14,118,876.93 |
| Unrealized profit of internal transactions | 6,649,074.03 | 997,361.10 | 5,784,713.24 | 867,706.99 |
| Deductible losses | 23,115,464.49 | 5,778,866.13 | 20,735,316.21 | 5,183,829.06 |
| Depreciation of fixed assets | 68,547,824.01 | 10,426,277.80 | 71,106,985.78 | 10,810,152.06 |
| Payroll payable | 36,021,596.49 | 5,403,239.47 | 61,821,414.20 | 9,273,212.13 |
| Total | 230,168,030.07 | 38,021,673.91 | 248,207,329.12 | 40,253,777.17 |
(2) Deferred Income Tax Liabilities Had not Been Off-set
Unit: RMB
| Item | Ending balance | Beginning balance | ||
| Taxable temporary difference | Deferred income tax liabilities | Taxable temporary difference | Deferred income tax liabilities | |
| Changes in fair value of other equity instrument investment | 2,053,655,651.22 | 308,048,347.68 | 2,758,137,833.20 | 413,720,674.97 |
| Changes in fair value of trading financial assets | 1,940,000.00 | 291,000.00 | 6,332,900.00 | 949,935.00 |
| Total | 2,055,595,651.22 | 308,339,347.68 | 2,764,470,733.20 | 414,670,609.97 |
(3) Deferred Income Tax Assets or Liabilities Listed by Net Amount after Off-set
Unit: RMB
| Item | Mutual set-off amount of deferred income tax assets and liabilities at | Amount of deferred income tax assets or liabilities after off-set at | Mutual set-off amount of deferred income tax assets and liabilities at | Amount of deferred income tax assets or liabilities after off-set at |
| the period-end | the period-end | the period-begin | the period-begin | |
| Deferred income tax assets | 38,021,673.91 | 40,253,777.17 | ||
| Deferred income tax liabilities | 308,339,347.68 | 414,670,609.97 |
(4) List of Unrecognized Deferred Income Tax Assets
Naught
(5) Deductible Losses of Unrecognized Deferred Income Tax Assets will Due in the Following YearsNone
31. Other Non-current Assets
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserve | Carrying value | Carrying amount | Depreciation reserve | Carrying value | |
| Assets of subsidiaries to be cleared and cancelled | 671,011.56 | 671,011.56 | 1,022,085.15 | 1,022,085.15 | ||
| Prepayments for business facilities | 9,995,769.14 | 9,995,769.14 | 10,401,758.47 | 10,401,758.47 | ||
| Total | 10,666,780.70 | 10,666,780.70 | 11,423,843.62 | 11,423,843.62 | ||
32. Short-term Borrowings
Naught
33. Trading Financial Liabilities
Naught
34. Derivative Financial Liabilities
Naught
35. Notes Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| Bank acceptance bill | 730,544,569.15 | 480,971,214.80 |
| Total | 730,544,569.15 | 480,971,214.80 |
The total bills payable that are due but unpaid amounted to RMB 0 at the end of the current period.
36. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| Accounts payable | 936,126,208.78 | 1,059,674,020.99 |
| Total | 936,126,208.78 | 1,059,674,020.99 |
(2) Significant Accounts Payable Aging over One Year
Naught
37. Advances from Customer
（1）List of Advances from Customer
Unit: RMB
| Item | Ending balance | Beginning balance |
| Advances from customers | 1,911,948.59 | 1,285,357.28 |
| Total | 1,911,948.59 | 1,285,357.28 |
（2）Significant Advances from Customer Aging over one year
Naught
38. Contract Liabilities
Unit: RMB
| Item | Ending balance | Beginning balance |
| Advances from customers | 71,380,411.53 | 65,777,726.45 |
| Total | 71,380,411.53 | 65,777,726.45 |
39. Payroll Payable
(1) List of Payroll Payable
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| I. Short-term salary | 82,485,090.47 | 340,675,128.89 | 377,754,237.24 | 45,405,982.12 |
| II. Post-employment benefit-defined contribution plans | 24,098,585.11 | 24,098,585.11 | ||
| Total | 82,485,090.47 | 364,773,714.00 | 401,852,822.35 | 45,405,982.12 |
(2) List of Short-term Salary
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| 1. Salary, bonus, allowance, subsidy | 82,131,394.79 | 307,609,604.48 | 344,702,315.49 | 45,038,683.78 |
| 2. Employee welfare | 13,603,278.47 | 13,603,278.47 | ||
| 3. Social insurance | 10,938,928.71 | 10,938,928.71 | ||
| Of which: Medical insurance premiums | 7,914,443.78 | 7,914,443.78 | ||
| Work-related injury insurance | 474,244.72 | 474,244.72 | ||
| Maternity insurance | 2,550,240.21 | 2,550,240.21 | ||
| 4. Housing fund | 6,299,436.50 | 6,299,436.50 | ||
| 5.Labor union budget and employee education budget | 353,695.68 | 2,223,880.73 | 2,210,278.07 | 367,298.34 |
| Total | 82,485,090.47 | 340,675,128.89 | 377,754,237.24 | 45,405,982.12 |
(3) List of Defined Contribution Plans
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| 1. Basic pension benefits | 23,641,263.28 | 23,641,263.28 | ||
| 2. Unemployment insurance | 457,321.83 | 457,321.83 | ||
| Total | 24,098,585.11 | 24,098,585.11 |
Other notes:
The Company participates in the scheme of pension insurance and unemployment insurance established bygovernment agencies as required. According to the scheme, fees are paid to it on a monthly basis and at the rate ofstipulated by government agencies. In addition to the above monthly deposit fees, the Company no longerassumes further payment obligations. Corresponding expenses are recorded into the current profits or losses or thecost of related assets when incurred.
40. Taxes Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| VAT | 19,516,172.43 | 7,470,456.34 |
| Corporate income tax | 75,987,273.88 | 6,753,904.80 |
| Personal income tax | 532,866.05 | 1,009,832.30 |
| Urban maintenance and construction tax | 1,359,019.72 | 1,174,681.01 |
| Education surcharge | 976,621.21 | 845,486.44 |
| Property tax | 3,410,116.13 | 315,798.24 |
| Land use tax | 2,305,422.18 | 187,752.00 |
| Other | 349,376.74 | 1,118,746.38 |
| Total | 104,436,868.34 | 18,876,657.51 |
41. Other Payables
Unit: RMB
| Item | Ending balance | Beginning balance |
| Other payables | 87,027,744.37 | 76,668,330.66 |
| Total | 87,027,744.37 | 76,668,330.66 |
(1) Interest Payable
Naught
(2) Dividends Payable
Naught
(3) Other Payables
1) Other Payables Listed by Nature
Unit: RMB
| Item | Ending balance | Beginning balance |
| Compensation for lawsuit | 1,082,784.95 | 1,082,784.95 |
| Performance bond | 64,169,442.69 | 42,365,111.53 |
| Relevant expense of sales | 1,237,824.09 | 3,143,336.62 |
| Other | 20,537,692.64 | 30,077,097.56 |
| Total | 87,027,744.37 | 76,668,330.66 |
2) Significant Other Payables Aging over One Year
Unit: RMB
| Item | Ending balance | Reason for not repayment or carry-over |
| A Company | 5,752,000.00 | The contract is not settled yet |
| Total | 5,752,000.00 | -- |
42. Liabilities Held for sale
Naught
43. Current Portion of Non-current Liabilities
Unit: RMB
| Item | Ending balance | Beginning balance |
| Lease obligation matured within 1 Year | 3,382,701.30 | 2,812,729.51 |
| Total | 3,382,701.30 | 2,812,729.51 |
44. Other Current Liabilities
Unit: RMB
| Item | Ending balance | Beginning balance |
| Pending changerover output VAT | 5,806,372.07 | 5,503,702.07 |
| Total | 5,806,372.07 | 5,503,702.07 |
45. Long-term Borrowings
Naught
46. Bonds Payable
Naught
47. Lease Liabilities
Unit: RMB
| Item | Ending balance | Beginning balance |
| Lease liabilities | 2,397,312.18 | 3,416,961.34 |
| Total | 2,397,312.18 | 3,416,961.34 |
48. Long-term Payables
Naught
49. Long-term Payroll Payable
Naught
50. Provisions
Naught
51. Deferred Income
Naught
52. Other Non-current Liabilities
Unit: RMB
| Item | Ending balance | Beginning balance |
| Liabilities of subsidiaries to be cleared and cancelled | 1,244,064.84 | |
| Total | 1,244,064.84 |
53. Share Capital
Unit: RMB
| Beginning balance | Increase/decrease (+/-) | Ending balance | |||||
| New shares issued | Bonus shares | Bonus issue from profit | Other | Subtotal | |||
| The sum of shares | 1,399,346,154.00 | 1,399,346,154.00 | |||||
54. Other Equity Instruments
Naught
55. Capital Reserves
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| Capital premium (premium on stock) | 7,911,543.36 | 7,911,543.36 | ||
| Other capital reserves | 7,245,971.54 | 7,245,971.54 | ||
| Total | 15,157,514.90 | 15,157,514.90 |
56. Treasury Shares
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| Treasury shares | 0.00 | 220,708,001.24 | 220,708,001.24 | |
| Total | 220,708,001.24 | 220,708,001.24 |
57. Other Comprehensive Income
Unit: RMB
| Item | Beginning balance | Reporting Period | Ending balance | |||||
| Income before taxation in the Current Period | Less: Recorded in other comprehensive income in prior period and transferred to profit or loss in the Current Period | Less: Recorded in other comprehensive income in prior period and transferred to retained earnings in the Current Period | Less: Income tax expense | Attributable to owners of the Company as the parent after tax | Attributable to non-controlling interests after tax | |||
| I. Other comprehensive income that may not subsequently be reclassified to profit or loss | 2,349,389,658.23 | -285,812,119.13 | 355,869,553.42 | -42,871,817.86 | -598,809,854.69 | 1,750,579,803.54 | ||
| Changes in fair value of other equity instrument investment | 2,349,389,658.23 | -285,812,119.13 | 355,869,553.42 | -42,871,817.86 | -598,809,854.69 | 1,750,579,803.54 | ||
| II. Other comprehensive income that may subsequently be reclassified to profit or loss | -1,124.62 | -57,416.42 | -57,416.42 | -58,541.04 | ||||
| Differences arising from translation of foreign currency-denominated financial statements | -1,124.62 | -57,416.42 | -57,416.42 | -58,541.04 | ||||
| Total of other comprehensive income | 2,349,388,533.61 | -285,869,535.55 | 355,869,553.42 | -42,871,817.86 | -598,867,271.11 | 1,750,521,262.50 | ||
58. Specific Reserve
Naught
59. Surplus Reserves
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| Statutory surplus reserves | 699,673,077.00 | 699,673,077.00 | ||
| Discretionary surplus reserves | 41,893,962.55 | 187,889.31 | 41,706,073.24 | |
| Total | 741,567,039.55 | 187,889.31 | 741,379,150.24 |
60. Retained Earnings
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Beginning balance of retained earnings before adjustments | 1,758,462,062.48 | 1,700,426,915.63 |
| Beginning balance of retained earnings after adjustments | 1,758,462,062.48 | 1,700,426,915.63 |
| Add: Net profit attributable to owners of the Company as the parent | 110,555,542.93 | 148,896,274.55 |
| Less:Dividend of ordinary shares payable | 258,879,038.49 | |
| Add:Carry-over of other comprehensive income to retained earnings | 355,869,553.42 | |
| Ending retained earnings | 2,224,887,158.83 | 1,590,444,151.69 |
List of adjustment of beginning retained earnings:
(1) RMB0.00 beginning retained earnings was affected by retrospective adjustment conducted according to theAccounting Standards for Business Enterprises and relevant new regulations.
(2) RMB0.00 beginning retained earnings was affected by changes in accounting policies.
(3) RMB0.00 beginning retained earnings was affected by correction of significant accounting errors.
(4) RMB0.00 beginning retained earnings was affected by changes in combination scope arising from samecontrol.
(5) RMB0.00 beginning retained earnings was affected totally by other adjustments.
61. Operating Revenue and Cost of Sales
Unit: RMB
| Item | Reporting Period | Same period of last year | ||
| Operating revenue | Cost of sales | Operating revenue | Cost of sales | |
| Main operations | 1,924,255,273.18 | 1,566,977,085.53 | 1,504,924,771.42 | 1,181,563,562.31 |
| Other operations | 31,086,843.02 | 20,387,769.28 | 17,959,355.62 | 13,462,662.03 |
| Total | 1,955,342,116.20 | 1,587,364,854.81 | 1,522,884,127.04 | 1,195,026,224.34 |
Relevant information of revenue:
Unit: RMB
| Category of contracts | Segment 1 | Segment 2 | Total | |
| Of which: | ||||
| LED lighting products | 1,532,904,155.86 | 1,532,904,155.86 | ||
| Traditional lighting products | 333,455,215.22 | 333,455,215.22 | ||
| Electrical products | 57,895,902.10 | 57,895,902.10 | ||
| Other | 31,086,843.02 | 31,086,843.02 | ||
| Of which: | ||||
| Domestic sales | 1,296,316,249.38 | 1,296,316,249.38 | ||
| Export sales | 659,025,866.82 | 659,025,866.82 | ||
| Total | 1,955,342,116.20 | 1,955,342,116.20 |
Information related to performance obligations:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or notfully performed yet was RMB0.00 at the period-end.Information related to transaction value assigned to residual performance obligations:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or notfully performed yet was RMB0.00 at the period-end.
62. Taxes and Surtaxes
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Urban maintenance and construction tax | 3,189,986.67 | 4,998,635.00 |
| Education surcharge | 1,367,137.15 | 2,146,457.14 |
| Property tax | 4,131,716.73 | 3,633,352.66 |
| Land use tax | 2,502,386.04 | 2,684,232.16 |
| Vehicle and vessel use tax | 5,280.88 | 8,527.08 |
| Stamp duty | 1,370,645.18 | 913,386.58 |
| Deed tax | 1,201.51 | |
| Environmental protection tax | 81,565.26 | 36,111.03 |
| VAT of land | 403,671.24 | |
| Levee protection fees | -212.76 | |
| Local education surcharge | 911,424.77 | 1,430,971.41 |
| Total | 13,964,802.67 | 15,851,673.06 |
63. Selling Expense
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Employee benefits | 33,029,549.69 | 28,172,676.97 |
| Business propagandize fees and advertizing fees | 11,806,465.11 | 7,657,275.11 |
| Sales promotion fees | 4,687,482.20 | 4,462,291.48 |
| Business travel charges | 3,668,874.83 | 2,464,021.64 |
| Dealer meeting expense | 201,586.16 | 513,244.52 |
| Commercial insurance premium | 2,132,533.15 | 1,515,532.45 |
| Other | 12,475,109.18 | 17,489,289.77 |
| Total | 68,001,600.32 | 62,274,331.94 |
Other note:
The Company starts to implement the new standards governing revenue since 1 January 2020 and it will betransferred to cost of sales with the freight in relation to contract performance for accounting.
64. Administrative Expense
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Employee benefits | 48,895,208.55 | 37,267,089.28 |
| Depreciation charge | 9,412,579.19 | 8,140,135.08 |
| Office expenses | 7,808,537.06 | 6,040,292.05 |
| Rent of land and management charge | 1,842,382.96 | 2,914,379.04 |
| Amortization of intangible assets | 2,700,867.04 | 2,214,359.48 |
| Engineering decoration cost | 3,786,630.64 | 1,484,811.01 |
| Other | 10,936,810.56 | 7,903,690.82 |
| Total | 85,383,016.00 | 65,964,756.76 |
65. Development Costs
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Employee benefits | 46,391,484.86 | 35,672,528.60 |
| Expense on equipment debugging | 5,051,118.26 | 2,837,455.51 |
| Certification and testing fee | 4,174,101.50 | 4,847,341.24 |
| Material consumption | 6,478,539.00 | 3,242,624.38 |
| Charges related to patents | 944,967.99 | 2,724,900.93 |
| Depreciation and long-term prepaid expense | 7,552,115.62 | 5,814,964.29 |
| Other | 6,180,407.15 | 3,958,266.78 |
| Total | 76,772,734.38 | 59,098,081.73 |
Other information:
1. R&D expense stood at RMB17,674,652.65 in the current period, up 29.91% year-on-year, primarily driven by aconsiderable increase of input in R&D, expansion of R&D teams and R&D projects, etc.
2. In respect of R&D expense incurred by the Company, expense other than that on bench-scale and pilot-scaleproduction is included in R&D expense; and sales revenue of products from bench-scale and pilot-scaleproduction is included in core business revenue and the relevant costs are included in cost of sales of corebusiness.
66. Finance Costs
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Interest expense | ||
| Less: Interest income | 8,247,486.69 | 17,500,666.35 |
| Foreign exchange gains or losses | 3,271,628.31 | -2,544,700.07 |
| Other | 1,041,118.70 | 702,721.58 |
| Total | -3,934,739.68 | -19,342,644.84 |
67. Other Income
Unit: RMB
| Sources | Reporting Period | Same period of last year |
| Subsidy for stabilizing posts | 39,075.10 | |
| Supporting fund for import and export | 10,000.00 | 126,000.00 |
| Subsidies for position training of employees | 2,968,000.00 | |
| Chancheng District's government quality award in 2019 | 1,000,000.00 | |
| Chancheng District's funds for supporting example setting and quality improvement of high-tech enterprises (towns and streets) in 2018 | 1,422,900.00 | |
| Foshan's funds for supporting municipal-level development of industrial design | 1,000,000.00 | |
| Special fund for promoting high-quality economic development | 1,762,092.60 | |
| Other | 2,060,940.00 | 440,028.00 |
| Total | 7,801,032.60 | 3,028,003.10 |
68. Investment Income
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Long-term equity investment income accounted by equity method | 37,460.99 | 4,725,081.89 |
| Dividend income from holding of other equity instrument investment | 14,940,422.96 | |
| Income received from financial products and structural deposits | 4,756,319.58 | 15,454,650.86 |
| Other | 416,050.00 | 1,023,100.00 |
| Total | 5,209,830.57 | 36,143,255.71 |
69. Net Gain on Exposure Hedges
Naught
70. Gain on Changes in Fair Value
Unit: RMB
| Sources | Reporting Period | Same period of last year |
| Trading financial assets | 1,940,000.00 | -1,532,350.00 |
| Total | 1,940,000.00 | -1,532,350.00 |
71. Credit Impairment Loss
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Bad debt loss of other receivables | -634,886.30 | -459,378.86 |
| Bad debt loss of accounts receivable | 1,258,347.12 | -2,919,831.52 |
| Total | 623,460.82 | -3,379,210.38 |
72. Asset Impairment Loss
Unit: RMB
| Item | Reporting Period | Same period of last year |
| II. Loss on inventory valuation and contract performance cost | -10,995,234.63 | -3,200,793.69 |
| Total | -10,995,234.63 | -3,200,793.69 |
73. Assets Disposal Income
Unit: RMB
| Source of gains on disposal of assets | Amount of the current period | Amount of the previous period |
| Gains on disposal of fixed assets | 1,781,700.24 | 7,489.02 |
74. Non-operating Income
Unit: RMB
| Item | Reporting Period | Same period of last year | Amount recorded in the current non-recurring profit or loss |
| Government grants | 57,720.00 | ||
| Total income from disposal of non-current assets | 1,674,379.33 | 43,653.10 | 1,674,379.33 |
| Of which: Income from disposal of fixed assets | 1,674,379.33 | 43,653.10 | 1,674,379.33 |
| Other | 361,374.31 | 483,761.90 | 361,374.31 |
| Penalty | 15,784.31 | 76,300.00 | 15,784.31 |
| Compensation for breach of contract | 8,100.10 | 1,452.00 | 8,100.10 |
| Total | 2,059,638.05 | 662,887.00 | 2,059,638.05 |
75. Non-operating Expense
Unit: RMB
| Item | Reporting Period | Same period of last year | Amount recorded in the current |
| non-recurring profit or loss | |||
| Donations | 1,340.00 | 1,340.00 | |
| Total losses from disposal of non-current assets | 418,256.44 | 704,238.91 | 418,256.44 |
| Of which: Losses from disposal of fixed assets | 418,256.44 | 704,238.91 | 418,256.44 |
| Losses on inventories | 1.88 | 274,833.59 | 1.88 |
| Penalty | 45,447.00 | ||
| Delaying payment | 191,967.71 | 47.09 | 191,967.71 |
| Other | 2,301.02 | 1.55 | 2,301.02 |
| Total | 613,867.05 | 1,024,568.14 | 613,867.05 |
76. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Current income tax expense | 21,216,733.02 | 18,140,342.11 |
| Deferred income tax expense | 1,573,168.26 | 4,910,380.59 |
| Total | 22,789,901.28 | 23,050,722.70 |
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
| Item | Reporting Period |
| Profit before taxation | 135,596,408.30 |
| Current income tax expense accounted at statutory/applicable tax rate | 20,339,461.25 |
| Influence of applying different tax rates by subsidiaries | 1,490,840.60 |
| Influence of income tax before adjustment | 965,218.58 |
| Influence of non-taxable income | -5,619.15 |
| Income tax expense | 22,789,901.28 |
77. Other Comprehensive Income
Refer to Note 57 for details.
78. Cash Flow Statement
(1) Cash Generated from Other Operating Activities
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Deposit interest | 10,231,978.87 | 20,813,594.94 |
| Income from insurance compensation | 24,207.40 | 11,293.51 |
| Margin income | 21,824,603.85 | 5,196,890.04 |
| Property and rental income | 6,351,181.05 | 3,790,160.94 |
| Subsidies | 7,053,978.60 | 3,001,473.10 |
| Income from waste | 12,948,191.88 | 6,810,795.49 |
| Other | 3,460,925.81 | 43,847,079.33 |
| Total | 61,895,067.46 | 83,471,287.35 |
(2) Cash Used in Other Operating Activities
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Administrative expense paid in cash | 27,576,619.91 | 22,386,929.76 |
| Selling expense paid in cash | 79,583,580.18 | 61,270,950.23 |
| Finance costs paid in cash | 742,850.03 | 510,120.99 |
| Returned cash deposit | 13,794,280.53 | 4,214,553.00 |
| Other | 14,045,552.60 | 3,828,357.24 |
| Total | 135,742,883.25 | 92,210,911.22 |
(3) Cash Generated from Other Investing Activities
Naught
(4) Cash Used in Other Investing Activities
Naught
(5) Cash Generated from Other Financing Activities
Naught
(6) Cash Used in Other Financing Activities
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Repurchase of treasury stocks | 220,895,890.55 | |
| Total | 220,895,890.55 |
79. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
| Supplemental information | Reporting Period | Same period of last year |
| 1. Reconciliation of net profit to net cash flows generated from operating activities: | -- | -- |
| Net profit | 112,806,507.02 | 151,665,693.97 |
| Add: Provision for impairment of assets | 10,371,773.81 | 6,580,004.07 |
| Depreciation of fixed assets, oil-gas assets, and productive living assets | 33,494,194.97 | 33,954,684.14 |
| Depreciation of right-of-use assets | 1,290,954.05 | |
| Amortization of intangible assets | 2,700,867.04 | 2,214,359.48 |
| Amortization of long-term prepaid expenses | 5,597,675.26 | 2,609,636.40 |
| Loss from disposal of fixed assets, intangible assets and other long-term assets (gains: negative) | -1,781,700.24 | -7,489.02 |
| Losses from scrapping of fixed assets (gains: negative) | -1,256,122.89 | 660,585.81 |
| Losses from changes in fair value (gains: negative) | -1,940,000.00 | 1,532,350.00 |
| Finance costs (gains: negative) | ||
| Investment loss (gains: negative) | -5,209,830.57 | -36,143,255.71 |
| Decrease in deferred income tax assets (increase: negative) | 2,232,103.26 | 5,140,233.09 |
| Increase in deferred income tax liabilities (“-” for decrease) | -658,935.00 | -229,852.50 |
| Decrease in inventory (“-” for increase) | -124,071,255.27 | 113,422,713.70 |
| Decrease in operating receivables (“-” for increase) | -115,537,231.59 | -50,285,519.68 |
| Increase in operating payables (“-” for decrease) | 127,740,640.67 | -24,779,263.68 |
| Others | ||
| Net cash generated from/used in operating activities | 45,779,640.52 | 206,334,880.07 |
| 2. Significant investing and financing activities without involvement of cash receipts and payments | -- | -- |
| Transfer of debts into capital | ||
| Current portion of convertible corporate bonds | ||
| Fixed assets leased in for financing | ||
| 3.Net increase/decrease of cash and cash equivalents: | -- | -- |
| Ending balance of cash | 1,345,331,488.69 | 1,234,805,265.88 |
| Less: Beginning balance of cash | 875,728,218.57 | 1,051,079,042.41 |
| Add: Ending balance of cash equivalents | ||
| Less: Beginning balance of cash equivalents | ||
| Net increase in cash and cash equivalents | 469,603,270.12 | 183,726,223.47 |
(2) Net Cash Paid For Acquisition of Subsidiaries
Naught
(3) Net Cash Received from Disposal of the Subsidiaries
Naught
(4) Cash and Cash Equivalents
Unit: RMB
| Item | Ending balance | Beginning balance |
| I. Cash | 1,345,331,488.69 | 875,728,218.57 |
| Including: Cash on hand | 9,119.25 | 14,800.25 |
| Bank deposit on demand | 1,235,496,662.22 | 870,224,197.60 |
| Other monetary assets on demand | 109,825,707.22 | 5,489,220.72 |
| III. Ending balance of cash and cash equivalents | 1,345,331,488.69 | 875,728,218.57 |
80. Notes to Items of the Statements of Changes in Owners’ Equity
Notes to the name of “Other” of ending balance of the same period of last year adjusted and the amount adjusted:
Not applicable
81. Assets with Restricted Ownership or Right of Use
Unit: RMB
| Item | Ending carrying value | Reason for restriction |
| Monetary assets | 159,619,895.39 | Security deposit of notes and security deposit of future foreign exchange settlement |
| Notes receivable | 80,709,869.38 | Pledged for notes pool |
| Total | 240,329,764.77 | -- |
82. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RMB
| Item | Ending foreign currency balance | Exchange rate | Ending balance converted to RMB |
| Monetary assets | -- | -- | 66,929,901.85 |
| Of which: USD | 10,207,186.31 | 6.4601 | 65,939,444.28 |
| EUR | 128,861.80 | 7.6862 | 990,457.57 |
| HKD | |||
| Accounts receivable | -- | -- | 299,389,831.12 |
| Of which: USD | 46,065,765.96 | 6.4601 | 297,589,454.68 |
| EUR | 234,234.92 | 7.6862 | 1,800,376.44 |
| HKD | |||
| Long-term borrowings | -- | -- | |
| Of which: USD | |||
| EUR | |||
| HKD | |||
| Contract liabilities | 21,154,681.97 | ||
| Of which: USD | 3,274,667.88 | 6.4601 | 21,154,681.97 |
| Prepayments | 2,874,441.07 | ||
| Of which: USD | 444,953.03 | 6.4601 | 2,874,441.07 |
| Accounts payable | 2,405,393.36 | ||
| Of which: USD | 372,346.15 | 6.4601 | 2,405,393.36 |
(2) Notes to Overseas Entities Including: for Significant Oversea Entities, Main Operating Place, RecordingCurrency and Selection Basis Shall Be Disclosed; if there Are Changes in Recording Currency, RelevantReasons Shall Be Disclosed.
□ Applicable √ Not applicable
83. Arbitrage
Naught
84. Government Grants
(1) Basic Information on Government Grants
Unit: RMB
| Type | Amount | Presented in | Charged to current profit or loss |
| Subsidy for stabilizing posts | 2,968,000.00 | Other income | 2,968,000.00 |
| Special fund for promoting high-quality economic development | 1,762,092.60 | Other income | 1,762,092.60 |
| Foshan's funds for supporting municipal-level development of industrial design | 1,000,000.00 | Other income | 1,000,000.00 |
| Supporting fund for import and export | 10,000.00 | Other income | 10,000.00 |
| Others | 2,060,940.00 | Other income | 2,060,940.00 |
| Total | 7,801,032.60 | 7,801,032.60 |
(2) Return of Government Grants
Naught
85. Other
NaughtVIII. Changes of Consolidation Scope
1. Business Combination Not under the Same Control
(1) Business Combination Not under the Same Control in the Reporting PeriodNaught
(2) Combination Cost and Goodwill
Naught
(3) The Identifiable Assets and Liabilities of Acquiree on Purchase Date
Naught
(4) Gains or losses from Re-measurement of Equity Held before the Purchase Date at Fair ValueWhether there is a transaction that through multiple transaction step by step to realize business combination andgaining the control during the Reporting Period
□ Yes √ No
(5) Notes to Reasonable Consideration or Fair Value of Identifiable Assets and Liabilities of the Acquireethat Cannot Be Determined on the Acquisition Date or during the Period-end of the MergerNaught
(6) Other Notes
Naught
2. Business Combination under the Same Control
Naught
3. Counter Purchase
Naught
4. Disposal of Subsidiary
Whether there is a single disposal of the investment to the subsidiary and lost control?
□ Yes √ No
Whether there are several disposals of the investment to the subsidiary and lost controls?
□ Yes √ No
5. Changes in Combination Scope for Other Reasons
Hainan Company was established in May during this period, and was included in the consolidation scope since itsestablishment.
6. Other
Naught
IX. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
| Name | Main operating place | Registration place | Nature of business | Holding percentage (%) | Way of gaining | |
| Directly | Indirectly | |||||
| Foshan Lighting Lamps & Components Co., Ltd. | Foshan | Foshan | Production and sales | 100.00% | Newly established | |
| Guangdong Fozhao New Light Sources Technology Co., Ltd. | Foshan | Foshan | Production and sales | 100.00% | Newly established | |
| FSL Chanchang Optoelectronics Co., Ltd. | Foshan | Foshan | Production and sales | 100.00% | Newly established | |
| Foshan Taimei Times Lamps and Lanterns Co., Ltd. | Foshan | Foshan | Production and sales | 70.00% | Newly established | |
| Foshan Electrical & Lighting (Xinxiang) Co., Ltd. | Xinxiang | Xinxiang | Production and sales | 100.00% | Newly established | |
| Nanjing Fozhao Lighting Components Manufacturing Co., Ltd. | Nanjing | Nanjing | Production and sales | 100.00% | Acquired | |
| FSL Zhida Electric Technology Co., Ltd. | Foshan | Foshan | Production and sales | 51.00% | Newly established | |
| FSL LIGHTING GmbH | Germany | Germany | Production and sales | 100.00% | Newly established | |
| Foshan Hortilite Optoelectronics Co.,Ltd. | Foshan | Foshan | Production and sales | 51.00% | Newly established | |
| Hunan Keda New Energy Investment and Development Co., Ltd. | Changsha | Changsha | Investment and technology development | 100.00% | Acquired | |
| Foshan Kelian New Energy Technology Co., Ltd. | Foshan | Foshan | Property development | 100.00% | Acquired | |
| Fozhao (Hainan) Technology Co., Ltd. | Hainan | Hainan | Production and sales | 100.00% | Newly established |
Notes: Holding proportion in subsidiary different from voting proportion:
Naught
Basis of holding half or less voting rights but still been controlled investee and holding more than half of thevoting rights not been controlled investee:
NaughtSignificant structured entities and controlling basis in the scope of combination:
NaughtBasis of determining whether the Company is the agent or the principal:
Naught
(2) Significant Non-wholly-owned Subsidiary
Unit: RMB
| Name | Shareholding proportion of non-controlling interests | The profit or loss attributable to the non-controlling interests | Declaring dividends distributed to non-controlling interests | Balance of non-controlling interests at the period-end |
| Foshan Taimei Times Lamps and Lanterns Co., Ltd. | 30.00% | 19,161.69 | 10,727,235.82 | |
| FSL Zhida Electric Technology Co., Ltd. | 49.00% | 1,599,134.82 | 23,712,352.82 | |
| Foshan Hortilite Optoelectronics Co.,Ltd. | 49.00% | 632,667.58 | 16,070,209.98 |
The holding proportion of non-controlling interests in subsidiary is different from voting proportion:
Naught
(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary
Unit: RMB
| Name | Ending balance | Beginning balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liability | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liability | Total liabilities | |
| Foshan Taimei Times Lamps and Lanterns Co., Ltd. | 116,474,789.59 | 14,741,641.45 | 131,216,431.04 | 95,458,978.31 | 0.00 | 95,458,978.31 | 71,270,518.28 | 15,316,406.34 | 86,586,924.62 | 50,893,344.19 | 50,893,344.19 | |
| FSL Zhida Electric Technology Co., Ltd. | 128,898,809.18 | 10,110,171.67 | 139,008,980.85 | 78,282,750.63 | 0.00 | 78,282,750.63 | 112,196,198.34 | 8,962,676.26 | 121,158,874.60 | 63,696,184.82 | 63,696,184.82 | |
| Foshan Hortilite Optoelectronics Co.,Ltd. | 60,211,501.24 | 12,910,424.71 | 73,121,925.95 | 40,324,862.98 | 0.00 | 40,324,862.98 | 51,192,090.96 | 12,249,945.68 | 63,442,036.64 | 31,936,160.19 | 31,936,160.19 |
Unit: RMB
| Name | Reporting Period | Same period of last year | ||||||
| Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | |
| Foshan Taimei Times Lamps and Lanterns Co., Ltd. | 72,063,898.77 | 63,872.30 | 63,872.30 | 86,882.37 | 62,409,344.35 | 3,419,713.42 | 3,419,713.42 | -2,169,954.22 |
| FSL Zhida Electric Technology Co., Ltd. | 79,244,539.01 | 3,263,540.44 | 3,263,540.44 | -5,139,161.29 | 45,607,598.07 | 3,558,174.26 | 3,558,174.26 | -2,023,109.53 |
| Foshan Hortilite Optoelectronics Co.,Ltd. | 41,436,035.13 | 1,291,186.52 | 1,291,186.52 | 1,463,433.79 | ||||
(4) Significant Restrictions on Using the Assets and Liquidating the Liabilities of the CompanyNaught
(5) Financial Support or Other Supports Provided to Structural Entities Incorporated into the Scope ofConsolidated Financial StatementsNaught
2. The Transaction of the Company with Its Owner’s Equity Share Changed but Still Controlling theSubsidiaryNaught
3. Equity in Joint Ventures or Associated Enterprises
(1) Significant Joint Ventures or Associated Enterprises
Naught
(2) Main Financial Information of Significant Joint Ventures
Naught
(3) Main Financial Information of Significant Associated Enterprises
NaughtNaught
(4) Summary Financial Information of Insignificant Joint Ventures or Associated Enterprises
| Closing balance/amount of the current period | Opening balance/amount of the previous period | |
| Joint venture: | -- | -- |
| Sum calculated by shareholding ratio of each item | -- | -- |
| Affiliated enterprises: | -- | -- |
| Total investment book value | 179,322,086.81 | 181,365,016.32 |
| Sum calculated by shareholding ratio of each item | -- | -- |
| -- Net profit | 37,460.99 | 4,725,081.89 |
| -- Total comprehensive income | 37,460.99 | 4,725,081.89 |
(5) Note to the Significant Restrictions on the Ability of Joint Ventures or Associated Enterprises toTransfer Funds to the CompanyNaught
(6) The Excess Loss of Joint Ventures or Associated Enterprises
Naught
(7) The Unrecognized Commitment Related to Investment to Joint VenturesNaught
(8) Contingent Liabilities Related to Investment to Joint Ventures or Associated EnterprisesNaught
4. Significant Common Operation
Naught
5. Equity in the Structured Entity Excluded in the Scope of Consolidated Financial StatementsNaught
6. Other
NaughtX. The Risk Related to Financial Instruments
The financial instruments of the Company included: monetary funds, notes receivable, accounts receivable, notesreceivable, accounts payable, etc. The details of each financial instrument see relevant items of Note VII.The main risks of the Company due to financial instruments were credit risk, liquidity risk and market risk. Theoperating management of the Company was responsible for the risk management target and the recognition of thepolicies.(I) Credit riskCredit risk was one party of the contract failed to fulfill the obligations and causes loss of financial assets of theother party. The credit risk the Company faced was selling on credit which leads to customer credit risk.The Company will evaluate credit risk of new customer, and set credit limit, once the balance of accountreceivable over credit limit, require the customer to pay or producing and delivering goods shall be approved bythe management of the Company.The Company through monthly aging analysis of account receivable and monitoring the collection situation of thecustomer ensured the overall credit risk of the Company was in control scope. Once appear abnormal situation,the Company should conduct necessary measures to requesting the payment timely.(II) Liquidity RiskLiquidity risk is referred to their risk of incurring capital shortage when performing settlement obligation in theway of cash payment or other financial assets. The policies of the Company are to ensure that there was sufficientcash to pay the due liabilities. The liquidity risk is centralized controlled by the Financial Department of theCompany. The financial department through supervising the balance of the cash and securities can be convert tocash at any time and the rolling prediction of cash flow in future 12 months to ensure the Company have sufficientcash to pay the liabilities under the case of all reasonable prediction, Each financial liability of the Company wasestimated due within 1 year.(III) Market riskMarket risk was referred to risk of the fair value or future cash flow of financial instrument changed due to thechange of market price, including: exchange rate risk, interest rate risk and other price risk.
1. Exchange rate risk
Exchange rate risk was referred to risk of possible losses due to changes of exchange rate. The exchange rate riskundertaken by the Company was mainly generated from USD and EUR. On 30 June 2021, all assets and liabilitiesof the Company were balances in RMB except that the balances of assets and liabilities presented in the Note VII
(82) Foreign Currency Monetary Items were in USD and EUR. The exchange rate risk generated from those
balance of assets and liabilities in foreign currency might influence the running performance of the Company tosome extent.The Company made efforts to avoid exchange rate risk through forward exchange settlement, improving operationmanagement and promoting the international competitiveness of the Company, etc.
2. Interest rate risk
Interest rate risk is refers to fluctuation risk of the fair value or future cash flow of financial instrument change due tothe change of market price. There was no bank loan in the Company, thus no RMB benchmark interest rate changes
3. Other price risk
NaughtXI. The Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
| Item | Ending fair value | |||
| Fair value measurement items at level 1 | Fair value measurement items at level 2 | Fair value measurement items at level 3 | Total | |
| I. Consistent fair value measurement | -- | -- | -- | -- |
| (I) Trading financial assets | 1,940,000.00 | 291,590,525.04 | 293,530,525.04 | |
| 1.Financial assets at fair value through profit or loss | 1,940,000.00 | 291,590,525.04 | 293,530,525.04 | |
| (III) Other equity instrument investment | 2,543,403,615.60 | 5,054,176.40 | 2,548,457,792.00 | |
| II. Inconsistent fair value measurement | -- | -- | -- | -- |
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level
In line with the market price of shares on the balance sheet date and forward foreign exchange option rate.
3. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters forConsistent and Inconsistent Fair Value Measurement Items at Level 2Items measured at fair value level 2 are bank's wealth management products, which are measured at thecontractual expected yield rate as a reasonable estimate of the fair value.
4. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters forConsistent and Inconsistent Fair Value Measurement Items at Level 3
(1) Because the business environment, operation conditions and financial conditions of the invested companies,China Guangfa Bank and Foshan Fochen Expressway Development Co., Ltd. haven’t changed significantly, theCompany takes investment costs as the reasonable estimation of fair value to measure.
(2) Because the business environment, operation conditions and financial conditions of the invested company,Shenzhen Zhonghao (Group) Co., Ltd. were deteriorated, the Company takes zero element as the reasonableestimation of fair value to measure.
5. Sensitiveness Analysis on Unobservable Parameters and Adjustment Information between Beginning andEnding Carrying Value of Consistent Fair Value Measurement Items at Level 3
Naught
6. Explain the Reason for Conversion and the Governing Policy when the Conversion Happens ifConversion Happens among Consistent Fair Value Measurement Items at Different LevelsNaught
7. Changes in the Valuation Technique in the Current Period and the Reason for Such ChangesNaught
8. Fair Value of Financial Assets and Liabilities Not Measured at Fair ValueFinancial assets and liabilities not measured at fair value include: monetary assets, accounts receivable andaccounts payable, etc. There is small difference between the carrying value of above financial assets and liabilitiesand fair value.
9. Other
NaughtXII. Related Party and Related-party Transactions
1. Information Related to the Company as the Parent of the Company
| Name | Registration place | Nature of business | Registered capital | Proportion of share held by the Company as the parent against the Company | Proportion of voting rights owned by the Company as the parent against the Company |
| Hong Kong Wah Shing Holding | Hong Kong | Investment | HKD110,000 | 13.47% | 13.47% |
| Company Limited | |||||
| Shenzhen Rising Investment Development Co., Ltd. | Shenzhen | Investment | RMB135.409614 million | 5.12% | 5.12% |
| Guangdong Electronics Information Industry Group Ltd. | Guangzhou | Sales & Production | RMB462 million | 8.77% | 8.77% |
| Rising Investment Development Co., Ltd. | Hong Kong | Investment | RMB200 million and HKD1 million | 1.82% | 1.82% |
| Guangdong Rising Finance Holding Co., Ltd. | Zhuhai | Investment | RMB1,393 million | 0.82% | 0.82% |
| Total | 30.00% | 30.00% |
Notes: Information on the Company as the parentThe largest shareholder of the Company, Hongkong Wah Shing Holding Company Limited, was thewholly-owned subsidiary of Electronics Group, and Electronics Group, Shenzhen Rising Investment DevelopmentCo., 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. (hereinafterreferred to as “Rising Investment”) were the wholly-owned subsidiaries of Guangdong Rising Holdings GroupCo., Ltd. (hereinafter referred to as “Rising Group”). In line with the relevant stipulation of Corporation Law andRules on Listed Companies Acquisition, Electronics Group, Shenzhen Rising and Rising Investment were personsacting in concert, and the Rising Group was the controlling shareholder of the Company. As of 31 December 2020the aforesaid persons acting in concert holding total A, B share of the Company 419,803,826.00 shares, 30.00 %of total share equity of the Company.
The final controller of the Company was Guangdong Rising Holdings Group Co., Ltd.
2. Subsidiaries of the Company
Refer to Note IX Equity in Other Entities-1. Equity in Subsidiaries for details.
3. Information on the Joint Ventures and Associated Enterprises of the CompanyRefer to Note IX Equity in Other Entities-3. Equity in Joint Ventures or Associated Enterprises for details ofsignificant joint ventures or associated enterprises of the Company.
4. Information on Other Related Parties
| Name | Relationship with the Company |
| Guangdong Rising Holdings Group Co., Ltd. | The Company’s actual controller |
| PROSPERITY LAMPS & COMPONENTS LTD | Shareholder owning over 5% shares |
| Hangzhou Times Lighting and Electrical Co., Ltd. | Acting-in-concert party of a 5% greater shareholder of the Company |
| Prosperity Electrical (China) Co., Ltd. | Acting-in-concert party of a 5% greater shareholder of the Company |
| Prosperity (Hangzhou) Lighting and Electrical Co., Ltd. | Acting-in-concert party of a 5% greater shareholder of the Company |
| Foshan NationStar Optoelectronics Co. Ltd. | Under same actual controller |
| Guangdong Fenghua Advanced Technology Holding Co., Ltd. | Under same actual controller |
| Guangdong Electronic Technology Research Institute | Under same actual controller |
| Zhuhai Doumen District Yongxingsheng Environmental Industrial Wastes Recycling Comprehensive Treatment Co., Ltd. | Under same actual controller |
| Foshan Fulong Environmental Protection Technology Co., Ltd. | Under same actual controller |
| Jiangmen Dongjiang Environmental Protection Technology Co., Ltd. | Under same actual controller |
| Guangdong New Electronic Information Ltd. | Under same actual controller |
| Guangdong Rising Rare Metals Photoelectric Materials Ltd. | Under same actual controller |
| Guangdong Yixin Changcheng Construction Group | Under same actual controller |
| Shenzhen Zhongjin Lingnan Nonfemet Company Limited | Under same actual controller |
| Guangdong Heshun Property Management Co., Ltd. | Under same actual controller |
| Guangdong Zhongjin Lingnan Equipment Technology Co., Ltd. | Under same actual controller |
| Guangdong Zhongjin Construction Installation Engineering Co., Ltd. | Under same actual controller |
| Guangdong Electronics Information Industry Group Ltd. | Under same actual controller |
| Guangzhou Huajian Engineering Construction Co., Ltd. | Under same actual controller |
| Guangdong Guangsheng Communications Technology Co., Ltd. | Under same actual controller |
| Guangdong Rising Finance Limited | Under same actual controller |
| Guangdong Zhongnan Construction Co., Ltd. | Under same actual controller |
| Guangdong Vollsun Data Solid-state Storage Co., Ltd | Under same actual controller |
| Guangdong Huajian Enterprise Group Co. Ltd. | Under same actual controller |
| Shenzhen Yuepeng Construction Co., Ltd. | Under same actual controller |
| Rising Investment Development Limited | Under same actual controller |
| Guangdong Rising Real Estate Group Co. Ltd. | Under same actual controller |
| Guangdong Rising Investment Group Co., Ltd. | Under same actual controller |
| OSRAM (China) Lighting Co., Ltd. | Company controlled by related natural person with significant influence |
5. List of Related-party Transactions
(1) Information on Acquisition of Goods and Reception of Labor Service
Information on acquisition of goods and reception of labor service
Unit: RMB
| Related party | Content | Reporting Period | The approval trade | Whether exceed trade | Same period of last |
| credit | credit or not | year | |||
| Foshan NationStar Optoelectronics Co., Ltd. | Purchase of materials | 26,696,615.70 | 120,000,000.00 | No | 15,731,289.16 |
| Guangdong Fenghua Advanced Technology Holding Co., Ltd. | Purchase of materials | 5,806,125.49 | 15,000,000.00 | No | 2,753,999.58 |
| PROSPERITY LAMPS & COMPONENTS LTD | Purchase of materials | 1,317,138.04 | 13,000,000.00 | No | 1,070,878.91 |
| Hangzhou Times Lighting and Electrical Co., Ltd. | Purchase of materials | 218,592.85 | 161,975.60 | ||
| Prosperity Electrical (China) Co., Ltd. | Purchase of materials | 118,407.08 | |||
| Guangdong Electronic Technology Research Institute | Purchase of equipment | 142,300.89 | 3,000,000.00 | No | 278,761.06 |
| Jiangmen Dongjiang Environmental Protection Technology Co., Ltd. | Receiving labor service | 143,934.91 | 33,309.73 | ||
| Foshan Fulong Environmental Protection Technology Co., Ltd. | Receiving labor service | 25,471.70 | 42,477.88 | ||
| Zhuhai Doumen District Yongxingsheng Environmental Industrial Wastes Recycling Comprehensive Treatment Co., Ltd. | Receiving labor service | 5,660.38 | 13,274.34 | ||
| Guangdong Electronic Technology Research Institute | Receiving labor service | 2,734.91 | 3,033.63 |
| Total | 34,358,574.87 | 151,000,000.00 | 20,207,406.97 |
Information of sales of goods and provision of labor service
Unit: RMB
| Related party | Content | Reporting Period | Same period of last year |
| Guangdong New Electronic Information Ltd. | Sale of products | 28,197,238.34 | |
| PROSPERITY LAMPS & COMPONENTS LTD | Sale of products | 11,719,058.86 | 9,332,663.68 |
| Guangdong Rising Rare Metals Photoelectric Materials Ltd. | Sale of products | 7,990,158.39 | |
| Guangdong Yixin Changcheng Construction Group | Sale of products | 2,881,672.01 | |
| Shenzhen Zhongjin Lingnan Nonfemet Company Limited | Sale of products | 951,402.66 | |
| Guangdong Heshun Property Management Co., Ltd. | Sale of products | 692,679.04 | |
| Guangdong Zhongjin Lingnan Equipment Technology Co., Ltd. | Sale of products | 108,659.28 | |
| Guangdong Zhongjin Construction Installation Engineering Co., Ltd. | Sale of products | 108,592.02 | |
| Guangdong Rising Holdings Group Co., Ltd. | Sale of products | 21,203.54 | 34,336.28 |
| Prosperity Electrical (China) Co., Ltd. | Sale of products | 21,069.56 | 11,282.10 |
| Guangdong Electronics Information Industry Group Ltd. | Sale of products | 8,013.27 | 8,004.42 |
| Guangzhou Huajian Engineering Construction Co., Ltd. | Sale of products | 6,145.47 | 127,948.85 |
| Guangdong Rising Communications Technology Co., Ltd. | Sale of products | 23,628.32 | |
| Total | 52,705,892.44 | 9,537,863.65 |
Information of sales/purchase of goods and provision/reception of labor service
1. The pricing policy for related-party transactions is as follows:
The pricing for related-party transactions observes the principle of market subject to the market price when thetransaction happens and relevant accounts shall be paid on time based on actual transaction.
2. The related-party transactions between the Company and subsidiaries and among subsidiaries have been offsetwhen consolidating financial statements.
(2) Information on Related-party Trusteeship/Contract
Naught
(3) Information on Related-party Lease
Naught
(4) Information on Related-party Guarantee
Naught
(5) Information on Inter-bank Lending of Capital of Related Parties
Naught
(6) Information on Assets Transfer and Debt Restructuring by Related PartyNaught
(7) Information on Remuneration for Key Management Personnel
Unit: RMB
| Item | Reporting period | Same period of last year |
| Chairman of the Board | 481,467.44 | 197,370.00 |
| General Manager | 471,367.44 | 548,526.00 |
| Chairman of the Supervisory Committee | 454,632.08 | 401,155.00 |
| Secretary of the Board | 32,696.24 | |
| Chief Financial Officer | 432,129.14 | 401,155.00 |
| Other | 3,599,472.96 | 2,116,926.00 |
| Total | 5,471,765.30 | 3,665,132.00 |
(8) Other Related-party Transactions
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6. Accounts Receivable and Payable of Related Party
(1) Accounts Receivable
Unit: RMB
| Item | Related party | Ending balance | Beginning balance | ||
| Carrying amount | Bad debt provision | Carrying amount | Bad debt provision | ||
| Monetary | Guangdong Rising | 1,581,250.00 | |||
| capital-Interest receivable | Finance Co., Ltd. | ||||
| Accounts receivable | Guangdong New Electronic Information Ltd. | 28,736,896.36 | 862,106.89 | 14,131,264.06 | 423,937.92 |
| Accounts receivable | Guangdong Rising Rare Metals Photoelectric Materials Ltd. | 9,028,878.99 | 270,866.37 | ||
| Accounts receivable | Guangdong Yixin Changcheng Construction Group | 5,517,512.14 | 165,525.36 | 2,261,222.79 | 67,836.68 |
| Accounts receivable | PROSPERITY LAMPS & COMPONENTS LTD | 2,980,463.66 | 89,413.91 | 3,953,777.97 | 118,613.34 |
| Accounts receivable | Shenzhen Zhongjin Lingnan Nonfemet Company Limited | 1,578,673.00 | 47,360.19 | 574,124.00 | 17,223.72 |
| Accounts receivable | Guangdong Heshun Property Management Co., Ltd. | 761,315.00 | 22,839.45 | ||
| Accounts receivable | Guangdong Zhongjin Lingnan Equipment Technology Co., Ltd. | 528,826.00 | 15,864.78 | 415,731.00 | 12,471.93 |
| Accounts receivable | Guangdong Zhongjin Construction Installation Engineering Co., Ltd. | 122,709.00 | 3,681.27 | ||
| Accounts receivable | OSRAM (China) Lighting Co., Ltd. | 117,554.16 | 94,043.33 | 117,554.16 | 94,043.33 |
| Accounts receivable | Prosperity (Hangzhou) Lighting and Electrical Co., Ltd. | 86,000.00 | 86,000.00 | 86,000.00 | 86,000.00 |
| Accounts receivable | Guangzhou Huajian Engineering Construction Co., Ltd. | 45,108.70 | 2,608.68 | 289,857.54 | 8,695.73 |
| Accounts receivable | Guangdong Rising Holdings Group Co., Ltd. | 9,060.00 | 271.80 | ||
| Accounts receivable | Guangdong Zhongnan Construction Co., Ltd. | 2,642,688.00 | 79,280.64 | ||
| Accounts receivable | Guangdong Vollsun Data Solid-state Storage Co., Ltd | 2,553,280.00 | 765,984.00 | ||
| Prepayments | Prosperity Electrical (China) Co., Ltd. | 39,428.00 | 39,428.00 | ||
| Prepayments | Foshan NationStar Optoelectronics Co. Ltd. | 31,266.86 | |||
| Other receivables | Guangdong New Electronic Information Ltd. | 465.50 | 13.97 | ||
| Total | 49,552,890.51 | 1,660,596.00 | 28,677,444.38 | 1,674,087.29 |
(2) Accounts Payable
Unit: RMB
| Item | Related party | Ending carrying amount | Beginning carrying amount |
| Accounts payable | Foshan NationStar Optoelectronics Co., Ltd. | 19,323,480.61 | 32,866,944.98 |
| Accounts payable | Guangdong Fenghua Advanced Technology Holding Co., Ltd. | 3,676,956.58 | 5,258,863.67 |
| Accounts payable | Hangzhou Times Lighting and Electrical Co., Ltd. | 226,907.87 | 289,282.42 |
| Accounts payable | PROSPERITY LAMPS & COMPONENTS LTD | 1,392,879.87 | 1,350,955.58 |
| Other payables | Guangdong Yixin Changcheng Construction Group | 17,502,563.48 | |
| Other payables | Guangdong Huajian Enterprise Group Co. Ltd. | 1,663,451.79 | 9,358,999.63 |
| Other payables | Guangdong Electronic Technology Research Institute | 276,940.00 | 260,860.00 |
| Other payables | Shenzhen Yuepeng Construction Co., Ltd. | 50,000.00 | |
| Other payables | Guangdong Fenghua Advanced Technology Holding Co., Ltd. | 10,000.00 | 30,000.00 |
| Other payables | Foshan NationStar Optoelectronics Co., Ltd. | 10,354.07 | 279,800.91 |
| Other payables | Guangdong Heshun Property Management Co., Ltd. | 3,330.08 | |
| Contract liabilities | Prosperity Electrical (China) Co., Ltd. | 54,049.20 | 39,764.94 |
| Total | 44,190,913.55 | 49,735,472.13 |
7. Commitments of Related Party
1. Commitment on Avoidance of Horizontal Competition
Commitment maker: Controlling shareholderContents of Commitment:Electronics Group and its acting-in-concert parties Shenzhen Rising Investment andHong Kong Rising Investment have made a commitment that the elimination of the horizontal competitionbetween Foshan Nation Star Optoelectronics Co., Ltd and the Company through business integration or otherways or arrangements shall be completed before 4 June 2020.Date of commitment making: 3 December 2019Term of commitment: 6 monthsFulfillment: Complete
2. Commitment on Avoidance of Horizontal Competition
Commitment maker: Controlling shareholderContents of Commitment: Electronics Group and its acting-in-concert parties Shenzhen Rising Investment andHong Kong Rising Investment have made more commitments as follows to avoid horizontal competition with theCompany: 1. They shall conduct supervision and restraint on the production and operation activities of themselvesand their relevant enterprises so that besides the enterprise above that is in horizontal competition with theCompany for now, if the products or business of them or their relevant enterprises become the same with orsimilar to those of the Company or its subsidiaries in the future, they shall take the following measures: (1) If theCompany thinks necessary, they and their relevant enterprises shall reduce and wholly transfer their relevantassets and business; and (2) If the Company thinks necessary, it is given the priority to acquire first, by propermeans, the relevant assets and business of them and their relevant enterprises. 2. All the commitments made bythem to eliminate or avoid horizontal competition with the Company are also applicable to their directly orindirectly controlled subsidiaries. They are obliged to urge and make sure that other subsidiaries execute what’sprescribed in the relevant document and faithfully honor all the relevant commitments. 3. If they or their directlyor indirectly controlled subsidiaries break the aforesaid commitments and thus cause a loss for the Company, theyshall compensate the Company on a rational basis.Date of commitment making: 4 December 2015Term of commitment: Long-standingFulfillment: In execution
3. Commitment on Reduction and Regulation of Related-party TransactionsCommitment maker: Controlling shareholderContents of Commitment: Electronics Group and its acting-in-concert parties Shenzhen Rising Investment andHong Kong Rising Investment have made a commitment that during their direct or indirect holding of theCompany’s shares, they shall 1. Strictly abide by the regulatory documents of the CSRC and the SZSE, theCompany’s Articles of Association, etc. and not harm the interests of the Company or other shareholders of the
Company in their production and operation activities by taking advantage of their position as the controllingshareholder and actual controller; 2. make sure that they or their other controlled subsidiaries, branch offices,jointly-run or associated companies (the “Relevant Enterprises” for short) will try their best to avoid or reducerelated-party transactions with the Company or the Company’s subsidiaries; 3. strictly follow the market principleof justness, fairness and equal value exchange for necessary and unavoidable related-party transactions betweenthem and their Relevant Enterprises and the Company, and withdraw from voting when a related-partytransaction with them or their Relevant Enterprises is being voted on at a general meeting or a board meeting, andexecute 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 causedfor the Company, its subsidiaries or the Company’s other shareholders, they shall be obliged to compensate.Date of commitment making: 4 December 2015Term of commitment: Long-standingFulfillment: In execution
4 Commitment on IndependenceCommitment maker: Controlling shareholderContents of Commitment: 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 HongKong Rising Investment have made the following commitments: 1. They will ensure the independence of theCompany in business: (1) They promise that the Company will have the assets, personnel, qualifications andcapabilities 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 theCompany’s shareholders. (3) They promise that they and their related parties will not be engaged in business that issubstantially in competition with the Company’s business. And (4) They promise that they and their related partieswill try their best to reduce related-party transactions between them and the Company; for necessary andunavoidable related-party transactions, they promise to operate fairly following the market-oriented principle and atfair prices, and execute the transaction procedure and the duty of information disclosure pursuant to the applicablelaws, 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 managementpersonnel will work only for and receive remuneration from the Company, not holding any positions in them or theirother controlled subsidiaries other than director and supervisor. (2) They promise the Company’s absoluteindependence from their related parties in labor, human resource and salary management. And (3) They promise tofollow the legal procedure in their recommendation of directors, supervisors and senior management personnel tothe 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 theCompany will have a production system, an 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-patentedtechnology in relation to its production and operation; and have independent systems for the procurement of rawmaterials and the sale of its products. (2) They promise that the Company will have independent and complete assetsall under the Company’s control and independently owned and operated by the Company. And (3) They promisethat they and their other controlled subsidiaries will not illegally occupy the Company’s funds and assets in any way,or use the Company’s assets to provide guarantees for the debts of themselves or their other controlled subsidiarieswith. 4. They will ensure the independence of the Company in organization: (1) They promise that the Company hasa 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 independentlyexecute their functions according to laws, regulations and the Company’s Articles of Association. 5. They willensure the independence of the Company in finance: (1) They promise that the Company will have an independentfinancial 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 relatedparties. (3) They promise that the Company’s financial personnel do not hold concurrent positions in its relatedparties. (4) They promise that the Company will independently pay its tax according to law. And (5) They promisethat the Company can make financial decisions independently and that they will not illegally intervene in theCompany’s use of its funds.Date of commitment making: 4 December 2015Term of commitment: Long-standingFulfillment: In execution
8. Other
NaughtXIII. Stock Payment
1. The Overall Situation of Stock Payment
□Applicable √ Not applicable
2. The Stock Payment Settled in Equity
□Applicable √ Not applicable
3. The Stock Payment Settled in Cash
□Applicable √ Not applicable
4. Modification and Termination of the Stock Payment
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5. Other
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XIV. Commitments and Contingency
1. Significant Commitments
Significant commitments on the balance sheet dateNaught
2. Contingency
(1) Significant Contingency on Balance Sheet Date
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(2) In Despite of no Significant Contingency to Disclose, the Company Shall Also Make RelevantStatementsThere was no significant contingency in the Company.
3. Other
NaughtXV. Events after Balance Sheet Date
1. Significant Non-adjusted Events
Naught
2. Profit Distribution
Naught
3. Sales Return
Naught
4. Note to Other Events after Balance Sheet Date
Naught
XVI. Other Significant Events
1. The Accounting Errors Correction in Previous Period
Naught
2. Debt Restructuring
Naught
3. Assets Replacement
Naught
4. Pension Plan
Naught
5. Discontinued Operations
Naught
6. Segment Information
Naught
7. Other Significant Transactions and Events with Influence on Investors’ Decision-makingNaught
8. Other
NaughtXVII. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Notes Receivable
(1) Category of Notes Receivable
Unit: RMB
| Item | Ending balance | Beginning balance | ||||||||
| Carrying amount | Bad debt provision | Carrying value | Carrying amount | Bad debt provision | Carrying value | |||||
| Amount | Proportion | Amount | Withdrawal proportion | Amount | Proportion | Amount | Withdrawal proportion | |||
| Accounts receivable for which bad debt provision separately accrued | 15,257,662.85 | 1.45% | 9,569,331.99 | 62.72% | 5,688,330.86 | 15,257,662.85 | 1.40% | 9,569,331.99 | 62.72% | 5,688,330.86 |
| Of which: | ||||||||||
| Accounts receivable for which bad debt provision accrued | 1,033,491,498.87 | 98.55% | 44,559,987.13 | 4.31% | 988,931,511.74 | 1,073,149,615.48 | 98.60% | 48,124,872.12 | 4.48% | 1,025,024,743.36 |
| by group | ||||||||||
| Of which: | ||||||||||
| Total | 1,048,749,161.72 | 100.00% | 54,129,319.12 | 5.16% | 994,619,842.60 | 1,088,407,278.33 | 100.00% | 57,694,204.11 | 5.30% | 1,030,713,074.22 |
Individual withdrawal of bad debt provision by single item:
Unit: RMB
| Name | Ending balance | |||
| Carrying amount | Bad debt provision | Withdrawal proportion | Reason for withdrawal | |
| Customer A | 14,220,827.14 | 8,532,496.28 | 60.00% | Involved in the lawsuit; the Company won in the first instance judgment and the other side had appealed |
| Customer B | 1,036,835.71 | 1,036,835.71 | 100.00% | Involved in the lawsuit; the Company won the case, but the counterpart has no property for repayment |
| Total | 15,257,662.85 | 9,569,331.99 | -- | -- |
Withdrawal of bad debt provision by group:
Unit: RMB
| Name | Ending balance | ||
| Carrying amount | Bad debt provision | Withdrawal proportion | |
| Credit risk portfolio | 1,033,491,498.87 | 44,559,987.13 | 4.31% |
| Total | 1,033,491,498.87 | 44,559,987.13 | -- |
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable ifadopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable.
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
| Aging | Ending balance |
| Within 1 year (including 1 year) | 984,186,747.88 |
| 1 to 2 years | 14,872,173.31 |
| 2 to 3 years | 22,403,377.77 |
| Over 3 years | 27,286,862.76 |
| 3 to 4 years | 8,743,397.77 |
| 4 to 5 years | 14,104,509.72 |
| Over 5 years | 4,438,955.27 |
| Total | 1,048,749,161.72 |
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting PeriodInformation of withdrawal of bad debt provision:
Unit: RMB
| Category | Beginning balance | Changes in the Reporting Period | Ending balance | |||
| Withdrawal | Reversal or recovery | Write-off | Other | |||
| Accounts receivable | 57,694,204.11 | -3,564,840.60 | 44.39 | 54,129,319.12 | ||
| Total | 57,694,204.11 | -3,564,840.60 | 44.39 | 54,129,319.12 | ||
(3) Particulars of the Actual Verification of Accounts Receivable during the Reporting Period
Unit: RMB
| Item | Amount |
| Other driblet small amount | 44.39 |
(4) Top 5 of the Ending Balance of the Accounts Receivable Collected according to Arrears Party
Unit: RMB
| Name | Ending balance of accounts receivable | Proportion to total ending balance of accounts receivable | Ending balance of bad debt provision |
| No. 1 | 130,321,324.71 | 12.43% | 3,909,639.74 |
| No. 2 | 99,148,025.12 | 9.45% | 0.00 |
| No. 3 | 55,072,539.33 | 5.25% | 1,652,176.18 |
| No. 4 | 18,109,974.59 | 1.73% | 543,299.24 |
| No. 5 | 17,654,601.13 | 1.68% | 529,638.03 |
| Total | 320,306,464.88 | 30.54% |
(5) Derecognition of Accounts Receivable due to the Transfer of Financial AssetsNaught
(6) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement ofAccounts ReceivableNaught
2. Other Receivables
Unit: RMB
| Item | Ending balance | Beginning balance |
| Other receivables | 493,080,363.83 | 462,284,585.09 |
| Total | 493,080,363.83 | 462,284,585.09 |
(1) Interest Receivable
Naught
(2) Dividends Receivable
Naught
(3) Other Receivables
1) Other Receivables Classified by Accounts Nature
Unit: RMB
| Nature | Ending carrying amount | Beginning carrying amount |
| Internal business group | 472,855,309.63 | 443,820,864.80 |
| VAT export tax refunds | 195,141.85 | |
| Bidding and performance bond | 6,282,632.03 | 4,025,073.30 |
| Borrowings and petty cash for employees | 5,092,620.77 | 7,403,907.26 |
| Rental fees and water & electricity fees | 3,454,648.46 | 2,989,445.13 |
| Other | 8,316,575.29 | 6,185,710.92 |
| Total | 496,001,786.18 | 464,620,143.26 |
2) Withdrawal of Bad Debt Provision
Unit: RMB
| Bad debt provision | First stage | Second stage | Third stage | Total |
| Expected credit loss of the next 12 months | Expected loss in the duration (credit impairment not occurred) | Expected loss in the duration (credit impairment occurred) | ||
| Balance of 1 January 2021 | 454,821.73 | 1,880,736.44 | 2,335,558.17 | |
| Balance of 1 January 2021 in the Current Period | —— | —— | —— | —— |
| Withdrawal of the Current Period | 40,984.24 | 544,879.94 | 585,864.18 | |
| Balance of 30 June 2021 | 495,805.97 | 2,425,616.38 | 2,921,422.35 |
Changes of carrying amount with significant amount changed of loss provision in the current period
□ Applicable √ not applicable
Disclosure by aging
Unit: RMB
| Aging | Ending balance |
| Within 1 year (including 1 year) | 484,905,549.55 |
| 1 to 2 years | 3,873,698.54 |
| 2 to 3 years | 3,627,339.77 |
| Over 3 years | 3,595,198.32 |
| 3 to 4 years | 3,077,373.22 |
| 4 to 5 years | 79,524.80 |
| Over 5 years | 438,300.30 |
| Total | 496,001,786.18 |
3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting PeriodInformation of withdrawal of bad debt provision
Unit: RMB
| Category | Beginning balance | Changes in the Reporting Period | Ending balance | |||
| Withdrawal | Reversal or recovery | Write-off | Other | |||
| Other accounts receivable | 2,335,558.17 | 585,864.18 | 2,921,422.35 | |||
| Total | 2,335,558.17 | 585,864.18 | 2,921,422.35 | |||
4) Particulars of the Actual Verification of Other Receivables during the Reporting PeriodNaught
5) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RMB
| Name of the entity | Nature | Ending balance | Aging | Proportion to total ending balance of other receivables% | Ending balance of bad debt provision |
| No. 1 | Internal business group | 394,627,792.74 | Within 1 years | 79.56% | |
| No. 2 | Internal business group | 19,936,475.39 | Within 1 years | 4.02% | |
| No. 3 | Internal business group | 17,995,308.05 | Within 3 year | 3.63% | |
| No. 4 | Internal business group | 10,535,474.03 | Within 2 year | 2.12% | |
| No. 5 | Provident fund | 2,263,797.33 | Within 1 years | 0.46% | 67,913.92 |
| Total | -- | 445,358,847.54 | -- | 89.79% | 67,913.92 |
6) Accounts Receivable Involving Government Grants
Naught
7) Derecognition of Other Receivables due to the Transfer of Financial AssetsNaught
8) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement ofOther ReceivablesNaught
3. Long-term Equity Investment
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserve | Carrying value | Carrying amount | Depreciation reserve | Carrying value | |
| Investment to subsidiaries | 345,507,295.41 | 345,507,295.41 | 355,584,295.41 | 355,584,295.41 | ||
| Investment to joint ventures and associated enterprises | 179,322,086.81 | 179,322,086.81 | 181,365,016.32 | 181,365,016.32 | ||
| Total | 524,829,382.22 | 524,829,382.22 | 536,949,311.73 | 536,949,311.73 | ||
(1) Investment to Subsidiaries
Unit: RMB
| Investee | Beginning balance (carrying value) | Increase/decrease | Ending balance (carrying value) | Ending balance of depreciation reserve | |||
| Additional investment | Reduced investment | Depreciation reserves withdrawn | Other | ||||
| FSL Chanchang Optoelectronics Co., Ltd. | 82,507,350.00 | 82,507,350.00 | |||||
| Foshan Taimei Times Lamps and Lanterns Co., Ltd. | 350,000.00 | 350,000.00 | |||||
| Nanjing Fozhao Lighting Components Manufacturing Co., Ltd. | 72,000,000.00 | 72,000,000.00 | |||||
| Foshan Electrical & | 35,418,439.76 | 35,418,439.76 | |||||
| Lighting (Xinxiang) Co., Ltd. | |||||||
| Guangdong Fozhao New Light Sources Technology Co., Ltd. | 50,077,000.00 | 50,077,000.00 | |||||
| Foshan Hortilite Optoelectronics Co.,Ltd. | 16,685,000.00 | 16,685,000.00 | |||||
| Foshan Lighting Lamps & Components Co., Ltd. | 15,000,000.00 | 15,000,000.00 | |||||
| FSL Zhida Electric Technology Co., Ltd. | 25,500,000.00 | 25,500,000.00 | |||||
| FSL Lighting GMBH | 195,812.50 | 195,812.50 | |||||
| Hunan Keda New Energy Investment and Development Co., Ltd. | 57,850,693.15 | 40,000,000.00 | 97,850,693.15 | ||||
| Total | 355,584,295.41 | 40,000,000.00 | 50,077,000.00 | 345,507,295.41 |
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
| Investee | Beginning balance (carrying value) | Increase/decrease | Ending balance (carrying value) | Ending balance of depreciation reserve | |||||||
| Additional investment | Reduced investment | Gains and losses recognized under the equity method | Adjustment of other comprehensive income | Changes of other equity | Cash bonus or profits announced to issue | Withdrawal of impairment provision | Other | ||||
| I. Joint ventures | |||||||||||
| II. Associated enterprises | |||||||||||
| ShenzhenPrimatronix | 181,365,016.32 | 37,460.99 | 2,080,390.50 | 179,322,086.81 | |||||||
| (Nanho) Electronics Ltd. | |||||||||||
| Subtotal | 181,365,016.32 | 37,460.99 | 2,080,390.50 | 179,322,086.81 | |||||||
| Total | 181,365,016.32 | 37,460.99 | 2,080,390.50 | 179,322,086.81 |
(3) Other Notes
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4. Operating Revenue and Cost of Sales
Unit: RMB
| Item | Reporting Period | Same period of last year | ||
| Operating revenue | Cost of sales | Operating revenue | Cost of sales | |
| Main business | 1,712,892,634.56 | 1,415,558,525.32 | 1,364,657,069.47 | 1,099,182,617.15 |
| Other business | 84,902,658.17 | 70,407,375.42 | 58,327,006.37 | 45,523,697.25 |
| Total | 1,797,795,292.73 | 1,485,965,900.74 | 1,422,984,075.84 | 1,144,706,314.40 |
Information related to performance obligations:
NaughtInformation related to transaction value assigned to residual performance obligations:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or notfully performed yet was RMB0.00 at the period-end.
5. Investment Income
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Long-term equity investment income accounted by equity method | 37,460.99 | 4,725,081.89 |
| Investment income from disposal of long-term equity investment | 6,754,363.94 | |
| Dividend income from holding of other equity instrument investment | 14,940,422.96 | |
| Investment income from financial products and structural deposits | 4,756,319.58 | 15,454,650.86 |
| Other | 416,050.00 | 1,023,100.00 |
| Total | 11,964,194.51 | 36,143,255.71 |
6. Other
Naught
XVIII. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
√ Applicable □ Not applicable
Unit: RMB
| Item | Amount | Note |
| Gains/losses on the disposal of non-current assets | 3,037,823.13 | |
| Government grants recognized in the current period, except for those acquired in the ordinary course of business or granted at certain quotas or amounts according to the government’s unified standards | 7,791,032.60 | |
| Capital occupation charges on non-financial enterprises that are recorded into current profit or loss | 516,895.46 | |
| Gain/loss from change of fair value of trading financial assets and liabilities, derivative financial assets and liabilities, and investment gains from disposal of trading financial assets and liabilities, derivative financial assets and liabilities, and investment in other debt obligations, other than valid hedging related to the Company’s common businesses | 2,356,050.00 | |
| Other non-operating income and expenses other than the above | 189,648.11 | |
| Less: Income tax effects | 1,969,325.03 | |
| Non-controlling interests effects | 317,088.85 | |
| Total | 11,605,035.42 | -- |
Explain the reasons if the Company classifies an item as an non-recurring gain/loss according to the definition inthe Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Non-recurring Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the saidexplanatory announcement as a recurrent gain/loss item
□ Applicable √ Not applicable
2. Return on Equity and Earnings Per Share
| Profit as of Reporting Period | Weighted average ROE (%) | EPS (Yuan/share) | |
| EPS-basic | EPS-diluted | ||
| Net profit attributable to ordinary shareholders of the Company | 1.82% | 0.0802 | 0.0802 |
| Net profit attributable to ordinary shareholders of the Company after deduction of non-recurring profit or loss | 1.63% | 0.0717 | 0.0717 |
3. Differences between Accounting Data under Domestic and Overseas Accounting Standards
(1) Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under Internationaland Chinese Accounting Standards
□ Applicable √ Not applicable
(2) Differences of Net profit and Net assets Disclosed in Financial Reports Prepared under Overseas andChinese Accounting Standards
□ Applicable √ Not applicable
(3) Explain Reasons for the Differences between Accounting Data under Domestic and OverseasAccounting Standards; for any Adjustment Made to the Difference Existing in the Data Audited by theForeign Auditing Agent, Such Foreign Auditing Agent’s Name Shall Be Clearly StatedNaught
4. Other
Naught
Foshan Electrical and Lighting Co., Ltd.Legal representative: Wu Shenghui25 August 2021