Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
FOSHAN ELECTRICAL AND LIGHTING CO., LTD.
ANNUAL REPORT 2016
March 2017
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Section I Important Statements, Contents and Definitions
The board of directors (the “Board”), the supervisory board (the “Supervisory Board”), as
well as the directors, supervisors and executive officers of Foshan Electrical and Lighting Co.,
Ltd. (the “Company”) hereby guarantee the factuality, accuracy and completeness of the
contents of this Report, and shall be jointly and severally liable for any false representation,
misleading statements or material omissions in this Report.
He Yong, head of the Company, Liu Xingming, accounting head for this Report, and Tang
Qionglan, head of the accounting department (head of accounting), hereby guarantee that the
Financial Report carried in this Report is factual, accurate and complete.
All directors attended the board meeting for the review of this Report.
Beijing Zhongzhengtiantong Certified Public Accountants LLP has issued a standard
auditor’s report with unqualified opinion for the Company.
The accounting data and financial report in this Report are subject to those audited by
Beijing Zhongzhengtiantong Certified Public Accountants LLP. This Report is prepared in
both Chinese and English. Should there be any understanding discrepancy between the two
versions, the Chinese version shall prevail.
The future plans and some other forward-looking statements, as well as the relevant
cautionary statements, involved in this Report shall not be considered as virtual promises of
the Company to investors. And investors are kindly reminded to be well aware of possible
risks.
The Company has described in detail in this Report the risk of market competition, the risk of
rising operating costs, the risk of falling prices of inventories and the risk of exchange rate
fluctuations. Please refer to “Possible risks” in “Outlook of the Company’s future
development” in “Section IV Performance Discussion and Analysis” of this Report.
The Board has considered and approved the following proposal for profit distribution: Based
on the total shares of 1,272,132,868, a cash dividend of RMB4.20 (tax inclusive) per 10 shares
will be distributed to all shareholders of the Company. No bonus shares will be granted, nor
will any capital reserve be converted into share capital.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Table of Contents
Section I Important Statements, Contents and Definitions ............................................................ 2
Section II Corporate Profile and Financial Results ........................................................................ 5
Section III Business Profile ............................................................................................................. 10
Section IV Performance Discussion and Analysis ......................................................................... 14
Section V Significant Events ........................................................................................................... 39
Section VI Share Changes and Shareholders’ Profile ................................................................... 74
Section VII Preference Shares ........................................................................................................ 85
Section VIII Directors, Supervisors, Executive Officers and Staff .............................................. 86
Section IX Corporate Governance ................................................................................................. 99
Section X Corporate Bonds ........................................................................................................... 113
Section XI Financial Report .......................................................................................................... 114
Section XII Documents Available for Reference ......................................................................... 239
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Definitions
Term Definition
The Company, Company, FSL Foshan Electrical and Lighting Co., Ltd.
GRAM Guangdong Rising Assets Management 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 Hong Kong Rising Investment Development Limited
CSRC China Securities Regulatory Commission
SZSE Shenzhen Stock Exchange
Shareholders’ General Meeting of Foshan Electrical and Lighting Co.,
Shareholders’ General Meeting
Ltd.
Board of Directors Board of Directors of Foshan Electrical and Lighting Co., Ltd.
Supervisory Board Supervisory Board of Foshan Electrical and Lighting Co., Ltd.
Annual report auditor Beijing Zhongzhengtiantong Certified Public Accountants LLP
Yuan, ten thousand, million, billion RMB Yuan, RMB Ten Thousand, RMB million, RMB billion
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Section II Corporate Profile and Financial Results
I Corporate information
Stock name FSL / FSL B Stock code 000541/200541
Stock exchange Shenzhen Stock Exchange
Company name in Chinese 佛山电器照明股份有限公司
Abbr. 佛山照明
Company name in English (if
FOSHAN ELECTRICAL AND LIGHTING CO.,LTD
any)
Abbr. (if any) FSL
Legal representative He Yong
Registered address No. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, P.R.China
Zip code
Office address No. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, P.R.China
Zip code
Company website www.chinafsl.com
Email gzfsligh@pub.foshan.gd.cn
II Contact information
Board Secretary Securities Representative
Name Lin Yihui Huang Yufen
No. 64, Fenjiang North Road, Chancheng No. 64, Fenjiang North Road, Chancheng
Address District, Foshan City, Guangdong District, Foshan City, Guangdong
Province, P.R.China Province, P.R.China
Tel. （0757）82810239 （0757）82966028
Fax （0757）82816276 （0757）82816276
E-mail fsl-yh@126.com fslhyf@163.com
III Information disclosure and place where this Report is kept
Newspapers designated by the Company for China Securities Journal, Securities Times, Securities Daily, Ta Kung Pao
information disclosure (HK)
Website designated by the China Securities
http://www.cninfo.com.cn
Regulatory Commission (CSRC) for the publication
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
of this Report
Board Secretary’s Office, FSL Office Building, No. 64, Fenjiang North
Place where this Report is kept
Road, Chancheng District, Foshan City, Guangdong Province, P.R.China
IV Company registration and alteration
Credibility code 91440000190352575W
Changes in main business activities of the
No changes
Company after going public (if any)
Changes of controlling shareholder (if any) No changes
V Other information
The CPAs firm hired by the Company
Name Beijing Zhongzhengtiantong Certified Public Accountants LLP
Office address 13/F, Tower B, Jinyun Building, A43 Xizhimen Avenue North, Haidian District, Beijing
Accountants writing signatures Tong Quanyong, Luo Dongri
Sponsor engaged by the Company to continuously perform its supervisory function during this Reporting Period
□ Applicable √ Not applicable
Financial advisor engaged by the Company to continuously perform its supervisory function during this Reporting
Period
□ Applicable √ Not applicable
VI Accounting and financial results
Indicate by tick mark whether the Company performed any retroactive adjustments to or restatement of its
accounting data due to changes of accounting policies or correction of accounting errors
□ Yes √ No
2016 2015 +/-%
Operating revenues (RMB Yuan) 3,366,454,968.60 2,876,659,100.63 17.03% 3,068,641,200.17
Net profit attributable to
shareholders of the Company 1,072,342,050.13 53,405,593.12 1,907.92% 266,125,048.97
(RMB Yuan)
Net profit attributable to
shareholders of the Company
351,237,317.17 150,093,497.33 134.01% 306,310,907.76
before exceptional profit and loss
(RMB Yuan)
Net cash flows from operating
289,978,768.48 188,325,189.43 53.98% 305,638,745.34
activities (RMB Yuan)
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Basic earnings per share (RMB
0.8429 0.0420 1,906.90% 0.2092
Yuan /share)
Diluted earnings per share (RMB
0.8429 0.0420 1,906.90% 0.2092
Yuan /share)
Weighted average return on equity
21.40% 1.27% 20.13% 9.08%
(%)
December 31, 2016 December 31, 2015 +/-% December 31, 2014
Total assets (RMB Yuan) 6,100,169,400.30 6,048,296,432.78 0.86% 3,736,704,336.40
Net assets attributable to
shareholders of the Company 4,990,466,577.12 5,023,546,888.12 -0.66% 3,044,585,720.58
(RMB Yuan)
VII Differences in accounting data under domestic and foreign accounting standards
1. Differences in the net profit and the net assets disclosed in the financial reports prepared under Chinese
and international accounting standards
□ Applicable √ Not applicable
No such differences for this Reporting Period.
2. Differences in the net profit and the net assets disclosed in the financial reports prepared under Chinese
and foreign accounting standards
□ Applicable √ Not applicable
No such differences for this Reporting Period.
VIII Financial results by quarter
Unit: RMB Yuan
1Q 2Q 3Q 4Q
Operating revenues 904,310,757.83 851,360,169.61 819,510,785.90 791,273,255.26
Net profit attributable to
107,776,865.30 99,148,947.42 73,179,107.88 792,237,129.53
shareholders of the Company
Net profit attributable to
shareholders of the Company 107,348,727.74 99,288,365.94 73,405,588.72 71,194,634.77
before exceptional profit and loss
Net cash flows from operating
186,104,091.50 105,524,215.56 32,420,605.94 -34,070,144.52
activities
Indicate by tick mark whether there are any material differences between the financial indicators above or their
summations and those which have been disclosed in quarterly or semi-annual reports
□ Yes √ No
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
IX Exceptional profit/loss
√ Applicable □ Not applicable
Unit: RMB Yuan
Item 2016 2015 2014 Note
Profit/loss on disposal of non-current assets
(including offset asset impairment -5,776,457.37 -8,172,702.85 -1,287,703.94
provisions)
Government grants charged to the profit/loss
for this Reporting Period (except for the
government grants closely related to the
1,669,377.53 4,780,007.27 2,174,021.86
business of the Company and given at a
fixed quota or amount in accordance with
the State’s uniform standards)
Profit due to the situation where investment
costs for the Company to obtain
subsidiaries, associates and joint ventures
-17,112.47
are lower than the enjoyable fair value of
identifiable net assets of investees when
making investments
Profit/loss on fair value changes of
transactional financial assets and liabilities Mainly due to sale
& investment income from disposal of through block trading
transactional financial assets and liabilities 853,216,065.17 19,472,654.77 2,962,781.37 of the Guoxuan
as well as financial assets available for sale, High-tech stock held
except for effective hedges related to routine by the Company
operations of the Company
Impairment provision reversal of accounts
receinable on which the impairment test is 3,535,749.69
carried out separately
Non-operating income and expense other
-4,774,788.19 -130,293,226.71 -51,945,691.06
than the above
Other gain and loss items that meet
944,428.72 1,499,406.22
definition of extraordinary gain/loss
Less: Corporate income tax 127,331,306.57 -16,925,475.37 -6,958,646.77
Minority interests (after tax) -566,092.70 344,540.78 530,207.54
Total 721,104,732.96 -96,687,904.21 -40,185,858.79 --
Explanation of why the Company classified an item as exceptional profit/loss according to the definition in the
Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Exceptional Profit and Loss, or reclassified any exceptional profit/loss item given as an example in the
said explanatory announcement to recurrent profit/loss
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
□ Applicable √ Not applicable
No such cases in this Reporting Period.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Section III Business Profile
I Main business scope for this Reporting Period
Is the Company subject to any disclosure requirements for special industries?
No.
1. Main business and products
We have been engaged in production, R&D and sale of lighting products since our listing. Our products mainly
include conventional lighting products and LED lighting products. We have a wide variety of products with a
complete range of specifications, including fluorescent lamps, halogen lamps, energy saving lamps, motor vehicle
lamps, conventional lamps, LED light source, LED lamps, etc. With the most specifications in the lighting
industry, our products are widely used for indoor and outdoor lighting, landscape lighting, motor vehicle lighting
and so on. Upon years of development, we have won quite many honors such as the title of “The King of Lamps
in China”, and our “FSL” and “Fenjiang” brands have been certified as “Famous China Brands”.
While pushing diversified strategies, the Company set the electrical engineering business as the new engine for its
rapid development in 2016. Based on the existing electrical engineering equipment, the Company strived to
develop electrical engineering equipment covering lots of series of electrical engineering equipment and sockets.
In future, the Company would make efforts to create a strategic layout where the development of lighting products
keeping pace with electrical engineering equipment.
2. Main business model
(1) Procurement model
We mainly procure raw materials such as lamp beads, lamp holders, electronic components, aluminum substrate,
plastic parts, metal materials, quartz tubes and fuel by way of bids invitation. A bids invitation supervisory
committee consisting of personnel from several departments will be set up in the future. For every kind of our
main raw materials, we usually have a few suppliers to choose from in procurement so that the procurement prices
would be fair, the supply of raw materials in time and the good quality of the raw materials ensured.
(2) Production models
① Production of the conventional products
Concerning the conventional products, we analyze sales of every month and predict future market demand so as to
formulate a production plan for the coming month. And our workshops produce according to the plan to avoid
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
extra stock and at the same time ensure that there is enough for sale.
② Production according to orders
Different from the conventional lighting products which are of little variation in specifications, LED lighting
products are at a fast pace of renewal and different customers often have different requirements regarding the
products’ appearances and performance indexes. Therefore, we have to organize individualized production for
some orders for LED lighting products, export orders in particular. For this kind of orders, we formulate our
production plans based on them and then make procurement plans according to the production plans, which will
help effectively control the stock and the procurement prices of raw materials, reduce capital occupation and
improve our operating efficiency to the maximum.
③ Combination of independent production and outsourcing
With a high production capacity, we produce most of our products and parts on our own. Only a small portion of
parts and low-tech products is outsourced to sub-manufacturers, who will produce in strict accordance with our
requirements. We will also tag along their production processes and examine carefully the quality of the products
finished. In this way, our supply of products is guaranteed.
(3) Sales model
We mainly adopt a commercial agent model, selling our products to commercial agents through various channels
and setting up business divisions under the sales department to follow up the use of our products by customers and
provide relevant support. In terms of channels, besides consolidating wholesale, we will also focus on the
development of franchised stores, illumination engineering & commercial lighting, e-commerce & retail sales and
automotive lighting to minimize our weaknesses in this respect and expand the space for our survival.
3. Main driving force for business performance
(1) Rapid development of the industry
As the emerging industry involved in the country’s strategies, LEC industry rapidly developed in the world in
recent years due to its features of high efficiency and energy-saving, green environmental protection, as well as
long service life. Thanks to the rapid development of the LED industry, the Company achieved good business
performance.
(2) The Company’s own advantages
By right of the Company’s advantages in technology, brand, channel, and scale, the Company firmly grasped the
opportunities brought by the industry’s rapid development, consistently pushed forward the technology upgrade of
main products, reinforced market development, and optimized the sales structure of products through sustainable
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
R&D input and technology innovation. And at the same time, by means of effective control on procurement and
manufacturing cost, the Company raised the efficiency of management and products, improved its comprehensive
competitiveness, overcame the difficulties and challenges resulted from the serious market situation, and kept the
sustainable growth of its operating revenue and profit.
4. Development stage and periodicity of the lighting industry as well as our position in the market
The recent years have witnessed the rapid rise of the LED lighting technology. Due to the sharp drop in their cost
and their remarkable performance in energy saving & emission reduction, LED lighting products have been
generally accepted by consumers, resulting in a higher and higher penetration rate as well as a fast-shrinking
market for conventional lighting products. However, after years of fast development and renewal, growth in LED
lighting has slowed down. Particularly the LED downstream with a low requirement for market access is suffering
from an obvious problem of structural overcapacity, leading to the disordered, cutthroat competition on the market.
Under the double hits by a macro economic downturn and fierce competition, large enterprises will expand
through mergers and acquisitions for stronger competitiveness, while some small and medium ones can only face
the fate of being washed out of the market due to lack of competitiveness, which is bringing the entire industry
into an integration phase. As a necessity for daily life, lighting products are mainly under the influence of the
macro economy and the real estate sector but are little affected by seasons and regions.
Generally speaking, China’s lighting industry is insufficiently centralized with no overwhelmingly superior
enterprises despite an enlarging market share of competitive brands. Upon years of development, we have become
a leading and quite competitive lighting enterprise with strong competitiveness in brand, production scale, channel,
R&D, etc.
II Significant changes in main assets
1. Significant changes in main assets
Main assets Reason for any significant change
Fixed assets No significant changes
Intangible assets No significant changes
Increased 120.01% from the opening amount mainly due to increase in ongoing
Construction in progress
construction projects
Available-for-sale financial assets Mainly due to sale through block trading of some of the Guoxuan High-tech stock held
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
by the Company
2. Main assets overseas
□ Applicable √ Not applicable
III Core competitiveness analysis
Is the Company subject to any disclosure requirements for special industries?
No.
The core competitiveness of the Company mainly reflects on fours aspects listed below:
Channel advantage
The Company has been sticking to the marketing strategy of deeply focusing and refining channels. Through years
of development and experience accumulation, the Company currently has four major sales channels, which contains
the circulation and wholesales channel, the exclusive shop channel, the E-business retail channel, and the
engineering commercial lighting channel, forming a marketing network covering the whole country. Replying on
strong and perfect sales channels, products of the Company can rapidly enter the market, which has significantly
improved the Company’s market development capability and competitiveness.
Brand advantage
The Company keeps focusing on the positioning, core value, and features of FSL brand, and continually improved
the brand recognition and reputation of FSL brand by product design, end sales, advertisement, special lighting
exhibition, and so on. At present, FSL and Fen Jiang among the three brands of the Company are both famous
trademarks in China. The FSL brand has become one of the most influential and popular brands in China, and the
powerful brand influence has become the main driver for continuous sales growth of the Company.
Technology advantage
The Company has always been attaching importance to R&D of new products and technologies, increasing the input
on independent innovation on technologies and products, and perfecting the improvement process for R&D and
technique of all products. The Company absorbs and trains technical talents, set up innovative incentive mechanism
and performance mechanism, and fully provides with supports in fund, talents, and mechanisms.
Scale advantage
As one of the enterprises to first step into the industry of producing and selling lighting products, the Company
possesses the manufacture culture of refining production and the large-scale manufacturing capability by years of
experience accumulation. The Company has production bases in Foshan, Nanjing and Xinxiang. The large-scale
and centralized production brings obvious economic benefits to the Company, which not only shows in manufacture
cost of products, but also shows in aspects such as raw material procurement and product pricing.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Section IV Performance Discussion and Analysis
I Overview
(I) Summary
In 2016, with great downward pressure and limited driving forces, the international and domestic economies both
slowed down in growth. In the lighting industry, despite a fast-growing LED market, LED enterprises were
excessive in number, causing increasingly fierce competition. In face of the unfavorable macro-environment and
the intense competition in the industry, the Company continued to follow the guideline of “Adjust the Structure,
Stabilize Growth, Attach Importance to Management and Improve Business Results”. Keeping in mind the targets
it set at the beginning of the year, as well as its development strategy, the Company beefed up product
development for a better product mix, strengthened marketing and improved management. As a result, the
business targets for the year have been excellently achieved. For the Reporting Period, the Company achieved
operating revenues of RMB 3366.4550million, up 17.03 % from the year earlier. To be specific, LED products
generated sales revenue of RMB 2045.6815million, representing a YoY increase of 44.43 %, while traditional
lighting products created sales revenue of RMB 1293.5391million, down 9.51 % from last year; the domestic sales
revenue stood at RMB 2147.7421million, a 11.66% increase from last year, while the overseas sales revenue
stood at RMB 1218.7129million, up 27.84% from the year earlier. The total profits stood at RMB 1273million
(including an investment income of RMB 853million from the sale of the Guoxuan High-tech stock in the
Reporting Period), up 2668.32 % year on year; and the net profits attributable to the shareholders of the listed
Company stood at RMB 1072million, representing a YoY rise of 1907.92 %.
(II) What we have done in 2016:
1. Reinforced R&D, and constantly launched new products
Based on LEC product’s features of short service life and rapid renewing, we focused on customers, insisted on
more input on R&D and product innovation, constantly built the competitive technology and R&D platform. We
put an emphasis on user survey and basic research, subdivided the product market via independent R&D and
external cooperation, continuously researched and developed new products, as well as launched them to the
market, so that our hard efforts would result to the transfer of our image as the wholesaler of big products in
circulation. In the Reporting Period, we spent R&D expense of RMB 110.07million, representing a year-on-year
increase of 18.49 %. We applied for 61patents, of which there’re 10 patents for invention, 33 patents of utility
models, 18 design patents. We accomplished 195 big series, of which there’re 1009 items in new product
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
development with specifications, and 269 items in technology and technique improvement with specifications.
The launch of new products enriched our product line, improved our market competitiveness, and brought growth
point for our sales revenue and profit.
2. Optimized channel construction, and expanded development space
In the Reporting Period, we continued to deeply dig in channel enlargement, and optimized channel construction.
In terms of domestic sales, we simultaneously promoted the core and emerging channels, and constantly
emphasized on developing new channels while keeping the advantaged channels, and as a result we achieved a
large growth of sales revenue in channels including exclusive shops, e-commerce, industrial mining, and motor
vehicles. In the Reporting Period, as for the exclusive chop channel, we newly increased 242exclusive shops,
contributing to 928 exclusive shops in total. As for the e-commerce channel, we conducted sales promotion while
keeping pace with Tmall and JD. In aspect of engineering commercial lighting, we organized special teams to
positively participate in engineering projects in various hidden channels. In terms of overseas sales, we made
breakthroughs in factors covering brand, client, product, and area. We strived to promote our FSL self-owned
brand, constantly improved the sales volume for our overseas self-owned brand, and successfully sold out our FSL
self-owned-brand products in 30 countries and regions in 2016, reaching a 66% year-on-year growth of sales
volume for FSL self-owned brand. We initiatively and deeply dug out customer demands, continuously intensify
our cooperation with the existing major customers, and sustainably conducted development of major customers.
We deeply developed LED business with the existing traditional customers, urged the constant optimization of
product structure in overseas sales, and reached 60% LED product sales in the whole overseas sales.
3. Implemented the precise production, and improved the operating efficiency
In the Reporting Period, we put forward the working subject for production management as “creating benefits via
precise production”. We saved human resources cost and improved production efficiency through improving the
production automation level. We cut down procurement cost through mechanisms such as sunshine procurement,
competitive bidding, and competitive negotiation. We also lowered cost and raised efficiency through optimizing
design, as well as introducing new materials and techniques. We strictly controlled waste and improved
production efficiency via enhancing the scheduling management, as well as the management and control on
production process. We decreased the risk of product’s market quality via executing the quality objective
appraisal system, as well as supervision and review on internal control of quality. We strictly implemented the
budget management system, utilized the idle fund to purchase the principal-protected financing products, so as to
improve the service efficiency of capital. In the Reporting Period, our gross margin increased by 1.17% as
compared with last year, and expense decreased by 6.76% as compared with last year.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
4. Established the subsidiary for electrical engineering, and increased our profit growth point
In Oct 2016, we established the subsidiary for electrical engineering. While based on our brand advantage,
channel advantage, as well as the abundant experience in production, operation, and management, we made great
efforts on electrical engineering equipment, and as a result, set the basis for our strategy of simultaneous
development of lighting products and electrical engineering equipment in future. In respect of product, we
organized the excellent R&D team in the industry, so that to lay the root for the extension of electrical engineering
equipment in later stage. In respect of channel, we depended on our current channel advantages, integrated
channel resources, applied incentive sales policy, and therefore aroused the enthusiasm of agencies. In the
Reporting Period, we gained sales revenue in electrical engineering equipment of RMB 70.16million, showing a
year-on-year increase of 90%.
II Analysis of main business
1. Overview
See “I Overview” in “Performance Discussion and Analysis”.
2. Revenues and costs
(1) Breakdown of operating revenues
Unit: RMB Yuan
2016
As a percentage of As a percentage of
+/-%
Amount operating revenues Amount operating revenues
(%) (%)
Operating revenues 3,366,454,968.60 100% 2,876,659,100.63 100% 17.03%
By business segment
Lighting fixtures and
3,366,454,968.60 100.00% 2,876,659,100.63 100.00% 17.03%
lamps
By product
LED products 2,045,681,465.82 60.77% 1,416,365,037.13 49.24% 44.43%
Traditional lighting
1,293,539,060.72 38.42% 1,429,560,217.10 49.70% -9.51%
products
Others 27,234,442.06 0.81% 30,733,846.40 1.07% -11.39%
By geographical segment
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
China 2,147,742,100.25 63.80% 1,923,383,563.07 66.86% 11.66%
Overseas 1,218,712,868.35 36.20% 953,275,537.56 33.14% 27.84%
(2) Business segments, products or geographical segments contributing over 10% of the operating revenues
or profit
√ Applicable □ Not applicable
Is the Company subject to any disclosure requirements for special industries?
No.
Unit: RMB Yuan
Increase/decrease Increase/decrease
Increase/decrease
Operating Gross profit rate of operating of gross profit
Operating cost of operating cost
revenue (%) revenue over last rate over last year
over last year (%)
year (%) (%)
Classified by industry:
Lighting fixtures
3,366,454,968.60 2,518,164,099.97 25.20% 17.03% 15.22% 1.17%
and lamps
Classified by product:
LED lighting
2,045,681,465.82 1,583,097,371.71 22.61% 44.43% 41.27% 1.73%
products
Traditional
1,293,539,060.72 916,616,441.30 29.14% -9.51% -12.12% 2.10%
lighting products
Others 27,234,442.06 18,450,286.96 32.25% -11.39% -15.56% 3.34%
Classified by region:
China 2,147,742,100.25 1,594,275,715.11 25.77% 11.66% 10.37% 0.87%
Overseas 1,218,712,868.35 923,888,384.86 24.19% 27.84% 24.66% 1.93%
Where the Company’s accounting standard of the main business data above changed during the reporting period, give the main
business data of the latest year adjusted according to the accounting standard at the end of the reporting period:
□ Applicable √ Inapplicable
(3) Whether revenue from physical sales is higher than service revenue
√ Yes □ No
Business segment Item Unit 2016 2015 +/-%
Sales volume Piece 871,948,420 837,767,920 4.08%
Lighting fixtures and
Output volume Piece 881,564,257 827,174,901 6.58%
lamps
Inventory Piece 133,785,918 124,170,082 7.74%
Reason for any over 30% YoY movements in the data above
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
□ Applicable √ Not applicable
(4) Execution progress of major signed sales contracts in this Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of operating costs
By business segment and product
Unit: RMB Yuan
2016
As a percentage As a percentage
Business segment Item +/-%
Amount of operating costs Amount of operating costs
(%) (%)
Lighting fixtures
2,518,164,099.97 100.00% 2,185,558,581.31 100.00% 15.20%
and lamps
Lighting fixtures
Raw materials 1,696,469,566.51 67.37% 1,416,799,337.80 64.83% 19.70%
and lamps
Lighting fixtures
Labor cost 504,117,326.14 20.02% 427,667,401.28 19.57% 17.90%
and lamps
Lighting fixtures Depreciation and
299,126,920.36 11.88% 319,242,900.55 14.61% -6.30%
and lamps other
Lighting fixtures
Others 18,450,286.96 0.73% 21,848,941.68 1.00% -15.60%
and lamps
Unit: RMB Yuan
2016
As a percentage As a percentage
Product Item +/-%
Amount of operating costs Amount of operating costs
(%) (%)
LED products Raw materials 1,139,950,591.51 45.27% 713,381,463.13 32.64% 59.80%
LED products Labor cost 264,639,920.23 10.51% 246,143,230.85 11.26% 7.50%
Depreciation and
LED products 178,506,859.97 7.09% 161,101,174.91 7.37% 10.80%
other
LED products Subtotal 1,583,097,371.71 62.87% 1,120,625,868.89 51.27% 41.30%
Traditional
Raw materials 556,518,975.00 22.10% 703,417,874.67 32.18% -20.90%
lighting products
Traditional
Labor cost 239,477,405.91 9.51% 181,524,170.43 8.31% 31.90%
lighting products
Traditional Depreciation and 120,620,060.39 4.79% 158,141,725.64 7.24% -23.70%
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
lighting products other
Traditional
Subtotal 916,616,441.30 36.40% 1,043,083,770.74 47.73% -12.10%
lighting products
Others Others 18,450,286.96 0.73% 21,848,941.68 1.00% -15.60%
- Total 2,518,164,099.97 100.00% 2,185,558,581.31 100.00% 15.20%
(6) Changes in the scope of the consolidated financial statements for this Reporting Period
√ Yes □ No
One new entity is included in the consolidation scope for this Reporting Period, namely, FSL Zhida Electric
Technology Co., Ltd., newly incorporated with a registered capital of RMB50 million and in which the Company
holds a stake of 51%. Meanwhile, one entity is excluded from the consolidation scope as compared with 2015. A
creditor of subsidiary Suzhou Mont Lighting Co., Ltd. (Suzhou Mont) applied to the court for Suzhou Mont’s
bankruptcy. On June 2, 2016, the Suzhou Industrial Park court appointed Jiangsu Yingyuan Law Firm to be
Suzhou Mont’s custodian through the Decision (2016) Suzhou 0591 Civil Bankruptcy No. 03. And the control of
the Company over Suzhou Mont has ceased since that day. Pursuant to the accounting standards for business
enterprises, the Company has excluded Suzhou Mont from its consolidation scope since June 2016.
(7) Major changes in the business, products or services in this Reporting Period
□ Applicable √ Not applicable
(8) Main customers and suppliers
Main customers
Total sales to top five customers (RMB Yuan) 453,921,650.54
Total sales to top five customers as a percentage of the
13.48%
total sales for this Reporting Period (%)
Total sales to related parties among top five customers as
a percentage of the total sales for this Reporting Period 0.00%
(%)
Information about top five customers
As a percentage of the total sales for this
No. Customer Sales amount (RMB Yuan)
Reporting Period (%)
1 Customer A 178,894,550.33 5.31%
2 Customer B 99,856,231.03 2.97%
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
3 Customer C 68,775,707.72 2.04%
4 Customer D 60,385,200.44 1.79%
5 Customer E 46,009,961.02 1.37%
Total -- 453,921,650.54 13.48%
Other information about the main customers
√ Applicable □ Not applicable
None of the top 5 customers are related parties of the Company.
Main suppliers
Total purchases from top five suppliers (RMB Yuan) 330,396,017.96
Total purchases from top five suppliers as a percentage of
15.42%
the total purchases for this Reporting Period (%)
Total purchases from related parties among top five
suppliers as a percentage of the total purchases for this 4.39%
Reporting Period (%)
Information about top five suppliers
As a percentage of the total purchases for
No. Supplier Purchase amount (RMB Yuan)
this Reporting Period (%)
1 Supplier A 94,159,851.42 4.39%
2 Supplier B 70,306,793.68 3.28%
3 Supplier C 65,489,158.75 3.06%
4 Supplier D 55,099,273.74 2.57%
5 Supplier E 45,340,940.37 2.12%
Total -- 330,396,017.96 15.42%
Other information about the main suppliers
√ Applicable □ Not applicable
Among the top 5 suppliers, the 1st supplier is a related party of the Company while the other 4 are not.
3. Expense
Unit: RMB Yuan
2016 2015 +/-% Reason for any significant change
Selling expenses 204,777,965.73 203,112,498.50 0.82%
Administrative expenses 211,412,262.47 241,585,514.09 -12.49%
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Finance costs -28,457,453.89 -28,871,124.02 1.43%
4. R&D input
√ Applicable □ Not applicable
The Company always took science and technology as the first priority, paid attention to technology R&D,
constantly researched and developed new products and technologies meeting market demands, promoted the
optimization and upgrade of product structure, improved the technology content of products, and improved the
core competitiveness of the Company. Meanwhile, the Company strengthened the research on technique and
technology of products, so as to cut down product cost and improve quality. In the Reporting Period, the Company
totally spent R&D input of RMB 110.07million, occupying by3.27% of operating revenue of the Reporting
Period.
Information about R&D input:
2016 2015 +/-%
Number of R&D personnel 259 231 12.12%
R&D personnel as a percentage
2.78% 2.88% -0.10%
in the total employees
R&D input (RMB Yuan) 110,070,467.56 92,891,920.00 18.49%
R&D input as a percentage in
3.27% 3.23% 0.04%
operating revenues
Capitalized R&D input (RMB
0.00 0.00 0.00%
Yuan)
Capitalized R&D input as a
percentage in the total R&D 0.00% 0.00% 0.00%
input
Reasons for any significant YoY change in the percentage of the R&D input in the operating revenues
□ Applicable √ Not applicable
Reason for any sharp variation in the percentage of the capitalized R&D input and rationale
□ Applicable √ Not applicable
5. Cash flows
Unit: RMB Yuan
Item 2016 2015 +/-%
Subtotal of cash inflows from
3,266,614,809.01 2,904,539,258.69 12.47%
operating activities
Subtotal of cash outflows from 2,976,636,040.53 2,716,214,069.26 9.59%
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
operating activities
Net cash flows from operating
289,978,768.48 188,325,189.43 53.98%
activities
Subtotal of cash inflows from
982,592,873.51 30,861,512.16 3,083.88%
investing activities
Subtotal of cash outflows from
720,093,967.08 68,596,503.73 949.75%
investing activities
Net cash flows from investing
262,498,906.43 -37,734,991.57 795.64%
activities
Subtotal of cash inflows from
10,000,000.00
financing activities
Subtotal of cash outflows from
15,901,660.85 215,284,023.90 -92.61%
financing activities
Net cash flows from financing
-5,901,660.85 -215,284,023.90 97.26%
activities
Net increase in cash and cash
545,737,534.17 -56,155,127.23 1,071.84%
equivalents
Explanation of why the data above varied significantly
√ Applicable □ Not applicable
1. The net cash flows from operating activities increased 53.98% from last year mainly because last year, the
compensations for false stock statements were paid as required by the judgment of the court.
2. The cash inflows from investing activities increased 3083.88% from last year mainly because of the sale
through block trading of some of the Guoxuan High-tech stock held by the Company.
3. The cash outflows from investing activities increased 949.75% from last year mainly because of the bank
wealth management products purchased and the investments made in external parties.
4. The net cash flows from investing activities increased 795.64% from last year mainly because of the sale
through block trading of some of the Guoxuan High-tech stock held by the Company.
5. The cash inflows from financing activities were the cash received from minority shareholder investments by
subsidiaries.
6. The cash outflows from financing activities decreased 92.61% from last year mainly because a smaller amount
of cash dividends were distributed.
7. The net cash flows from financing activities increased 97.26% from last year mainly because a smaller amount
of cash dividends were distributed.
8. The net increase in cash and cash equivalents increased 1071.84% from last year mainly because of the sale
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
through block trading of some of the Guoxuan High-tech stock held by the Company.
Reason for any big difference between the net operating cash flow and the net profit for this Reporting Period
√ Applicable □ Not applicable
For the Reporting Period, the net operating cash flows stood at RMB 289,978,768.48 yuan while the net profits
stood at RMB 1,073,256,393.74 yuan, representing a difference of RMB-783,277,625.26 yuan, mainly because of
the sale through block trading of some of the Guoxuan High-tech stock held by the Company.
III Analysis of non-core business
√ Applicable □ Not applicable
Unit: RMB Yuan
As a percentage of
Amount Source/reason Recurring or not
total profit (%)
Sale of tradable shares in
Investment income 882,079,521.77 69.28% some investees & receipt of No
bonuses from investees
Bad-debt and inventory
Asset impairment 25,640,511.08 2.01% No
falling price provisions
Non-operating Government subsidies
3,740,686.27 0.29% No
revenue received and others
Non-operating Disposal of non-current
12,622,554.30 0.99% No
expense assets
IV Analysis of assets and liabilities
1. Significant changes in the asset composition
Unit: RMB Yuan
December 31, 2016 December 31, 2015
As a As a Change in
percentage of percentage of percentag Reason for any significant change
Amount Amount
total assets total assets e (%)
(%) (%)
1,479,283,642. Sale of some of the Guoxuan High-tech
Monetary funds 24.25% 935,241,205.20 15.46% 8.79%
54 stock
Accounts 595,257,954.0 Stop of the use of trade acceptance bills
9.76% 366,401,130.72 6.06% 3.70%
receivable 0 in settlement with customers
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
753,681,605.1
Inventories 12.36% 559,651,928.21 9.25% 3.11% Stock-up for growing sales
Mainly due to the acquisition of a
Long-term equity 210,394,932.6 32.85% stake in Primatronix (Nanho)
3.45% 382,637.52 0.01% 3.44%
investments 9 Electronics Ltd. at RMB0.18 billion in
the Current Period
446,006,929.6
Fixed assets 7.31% 484,436,218.17 8.01% -0.70%
Construction in More input to ongoing construction
71,479,325.91 1.17% 32,488,518.68 0.54% 0.63%
progress projects
2. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: RMB Yuan
Profit/loss on
Cumulative fair Impairment
fair value Purchased in Sold in this
Opening value changes provided in this Closing
Item changes in this this Reporting Reporting
balance charged to Reporting balance
Reporting Period Period
equity Period
Period
Financial assets
1. Financial
assets at fair
value through
profit/loss 51,600.00 51,600.00
(excluding
derivative
financial assets)
2.
Available-for-sa 2,787,166,401. 1,308,399,369. 1,427,901,09
965,244,565.11
le financial 96 22 6.63
assets
Subtotal of 2,787,218,001. 1,308,399,369. 1,427,901,09
965,244,565.11
financial assets 96 22 6.63
Total of the 2,787,218,001. 1,308,399,369. 1,427,901,09
965,296,165.11
above 96 22 6.63
Financial
0.00 0.00
liabilities
Significant changes in the measurement attributes of the main assets in this Reporting Period
□ Yes √ No
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
3. Restricted asset rights as of the end of this Reporting Period
Not applicable.
V Investments made
1. Total investments made
√ Applicable □ Not applicable
Investments made in this Reporting Period Investments made in the prior year (RMB
+/-%
(RMB Yuan) Yuan)
220,507,350.00 0.00 -
2. Significant equity investments made in this Reporting Period
√ Applicable □ Not applicable
Unit: RMB Yuan
The Index
Compa Source Progres Profit/l to
Amoun Project Lawsuit
Main Way of ny’s of Term of Type of s as of oss for Disclos disclose
Investe t of Partner ed s
busines investm shareho investm investm investm balance Reporti ure date d
e investm s earning involve
s ent lding ent ent ent sheet ng (if any) informa
ent s d
percent funds date Period tion (if
age any)
Product
ion and
The
operati
32.85%
on of
stake in
electric
Primatr
al
onix
Primatr product
(Nanho
onix , The
)
(Nanho commu 180,00 Compa Equity www.c
Acquisi Electro 558,68 09/03/2
) nication 0,000.0 32.85% ny’s None N/A acquisit 0.00 None ninfo.c
tion nics 6.07
Electro product 0 own ion om.cn
Ltd. has
nics , plastic funds
been
Ltd. product
transfer
, mould
red to
product
the
, radio
Compa
transmi
ny
ssion
equipm
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
ent,
handset
(mobile
phone),
LED
lighting
product
;
Import
and
export,
as well
as the
support
ing
busines
s for
the
aforesai
d
commo
dities
( not
related
to
commo
dities
manage
d by the
State-tr
ading
busines
s, and
should
be
applied
accordi
ng to
related
state
rules if
the
commo
dity is
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
related
to
quota,
license
manage
ment,
and
other
special
rules);
Leasing
busines
s of
self-ow
ned
plants
and the
support
ing
dormito
ries in
NO.100
Busha
Road,
Nanwa
n
Street,
Longga
ng
District
Product The
ion and 30%
Foshan operati stake in
Chanch on of Foshan
ang lamps, Chanch
The
Electric electric ang
Compa Equity www.c
Applia lighting Acquisi 40,507, Electric 5,984,9 10/19/2
30.00% ny’s None N/A acquisit 0.00 None ninfo.c
nces product tion 350.00 Applian 09.62
own ion om.cn
(Gaomi s and ces
funds
ng) accesso (Gaomi
Co., ries, as ng)
Ltd. well as Co.,
the Ltd. has
related been
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
installat transfer
ion and red to
consulti the
ng Compa
service ny
220,50
6,543,5
Total -- -- 7,350.0 -- -- -- -- -- -- 0 -- -- --
95.69
3. Significant non-equity investments ongoing in this Reporting Period
□ Applicable √ Not applicable
4. Financial investments
(1) Securities investments
√ Applicable □ Not applicable
Unit: RMB Yuan
Profit/lo
ss on Cumulat Source
Variety Purchas Profit/lo
Account fair ive fair Sold in
Code of Name of Initial ed in ss in of
of ing Opening value value this Closing Account
this this
securitie securitie investm measure book changes changes Reporti book investm
securitie Reporti Reporti
ment value in this charged ng value ing title
s s ent cost ng ng ent
s model Reporti to Period
Period Period
ng equity funds
Period
Availabl
Guoxua
Domesti Fair 2,708,5 1,259,5 1,355,3 e-for-sal
n 160,000 965,244 869,297 Own
c/overse 002074 value 28,165. 31,308. 83,288. e
High-tec ,000.00 ,565.11 ,039.05 funds
as stock method 00 90 49 financia
h
l asset
Availabl
Domesti China Fair e-for-sal
30,828, 78,638, 48,868, 3,523,8 72,517, Own
c/overse 601818 Everbrig value e
816.00 236.96 060.32 83.26 808.14 funds
as stock ht Bank method financia
l asset
Availabl
Domesti e-for-sal
Xiamen 292,574 Cost 292,574 292,574 Own
c/overse N/A e
Bank ,133.00 method ,133.00 ,133.00 funds
as stock financia
l asset
Foshan Availabl
Domesti 500,000 Cost 500,000 500,000 Own
N/A branch e-for-sal
c/overse .00 method .00 .00 funds
of e
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
as stock Guangd financia
ong l asset
Develop
ment
Bank
Held-for
Fair
60,039, 60,039, 27,635. -trading Own
Other 205007 7 Days value
000.00 000.00 14 financia funds
method
l asset
Held-for
Fair
140,001 140,001 131,177 -trading Own
Other 205008 14 Days value
,000.00 ,000.00 .73 financia funds
method
l asset
Held-for
Fair
205010 19,841, 19,841, 45,661. -trading Own
Other 28 days value
000.00 000.00 48 financia funds
method
l asset
Held-for
Fair
19,800, 19,800, 1,342.2 -trading Own
Bond 204001 GC001 value
198.00 198.00 3 financia funds
method
l asset
Held-for
Fair
79,803, 79,803, 26,965. -trading Own
Bond 204004 GC004 value
192.00 192.00 79 financia funds
method
l asset
Held-for
Fair
238,911, 238,911, 112,566. -trading Own
Bond 204007 GC007 value
945.00 945.00 52 financia funds
method
l asset
Held-for
Fair
19,901, 19,901, 23,161. -trading Own
Bond 204014 GC014 value
990.00 990.00 39 financia funds
method
l asset
Held-for
Domesti Fair
7,005.0 7,005.0 5,018.1 -trading Own
c/overse 300456 Navior value
0 0 0 financia funds
as stock method
l asset
1,062,2 3,658,5 1,308,3 1,720,9
965,244 873,194
Total 08,279. -- 45,864. 0.00 99,369. 0.00 75,229. -- --
,565.11 ,450.69
00 96 22
Disclosure date of the 01/23/2014
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
announcement about the
board’s consent for the
securities investment
Disclosure date of the
announcement about the
general meeting’s consent
for the securities
investment (if any)
Note: The funds for the “pledged repo” and “reverse repo of government bonds” (“other” and “bond” in the table
above) were strictly controlled within the line approved by the board, without use out of line. In order to better use
the funds, we carried out repeated investment in the mature investment products above in multiple transactions. As
such, the single investment costs for the “other” and “bond” were their accumulative amounts which were
repeatedly invested within the first quarter of 2016.
On March 24, 2016, the Eighth Board convened a third meeting, which resolved on the termination of the said
securities investment since April 2016. And the Company no longer conducts such business from April 2016.
(2) Investment in derivative financial instruments
□ Applicable √ Not applicable
No such cases in this Reporting Period
5. Use of funds raised
□ Applicable √ Not applicable
No such cases in this Reporting Period.
VI Sale of major assets and equity interests
1. Sale of major assets
√ Applicable □ Not applicable
Net Ratio Relatio Credito Execute
Owners
profit of the nship r’s d as
hip of
contrib net betwee rights schedul Index
Transac Effect Related the
uted to profit n the and ed or to
Transac tion on the Pricing -party asset
Asset Date of the contrib transact liabiliti not; if Disclos disclose
tion price Compa principl transact involve
sold sale Compa uted by ion es not, ure date d
party (RMB0 ny (see e ion or d has
ny from the sale party involve give informa
’000) note 3) not been all
the of the and the d have reasons tion
transfer
period- asset to Compa been all and
red or
begin the ny transfer measur
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
to the Compa (applica not red or es
date of ny’s ble for not taken
sale total related-
(RMB0 profit party
’000) (%) transact
ions)
Indicati
ve
Announ
No cement
impact No.
on the 2016-0
Some busines 63 on
Market
of the s Sale of
11/15/2 price
Guoxua continu Some
Block 016 96,524. 72,523. when 12/09/2
n ity and 67.57% No N/A Yes Yes Yes of
trading to7/12/ 46 37 reducin
High-te manage Guoxua
2016 g the
ch ment n
stock
stock stability High-te
of the ch
Compa Stock
ny on
www.c
ninfo.c
om.cn
2. Sale of major equity interests
□ Applicable √ Not applicable
VII Main controlled and joint stock companies
√ Applicable □ Not applicable
Main subsidiaries and joint stock companies with an over 10% influence on the Company’s net profit
Unit: RMB Yuan
Relationship Main
Company business Registered Operating Operating
with the Total assets Net assets Net profit
name scope capital revenues profit
Company
Foshan
Chansheng 41,308,724.4 24,571,267.7 175,664,083.
Subsidiary Manufacture 1,000,000.00 7,851,031.25 5,718,636.29
Electronic 3 9
Ballast Co.,
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Ltd.
Foshan
Chanchang
Electric 72,782,944.0 114,266,729. 105,963,153. 66,246,503.3
Subsidiary Manufacture 7,912,810.13 5,992,538.34
Appliances 0 01 40
(Gaoming)
Co., Ltd.
Foshan
Taimei Times 74,038,971.4 16,758,120.6 131,088,201.
Subsidiary Manufacture 500,000.00 8,021,892.93 5,746,438.79
Lamps Co., 2 0
Ltd.
FSL New
Light Source 50,000,000.0 55,563,518.2 53,824,332.1 21,731,567.3
Subsidiary Manufacture 332,396.04 193,996.43
Technology 0 5 2
Co., Ltd.
FSL
(Xinxiang) 35,418,439.7 53,791,708.3 44,370,799.3 45,581,638.6
Subsidiary Manufacture 5,296,288.75 3,819,950.09
Lighting Co., 6 9 6
Ltd.
Guangdong
Fozhao
200,000,000. 223,762,603. 223,419,736.
Financing Subsidiary Finance 4,817,241.98 3,612,931.48
00 36
Lease Co.,
Ltd.
FSL Lighting
Equipment 15,000,000.0 84,110,568.3 45,083,516.0 149,397,618. 11,733,875.5
Subsidiary manufacture 7,941,495.19
Co., Ltd. 0 8 1 25
Nanjing
Fozhao
Lighting 41,683,200.0 62,553,979.8 45,465,065.0 42,824,302.6
Subsidiary Manufacture 114,351.94 249,386.72
Components 0 7 5
Manufacturin
g Co., Ltd.
FSL Zhida
Electric 50,000,000.0 38,940,925.0 35,460,469.9
Subsidiary Manufacture 433,033.67 -52,707.59 -39,530.09
Technology 0 4
Co., Ltd.
Subsidiaries obtained or disposed in this Reporting Period
√ Applicable □ Not applicable
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
How to obtain or dispose the subsidiary in Effect on overall production and operation
Subsidiary
this Reporting Period results
Created new business and new profit
growth points to improve the Company’s
business structure, bettered the Company’s
FSL Zhida Electric Technology Co., Ltd. Newly incorporated sustained development capability and
overall earnings, and laid a foundation for
the next step of the Company’s
development strategy
Suzhou Mont Lighting Co., Ltd. Bankruptcy liquidation No great effects
Information about the main controlled and joint stock companies
—Foshan Chansheng Electronic Ballast Co., Ltd. was invested and established by the Company and Mr. Ma
Henglai and had set up and obtained license for business corporation on 26 Aug. 2003. The Company holds 75%
equities of the said company; therefore the said subsidiary was included into the scope of the consolidated
financial statements since the date of foundation.
On 24 Dec. 2013, the Company and Mr. Ma Henglai signed the equity transfer agreement. The Company
purchased 25% equity of Foshan Chansheng Electronic Ballast Co., Ltd. held by Mr. Ma Henglai. After the
purchasing, the Company held 100% equity of Foshan Chansheng Electronic Ballast Co., Ltd.
—Foshan Chanchang Electric Appliances (Gaoming) Co., Ltd., which is a Sino-foreign joint venture invested and
established by the Company and Prosperity Lamps and Components Ltd, had obtained license for business
corporation on 23 Aug. 2005 through approval by Foreign Trade and Economic Cooperation Bureau of Gaoming
District, Foshan with document “MWJMY Zi [2005] No. 79”. The Company holds 70% equities of the said
company; therefore the said subsidiary was included into the scope of the consolidated financial statements since
the date of foundation.
On 23 Aug. 2016, the Company and Prosperity Lamps and Components Ltd signed the equity transfer agreement.
The Company purchased 30% equity of Foshan Chanchang Electric Appliances (Gaoming) Co., Ltd. held by
Prosperity Lamps and Components Ltd. After the purchasing, the Company held 100% equity of Foshan
Chanchang Electric Appliances (Gaoming) Co., Ltd.
—Foshan Taimei Times Lamps Co., Ltd., which is a Sino-foreign joint venture invested and established by the
Company and Reback North America Investment Limited, had obtained license for Business Corporation on 5
Dec. 2005 through approval by Foreign Trade and Economic Cooperation Bureau of Gaoming District, Foshan
with document “MWJMY Zi [2005] No. 97”. The Company holds 70% equities of the said company; therefore
the said subsidiary was included into the scope of the consolidated financial statements since the date of
foundation.
—FSL New Light Source Technology Co., Ltd. (its predecessor was “Foshan Lighting Lamps and Lanterns Co.,
Ltd.” and it changed its name to “FSL New Light Source Technology Co., Ltd.” on 17 Dec. 2014), which is
invested and established by the Company together with Foshan Haozhiyuan Trading Co., Ltd., Shanghai Liangqi
Electric Co., Ltd, Changzhou Sanfeng Electrical & Lighting Co., Ltd., Henan Xingchen Electrical & Lighting Co.,
Ltd., Foshan Hongbang Electrical & Lighting Co., Ltd., Hebei Jinfen Trading Co., Ltd., obtaining its license for
Business Corporation on 27 Sept. 2009. The Company holds 60% equities of this company. Therefore the said
subsidiary was included into the scope of the consolidated financial statements since the date of foundation.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
On 25 Sep. 2009 and 19 Nov. 2010, the equity transfer agreement was signed between the Company and the
minority shareholders, in which the minority shareholders respectively transferred their equities of Foshan
Lighting Lamps and Lanterns Co., Ltd. to the Company. After transfer, the Company holds 100% equities of
Foshan Lighting Lamps and Lanterns Co., Ltd.
—FSL (Xinxiang) Lighting Co., Ltd. is a limited liability company which is invested and established by the
Company, obtaining its license for Business Corporation on 17 Apr. 2009. The Company holds 100% equities of
the said company, therefore the said subsidiary was included into the scope of the consolidated financial
statements since date of foundation. On 27 Aug. 2013, the 3rd Session of the 7th Board of Directors reviewed and
approved to invest another RMB 2 million (land in an industrial park in Xinxiang, Henan Province and monetary
funds) in FSL (Xinxiang) Lighting, increasing the registered capital of FSL (Xinxiang) Lighting to RMB
35,418,439.76.
—FSL Lighting Equipment Co., Ltd. is a limited liability company invested and established by the Company with
the registered capital of RMB 15 million, which had obtained its license for Business Corporation on 8 May 2013.
And the Company holds 100% equities of this company. Therefore the said subsidiary was included into the scope
of the consolidated financial statements since the date of foundation.
—In accordance with the equity transfer agreement signed between the Company and Prosperity Lamps and
Components Ltd. on 27 Aug. 2008, Prosperity Lamps and Components Ltd. transferred 100% equities of Nanjing
Fozhao Lighting Components Manufacturing Co., Ltd. (formerly known as “Prosperity (Nanjing) Lighting
Components Co., Ltd.”, and changed name to “Nanjing Fozhao Lighting Components Manufacturing Co., Ltd.”
on 15 Nov. 2010.) to the Company. Therefore, Nanjing Fozhao Lighting Components Manufacturing Co., Ltd.
became a wholly-owned subsidiary of the Company. The said subsidiary was included into the scope of the
consolidated financial statements since the merger date.
—FSL Zhida Electric Technology Co., Ltd. was incorporated by the Company, Foshan Zhibida Enterprise
Management Co., Ltd. and Dongguan Baida Semiconductor Material Co., Ltd. on a joint investment basis. FSL
Zhida obtained its business license on October 21, 2016. Holding a stake of 51% in it, the Company has included
FSL Zhida in its consolidated financial statements since the date of FSL Zhida’s incorporation.
VIII Structured bodies controlled by the Company
□ Applicable √ Not applicable
IX Outlook for the future development of the Company
(I) Development trends in the industry
As the emerging industry, the LED lighting is now in the stage of rapid development. The LED light source is
honored as the third revolution in human being’s lighting history, and has aroused the development and research
upsurge in the globe due to its advantages of high efficiency and energy-saving, green environmental protection,
as well as long service life. After several years of rapid and disordered development in the LED industry, despite
the sustainable growth of utilized LEC led by newly increased demands and replacement needs, the LED industry,
especially in the downstream application fields, is facing with obvious structural over-capacity problem. The
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
supply of low-end products and repeatable products exceeds demand, together with the intense price competitions,
resulting in companies’ growth of revenue instead of profit. The supply of high-end products and specially used
products falls short of demand, giving rise to high prices and rich profit. In the years to come, with the industry
transformation and the intensified market competitions, the LED industry will step into a period with faster
integration speed. On one hand, as for middle and small enterprises, which don’t have the advantage in core
technology of product and sales channel, the pressure from competitions and surviving will be higher and higher.
On the other hand, the advantaged enterprises will continuously make efforts on technology breakthrough, brand
building, channel extension, as well as cost cut and efficiency improvement, so as to advance the cost
performance of products and the market competitiveness. With the dual promotion of surviving pressure and
demands for brand and scale effect, the LEC industry in future will step into the peak season of integration, when
the industry competitions will gradually tend to be rational, and transfer from price competitions in the past to
competitions in technology, product, brand, and service.
(II) Development strategy in future
The Company will adhere to the path of professional development, center around the main business of lighting
products, be oriented by market demand, take the motive as technology innovation, take the core as brand
operation, build the domestic and international market net with effective covering fraction by making qualified
products and improving efficiency, comprehensively improve the Company’s operation quality and the capability
of sustainable development, as well as devote itself to becoming the top 1 brand among lighting enterprises in the
country. And at the same time, the Company will preserve in multiple development strategies, strive to develop
the electrical engineering industry, and attempt to carry forward the strategic layout where the lighting business
and the electrical engineering industry keeping the same pace.
(III) Operation plan in 2017
1. To improve R&D innovation and strengthen company competitiveness
The Company will reinforce R&D input, as well as the innovation on science and technology, introduce
high-quality R&D talents, enhance the technology communication and cooperation with external institutions,
continuously improve the technology level to “high-grade, precision, and advanced” standard, and strengthen the
growth power generated from the internal part of the Company. The Company will positively and firmly propel
the work of science and technology innovation, as well as product R&D, put forth effort to improve the
technology content and quality level of products, so as to offer guarantee for the sustainable and rapid
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
development of the Company.
2. To sustainably improve the marketing capability, and improve market share
In respect of domestic sales, the Company will further deepen channel management, emphasize on strengthening
the construction of weak channels; adjust measures to local conditions and enlarge the force of market expansion,
develop multiple end-sales activities; reinforce the promotion of new products, and continuously improve market
share. In respect of overseas sales, the Company will continue to do a good job in management and service for
major clients, develop the potential value of major clients, and improve business performance for a single client;
continue to strengthen the development of major clients, enlarge client groups and market share; to seize
opportunities arising from the deep change of industries around the world and the re-division of labor to promote
the international recognition of the Company’s own brands ;intensify the sales of self-owned brand, enhance the
promotion of self-owned brand, improve the popularity and reputation of FSL in overseas market; innovate on the
overseas sales mode, sustainably optimize product sales structure, and prioritize the development of LED lighting
products.
3. To make great efforts on electrical engineering equipment, so as to increase profit growth point for the
Company
In 2017, the Company will make great efforts on electrical engineering equipment, fully take the advantage of
resource sharing and synergistic interaction, and make the business of electrical engineering equipment bigger and
stronger. By means of further enriching the product line, perfecting sales policy, enlarging sales channels, and
strengthen the promotion of brands,the Company will make electrical engineering equipment rapidly become the
key sales revenue source besides lighting products, increase profit growth point, and improve the comprehensive
competitiveness of the Company.
4. To strengthen expense control and cut down production cost
In the face of pressure from the uprising cost of raw materials, transportation, and human labor, the Company will
continue to strengthen procurement management, enlarge the bidding coverage, reinforce the management of
quotation review and approval, enhance market analysis, improve the ability of judgment on market conditions,
cut down procurement; continuously strengthen the thorough budget management, manage and control all kinds
of expenditure from the source, control expense and cut down cost via the reversed forcing mechanism; strengthen
the management and control on production process, further improve the production automation level, and
gradually develop to the trend of intellectualization, so as to decrease human labors and improve production
efficiency.
5. To value talent training, and perfect the human resources management system
The Company will positively train and introduce talents in R&D, production, marketing, and management, put
forth efforts to organizing a staff team featuring with “unity, innovation, high-efficiency, and professionalism”;
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
continue to perfect the human resources management system, establish a remuneration appraisal system oriented
by performance; continuously improve the employee structure, improve the skill and profession level of
employees, urge the employees to develop to a direction of technicalization and professionalism, so as to meet the
long-term demand for the Company’s development.
(IV) Possible risks
1. Risks from the more and more intensified marketing competitions
The descending growth of domestic economy, the regulatory and control policy of real estate market, the weak
recovery of overseas economy, as well as the complexity and variety of political environment bring about the
uncertainty of market demand. At the same time, in an industry with sufficient competitions, the lighting products
are exposed to a market with low concentration and fierce competitions. In future, if the macro economy is further
in a downturn, and the market competitions keep fierce, the demands for the Company’s products may shrink, and
the product price may fall down, further causing effects on the Company’s business performance.
2. Risks from the price fluctuation of raw materials
The raw material cost of the Company’s lighting products accounts for about 65% of the operating cost, which
means the price fluctuation of raw materials will cause significant impact on the Company’s operating cost. Based
on the price fluctuation of raw materials, the Company will accordingly make product price adjustment, which has
hysteresis and is restricted by the supply and demand status in the market, as well as the Company’s bargain
ability. If there’s big price fluctuation of raw materials in future, and the product sales price of the Company can’t
be simultaneously adjusted in time, the profitability of the Company may therefore fluctuate.
3. Risk of loss from falling inventory price
As at the end of the Reporting Period, the net value of the Company’s inventory was RMB 753.6816million,
accounting for 22.27 % of the current assets. Inventory mainly contains raw materials, semi-finished products, and
finished products. As there’re plenty of product categories, standards, and models in the Company, the inventory
value is high. With the gradual increase of the Company’s sales revenue year after year, the raw materials and
inventory commodities reserved for production and sales will simultaneously increase, leading to high level of the
Company’s inventory. If there’re changes in price or demand in raw material market and product sales market, the
risk of loss from falling inventory price of the Company may happen.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
4. Risks from fluctuation of the exchange rate
The RMB exchange rate in China is based on market supply and demand, reference to a basket of currencies,
managed floating exchange rate system. The fluctuation of the world economy, the tension upgrade in some hot
spot areas, as well we the currency policies in different countries, will bring about the fluctuation of exchange rate.
The export business of the Company accounts for one-third of the Company’s whole business, and is obtaining
scale enlargement year after year. If there’s large fluctuation of the exchange rate, the Company’s business
performance will be affected.
X Visits paid to the Company for purposes of research, communication, interview, etc.
1. In this Reporting Period
√ Applicable □ Not applicable
Date of visit Way of visit Type of visitor Index to main inquiry information
Investor Relations-EasyIR-
01/28/2016 One-on-one meeting Institution
www.cninfo.com.cn
Investor Relations-EasyIR-
03/29/2016 One-on-one meeting Institution
www.cninfo.com.cn
Investor Relations-EasyIR-
05/06/2016 One-on-one meeting Institution
www.cninfo.com.cn
Times of visit
Number of visiting institutions
Number of visiting individuals
Number of other visitors
Significant undisclosed information disclosed,
None
revealed or leaked
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Section V Significant Events
I Profit distribution and converting capital reserve into share capital for common
shareholders
Formulation, execution or adjustments of profit distribution policy, especially cash dividend policy, for common
shareholders in this Reporting Period
√ Applicable □ Not applicable
According to the CSRC Notice on Further Implementing Matters Related to Cash Dividend Distribution of Listed
Companies (Zheng-Jian-Fa [2012] No. 37) and the Guangdong CSRC Notice on Further Implementing
Regulations Related to Dividend Distribution of Listed Companies (Guang-Dong-Zheng-Jian [2012] No. 91), in
order to further standardize the dividend mechanism, promote a scientific, sustained and stable dividend
mechanism and protect legal rights and interests of investors, in 2012, the Company convened a general meeting
to revise the dividend-related contents in its Articles of Association and specify the dividend conditions, the
lowest dividend ratio, the decision-making procedure, etc.. Meanwhile, it formulated the Management Rules for
Profit Distribution and the Return for Shareholder Plan for the Coming Three Years (2015-2017), specifying the
arrangements and forms of dividends, the cash dividend planning and the distribution intervals, which further
improved the decision-making and supervision procedures for dividend distribution. According to the Company’s
Articles of Association, the profit distributed in cash shall not be less than 30% of the distributable profit achieved
in the year.
The Company’s proposal for profit distribution and converting capital reserve into share capital for the Reporting
Period was in compliance with relevant rules such as the Company’s Articles of Association.
Special statement about cash dividend policy
In compliance with the Company’s Articles of Association and
Yes
resolution of general meeting
Specific and clear dividend standard and ratio Yes
Complete decision-making procedure and mechanism Yes
Independent directors fulfilled their responsibilities and played
Yes
their due role.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Minority interests have the chance to fully express their opinion
and desire and their legal rights and interests were fully Yes
protected.
In adjustment or alteration of the cash dividend policy, the
conditions and procedure were in compliance with applicable N/A
regulations and transparent.
Plans/proposals for profit distribution and converting capital reserve into share capital for common shareholders
for the past three years (including this Reporting Period):
For 2014, based on the total 978,563,745 shares of the Company as at December 31, 2014, a cash dividend of
RMB2.20 (tax included and dividends for B-share holders paid in the Hong Kong dollars) was distributed to the
A-share and B-share holders for every 10 shares they held, with the total distributed cash dividends reaching RMB
215,284,023.90; and 3 shares were increased, with capital reserve, to all the shareholders for every 10 shares they
held, with the increased shares totaling 293,569,123 shares.
For 2015, based on the total 1,272,132,868 shares of the Company as at December 31, 2015, a cash dividend of
RMB 0.125 yuan (tax included and dividends for B-share holders paid in the Hong Kong dollars) was distributed
to the A-share and B-share holders for every 10 shares they held, with the total distributed cash dividends reaching
RMB 15,901,660.85 yuan.
For 2016, based on the total 1,272,132,868shares of the Company as at December 31, 2016, a cash dividend of
RMB4.20(tax included and dividends for B-share holders to be paid in the Hong Kong dollars) will be distributed
to the A-share and B-share holders for every 10 shares they hold, with the total distributed cash dividends
reaching RMB534,295,804.56yuan.
Cash dividend distribution of the Company to common shareholders over the past three years (including this
Reporting Period)
Unit: RMBYuan
Net profit Proportion in net
attributable to profit attributable to
common common
Cash dividends shareholders of the shareholders of the Ratio of cash
Cash dividends in
Year dividends in other
(tax included) Company in the Company in the other forms
forms
consolidated consolidated
statements for the statements for the
year year (%)
2016 534,295,804.56 1,072,342,050.13 49.83% 0.00 0.00%
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
2015 15,901,660.85 53,405,593.12 29.78% 0.00 0.00%
2014 215,284,023.90 266,125,048.97 80.90% 0.00 0.00%
Indicate by tick mark whether the Company made profit in this Reporting Period and the profit distributable to
common shareholders of the Company was positive, but it did not put forward a proposal for cash dividend
distribution to its common shareholders
□ Applicable √ Not applicable
II Proposal for profit distribution and converting capital reserve into share capital for this
Reporting Period
√ Applicable □ Not applicable
Bonus shares for every 10 shares (share)
Dividend for every 10 shares (RMB yuan) (tax
4.20
inclusive)
Additional shares to be converted from capital
reserve for every 10 shares (share)
Total shares as the basis for the profit distribution 1,272,132,868
proposal (share)
Total cash dividends (RMB yuan) (tax included) 534,295,804.56
Distributable profit (RMB yuan) 1,448,907,867.73
Percentage of cash dividends in the total profit to 100.00%
be distributed (%)
Cash dividend policy
Where the Company is at a mature stage of development and has plans for considerable spending, in profit distribution, cash
dividends shall reach at least 40% in the total profit to be distributed.
Details about the proposal for profit distribution and converting capital reserve into share capital
As audited by Beijing Zhongzhengtiantong Certified Public Accountants LLP, the after-tax net profits of RMB
1,054,858,446.87yuan of the Company without subsidiaries for 2016, plus the opening retained profits of RMB515,436,926.40
yuan, minus the distributed profits of RMB15,901,660.85yuan for 2015 (a cash dividend of RMB0.125yuan for every 10 shares)
and the statutory surplus reserve of RMB 105,485,844.69yuan for 2016, equals the closing profits distributable to shareholders of
RMB 1,448,907,867.73yuan. The Board of Directors has proposed to allocate profits for 2016 as follows: Based on the total
1,272,132,868 shares of the Company as at December 31, 2016, a cash dividend of RMB4.20yuan(tax included and dividends for
B-share holders to be paid in the Hong Kong dollars) will be distributed to the A-share and B-share holders for every 10 shares they
hold, with the total cash dividends to be distributed reaching RMB 534,295,804.56yuan. The retained profits of RMB
914,612,063.17yuan will be carried forward into the next year. The profit allocation preplan can be effective upon review and
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
approval of the Shareholders’ General Meeting of the Company.
III Fulfillment of commitments
1. Commitments of the Company’s actual controller, shareholders, related parties and acquirer, as well as
the Company and other commitment makers, fulfilled in this Reporting Period or ongoing at the
period-end
√ Applicable □ Not applicable
Date of
Commitment Type of Period of
Commitment Contents commitment Fulfillment
maker commitment commitment
making
Electronics Group
and its
acting-in-concert
parties Shenzhen
Rising Investment
and Hong Kong
Rising Investment
have made a
commitment that
within 12 months
from the completion
of their acquisitions,
they shall not
transfer or entrust
Commitments made in
others to manage the
acquisition documents Controlling
About share lock-up shares directly or 2015-12-04 12 months Fulfilled
or shareholding shareholder
indirectly held by
alteration documents
them in the
Company, nor shall
they allow the
Company to
repurchase those
shares, except for
the case where those
shares may be
transferred for no
compensation due to
any business or
asset integration
with their actual
controller or their
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
actual controller’s
controlled
subsidiaries.
Electronics Group
and its
acting-in-concert
parties Shenzhen
Rising Investment
and Hong Kong
Rising Investment
have made a
commitment that the
business of Foshan
NationStar
Optoelectronics Co.,
Ltd. that is in
About avoidance of competition with the
Controlling
horizontal business of the 2015-12-04 24 months Ongoing
shareholder
competition Company takes up
only a small part in
NationStar’s total
business, they shall
gradually reduce or
eliminate the
horizontal
competition as
planned through
business integration
or other ways or
arrangements within
the coming
months.
Electronics Group
and its
acting-in-concert
parties Shenzhen
Rising Investment
About avoidance of
Controlling and Hong Kong
horizontal 2015-12-04 Long-standing Ongoing
shareholder Rising Investment
competition
have made more
commitments as
follows to avoid
horizontal
competition with the
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Company: 1. They
shall conduct
supervision and
restraint on the
production and
operation activities
of themselves and
their relevant
enterprises so that
besides the
enterprise above that
is in horizontal
competition with the
Company for now, if
the products or
business of them or
their relevant
enterprises become
the same with or
similar to those of
the Company or its
subsidiaries in the
future, they shall
take the following
measures: (1) If the
Company thinks
necessary, they and
their relevant
enterprises shall
reduce and wholly
transfer their
relevant assets and
business; and (2) If
the Company thinks
necessary, it is given
the priority to
acquire first, by
proper means, the
relevant assets and
business of them
and their relevant
enterprises. 2. All
the commitments
made by them to
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
eliminate or avoid
horizontal
competition with the
Company are also
applicable to their
directly or indirectly
controlled
subsidiaries. They
are obliged to urge
and make sure that
other subsidiaries
execute what’s
prescribed in the
relevant document
and faithfully honor
all the relevant
commitments. 3. If
they or their directly
or indirectly
controlled
subsidiaries break
the aforesaid
commitments and
thus cause a loss for
the Company, they
shall compensate the
Company on a
rational basis.
Electronics Group
and its
acting-in-concert
parties Shenzhen
Rising Investment
and Hong Kong
About reduction and Rising Investment
Controlling regulation of have made a
2015-12-04 Long-standing Ongoing
shareholder related-party commitment that
transactions during their direct or
indirect holding of
the Company’s
shares, they shall 1.
strictly abide by the
regulatory
documents of the
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
CSRC and the
SZSE, the
Company’s Articles
of Association, etc.
and not harm the
interests of the
Company or other
shareholders of the
Company in their
production and
operation activities
by taking advantage
of their position as
the controlling
shareholder and
actual controller; 2.
make sure that
they or their other
controlled
subsidiaries, branch
offices, jointly-run
or associated
companies (the
“Relevant
Enterprises” for
short) will try their
best to avoid or
reduce related-party
transactions with the
Company or the
Company’s
subsidiaries; 3.
strictly follow the
market principle of
justness, fairness
and equal value
exchange for
necessary and
unavoidable
related-party
transactions
between them and
their Relevant
Enterprises and the
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Company, and
withdraw from
voting when a
related-party
transaction with
them or their
Relevant Enterprises
is being voted on at
a general meeting or
a board meeting,
and execute the
relevant approval
procedure and
information
disclosure duties
pursuant to the
applicable laws,
regulations and
regulatory
documents. Where
the aforesaid
commitments are
broken and a loss is
thus caused for the
Company, its
subsidiaries or the
Company’s other
shareholders, they
shall be obliged to
compensate.
In order to ensure
the independence of
the Company in
business, personnel,
asset, organization
and finance,
Controlling Electronics Group
About independence 2015-12-04 Long-standing Ongoing
shareholder and its
acting-in-concert
parties Shenzhen
Rising Investment
and Hong Kong
Rising Investment
have made the
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
following
commitments: 1.
They will ensure the
independence of the
Company in
business: (1) They
promise that the
Company will have
the assets,
personnel,
qualifications and
capabilities for it to
operate
independently as
well as the ability of
independent,
sustainable
operation in the
market. (2) They
promise not to
intervene in the
Company’s business
activities other than
the execution of
their rights as the
Company’s
shareholders. (3)
They promise that
they and their
related parties will
not be engaged in
business that is
substantially in
competition with the
Company’s
business. And (4)
They promise that
they and their
related parties will
try their best to
reduce related-party
transactions
between them and
the Company; for
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
necessary and
unavoidable
related-party
transactions, they
promise to operate
fairly following the
market-oriented
principle and at fair
prices, and execute
the transaction
procedure and the
duty of information
disclosure pursuant
to the applicable
laws, regulations
and regulatory
documents. 2. They
will ensure the
independence of the
Company in
personnel: (1) They
promise that the
Company’s GM,
deputy GMs, CFO,
Company Secretary
and other senior
management
personnel will work
only for and receive
remuneration from
the Company, not
holding any
positions in them or
their other
controlled
subsidiaries other
than director and
supervisor. (2) They
promise the
Company’s absolute
independence from
their related parties
in labor, human
resource and salary
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
management. And
(3) They promise to
follow the legal
procedure in their
recommendation of
directors,
supervisors and
senior management
personnel to the
Company and not to
hire or dismiss
employees beyond
the Company’s
Board of Directors
and General
Meeting. 3. They
will ensure the
independence and
completeness of the
Company in asset:
(1) They promise
that the Company
will have a
production system, a
auxiliary production
system and
supporting facilities
for its operation;
legally have the
ownership or use
rights of the land,
plants, machines,
trademarks, patents
and non-patented
technology in
relation to its
production and
operation; and have
independent systems
for the procurement
of raw materials and
the sale of its
products. (2) They
promise that the
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Company will have
independent and
complete assets all
under the
Company’s control
and independently
owned and operated
by the Company.
And (3) They
promise that they
and their other
controlled
subsidiaries will not
illegally occupy the
Company’s funds
and assets in any
way, or use the
Company’s assets to
provide guarantees
for the debts of
themselves or their
other controlled
subsidiaries with. 4.
They will ensure the
independence of the
Company in
organization: (1)
They promise that
the Company has a
sound corporate
governance
structure as a
joint-stock company
with an independent
and complete
organization
structure. And (2)
They promise that
the operational and
management organs
within the Company
will independently
execute their
functions according
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
to laws, regulations
and the Company’s
Articles of
Association. And 5.
They will ensure the
independence of the
Company in
finance: (1) They
promise that the
Company will have
an independent
financial department
and financial
accounting system
with normative,
independent
financial accounting
rules. (2) They
promise that the
Company will have
independent bank
accounts and not
share bank accounts
with its related
parties. (3) They
promise that the
Company’s financial
personnel do not
hold concurrent
positions in its
related parties. (4)
They promise that
the Company will
independently pay
its tax according to
law. And (5) They
promise that the
Company can make
financial decisions
independently and
that they will not
illegally intervene in
the Company’s use
of its funds.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
The profits
distributed by the
Company in cash
Other commitments
About cash every year shall not
made to minority The Company 2009-05-27 Long-standing Ongoing
dividends be less than 30% of
interests
the distributable
profits it has
achieved in the year.
Executed on time or not Yes
Specific reasons for
failing to fulfill
N/A
commitments on time
and plans for next step
2. Where there had been an earnings forecast for an asset or project and this Reporting Period was still
within the forecast period, explain why the forecast has been reached for this Reporting Period.
□Applicable √ Not applicable
IV Occupation of the Company’s funds by the controlling shareholder or its related parties
for non-operating purposes
□ Applicable √ Not applicable
No such cases in this Reporting Period.
V Explanations given by the Board of Directors, the Supervisory Board and the independent
directors (if any) regarding the “modified auditor’s report” issued by the CPAs firm for this
Reporting Period
□ Applicable √ Not applicable
VI YoY changes in accounting policies, estimations and methods
√ Applicable □ Not applicable
On September 22, 2016, the 9th meeting of the 8th Board was convened, at which the Proposal on Accounting
Estimation Change was considered and approved. In order to present the recoverableness and risk changes of
accounts receivable in a more objective and fairer way and prevent financial risks, taken into account the actual
occurrence of bad debts on accounts receivable in the past, pursuant to the accounting standards for business
enterprises, the Company has changed the accounting estimations of the bad-debt provision percentages on
accounts receivable as follows:
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Account age Former bad-debt provision percentage Changed bad-debt provision percentage
Accounts Other accounts Accounts Other accounts
receivable receivable receivable receivable
Within 1 year 6% 6% 3% 3%
1-2 years 6% 6% 10% 10%
2-3 years 6% 6% 30% 30%
3-4 years 6% 6% 50% 50%
4-5 years 6% 6% 80% 80%
Over 5 years 6% 6% 100% 100%
The said change in accounting estimations increased the Company’s total profit for 2016 by RMB
7,956,755.73yuan.
VII Retroactive restatement due to correction of material accounting errors in this Reporting
Period
□ Applicable √ Not applicable
No such cases in this Reporting Period.
VIII YoY changes in the scope of the consolidated financial statements
√ Applicable □ Not applicable
1. As considered and approved at the sixth meeting of the eighth Board on July 19, 2016, the Company
incorporated FSL Zhida Electric Technology Co., Ltd. (FSL Zhida) through investment and thus holds a 51%
stake in it. FSL Zhida has been included in the Company’s consolidated financial statements since October 21,
2016, the date of its incorporation.
2. Suzhou Mont Lighting Co., Ltd. (Suzhou Mont), one of the Company’s controlled subsidiaries, was sued by its
creditor Suzhou LiftAll Electronics Co., Ltd. in the People’s Court of Suzhou Industrial Park, requesting the Court
to carry out bankruptcy liquidation on Suzhou Mont. The Court has ruled in favor of the plaintiff on May 9, 2016
and appointed Jiangsu Yingyuan Law Firm as the custodian of Suzhou Mont on June 3, 2016 (for details, see the
Progress Announcement on Controlled Subsidiary’s Bankruptcy and Liquidation disclosed on
www.cninfo.com.cn dated June 6, 2016). And the control of the Company over Suzhou Mont has ceased since
that day. Pursuant to the accounting standards for business enterprises, the Company has excluded Suzhou Mont
from its consolidation scope since June 2016.
IX Engagement and disengagement of CPAs firm
Current CPAs firm
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Name of the domestic CPAs firm Beijing Zhongzhengtiantong Certified Public Accountants LLP
The Company’s payment for the domestic CPAs firm
(RMB’0,000)
Consecutive years of the audit service provided by
the domestic CPAs firm
Names of the certified public accountants from the
Tong Quanyong, Luo Dongri
domestic CPAs firm
Name of the foreign CPAs firm (if any) N/A
The Company’s payment for the foreign CPAs firm
(RMB’0,000) (if any)
Consecutive years of the audit service provided by
the foreign CPAs firm (if any)
Names of the certified public accountants from the
N/A
foreign CPAs firm (if any)
Indicate by tick mark whether the CPAs firm was changed in this Reporting Period.
√ Yes □ No
Indicate by tick mark whether the CPAs firm was changed during the audit.
□ Yes √ No
Indicate by tick mark whether the approval procedure was executed to change the CPAs firm.
√ Yes □ No
Details about the change of the CPAs firm
Pursuant to the applicable regulations and requirements of authorities, as considered and approved by the
company's 2015 annual general meeting of shareholders, the Company changed during this Reporting Period its
financial auditor and internal control auditor to Beijing Zhongzhengtiantong Certified Public Accountants LLP for
2016.
CPAs firm, financial advisor or sponsor engaged for internal control audit
√ Applicable □ Not applicable
In the Reporting Period, the Company engaged Beijing Zhongzhengtiantong Certified Public Accountants LLP as
its internal control auditor with the total audit fees of RMB 480000 yuan.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
X Possibility of listing suspension or termination after disclosure of this Report
□ Applicable √ Not applicable
XI Bankruptcy and restructuring
□ Applicable √ Not applicable
No such cases in this Reporting Period.
XII Significant litigations and arbitrations
√ Applicable □ Not applicable
In Mar. 2013, CSRC Guangdong administered an administrative punishment on the illegal information disclosure
of the Company. During the period from Sept. 2013 to May 2016, a total of 2,769 plaintiffs separately sued the
Company to Guangzhou Intermediate People’s Court for false securities statements, demanding civil
compensations of RMB386.845 million and HKD1.328 million in total from the Company for its illegal
information disclosure. As of January 13, 2017, all the 2,769 cases had been tried and the verdicts had taken effect.
According to the verdicts, the Company shall compensate the plaintiffs with a total of RMB182.7365 million and
HKD7.3582million and bear the legal fare of RMB 3.2332million. As of March 27, 2017, the Company had made
compensations to the 2,719 plaintiffs (excluding 49 plaintiffs who were overruled) for
RMB190.1732million(including legal fees). Thus, these cases of false securities statements have all been closed.
They had an influence of RMB61.4383 million on the total profits of the Company in 2014 and RMB131.8899
million on that in 2015, and little influence on the financial results of 2016.
XIII Punishments and rectifications
□ Applicable √ Not applicable
No such cases in this Reporting Period.
XIV Credit conditions of the Company as well as its controlling shareholder and actual
controller
√ Applicable □ Not applicable
In the Reporting Period, the controlling shareholder and actual controller of the Company were in a good credit
position, without unsatisfied court judgments, large-amount overdue liabilities or the like.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
XV Implementation of any equity incentive plan, employee stock ownership plan or other
incentive measures for employees
□ Applicable √ Not applicable
No such cases in this Reporting Period.
XVI Significant related-party transactions
1. Related-party transactions relevant to routine operation
√ Applicable □ Not applicable
Obtaina
Proporti ble
on in Approv market
Index
Relation Transact Transact total ed price for
Contents Over to
Related ship Type of Pricing ion ion amounts transacti Mode of transacti
of approve Disclos disclose
transactio with the transacti principl price(R amount of on line settleme on of
transacti d line or ure date d
n party Compan on e MB’0,0 (RMB’0 transacti (’ nt the
on not informa
y 00) ,000) ons of RMB’0, same
tion
same 000) kind(R
kind MB’
0,000)
Purchasi
Corpora ng
tion that products
Prosperity
holds and Purchas
Lamps & www.c
over 5% receivin e of Market Remitta 03/28/2
Compone 193.05 193.05 0.09% 650 No 193.05 ninfo.c
shares g labor material price nce
nts om.cn
of the service s
Limited
Compan from
y related
party
Acting-i
Purchasi
n-conce
ng
rt party
products
of a
Prosperity and Purchas
corporat www.c
Electrical receivin e of Market Remitta 03/28/2
ion that 636.80 636.8 0.30% 1,500 No 636.80 ninfo.c
(China) g labor material price nce
holds om.cn
Co., Ltd. service s
over 5%
from
shares
related
of the
party
Compan
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
y
Acting-i
n-conce Purchasi
rt party ng
Hangzhou of a products
Times corporat and Purchas
www.c
Lighting ion that receivin e of Market Remitta 03/28/2
174.93 174.93 0.08% 350 No 174.93 ninfo.c
and holds g labor material price nce
om.cn
Electrical over 5% service s
Co., Ltd. shares from
of the related
Compan party
y
Purchasi
ng
Foshan products
Under
NationSta and Purchas
same www.c
r receivin e of Market 9,415.9 9,415.9 Remitta 9,415.9 03/28/2
actual 4.39% 30,000 No ninfo.c
Optoelect g labor material price 9 9 nce 9 016
controll om.cn
ronics service s
er
Co., Ltd. from
related
party
Purchasi
ng
Guangdo products
Under
ng and Purchas
same www.c
Fenghua receivin e of Market Remitta 03/28/2
actual 854.51 854.51 0.40% 2,000 No 854.51 ninfo.c
Advanced g labor material price nce
controll om.cn
Holding service s
er
Co., Ltd. from
related
party
Purchasi
ng
Guangdo products
Under
ng and Purchas
same
Huayueba receivin e of Market Remitta
actual 139.17 139.17 0.06% No 139.17 N/A
o New g labor material price nce
controll
Energy service s
er
Co., Ltd. from
related
party
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Selling
Corpora
products
tion that
Prosperity and
holds
Lamps & providin www.c
over 5% Selling Market 2,634.3 2,634.3 Remitta 2,634.3 03/28/2
Compone g labor 0.79% 4200 No ninfo.c
shares products price 9 9 nce 9 016
nts service om.cn
of the
Limited to
Compan
related
y
party
Acting-i
n-conce
Selling
rt party
Prosperity products
of a
(Hangzho and
corporat
u) providin www.c
ion that Selling Market Remitta 03/28/2
Lighting g labor 13.25 13.25 0.00% 350 No 13.25 ninfo.c
holds products price nce
and service om.cn
over 5%
Electrical to
shares
Co., Ltd. related
of the
party
Compan
y
Acting-i
n-conce
Selling
rt party
products
of a
and
Prosperity corporat
providin www.c
Electrical ion that Selling Market Remitta 03/28/2
g labor 29.59 29.59 0.01% 120 No 29.59 ninfo.c
(China) holds products price nce
service om.cn
Co., Ltd. over 5%
to
shares
related
of the
party
Compan
y
An
Selling
acting-i
products
n-conce
and
OSRAM rt party
providin www.c
(China) of Selling Market Remitta 03/28/2
g labor 504.93 504.93 0.15% 1,300 No 504.93 ninfo.c
Lighting corporat products price nce
service om.cn
Co., Ltd. ion that
to
held
related
over 5%
party
shares
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
of the
Compan
y within
the past
months
An
acting-i
n-conce
rt party
Selling
of
products
corporat
and
Osram ion that
providin www.c
Asia held Selling Market Remitta 03/28/2
g labor 548.02 548.02 0.16% 2,500 No 548.02 ninfo.c
Pacific over 5% products price nce
service om.cn
Ltd. shares
to
of the
related
Compan
party
y within
the past
months
A
Selling
compan
Shanghai products
y with a
Linxian and
related
Mechanic providin www.c
individu Selling Market Remitta 03/28/2
al and g labor 15.63 15.63 0.00% 70 No 15.63 ninfo.c
al in it products price nce
Electrical service om.cn
as a
Equipmen to
senior
t Co., Ltd. related
executiv
party
e
Selling
products
Foshan
Under and
NationSta
same providin www.c
r Selling Market Remitta 03/28/2
actual g labor 14.00 14.00 0.00% 100 No 14.00 ninfo.c
Optoelect products price nce
controll service om.cn
ronics
er to
Co., Ltd.
related
party
15,174.
Total -- -- -- 43,140 -- -- -- -- --
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Details of any sales return of a large
N/A
amount
In March 2016, the Company predicted the total amounts of its routine transactions with
related parties Foshan NationStar Optoelectronics Co., Ltd., Guangdong Fenghua Advanced
Give the actual situation in this Holding Co., Ltd., OSRAM (China) Lighting Co., Ltd., OSRAM (China) Lighting Co.,
Reporting Period (if any) where a Ltd., Osram Asia Pacific Ltd., Prosperity Lamps & Components Limited, Prosperity
forecast had been made for the total Electrical (China) Co., Ltd., Prosperity (Hangzhou) Lighting and Electrical Co., Ltd.,
amounts of routine related-party Hangzhou Times Lighting and Electrical Co., Ltd. and Shanghai Linxian Mechanical and
transactions by type to occur in this Electrical Equipment Co., Ltd. Concerning the purchases from its related parties, the actual
Reporting Period amount in 2016 was RMB114.1445million, accounting for 33.09% of the predicted. As for
the sales to its related parties, the actual amount in 2016 was RMB37.5980million,
accounting for 43.52% of the predicted.
Reason for any significant difference
between the transaction price and the N/A
market reference price (if applicable)
2. Related-party transactions regarding purchase or sales of assets or equity interests
√ Applicable □ Not applicable
Book Assessed
value of value of
Relations Type of Contents Price of Index to
Related the the Profit/loss
hip with the of the Pricing transfer Mode of Disclosur disclosed
transactio transferre transferre (RMB’0,
the transactio transactio principle (RMB’0, settlement e date informati
n party d asset d asset 000)
Company n n 000) on
(RMB’0, (RMB’0,
000) 000)
The Announc
Company ement
acquired No.
the 30% 2016-042
stake held on
Sharehold by Acquisiti
Prosperity er that Prosperity on of
Accordin
Lamps & holds Equity Lamps & Stake in
g to the 08/25/201
Compone over 5% acquisitio Compone 2,976.52 4,050.74 4,050.74 In cash 0 Controlle
assessed
nts shares of n nts d
value
Limited the Limited Subsidiar
Company in Foshan y&
Chanchan Related-p
g Electric arty
Appliance Transacti
s on on
(Gaoming www.cnin
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
) Co., Ltd. fo.com.cn
Reason for any large difference between
the transfer price and the book value or N/A
assessed value (if any)
After the acquisition, Foshan Chanchang Electric Appliances (Gaoming) Co., Ltd.
Effect on the Company’s business results became a wholly-owned subsidiary of the Company. For the Reporting Period, Foshan
and financial position Chanchang Electric Appliances (Gaoming) Co., Ltd. achieved operating revenues of
RMB 66.2465million and net profit of RMB 5.9925million.
Performance of the asset in this Reporting
Period when a performance-related N/A
undertaking is involved in the transaction
3. Related-party transitions regarding joint investments
√ Applicable □ Not applicable
Relationship Registered Total assets of Net assets of Net profit of
Main business
Joint investor with the Investee capital of investee investee investee
of investee
Company investee (RMB’0,000) (RMB’0,000) (RMB’0,000)
Production and
operation of
electrical
product,
communication
product, plastic
product, mould
product, radio
transmission
equipment,
Guangdong Shareholder handset (mobile
Primatronix
Electronics that holds phone), LED
(Nanho) RMB63.33
Information over 5% lighting 17,094.32 1,356.06 -171.47
Electronics million
Industry shares of the product; Import
Ltd.
Group Ltd. Company and export, as
well as the
supporting
business for the
aforesaid
commodities
( not related to
commodities
managed by the
State-trading
business, and
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
should be
applied
according to
related state
rules if the
commodity is
related to quota,
license
management,
and other
special rules);
Leasing
business of
self-owned
plants and the
supporting
dormitories in
NO.100 Busha
Road, Nanwan
Street,
Longgang
District
Progress on significant
ongoing construction N/A
projects of investee (if any)
4. Credits and liabilities with related parties
□ Applicable √ Not applicable
No such cases in this Reporting Period.
5. Other significant related-party transactions
√ Applicable □ Not applicable
On December 23, 2016, the Company held the 11th meeting of the 8th Board of Directors, and the Proposal on
Signing the Financial Services Agreement with Guangdong Rising Finance Co., Ltd. was examined and approved
at the meeting. On the same day, the Company signed the Financial Services Agreement with Guangdong Rising
Finance Co., Ltd. (hereinafter referred to as “Rising Finance”), and Rising Finance would provide deposit and
settlement services for the Company. During the term of validity of the Agreement, the daily deposit balance of
the Company in Rising Finance Company shall not exceed RMB 150 million. During the Reporting Period, the
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
daily deposit balance held of the Company in Rising Finance Company was RMB 100 million, and the interest
income incurred and recognized in the Reporting Period was RMB 42000 yuan.
Index to the current announcements about the said related-party transactions disclosed
Title of current announcement Disclosure date Disclosure website
Announcement on Signing Financial Service
Agreement with Guangdong Rising Finance 12/24/2016 www.cninfo.com.cn
Co., Ltd.
XVII Significant contracts and execution
1. Entrustment, contracting and leasing
(1) Entrustment
□ Applicable √ Not applicable
No such cases in this Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in this Reporting Period.
(3) Leasing
√ Applicable □ Not applicable
Particulars about leasing:
The Company and Shanghai Jiabao Industry & Commerce (Group) Co., Ltd. (hereinafter referred to as “Shanghai
Jiabao) signed , where Shanghai Jiabao agreed to license the Company to
exclusively use its trademarks “Hu Zi” (registration No.: 100940), “Lian He” (registration No.: 100950) and “Lian
He” (registration No.: 3603597) from 1 Jan. 2014 to 31 Dec. 2016; and the Company shall pay to Shanghai Jiabao
1% of the net sales of products produced by the Company and carrying the licensed trademarks as the license fee,
but it shall not be less than RMB1 million per year (for details, see the “Announcement No. 2014-002 on Signing
” disclosed on http://www.cninfo.com.cn dated 9 Jan. 2014).
Any leasing event incurring profit/loss over 10% of the total profits of the Company for this Reporting Period
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
□ Applicable √ Not applicable
No such cases in this Reporting Period.
2. Significant guarantees
□ Applicable √ Not applicable
No such cases in this Reporting Period.
3. Entrusted cash management
(1) Entrusted cash management
√ Applicable □ Not applicable
Unit: RMB'0,000
Actuall
y
Actual
receive
principal Amount Actual
Related-p Method d/paid
Commenc amount provided profit/loss
arty Product Entrusted Terminati of Projected profit/l
Trustee ement recovered for in this
transactio type amount on date remunerat earnings oss in
date in this impairme Reporting
n (yes/no) ion this
Reporting nt (if any) Period
Reporti
Period
ng
Period
Xindache
Principal
ng Guarantee
repaymen
sub-branc d principal
04/05/201 07/07/201 t with Receiv
h of Bank No and 3,000 3,000 23.82
6 6 interest ed
of floating
upon
Guangzho interest
maturity
u
Foshan
Principal
Dunhou Guarantee
repaymen
sub-branc d principal
04/05/201 05/10/201 t with Receiv
h of No and 4,000 4,000 9.59
6 6 interest ed
China floating
upon
Construct interest
maturity
ion Bank
Sales Guarantee Principal
Departme d principal 04/05/201 05/10/201 repaymen Receiv
No 5,000 5,000 13.42
nt of and 6 6 t with ed
Foshan floating interest
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
branch of interest upon
Industrial maturity
and
Commerc
ial Bank
of China
Principal
Foshan Guarantee
repaymen
branch of d principal
04/15/201 05/20/201 t with Receiv
China No and 8,000 8,000 25.32
6 6 interest ed
Minsheng floating
upon
Bank interest
maturity
Guangzho
Principal
u Guarantee
repaymen
Huanshid d principal
04/08/201 07/08/201 t with Receiv
ong No and 8,000 8,000
6 6 interest ed
sub-branc floating
upon
h of SPD interest
maturity
Bank
Principal
Guarantee
Foshan repaymen
d principal
branch of 04/15/201 07/04/201 t with Receiv
No and 10,000 10,000 72.33
Huaxia 6 6 interest ed
floating
Bank upon
interest
maturity
Principal
Foshan Guarantee
repaymen
Jiangwan d principal
05/12/201 08/11/201 t with Receiv
sub-branc No and 3,000 3,000 20.57
6 6 interest ed
h of Ping floating
upon
An Bank interest
maturity
Foshan
Principal
Dunhou Guarantee
repaymen
sub-branc d principal
05/16/201 11/14/201 t with Receiv
h of No and 8,000 8,000 123.66
6 6 interest ed
China floating
upon
Construct interest
maturity
ion Bank
Sales Guarantee Principal
Departme d principal 05/16/201 11/14/201 repaymen Receiv
No 5,000 5,000 73.55
nt of and 6 6 t with ed
Foshan floating interest
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
branch of interest upon
Industrial maturity
and
Commerc
ial Bank
of China
Sales
Departme
nt of Principal
Guarantee
Foshan repaymen
d principal
branch of 06/06/201 12/05/201 t with Receiv
No and 3,000 3,000 42.63
Industrial 6 6 interest ed
floating
and upon
interest
Commerc maturity
ial Bank
of China
Xindache
Principal
ng Guarantee
repaymen
sub-branc d principal
07/15/201 10/13/201 t with Receiv
h of Bank No and 3,000 3,000 22.22
6 6 interest ed
of floating
upon
Guangzho interest
maturity
u
Principal
Foshan Guarantee
repaymen
Jiangwan d principal
07/14/201 10/13/201 t with Receiv
sub-branc No and 3,000 3,000 22.44
6 6 interest ed
h of Ping floating
upon
An Bank interest
maturity
Guangzho
Principal
u Guarantee
repaymen
Huanshid d principal
07/21/201 10/21/201 t with Receiv
ong No and 5,000 5,000 37.5
6 6 interest ed
sub-branc floating
upon
h of SPD interest
maturity
Bank
Principal
Foshan Guarantee
repaymen
Jiangwan d principal
08/16/201 10/11/201 t with Receiv
sub-branc No and 3,000 3,000 12.43
6 6 interest ed
h of Ping floating
upon
An Bank interest
maturity
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Foshan
Principal
Dunhou Guarantee
repaymen
sub-branc d principal
11/16/201 12/28/201 t with Receiv
h of No and 500 500 1.27
6 6 interest ed
China floating
upon
Construct interest
maturity
ion Bank
Principal
Foshan Guarantee
repaymen
branch of d principal To be
08/16/201 02/16/201 t with
China No and 3,000 3,000 49.07 36.08 receive
6 7 interest
Minsheng floating d
upon
Bank interest
maturity
Shenzhen
Chegong Principal
Guarantee
miao repaymen
d principal To be
sub-branc 09/06/201 03/06/201 t with
No and 5,000 5,000 61.99 40.06 receive
h of 6 7 interest
floating d
China upon
interest
Bohai maturity
Bank
Principal
Foshan Guarantee
repaymen
Jiangwan d principal To be
10/19/201 t with
sub-branc No and 6,000 04/19/217 6,000 85.27 34.20 receive
6 interest
h of Ping floating d
upon
An Bank interest
maturity
Xindache
Principal
ng Guarantee
repaymen
sub-branc d principal To be
10/28/201 06/02/201 t with
h of Bank No and 3,000 3,000 53.51 16.02 receive
6 7 interest
of floating d
upon
Guangzho interest
maturity
u
Foshan
Principal
Dunhou Guarantee
repaymen
sub-branc d principal To be
11/16/201 02/22/201 t with
h of No and 2,500 2,500 16.11 5.35 receive
6 7 interest
China floating d
upon
Construct interest
maturity
ion Bank
Sales No Guarantee 5,000 11/17/201 02/16/201 Principal 5,000 36.15 17.88 To be
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Departme d principal 6 2 repaymen receive
nt of and t with d
Guangzho floating interest
u branch interest upon
of China maturity
CITIC
Bank
Sales
Departme
nt of Principal
Guarantee
Foshan repaymen
d principal To be
branch of 11/16/201 05/18/201 t with
No and 5,000 5,000 66.07 16.34 receive
Industrial 6 7 interest
floating d
and upon
interest
Commerc maturity
ial Bank
of China
Principal
Foshan Guarantee
repaymen
branch of d principal To be
11/18/201 02/21/201 t with
China No and 5,000 5,000 40.90 18.68 receive
6 7 interest
Minsheng floating d
upon
Bank interest
maturity
Principal
Foshan Guarantee
repaymen
branch of d principal To be
11/18/201 02/21/201 t with
China No and 5,500 5,500 44.99 20.37 receive
6 7 interest
Minsheng floating d
upon
Bank interest
maturity
Total 111,500 -- -- -- 111,500 454.06 769.45 --
Source of entrusted cash The Company’s own idle funds
Cumulative principals and
interest overdue
Lawsuits (if applicable) N/A
Disclosure date of the
announcement about the board’s
03/28/2016
consent for the cash management
entrustment (if any)
Disclosure date of the
announcement about the consent
of the shareholders’ meeting for
the cash management
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
entrustment (if any)
Any plans for cash management
Yes
entrustment in the future
(2) Entrusted loans
□ Applicable √ Not applicable
No such cases in this Reporting Period.
4. Other significant contracts
□ Applicable √ Not applicable
No such cases in this Reporting Period.
XVIII Social responsibilities
1. Targeted measures taken to help people lift themselves out of poverty
□ Applicable √ Not applicable
2. Other social responsibilities taken
We have always attached importance to the accomplishment of our social value. With “provide returns for
shareholders, 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 the
natural environment and safeguarding social safety so as to promote common, harmonious and sustainable
development of the Company and the society.
A. Protection of the rights and interests of our shareholders and creditors
We 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.
B. 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
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
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.
C. Protection of the rights and interests of our customers and consumers
We have been upholding the “Customer First” principle in our provision of quality products and services 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 services and try to build a
win-win relationship with our customers.
D. Protection of the rights and interests of our suppliers
We respect and protect the legal rights and interests of our suppliers, carefully protect their secret and 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 realize mutual benefits and mutual
development of the suppliers and the Company.
E. Environmental protection and sustainable development
As an active response to the government’s call for building an environment-friendly and resource-saving society,
we take on our responsibility of environmental protection and strictly abide by the government’s laws and
regulations in environmental protection. In the Reporting Period, we enhanced the R&D, promotion and sale of
environment-friendly and high-efficient products. We have passed the ISO14001 environmental management
system certification, passed the province’s voluntary clean production examination and won the title of “Clean
Production Enterprise in Guangdong Province”.
F. 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.
Is the Company or any of its subsidiaries a heavily polluting business identified by the environmental protection
authorities of China?
No.
Indicate by tick mark whether a social responsibility report is released
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
□ Yes √ No
XIX Other significant events
√ Applicable □ Not applicable
On August 23, 2016, the Company held the 1st Extraordinary Shareholders’ General Meeting in 2016, examined
and approved the Proposal on Authorizing the Reduction in Holding of Part of the Stocks of Guoxuan High-tech in
Due Time, and authorized the management of the Company to choose the time to reduce holding part of the stocks
of Guoxuan High-tech through block trading or aggregate auction in accordance with the laws and regulations
from the date of approval by the shareholders’ General Meeting to December 31, 2016. The reduction shall not
exceed 3650 shares, and the price shall be determined according to the market price when the reduction was
implemented.
From November 15, 2016 to December 7, 2016, the Company reduced holding 29,270,000 shares of Guoxuan
High-tech through the block trading, accounting for 3.34% of the total share capital of Guoxuan High-tech. The
total turnover was RMB 965.2446 million. After deducting costs and related taxes and fees, The company
achieved an investment income of RMB853.2161 million, contributing RMB725.2337 million to the net profit of
the Company for 2016. As of the end of the Reporting Period, the Company still holds 43,736,150 shares of
Guoxuan High-tech, accounting for 4.98% of the total share capital of Guoxuan High-tech.
XX Significant events of subsidiaries
√ Applicable □ Not applicable
During the Reporting Period, Suzhou Mont Lighting Co., Ltd. (hereinafter referred to as “Suzhou Mont”), a
subsidiary of the Company, was filed for bankruptcy liquidation by the creditor Suzhou Liftall Electronics Co.,
Ltd. with the Suzhou Industrial Park People’s Court. Suzhou Industrial Park People’s Court had accepted the
bankruptcy liquidation application and designated Jiangsu Yingyuan Law Firm as the administrator of Suzhou
Mont. The Company’s investment in Suzhou Mont was RMB 24.36 million, and the claims that hadn’t been
recognized by the judiciary were RMB 14,187,300, totaling RMB 38,547,300. In the year of 2015, the Company
has made provision for impairment of the aforesaid assets in full. (For details, please refer to Announcement on
Holding Subsidiary Suzhou Mont Lighting Co., Ltd. Being Filed for Bankruptcy Liquidation, Announcement on
the Court’s Acceptance of the Bankruptcy Liquidation Matters of the Holding Subsidiary and Announcement on
the Progress of Bankruptcy Liquidation of the Holding Subsidiary published on http://www.cninfo.com.cn on
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
April 19, 2016, May 10, 2016 and June 4, 2016).
The bankruptcy liquidation of Suzhou Mont did not have any significant impact on the Company’s operating and
performance in 2016.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Section VI Share Changes and Shareholders’ Profile
I Share changes
1. Share changes
Unit: share
Before Increase/decrease (+/-) After
Increase
Percentag New Bonus from Percentag
Number Other Subtotal Number
e (%) issues shares capital e (%)
reserve
12,655,86 12,522,47
0.99% -133,382 -133,382 0.98%
1. Restricted shares 1
1.3 Shares held by other
4,539,832 0.36% -133,382 -133,382 4,406,450 0.34%
domestic investors
Among which: Shares held
3,959,926 0.31% -99,251 -99,251 3,860,675 0.30%
by domestic corporations
Shares held by
579,906 0.05% -34,131 -34,131 545,775 0.04%
domestic individuals
1.4 Shares held by foreign
8,116,029 0.64% 8,116,029 0.64%
investors
Shares held by
8,116,029 0.64% 8,116,029 0.64%
foreign individuals
1,259,477, 1,259,610
99.01% 133,382 133,382 99.02%
2. Non-restricted shares 007 ,389
974,861,5 974,940,0
2.1 RMB common shares 76.63% 78,457 78,457 76.64%
88
2.2 Domestically listed 284,615,4 284,670,3
22.37% 54,925 54,925 22.38%
foreign shares 19
1,272,132, 1,272,132
3. Total shares 100.00% 100.00%
868 ,868
Reasons for any share changes
√ Applicable □ Not applicable
1. During this Reporting Period, the ownership of 17,564 restricted shares was transferred from domestic
corporations to domestic individuals, and these shares have been unlocked as non-restricted shares on October 27,
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
2016.
2. 114,618 restricted shares (81,687 shares held by domestic corporations and 32,931 shares by domestic
individuals) have been unlocked as non-restricted shares on October 27, 2016.
3. During this Reporting Period, the Company’s shares held by some new supervisors and outgoing directors and
executive officers were locked up or unlocked as stipulated, resulting in an increment of 31,889 non-restricted
shares.
4. During this Reporting Period, some supervisors and executive officers increased their shareholdings in the
Company, representing an increase of 13,125restricted shares.
5. Due to Item 2, 3 and 4 above, the Company’s restricted shares decreased by 133,382 shares in the Reporting
Period.
Approval of share changes
√ Applicable □ Not applicable
Upon the review and approval of the Shenzhen Stock Exchange and the Shenzhen branch of China Securities
Depository and Clearing Co., Ltd., 114,618 restricted shares became tradable on October 27, 2016 (for details, see
the Indicative Announcement No. 2016-057 on Unlocking Shares disclosed on www.cninfo.com.cn dated October
26, 2016).
Transfer of share ownership
□ Applicable √ Not applicable
Effects of share changes on the basic EPS, diluted EPS, net assets per share attributable to common shareholders
of the Company and other financial indexes over the prior year and the prior period
□ Applicable √ Not applicable
Other contents that the Company considers necessary or is required by the securities regulatory authorities to
disclose
□ Applicable √ Not applicable
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
2. Changes in restricted shares
√ Applicable □ Not applicable
Unit: share
Reason for
Name of Opening Unlocked in this Increased in this Closing restricted Date of
lock-up/unlockin
shareholder restricted shares Reporting Period Reporting Period shares unlocking
g
Lock-up of
Zhang Xuequan 8,483 0 1,425 9,908 executive Uncertain
officer’s shares
Lock-up of
Ye Zhenghong 21,996 0 11,700 33,969 supervisor’s Uncertain
shares
Lock-up of
outgoing
Xie Qing 22,912 0 8,613 31,525 05/27/2017
executive
officer’s shares
Expiration of
lock-up of
Pan Jie 55,900 55,900 0 0 06/26/2016
outgoing
director’s shares
Foshan
Restricted shares
Enterpreneur
81,687 81,687 0 0 before going 10/27/2016
Directors
public
Association
Restricted shares
Zhou Zuliang 13,174 13,174 0 0 before going 10/27/2016
public
Restricted shares
Han Yuqin 10,977 10,977 0 0 before going 10/27/2016
public
Restricted shares
Chen Xianming 4,390 4,390 0 0 before going 10/27/2016
public
Restricted shares
Zhang Sirui 4,390 4,390 0 0 before going 10/27/2016
public
Lock-up of
Lin Qing 0 0 15,398 15,398 supervisor’s Uncertain
shares
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Total 223,909 170,518 37,136 90,800 -- --
II Issuance and listing of securities
1. Securities (excluding preference shares) issued in this Reporting Period
□ Applicable √ Not applicable
2. Changes in total shares of the Company and the shareholder structure, as well as the asset and liability
structures
□ Applicable √ Not applicable
3. Existing employee-held shares
□ Applicable √ Not applicable
III Shareholders and actual controller
1. Total number of shareholders and their shareholdings
Unit: share
Total number of
preference
Total number of
Total number of shareholders
common
preference with resumed
Total number shareholders at
shareholders with voting rights at
of common the prior
85,213 85,567 resumed voting 0 the prior
shareholders at month-end
rights at the month-end
the period-end before the
period-end (if any) before the
disclosure of this
(see note 8) disclosure of this
Report
Report (if any)
(see note 8)
5% or greater shareholders or the top 10 shareholders
Total Increase/ Pledged or frozen shares
Number Number
Sharehold shares decrease
of of
Name of Nature of ing held at during
restricted non-restric
shareholder shareholder percentag the this Status Number
shares ted shares
e (%) period-en Reporting
held held
d Period
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Hong Kong Wah
Foreign 171,360,3 171,360,3
Shing Holding 13.47% 0 0 Pledged 83,966,592
corporation 91
Company Limited
Prosperity Lamps
Foreign 133,577,1 133,577,1
& Components 10.50% 0
corporation 43
Limited
Shenzhen Rising
Investment State-owned 65,178,30 65,178,30
5.12% 25641558 0
Development Co., corporation 5
Ltd.
Guangdong
Electronics
State-owned 60,357,72 60,357,72
Information 4.74% 0 0 Pledged 29,575,287
corporation 8
Industry Group
Ltd.
Central Huijin
State-owned 30,799,00 30,799,00
Asset Management 2.42% 0
corporation 0
Co., Ltd.
Essence
International Foreign 23,794,84 23,794,84
1.87% 219287 0
Securities (Hong corporation 8
Kong) Co., Ltd.
DBS Vickers
Foreign 23,555,75 23,555,75
(Hong Kong) Ltd 1.85% 1620492 0
corporation 5
A/C Clients
Hong Kong Rising
Investment Foreign 23,165,68 23,165,68
1.82% 0
Development Co., corporation 4
Ltd.
National Social
14,368,80 14,368,80
Security Fund Other 1.13%
2
Portfolio 113
10,821,37 10,821,37
Zhuang Jianyi Foreign individual 0.85% 0
2
Strategic investors or general
corporations becoming top-ten
N/A
shareholders due to placing of new
shares (if any) (see Note 3)
Among the top 10 shareholders, Hong Kong Wah Shing Holding Company Limited,
Related or acting-in-concert parties
Shenzhen Rising Investment Development Co., Ltd., Guangdong Electronics Information
among the shareholders above
Industry Group Ltd. and Hong Kong Rising Investment Development Co., Ltd. are
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
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.
Shareholdings of the top ten non-restricted shareholders
Number of non-restricted shares held at the Type of shares
Name of shareholder
period-end Type Number
Hong Kong Wah Shing Holding RMB common
171,360,391 171,360,391
Company Limited share
Prosperity Lamps & Components RMB common
133,577,143 133,577,143
Limited share
Shenzhen Rising Investment RMB common
65,178,305 65,178,305
Development Co., Ltd. share
Guangdong Electronics Information RMB common
60,357,728 60,357,728
Industry Group Ltd. share
Central Huijin Asset Management Co., RMB common
30,799,000 30,799,000
Ltd. share
Domestically
Essence International Securities (Hong
23,794,848 listed foreign 23,794,848
Kong) Co., Ltd.
share
Domestically
DBS Vickers (Hong Kong) Ltd A/C
23,555,755 listed foreign 23,555,755
Clients
share
Domestically
Hong Kong Rising Investment
23,165,684 listed foreign 23,165,684
Development Co., Ltd.
share
National Social Security Fund RMB common
14,368,802 14,368,802
Portfolio 113 share
Domestically
Zhuang Jianyi 10,821,372 listed foreign 10,821,372
share
Among the top 10 shareholders, Hong Kong Wah Shing Holding Company Limited,
Related or acting-in-concert parties Shenzhen Rising Investment Development Co., Ltd., Guangdong Electronics Information
among the top ten non-restrictedly Industry Group Ltd. and Hong Kong Rising Investment Development Co., Ltd. are
tradable share holders and between the acting-in-concert parties; and Prosperity Lamps & Components Limited and Zhuang Jianyi
top ten non-restrictedly tradable share are acting-in-concert parties. Apart from that, it is unknown whether there is among the top
holders and the top ten shareholders 10 shareholders any other related parties or acting-in-concert parties as defined in the
Administrative Measures for the Acquisition of Listed Companies.
Top ten common shareholders
N/A
conducting securities margin trading
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
(if any) (see Note 4)
Indicate by tick mark whether any of the top ten common shareholders or the top ten non-restricted common
shareholders of the Company conducted any promissory repo during this Reporting Period.
□ Yea √ No
No such cases in this Reporting Period.
2. Information about the controlling shareholder
Nature of the controlling shareholder: Controlled by the local government
Type of the controlling shareholder: Corporation
Legal
Name of controlling Date of
representative/perso Credibility code Main business scope
shareholder establishment
n in charge
Development, production and sale
of electronics, IT products and
electrical appliances, operation of
electronic information networks
and computers, electronic
computer technology service, and
equipment and venue rental
service; sale of electronic
computers and fittings, electronic
components, electron devices, and
Guangdong Electronics electrical machinery and
Information Industry He Yong 10/19/2000 91440000725458764N equipment; wholesale of coal;
Group Ltd. energy performance contracting
service, development and
consulting service of energy-saving
technology, and manufacture and
installation of energy-saving
equipment; parking lot operation
(188 Yueken Road, Tianhe District,
Guangzhou, Guangdong Province,
P.R.China); import and export of
goods; and training of professional
and technical personnel.
Shenzhen Rising Equity and venture capital
Investment Wu Xiaohui 08/27/2003 91440300754255560K investment (approval shall be
Development Co., Ltd. obtained for each specific
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
investment project); industrial
investment (approval shall be
obtained for each specific
investment project); trustee service
for asset management (not
including securities, insurance,
funds, financial service, human
resources consulting service and
other restricted business); and
investment information consulting
service, economic information
consulting service, investment
management planning, corporate
identity design (excluding
restricted business).
Guangdong Rising
Finance Holding Co., Wang Li Xin 14/11/2014 91440400315213166P Investment and asset management
Ltd.
Hong Kong Rising
Investment Liu Wei 07/11/2001 764105 Investment and asset management
Development Limited
In the reporting period, Guangdong Electronics Information Industry Group Ltd. held 61,348,500 shares
Shareholdings of in Foshan NationStar Optoelectronics Co., Ltd., representing a stake of 12.90% in NationStar. Shenzhen
controlling shareholder Rising Investment Development Co., Ltd. held 34,984,561 shares in Guangdong Fenghua Advanced
in other listed Holding Co., Ltd., accounting for 3.91% of Fenghua’s total shares; and held 106,178,408 shares in
companies at home or Shenzhen Zhongjin Lingnan Nonfemet Co., Ltd., representing a stake of 4.804% in Nonfemet. Shenzhen
abroad in reporting Rising Investment Development Co., Ltd. held 1,302,027 shares in Dongjiang Environmental Co. Ltd,
period accounting for 0.15% of Dongjiang Environment’s total shares; and held 882,501 shares in Foshan
NationStar Optoelectronics Co., Ltd, accounting for 0.19% of NationStar’s total shares.
Change of the controlling shareholder during this Reporting Period
□ Applicable √ Not applicable
No such cases in this Reporting Period.
3. Information about the actual controller
Nature of the actual controller: Local administrator for state-owned assets
Type of the actual controller: Corporation
Legal
Name of actual Date of
representative/person Credibility code Main business scope
controller establishment
in charge
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Asset management and operation,
equity management and operation,
investment operation, and
management and re-investment of
investment earnings; other business
authorized by the state-owned assets
administration of the Guangdong
Province; contractor service for
overseas projects and domestic
projects calling for international bids,
Guangdong Rising
contractor service for survey,
Assets Management Li Zezhong 12/23/1999 91440000719283849E
consulting, design and supervision of
Co., Ltd.
the aforesaid overseas projects,
export of equipment and materials
for the aforesaid overseas projects,
and dispatch of contract workers for
the aforesaid overseas projects;
property rental service; and
exploitation, sale and deep
processing of rare earth (operated by
the branches with the relevant
licenses).
At the end of the Reporting Period, Guangdong Rising Assets Management Co., Ltd. directly or indirectly
Shareholdings of the held the following stakes in other listed companies at home or abroad: 1. a 42.87% stake of 129,372,517
actual controller in other shares in Rising Nonferrous (stock code: 600259); 2. a 35.31% stake of 781,207,756shares in Nonfemet
listed companies at (stock code: 000060); 3. a 23.94% stake of 214,286,912shares in Fenghua Advanced (stock code:
home or abroad in this 000636); 4. a20.56% stake of97,815,633shares in NationStar Optoelectronics (stock code: 002449); 5. a
Reporting Period 7.31% stake of 64,880,898 shares in Dongjiang Environment (stock code: 002672); 6. a 6.94% stake of
5,614,082,653 shares in China Telecom (stock code: 00728).
Change of the actual controller during this Reporting Period
□ Applicable √ Not applicable
No such cases in this Reporting Period.
Ownership and control relations between the actual controller and the Company
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
State-owned Assets Supervision and Administration Commission of
the People’s Government of Guangdong Province
100%
Guangdong Rising Assets Management Co., Ltd.
100% 100% 100%
Guangdong Rising Financial Holding Hong Kong Rising Investment Guangdong Electronics
Co., Ltd. Development Limited Information Industry Group Ltd.
0.537% 100% 4.745% 100%
%
Shenzhen Rising Investment Hong Kong Wah Shing Holding
Development Co., Ltd. 1.821% Company Limited
5.124% 13.470%
Foshan Electrical and Lighting Co., Ltd.
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset
management.
□ Applicable √ Not applicable
4. 10% or greater corporate shareholders
√ Applicable □ Not applicable
Legal representative / Date of
Name of corporate shareholder Registered capital Business scope
company principal establishment
Import and export of
electronics, electric lighting
products, lamps, electric
Prosperity Lamps & Components
Zhuang Jianyi 04/28/1978 HKD2 million lighting equipment, etc., and
Limited
design, installation and
after-sales service of
lighting solutions
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
5. Limitations on shareholding decrease by the Company’s controlling shareholder, actual controller,
reorganizer and other commitment makers
√ Applicable □ Not applicable
The controlling shareholders have made a commitment that within 12 months from the date of the control right
change (December 4, 2015), they shall not transfer or entrust others to manage the shares directly or indirectly
held by them in the Company, nor shall they allow the Company to repurchase those shares, except for the case
where those shares may be transferred for no compensation due to any business or asset integration with their
actual controller or their actual controller’s controlled subsidiaries.
In this Reporting Period, the controlling shareholders strictly kept to its commitment on share trading limitation.
And the commitment has expired on December 4, 2016.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Section VII Preference Shares
□ Applicable √ Not applicable
No preference shares in this Reporting Period.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Section VIII Directors, Supervisors, Executive Officers and Staff
I Changes in shareholdings of directors, supervisors and executive officers
Increase Decrease
Opening Other Closing
in this in this
Office Incumben Starting Ending sharehold increase/d sharehold
Name Gender Age date of date of Reporting Reporting
title t/former tenure tenure ing ecrease ing
Period Period
(share) (share) (share)
(share) (share)
Board Incumben 12/25/201 12/25/201
He Yong Male 56 0 0 0 0
Chairman t 5
Vice
Zhuang Incumben 12/25/201 12/25/201 10,821,37 10,821,37
Board Male 65 0 0
Jianyi t 5 8 2
Chairman
Incumben 12/25/201 12/25/201
Cheng Ke Director Male 42 10,500 0 0 0 10,500
t 5
Incumben 10/18/201 12/25/201
Qi Siyin Director Male 36 0 0 0 0
t 6
Huang Incumben 12/25/201 12/25/201
Director Male 47 0 0 0 0
Zhiyong t 5
Liu Director Incumben 04/22/201 12/25/201
Male 54 478,764 0 0 0 478,764
Xingming & GM t 6
Independ
Zhang Incumben 12/25/201 12/25/201
ent Female 67 0 0 0 0
Nan t 5
Director
Independ
Incumben 12/25/201 12/25/201
Lu Rui ent Male 41 0 0 0 0
t 5
Director
Independ
Incumben 12/25/201 12/25/201
Lu Wei ent Male 52 0 0 0 0
t 5
Director
Chairman
Liang of the Incumben 12/25/201 12/25/201
Female 41 0 0 0 0
Yuefei Superviso t 5
ry Board
Zhuang Superviso Incumben 12/25/201 12/25/201
Male 31 0 0 0 0
Junjie r t 5
Ye
Superviso Incumben 12/10/201 12/25/201
Zhenghon Male 43 29,328 15,600 0 0 44,928
r t 5
g
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Superviso Incumben 09/20/201 12/25/201
Lin Qing Male 47 20,530 0 0 0 20,530
r t 6
Liang Superviso Incumben 09/20/201 12/25/201
Female 42 0 0 0 0
Yueyi r t 6
Board Incumben 01/26/201 12/25/201
Lin Yihui Male 62 13,000 0 0 0 13,000
Secretary t 6
Tang Incumben 01/26/201 12/25/201
CFO Female 46 0 0 0 0
Qionglan t 6
Incumben 01/26/201 12/25/201
Wei Bin Vice GM Male 47 34,169 0 0 0 34,169
t 6
Jiao Incumben 01/26/201 12/25/201
Vice GM Male 44 41,444 0 0 0 41,444
Zhigang t 6
Incumben 01/26/201 12/25/201
Chen Yu Vice GM Male 44 17,160 0 0 0 17,160
t 6
Xu Incumben 01/26/201 12/25/201
Vice GM Male 46 0 0 0 0
Xiaoping t 6
Zhang Incumben 08/23/201 12/25/201
Vice GM Male 42 24,960 0 0 0 24,960
Yong t 6
Zhang Incumben 08/23/201 12/25/201
Vice GM Male 39 11,311 1,900 0 0 13,211
Xuequan t 6
Chen 12/25/201 04/07/201
Director Former Male 52 0 0 0 0
Binghui 5
12/25/201 09/08/201
Liu Ren Director Former Male 49 0 0 0 0
5
Zhang Superviso 12/10/201 08/10/201
Former Male 42 24,960 0 0 0 24,960
Yong r 5
Zhang Superviso 12/10/201 08/10/201
Former Male 39 11,311 1,900 0 0 13,211
Xuequan r 5
01/26/201 11/25/201
Xie Qing Vice GM Former Male 42 31,525 0 0 0 31,525
6
11,570,33 11,576,73
Total -- -- -- -- -- -- 19,400 0 0
4
II Changes in directors, supervisors and executive officers
Name Office title Type of change Date Reason
Chen Binghui Director Outgoing 04/07/2016 Resigned for personal reason
Liu Ren Director Outgoing 09/08/2016 Resigned for job change
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Zhang Yong Supervisor Appointed 08/10/2016 Post change
Zhang Xuequan Supervisor Appointed 08/10/2016 Post change
Xie Qing Vice GM Dismissed 11/25/2016 Resigned for personal reason
Liu Xingming Director Appointed 04/22/2016 Elected as a director of the 8th Board
Qi Siyin Director Appointed 10/18/2016 Elected as a director of the 8th Board
III Brief biographies
Professional backgrounds, main working experience and current responsibilities in the Company of the incumbent
directors, supervisors and executive officers
1. Working experience of the directors
Mr. He Yong: Han nationality, born in Sep. 1960, a member of the Communist Party of China. He graduated
from Open University of Hong Kong with a MBA and master’s degree. He once acted as the Vice-minister of the
Operating and Management Department of Guangdong Rising Assets Management Co., Ltd., the Chairman of the
Reform and Stableness Office, the Minister of the Operating and Management Department, the Supervisor of
Shenzhen Zhongjin Lingnan Nonfemet Co., Ltd., the GM of Guangdong Electronics Information Industry Group
Ltd. and Deputy Secretary. Now he serves as the Chairman of the Board of Directors of Guangdong Electronics
Information Industry Group Ltd., the Party Secretary and the Chairman of Foshan NationStar Optoelectronics Co.,
Ltd., the Chairman of Foshan Sigma Venture Capital Co., Ltd. and the Chairman of Shenzhen Primatronix (Nanho)
Electronics Ltd. And he has been the Board Chairman of the Company since December 2015.
Mr. Zhuang Jianyi: born in 1951, with a bachelor’s degree and MBA. He now acts as the Chairman of Hong
Kong Youchang Lighting Equipment, and has been engaged in the electric light source equipment production as
well as the trading business for about 40 years. From 1995 to 2010, he acted as the Directors, the Vice Chairman
and the Chairman of the Company. And he was elected as a director of the 8th Board of the Company in December
2015.
Mr. Cheng Ke: Han nationality, born in Feb. 1974, a member of the Communist Party of China and an auditor
with the bachelor’s degree. He once acted as the Attendant of the Audit Division of Guangzhou Dongshan
Corporate Authority of Guangzhou Military Logistics Department, the Assistant Supervisor, the Supervisor, the
Senior Executive and the Vice-Minister of the Financing Plan Department of Guangdong Rising Assets
Management Co., Ltd., Vice GM of Hubei Ashennan Expressway Development Co., Ltd., Hubei Gdrising Han-E
Expressway Co., Ltd. and Hubei Han-Cai Expressway Co., Ltd. and now acts as the Minister of the Financing
Plan Department of Guangdong Rising Assets Management Co., Ltd. and the Director of Guangdong Rising
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Assets Management Co., Ltd. And he was elected as a director of the 8th Board of the Company in December
2015.
Mr. Qi Siyin: Chinese nationality, with no right of permanent residence abroad. Born in May 1980, a member of
the Communist Party of China, postgraduate degree, dual master’s degrees. Ever worked in Guangdong Provincial
Expressway Development Co., Ltd., former investor relations management clerk, investor relations management
director, information disclosure director and securities affairs representative of the Securities Department. Has
been working in Guangdong Rising Assets Management Co., Ltd. as Senior Director of Capital Operation
Department, Deputy Secretary of the Communist Youth League and Deputy Director; as Director and Deputy
General Manager of Hong Kong Rising Investment Co., Ltd.; as Deputy Director of Capital Operations
Department of Guangdong Rising Assets Management Co., Ltd. since 2007. Currently as the Director of Capital
Operations Department of Guangdong Rising Assets Management Co., Ltd. In October 2016, elected as the
director of the 8th Board of Directors of the Company.
Mr. Huang Zhiyong: Han nationality, born in Aug. 1969, a member of the Communist Party of China and an
engineer. He graduated from Xidian University with a bachelor’s degree of Electronic Devices Structures. He
once acted as the Vice GM of Shenzhen Primatronix (Nanho) Electronics Ltd., the Minister of Enterprise
Development Department and the GM Assistant of Guangdong Electronics Information Industry Group Ltd.. He
now acts as the Vice GM and a member of Communist Party of China of Guangdong Electronics Information
Industry Group Ltd. and the Chairman of Vollsun Ltd., the Director and GM of Foshan Sigma Venture Capital
Co., Ltd.. And he was elected as a director of the 8th Board of the Company in December 2015.
Mr. Liu Xingming: Born in Jun. 1962, a member of the Communist Party of China and an engineer with a
bachelor’s degree. He joined the Company in 1983, and acted as Vice GM from 1997 to 2005; acted as GM of the
Company from Dec. 2005 to Nov. 2008; acted as Vice GM of the Company in Dec. 2008; elected as the Director
of the Company from 1995 to Dec. 2015; acted as Vice Director of the Board from Apr. 2011 to Dec. 2015; from
Apr. 2012 up to now, he acted as the GM and Vice Director of the Board; after 1995, he was elected as the
Director of the Company; and he was elected as a director of the Company in April 2016. In Jul. 2015, he was
elected as the Party Secretary of the Company.
Ms. Zhang Nan (Independent Director): Han nationality, born in Feb. 1949, a member of the Communist Party
of China and a senior economist. She graduated from Chinese Academy of Social Sciences with a master degree
of economic law. She once acted as the Vice-Minister of Beijing Electronic Instruments Industry System Office,
Deputy Director of Audit and Regulations Bureau, the Director, the Deputy Director and the Chief of the research
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
laboratory of SETC, the Regulations Bureau and the Economic cadre training center as well as the bureau-level
Supervisor of the large enterprises of the Board of Supervisors of the State-owned Assets Supervision and
Administration Commission and retired in Mar. 2009. She used to be an Independent Director of CSCL and
Guandgong Rising Nonferrous Metals Co., Ltd. And she was elected as an independent director of the 8th Board
of the Company in December 2015.
Mr. Lu Rui (Independent Director): Chinese Nationality, no permanent residency abroad, born in Jan. 1975. He
graduated in 2006 from the Sun Yat-Sen University of Management Accounting with a doctor’s degree of
management. He is now a professor, doctorial tutor, the Head of the Accounting and Capital Operation Research
Center and the Head of the EDP Education Center of the Lingnan (University) College of Sun Yat-Sen University.
He acted as the Teaching Assistant and the Lecturer of the Financial Accounting Department of Guangzhou
Finance & Trade Management Institute during the period from July 1996 to August 2003, the Lecturer of the
Lingnan (University) College of Sun Yat-Sen University during the period from July 2006 to December 2008, and
the Associate Professor of the Lingnan (University) College of Sun Yat-Sen University during the period from
January 2009 to June 2016. And he has been a profession at the Lingnan (University) College of Sun Yat-Sen
University since July 2016. He was a visiting scholar to the MIT Sloan School of Management for January-June
2007 and September-October 2009. His other academic and social posts mainly include: the member of
Independent Director Committee of China Association for Public Companies, a national leading accounting
professional recognized by the Ministry of Finance, the member of All-China Financial Youth Federation, the
member of the senior member of Accounting Society of China, the member of AAA and America Finance
Management Academy, the evaluation experts of NSFC and the researcher of the Internal Control Research
Center of Sun Yat-Sen University; the Independent Director of Guangzhou GCI Science & Technology Co., Ltd.
since Apr. 2010, the Independent Director of Xilong Chemical Co., Ltd. since Jan. 2015 and the Independent
Director of Youmi Technology Co., Ltd. since May 2016. And he was elected as an independent director of the 8th
Board of the Company in December 2015.
Mr. Lu Wei (Independent Director): Chinese Nationality, born in Dec. 1964. He is a doctoral candidate in
economic administration at Fudan University and a doctor’s degree holder in economics. He was a teaching
assistant, a lecturer, a departmental chief, an associate profession and then a professor at Fudan University during
the period from August 1989 to March 2003. And he has been working in Shanghai Jiao Tong University since
April 2003. He was a professor and doctoral tutor of the Department of Business Administration of the Antai
Management School of Shanghai Jiao Tong University during the period from April 2003 to March 2006, and has
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
been a professor and doctoral tutor of the Department of Business Administration of the Antai Economics and
Management School of Shanghai Jiao Tong University since April 2006. He has been the head of the SJTU-USC
Cultural Creativity Industries School since October 2014; an independent director of Shanghai Shibei Hi-tech Co.,
Ltd. since Sep. 2012; and an independent director of Shanghai Lujiazui Finance & Trade Zone Development Co.,
Ltd. since May 2015. And he was elected as an independent director of the 8th Board of the Company in
December 2015.
2. Working experience of the supervisors
Ms. Liang Yuefei: Han nationality, born in Nov. 1975, a member of the Communist Party of China and a CCPA
member. She graduated from Guangdong Polytechnik Normal College with a bachelor’s degree. She once acted
as the Vice-Minister of the Total Fiscal Audit Department of Guangdong Electronics Information Industry Group
Ltd.. And now acts as the general manager assistant, Minister of the Total Fiscal Department and Employee
Supervisor of Guangdong Electronics Information Industry Group Ltd., the Supervisor of Foshan Sigma Venture
Capital Co., Ltd. and the chairman of the Supervisory Board of Foshan NationStar Optoelectronics Co., Ltd, the
Director of Primatronix (Nanho) Electronics Ltd and Guangdong HuaSheng data solid-state storage co., LTD...
And she was elected as the chairman of the 8th Supervisory Board of the Company in December 2015.
Mr. Zhuang Junjie: Born in Sep. 1985, a Hong Kong permanent resident. He graduated with a bachelor’s degree
and once acted as the Consultant Manager of Accenture Software and now acts as the Director of Hong Kong
Youchang Lighting Equipment Co., Ltd. And he was elected as a supervisor of the 8th Supervisory Board of the
Company in December 2015.
Mr. Ye Zhenghong: Born in Jul. 1973, a member of the Communist Party of China with a college degree. He
joined the Company from Jul. 1995; worked in the Machine Repair Shop from Jul. 1997 to Jan. 2001; acted as
Equipment Management Director in T8 Fluorescent Lamp Factory from Feb. 2001 to Jan. 2005; acted as Director
of Machine Repair Workshop from May 2005 to Jan. 2007; acted as Chief Officer of Machinery Dynamic
Department from May 2006 to Dec. 2007; and acted as factory director of T8 Fluorescent Lamp Factory from Jan.
2008 to Nov. 2013; and acted as factory director of LED of T8 from Dec. 2013 up to now; the Chairman of the 5th
Board of Supervisors and the Employee Supervisor of the 6th, 7th and 8th Board of Supervisors.
Mr. Lin Qing: born in September 1969, member of the Communist Party of China, undergraduate degree, electric
light source engineer; has been working in the company since August 1991; worked as mercury lamp workshop
technician and workshop director from June 1996 to February 2002; as the workshop director and factory director
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
of the fluorescent lamp factory from March 2002 to September 2009; as the director of Technology Department
since October 2009; in July 2015, elected as a discipline committee member of the company’s CPC committee.
And he was elected as a Employee Supervisor of the Company in September 2016.
Ms. Liang Yueyi: born in June 1974, member of the Communist Party of China, college degree; has been
working in the company since August 1995; worked as the Secretary to the President from August 1995 to
September 2002; as clerk of the Import & Export Trade Department from October 2002 to December 2006; as the
Deputy Manager of the Import & Export Trade Department since January 2007; a member of the company’s CPC
committee since July 2015; as a female member of the company’s labor union since April 2016. And she was
elected as a Employee Supervisor of the Company in September 2016..
3. Working experience of the senior management staff
Mr. Liu Xingming: Born in Jun. 1962, a member of the Communist Party of China and an engineer with a
bachelor’s degree. He joined the Company in 1983, and acted as Vice GM from 1997 to 2005; acted as GM of the
Company from Dec. 2005 to Nov. 2008; acted as Vice GM of the Company in Dec. 2008; elected as the Director
of the Company from 1995 to Dec. 2015; acted as Vice Chairman of the Board from Apr. 2011 to Dec. 2015; from
Apr. 2012 up to now, he acted as the GM of the Company; and he was elected as a director of the Company in
April 2016. In Jul. 2015, he was elected as the Party Secretary of the Company.
Mr. Lin Yihui: Born in Nov. 1954, a member of the Communist Party of China with a master’s degree in
Economics. He was in active service in force from Dec. 1970 to 1986 and acted as posts of command, battalion
and group; works in Foshan International Trust and Investment Company from 1986 to Sep. 2000 and acted as
Section Chief and Vice GM and was in charge of the securities business of the Company as well as host the works
such as the underwritten offering and listing recommendation of the shares of various companies over years; acted
as Party Secretary of the Company from May. 2010 to Jul. 2015. He has acted as the Secretary of the Company
since May 2013.
Ms. Tang Qionglan: born in March 1970, member of the Communist Party of China, bachelor degree, China
Certified Public Accountant, worked as an accountant in Foshan Certified Public Accountants, served as audit
manager of BDO China Shu Lun Pan Certified Public Accountants LLP Foshan Branch; as Deputy Manager of
the Finance Department, Manager, Chief Financial Officer, Deputy General Manager and Chief Financial Officer
of Foshan NationStar Optoelectronics Co., Ltd. from October 2008 to January 2016. In January 2016, elected as
the Chief Financial Officer of the Company.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Mr. Wei Bin: Born in May 1969, a member of the Communist Party of China and an engineer with a bachelor’s
degree. He joined in the Company in 1991, and responsible for the product development of the graduate school of
the Company from Mar. 1992 to Dec. 1996, acted as Workshop Manager of Energy Saving Lamp Workshop from
Jan. 1997 to Dec. 2005, acted as Workshop Manager of HID Workshop from Jan. to Dec. 2005, acted as Workshop
Manager of T5 Workshop from 2006 to Nov. 2008, acted as the Department Director of the Technology
Department from Nov. 2008 to 2009 and acted as Vice GM of the Company from Sep. 2009.
Mr. Jiao Zhigang: Born in May 1972, a member of the Communist Party of China with a bachelor’s degree. He
graduated from South China University of Technology in Jul. 1994, and at the same year he entered Foshan
Electrical and Lighting Co., Ltd. He acted as Warehouse Director of the Company from Aug. 1995 to Sep. 2013,
acted as Department Director of Human Resources Department from May 2010 to Sep. 2013; selected as
Employee Supervisor from Mar. 2007 to Sep. 2013, and as Chairman of the Supervisory of the Company from
May 2010 to Sep. 2013. He acted as Vice GM of the Company in Sep. 2013.
Mr. Chen Yu: Born in Dec. 1972, a member of the Communist Party of China, college graduate and engineer. He
entered Foshan Electrical and Lighting Co., Ltd. in Jul. 1994. And acted as workshop manager of parabolic
reflector, coating film, energy saving lamp, factory director of the branch factory of Gaoming and workshop
manager of general bulbs from Jan. 1997 to Dec. 2012, acted as Director of Production Department, OEM
Department and Mechanical Dynamics Department from Jan. to Aug. 2013, acted as Director of Production
Department and OEM Department from Sep. 2013 to May 2014 as well as acted as Vice GM of the Company
from May 2014.
Mr. Xu Xiaoping: born in July 1970, member of the Communist Party of China, postgraduate degree, engineer.
Worked as Deputy General Manager and General Manager of Guangdong Fenghua Advanced Technology
Holding Co., Ltd. Xin’gu Branch from September 2000 to December 2013, also as the General Manager of
Guangdong Fenghua Semiconductor Technology Co., Ltd. from January 2011 to December 2013, and Deputy
Director of Headquarters Operations Center from January 2013 to February 2015; as the General Manager of
Guangdong Fenghua Advanced Technology Holding Co., Ltd. Lihua Branch from March 2015 to January 2016;
won the first prize of scientific and technological progress of Zhaoqing in 2008; won the title of the “Ninth Batch
of Top Talents of Zhaoqing” in 2010; served as Deputy General Manager of the company in January 2016.
Mr. Zhang Yong: Born in Jun. 1974, a member of the Communist Party of China and a mechanical engineer with
a college degree. From Jul. 1997, he joined in the Foshan Electrical and Lighting Co., Ltd. and successively acted
as Deputy Director and Director of Lamp Filament Appliance Workshop from Oct. 1999 to Jun. 2008; acted as
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Factory Director of Gaoming Fluorescent Lamp Factory and Factory Director of Gaoming Branch Factory from
Jul. 2008 to Dec. 2008; respectively acted as Department Director of Product Department, OEM Department,
Mechanical Dynamics Department and Infrastructure Department from Jan. 2009 to Dec. 2012; acted as General
Manager Assistant from Mar. 2013 to August 2016. He was a supervisor and the Chairman of the Board of
Supervisors of the Company from Sep. 2013 to August 2016; has been the chairman of the Labor Union of the
Company since September 2013; was elected as the Deputy Party Secretary in July 2015; and has been a vice GM
of the Company since August 2016.
Mr. Zhang Xuequan: Born in Dec. 1977, a member of the Communist Party of China with a bachelor’s degree.
He joined the Company in Oct. 1996. He worked in the former Iodine-tungsten Lamp Workshop from Oct. to Dec.
1996; worked in the Technology Department and then the Quality Control Department from Jan. 1997 to Aug.
2005; acted as the Workshop Manager of Lamp Workshop from Sept. 2002 to May 2008; acted as the Department
Director of the Business Management Department of the Company from Jun. 2008 to August 2016. He has
concurrently acted as the Office Director since Feb. 2016. He has been the Party Branch Secretary for the
Administrative Office of the Company since July 2010, and a member of the party committee of the Company
since July 2015. He was a supervisor of the Company from May 2013 to August 2016 and has been a vice GM of
the Company since August 2016.
Posts concurrently held in shareholding entities
√Applicable □Not applicable
Allowance from
Starting date of Ending date of
Name Shareholding entity Post the shareholding
tenure tenure
entity (yes/no)
Chairman,
Guangdong Electronics Information
He Yong Party Yes
Industry Group Ltd.
Secretary
Zhuang Jianyi Youchang Light Equipment Co., Ltd. Chairman Yes
Guangdong Electronics Information
Huang Zhiyong Vice GM Yes
Industry Group Ltd.
Planning and
Guangdong Electronics Information Finance
Liang Yuefei Yes
Industry Group Ltd. Manager &
GM Assistant
Zhuang Junjie Youchang Light Equipment Co., Ltd. Director Yes
Remark None
Posts held concurrently in other entities
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
√Applicable □Not applicable
Starting date of Ending date of Allowance from
Name Other entity Post
tenure tenure the entity (yes/no)
Planning and
Guangdong Rising Assets Management Co.,
Cheng Ke Finance Yes
Ltd.
Manager
Capital
Guangdong Rising Assets Management Co.,
Qi Siyin Operation Yes
Ltd.
Manager
Lingnan (University) College of Sun
Lu Rui Professor Yes
Yat-Sen University
Lu Wei Antai School of Management of SJTU Professor Yes
Remark None
Punishments imposed in the recent three years by the securities regulators on the incumbent directors, supervisors
and executive officers as well as those who left in this Reporting Period
√ Applicable □ Not applicable
In Mar. 2013, Mr. Liu Xingming was warned by the Guangdong CSRC and fined RMB30,000.
In Mar. 2013, Mr. Xie Qing and Mr. Wei Bin were warned by the Guangdong CSRC.
IV Remuneration of directors, supervisors and executive officers
Decision-making procedure, determination basis and actual remuneration payment of directors, supervisors and
executive officers
The Remuneration & Appraisal Committee under the Board of Directors decides the
remuneration of directors, supervisors and senior management in accordance with the Plan for
Decision-making procedure for the
Implementing the Equity Incentive Mechanism for Middle-and Top-Rank Management
remuneration of directors,
Personnel reviewed and approved on the 2001 Annual Shareholders’ General Meeting, and
supervisors and senior management
the particulars on completing current main financial indexes & operating goals, as well as the
fulfillment of job responsibilities by them.
The remuneration of directors (excluding independent directors), supervisors and senior
management who withdraw remuneration in the Company are all decided in accordance with
Basis for determining the
the Company’s Plan for Implementing the Equity Incentive Mechanism for Middle-and
remuneration of directors,
Top-Rank Management Personnel and the Salary System and the relevant appraisal indexes.
supervisors and senior management
The allowance of independent directors should be granted according to the standard reviewed
and approved by 2010 Annual Shareholders’ General Meeting.
Actual payment of the remuneration The total remuneration (before tax) actually paid to the directors, supervisors and senior
of directors, supervisors and senior management staff for 2016 were RMB11.2040 million.
management
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Remuneration of directors, supervisors and executive officers in this Reporting Period
Unit: RMB'0,000
Remuneration
Total before-tax
from related
remuneration
Name Office title Gender Age Incumbent/former parties of the
from the
Company
Company
(yes/no)
He Yong Board Chairman Male 56 Incumbent Yes
Vice Board
Zhuang Jianyi Male 65 Incumbent Yes
Chairman
Cheng Ke Director Male 42 Incumbent Yes
Qi Siyin Director Male 36 Incumbent Yes
Huang Zhiyong Director Male 47 Incumbent Yes
Liu Xingming Director & GM Male 54 Incumbent 170.7 No
Independent
Zhang Nan Female 67 Incumbent No
Director
Independent
Lu Rui Male 41 Incumbent 14.4 No
Director
Independent
Lu Wei Male 52 Incumbent 14.4 No
Director
Supervisory
Liang Yuefei Female 41 Incumbent Yes
Board Chairman
Zhuang Junjie Supervisor Male 31 Incumbent Yes
Ye Zhenghong Supervisor Male 43 Incumbent 49.9 No
Lin Qing Supervisor Male 47 Incumbent 39.95 No
Liang Yueyi Supervisor Female 42 Incumbent 55.17 No
Lin Yihui Board Secretary Male 62 Incumbent 104.56 No
Tang Qionglan CFO Female 46 Incumbent 98.59 No
Wei Bin Vice GM Male 47 Incumbent 101.56 No
Jiao Zhigang Vice GM Male 44 Incumbent 98.49 No
Chen Yu Vice GM Male 44 Incumbent 91.49 No
Xu Xiaoping Vice GM Male 46 Incumbent 60.61 No
Zhang Yong Vice GM Male 42 Incumbent 91.49 No
Zhang Xuequan Vice GM Male 39 Incumbent 65.07 No
Chen Binghui Director Male 52 Former Yes
Liu Ren Director Male 49 Former Yes
Xie Qing Vice GM Male 42 Former 64.02 No
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Total -- -- -- -- 1,120.40 --
Equity incentives for directors, supervisors and executive officers in this Reporting Period
□ Applicable √ Not applicable
V Employees
1. Number, functions and educational backgrounds of employees
Number of in-service employees of the Company 1,789
Number of in-service employees of main subsidiaries 7,591
Total number of in-service employees 9,380
Total number of employees with remuneration in this Reporting
9,380
Period
Number of retirees to whom the Company or its main
subsidiaries need to pay retirement pension
Functions
Function Number of employees
Production 7,852
Sales
Technical
Financial
Administrative
Total 9,380
Educational backgrounds
Educational background Number of employees
College and above 1,460
Technical secondary school and high school 1,781
Below high school 6,139
Total 9,380
2. Employee remuneration policy
The general principal of the employee’s remuneration policy is: as for the external part, the Company should
maintain the market competitiveness of the talents by possessing of the attraction and as for the internal part,
should possess of the impartiality and consistency. The salary level of the external labor market and the social
average salary level as well as the wage guiding issued by the governmental department are the important
reference basis for the confirm of the salary standard of the Company; to confirm different pay grade according to
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
different positions and the position characteristics and to furthest incentive the enthusiasm of the employees; to
abide with the principal of giving priority to efficiency and give consideration of the fairness and to object to the
equalitarianism when distributing the remunerations, to pay with generous compensation for those excellent
employees who creates great value, to appropriately incline to the key talents and the market supply shortage
talents; the lowest salary of the Company should not be lower than the local lowest salary standard.
3. Employee training plans
The Company has been setting great store on the training and development work of the employees, and combined
with the actual situation, annual plan, the position nature and the responsibilities as well as the development
demands, the Company built up a serious of training plan through the methods of having classes by internal
lecturers and external engaged professors, which with multiple levels, channels, fields and ways to strengthen the
employee training work, including the new employee orientation training, the on-the-job personnel professional
training, the frontline staff skills training, skills training for managerial personnel, etc., to constantly improve the
overall quality of the current employees for realizing the win-win situation and mutual progress.
4. Labor outsourcing
□ Applicable √ Not applicable
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Section IX Corporate Governance
I Basic situation of corporate governance
During the Reporting Period, in strict accordance with relevant requirements of Company Law, Securities Law,
Code of Corporate Governance of Listed Companies and Rules of Stock Listing of Shenzhen Stock Exchange as
well as other relevant laws, rules and regulations, the Company continuously perfected the corporate governance
structure and set up an effective corporate governance system. At present, the Company has set up governance
structure of responsible Shareholders’ General Meeting, the Board of Directors, the Supervisory Committee and
managers, who performed right of decision-making, execution and supervision respectively according to their
duties; besides, the Company set up special committees of the Board of Directors and system for independent
directors. The Company strengthened information disclosure of principal shareholders and persons
acting-in-concert, forbidden shareholders of the Company to misapply their rights. The Company separated from
the principal shareholder in personnel, assets, business, financial affairs and organizational, and was absolutely
impendent. The Company timely revised and perfected various systems in accordance with the latest issued laws
& rules and relevant regulations of CSRC and Shenzhen Stock Exchange. And the corporate governance is
basically in line with the requirements of relevant laws, regulations and regulatory documents.
Any significant incompliance with the regulatory documents issued by the CSRC governing the governance of
listed companies
□ Yes √ No
No such cases in this Reporting Period.
II Independence of businesses, personnel, asset, organizations and finance which are separate
from the controlling shareholder
The Company is completely separated from its controlling shareholder in aspects such as business, personnel,
assets, institutions and finance and possesses independent and complete business and self-dependent operating
ability.
1. As for the business, the Company is independent of the controlling shareholders and the subordinate enterprises
and owns the independent business departments and management system as well as possesses of impendent and
entire business and self-dependent operating ability.
2. As for the personnel, the Company formulates the independent management system such as the labor, personnel
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
and the salary, possesses the independent personnel department and the operating management team. The Senior
Executives of the Company are serving at the Company in full time and receiving the salary from the Company.
3. As for the assets, the assets of the Company are independent and entire with clear ownership, and possesses the
independent production system, BOP system and the supporting facilities, as well as possesses the legal
ownership of the land, factories, equipments related to the production and operating and the assets such as the
trademark, patent and the non-patent technology, and possesses the entire control and govern power of all the
assets of the Company without any behavior such as any controlling shareholder occupies the assets of the
Company.
4. As for the institutions, the Company set up the independent and entire organizations and institutions, and the
construction as well as the operating of the corporate governance institutions is executed strictly executed
according to the Articles of Association, and the production and operating as well as the offices are entirely
independent from the controlling shareholders with any situation of working under one roof with the controlling
shareholders.。
5. As for the finance, the Company set up the independent finance department and builds up the independent and
normative accounting and financial control system according to the requirements of the ASBE, set up the
independent bank account and pays the taxes legally and independently and the Company could make the
financial decisions independently without any situation of the shareholding intervenes the capital usage.
III Horizontal competition
√ Applicable □ Not applicable
Nature of Solution’s
Name of controlling
Type of issue controlling Cause for issue Solution progress and
shareholder
shareholder follow-up plan
The controlling shareholders
Guangdong committed: 1. in view of the
Electronics percentage of the horizontal
Information Some enterprises competition between the
Industry Group Ltd., Local State-owned controlled by the Foshan NationStar
Shenzhen Rising Assets controlling shareholders Optoelectronics Co., Ltd.
Horizontal
Investment Supervision and engage in the same or and Foshan Electrical and Ongoing
competition
Development Co., Administration similar business with the Lighting Co., Ltd. was less,
Ltd., Hong Kong Commission Company, which incurs the Electronics Group,
Rising Investment horizontal competition. Shenzhen Guangdong
Development Rising Investment and Hong
Limited Kong Guangdong Rising
Investment committed to
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
designedly gradually reduce
or eliminate the horizontal
competition through
business integration or other
methods and arrangement
within 24 months in the
future. 2. In view of
Shenzhen Primatronix
(Nanho) Electronics Ltd.
(hereinafter referred to as
“Nanho Primatronix”),
Guangdong Rising
Optoelectronic Co., Ltd.
(hereinafter referred to as
“Guangdong Rising
Optoelectronic”) and Henan
Guangdong Rising
High-tech Investment Co.,
Ltd. (hereinafter referred to
as “Guangdong Rising
Hi-tech”) were all ceased
the business which were of
horizontal competition with
Foshan Electrical and
Lighting, and the
Electronics Group and its
persons acting in concert
was planed to respectively
adopt the corresponding
solving measures on Nanho
Primatronix, Guangdong
Rising Optoelectronic and
Guangdong Rising Hi-tech:
(1) Nanho Primatronix: had
ceased the relevant business
of horizontal competition
with the Foshan Electrical
and Lighting; (2)
Guangdong Rising
Optoelectronic: had ceased
the relevant business of
horizontal competition with
the Foshan Electrical and
Lighting and the Electronics
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Group will plan to transfer
the relevant equities or
shutdown the company
according to the relevant
situation after the
completion of the
acceptance check of the
government project
originally undertook by
Guangdong Rising
Optoelectronic and the
completion of the relevant
processing work; (3)
Guangdong Rising Hi-tech:
owning to the small
operating scope, the
Electronics Group had
executed the shutdown of
the whole company that
only left 4 employees to
take the responsibility of the
recovery of the amount of
the goods selling and the
written-off procedures of
the company. As for
avoiding the horizontal
competition with Foshan
Electrical and Lighting, the
further commitments on the
relevant arrangements made
by the Electronics Group,
Shenzhen Guangdong
Rising Investment and Hong
Kong Guangdong Rising
Investment as follows: 1.
the company will execute
the supervision and
restriction on the production
and the operating activities
of the company and the
relevant enterprises except
for the above enterprises
currently involved with the
horizontal competition with
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Foshan Electrical and
Lighting and if there is same
or similar situation occurs
horizontal competition with
Foshan Electrical and
Lighting from the future
promises and the relevant
enterprises on the products
or business, the Company
following measures to solve
the problem: (1) when
commits to adopt the
Foshan Electrical and
Lighting considers it is
necessary, the Company and
the relevant enterprises
would decrease the
shareholding until entirely
completes the transfer of the
held relevant assets and
business; (2) when Foshan
Electrical and Lighting
considers it is necessary,
should take preference to
purchase the relevant assets
and business held by the
company and the relevant
enterprises through
appropriate methods; 2.each
commitment made by the
company on eliminating or
avoiding the horizontal
competition is also adapted
to the subordinate
enterprises directly or
indirectly controlled by the
company and the Company
owns the obligation to urge
and ensure the other
subordinate enterprises to
carry out each events and
arrangement stated on the
document and to strictly
abide to the whole
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
commitments. 3. If the
company or the subordinate
enterprises directly or
indirectly controlled by the
company violated the above
commitments that led to the
losses of Foshan Electrical
and Lighting, the company
should pay for the
reasonable compensation.”
The controlling shareholders
committed: 1. guaranteed to
strictly abide by the each
regulation from the CSRC,
the normative laws
documents of SZSE and the
Articles of Association of
Foshan Electrical and
Lighting. Among the
production and operating
activities since then, the
promisee would not take
Guangdong
advantage of the position of
Electronics
the controlling shareholders
Information Some enterprises
and the actual controller to
Industry Group Ltd., controlled by the
carry out any behavior that
Shenzhen Rising controlling shareholders
Related-party harm the benefits of Foshan
Investment Local SASAC engage in business with Ongoing
transactions Electrical and Lighting and
Development Co., the Company, which
other shareholders; 2. the
Ltd., Hong Kong incurs related-party
promisee and the other
Rising Investment transactions.
subsidiaries, the branch
Development
companies, the joint
Limited
ventures or associated
companies (hereinafter
referred to as the “relevant
enterprises”) will try their
best to avoid and reduce the
related transactions with
Foshan Electrical and
Lighting and its
subsidiaries; 3. as for the
related transactions which
are indeed necessary and
could not be avoided
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
between the promisee, the
relevant enterprises and
Foshan Electrical and
Lighting, will strictly abide
by the market principles of
fairness, justice with
valuable consideration.
When the Annual General
Meeting or the Board of
Directors is executing the
voting on the related
transactions which involved
with the promisee and the
relevant enterprises, should
execute the obligation of
avoiding the voting and at
the same time execute the
transactions vetting process
as well as the information
disclosure obligations
according to the relevant
laws and regulations and the
normative documents. If
violated the above
commitments and caused
the losses to Foshan
Electrical and Lighting as
well as the subsidiaries and
other shareholders, the
promisee should assume
compensation liability.
IV Annual and special meetings of shareholders convened during this Reporting Period
1. Meetings of shareholders convened during this Reporting Period
Index to the
Investor
Meeting Type Convened date Disclosure date disclosed
participation ratio
information
Announcement No.
2015 Annual 2016-020 on
Meeting of Annual 38.19% 04/22/2016 04/23/2016 Resolutions of
Shareholders 2015 Annual
Meeting of
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Shareholders
disclosed on
www.cninfo.com.cn
Announcement No.
2016-039 on
st
The 1 Special Resolutions of 1st
Meeting of Special 37.56% 08/23/2016 08/24/2016 Special Meeting of
Shareholders in 2016 Shareholders in 2016
disclosed on
www.cninfo.com.cn
Announcement No.
2016-054 on
The 2nd Special Resolutions of 2nd
Meeting of Special 37.43% 10/18/2016 10/19/2016 Special Meeting of
Shareholders in 2016 Shareholders in 2016
disclosed on
www.cninfo.com.cn
2. Special meetings of shareholders convened at the request of preference shareholders with resumed voting
rights
□ Applicable √ Not applicable
V Performance of independent directors in this Reporting Period
1. Attendance of independent directors in board meetings and meetings of shareholders
Attendance of independent directors in board meetings
Due presence in Presence by Absent for two
Presence on site Presence through
Independent director this Reporting telecommunicati Absence (times) consecutive
(times) a proxy (times)
Period (times) on (times) times
Zhang Nan 10 5 5 0 0 No
Lu Rui 10 5 5 0 0 No
Lu Wei 10 4 5 1 0 No
Attendance of independent directors in
meetings of shareholders as non-voting
delegates (times)
2. Objections raised by independent directors on issues of the Company
Indicate by tick mark whether any independent directors raised any objections on issues of the Company.
□ Yes √ No
No such cases in this Reporting Period.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
3. Other details about the performance of duties by independent directors
Indicate by tick mark whether any suggestions from independent directors were adopted by the Company.
√ Yes □ No
Suggestions from independent directors adopted or not adopted by the Company:
During the Reporting Period, in accordance with the requirements of Company Law, Code of Governance of
Listed Companies, Guidance on the Establishment of the Independent Directors System of the Listed Companies,
Articles of Association and relevant systems, the independent directors of the Company attended the board
sessions held during the Reporting Period, carefully reviewed the proposals proposed on the sessions, paid
attention to the operation of the Company, performed the duties sincerely and diligently, and issued independent
opinion on acquisition and sale of assets, asset impairment provision making, related-party transactions, profit
distribution, etc., as well as proposed many precious advices on perfection of systems and decision of routine
operation of the Company, so as to play an active role in protecting the legal right of the Company and its
shareholders.
VI Performance of duties by specialized committees under the Board during this Reporting
Period
(I) Work accomplished by the Audit Committee
According to the related provisions of China Securities Regulatory Commission and Shenzhen Stock Exchange,
as well as the Rules of Implementation for the Audit Committee of the Board, the Audit Committee diligently
performed the following work duties:
1. On January 29, 2016, the Audit Committee convened a session and reviewed as well as approved the following
two topics:
(1) Reviewed and approved the auditor’s schedule for the 2015 annual audit of the Company; and
(2) Reviewed and approved the Financial Department’s briefing on the 2015 main financial data.
Had not discovered any significant problem of the 2015 main financial data of the Company after carefully
reviewed and the 2015 main financial data and pretax profits analysis submitted by Ministry of Finance and
listened to the report from the financial staffs. Since there is a period of time between this preliminary review of
the financial statements and the formal issuance of the auditor’s report and the financial statements, we hereby
remind the Company’s Financial Department to pay attention to dealing with the follow-up affairs after the date of
Balance Sheet in strict compliance with the New Accounting Standards for Business Enterprises, so as to ensure
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
the factuality, fairness and completeness of the financial statements.
2. On March 17, 2016, the Audit Committee convened a session and reviewed as well as approved the following
two topics:
(1) 2015 annual financial report of the Company;
(2) Proposal on hiring new CPAs firm; and
In view of the fact that GP Certified Public Accountants LLP (Special General Partnership) has been providing
financial audit services for the Company for 23 years, and the service period of present year is about to expire, it
is proposed to appoint Beijing Zhongzheng Tiantong Certified Public Accountants (Special General Partnership)
as the auditing institution for finance and internal control of the Company for the year 2016 after careful
investigation and survey in order to ensure the independence and objectivity of the audit work.
(3) 2015 work plan of Audit Department.
3. On April 18, 2016, the Audit Committee convened a meeting, at which the Proposal on Appointment of Pang
Haitao as Internal Audit Manager was considered and approved.
(II) Work of the Remuneration and Appraisal Committee
1. On January 29, 2016, the Remuneration and Appraisal Committee held a meeting to consider the Notes on the
Remuneration of the Senior Management of the Company for 2015;
In the case of macroeconomic downturn and increased competition in the industry, the Company’s performance in
2015 didn’t meet the requirements, which was mainly due to the following reasons: (1) Compensated the investors
for losses of RMB 130.42 million; (2) accrued provision for impairment of assets RMB 89.47 million; (3) LED
product price dropped, resulting in profits reduction.
Although the Company’s performance in 2015 didn’t meet the requirements, the achievement of main business
didn’t decline too much. The operating income of the Company in 2015 was RMB 2,876,659,100, which declined
by 6.26% on a year-on-year basis. According to the fulfillment of the performance indicators of senior
management, comparing with the performance requirements and combined with the Company’s actual situation, it
is decided to pay only the basic annual salary to the senior management in 2015, while the performance salary and
long-term incentive fund will be garnished.
2. On December 20, 2016, the Remuneration and Appraisal Committee held a meeting to consider the Proposal of
Remuneration Plan for Senior Management of Foshan Electrical and Lighting Co., Ltd. (Draft).
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
The Proposal was developed according to the industry and regional remuneration level of the Company, combined
with the actual operation of the company and the assessment system. The remuneration scheme complies with
laws and regulations and the Articles of Association and other relevant provisions and is conducive to mobilize the
enthusiasm and creativity of the company’s senior management, create good business performance and promote
the company’s long-term development.
(III) Work of the Nomination Committee
During the Reporting Period, the Nomination Committee carried out its work actively and seriously, carefully
audited the qualification, work experience and other related matters of the directors and senior management
serving in the Reporting Period, and believed that the directors and senior management were fully qualified for
their work. During the Reporting Period, the Nomination Committee nominated Qi Siyin as director of the Board
of Directors; nominated Zhang Yong and Zhang Xuequan as the senior management of the Company.
VII Performance of duties by the Supervisory Board
Did the Supervisory Board find any risks to the Company during its supervision in this Reporting Period?
□ Yes √ No
The Supervisory Board raised no objections in this Reporting Period.
VIII Appraisal and incentive for executive officers
The senior management of the Company is appointed by the Board of Directors, evaluated by the Remuneration
and Appraisal Committee of the Board of Directors according to their work abilities, duty performance and
fulfillment of the operating performance management, and paid according to Establishing Equity Incentive
System for Middle and Senior Management and Remuneration System of the company considered and passed at
the Annual Shareholders’ General Meeting of the Company in 2001, the Remuneration Plan for Executive Officers
considered and approved by the Board and salary system of the Company.
IX Internal control
1. Serious internal control defects found in this Reporting Period
□ Yes √ No
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
2. Internal control self-evaluation report
Disclosure date of the internal control
03/30/2017
self-evaluation report
Index to the disclosed internal control
See www.cninfo.com.cn for the Internal Control Self-Evaluation Report 2016
self-evaluation report
Total assets of the evaluated entities as a
99.36%
percentage in the consolidated total assets
Operating revenues of the evaluated
entities as a percentage in the consolidated 99.99%
operating revenues
Defect identification standards
Type Financial-report related Non-financial-report related
Defect with one of the following
characteristics should be recognized as a
serious defect: 1. being punished for
Defect with one of the following seriously violating the national laws, the
characteristics should be recognized as a administrative laws and regulations and
serious defect: 1. the defect involved with the normative documents; 2. the
the malpractices of the Directors, the Company suffers a serious economic loss
Supervisors and the Senior Executives; 2. the due to any serious errors made in
controlled environment is invalid; 3. the CPA decision-making caused by serious lack
discovered any significant misstatement of decision-making procedures on
from the current financial report while the significant events or unfair
internal control could not discover the decision-making; 3. the Company’s
mistake during the operating process; 4. the reputation has been unrepairably
supervision from the Corporate Audit damaged by any conduct in violation of
Committee and the internal audit institution laws and regulations which produces a
Nature standard
on the internal control. If there met with one far-reaching negative impact and draws
of the situation of the following, should be the public’s attention widely; 4. the
recognized as an important defect: 1. the major business involved with the
recognized important defect is not solved production and operating of the
during the reasonable period; 2. corrects the Company lack of the system control or
published financial report; 3. the function of the system control is invalid; 5. the
the internal audit of the Company is invalid; results of the internal control assessment
4. the control of whether execute the turn out to include any serious defects
selection and the application of the and such defects fail to be rectified
accounting policies according to the effectively within 12 months. Defects
Generally Accepted Accounting Principles is with the following characteristics should
invalid. be recognized as important defects: 1.
owing to partly lack of the
decision-making process on significant
events and the undemocratic
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
decision-making process which caused
the decision-making mistake that led the
Company face with certain economic
losses; 2. the negative influences owning
to the unlawful acts and the irregularities
h involve with wide range and cause
public concern among the partial regions
which bring certain harms to the
reputation of the Company; 3. the system
of the major business involved with the
production and operating of the
Company is incomplete or partially
invalid; 4. the results of the internal
control assessment turn out to include
any serious defects and such defects fail
to be rectified effectively within 6
months.
Based on the data of the 2016 consolidated According to the quantitative criterion of
statements, the quantitative criterion of the internal control defects of the
confirming the important degree of the financial report, the quantitative criterion
misstatement (including the false negatives) of the internal control defects assessment
from of the consolidated statements of the of the non-financial report confirmed by
listed companies is as follows: serious the Company is as follows: serious
Quantitative standard
defect: misstatement≥1.0% of the total assets defect: losses amount≥1.0% of the total
amount; important defects: 0.5% of the total assets amount; important defects: 0.5%
assets amount≤misstatement＜1.0% of the of the total assets amount≤losses amount
total assets amount; common defects: ＜ 1.0% of the total assets amount;
misstatement ＜ 0.5% of the total assets common defects: losses amount＜0.5%
amount. of the total assets amount.
Number of serious financial-report-related
defects
Number of serious
non-financial-report-related defects
Number of important
financial-report-related defects
Number of important
non-financial-report-related defects
X Auditor’s report on internal control
√ Applicable □ Not applicable
Opinion paragraph in the auditor’s report on internal control
Beijing Zhongzhengtiantong Certified Public Accountants LLP considered that: Foshan Electrical and Lighting Co., Ltd.
maintained effective internal control of the financial report in all significant aspects according to the Basic Standards for Internal
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Control and relevant regulations.
Auditor’s report on internal control
Disclosed
disclosed or not
Disclosure date 03/30/2017
Index to the disclosed auditor’s
See www.cninfo.com.cn for the Auditor’s Report on Internal Control
report on internal control
Type of the auditor’s opinion Standard unqualified opinion
Serious non-financial-report-related
None
defects
Indicate by tick mark whether any modified opinions are expressed by the CPAs firm in its auditor’s report on the
Company’s internal control.
□ Yes √ No
Indicate by tick mark whether the auditor’s report on the Company’s internal control issued by the CPAs firm is
consistent with the self-evaluation report of the Board.
√ Yes □ No
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Section X Corporate Bonds
Are there any corporate bonds publicly offered and listed on the stock exchange, which were undue before the
approval date of this Report or were due but could not be redeemed in full?
No.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Section XI Financial Report
I Auditor’s report
Type of auditor’s opinion Standard unqualified opinion
Date of signing the auditor’s report 03/28/2017
Name of the auditor Beijing Zhongzhengtiantong Certified Public Accountants LLP
No. of the auditor’s report ZZTT（2017）Auditor’s Report No. 071062
Name of CPA Tong Quanyong, Luo Dongri
Text of the Auditor’s Report
Auditor’s Report
ZZTT（2017）Auditor’s Report No. 071062
All shareholders of Foshan Electrical and Lighting Co., Ltd.,
We have audited the accompanying financial statements of Foshan Electrical and Lighting Co., Ltd.
(the “Company”), which comprise the Company’s and consolidated balance sheets as at December
31, 2016, the Company’s and consolidated income statements, the Company’s and consolidated
cash flow statements, the Company’s and consolidated statements of changes in shareholders’
equity for the year then ended, as well as the notes to the financial statements.
1. The management’s responsibility for the financial statements
The management of the Company is responsible for the preparation and fair presentation of these
financial statements. Such a responsibility includes: (1) preparing financial statements according to
the Accounting Standards for Business Enterprises and make them a fair presentation; and (2)
designing, implementing and maintaining internal control relevant to the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
2. Auditor’s responsibility
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Our responsibility is to express an opinion on these financial statements based on our audit. We
have conducted our audit in accordance with the Audit Standards for Chinese Registered
Accountants, which require that we comply with ethical requirements and plan and perform the
audit to obtain reasonable assurance as to whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risks assessments, the auditor considers the internal control
related to the preparation of the financial statements so as to design proper audit procedures. An
audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate, which provides a
basis for us to express auditing opinion.
3. Auditor’s opinion
In our opinion, the financial statements of the Company have been prepared according to the
Accounting Standards for Business Enterprises in all material aspects, which give a fair view of the
Company’s and consolidated financial positions as at December 31, 2016 and the Company’s and
consolidated operating results and cash flows for the year then ended.
Beijing Zhongzhengtiantong Certified CPA:
Public Accountants LLP
Tong Quanyong
CPA:
Beijing China Luo Dongri
March 28, 2017
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
II Financial statements
Currency unit for the financial statements: RMB
1. Consolidated balance sheet
Prepared by Foshan Electrical and Lighting Co., Ltd.
December 31, 2016
Unit: RMB Yuan
Item December 31, 2016 December 31, 2015
Current assets:
Monetary funds 1,479,283,642.54 935,241,205.20
Settlement reserve
Interbank lendings
Financial assets at fair value through
51,600.00
profit/loss
Derivative financial assets
Notes receivable 67,925,843.74 202,669,316.48
Accounts receivable 595,257,954.00 366,401,130.72
Accounts paid in advance 30,292,007.11 6,858,950.41
Premiums receivable
Reinsurance premiums receivable
Receivable reinsurance contract
reserve
Interest receivable 4,612,406.80 3,022,646.23
Dividends receivable
Other accounts receivable 11,977,660.58 17,313,604.14
Financial assets purchased under
agreements to resell
Inventories 753,681,605.19 559,651,928.21
Assets held for sale
Non-current assets due within one
year
Other current assets 441,205,461.72 91,060,842.89
Total current assets 3,384,236,581.68 2,182,271,224.28
Non-current assets:
Loans and advances to customers
Available-for-sale financial assets 1,732,150,857.01 3,092,416,162.34
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investments 210,394,932.69 382,637.52
Investment property
Fixed assets 446,006,929.66 484,436,218.17
Construction in progress 71,479,325.91 32,488,518.68
Engineering materials
Disposal of fixed assets
Productive living assets
Oil-gas assets
Intangible assets 160,330,395.13 163,887,313.63
R&D expenses
Goodwill
Long-term deferred expenses 6,897,119.78 406,425.35
Deferred tax assets 43,547,918.44 42,744,728.66
Other non-current assets 45,125,340.00 49,263,204.15
Total non-current assets 2,715,932,818.62 3,866,025,208.50
Total assets 6,100,169,400.30 6,048,296,432.78
Current liabilities:
Short-term borrowings
Borrowings from the Central Bank
Money deposits accepted and
inter-bank deposits
Interbank borrowings
Financial liabilities at fair value
through profit/loss
Derivative financial liabilities
Notes payable
Accounts payable 552,255,512.33 396,263,382.12
Accounts received in advance 41,180,818.13 71,531,790.37
Financial assets sold for repurchase
Fees and commissions payable
Payroll payable 96,021,156.06 72,004,987.32
Taxes payable 138,282,644.72 12,969,090.31
Interest payable
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Dividends payable 6,287,923.09
Other accounts payable 50,104,338.81 36,530,501.22
Reinsurance premiums payable
Insurance contract reserve
Payables for acting trading of
securities
Payables for acting underwriting of
securities
Liabilities held for sale
Non-current liabilities due within one
year
Other current liabilities
Total current liabilities 884,132,393.14 589,299,751.34
Non-current liabilities:
Long-term borrowings
Bonds payable
Of which: Preference shares
Perpetual bonds
Long-term accounts payable
Long-term payroll payable
Special payables
Provisions
Deferred income 10,449,768.49 10,722,275.02
Deferred tax liabilities 200,112,595.11 390,534,187.37
Other non-current liabilities
Total non-current liabilities 210,562,363.60 401,256,462.39
Total liabilities 1,094,694,756.74 990,556,213.73
Owners’ equity:
Share capital 1,272,132,868.00 1,272,132,868.00
Other equity instruments
Of which: Preference shares
Perpetual bonds
Capital reserve 285,821,459.07 296,324,375.58
Less: Treasury shares
Other comprehensive income 1,133,971,372.25 2,212,989,156.02
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Special reserve
Surplus reserve 733,924,951.81 628,439,107.12
Provisions for general risks
Retained earnings 1,564,615,925.99 613,661,381.40
Equity attributable to owners of the
4,990,466,577.12 5,023,546,888.12
Company
Minority interests 15,008,066.44 34,193,330.93
Total owners’ equity 5,005,474,643.56 5,057,740,219.05
Total liabilities and owners’ equity 6,100,169,400.30 6,048,296,432.78
Legal representative: He Yong Accounting head for this Report: Liu Xingming
Head of the accounting department: Tang Qionglan
2. Balance sheet of the Company
Unit: RMB Yuan
Item December 31, 2016 December 31, 2015
Current assets:
Monetary funds 1,235,417,964.88 633,291,177.30
Financial assets at fair value through
51,600.00
profit/loss
Derivative financial assets
Notes receivable 66,222,840.44 200,483,728.48
Accounts receivable 611,855,496.90 387,870,578.18
Accounts paid in advance 117,217,953.23 6,258,960.70
Interest receivable 3,590,629.01 1,979,245.24
Dividends receivable 14,671,820.57
Other accounts receivable 56,714,849.84 47,175,016.15
Inventories 717,097,516.25 540,058,085.51
Assets held for sale
Non-current assets due within one
year
Other current assets 379,932,325.87 87,132,242.99
Total current assets 3,202,721,396.99 1,904,300,634.55
Non-current assets:
Available-for-sale financial assets 1,732,150,857.01 3,092,416,162.34
Held-to-maturity investments
Long-term accounts receivable
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Long-term equity investments 693,992,222.45 417,972,577.28
Investment property
Fixed assets 375,075,102.44 403,470,166.52
Construction in progress 69,589,510.14 32,098,207.18
Engineering materials
Disposal of fixed assets
Productive living assets
Oil-gas assets
Intangible assets 117,017,633.92 120,554,776.71
R&D expenses
Goodwill
Long-term deferred expenses 6,897,119.78
Deferred tax assets 37,790,043.38 36,469,936.66
Other non-current assets 44,519,790.00 49,025,459.75
Total non-current assets 3,077,032,279.12 4,152,007,286.44
Total assets 6,279,753,676.11 6,056,307,920.99
Current liabilities:
Short-term borrowings
Financial liabilities at fair value
through profit/loss
Derivative financial liabilities
Notes payable
Accounts payable 701,814,818.26 518,615,548.53
Accounts received in advance 38,406,798.91 70,168,946.84
Payroll payable 66,764,581.34 48,921,086.93
Taxes payable 121,939,572.62 2,172,775.43
Interest payable
Dividends payable
Other accounts payable 258,368,416.59 93,375,598.50
Liabilities held for sale
Non-current liabilities due within one
year
Other current liabilities
Total current liabilities 1,187,294,187.72 733,253,956.23
Non-current liabilities:
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Long-term borrowings
Bonds payable
Of which: Preference shares
Perpetual bonds
Long-term payables
Long-term payroll payable
Special payables
Provisions
Deferred income 9,984,768.34 10,102,274.95
Deferred tax liabilities 200,112,595.11 390,534,187.37
Other non-current liabilities
Total non-current liabilities 210,097,363.45 400,636,462.32
Total liabilities 1,397,391,551.17 1,133,890,418.55
Owners’ equity:
Share capital 1,272,132,868.00 1,272,132,868.00
Other equity instruments
Of which: Preference shares
Perpetual bonds
Capital reserve 293,425,065.15 293,419,444.90
Less: Treasury shares
Other comprehensive income 1,133,971,372.25 2,212,989,156.02
Special reserve
Surplus reserve 733,924,951.81 628,439,107.12
Retained earnings 1,448,907,867.73 515,436,926.40
Total owners’ equity 4,882,362,124.94 4,922,417,502.44
Total liabilities and owners’ equity 6,279,753,676.11 6,056,307,920.99
Legal representative: He Yong Accounting head for this Report: Liu Xingming
Head of the accounting department: Tang Qionglan
3. Consolidated income statement
Unit: RMB Yuan
Item 2016
1. Operating revenues 3,366,454,968.60 2,876,659,100.63
Including: Sales income 3,366,454,968.60 2,876,659,100.63
Interest income
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Premium income
Fee and commission income
2. Operating costs 2,966,419,594.56 2,716,539,877.28
Including: Cost of sales 2,518,164,099.97 2,185,558,581.31
Interest expenses
Fee and commission expenses
Surrenders
Net claims paid
Net amount provided as insurance
contract reserve
Expenditure on policy dividends
Reinsurance premium
Taxes and surtaxes 34,882,209.20 25,680,514.21
Selling expenses 204,777,965.73 203,112,498.50
Administrative expenses 211,412,262.47 241,585,514.09
Finance costs -28,457,453.89 -28,871,124.02
Asset impairment loss 25,640,511.08 89,473,893.19
Add: Profit on fair value changes (“-”
35,935.00
means loss)
Investment income (“-” means loss) 882,079,521.77 19,523,757.86
Including: Share of profit/loss of
4,327,697.03 -3,307,086.87
associates and joint ventures
Exchange gains (“-” means loss)
3. Operating profit (“-” means loss) 1,282,114,895.81 179,678,916.21
Add: Non-operating income 3,740,686.27 7,627,967.24
Including: Profit on disposal of
20,253.97 182,286.57
non-current assets
Less: Non-operating expense 12,622,554.30 141,313,889.53
Including: Loss on disposal of
5,796,711.34 8,354,989.42
non-current assets
4. Total profit (“-” means loss) 1,273,233,027.78 45,992,993.92
Less: Corporate income tax 199,976,634.04 8,308,268.53
5. Net profit (“-” means loss) 1,073,256,393.74 37,684,725.39
Net profit attributable to owners of
1,072,342,050.13 53,405,593.12
the Company
Minority interests’ income 914,343.61 -15,720,867.73
6. Other comprehensive income net of tax -1,079,017,783.77 2,140,838,817.33
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Other comprehensive income net of
tax attributable to owners of the -1,079,017,783.77 2,140,838,817.33
Company
6.1 Other comprehensive income
that will not be reclassified into
profit/loss
6.1.1 Changes in net liabilities
or assets with a defined benefit plan upon
re-measurement
6.1.2 Share of other
comprehensive income of investees that
cannot be reclassified into profit/loss
under the equity method
6.2 Other comprehensive income
to be subsequently reclassified into -1,079,017,783.77 2,140,838,817.33
profit/loss
6.2.1 Share of other
comprehensive income of investees that
21,831,908.42
will be reclassified into profit/loss under
the equity method
6.2.2 Profit/loss on fair value
changes of available-for-sale financial -1,100,849,692.19 2,140,838,817.33
assets
6.2.3 Profit/loss on
reclassifying held-to-maturity
investments into available-for-sale
financial assets
6.2.4 Effective profit/loss on
cash flow hedges
6.2.5 Currency translation
differences
6.2.6 Other
Other comprehensive income net of
tax attributable to minority interests
7. Total comprehensive income -5,761,390.03 2,178,523,542.72
Attributable to owners of the
-6,675,733.64 2,194,244,410.45
Company
Attributable to minority interests 914,343.61 -15,720,867.73
8. Earnings per share
8.1 Basic earnings per share 0.8429 0.0420
8.2 Diluted earnings per share 0.8429 0.0420
Where business mergers under the same control occurred in this Reporting Period, the net profit achieved by the merged parties
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
before the business mergers was RMB0.00, with the corresponding amount for the last period being RMB0.00.
Legal representative: He Yong Accounting head for this Report: Liu Xingming
Head of the accounting department: Tang Qionglan
4. Income statement of the Company
Unit: RMB Yuan
Item 2016
1. Operating revenues 3,419,178,022.89 2,931,734,966.72
Less: Operating costs 2,643,247,405.29 2,324,989,903.05
Taxes and surtaxes 23,282,652.36 17,146,422.63
Selling expenses 202,456,041.37 198,554,906.43
Administrative expenses 193,826,370.43 187,165,627.10
Finance costs -23,363,408.54 -21,570,398.18
Asset impairment loss 25,569,327.12 90,519,931.40
Add: profit on fair value changes (“-”
35,935.00
means loss)
Investment income (“-” means
895,733,724.43 19,523,757.86
loss)
Including: Share of profit/loss of
4,327,697.03 -3,307,086.87
associates and joint ventures
2. Operating profit (“-” means loss) 1,249,893,359.29 154,488,267.15
Add: Non-operating income 3,197,757.63 5,222,584.35
Including: Profit on disposal of
9,401.71 9,375.59
non-current assets
Less: Non-operating expense 10,946,958.61 139,994,837.37
Including: Loss on disposal of
5,485,996.38 7,411,664.29
non-current assets
3. Total profit (“-” means loss) 1,242,144,158.31 19,716,014.13
Less: Corporate income tax 187,285,711.44 -2,990,648.49
4. Net profit (“-” means loss) 1,054,858,446.87 22,706,662.62
5. Other comprehensive income net of
-1,079,017,783.77 2,140,838,817.33
tax
5.1 Other comprehensive income that
will not be reclassified into profit and
loss
5.1.1 Changes in net liabilities or
assets with a defined benefit plan upon
re-measurement
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
5.1.2 Share of other
comprehensive income of investees that
cannot be reclassified into profit/loss
under the equity method
5.2 Other comprehensive income to
be subsequently reclassified into -1,079,017,783.77 2,140,838,817.33
profit/loss
5.2.1 Share of other
comprehensive income of investees that
21,831,908.42
will be reclassified into profit/loss
under the equity method
5.2.2 Profit/loss on fair value
changes of available-for-sale financial -1,100,849,692.19 2,140,838,817.33
assets
5.2.3 Profit/loss on reclassifying
held-to-maturity investments into
available-for-sale financial assets
5.2.4 Effective profit/loss on cash
flow hedges
5.2.5 Currency translation
differences
5.2.6 Other
6. Total comprehensive income -24,159,336.90 2,163,545,479.95
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
Legal representative: He Yong Accounting head for this Report: Liu Xingming
Head of the accounting department: Tang Qionglan
5. Consolidated cash flow statement
Unit: RMB Yuan
Item 2016
1. Cash flows from operating activities:
Cash received from sale of
3,142,236,107.62 2,835,034,614.10
commodities and rendering of service
Net increase in money deposits from
customers and interbank placements
Net increase in loans from the
Central Bank
Net increase in funds borrowed from
other financial institutions
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Cash received from premium of
original insurance contracts
Net cash received from reinsurance
business
Net increase in deposits of policy
holders and investment fund
Net increase in disposal of financial
assets at fair value through profit/loss
Interest, fees and commissions
received
Net increase in interbank borrowings
Net increase in funds in repurchase
business
Tax refunds received 71,456,301.70 42,423,907.66
Cash received from other operating
52,922,399.69 27,080,736.93
activities
Subtotal of cash inflows from operating
3,266,614,809.01 2,904,539,258.69
activities
Cash paid for goods and services 1,962,007,251.93 1,618,725,610.28
Net increase in loans and advances to
customers
Net increase in funds deposited in the
Central Bank and interbank placements
Cash paid for claims of original
insurance contracts
Interest, fees and commissions paid
Cash paid as policy dividends
Cash paid to and for employees 610,995,842.31 508,218,930.15
Taxes paid 242,817,744.82 214,353,895.03
Cash paid for other operating
160,815,201.47 374,915,633.80
activities
Subtotal of cash outflows from
2,976,636,040.53 2,716,214,069.26
operating activities
Net cash flows from operating activities 289,978,768.48 188,325,189.43
2. Cash flows from investing activities:
Cash received from retraction of
64,155,025.41 25,409,754.20
investments
Cash received as investment income 918,324,848.10 4,413,629.96
Net cash received from disposal of
fixed assets, intangible assets and other 113,000.00 1,038,128.00
long-term assets
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Net cash received from disposal of
subsidiaries or other business units
Cash received from other investing
activities
Subtotal of cash inflows from investing
982,592,873.51 30,861,512.16
activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 99,546,739.15 68,596,503.73
assets
Cash paid for investment 620,507,350.00
Net increase in pledged loans
Net cash paid to acquire subsidiaries
and other business units
Cash paid for other investing
39,877.93
activities
Subtotal of cash outflows from
720,093,967.08 68,596,503.73
investing activities
Net cash flows from investing activities 262,498,906.43 -37,734,991.57
3. Cash flows from financing activities:
Cash received from capital
10,000,000.00
contributions
Including: Cash received from
minority shareholder investments by 10,000,000.00
subsidiaries
Cash received as borrowings
Cash received from issuance of
bonds
Cash received from other financing
activities
Subtotal of cash inflows from financing
10,000,000.00
activities
Repayment of borrowings
Cash paid for interest expenses and
15,901,660.85 215,284,023.90
distribution of dividends or profit
Including: dividends or profit paid
by subsidiaries to minority interests
Cash paid for other financing
activities
Sub-total of cash outflows from
15,901,660.85 215,284,023.90
financing activities
Net cash flows from financing activities -5,901,660.85 -215,284,023.90
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
4. Effect of foreign exchange rate
-838,479.89 8,538,698.81
changes on cash and cash equivalents
5. Net increase in cash and cash
545,737,534.17 -56,155,127.23
equivalents
Add: Opening balance of cash and
933,546,108.37 989,701,235.60
cash equivalents
6. Closing balance of cash and cash
1,479,283,642.54 933,546,108.37
equivalents
Legal representative: He Yong Accounting head for this Report: Liu Xingming
Head of the accounting department: Tang Qionglan
6. Cash flow statement of the Company
Unit: RMB Yuan
Item 2016
1. Cash flows from operating activities:
Cash received from sale of
3,164,460,619.08 2,801,046,950.23
commodities and rendering of service
Tax refunds received 71,456,301.70 42,234,888.61
Cash received from other operating
43,134,054.60 14,330,850.10
activities
Subtotal of cash inflows from operating
3,279,050,975.38 2,857,612,688.94
activities
Cash paid for goods and services 2,428,381,785.03 1,958,657,434.17
Cash paid to and for employees 235,862,626.78 185,511,119.94
Taxes paid 141,319,406.75 120,381,921.25
Cash paid for other operating
155,496,800.41 391,075,314.15
activities
Subtotal of cash outflows from
2,961,060,618.97 2,655,625,789.51
operating activities
Net cash flows from operating activities 317,990,356.41 201,986,899.43
2. Cash flows from investing activities:
Cash received from retraction of
64,155,025.41 25,409,754.20
investments
Cash received as investment income 918,324,848.10 4,413,629.96
Net cash received from disposal of
fixed assets, intangible assets and other 14,000.00 18,626.61
long-term assets
Net cash received from disposal of
subsidiaries or other business units
Cash received from other investing
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
activities
Subtotal of cash inflows from investing
982,493,873.51 29,842,010.77
activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 90,609,951.60 77,403,585.76
assets
Cash paid for investment 591,007,350.00
Net cash paid to acquire subsidiaries
and other business units
Cash paid for other investing
activities
Subtotal of cash outflows from
681,617,301.60 77,403,585.76
investing activities
Net cash flows from investing activities 300,876,571.91 -47,561,574.99
3. Cash flows from financing activities:
Cash received from capital
contributions
Cash received as borrowings
Cash received from issuance of
bonds
Cash received from other financing
activities
Subtotal of cash inflows from financing
activities
Repayment of borrowings
Cash paid for interest expenses and
15,901,660.85 215,284,023.90
distribution of dividends or profit
Cash paid for other financing
activities
Sub-total of cash outflows from
15,901,660.85 215,284,023.90
financing activities
Net cash flows from financing activities -15,901,660.85 -215,284,023.90
4. Effect of foreign exchange rate
-838,479.89 8,514,259.57
changes on cash and cash equivalents
5. Net increase in cash and cash
602,126,787.58 -52,344,439.89
equivalents
Add: Opening balance of cash and
633,291,177.30 685,635,617.19
cash equivalents
6. Closing balance of cash and cash
1,235,417,964.88 633,291,177.30
equivalents
Legal representative: He Yong Accounting head for this Report: Liu Xingming
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Head of the accounting department: Tang Qionglan
7. Consolidated statement of changes in owners’ equity
2016
Unit: RMB Yuan
Equity attributable to owners of the Company
Other equity
Other Retaine Minorit Total
Item instruments Less: General
Share Capital compre Special Surplus d y owners’
Prefer Perpet Treasur risk
capital reserve hensive reserve reserve earning interests equity
ence ual Other y shares reserve
income s
shares bonds
1. Balance at the 1,272, 2,212,9 5,057,7
296,324 628,439 613,661 34,193,
end of the prior 132,86 89,156. 40,219.
,375.58 ,107.12 ,381.40 330.93
year 8.00 02
Add: Changes
in accounting
policies
Correction of
errors in prior
periods
Business
mergers under the
same control
Other
2. Balance at the 1,272, 2,212,9 5,057,7
296,324 628,439 613,661 34,193,
beginning of the 132,86 89,156. 40,219.
,375.58 ,107.12 ,381.40 330.93
year 8.00 02
3. Increase/
-1,079,0
decrease in the -10,502, 105,485 950,954 -19,185, -52,265,
17,783.
period (“-” means 916.51 ,844.69 ,544.59 264.49 575.49
decrease)
3.1 Total -1,079,0 1,072,3
914,343 -5,761,3
comprehensive 17,783. 42,050.
.61 90.03
income 77
3.2 Capital
-10,508, -13,811, -24,320,
increased and
536.76 685.01 221.77
reduced by owners
3.2.1
Ordinary shares 10,000, 10,000,
increased by 000.00 000.00
shareholders
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
3.2.2 Capital
increased by
holders of other
equity instruments
3.2.3
Amounts of
share-based
payments charged
to owners’ equity
-10,508, -23,811, -34,320,
3.2.4 Other
536.76 685.01 221.77
-121,38
3.3 Profit 5,620.2 105,485 -6,287,9 -22,183,
7,505.5
distribution 5 ,844.69 23.09 963.69
3.3.1 -105,48
105,485
Appropriation to 5,844.6
,844.69
surplus reserve
3.3.2
Appropriation to
general risk
provisions
3.3.3
Appropriation to -15,901, -6,287,9 -22,189,
owners (or 660.85 23.09 583.94
shareholders)
5,620.2 5,620.2
3.3.4 Other
5
3.4 Internal
carry-forward of
owners’ equity
3.4.1 New
increase of capital
(or share capital)
from capital
reserve
3.4.2 New
increase of capital
(or share capital)
from surplus
reserve
3.4.3 Surplus
reserve for making
up loss
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
3.4.4 Other
3.5 Special reserve
3.5.1
Withdrawn for the
period
3.5.2 Used in
the period
3.6 Other
1,272, 1,133,9 1,564,6 5,005,4
285,821 733,924 15,008,
4. Closing balance 132,86 71,372. 15,925. 74,643.
,459.07 ,951.81 066.44
8.00 25 99
2015
Unit: RMB Yuan
Equity attributable to owners of the Company
Other equity Minorit
Other Total
Item instruments Less: General Retaine y
Share Capital compre Specific Surplus owners’
Prefer Perpet Treasur risk d interest
capital reserve hensive reserve reserve equity
ence ual Other y shares reserve earnings s
income
shares bonds
1. Balance at the 978,56 3,094,4
589,892 72,150, 626,168 777,810 49,914,
end of the prior 3,745. 99,919.
,717.59 338.69 ,440.86 ,478.44 198.66
year 00
Add: Changes
in accounting
policies
Correction of
errors in prior
periods
Business
mergers under the
same control
Other
2. Balance at the 978,56 3,094,4
589,892 72,150, 626,168 777,810 49,914,
beginning of the 3,745. 99,919.
,717.59 338.69 ,440.86 ,478.44 198.66
year 00
3. Increase/
293,56 -293,56 2,140,8 -164,14 1,963,2
decrease in the 2,270,6 -15,720
9,123. 8,342.0 38,817. 9,097.0 40,299.
period (“-” means 66.26 ,867.73
00 1 33 4
decrease)
3.1 Total 2,140,8 53,405, -15,720 2,178,5
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
comprehensive 38,817. 593.12 ,867.73 23,542.
income 33
3.2 Capital
increased and
reduced by owners
3.2.1
Ordinary shares
increased by
shareholders
3.2.2 Capital
increased by
holders of other
equity instruments
3.2.3
Amounts of
share-based
payments charged
to owners’ equity
3.2.4 Other
-217,55 -215,28
3.3 Profit 2,270,6
4,690.1 4,023.9
distribution 66.26
6
3.3.1
2,270,6 -2,270,6
Appropriation to
66.26 66.26
surplus reserve
3.3.2
Appropriation to
general risk
provisions
3.3.3
-215,28 -215,28
Appropriation to
4,023.9 4,023.9
owners (or
0
shareholders)
3.3.4 Other
3.4 Internal 293,56 -293,56
carry-forward of 9,123. 9,123.0
owners’ equity 00
3.4.1 New
increase of capital 293,56 -293,56
(or share capital) 9,123. 9,123.0
from capital 00
reserve
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
3.4.2 New
increase of capital
(or share capital)
from surplus
reserve
3.4.3 Surplus
reserve for making
up loss
3.4.4 Other
3.5 Special reserve
3.5.1
Withdrawn for the
period
3.5.2 Used in
the period
3.6 Other 780.99 780.99
1,272, 2,212,9 5,057,7
296,324 628,439 613,661 34,193,
4. Closing balance 132,86 89,156. 40,219.
,375.58 ,107.12 ,381.40 330.93
8.00 02
Legal representative: He Yong Accounting head for this Report: Liu Xingming
Head of the accounting department: Tang Qionglan
8. Statement of changes in owners’ equity of the Company
2016
Unit: RMB Yuan
Other equity instruments Other
Less: Retaine Total
Item Share Prefere Capital comprehe Special Surplus
Perpetu Treasury d owners’
capital nce Other reserve nsive reserve reserve
al bonds shares earnings equity
shares income
1. Balance at the
1,272,13 293,419,4 2,212,989 628,439,1 515,436 4,922,417
end of the prior
2,868.00 44.90 ,156.02 07.12 ,926.40 ,502.44
year
Add: Changes
in accounting
policies
Correction of
errors in prior
periods
Other
2. Balance at the 1,272,13 293,419,4 2,212,989 628,439,1 515,436 4,922,417
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
beginning of the 2,868.00 44.90 ,156.02 07.12 ,926.40 ,502.44
year
3. Increase/
decrease in the -1,079,01 105,485,8 933,470 -40,055,3
5,620.25
period (“-” means 7,783.77 44.69 ,941.33 77.50
decrease)
3.1 Total 1,054,8
-1,079,01 -24,159,3
comprehensive 58,446.
7,783.77 36.90
income
3.2 Capital
increased and
reduced by owners
3.2.1
Ordinary shares
increased by
shareholders
3.2.2 Capital
increased by
holders of other
equity instruments
3.2.3
Amounts of
share-based
payments charged
to owners’ equity
3.2.4 Other
-121,38
3.3 Profit 105,485,8 -15,896,0
5,620.25 7,505.5
distribution 44.69 40.60
3.3.1 -105,48
105,485,8
Appropriation to 5,844.6
44.69
surplus reserve
3.3.2
Appropriation to -15,901, -15,901,6
owners (or 660.85 60.85
shareholders)
3.3.3 Other 5,620.25 5,620.25
3.4 Internal
carry-forward of
owners’ equity
3.4.1 New
increase of capital
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
(or share capital)
from capital
reserve
3.4.2 New
increase of capital
(or share capital)
from surplus
reserve
3.4.3 Surplus
reserve for making
up loss
3.4.4 Other
3.5 Special reserve
3.5.1
Withdrawn for the
period
3.5.2 Used in
the period
3.6 Other
1,448,9
1,272,13 293,425,0 1,133,971 733,924,9 4,882,362
4. Closing balance 07,867.
2,868.00 65.15 ,372.25 51.81 ,124.94
2015
Unit: RMB Yuan
Other equity instruments Other
Less: Retaine Total
Item Share Prefere Capital comprehe Special Surplus
Perpetu Treasury d owners’
capital nce Other reserve nsive reserve reserve
al bonds shares earnings equity
shares income
1. Balance at the
978,563, 586,987,7 72,150,33 626,168,4 710,284 2,974,155
end of the prior
745.00 86.91 8.69 40.86 ,953.94 ,265.40
year
Add: Changes
in accounting
policies
Correction of
errors in prior
periods
Other
2. Balance at the 978,563, 586,987,7 72,150,33 626,168,4 710,284 2,974,155
beginning of the 745.00 86.91 8.69 40.86 ,953.94 ,265.40
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
year
3. Increase/
-194,84
decrease in the 293,569, -293,568, 2,140,838 2,270,666 1,948,262
8,027.5
period (“-” means 123.00 342.01 ,817.33 .26 ,237.04
decrease)
3.1 Total
2,140,838 22,706, 2,163,545
comprehensive
,817.33 662.62 ,479.95
income
3.2 Capital
increased and
reduced by owners
3.2.1
Ordinary shares
increased by
shareholders
3.2.2 Capital
increased by
holders of other
equity instruments
3.2.3
Amounts of
share-based
payments charged
to owners’ equity
3.2.4 Other
-217,55
3.3 Profit 2,270,666 -215,284,
4,690.1
distribution .26 023.90
3.3.1
2,270,666 -2,270,6
Appropriation to
.26 66.26
surplus reserve
3.3.2
-215,28
Appropriation to -215,284,
4,023.9
owners (or 023.90
shareholders)
3.3.3 Other
3.4 Internal
293,569, -293,569,
carry-forward of
123.00 123.00
owners’ equity
3.4.1 New
increase of capital 293,569, -293,569,
(or share capital) 123.00 123.00
from capital
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
reserve
3.4.2 New
increase of capital
(or share capital)
from surplus
reserve
3.4.3 Surplus
reserve for making
up loss
3.4.4 Other
3.5 Special reserve
3.5.1
Withdrawn for the
period
3.5.2 Used in
the period
3.6 Other 780.99 780.99
1,272,13 293,419,4 2,212,989 628,439,1 515,436 4,922,417
4. Closing balance
2,868.00 44.90 ,156.02 07.12 ,926.40 ,502.44
Legal representative: He Yong Accounting head for this Report: Liu Xingming
Head of the accounting department: Tang Qionglan
III Company profile
1. Overview of the Company
Foshan Electrical and Lighting Co., Ltd. (hereinafter referred to as “the Company”), a joint-stock limited
company jointly founded by Foshan Electrical and Lighting Company, Nanhai Wuzhuang Color Glazed Brick
Field, and Foshan Poyang Printing Industrial Co. on Oct. 20, 1992 by raising funds under the approval of YGS
(1992) No. 63 Document issued by the Joint Examination Group for Experimental Enterprises in Stock System of
Guangdong Province and the Economic System Reform Commission of Guangdong Province, is an enterprise
with its shares held by both the corporate and the natural persons. As approved by China Securities Regulatory
Commission with Document (1993) No. 33, the Company publicly issued 19.3 million shares of social public
shares (A shares) to the public in Oct., 1993, and was listed in Shenzhen Stock Exchange for trade on Nov. 23,
1993. The Company was approved to issue 50,000,000 B shares on Jul. 23, 1995. And, as approved to change into
a foreign-invested stock limited company on Aug. 26, 1996 by (1996) WJMZEHZ No. 466 Document issued by
the Ministry of Foreign Trade and Economic Cooperation of the People’s Republic of China. On Dec. 11, 2000, as
approved by China Securities Regulatory Commission with ZJGS Zi [2000] No. 175 Document, the Company
additionally issued 55,000,000 A shares. At approved by the Shareholders’ General Meeting 2006, 2007, 2008 and
2014 the Company implemented the plan of capitalization of capital reserve, after the transfer, the registered
capital of the Company has increased to RMB1,272,132,868.00.
Credibility code of the Company: 91440000190352575W
Legal representative: Mr. He Yong
Address: No. 64, Fenjiang North Road, Foshan, Guangdong Province
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
2. Business nature and main operating activities
R&D and production of electro-optical source products, electro-optical source equipment and electro-optical
accessories, raw materials of electric light sources, lamps & fittings, electrical materials, motorcycle components,
household appliances, electric switches, electrical outlets, fire control products, ventilation devices, LED products,
lithium ion batteries and relevant materials; domestic and overseas sale of the aforesaid products; relevant
engineering consulting services. (Where a license is required, it must be obtained according to the government’s
rules before operation.)
3. Approval and Issue of the Financial Report
The Financial Report was approved and authorized for issue by the Board of Directors on March 28, 2017.
4. Scope of the consolidated financial statements and changes
The consolidation scope of the financial statement including the Company and the 9 subordinate subsidiaries such
as Foshan Chanchang Electric Appliance (Gaoming) Co., Ltd., Foshan Chansheng Electronic Ballast Co., Ltd.,
Foshan Taimei Times Lamps and Lanterns Co., Ltd., Nanjing Fozhao Lighting Components Co., Ltd., FSL
(Xinxiang) Lighting Co., Ltd., Foshan Electrical and Lighting New Light Source Technology Co., Ltd.,
Guangdong Fozhao Leasing Co., Ltd., Foshan Lighting Lamps & Components Co., Ltd. and FSL Zhida Electric
Technology Co., Ltd.
When compared with last year, FSL Zhida Electric Technology Co., Ltd. is newly added to and Suzhou Mont
Lighting Co., Ltd. is excluded from the consolidation scope. For details, see “Note VIII Changes in the
consolidation scope”.
IV Basis for preparation of financial statements
1. Preparation basis
The financial statements of the Company are based on the assumption of continuing operation, and are prepared
according to the actual transactions and events, the Accounting Standards for Business Enterprises - Basic
Standards issued by the Ministry of Finance (Decree No. 33 of the Ministry of Finance, revised by Decree No. 76
of the Ministry of Finance) , 41 specific accounting standards, the guidelines on the application of accounting
standards for business enterprises, the interpretation of accounting standards for business enterprises and other
relevant provisions (hereinafter referred to as the Accounting Standards for Business Enterprises) promulgated
and revised on and after 15 February 2006, as well as the disclosure requirements of Rules for the Information
Disclosure of Companies Publicly Issuing Securities No. 15 - General Provisions on Financial Reporting of China
Securities Regulatory Commission (Revised 2014).
According to the relevant provisions of the Accounting Standards for Business Enterprises, the Company’s
accounting is based on accrual basis. Except certain financial instruments, these financial statements are based on
historical costs. The amount of non-current assets held for sale is valuated at fair value less the estimated amount
and the original book value at the time when the conditions for sale are satisfied, whichever is lower. If the asset is
impaired, the corresponding provision for impairment shall be made in accordance with the relevant provisions.
2. Continuation
The Company has no matters affecting the continuing operation of the Company and is expected to have the
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
ability to continue to operate in the next 12 months. The financial statements of the Company are prepared on the
basis of continuing operation.
V Important accounting policies and estimations
Is the Company subject to any disclosure requirements for special industries?
No.
Reminders of the specific accounting policies and accounting estimations:
Naught
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Group are in compliance with in compliance with the Accounting
Standards for Business Enterprises, which factually and completely present the Company’s and the consolidated
financial positions, business results and cash flows, as well as other relevant information.
2. Fiscal Year
A fiscal year starts on 1 January and ends on 31 Dec. according to the Gregorian calendar.
3. Operating cycle
A normal operating cycle refers to a period from the Group purchasing assets for processing to realizing cash or
cash equivalents. An operating cycle for the Group is 12 months, which is also the classification criterion for the
liquidity of its assets and liabilities.
4. Recording Currency
Renminbi is the recording currency for the statements of the Company and its subsidiaries, as well as for the
consolidated financial statements.
5. Accounting treatment methods for business combinations under the same control or not under the same
control
A business combination refers to a transaction or event that combines two or more separate businesses to form a
reporting entity. Business combinations are divided into the combination under the same control and the
combination under different controls.
(1) Business combinations under the same control
A business combination under the same control is a business combination in which all of the combining
enterprises are ultimately controlled by the same party or the same parties both before and after the business
combination and on which the control is not temporary. For the combination under the same control, the party
obtaining control over other companies involved in the combination on the combination day is the combining
party, and other companies are combined parties. Combination day is the date on which the obtaining party
actually obtains control over the combined parties.
The assets and liabilities acquired by the combining party are measured at the book value of the combined parties
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
at the date of combination. The capital reserve (share premium) is adjusted by the difference between the book
value of the net assets obtained by the combining party and the book value of the paid combination consideration
(or total nominal value of the issued shares); if the capital reserve (share premium) is insufficient to offset, adjust
the retained earnings.
The direct costs incurred by the combining party in the conduct of the business combination shall be recorded into
the current profits and losses when incurred.
(2) Business combinations not under the same control
It is business combination under different controls if the companies involved in the combination are not subject to
the final control of the same party or same multiple parties before and after the combination. For the combination
under different controls, the party obtaining control over other companies involved in the combination on the
combination day is the combining party, and other companies are combined parties. Combination day is the date
on which the obtaining party actually obtains control over the combined parties.
For the combination under different controls, the costs of combination include the assets paid, liabilities incurred
or assumed by the purchaser and the fair value of the equity securities issued by the purchaser for the acquisition
of the acquiree, and the audit fees, legal services, assessment consulting and other intermediary service fees and
other management fees incurred for the business combination are included in the current profits and losses. The
transaction costs of the equity securities or debt securities issued by the purchaser as combination consideration
shall be included in the initial recognized amount of the equity securities or the debt securities. The involved
contingent consideration shall be included in the combination cost at the fair value at the purchase date, and if
contingent consideration should be adjusted due to new or further evidence within 12 months after the purchase
date, the consolidated goodwill should be adjusted accordingly. The combination costs incurred by the acquirer
and the identifiable net assets acquired in the combination are measured at the fair value at the acquisition date.
The difference of the combination cost greater than the fair value of the identifiable net assets of the acquiree
acquired at the acquisition date is recognized as goodwill. If the combination cost is less than the fair value of the
identifiable net assets of the acquiree acquired in the combination, the fair value of the identifiable assets,
liabilities and contingent liabilities of the acquiree and the measurement of the combination costs shall be
reviewed first. If the combination cost is still less than the fair value of the identifiable net assets of the acquiree
acquired in the combination, the difference shall be recorded into the current profits and losses.
If the deductible temporary difference obtained by the purchaser from the acquiree has not been confirmed on the
date of purchase due to the non-compliance with the recognition criteria of deferred income tax assets, the
relevant deferred income tax assets shall be recognized and the goodwill shall be reduced if new or further
information is obtained within 12 months after the date of purchase showing that the relevant circumstances are
already present and it is expected that the economic benefits brought by the deductible temporary difference of the
acquiree on the date of purchase may be realized. If the goodwill is insufficient to offset, the difference shall be
recognized as profit or loss for the current period. Except for the above, the deferred income tax assets related to
the business combination shall be recognized and included in the current profits and losses.
6. Methods for preparing consolidated financial statements
(1) Principle of determining the scope of consolidation
The scope of consolidation of the consolidated financial statements of the Company is determined on the basis of
control. Control means that the Company has the right to invest in the investee and enjoy a variable return through
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
the participation of the relevant activities of the investee, and has the ability to use the power over the investee to
affect the amount of its return. The scope of consolidation includes the Company and all subsidiaries. Subsidiary
means the subject controlled by the Company.
The Company will conduct a reassessment once the changes in the relevant facts and circumstances result in the
changes to the relevant elements of aforesaid control definition.
(2) Principles, procedures and methods for the preparation of consolidated statements
The Company starts to incorporate it into the scope of consolidation from the date of obtaining the actual control
over the net assets and decision-making of production and operation of the subsidiaries, and ceases to incorporate
it in the scope of consolidation from the date of losing the actual control. For the disposed subsidiaries, the
operating results and cash flow before the date of disposal have been properly included in the consolidated income
statement and consolidated cash flow statement; for the subsidiaries disposed in current period, the beginning
amount of the consolidated balance sheet isn’t adjusted. For the subsidiaries added due to the business
combination under different controls, the operating results and cash flow after the date of purchase have been
properly included in the consolidated income statement and the consolidated cash flow statement, and the
beginning amount and the contrast amount of the consolidated financial statements are not adjusted. For the
subsidiaries added due to the business combination under same control, the operating results and cash flow from
the period begin of the combination to the date of combination have been properly included in the consolidated
income statement and the consolidated cash flow statement, and the contrast amount of the consolidated financial
statements is adjusted at the same time.
In the preparation of the consolidated financial statements, if the subsidiaries are inconsistent with the accounting
policies or accounting periods adopted by the Company, the necessary adjustments shall be made to the financial
statements of the subsidiaries in accordance with the Company’s accounting policies and accounting periods. For
subsidiaries acquired by business combination under different controls, the financial statements shall be adjusted
on the basis of the fair value of the identifiable net assets at the acquisition date.
As for the subsidiaries acquired from the enterprise combine not under the same control, the individual financial
statement should be adjusted based on the fair value of the identifiable net assets on the purchase date when
compiling the consolidated financial statements; as for the subsidiaries acquired from the enterprise combine
under the same control, should be regarded as exist as the current state when each involved combine party starting
to execute the control in the ultimate control party, and should include the assets, liabilities, operating results and
the cash flow in the consolidated financial statements since the year-begin of the combine period and to adjust the
previous compared financial statement according to the above principles.
All significant balances, transactions and unrealized profits in the Company are set off at the time of preparation
of the consolidated financial statements.
The part of shareholders’ equity and the net profit or loss for the current period of the subsidiaries that are not of
the Company are listed in shareholders’ equity and net profits in the consolidated financial statements as the
minority interests and minority gains and losses separately. The share of minority interests in the current net profit
or loss of the subsidiaries is presented under the item “Minority gains and losses” under the net profit item of the
consolidated income statement. The losses shared by the minority shareholders of the subsidiary exceeding its
share in the shareholders’ equity at the period begin still off set the minority shareholders' equity.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
7. Classification of joint arrangements and accounting treatment of joint operations
A joint arrangement refers to an arrangement jointly controlled by two participants or above and be divided into
joint operations and joint ventures.
When the Company is the joint venture party of the joint operations, should recognize the following items related
to the interests share of the joint operations:
(1) Recognize the assets individually held and the assets jointly held by recognizing according to the holding
share;
(2) Recognize the liabilities undertook individually and the liabilities jointly held by recognizing according to the
holding share;
(3) Recognize the revenues occurred from selling the output share of the joint operations enjoy by the Company;
(4) Recognize the revenues occurred from selling the assets of the joint operations according to the holding share;
(5) Recognize the expenses individually occurred and the expenses occurred from the joint operations according
to the holding share of the Company.
When the Company is the joint operation party of the joint ventures, should recognize the investment of the joint
ventures as the long-term equity investment and be measured according g to the said methods of the notes of the
long-term equity investment of the financial statement.
8. Recognition standard for cash and cash equivalents
In the Group’s understanding, cash and cash equivalents include cash on hand, any deposit that can be used for
cover, and short-term (usually due within 3 months since the day of purchase) and high circulating investments,
which are easily convertible into known amount of cash and whose risks in change of value are minimal.
9. Foreign currency and accounting method for foreign currency
(1) Foreign currency business
Foreign currency shall be recognized by employing systematic and reasonable methods, and shall be translated
into the amount in the functional currency at the exchange rate which is approximate to the spot exchange rate of
the transaction date. On the balance sheet date, the foreign currency monetary items shall be translated at the spot
exchange rate. The balance of exchange arising from the difference between the spot exchange rate on the balance
sheet date and the spot exchange rate at the time of initial recognition or prior tot the balance sheet date shall be
recorded into the profits and losses at the current period except that the balance of exchange arising from foreign
currency borrowings for the purchase and construction or production of qualified assets shall be capitalized. The
foreign currency non-monetary items measured at the historical cost shall still be translated at the spot exchange
rate on the transaction date.
(2) Translation of foreign currency financial statements
The asset and liability items in the balance sheets shall be translated at a spot exchange rate on the balance sheet
date. Among the owner’s equity items, except for the items as “undistributed profits”, other items shall be
translated at the spot exchange rate at the time when they are incurred. The revenues and the expenses items of the
income statement should be translated according to the spot rate on the exchange date.
The difference of the foreign currency financial statements occurred from the above translation should be listed
under the “other comprehensive income” item of the owners’ equity of the consolidated financial statement. As
for the foreign currency items which actually form into the net investment of the foreign operation, the exchange
difference occurred from the exchange rate changes should be listed under the “other comprehensive income” of
the owners’ equity among the consolidated financial statement when compile the consolidated financial statement.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
When disposing the foreign operation, as for the discounted difference of the foreign financial statement related to
the foreign operation should be transferred in the current gains and losses according to the proportion. The foreign
cash flow adopts the spot exchange rate on the occurring date of the cash flow. And the influenced amount of the
exchange rate changes should be individually listed among the cash flow statement.
10. Financial instruments
(1) Classification, recognition and measurement of financial assets
Financial assets shall be classified into the following four categories when they are initially recognized: financial
assets measured at fair value and of which variations are recorded in the profits and losses for the current period,
loans and the account receivables, financial assets available for sale and the investments which will be held to
their maturity.
① Financial assets measured at fair value and of which variations are recorded in the profits and losses for the
current period refer to financial assets held by the Company for the purpose of selling in the near future, including
transactional financial assets, or financial assets designated by the management in the initial recognition to be
measured at fair value with variations recorded in the gains and losses for the current period. Financial assets
measured at fair value and of which variations are recorded in the profits and losses for the current period are
subsequently measured at their fair values. Interest or cash dividends arising from such assets during the holing
period are recognized as investment gains. Gains or losses arising from fair value changes are recorded in the
gains and losses for the current period at the end of the Reporting Period. When such assets are disposed, the
difference between their fair values and initially recognized amounts is recognized as investment gains and the
gains and losses arising from fair value changes are adjusted accordingly.
② Loan and accounts receivable: the non-derivative financial assets for which there is no quoted price in the
active market and of which the recoverable amount is fixed or determinable shall be classified as loan and
accounts receivable. The Company shall make subsequent measurement on its loan and accounts receivable on the
basis of the post-amortization costs by adopting the actual interest rate, from which gains and losses, when loan
and accounts receivable are terminated from recognizing, or are impaired or amortized, shall be recorded into the
profits and losses of the current period.
③ Available-for-sale Financial Assets: the non-derivative financial assets which are designated as
available-for-sale financial assets when they are initially recognized as well as the non-derivative financial assets
other than loans and accounts receivables, investments held until their maturity; and transaction financial assets.
The Company shall make subsequent measurement on available-for-sale financial assets at fair value and
recognize the interests or the cash bonus acquired the holding period as the investment income, as well as directly
include the profits or losses formed by the changes of the fair value into the owners’ equity at the period-end, until
the said financial assets shall be transferred out when they are terminated from recognizing or are impaired, which
shall be recorded into the profits and losses of current period.
④ Held-to-maturity Investments: non-derivative financial asset with a fixed date of maturity, a fixed or
determinable recoverable amount and which the Company’s management holds for a definite purpose or the
Company’s management is able to hold until its maturity. The Company shall make subsequent measurement on
its Held-to-maturity Investments on the basis of the post-amortization costs by adopting the actual interest rate,
from which gains and losses, when loan and accounts receivable are terminated from recognizing, or are impaired
or amortized, shall be recorded into the profits and losses of the current period.
(2) Classification, Recognition and Measurement of Financial Liabilities
Financial liabilities shall be classified into the following two categories when they are initially recognized: (1) the
transactional financial liabilities; and (2) other financial liabilities. The financial liabilities initially recognized by
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
the Company shall be measured at their fair values. For the transactional financial liabilities, the transaction
expenses thereof shall be directly recorded into the profits and losses of the current period; for other categories of
financial liabilities, the transaction expenses thereof shall be included into the initially recognized amount.
① As for the financial liabilities measured by fair value and its changes be included in the current gains and
losses, which including trading financial liabilities and the financial liabilities be appointed to be measured by fair
value with the changes be included in the current gains and losses when being initially recognized, should be
executed subsequent measurement according to the fair value with the profits or losses formed by the changes of
the fair value be included in the current gains and losses.
② Other financial liabilities: The Company shall make subsequent measurement on its other financial liabilities
on the basis of the post-amortization costs by adopting the actual interest rate, from which gains and losses, when
other financial liabilities are terminated from recognizing or amortized, shall be recorded into the profits and
losses of the current period.
(3) Recognition and measurement of financial asset transfers
As for the Company transferred nearly all of the risks and rewards related to the ownership of a financial asset to
the transferee, should derecognize the financial assets; as for maintained nearly all of the risks and rewards related
to the ownership of a financial asset, should continue to recognize the transferred financial assets and recognize
the received counter price as a financial liability. Where the Company does not transfer or retain nearly all of the
risks and rewards related to the ownership of a financial asset (that is to say, it is not under a circumstance as
mentioned in Article 7 of these Standards), it shall deal with it according to the circumstances as follows,
respectively: (1)If it gives up its control over the financial asset, it shall stop recognizing the financial asset; (2)If
it does not give up its control over the financial asset, it shall, according to the extent of its continuous
involvement in the transferred financial asset, recognize the related financial asset and recognize the relevant
liability accordingly.
If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the difference between
the amounts of the following 2 items shall be recorded in the profits and losses of the current period: (1) The book
value of the transferred financial asset; (2) the sum of consideration received from the transfer, and the
accumulative amount of the changes of the fair value originally recorded in the owner's equities.
If the transfer of partial financial asset satisfies the conditions to stop the recognition, the entire book value of the
transferred financial asset shall, between the portion whose recognition has been stopped and the portion whose
recognition has not been stopped, be apportioned according to their respective relative fair value, and the
difference between the amounts of the following 2 items shall be included into the profits and losses of the current
period: (1)The book value of the portion whose recognition has been stopped; (2)The sum of consideration of the
portion whose recognition has been stopped, and the portion of the accumulative amount of the changes in the fair
value originally recorded in the owner's equities which is corresponding to the portion whose recognition has been
stopped.
(4) De-recognition conditions of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of the
financial liability be terminated in all or partly. Where the Group (debtor) enters into an agreement with a creditor
so as to substitute the existing financial liabilities by way of any new financial liability, and if the contractual
stipulations regarding the new financial liability is substantially different from that regarding the existing financial
liability, it terminates the recognition of the existing financial liability, and at the same time recognizes the new
financial liability. If executed practical modification on the whole or part of the contract regulations of the existing
financial liabilities, should terminate to recognize the existing financial liabilities or certain part of it and at the
same time recognize the revised financial liabilities as a new financial liabilities.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
Where the recognition of a financial liability is totally or partially terminated, the enterprise concerned shall
include into the profits and losses of the current period for the gap between the book value which has been
terminated from recognition and the considerations it has paid (including the non-cash assets it has transferred out
and the new financial liabilities it has assumed).
If the Company re-purchase part of the financial liabilities, should distribute the whole book value of the financial
liabilities according to the comparatively fair value between the continued reorganization part and the terminated
reorganization part on the re-purchase date. And the difference between the book value distributed to the
terminated recognition part and the counter price of the paid part (including the rolled out non-cash assets or the
new financial liabilities undertook) should be included in the current gains and losses.
(5) Recognition method of the fair value of the financial assets and the financial liabilities
As for the financial instruments for which there is an active market, the quoted prices in the active market shall be
used to determine the fair values thereof. Where there is no active market for a financial instrument, the Company
concerned shall adopt value appraisal techniques to determine its fair value. The value appraisal techniques
mainly include the prices adopted by the parties, who are familiar with the condition, in the latest market
transaction upon their own free will, the current fair value obtained by referring to other financial instruments of
the same essential nature, the cash flow capitalization method and the option pricing model, etc.
(6) Impairment test of financial assets (excluding the accounts receivable) and withdrawal method of impairment
provision
The Company inspects the book value of the financial assets on the balance sheet date to judge whether there are
evidences indicate that the financial assets had occurred impairment owning to the occurrence of one or multiple
events.
As for the measurement for impairment of financial assets measured on the basis of the post-amortization costs,
where there is any objective evidence proving that a financial asset measured on the basis of post-amortization
costs is impaired, should be recognized by the carrying amount of the difference between the said financial asset
which shall be written down to the current value of the predicted future cash flow (excluding the loss of future
credits not yet occurred) and the amount of the as written down which shall be recognized as loss of the
impairment of the asset. When calculating the current value of the estimated future cash flow, should adopt the
original effective interests’ rate of the financial assets as the discount rate. The book value of the assets should be
written down to the estimated recoverable amount through impairment provision items with the written down
amount be included in the current gains and losses. As for the financial assets with individual significant amount,
should adopt the individual assessment for ensure whether there are objective evidences indicate the impairment
provision and as for the other assets with insignificant amount, should be inspected by individual or group
assessment for ensure whether there are objective evidences indicate the impairment provision.
As for the financial assets measured by cost, if there are evidences indicate the impairment of the financial
instruments without market price which had not measured by fair value because the fair value could not be
reliable measured, the amount of the impairment losses should be measured by the difference between the book
value of the financial assets and the current value of the estimated future cash flow acquired from the discounting
measurement of the current market return rate of the similar financial assets.
Where an available-for-sale financial asset is impaired, the accumulative losses arising from the decrease of the
fair value of the owner’s equity which was directly included shall be transferred out and recorded into the profits
and losses of the current period.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
11. Receivables
(1) Accounts receivable with significant single amount for which the bad debt provision is made
individually
Definition or amount criteria for an account receivable with a Top five accounts receivable with the largest balances or
significant single amount accounts accounting for over 10% of the total balance of
receivables.
Making separate bad-debt provisions for accounts receivable For an account receivable with a significant single amount, the
with a significant single amount impairment test shall be carried out on it separately. If there is
any objective evidence of impairment, the impairment loss is
recognized and the bad-debt provision is made according to the
difference between the present value of the account receivable’s
future cash flows and its carrying amount. As for non-significant
accounts receivable for which separate impairment provisions are
not necessary as proved by the impairment test, as well as other
significant accounts reivable that have not been impaired as
proved by a separate impairment test, they shall be grouped
according to their credit risks and account ages, and then the
impairment test is carried out on a group basis.
(2) Accounts receivable which the bad debt provision is withdrawn by credit risk characteristics
Group name Withdrawal method of bad debt provision
Common transaction group Aging analysis
Internal transaction group Age analysis method
In the groups, those adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Withdrawal proportion of account Withdrawal proportion of other account
Aging
receivables receivables
Within 1 year (including 1 year) 3.00% 3.00%
1 to 2 years 10.00% 10.00%
2 to 3 years 30.00% 30.00%
3 to 4 years 50.00% 50.00%
4 to 5 years 80.00% 80.00%
Over 5 years 100.00% 100.00%
In the groups, those adopting balance percentage method to withdraw bad debt provision
□ Applicable √ Not applicable
In the groups, those adopting other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
(3) Accounts receivable with an insignificant single amount but for which the bad debt provision is made
independently
Reason of individually withdrawing bad debt provision There are definite evidences indicate the obvious difference of thee
returnability
Withdraw the bad debt provision according to the difference of
Withdrawal method for bad debt provision
which the future cash flow lower than the book value.
12. Inventory
Is the Company subject to any disclosure requirements for special industries?
No.
(1) Classification of inventory
Inventory refers to finished products, goods in process, and materials consumed in the production process or the
provision of labor services held by the Company for sale in daily activities, mainly including raw materials, goods
in process, materials in transit, finished products, commodities, turnover materials, and commissioned processing
materials. Turnover materials include low-value consumables and packaging.
(2) Pricing method of inventory sent out
The inventory is valued at actual cost when acquired, and inventory costs include procurement costs, processing
costs and other costs. The weighted average method is used when receiving or sending out inventory.
(3) Basis for determining the net realizable value of inventory and the method of withdrawal for inventory
impairment
Net realizable value refers to the estimated selling price of the inventory minus the estimated cost to be incurred at
the time of completion, the estimated selling expenses and the relevant taxes and fees in daily activities. In
determining the net realizable value of inventory, the conclusive evidence obtained is used as the basis and the
purpose of holding the inventory and the impact of the events after the balance sheet date should be taken into
account.
For finished products, the materials used for sale and other goods used for direct sale, the net realizable value is
determined by the estimated selling price of the inventory minus the estimated selling expenses and related taxes
in the process of normal production and operation.
For materials inventory needs to be processed, the net realizable value is determined by the estimated selling price
of the finished products minus the estimated cost to be incurred, the estimated sales costs and the relevant taxes
and fees in the process of normal production and operation.
(4) Inventory system
The inventory system of the Company is perpetual inventory.
(5) Amortization method of turnover materials
Low-value consumables are amortized in one-off method.
The packaging is amortized in one-off method.
13. Divided as assets held for sale
The Company divides the non-current financial assets which simultaneously meet with the following conditions
(excluding financial assets) as the assets held for sale: ① the composition part should and could be immediately
sold only according to the usual and idiomatic clauses of selling such composition part under the current
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
circumstance; ② had made a solution on the disposing of the composition part;③ had signed a irrevocable
transfer agreement with the transferee; ④ the transfer probably be completed within 1 year.
The assets classified as separate non-current assets and disposal groups held for sale are presented separately in
the current assets of the balance sheet; liabilities classified as associated with the transferred assets in the disposal
group held for sale are presented separately in the current liabilities of the balance sheet.
For an asset or disposal group classified as held for sale but no longer meets the conditions for recognition of
non-current assets held for sale, the Company ceases to classify it as held for sale and measure according to the
amount of the following two items, whichever is lower:
1. The book value of the asset or disposal group before being classified as held for sale is measured by the amount
adjusted according to the depreciation, amortization or impairment that should be recognized as it isn’t classified
as held for sale.
2. The recoverable amount at the date decided not to sell.
14. Long-term equity investments
Long-term equity investment refers to the Company’s long-term equity investment with control, joint control or
significant influence on the investee. The long-term equity investment of the Company which has no control, joint
control or significant influence on the investee is accounted for as financial assets available-for-sale or financial
assets at fair value and changes recognized in profit or loss for the current period. For details of accounting
policies, please refer to Note 5: Important accounting policies and accounting estimates, and Note 10: Financial
instruments.
Joint control refers to the control that is common to an arrangement in accordance with the relevant agreement,
and the relevant activities of the arrangement must be agreed upon by the participant who has shared the control.
Significant influence refers to the Company has the power to participate in decision-making on the financial and
operating policies of the investee, but can’t control or jointly control the formulation of these policies with other
parties.
(1) Investment cost recognition for long-term equity investments
① For the merger of enterprises under the same control, it shall, on the date of merger, regard the share of the
book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment,
and the direct relevant expenses occurred for the merger of enterprises shall be included into the profits and losses
of the current period.
② For the merger of enterprises not under the same control, The combination costs shall be the fair values, on the
acquisition date, of the assets paid, the liabilities incurred or assumed and the equity securities issued by the
Company in exchange for the control on the acquiree, and all relevant direct costs incurred to the acquirer for the
business combination. Where any future event that is likely to affect the combination costs is stipulated in the
combination contract or agreement, if it is likely to occur and its effects on the combination costs can be measured
reliably, the Company shall record the said amount into the combination costs.
③ The cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost
which is actually paid. The cost consists of the expenses directly relevant to the obtainment of the long-term
equity investment, taxes and other necessary expenses.
④ The cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair
value of the equity securities issued.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
⑤ The cost of a long-term investment obtained by the exchange of non-monetary assets (having commercial
nature) shall be recognized base on taking the fair value and relevant payable taxes as the cost of the assets
received.
⑥ The cost of a long-term equity investment obtained by recombination of liabilities shall be recognized at the
fair value.
(2) Subsequent measurement of long-term equity investment and recognized method of profit/loss
The long-term equity investment with joint control (except for the common operator) or significant influence on
the investee is accounted by equity method. In addition, the Company's financial statements use cost method to
calculate long-term equity investments that can control the investee.
(1) Long-term equity investment accounted by cost method
When the cost method is used for accounting, the long-term equity investment is priced at the initial investment
cost, and the cost of the long-term equity investment is adjusted according to additional investment or recovered
investment. Except the price actually paid when acquired investment or cash dividends or profits that have been
declared but not yet paid included in the consideration, current investment income is recognized by the cash
dividends or profits declared by the investee.
(2) Long-term equity investment accounted by equity method
When the equity method is used for accounting, if the initial investment cost of the long-term equity investment is
greater than the fair value of the investee’s identifiable net assets, the initial investment cost of the long-term
equity investment shall not be adjusted; if the initial investment cost is less than the fair value of the investee’s
identifiable net assets, the difference shall be recorded into the current profits and losses, and the cost of the
long-term equity investment shall be adjusted at the same time.
When the equity method is used for accounting, the investment income and other comprehensive income shall be
recognized separately according to the net profit or loss and other comprehensive income realized by the investee,
and the book value of the long-term equity investment shall be adjusted at the same time. The part entitled shall be
calculated according to the profits or cash dividends declared by the investee, and the book value of the long-term
equity investment shall be reduced accordingly. For other changes in the owner’s equity other than the net profit
or loss, other comprehensive income and profit distribution of the investee, the book value of the long-term equity
investment shall be adjusted and included in the capital reserve. When the share of the net profit or loss of the
investee is recognized, the net profit of the investee shall be adjusted and recognized according to the fair value of
the identifiable assets of the investee when the investment is made. If the accounting policies and accounting
periods adopted by the investee are inconsistent with the Company, the financial statements of the investee shall
be adjusted according to the accounting policies and accounting periods of the Company and the investment
income and other comprehensive income shall be recognized accordingly. For the transactions between the
Company and associates and joint ventures, if the assets made or sold don’t constitute business, the unrealized
gains and losses of the internal transactions are offset by the proportion attributable to the Company, and the
investment gains and losses are recognized accordingly. However, the loss of unrealized internal transactions
incurred by the Company and the investee attributable to the impairment loss of the transferred assets shall not be
offset. If the assets made to associates or joint ventures constitute business, and the investor makes long-term
equity investment but does not obtain the control, the fair value of the investment shall be taken as the initial
investment cost of the new long-term equity investment, and the difference between initial investment and the
book value of the investment is fully recognized in profit or loss for the current period. If the assets sold by the
Company to joint ventures or associates constitute business, the difference between the consideration and the book
value of the business shall be fully credited to the current profits and losses. If the assets purchased by Company
from joint ventures or associates constitute business, conduct accounting treatment in accordance with the
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
provisions of Accounting Standard for Business Enterprises No. 20 - Business combination, and the profits or
losses related to the transaction shall be recognized in full.
When the net loss incurred by the investee is recognized, the book value of the long-term equity investment and
other long-term equity that substantially constitute the net investment in the investee shall be written down to zero.
In addition, if the Company has an obligation to bear additional losses to the investee, the estimated liabilities are
recognized in accordance with the obligations assumed and included in the current investment losses. If the
investee has realized net profit in later period, the Company will resume the recognition of the income share after
the income share has made up the unrecognized loss share.
(3) Acquisition of minority interests
In the preparation of the consolidated financial statements, capital reserve shall be adjusted according to the
difference between the long-term equity investment increased due to the purchase of minority interests and the
share of the net assets held by the subsidiary from the date of purchase (or the date of combination) calculated
according to the proportion of the new shareholding ratio, and retained earnings shall be adjusted if the capital
reserve is insufficient to offset.
(4) Disposal of long-term equity investment
In the consolidated financial statements, the parent company partially disposes of the long-term equity investment
in the subsidiary without the loss of control, and the difference between the disposal price and the net assets of the
subsidiary corresponding to the disposal of the long-term equity investment is included in the shareholders’ equity.
If the disposal of long-term equity investment in subsidiaries results in the loss of control over the subsidiaries,
handle in accordance with the relevant accounting policies described in Note 5: Important accounting policies and
accounting estimates, and Note 6: Preparation method of consolidated financial statements.
In other cases, the difference between the book value and the actual acquisition price shall be recorded into the
current profits and losses for the disposal of the long-term equity investment.
For long-term equity investment accounted by the equity method and residual equity after disposal still accounted
by the equity method, other comprehensive income originally included in the shareholders’ equity shall be treated
in the same basis of the investee directly disposing related assets or liabilities by corresponding proportion. The
owner’s equity recognized by the change of the owner’s equity of the investee other than the net profit or loss,
other comprehensive income and profit distribution is carried forward proportionally into the current profits and
losses.
For long-term equity investment accounted by the cost method and residual equity after disposal still accounted by
the cost method, other comprehensive income accounted by equity method or recognized by financial instrument
and accounted and recognized by measurement criteria before the acquisition of the control over the investee is
treated in the same basis of the investee directly disposing related assets or liabilities, and carried forward
proportionately into the current profits and losses. Other changes of owner’s equity in net assets of the investee
accounted and recognized by the equity method other than the net profit or loss, other comprehensive income and
profit distribution are carried forward proportionally into the current profits and losses.
(3) Impairment provisions for long-term equity investments
For the relevant testing method and provision making method, see “22. Impairment of long-term assets” herein.
15. Investment real estates
Measurement mode of investment real estates
Not applicable
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
16. Fixed assets
(1) Recognition conditions
Fixed assets of the Company refers to the tangible assets that simultaneously possess the features as follows: they
are held for the sake of producing commodities, rendering labor service, renting or business management; and
their useful life is in excess of one accounting year and unit price is higher. No fixed assets may be recognized
unless it simultaneously meets the conditions as follows: ① The economic benefits pertinent to the fixed asset
are likely to flow into the Company; and ② The cost of the fixed asset can be measured reliably.
(2) Depreciation method
Expected net salvage
Category of fixed assets Method Useful life Annual deprecation
value
Housing and building Average method of
3—30 years 5% 31.67%-3.17%
useful life
Machinery equipments Average method of
2—10 years 5% 47.50%-9.50%
useful life
Transportation vehicle Average method of
5—10 years 5% 19.00%-9.50%
useful life
Average method of
Electronic equipment 2—8 years 5% 47.50%-11.88%
useful life
(3) Recognition basis, pricing and depreciation method of fixed assets by finance lease
Not applicable
17. Construction in Progress
Is the Company subject to any disclosure requirements for special industries?
No.
1. Pricing of construction in progress
The constructions are accounted according to the actual costs incurred. The constructions shall be carried forward
into fixed assets at the actual cost when reach intended usable condition. The borrowing expenses eligible for
capitalization incurred before the delivery of the construction are included in the construction cost; after the
delivery, the relevant interest expense shall be recorded into the current profits and losses.
2. Standard and time of construction in progress carrying forward into fixed assets
The Company’s construction in progress is carried forward into fixed assets when the construction completes and
reaches intended usable condition. The criteria for determining the intended usable condition shall meet one of the
following:
(1) The physical construction (including installation) of fixed assets has been completed or substantially
completed;
(2) Has been produced or run for trial, and the results indicate that the assets can run normally or can produce
stable products stably, or the results of the trial operation show that it can operate normally;
(3) The amount of the expenditure on the fixed assets constructed is little or almost no longer occurring;
(4) The fixed assets purchased have reached the design or contract requirements, or basically in line with the
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
design or contract requirements.
3. Provision for impairment of construction in progress
Please refer to Note 5: Important accounting policies and accounting estimates and Note 22: Long-term deferred
expenses for the impairment test method and provision for impairment of construction in progress.
18. Borrowing costs
The borrowing costs refer to interest and other related costs incurred by the Company as a result of borrowings,
including interest on borrowings, amortization of discounts or premiums, ancillary expenses and exchange
differences arising from foreign currency borrowings. The borrowing costs incurred by the Company directly
attributable to the acquisition, construction or production of assets eligible for capitalization are capitalized and
included in the cost of the relevant assets. Other borrowing costs are recognized as expenses according to the
amount at the time of occurrence, and are included in the current profits and losses.
1. Principle of capitalization of borrowing costs
Borrowing costs can be capitalized when all the following conditions are met: Asset expenditure has already
occurred; borrowing costs have already occurred; construction or production activities necessary to bring the
assets to the intended useable or sellable status have already begun.
2. Capitalization period of borrowing costs
Capitalization period refers to the period from the capitalization of borrowing costs starting to the end of
capitalization, excluding the period when capitalization is suspended.
If assets that meet the conditions of capitalization are interrupted abnormally in the course of construction or
production, and the interruption time exceeds 3 consecutive months, the capitalization of borrowing costs shall be
suspended. The borrowing costs incurred during the interruption are recognized as expenses and included in
current profits and losses until the acquisition or construction of the assets is resumed. The capitalization of the
borrowing costs continues if the interruption is a procedure necessary for the purchase or production of assets
eligible for capitalization to meet the intended useable or sellable status.
The borrowing costs shall cease to be capitalized when the purchased or produced assets that meet the conditions
of capitalization meet the intended useable or sellable status. The borrowing costs incurred after the assets eligible
for capitalization meet the intended useable or sellable status can be included in the current profits and losses
when incurred.
3. Calculation method of capitalized amount of borrowing costs
During the period of capitalization, the capitalization amount of interests (including amortization of discounts or
premiums) for each accounting period is determined in accordance with the following provisions:
(1) For special borrowings for the acquisition or construction of assets eligible for capitalization, the interest
expenses actually incurred in the current period of borrowings shall be recognized after deducting the interest
income obtained by depositing the unused borrowing funds into the bank or investment income obtained from
temporary investment.
(2) Where the general borrowing is occupied for the acquisition or construction of assets eligible for capitalization,
the Company multiplies the weighted average of the asset expenditure of the accumulated asset expenditure
exceeding the special borrowing by the capitalization rate of the general borrowing to calculate the amount of
interest that should be capitalized for general borrowings. The capitalization rate is determined based on the
weighted average interest rate of general borrowings.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2016
19. Biological assets
Not applicable
20. Oil-gas assets
Not applicable
21. Intangible assets
(1) Pricing method, useful life and impairment test
1. Recognition criteria of intangible assets
Intangible assets are identifiable non-monetary assets that are owned or controlled by the Company without
physical form. The intangible assets are recognized when all the following conditions are met: (1) Conform to the
definition of intangible assets; (2) Expected future economic benefits related to the assets are likely to flow into
the Company; (3) The costs of the assets can be measured reliably.
2. Initial measurement of intangible assets
Intangible assets are initially measured at cost. Actual costs are determined by the following principles:
(1) The cost of the acquisition of intangible assets, including the purchase price, relevant taxes and other expenses
directly attributable to the intended use of the asset. The payment of purchase price of intangible assets exceeding
normal credit terms is deferred, and the cost of intangible assets having financing nature in essence shall be
recognized based on the present value of the purchase price. The difference between the actual payment price and
the present value of the purchase price shall be recorded into the current profits and losses in the credit period
except that can be capitalized in accordance with the Accounting Standard for Business Enterprises No. 17 -
Borrowing Cost.
(2) The cost of investing in intangible assets shall be recognized according to the value agreed upon in the
investment contract or agreement, except that the value of the contract or agreement is unfair.
3. Subsequent measurement of intangible assets
The Company shall determine the useful life when it obtains intangible assets. The useful life of intangible assets
is limited, and the years of the useful life or output that constitutes the useful life or similar measurement units
shall be estimated. The intangible assets are regarded as intangible assets with uncertain useful life if the term that
brings economic benefits to the Company is unforeseeable
Intangible assets with limited useful life shall be amortized by straight line method from the time when the
intangible assets are available until can’t be recognized as intangible assets; intangible assets with uncertain useful
life shall not be amortized. The Company reviews the estimated useful life and amortization method of intangible
assets with limited useful life at the end of each year, and reviews the estimated useful life of intangible assets
with uncertain useful life in each accounting period. For intangible assets that evidence shows the useful life is
limited, the useful life shall be estimated and the intangible assets shall be amortized in the estimated useful life.
4. Recognition criteria and withdrawal method of intangible asset impairment provision
The impairment test method and withdrawal method for impairment provision of intangible assets are detailed in
Note 5: Significant accounting policies and accounting estimates, and Note 22: Long-term asset impairment.
(2) Accounting policy for internal research and development expenditures
The expenditures in internal research and development projects of the Company are classified into expenditures in
research stage and expenditures in development stage. The expenditures in research stage are included in the
cur
